Docstoc

BROKER UPDATE

Document Sample
BROKER UPDATE Powered By Docstoc
					CitiMortgage Correspondent Lending
The Business Built for YOURS.


CORRESPONDENT BULLETIN                                                                                #04-
                                                                                             BULLETIN #04-12 | JULY 16, 2004


What’s New                                                                          Page
Alt A Loan Program Introduction .........................................................1
CitiMortgage Assessment Areas...........................................................1
Early Payment Default (EPD) Loans ....................................................1


ALT A LOAN PROGRAM INTRODUCTION
                   INTRODUCTION
CitiMortgage is rolling out another new product to expand
Correspondents’ lending opportunities – the Alt A loan product. Our
program guidelines allow expanded LTV/CLTV parameters, along with
reduced documentation. Correspondents may deliver Alt A loans using our fixed-rate (15- and 30-year), and
LIBOR ARM products (3/1 and 5/1) on primary, second home and investment properties (1-4 units). The
reduced documentation for Alt A loans include Full/Alternative and Stated Income/Verified Assets
documentation processes.
A complete Alt A Program Description (Section 216) for the Alt A offering is attached to this bulletin, and is
available on the CitiMortgage Web site.
             ASSESSMENT
CITIMORTGAGE ASSESSM ENT AREAS
The CitiMortgage Assessment Area grid has been updated with the new Metropolitan Statistical Area
(MSA), Metropolitan District (MD), and 2004 median income levels.
The updated CitiMortgage Assessment Area grid (Exhibit 5) of the Correspondent Manual is attached to this
announcement.
              DEFAULT       LOANS
EARLY PAYMENT DEFAULT (EPD) LO ANS
CitiMortgage is removing the repurchase language around EPD loans in the Representations and Warrants
section of the Correspondent Manual (Section 2202). Effective immediately, the language below replaces
the current policy:
                      (EPD)
Early Payment Default (EPD )
CitiMortgage Correspondent Lending imposes an Early Payment Default (EPD) obligation on all
Correspondents pursuant to the following terms and conditions incorporated by reference into and form
part of the CitiMortgage Correspondent Loan Purchase Agreement.
Government Loans
If any of the following payments due CitiMortgage, or its assigns, remain unpaid for sixty (60) or more days
after the applicable due date specified in the corresponding Government Loan documents (“Delinquent
Government Loan”), the Correspondent shall, upon notice from CitiMortgage, pay the EPD Fees assessed.
     •     FHA or VA Loans: Any of the first four (4) payments; or
     •     VA or HUD Repossession (without appraisal): Any of the first twelve (12) payments; or
     •     VA Streamline Refinance (without appraisal): Any of the first twenty-four (24) payments.
                                            app raisal):




Page 1 of 2                                                                                    cvb
CitiMortgage may, at its sole and absolute discretion, require the Correspondent to reimburse/pay
CitiMortgage for the following:
      •      All price and/or SRP enhancements paid by CMI to the Correspondent at the time of purchase for
             such Delinquent Government Loan;
      •      Any price in excess of par paid by CMI to the Correspondent for such Delinquent Government Loan,
             if the loan has not been pooled or sold in the secondary market;
      •      The service release premium, as a percentage of the unpaid principal balance at the time of
             purchase, paid by CMI to the Correspondent for such Delinquent Government Loan; and
      •      An EPD Administrative Fee of $350.




CitiMortgage policies defined within this document do not necessarily affect the CalPERS Member Home
Loan Program or the Special Programs Division. Refer to the CalPERS Participant Guide, the Special
Programs Manual, or the respective bulletins of these divisions for specific program guidelines.
At CitiMortgage, we are building our business to help yours grow. For more information regarding this
bulletin or any CitiMortgage products and programs, please contact your Account Executive. You also may
direct questions to CitiMortgage’s Client Relations Team at 800-967-2205, Option 1. Calls are randomly
monitored and recorded to ensure quality service.




2004 CitiMortgage, Inc. CitiMortgage, Inc. does business as Citicorp Mortgage in MT and NM. CitiMortgage, Inc. is an equal housing lender. CitiMortgage is a registered
service mark of Citicorp. CitiQuik is a registered service mark of Citicorp. Applications that are not approved within minutes will be subjected to our normal underwriting process
and may still be approved. Approvals are subject to verification of information, receipt of satisfactory appraisal and title report, and meeting our customary closing conditions. This
information is for use by mortgage and real estate professionals only and it is subject to change without notice. Do not distribute to consumers."



Page 2 of 2                                                                                                                            cvb
cvb                                                               PROGRAM DESCRIPTIONS
CORRESPONDENT MANUAL                                                                     ALT A 216

PROGRAM DESCRIPTION – ALT A
Alt A mortgage loans lie outside of standard CitiMortgage loan parameters. CitiMortgage Alt A
guidelines allow expanded LTV/CLTV, along with reduced documentation.

PRODUCTS
  Fixed Rate (15- and 30-year only)
  LIBOR ARMs (3/1 & 5/1 only)

LOAN TERM
   15- to 30-years
OCCUPANCY
   Primary Residence
   Second Home
   Investment

ELIGIBLE PROPERTIES
   1 Unit – including PUDs and condominiums
   2-4 Units
   NY cooperatives (Primary and Second Home only)

TRANSACTION TYPES
   Purchase
   Rate/Term Refinance
   Cash Out Refinance

DOCUMENTATION PROCESS TYPES
   Full/Alt
   Stated Income/Verified Assets

INELIGIBLE PRODUCTS/TRANSACTION TYPES
   Texas Section 50(a)(6) loans
   Loan does not meet the credit score, LTV, or loan amount guidelines
   Community Lending, FHA, or VA products
   Funds from a Bridge Loan
   Non-arms length transactions
   Funds from a Gift
   Income from a trailing co-borrower
MAXIMUM LOAN AMOUNT
Maximum loan amount up to $1.5 M, depending upon the LTV and Documentation Process. For
automated underwriting, the maximum loan amount is $700,000.
July 2004                                                                                       216-1
cvb                                                                   PROGRAM DESCRIPTIONS
CORRESPONDENT MANUAL                                                                        ALT A 216
LTV/CLTV/HCLTV/FICO

                                       Full/Alt Documentation

                                   Purchase & Rate/Term Refinance

  Property Type    Occupancy           Max Loan Amount   Max LTV       Max       Min.
                                                                    CLTV/HCLTV   FICO

  1-2 unit         Primary             $650,000           90%         100%       660

  1-2 unit         Primary             $1,000,000         80%         100%       620

  1-2 unit         Primary             $1,500,000         75%         100%       620

  3-4 unit         Primary             $1,000,000         75%          90%       620

  3-4 unit         Primary             $1,500,000         70%          90%       620

  1 unit           Second home         $400,000           95%          95%       660

  1 unit           Second home         $500,000           90%          95%       660

  1 unit           Second home         $650,000           75%          75%       660

  1-2 unit         Investment          $300,000           90%          90%       660

  1-2 unit         Investment          $400,000           80%          80%       660

  1-2 unit         Investment          $650,000           75%          75%       660

  3-4 unit         Investment          $650,000           70%          70%       660

                                  Cash Out Refinance                                    Max Cash Out

  1-2 unit         Primary             $400,000           90%         100%       660       100K

  1-2 unit         Primary             $650,000           80%          90%       660       200K

  3-4 unit         Primary             $650,000           80%          80%       660       200K

  1 unit           Second home         $400,000           90%         100%       660       100K

  1-2 unit         Investment          $650,000           75%          75%       660       200K

                            Stated Income/Verified Assets Documentation

                                   Purchase & Rate/Term Refinance

  Property Type   Occupancy         Max Loan Amount      Max          Max         Min
                                                         LTV       CLTV/HCLTV    FICO

  1-2 unit        Primary           $400,000             95%          95%        700

July 2004                                                                                         216-2
cvb                                                                   PROGRAM DESCRIPTIONS
CORRESPONDENT MANUAL                                                                          ALT A 216

  Property Type    Occupancy         Max Loan Amount       Max        Max         Min
                                                           LTV     CLTV/HCLTV    FICO

  1-2 unit         Primary           $500,000              90%        90%        660

  1-4 unit         Primary           $650,000              75%        80%        660

  1-4 unit         Primary           $1,000,000            70%        80%        660

  1 unit           Second home       $400,000              90%        90%        660

  1 unit           Second home       $500,000              85%        85%        660

  1-2 unit         Investment        $400,000              75%        75%        660

  1-2 unit         Investment        $650,000              70%        70%        660

  3-4 unit         Investment        $650,000              65%        65%        660

                                   Cash Out Refinance                                    Max Cash Out

  1-2 unit         Primary           $500,000              80%        90%        660          200K

  1-4 unit         Primary           $650,000              65%        65%        660          200K

  1 unit           Second home       $500,000              75%        75%        660          200K

  1-2 unit         Investment        $650,000              65%        75%        660          200K

QUALIFYING RATIOS
Maximum 45% debt-to-income ratio, including loans processed and approved through DU or LP.
BUY DOWNS
Temporary buy downs are not permitted.
MORTGAGE INSURANCE
Required for all LTVs exceeding 80%. See chart below.
 LTV                                              80.01 – 85%    85.01 – 90%    90.01 – 95%
 % MI > 20 Years (includes all ARM loans)            12%            25%            30%
 % MI ≤ 20 Years                              6%                    12%            25%
Note: Co-ops require 35% MI coverage for LTVs > 90%.
ELIGIBLE BORROWERS
U.S. citizens and CitiMortgage-defined permanent resident aliens are eligible. Non-Occupant co-
borrowers are not permitted. See Exhibit 10 of the Correspondent Manual, Immigration Classification
Chart, to define eligible permanent resident aliens.



July 2004                                                                                            216-3
cvb                                                                 PROGRAM DESCRIPTIONS
CORRESPONDENT MANUAL                                                                      ALT A 216
SPECIAL UNDERWRITING CRITERIA
   Credit
   •   Residential Mortgage Credit Report (RMCR) or tri-merged report is required.
   •   A minimum of two FICO scores must be obtained for each applicant to determine each
       applicant’s representative FICO score. If two FICO scores are obtained, the applicant’s
       representative FICO score is the lower score. If three FICO scores are obtained, the
       applicant’s representative FICO score is the middle score. If there is more than one applicant,
       the score from the applicant with the lowest representative FICO score is used.
   •   A 12-month mortgage history is required, with a 0x30 rating over most recent 24-month period.
   •   A minimum of three trades reflecting a two-year history is required.
   •   Bankruptcies must be discharged for a minimum of 2 years from application date.
   •   Foreclosures must be discharged for a minimum of 3 years from application date.
   •   Borrower may not be a party to a lawsuit.
   •   No non-traditional credit methods may be used.
   Income
   For the Full/Alt Documentation Process
   Salaried borrowers:
   • VOE, or pay stub covering most recent 30 days with YTD earnings noted AND most recent 2-
      years W2 forms;
   • Verbal VOE;
   • Gaps greater than 30 days must be explained.
   Self-employed borrowers:
   • Most recent two years of personal and business returns (complete with all schedules);
   • Signed 8821/4506-T at close;
   • Verbal verification of business existence no more than 15 days prior to closing.
   For the Stated Income/Verified Assets Documentation Process
   All borrowers:
   •   Employment and income must be disclosed on 1003 and must be “reasonable” for the
       employment disclosed;
   •   Verification of income is NOT required;
   •   Verbal VOE for salaried borrowers; OR CPA certification or copy of business license for self-
       employed borrowers;
   •   Signed 8821/4506-T at close;
   •   Gaps in employment are NOT permitted.
   Other Income
   For the Full/Alt Documentation Process
July 2004                                                                                        216-4
cvb                                                                PROGRAM DESCRIPTIONS
CORRESPONDENT MANUAL                                                                      ALT A 216
   •   Verification should include documents required to confirm receipt of income for the past 12
       months (3 months for alimony or child support) and that the income is expected to continue for
       the next 3 years;
   •   Signed 8821/4506-T covering the past year at close.
   For the Stated Income/Verified Assets Documentation Process
   • Stated income is used for all borrowers provided it appears reasonable and consistent;
   • Signed 8821/4506-T covering the past year at close.
   Assets
   •  VOD with two-month average balance or two months of bank statements, or other asset
      statements, as applicable.
   Note: For the Stated Income/Verified Assets documentation process, no gift funds are allowed.
   Contributions

                                                    LTV                   Maximum Contribution

                                                   > 90%                           3%
              Primary Residence
                                                   ≤ 90%                           6%

            Second/Vacation Home &                 > 80%                           3%

                  Investment                       ≤ 80%                           6%

   Reserves
   For the Full/Alt Documentation Process
      Primary – 2 months PITI for purchase only
      Second home – 2 months PITI for purchase and refinance
      Investor – 6 months PITI for purchase and refinance
   For the Stated Income/Verified Assets Documentation Process
       Primary – 6 months PITI for purchase and refinance
       Second home – 6 months PITI for purchase and refinance
       Investor – 6 months PITI for purchase and refinance
   Appraisal
   For loan amounts less than or equal to $1 million, a full URAR is required. If using the Full/Alt
   documentation process, loan amounts in excess of $1 million are allowed provided that two
   appraisal reports are submitted.




July 2004                                                                                        216-5
cvb                                                                   PROGRAM DESCRIPTIONS
CORRESPONDENT MANUAL                                                                          ALT A 216

AUTOMATED UNDERWRITING REQUIREMENTS
DU “Approve/Eligible” and “Approve/Ineligible” recommendations are acceptable, along with LP
Accept and Accept Plus decisions, with the following stipulations:
   • Maximum $700,000 loan amount
   • A DU Approve/Ineligible recommendation is allowed for non-conforming loans only, with ineligibility
      due to loan size
   • Standard documentation (two years employment)
   • Full appraisal report
   • Adhere to credit score, reserve, and MI requirements
   • Maximum 45% debt-to-income ratio
   • Loans processed and/or approved through DU or LP must comply with Loan
      Amount/LTV/CLTV/HCLTV parameters and documentation for the Documentation Process
      selected
   Note: If file does not contain a full two years employment verification, loan must be identified and
   processed under the Stated Income/Verified Assets Documentation Process.

REPRESENTATIONS AND WARRANTIES
In addition to the representations and warranties, terms, conditions and requirements of
Correspondent as detailed in the Correspondent Loan Purchase Agreement and the Correspondent
Manual, Correspondent makes the following representations and warranties when delivering
Expanded A products, as defined in the Correspondent Manual:
   1. That the origination practices utilized by Correspondent with respect to the Loans have been legal,
      proper, prudent and customary for loans of a type and credit quality similar to the Loans delivered
      to CitiMortgage.
   2. In addition to the representation and warranty contained in Paragraph 2(i) of the Correspondent
      Loan Purchase Agreement, Correspondent further represents and warrants that it has reviewed all
      of the statements in the documentation submitted for each Loan submitted to CitiMortgage for
      purchase and has made such inquires as it deems necessary to make and confirm the accuracy of
      the representations set forth therein.
   3. That the Correspondent will promptly notify CitiMortgage of any fact, occurrence, act or omission
      regarding the Loan, the mortgaged property or the mortgagor of which Correspondent had
      knowledge; and which fact, occurrence, act or omission may have a material, adverse affect on the
      value of the Loan delivered to CitiMortgage and/or cause private institutional investors to consider
      the Loan to be an unacceptable investment.
   4. That Correspondent employs staff who are experienced and trained in the proper origination of
      loans of a type and credit quality similar to Loans delivered to CitiMortgage.
   5. That Correspondent has adopted appropriate operating procedures, including risk assessment
      strategies, which are prudent and customary for lenders engaged in the origination of loans of a
      type and credit quality similar Loans delivered to CitiMortgage.
   6. Correspondent represents and warrants that no Loan delivered to CitiMortgage under Expanded A
      Stated Income/Verified Assets Documentation Process shall have been previously been processed
      under a loan program requiring full documentation.

July 2004                                                                                           216-6
cvb                                                             PROGRAM DESCRIPTIONS
CORRESPONDENT MANUAL                                                                   ALT A 216
SPECIAL REGISTRATION INSTRUCTIONS
Program Code for the ALT A process:
       0132 - Full Doc Alt A
       0133 - DU Full Doc Alt A
       0134 - LP Full Doc Alt A
       0135 - Stated Income Alt A

Process Type:
       ALTA

ALT A products are priced using the ALT A daily rate sheet, which includes any special adjustments
other than standard adjusters.




July 2004                                                                                    216-7
                                                                                          EXHIBIT 5


                            CITIBANK ASSESSMENT AREAS WITH MEDIAN INCOME
COUNTY            METRO AREA (MSA/MD)                MSA    ST/CTY   MEDIAN FAMILY INCOME
CALIFORNIA                                                            80%        100%
Alameda           Oakland-Fremont-Hayward            3608   06/001   $65,760    $82,200
Contra Costa      Oakland-Fremont-Hayward            3608   06/013   $65,760    $82,200
Fresno            Fresno                             2342   06/019   $33,663    $42,079
Los Angeles       Los Angeles-Long Beach-Glendale    3108   06/037   $42,800    $53,500
Kern              Bakersfield                        1254   06/029   $37,280    $46,600
Kings             Hanford-Corcoran                   2526   06/031   $35,040    $43,800
Madera            Madera                             3146   06/039   $33,887    $42,359
Marin             San Francisco-San Mateo-Redwood    4188   06/041   $76,000    $95,000
                  City
Merced            Merced                             3290   06/047   $35,120    $43,900
Monterey          Salinas                            4150   06/053   $48,640    $60,800
Napa              Napa                               3490   06/055   $54,261    $67,827
Nevada            N/A                                9999   06/057   $36,612    $45,766
Orange            Santa Ana-Anaheim-Irvine           4204   06/059   $59,360    $74,200
Placer            Sacramento--Arden-Arcade--         4090   06/061   $47,185    $58,982
                  Roseville
Riverside         Riverside-San Bernardino-Ontario   4014   06/065   $43,440    $54,300
San Bernardino    Riverside-San Bernardino-Ontario   4014   06/071   $43,440    $54,300
Sacramento        Sacramento--Arden-Arcade--         4090   06/067   $47,185    $58,982
                  Roseville
San Diego         San Diego-Carlsbad-San Marcos      4174   06/073   $50,720    $63,400
San Francisco     San Francisco-San Mateo-Redwood    4188   06/075   $76,000    $95,000
                  City
San Mateo         San Francisco-San Mateo-Redwood    4188   06/081   $76,000    $95,000
                  City
Santa Clara       San Jose-Sunnyvale-Santa Clara     4194   06/085   $70,845    $88,551
San Luis Obispo   San Luis Obispo-Paso Robles        4202   06/079   $49,360    $61,700
Santa Barbara     Santa Barbara-Santa Maria-Goleta   4206   06/083   $49,360    $64,700
Santa Cruz        Santa Cruz-Watsonville             4210   06/087   $60,240    $75,300
Sonoma            Santa Rosa-Petaluma                4222   06/097   $59,680    $74,600
San Joaquin       Stockton                           4470   06/077   $44,080    $55,100
Stanislaus        Modesto                            3370   06/099   $41,600    $52,000
Tulare            Visalia-Porterville                4730   06/107   $33,680    $42,100
Ventura           Oxnard-Thousand Oaks-Ventura       3710   06/111   $61,920    $77,400

Yolo              Sacramento--Arden-Arcade--         4090   06/113   $47,185    $58,982
                  Roseville


July 2004                                                                                       1/3
                                                                                           EXHIBIT 5


COUNTY            METRO AREA (MSA/MD)                 MSA    ST/CTY   MEDIAN FAMILY INCOME
CONNECTICUT
Fairfield         Bridgeport-Stamford-Norwalk         1486   09/001   $70,148    $87,686
FLORIDA
Broward           Fort Lauderdale-Pompano Beach-      2274   12/011   $46,160    $57,700
                  Deerfield Beach
Dade              Miami-Miami Beach-Kendall           3312   12/086   $36,320    $45,400
Palm Beach        West Palm Beach-Boca Raton-         4842   12/099   $49,680    $62,100
                  Boynton Beach
ILLINOIS
Cook              Chicago-Naperville-Joliet, IL       1697   17/031   $52,088    $65,110
Du Page           Chicago-Naperville-Joliet, IL       1697   17/043   $52,088    $65,110
Kane              Chicago-Naperville-Joliet, IL       1697   17/089   $52,088    $65,110
Lake              Lake County-Kenosha County, IL-WI   2940   17/097   $62,880    $78,601
McHenry           Chicago-Naperville-Joliet, IL       1697   17/111   $52,088    $65,110
MID-ATLANTIC
Arlington         Washington-Arlington-Alexandria,    4789   51/013   $63,953    $79,942
                  DC-MD-VA-WV
Alexandria City   Washington-Arlington-Alexandria,    4789   51/510   $63,953    $79,942
                  DC-MD-VA-WV
Baltimore City    Baltimore-Towson, MD                1258   24/510   $54,880    $68,600
D.C.              Washington-Arlington-Alexandria,    4789   11/001   $63,953    $79,942
                  DC-MD-VA-WV
Fairfax           Washington-Arlington-Alexandria,    4789   51/059   $63,953    $79,942
                  DC-MD-VA-WV
Fairfax City      Washington-Arlington-Alexandria,    4789   51/600   $63,953    $79,942
                  DC-MD-VA-WV
Falls Church      Washington-Arlington-Alexandria,    4789   51/610   $63,953    $79,942
                  DC-MD-VA-WV
Montgomery        Bethesda-Frederick-Gaithersburg,    1364   24/031   $69,951    $87,439
                  MD
Prince George     Washington-Arlington-Alexandria,    4789   24/033   $63,953    $79,942
                  DC-MD-VA-WV
NEVADA
Carson City       Carson City                         1618   32/510   $44,640    $55,800
Churchill         N/A                                 9999   32/001   $42,660    $53,325
Clark             Las Vegas-Paradise                  2982   32/003   $44,874    $56,093
Elko              N/A                                 9999   32/007   $42,660    $53,325
Humboldt          N/A                                 9999   32/013   $42,660    $53,325
Lyon              N/A                                 9999   32/019   $42,660    $53,325
Washoe            Reno-Sparks                         3990   32/031   $48,537    $60,672


July 2004                                                                                        2/3
                                                                                      EXHIBIT 5


COUNTY        METRO AREA (MSA/MD)                MSA    ST/CTY   MEDIAN FAMILY INCOME
NEW JERSEY                                                        80%        100%
Bergen        New York-Wayne-White Plains, NY-   3564   34/003   $43,407    $54,259
              NJ
Essex         Newark-Union, NJ-PA                3508   34/013   $60,561    $75,702
Middlesex     Edison, NJ                         2076   34/023   $60,998    $76,248
Morris        Newark-Union, NJ-PA                3508   34/027   $60,561    $75,702
Passaic       New York-Wayne-White Plains, NY-   3564   34/031   $43,407    $54,259
              NJ
Union         Newark-Union, NJ-PA                3508   34/039   $60,561    $75,702
NEW YORK
Bronx         New York-Wayne-White Plains, NY-   3564   36/005   $43,407    $54,259
              NJ
Erie          Cheektowaga-Tonawanda, NY          1538   36/029   $42,880    $53,600
Kings         New York-Wayne-White Plains, NY-   3564   36/047   $43,407    $54,259
              NJ
Monroe        Rochester                          4038   36/055   $46.882    $58,603
Nassau        Nassau-Suffolk, NY MD              3500   36/059   $68,240    $85,300
New York      New York-Wayne-White Plains, NY-   3564   36/061   $43,407    $54,259
              NJ
Niagara       Buffalo- Cheektowaga-Tonawanda,    1538   36/063   $42,880    $53,600
              NY
Queens        New York-Wayne-White Plains, NY-   3564   36/081   $43,407    $54,259
              NJ
Richmond      New York-Wayne-White Plains, NY-   3564   36/085   $43,407    $54,259
              NJ
Rockland      New York-Wayne-White Plains, NY-   3564   36/087   $43,407    $54,259
              NJ
Suffolk       Nassau-Suffolk, NY MD              3500   36/103   $68,240    $85,300
Westchester   New York-Wayne-White Plains, NY-   3564   36/119   $43,407    $54,259
              NJ
TEXAS
Bexar         San Antonio                        4170   48/029   $39,174    $48,968




July 2004                                                                                   3/3

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:33
posted:8/6/2011
language:English
pages:12