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CalSTRS Home Loan Program Special Programs

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  CalSTRS Home Loan Program
       Special Programs
                                 Built On…
                                 Knowledge, Commitment,
                                 and Trust Since 1988
                                                          About CalSTRS!


    •   CalSTRS History
    •   Loan Officer Certification
    •   General CalSTRS Home Loan Program Guidelines
    •   Standard Conventional Product Guidelines
    •   80/17 Product Guidelines
    •   Rate Locks and Float Downs
    •   Fees
    •   CalSTRS Marketing Guidelines
    •   CalSTRS Web site
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                                                                  CalSTRS Home
                                                                   Loan Program


    • The CalSTRS Home Loan Program was created in 1984 and
      restructured in July of 2004.
    • Bank of America is the Program Administrator since July of 2004, with
      approved mortgage correspondents that originate, package and
      deliver closed loans on behalf of the CalSTRS Member.
    • The Program was designed to offer CalSTRS members a great choice
      of mortgage loans with competitive rates, along with first-class
      service.
    • Borrower Advantage:
       – Borrower’s Money Works for the Pension Fund
       – Borrowers can obtain a great loan with a competitive rate—and their money
         works for them, since “Income derived through the Home Loan Program
         goes directly into the California State Teachers’ Retirement Fund.”
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                                                  New Requirements
                                                   for Loan Officers


    • CalSTRS is enforcing additional requirements to
      lenders who originate loans under their program. This
      is to ensure the loan officer is knowledgeable of the
      program.
    • Unique id's will be assigned by Land Home for each
      CalSTRS approved loan officer.
    • Mandatory training for each loan officer and processor
      (conducted by lender).



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                                                            CalSTRS Home
                                                             Loan Program


    • Standard Conventional Product
    • 80/17 Product




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                                                              General CalSTRS
                                                                   Guidelines


    • Eligible Properties
       –   Properties must be located within the State of California
       –   Owner occupied
       –   Principal residences
       –   Manufactured homes are not eligible
       –   Condos meeting Fannie Mae eligibility requirements
       –   No unpermitted additions or conversions to property




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                                                            General CalSTRS
                                                                 Guidelines


    • Eligible Borrowers
       – A member of the California State Teachers' Retirement System
       – Employees of a California public school district
       – Employees of a CA Community College
       – CalSTRS Employees
       – As proof of eligibility, a copy of a CalSTRS benefits statement, or a
         pay stub or VOE from a California public school district must be
         included in the file sent to underwriting at time of loan submission.
       – Borrowers must have a valid social security number



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                                                        General CalSTRS
                                                             Guidelines


    • Temporary and permanent buy-downs are not
      permitted
    • Loans are not assumable
    • No prepayment penalties are allowed
    • Alt docs (paystubs, W2’s, bank statements, etc.) are
      permitted, according to Fannie Mae and Freddie Mac
      guidelines.
    • Appraisal or property inspection required according to
      AUS cert, unless waived by AUS cert (fee assessed)

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                                                          Standard
                                                Conventional Loans


    • Purchases
    • Refinances (including Cash Out Refi’s)
    • 15 and 30 Year Fixed Rate Conforming




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                                            Standard Conventional
                                                   Loan Summary


                                                Owner-occupied 2- to 4-units; attached and
Eligible Properties                             detached SFRs; condos; and PUDs

Term                                            15 or 30 years

Conforming Loan Amount                          Up to $417,000

Loan-to-Value (LTV) of 1st Mortgage             95%

Down Payment                                    Standard Fannie Mae Guidelines

Sources of Closing Costs                        Standard Fannie Mae Guidelines




                      AMX – Infusing the Power of X in Everything We Do!
                                          Standard Conventional
                                              Conforming Loans


•   Loan Amounts up to $417,000
•   LLPA’s are required for loan characteristics, adverse market, and escrow
    waiver. The LLPA’s are the same as what is in use by Fannie Mae.




                    AMX – Infusing the Power of X in Everything We Do!
                                               Standard Conventional
                                              Underwriting Guidelines


     • Homebuyer education is not required
     • Non-occupant co-borrowers and co-signers are permitted
     • 5% minimum down payment from borrowers own funds
     • Closing costs may be paid by third party
     • Borrowers may not own other property.
     • Non-permanent resident aliens are eligible
     • CalSTRS will not require impounds on the Conventional Standard
       product loans if the LTV is below 89%
     • Conforming:
         – Ratios : Standard Fannie Mae/Freddie Mac Guidelines
         – Reserves: stricter of 2 months or AUS instruction

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                                          Mortgage Insurance



• Required on all loans exceeding 80% LTV
• Any Bank of America approved MI Company is
  eligible to insure first mortgage loans.
• Standard Fannie Mae required MI Coverage




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                                                                        80/17 Loans


     • Purchase Transactions
     • 30-year Conforming Loans




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                                                      80/17 Loan Summary



                                         Owner-occupied SFRs; approved condos; approved attached and
Eligible Properties
                                            detached PUDs
Term                                     30 years (1st and 2nd mortgages)
Conforming 1st Loan Amount               Up to $417,000
Loan-to-Value (LTV) of 1st Mtg           80%
Loan-to-Value (LTV) of 2nd Mtg           17%
Max CLTV of 1st and 2nd Mtgs             97%
Down Payment                             3%
                                         Borrower’s own funds, seller contributions up to 3%, gift from
Sources of Closing Costs
                                         relative, or unsecured grant from approved government agency
2nd Mortgage                             Deferred payments on the 17% 2nd mortgage for the first 5 yrs
Loan Level Price Adjustments             Refer to CalSTRS Price Guide




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                            80/17 Second Mortgage Loans


     • Interest rates for the second mortgage loan carries the same rate
        as the first mortgage
     • 30-year term with a five-year deferred payment structure
     • Simple interest calculation will be used for years 1 through 5, no
        principal or interest payments shall be due during the first 5
        years / 60 months.
     • CalSTRS Note and Deed must be used
     • Year 6 / Payment Number 61:
        – The accrued simple interest balance from the deferral period will be added
          to the original loan balance.
        – The new loan amount will be amortized over the remaining 25 years / 300
          months, and the borrower will then make monthly payments for the
          remaining life of the 2nd loan.

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                                                         80/17 Second Loan
                                                    P&I Calculation Example


     • Interest                                             • Example
                                                                  $59,160   loan amount
       Interest will be charged at the rate of                    x     7% interest rate
       _________________________________                          _________
       percent (_______%) on the unpaid principal                 $4141.20 accrued interest
       until the full amount of principal has been                x     5    yrs deferral period
                                                                  ________
       paid. I will pay simple interest until one month           $20,706.00 total accrued interest for 5yrs
       before the first payment date shown in
       Section 3(B) and then compounded interest                  +$59,160.00 original loan balance
       until the earlier of the Maturity Date (as                 __________
       defined below) or the date this Note is repaid             $79,866.00
       in full.                                                   + $ 147.49 13 days of interest from
                                                                     7/19/2007(sett date) on 08/01/2007
                                                                     (one month prior to 1st payment)
                                                                  __________
                                                                  $80,013.49

                                                                  $80,013.49 amortized for 25 years = $565.52


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                                                     80/17 Loans




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                              80/17 Underwriting Guidelines


     •   Homebuyer Education is required for 1st Time Homebuyers
     •   Borrower(s) can not own any other property
     •   Non-occupant co-borrowers and co-signers are not permitted
     •   3% down payment is required, a minimum of 1% must come from the
         borrower’s own funds. Remainder may come from:
           – Gift from a relative if repayment is not required
           – Grant from a government agency or an employer- assisted housing
               program, which has been approved by Bank of America
     •   Title Policy for 80/17 must cover 1st and 2nd loan amounts, including
         recording info of 2nd
     •   CalSTRS will requires impounds on all 80/17 loans.
     •   Non-permanent resident aliens are eligible
     •   Credit score of 640 is required for all combined loan amounts up to
         $400,000
     •   Credit score of 740 is required for all combined loan
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         amounts between $400,001 to $417,000
                          AMX – Infusing the Power of X in Everything We Do!
                         80/17 Underwriting Guidelines



     • Conforming:
       – Ratios: Standard Fannie Mae/Freddie Mac guidelines
       – Reserves: Stricter of 2 months or AUS instruction




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                                                   AUS Findings




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                       80/17 Underwriting Guidelines



     • The 80/17 loans run through DU.
     • Indicate that the second 17% mortgage is a Community
        Second Program in DU for a more favorable finding




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                                                                  Allowable Fees


     • Origination Fee:
        – 1.00% Standard Conventional
        – 1.25% 80/17 (only on 1st loan)
     • Discount Points:
        – Not allowed
     • Other Closing Costs:
        – Normal and customary fees are allowed including the appraisal fee,
          credit report fee, survey fee, title insurance premium, and other
          closing, costs as permitted by the respective agency such as Loan
          Level Price Adjustments (LLPA’s).

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                                                        Fannie Mae Fees



     • All CalSTRS Conforming conventional loans are
       subject to the Fannie Mae 0.25% Adverse Market
       Delivery Fee and the new loan level pricing
       adjustments per LTV and Credit score.
     • Fannie Mae Adverse Market Delivery Fee and Loan
       Level Pricing Adjustments




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                                                CalSTRS Interest Rate
                                                 Lock and Float Down


     • Interest Rate and Lock Period:
        – Programs priced daily by CalSTRS, posted on CalSTRS Website
        – 45 day rate lock, loans A one time free 15 day extension is
          available.
     • Float Down Opportunity:
        – One-time free float down. Float down must be locked with CalStrs
          same day. Requests for float downs with prior dates will not be
          honored.
        – The float down may occur at any time during the 45-day lock period
        – The float down is not available after the 15-day extension period is
          exercised, regardless of when the extension is taken

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                            Rate Locks and Commitment


     • Locks for the 80/17 1st and 2nd mortgages must be
       made concurrently
     • Property changes require a new lock
     • There is no fee for cancellations - All loans that will not
       be delivered must be cancelled
     • Loans may be locked with normal Land Home locking
       process through PC Lender.




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                                                  Marketing Guidelines


     All marketing materials must be approved by Bank of America and
     CalSTRS. Marketing materials include hard copy advertisements (e.g.,
     flyers, letters, ads, bulletins, etc.) as well as electronic advertising.
     Please do not post any CalSTRS advertising without prior approval from
     our marketing dept.
     You must be CalSTRS certified to in order to advertise CalSTRS
     products.
     For CalStrs approval please contact Eileen Daley at
     edaley@lhfinancial.com
     For Marketing Materials, please contact marketing@lhfinancial.com


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                                 PCLender Program Codes


     • CSTRS30-000                   CalSTRS Fixed 30
     • CSTRS8017-000                 CalSTRS Fixed 30 (80/17/3)
     • CSTRS2nd8017-000              CalSTRS Fixed 30 Yr. 2nd (80/17/3)




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                   AMX – Infusing the Power of X in Everything We Do!
                                  CalSTRS Website




                                    • www.calstrs.com
                                     Home Loan Program




AMX – Infusing the Power of X in Everything We Do!
AMX – Infusing the Power of X in Everything We Do!




                                 1355 Willow Way, Suite 250
                                    Concord, CA 94520

                                      Phone: 800-522-5263




             Equal Housing Opportunity Lender. AMX is a Division of Land/Home Financial Services, Inc.
 CFL Finance Lender/Broker #605-2040. NMLS# 1796. Land/Home only conducts business in states we are licensed in.

				
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