Matrix A T300RP, T304RP, and T300JRP ONLY 1. PRIMARY RESIDENCE Rate & Term Refinance. CLTV/HCLTV Fico score Max DTI Type

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1 The Federal Housing Finance Agency (FHFA) Home Affordable Refinance Program (HARP) is designed to assist borrowers who have demonstrated an acceptable payment history on their existingfannie Mae mortgage loan, but may not have been able to refinance to obtain a lower payment or move to a more stable product. Only Rate/Term Refinance transactions are eligible (E.G. Limited cash out refinance) paying off the existing first FannieMae mortgage, financing of closing costs, and no more than $250 cash back to borrower. FannieMae loan look up table: is provided for reference purposes only. DU will determine if the existing loan is eligible for the program. To be eligible for DU Refi Plus, the note date of the mortgage being refinanced need so be on or prior to May 31, This change is effective immediately for new or existing DU Refi Plus applications. The DU Refi Plus database will be updated the weekend of November 16, 2013 to include the additional mortgage loans that are now eligible for DU Refi Plus. New or existing loan case files underwritten through DU after the weekend of 11/16/2013 and that meet the revised eligibility criteria will be underwritten as DURP. The updates reflected in this product guide are applicable to DU Refi Plus loan transactions with M.I. findings as stated in the Automated Underwriting topic and also meet all of the other M.I. requirements herein stated. Please note: There are two separate product matrices A and B. The higher LTVs are stated on Matrix A and are only permitted for Matrix A T300RP, T304RP, and T300JRP ONLY 1 PRIMARY RESIDENCE Rate & Term Refinance LTV w/ DU REFI PLUS APPROVE for findings on or after 9/12/ Property LTV w/o CLTV/HCLTV Fico score Max DTI Type Secondary Fin. 3 Secondary Fin. 1 Unit SFR or PUD >105% 125% >105% 125% Unlimited Unit SFR or PUD 105% 105% Unlimited 620 DU % 105% 110% 620 DU SECOND HOME Rate & Term Refinance the 20 and 30 year Fixed Rate produ cts. 1 P a g e

2 % 105% 110% 680 DU INVESTMENT PROPERTY Rate & Term Refinance % 105% 110% 680 DU Please refer to Matrix B for other eligible products Eligible only with Accept/Eligible DU Refi Plus findingsexcept for specific B.P.M.I. transactions with certificates that can be transferred or modified by an approved M.I. company. Please refer to specific M.I. topic for details. Subject to Geographic State Restrictions Note: while DU findings may indicate higher LTV/CLTV findings, these parameters must be met. 2 P a g e

3 LTV w/ MATRIX B T301RP, A341RP, A342RP, A343RP, T301JRP and A341JRP Products 1 PRIMARY RESIDENCE Rate & Term Refinance DU REFI PLUS APPROVE 2 Property LTV w/o CLTV/ Fico score Max DTI Type Secondary Fin. 3 Secondary Fin. HCLTV % 105% 110% 620 DU SECOND HOME Rate & Term Refinance 1 105% 105% 110% 680 DU INVESTMENT PROPERTY Rate & Term Refinance % 105% 110% 680 DU 1 Please refer to Matrix A for 20 and 30 year Fixed Rate products 2 Eligible only with Accept/Eligible DU Refi Plus findingsexcept for specific B.P.M.I. transactions with certificates that can be transferred or modified by an approved M.I. company. Please refer to specific M.I. topic for details. 3 Subject to Geographic State Restrictions Note: while DU findings may indicate higher LTV/CLTV findings, these parameters must be met 3 P a g e

4 TOPIC CRITERIA Ability to Effective with all loan applications dated on or after January 10, 2014 (Retail) or applications received on or after January Repay and 10, 2014 (Wholesale), all loans must meet the Ability to Repay and Qualified Mortgage provision of the Dodd Frank Act. Qualified Please refer to SPM Compliance for further details and/or questions Mortgage Rule ARM Products Margin: Libor Index: 2.25% Life Floor: The life floor will never be lower than the margin Index: Libor Index = the average of interbank offered rates for one year in U.S. dollar denominated deposits in the London market (Libor) as published in The Wall Street Journal. Payment Adjustment Date: 1 st payment change date is the first month following the interest rate adj. and every 12 mos. thereafter. Life Cap: 5/1, 7/1 & 10/1 5% over the Note Rate. Interest Rate Adjustment Cap and Date: o 5/1 ARM: Interest rate is fixed for the first 60 months. The maximum interest rate adjustment at the first adjustment date is 5% maximum first time adjustment. Thereafter the interest rate adjusts annually with a maximum interest rate change of 2%, which will not cause deferred interest. o 7/1 ARM: Interest rate is fixed for the first 84 months. The maximum interest rate adjustment at the first adjustment date is 5% maximum first time adjustment. Thereafter the interest rate adjusts annually with a maximum interest rate change of 2%, which will not cause deferred interest. o 10/1 ARM: Interest rate is fixed for the first 120 months. The maximum interest rate adjustment at the first adjustment date is 5% maximum first time adjustment. Thereafter the interest rate adjusts annually with a maximum interest rate change of 2%, which will not cause deferred interest. Note: The interest rate must always be rounded to the nearest 1/8 th of 1% (0.125%) o Qualification: 5/1 ARMS qualify at the greater of Fully Indexed or Note Rate +2 %. 7/1 & 10/1 ARM: Qualify at the Note rate. ASSUMPTIONS Not allowed 4 P a g e

5 TOPIC AUTOMATED UW Borrower Eligibility Cash Back Limitation Cash Reserves /Assets CRITERIA Approve/Eligible: ExpressLoanDU REFI PLUS A/E Finding is required. DU finding will state the following message: o This loan case file was underwritten according to the DU Refi Plus expanded eligibility guidelines offered on certain limited cash out refinance loan case files where the borrower s existing loan is identified by DU as a Fannie Mae loan. This loan case file must be delivered with Special Feature Code 147. o Loans with >80% LTV requiring M.I: Certain loan transactions with existing B.P.M.I insurance from an SPM approved MI company may be eligible for financing. The DU finding will read: Fannie Mae s records indicate that the existing Fannie Mae loan being refinanced with this DU Refi Plus transaction contains the following mortgage insurance (MI) information MI Provider MI Coverage Obtained MI Certificate Number (Will state specific MI co) (Will indicate the % of insurance coverage) (Discloses cert. #) To be eligible for financing with existing B.P.M.I: ALL of the criteria listed in the M.I. topic must be met exactly as stated. The Loan Originator (LO) is responsible to obtain and validate certain information from the M.I. issuing company prior to submission (E.G. the DU findings will not indicate all of the necessary M.I. details). This specific information as stated in the M.I. topic under Originator Responsibilities must be provided in the submission package exactly as required. Exceptions to the policy requirements are not available.please refer to M.I. topic for complete details and requirements. Accuracy of both the Borrower and Subject Address input is required. o DU matches Borrower(s) Social Security Number(s) with the FannieMae loan. o FannieMae guidelines for entering correct standardized property address (including applicable unit number) must be followed. LTV/CLTV/FICO requirements must be met as stated in applicable product matrix regardless if findings permit a higher LTV/CLTV. Please note that a loan may lose eligibility if the AUS is reran and there have been significant change (i.e. MI rescinded, current mortgage delinquent, etc. as both FHLMC & FNMA update their databases on a monthly basis) Refer to FannieMae DURP guidelines Benefit to the Borrower is required. o DU cannot determine if FannieMae requirements are met, therefore, the UW must represent and warrant that the borrower is receiving a benefit from refinancing as stated in FannieMae guidelines o Asset and income doc requirements apply payment increase is >20%. o Adding Borrowers: Permitted as long as one of the original Borrowers is retained on loan o Removing/Deleting Borrower: Permitted as long the existing Borrower(s) is retained Permanent Resident : o If the borrowers on new loan are the same as the borrowers on existing loan, no verification of residency status required o If the borrowers on new loan are not the same as the borrowers on existing loan are not the same, SPM residency policy applies Non Permanent Resident: o If the borrowers on new loan are the same as the borrowers on existing loan, no verification of residency status required o If the borrowers on new loan are not the same as the borrowers on existing loan are not the same, SPM residency policy applies Borrower may receive cash back at closing $ Any excess cash representing the difference between the estimated and the actual payoff of the original loan plus closing costs and prepaid fees that is more than $250 must be applied as a principal curtailment to the new mortgage or a reduction in the actual loan amount. Fannie Mae policy B applies As per DU findings and DU Refi Plus documentation requirements. As stated in DU Ref Plus guidelines: o large deposits appearing on account statements do not need to be investigated. o proof of liquidation of assets is not required even if those assets are used by the borrower to pay closing costs. 5 P a g e

6 TOPIC Condo/PUD Approvals CREDIT ELIGIBILITY CRITERIA FOR DURP LOANS ESCROW WAIVERS INCOME DOC REQUIREMENT. CRITERIA Condo or PUD project reviews: Not required. Limited Reps & Warrants: UW is required to represent and warrant: Property is not in a condominium hotel or motel or cooperative hotel or motel. Property is not in a houseboat project or a timeshare or segmented ownership project Insurance requirements are met If an appraisal report is obtained, and indicates the subject project consists of an in complete conversion and/or there is a presence of a rental office for unconverted apt. units, the project will not be eligible for DU Refi Plus regardless of DU findings. Condo/PUD type: Condo type V and PUD type E must be selected and accurately reflected on 1008 DU will not apply FICO score requirement for DU Refi Plus: UW must ensure the min FICO scores are met for applicable Product Matrix o Previous SPM requirement for 0 x 30 day Mortgage late history in the past 12 months is hereby removed o Borrowers whom have applied for or received a loan modification may be eligible to refinance under DU Refi Plus o The standard waiting period & re establishment of credit criteria following a bankruptcy, foreclosure, deed in lieu or Preforeclosure sale is being removed for DU Refi Plus loan casefile. DU will issue a message on loan casefiles for borrowers with significant derogatory credit letting the lender know that DU did identify the event and that the loan casefile would be eligible for delivery to FNMA, regardless of when the event occurred. o If DU is reading a short sale or foreclosure incorrectly, as of 9.1, the UW has the ability to override the DU and make the corrections in the Declarations section just like any regular DU 9.1 loan< Please refer to applicable DU Refi Plus guidelines DURP loan eligible: DU Refi Plus guidelines are posted in FannieMae sections B through B E FannieMae website has also posted numerous FAQ s for DU Refi Plus and HARP /23/2013 Effective immediately FNMA revised the eligibility date to be based on the note date of the original loan, on or prior to May 31, 2009 for all new and existing applications. o All DURP requirements stated in product guide must be met including, but not limited to Acceptable DU Refi Plus and ExpressLoan findings, applicable MI messages, LTV/CLTV parameters, credit, income, appraisal and documentation criteria. o The new loan amount must meetrate/term Refinance (E.G. Limited cash out refinance) criteria: ONLY paying off the existing first FannieMae mortgage, plus financing of closing costs, and no more than $250 cash back to borrower The UW must enter only the balance of the first mortgage being paid off with the new transaction on line d., Refinance of the Details of Transaction section of the loan application. This amount must match the balance of the mortgage being paid off, as shown in the liabilities section of the loan application. Escrow shortages, delinquent property taxes, delinquent HOA dues etc. may NOT be included in the loan amount DURP loan ineligible: o Any loan not meeting eligibility criteria herein stated o Loan products not specifically listed as being eligible, including but not limited to: 10 Year Fixed Rate, & 3/1 ARM o Loans secured by properties ineligible for SPM financing include, but not limited to: Florida Condo s, Coops, Manufactured Homes, etc. Escrow waivers are not available. Standard SPM Escrow/Impound policy applies. Per DU findings and DU Refi Plus documentation requirements All income must be validated with processed #4506. An additional signed #4506 is required at closing 6 P a g e

7 GEO RESTRICTIONS Geographic restrictions may apply. Please refer to the Geographic Restrictions posted on SPM website. Because DU is unable to determine if a DU Refi Plus loan casefile is an HPML loan, it is the Lender s responsibility to make the determination, and comply in all respects with Regulation Z requirements for HPML loans as follows: Primary & 2 nd Homes ( Investment Properties are exempt from HPML) DU Approved/Eligible only No Manual UW Maximum DTI ratio of 45% Impounds Required (regardless of LTV) Prohibition on ARM loans with an initial fixed rate period of < 7 years (7/1 ARM eligible) Full Credit, Asset, and Income Documentation Full Income Documentation as noted below Higher Price Mortgage Loans HPML All Employment Income Base Pay (salary or hourly) Bonus & Overtime Income Commission Income Self Employment Alimony or Child Support Rental Income Retirement & Pension Verbal Verification of Employment See B For Verbal Verification of Employment full requirements 1 Paystub Applies to primary, secondary (2 nd job & multiple jobs), and seasonal employment 1 Paystub or 1 year personal tax return Applies without regard to the % of commission earnings 1 year personal tax return Applies to primary & secondary self employment Copy of divorce decree, separation agreement, court order or equivalent documentation, and 1 month documentation of receipt Lease or 1 year personal tax return (Form 1007 is not required) Applies to rental income from subject or other properties owned by the borrower One of the following: Award Letter, 1 year personal tax return, W 2 or 1099 form, or 1 month bank statement reflecting direct deposit. Social Security One of the following: Award Letter, 1 year personal tax return, Form SSA 1099, or 1 month bank statement reflecting direct deposit 7 P a g e

8 Temporary Leave Income All Other Income Types: Automobile Allowance Boarder Income Capital Gains Income Disability Income Long Term Foreign Income Foster Care Income Interest & Dividends Income MCC Mortgage Differential Payments Income Notes Receivable Income Public Assistance Income Royalty Payment Income Tip Income Trust Income Unemployment Benefits Related to Seasonal Employ VA Benefits Income Lender must receive: The borrower s written confirmation of his/her intent to return to work, and No evidence or information from the borrower s employer indicating that the borrower does not have the right to return to work after the leave period. Regardless of the date of return, the amount of the regular employment income the borrower received prior to the temporary leave must be used to qualify Lender must determine appropriate documentation. Examples include (but are not limited to): An award letter or equivalent 1 paystub or equivalent documentation 1 year personal tax returns IRS 1099 Form 1 month bank statement reflecting direct deposit An agreement/contract Full Asset Documentation as follows: Checking Accounts Savings Accounts Certificates of Deposit Money Mark One recent statement (monthly, quarterly, or annual) showing asset balance 8 P a g e

9 Accounts Stocks, Bonds, Mutual Funds Retirement Accounts Trust Accounts Secured Borrower Funds Donations from Entities (Hardest Hit Fund) Gifts Full Property Appraisal Report(1004, 1073, 1025) as per property type no reduced valuation tool No Appraisal Delivery Waivers allowed file must document full compliance with ECOA Appraisal Delivery Regulations effective 01/18/20014 Loan Term MAX FINANCED PROPERTIES MAXIMUM LOAN AMOUNT Loan Terms are only available as stated in the project header at the top of the page. There is no 25 year fixed rate term available. No Limit regardless of occupancy type as per DU Refi Plus guidelines Standard: Subject to standard Fannie Mae loan limits High Balance/Jumbo: Subject to currenthigh Balance/ Jumbo loan limits regardless if original FNMA loan was originated at a higher loan amount that was permitted at that time. 9 P a g e

10 TOPIC MORTGAGE INSURANCE (BPMI transfer/mod of M.I. cert) CRITERIA SPM will permit the assignment/transfer/modification of an existing Borrower Paid M.I. (BPMI) policy from the current loan to the new loan for transactions >80% LTV from SPM approved M.I. companies. Eligible M.I.: BPMI (monthly) Ineligible M.I.: Any type of M.I coverage LPMI, HPMI, financed or single paid premium or M.I. certifications from companies not deemed an SPM approved company will not be eligible. ALL of the criteria must be met exactly as stated herein. Exceptions to these policies are not available. Approved companies: The DU findings must identify the insuring company. It must be one of the specifically SPM approved M.I. companies: Either Radian, MGIC, Genworth, or (UGICfor loans in processprior to ) o New M.I. certification option is not available. o Only the existing M.I. company listed on the DU finding will be able to transfer or modify the existing M.I. cert Ineligible insuring M.I. companies: PMI, Triad and RMIC. UGIC will be an ineligible company for new loans after (Note: Essent is not participating in this program). M.I. DU findings: Must be received exactly as illustrated in the Automated Underwriting topic. o The DU findings will NOT indicate the type of M.I. present on the current loan: Prior to loan submission, the Originator is responsible to contact the individual company listed on the DU findings to ensure that the current policy consists of an eligible Borrower Paid (BPMI) as stated in the Originator s responsibility section outlined below. o Level of MI coverage stated in DU findings MI Coverage Obtained will be acceptable subject to the M.I. Company s confirmation as outlined in below Originator Responsibility requirements. (Refer to Automated Underwriter topic for example) Originator s Responsibilities: Requirements must be completed PRIOR to loan submission without exception: o Ensure the M.I. policy reflected on DU findings was issued by one of the SPM approved companies listed above. o Contact issuing M.I. company listed on DU findings and obtain/confirm all of the following required information: Existing policy is an active/valid, policy AND Coverage type consists of Borrower Paid Mortgage Insurance (BPMI) AND The BPMI policy is transferrable/eligible for modification AND Obtain the factors for first 10 years and factors for remaining term o Certify in the loan submission package that: M.I. Company was contacted and all required information was confirmed with the issuing M.I. Company. The Originator s cert must include the exact and complete information for all FOUR requirements stated above. DURP Loan Originator s Certification of MI Information form posted on Doc Library website under Submission/Doc Draw tab. o ExpressLoan must be ran with the M.I. company provided factors Note: The Mortgage Insurance company may deny the request to modify or assign/extent the coverage due to any of the following reasons: No active certificate Certificate cancelled for LTV drop Eligibility requirement stating one of the borrower s must be present on the current certificate Current MI certificate is reported as delinquent in a CAT 10 or greater MI company is not the current MI provider Approved M.I. contact information: Note: The individual company may have a different processes or requirements for disclosing this information. Any specific company s requirement posted herein is provided strictly as a courtesy and may be subject to their revisions or changes. o Radian: Customer Care #: o MGIC: Customer Service #: o Genworth: Genworth Action Center #: P a g e

11 Continued on following page TOPIC MORTGAGE INSURANCE (transfer/mod of M.I. cert) NON Occupant CO BORROWERS PREPAY PENALTY SUBORDINATE FINANCING CRITERIA Continued from previous page o UGI: Customer Quality Center: Signed 1003 or Third Party Authorization form (available on their website) is required Completed form or 1003 must be sent to: loanmods@ugcorp.com Website information: Note: UGI information is being retained as a courtesy for loans already in process prior to Premiums:The SPM approved MI companies listed above have the same process with regard to the MI premium transfer. o Monthly BPMI: For borrower paid monthly premiums, the premium rate on the existing MI cert remains the same. The monthly payment will be based on the new loan amount. The new loan amount may be higher or lower than the original loan amount. Monthly gap coverage owed may be required to be collected at closing. State tax/assessment fees may apply and must also be collected at closing. MI cert must be accurately reviewed to ensure the loan is closed correctly. SPM personnel: must follow the individual M.I. company s procedure to ensure the cert will meet FannieMae requirements including, but not limited to: o If a change or update occurs on the loan file (E.G. the loan amount increases or decreases), the request form must be re sent with the updated information. o Ensuring that the M.I approval document matches the information on the DU cert: Loan #, New Loan Amount, Borrower s Name, Property address, MI cert #, monthly payment (if applicable), amount and type of MI coverage Discrepancy in Premium Coverage: If the M.I. Company confirms different coverage than reported in DU, Fannie Mae has confirmed that the coverage currently in effect will be the accurate MI coverage. Therefore, the MI coverage per the MI cert should be used to close the loan. o Any amount due at closing must be taken into consideration Non occupant co borrowers are permitted There are no prepayment penalties Existing financing is permitted subject to CLTV parameters stated in matrix. New subordinate financing and/or paying off/paying down existing subordinate financing with loan proceeds is not allowed. Payoff of existing subordinate liens from the borrower's own funds is allowed and may occur within the DU Refi Plus refinance transaction. (E.G. it can be reflected on the HUD 1). Documentation sourcing the funds used for the pay off of the lien must be provided. Refer to Fannie policy for additional information 11 P a g e