Broker and Correspondent Training

Transcription

1 Broker and Correspondent Training

2 Flanagan State Bank headquarters is located in Flanagan, IL. The bank was founded in 1913 and has been family owned/operated since the 1930 s by the Schwerin family. FSB is a bank that believes in providing the best possible customer service. We do not believe in going just half way and will commit to taking care of our customers 100% Our TPO Division continues to cultivate new investors and agencies to provide the best possible programs and rates that we can.

3 Programs FHA USDA VA Conventional Services Appraisal Department Scenario Review Income Analysis Q & A Quick Underwriting Forms & Docs Loan Officer Marketing Materials Contact Information Helpful Links Program Information

4 Correspondent Closes loans in their company name Funds their own loans that are closing in their name using a warehouse line, funding line or own funds Does not disclose YSP/SRP FSB will purchase the loan from them after delivery of the closing package Broker Loan closes in Flanagan s name FSB funds are used to fund the loan Disclosure of LPC required Loan is funded at time of closing if a purchase or recission if a refi. For most of our customers, a combination of both Corr and Broker is used due to FHA

5 Rate sheets are distributed via every morning and then as rates change throughout the day Available on our website at Off sheet pricing available for Jumbo loans, high balance FHA & VA loans

6 USDA Loan Scenario - $85, loan amount, 649 credit score, IL property, waiving underwriting Work your way backwards to the profit your company identifies as needed from each transaction. IF your company designates your profit should be 2.75 Lender Paid, start adding your adjustments up first. For this scenario that would equal: Loan Size N/A Credit Score State Location N/A Waiving Underwriting Fee Total Adjustments = Now add your anticipated compensation to the total adjustments = 4.50 Your rate must cover at a minimum or it will result in a discount being paid by the borrower. Looking at the rate sheet in your hand outs, this would put the rate offered at: 4.375% paying (30 day lock) subtract your adjustments/comp needed and you are left with.248 credit to the borrower towards closing costs or rate extensions.

7 FSB does not set any limits on Borrower Paid Compensation. However, the loan must pass the final Points & Fees Test or fees will be reduced at closing. Pricing will work similar to the screen before, but compensation will not be reduced from the yield on the rate. The remaining yield left on the rate will be provided to the borrower as a credit, but the credit CANNOT be used towards the Borrower Paid Origination Fee showing on the GFE. It can be used for all other closing costs except the origination fee.

8 Please note: FSB s lowest loan amount is: $30,000 on USDA $35,000 on FHA/VA $40,000 on Conventional

9 The Correspondent customers do not have Lender Paid Compensation. They do not have to disclose the yield earned on the rate on the GFE/TIL They are limited only by max pricing on the program/rate sheets for each program. Please note USDA is limited to FHA/VA is limited to Conventional is limited to The max pricing is after adjustments! Corr files may charge Upfront fee and earn yield on rate

10 All locks are completed online within the file you are locking Once locked within the file, an confirmation will be sent to confirm pricing Off sheet pricing for Jumbo and High Balance VA/FHA loans is available Pricing is subject to change as the market changes, always confirm pricing either using online pricing/scenario Pricer or have the most recent rate sheet

11 LO or Processor begins file in Mortgagebot Upload of FNMA 3.2 or manual entry file Registration of File is completed Loan can be locked at this time, if desired Submission Package is uploaded for review Loan is finaled to notify Underwriting Department loan is ready for review File is received in Underwriting Jr Underwriters pick up file in order of receipt and sort/label documents for UW to review. All reports are ordered Jr Underwriters complete compliance review of file and condition accordingly Loan is sent to UW for credit underwriting Underwriters review and condition for PTC and PTF items needed File is sent back to Jr UW s to deliver Conditional Approval to LO/Processor File is received for resubmission Conditions are sorted and labeled by the Jr. Underwriter. Compliance Conditions are reviewed by the Jr UW and signed off if provided Jr UW sends loan to UW for condition review UW clears conditions and sends updated approval to Jr UW Jr UW delivers update Conditional Approval to LO/Processor Resubmission of conditions (consecutive attempt) Same pattern as above If loan is USDA: all conditions are met, file is sent to USDA office for CC If all conditions are met, UW will FINAL loan clearing all conditions Loan is sent back to Jr UW to confirm all Compliance conditions are cleared. If all are cleared CTC can be issued. is sent to LO/Processor confirming CTC or requesting items needed for CTC Clear to Close LO/Processor to send Closing Request Form to Closing Department via Closer will confirm receipt of document and closing date Closing Instructions are sent out at least 24 hours prior to closing or per closing request HUD to be approved on all brokered loans prior to closing package sent to Title Company Wire for broker funded loans is sent 24 hours prior to closing Post Closing (Correspondent) If a loan is a Corr that is closing, the closing package is to be uploaded in the Mortgagebot file The original Allonge, Note and Bailey Letter is to be sent to the TPO Division Headquarters The LO/Processor will the Correspondent and notify them the package is ready for review The Jr UW will review and advise if all is in file for Purchase The file and originals must be delivered prior to the lock expiring

12 Tips and Tricks to getting your file through our underwriting review quickly

13 One of the most common things we see in underwriting is the 1003 having missing information or inaccurate information. It is very important that the application contain ALL the boxes filled in, not just some of them The next few slides will provide insight into the most common errors that show up on a 1003 and these errors will add conditions to your approval that tie up your time and could be avoided

14 The highlighted section should be accurate and match the GFE/TIL. If a Joint account, the top section should be signed by both applicants. The refinance section should only be completed IF a refinance and all sections should be completed.

15 It is important to list their current address and any addresses the borrower/co-borrower may have had over the past 2 years. If the address does not match the Driver s License that is submitted, the underwriter will require an LOX. If RENT is marked in the residence history, a VOR will be requested. If Own is marked in the residence history, the REO section should contain coordinating information. IF the applicant does not rent or own, neither should be marked and an LOX from the borrower should be included noting the circumstances of the housing for the borrower. All forms that show a section for initials or signatures must be fully executed to meet compliance requirements.

16 The employment history section must be completed in detail. Any missing information will result in conditions from the underwriter to complete the section. Phone number should be accurate and not a number that will reach the borrower. This number will be used to complete the Verbal Verification of Employment that will be completed within 48 hours of closing. If a borrower has multiple W-2 s for the most recent 2 years, all W-2 employment must be listed on the Dates must be correct and a verification may be requested at the discretion of the underwriter.

17 Monthly Income and Housing Expense Accurate income is always crucial in a mortgage loan. Income should be broken down according to its correct classification and not lumped together if containing OT, Bonus or Commission. SSI can be grossed up according to the tax bracket chart and will be listed under Other Income. Self employment income will also be referenced in this section. If rent/own are checked in the residence history, then Present Housing Expense must be completed. This section allows the underwriter to verify how much payment shock the borrower will experience. Proposed housing should include the full PITI payment that the loan will generate.

18 Assets: If assets are listed in the application, then 2 months bank statements MUST be provided. Bank statements will also be required regardless if on application or not when verifying fixed income, down payment funds (to verify borrower used own funds for Earnest Money Deposit if cancelled check not provided) or cash to close is noted in details of transaction. If bank statements note NSF, overdrafts or other negative activity on accounts, UW guides do note that this is financial mismanagement and will not approve the borrower for a loan. It is important that the Loan Officer/Processor review statements prior to submission to underwriting. If the circumstance was a one time occurrence, an exception may be made based on the reason for the NSF. Liabilities: Must all be included that are on the credit report and any that might not report on the report, but should be a part of the DTI. Paystubs should be reviewed for child support garnishments prior to underwriting submission.

19 Under Assets Section, many LO s will list household goods and Automobiles in this section. For the purposes of mortgage loans, this information is not required. Liquid assets are more important to an application than non liquid assets. Alimony, Child Support, Maintenance will required documentation to support. A divorce decree and verification of children s ages are basic documents needed. Job related expenses: Listed here will be union dues, unreimbursed expenses taken from tax returns and other misc amounts that are the borrower s responsibility based on their employment. These are recurring expenses. Unreimbursed expenses are typically a surprise to the LO and 8 out of 10 times a deal killer. FSB strongly suggests requesting the tax returns from the borrower to verify there are not any surprises before it is underwritten.

20 REO Section Full disclosure of properties owned is required. This should include lots, land, commercial property, residential property, etc. USDA is very specific about a borrower only retaining a single residential property in addition to purchase the new one. They must qualify with BOTH PITI payments. Properties that are pending sale or recently sold should be referenced in this section, too. Free & Clear properties must be documented so the underwriter can see that the property truly is Free & Clear PITI must be proven on all properties either through tax returns (Schedule E or mortgage statements, tax statements and proof of HOI)

21 Details of transaction: a) Purchase price should match the contract b) If escrow is being held for repairs to property, include this amount here. c) N/A only for construction lending d) If a refi debts to be paid off should transfer to this section from marked to be paid liabilities e) Prepaid items as showing on GFE f) Closing costs as showing on GFE g) Government Loan Fee as applicable h) Discount points if applicable i) Total costs of transaction j) DPA/Grant will show in this box k) Closing costs paid by seller per contract l) Other Credits such as property tax credit, broker credit, etc will reflect here m) Base loan amount n) Government Loan fee(should match g) o) Total Loan amount p) Cash from/to borrower. If cash from borrower, assets to cover this amount need to show in Assets section of No cash back allowed to borrower except for reimbursement of fees paid in advance

22 All questions must be marked correctly. The borrower does sign acknowledging that all information contained in the applications is true and accurate. The questions we see that are normally marked inaccurately are: B C G Double check the answers with the borrower to insure accuracy and eliminate surprises later in the loan process.

23 Borrowers signatures will be matched to driver s license signatures to confirm identity and verify matching. Date of application should match date of GFE/TIL and other initial application disclosures. Date of 1003 may be after credit report date on a purchase. Typically the receipt of the purchase contract is a simple reference date for determining when the 3 day rules begins for disclosures. On a refinance it should be dated within 3 days of the credit report per compliance rules.

24 Ethnicity, Race and Sex should be checked based on information from the LO. Originator to indicate how application was taken. LO s information and signature required. Should be dated within the 3 days required per RESPA for initial disclosure.

25 Credit Reports are valid for 90 days from the date pulled All non traditional tradelines must be added to the reports as a supplement All government loans will require letter of explanation for the derogatory credit that shows on the report. The LOX must show what happened, how the borrower overcame the problem and how the problem will not happen again. All inquiries must be listed on the Undisclosed Debt Form and note if new credit was opened or not. FSB does pull a soft pull credit report that will show any new credit, updated balances and new inquires at the end of the underwriting process.

26 The minimum documentation required for submitting a file to underwriting is: All required application disclosures GFE & TIL years W-2 s most recent 30 days most recent paystubs Written VOE if using OT, Bonus, Commission or job time is under 2 years Verbal VOE if straight wage earner income and job time over 2 years Credit Report Purchase contract, if purchase transaction Payoff, if refinance transaction 2 months bank statements or assets statements if other type of asset Letters of explanation for derogatory credit Letter of explanation for rent free as applicable Verification of mortgage/rent added to credit if not showing on the credit Copy of Driver s License must be valid and not expired 4506T fully executed If self employed 2 most recent years of tax returns (personal & business returns with all schedules)

27 HOI Quote or binder VA Certificate of eligibility Notes to underwriter providing details for the file Property info if Condo or PUD condo/pud questionnaire, HOA bylaws, master policies, etc Tax returns for all borrowers of all income types Title commitment with tax info included

28 It is important to note that compliance requires all docs to be included in the loan as required by Federal and State Laws. The list of documents on the next page incorporates all regulations mortgage lenders and brokers currently have to meet to remain compliant. If you ever disagree with our requirements, we just ask that you supply proof that the document in question is not required in your state. To do this, we must have it in writing from your State Regulator.

29 Submission Cover Sheet State Disclosure as applicable for your state Initial 1003 GFE Itemization of Fees/Fees Worksheet to match GFE Intent to Proceed TIL HUD Counseling Disclosure Acknowledgment Servicing Disclosure Notice of Right to Receive Copy of Appraisal Equal Credit Opportunity Act Disclosure Service Provider Form, if State required or if items listed in Section 6 on GFE Notice to Home Loan Applicant Credit Score Info Disclosure (usually final pages of credit report) Risk Based Pricing/Your Credit Score and the Price You Pay For Credit Disclosures notices Undisclosed Debt Acknowledgment Form Copy of Driver s License 4506T form fully completed Mortgage Fraud FBI Form Mortgage Broker Disclosure if applicable Privacy Act Disclosure Flood Disaster Protection Act of 1973 Borrower s Certification & Authorization Fair Credit Reporting Act Patriot Act Disclosure Anti-Steering Disclosure if LPC and must have 3 options completed! Proof of Delivery of HUD Settlement Book Program Specific Disclosures All disclosures are available at or from your Account Executive Team

30 4506T being sent in with form correctly completed FSB will order transcripts immediately upon receipt of file. If the form is not completed correctly it will be rejected by the IRS and cause delays Proper submission of file to underwriting the inclusion of the needed docs for Federal and State are the responsibility of the submitting LO to obtain and insure all dates, figures and amounts match and are correct Telling the Underwriter the story of the file. Please do not leave the underwriter to guess at what needs to be know on the file. Supply a Note To Underwriter outlining what you are trying to accomplish, how you are doing it, what items you are missing, etc. The more information you supply the better your conditions will be. Numerous conditions come from an underwriter trying to piece the file together with limited information. Providing as complete a file as possible for initial underwriting if you need a quick turn around for a closing deadline then we need as full of a file as possible. We can close fast, as long as we have everything we need to do our part. When re-submitting conditions, do not upload one or two and then resub. We want as many conditions as possible to review at one time. Our goal is to touch a file 2 3 times and then be ready for closing. Touching a file more than this slows our process up and will result in delays on our turn times.

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32 The Corr files will have less compliance conditions on the front end of the underwriting process. The compliance conditions will be noted, but will be required with the closing package Corr files will be responsible for providing: Flood Cert and tax transcripts HOI and Title will be in the name of the Correspondent Funding the loan Reviewing the Purchase Advice Preparing the Allonge and Bailey Letter for closing The Corr will be responsible for delivering the closing package after the closing. The delivery will occur in this manner: The closing package and any outstanding PTF conditions and Compliance Conditions will be uploaded to the file in Mortgagebot to Closing Package. The original Note, Allonge and Bailey Letter will be overnighted or mailed to FSB The closing package (all items) must be received by FSB before we can purchase the loan The rate must be valid through the purchasing of the file.

33 Do Insure that all your dates on your initial disclosures are uniform Make sure the LO signs the 1003 before submission and dates the form correctly Application Dates are: Purchase date property address was obtained. Usually determined by purchase contract. Refinance date should be on or within 3 days of credit report date GFE Prepared Date within 3 days of 1003 blank dates are not allowed LO to sign TIL, 92900A and any other documents that have a signature space for them. Blanks are not acceptable Don t Send in docs with dates that are not within 3 days from application Have multiple dates throughout the forms. Send in a GFE that does not match the fees worksheet and the Details of Transaction on the 1003 Send in a GFE with blanks all must be completed properly Send in a TIL with the recording fee a different amount than what is disclosed on the GFE

34 When reviewing your submitted GFE, we are looking for this information in the Important Dates Section:

35 Insert System Training here!! If you have already had our LOS training, please proceed to the next slide

36 The next few screens will outline how to utilize our Pricing Engine and lock the files.

37 To locate the Scenario Pricing Engine, open Forms & Docs and midway down the menu click on Scenario Pricer. All sections in RED must have information entered to price correctly.

38 Originator Compensation must be entered. Choose one of the following options: Lender Paid Borrower Paid Origination fee: Must be completed to reflect the amount being charged for either LPC or BPC as chosen above The lock information does not carry over to the GFE at this time. If using our system to prepare Initial Docs, please note you will still have to complete the GFE in full. On Correspondent Loans, it is not necessary to choose compensation type.

39 Make sure to complete the Credit Information section for accurate pricing! In the same section you will be able to tell us to waive the underwriting/commitment fee. Under credit grade choose UW WAIVER.

40 Once the form is completed appropriately, click on PRODUCT SELECTION at the bottom of the screen. Your pricing options will be shown and you may choose which rate/pricing is best for your loan. All adjustments will show at the bottom. You may choose any of the options from the buttons below the pricing. Please note that you will not be able to choose a rate until you choose the lock button at the bottom.

41 Located two spots down from the Scenario Pricer, this screen is used for when the LO is ready to complete the lock and does not need to price out the loan. Screens are similar to Scenario Pricer All information must be entered to accurately price the loan. Any information needed but not entered will result in pricing not being shown. To waive UW fee, use drop down under Credit Information Credit Grade

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43 Confirmation will be sent via

44 If your rate expires, you will be charged an extension fee PLUS worst case scenario for the difference, as applicable It is best to not let rates expire and simply extend so as not to have any additional adjustments If your loan will not be closing for whatever reason and it is locked, please cancel your locks with the lock desk A new lock cannot be completed until the current one has expired for 61 days

45 FHA Case Numbers To request a NEW case number complete the form and to govrequests@flanaganstatebank.com Within a few hours (or less) the FHA case number will be returned to you To request a TRANSFER from another lender to FSB of a case number, you must contact the Lender that holds the case number and provide them with our FHA ID. They will then transfer it to us. To have FSB Transfer a case number to another Lender, complete the Transfer Section of the form and send to govrequests@flanaganstatebank.com The appraisal CANNOT be ordered until the case number is received per FHA guides VA Case Numbers These must be requested through the VA Portal by the submitting company When you request the case number the appraisal is automatically ordered

46 FSB does not maintain any AMC relationships We accept any AMC appraisal, but will not order through the AMC on behalf of our accounts We will maintain a roster for each company and each companies branch allowing them to use local appraisers. There must be a minimum of 3 appraisers on the roster to begin ordering through FSB We do not collect any fees and all appraisal fees are to be paid at closing To order an appraisal, complete the Appraisal Order form located on our website at Leave the Name/Address of the Appraiser BLANK FSB will complete If a purchase order, include purchase contract with the order form and send to appraisal@flanaganstatebank.com If a refi, only the order is needed The appraisal department will confirm receipt of order and acceptance of order by the appraiser. Notes will be maintained in the file on status of appraisal and due date

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48 Mortgagee Clause for title: Flanagan State Bank ISAOA 333 Chicago Road, PO Box 302 Paw Paw, IL Loan # EPA & COMP endorsements needed 24 month chain of title. Must include the verbiage a 24 month chain of title has been completed CPL Wire Instructions if FSB is funding the loan Property taxes must be noted on title or a tax certificate provided Lender s coverage must match the loan amount Clear title must be provided before closing will occur

49 Currently 24 hour underwriting turn times on all products A conditional approval does not mean that additional conditions will not apply. Although FSB does not wish to consistently add conditions to a loan, it may be necessary as new information is presented in the file for review. It is strongly suggested to present the best possible file at submission to avoid additional conditions as the file progresses. Goal: to touch files no more than 2 3 times before closing the file AE Team will be able to answer majority of your underwriting questions, but you may contact the underwriter via or phone with questions, as well. Please try to keep these to a minimum to allow them to maintain underwriting turn times The duties for underwriting are split up between the Jr Underwriting and Underwriter. The Jr Underwriter reviews all compliance items and provides the compliance conditions The Underwriter completes the Prior to Closing (PTC) and Prior to Funding (PTF) conditions. Questions should be directed to each accordingly

50 Broker Loans The underwriter will provide Final Approval, but the Jr Underwriter actually gives the CTC on the file once all compliance conditions are met The CTC will be sent to the LO or Processor (or both) with a notice to send the completed Closing Request Form to the Closing Department to schedule with them The Closing Department, upon receipt of the Closing Request Form will confirm the closing and date of closing with the sender Closing Instructions are sent out first with instructions for the preparation of the HUD The HUD will be sent back to the assigned closer for review and upon HUD approval, the closing docs will be sent to the title company The wire for the closing is sent 24 hours in advance, or as soon as possible on a closing that is a rush Correspondent Loans Follow above, but wire will be sent by Correspondent If docs are prepared by Corr, they will be responsible for HUD approval

51 Upload closing package to file within 48 hours and advise them the package is uploaded and ready for review. Overnight/Mail original Allonge, Bailey Letter and Note to: Flanagan State Bank 333 Chicago Road, PO Box 302 Paw Paw, IL Att: Correspondent Department Lock must be valid through receipt of the original documents. It is the Correspondent companies responsibility to extend accordingly Review Purchase Advice when sent by Flanagan and confirm accuracy The loan is not considered delivered to FSB until the Note and Allonge are in our possession

52 For both Brokered Loans and Correspondent Loans If our investors request a document that you may have in your file or requires contact with the borrower, we will come back to you for assistance in meeting such a request In all our closing packages, a First Payment Letter is prepared. This contains information needed by the borrower to mail their first payment to us by the due date shown. Often times, this notice is not pointed out by the closers. Please bring this to your borrower s attention so they can make their payment on time and mailed to the correct place. Your borrower will get notification of the transfer of their loan. If you would like to confirm they were notified by the correct company, please contact your Account Executive for this information.

53 Thank you for viewing our training. If you have questions after this training you may or contact your Account Executive Team