SERIES. ImpacCorrespondent.com

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1 SERIES 2017 Impac Mortgage Corp. NMLS # Rates, fees and programs are subject to change without notice. Other restrictions may apply. Information is intended solely for mortgage bankers, mortgage brokers, financial institutions and correspondent lenders. Not intended for distribution to consumers, as defined by Section of Regulation Z, which implements the Truth-In-Lending Act. Licensed by the Department of Business Oversight, under the California Residential Mortgage Lending Act (License # ). In the state of New York, Impac Mortgage Corp. dba Excel Mortgage. January 9, 2017

2 Today We Will Cover Introductions iqm Series Overview o Highlights o How to qualify o Potholes Tools & Resources o idasl Developing Profitable Partnerships 2

3 An Impressive 20 Year History A market pioneer and product innovator through many market cycles 3

4 What is The iqm Series? Straightforward products for unique borrowers Self-employed Retirees Trust fund beneficiaries Foreign Nationals Real estate investors Borrowers with DTI issues Fannie / Freddie ineligible Non-Warrantable condo buyers What it s not Subprime Extremely difficult to process Painfully slow to underwrite & close 4

5 We sell what we know. Know your products. OVERVIEW The iqm Series FEATURES & PARAMETERS ACROSS ALL PROGRAMS 5

6 iqm: A Quick Overview Four products. Limitless opportunity. *Always refer to actual and complete guidelines for up to date information. 6

7 Guideline Highlights BK/Short Sale/DIL: => 2 years and < 4 years acceptable at: o Max. 70% LTV or existing guidelines, whichever is lower; and o Additional 6 months reserves required for subject property Foreclosure: =>3 years and < 7 years acceptable at o Max. 70% LTV or existing guidelines, whichever is lower; and o Additional 6 months reserves required for subject Cash-Out: o Can be used to meet reserve requirement Seasoning: Ownership seasoning NOT required (Cash Out & New Value) Gift Funds Allowed: For paying off debt, down payment & closing costs Not allowed for reserve requirement 10% reduction in LTV required unless borrower has 5% of their own verified funds into the transaction Condos: (CondoReview@ImpacMail.com) o Non-Warrantable Condos (see guidelines): FNMA concentration limits (% of NOO in project) do not apply Single Entity Ownership Exception up to 25% 7

8 ARM Qualification Interest Rate Adjustment Caps 5/1, 7/1 & 10/1 ARM Initial: 2% up; Subsequent: 2% up/down; Lifetime: 5% up Margin Agency Plus: 3.5, Alt Doc: 4.125, Investor: 4.75 Index Interest Rate Floor Index Establish Date Interest Only Option 1-Year LIBOR (London InterBank Offer Rate) Note start rate 45 Days Prior to the Change Date Interest Only Option available for fixed period of ARMs For Agency Plus, Foreign National, and Alt Doc Bank Statements 5/1, 7/1, 10/1 ARM Qualify at the greater of the fully-indexed rate or Note rate. Qualifying Rate and Ratios: ARM qualifying ratios are based on a fully amortizing principal and interest payment. Interest Only loans qualify at the greater of the fully-indexed rate or note rate based on the scheduled remaining loan term at the time of recast after the interest only period has expired. Investor: Loan qualification is based on Debt Coverage Ratio (DCR) for the subject property. Debt to Income (DTI) ratio is not calculated. 8

9 Using flexible, niche programs as sales tools. PROGRAMS OVERVIEW HIGHLIGHTS AND TIPS The iqm Series 9

10 Agency Plus: Program Highlights A Paper Jumbo Alternative, Freddie / Fannie Near Miss Loan Amounts to $3M DTI up to 50% No Seasoning for Cash Out No Seasoning for New Value Cash Out on Non-Owner w/ up to 10 Financed Properties. Gift Funds & Gift of Equity OK (certain parameters apply) Reduced Seasoning for BK/Short Sale/Foreclosure 10

11 Agency Plus: Qualifying Your full doc iqm option Qualified Traditionally as a Full Doc Loan 2 years W2/Tax Returns Required 30 Days Worth of Paystubs 2 Months Statements for Reserves 11

12 Agency Plus: Potholes Common issues, things to remember Include your Cover Letter with Submission Include the DU Approve/Ineligible/Refer Non-Warrantable Condo Exception is not a Blanket Statement. 2 years W2/Tax Returns with 30 Days Paystubs. 2 Appraisals for Loans over $1M ARR required 12

13 Alt Doc: Bank Statement Highlights For Self Employed borrowers No tax returns/4506 DTI up to 50% 12 months bank statements Personal OR business Flexible options to qualify Co-borrower W2 & retirement income CAN be used. (See guidelines for details) Use 100% of checking, savings, stocks, bonds, retirement funds to meet reserve requirement Cash out up to $2M 13

14 Alt Doc: Bank Statement Qualifying Always utilize worksheets and idasl full underwrite 3 Main Options to Qualify Personal with Deposits FROM Business Account: 100% of deposits will be used. 12 months of personal and 3 months of business. Expense Factor: (Option for Business or Co-Mingled Personal) Default to 70% Expense Factor OR provide CPA/Tax Preparer Letter stating Actual Expense Factor based on most recent year s filed tax returns. P&L: (Option for Business or Co-Mingled Personal) CPA/Tax Preparer produced Profit and Loss Statement. 14

15 Alt Doc: Bank Statement Potholes Most common mistakes Submission: Run an idasl Full UW and Include a Cover Letter, Paint the Picture Work History: 2 Years Self-Employment required Documentation: Make sure ALL statements are included AND Current. Do NOT include Tax Returns or 4506 Assets/Reserves: 50% or less of Business Account MAY be used if the borrower is the Sole Owner Pre-Qualify: Use Spreadsheets and idasl full UW to properly pre-qualify and include with submission. Make sure the numbers work Common Misconception: Personal Bank Statements does not ALWAYS mean using 100% of deposits. (Co-mingled personal treated the same as Business) Scrub the Statements : Remove or separate Non-Business Related deposits Expense Ratio Letter: Make sure the letter is from a CPA/Tax Preparer on Company Letterhead and meets guideline requirements (No Exculpatory Language) NSFs/Overdrafts: 3 or less is ok. Fee charged = NSF 15

16 Alt Doc: Asset Program Highlights Asset Qualification for high net worth borrowers No Income/No Employment No DTI No Tax Returns/4506 Assets are not pledged No Rental or Mortgage History Required (if there is history, credit requirements must be met) 1x30 OK Gift Funds OK for Down Payment No Seasoning for Cash Out No Seasoning for New Value Cash Out on NOO w/ up to 10 Financed Properties 16

17 Alt Doc Asset Qual: Qualifying How to calculate assets REQUIRED TO QUALIFY: Reserves = 3 months, Debt Coverage = 60 months Loan Amount: $300K Principal & Interest (P&I) for subject = $2K Verified Assets: $100K Checking & Savings (100% usable) = $ 100K $150K Stocks & Bonds (90% usable) = $ 135K $150K Mutual Funds (90% usable) = $ 135K $200K 401K (80% usable) = $ 160K Total Allowable Assets = $530K Less Loan Amount (& DP & CC if Purchase) - $300K RESIDUAL ASSETS = $230K Borrower Qualifies! Assets > Funds required to cover all debt for 60 months plus required reserves. Total Monthly Debt: (revolving, installment, alimony/child support, hazard insurance, property tax on the subject property, REO neg. cash flow) excluding subject P&I = $2.5K Reserves = 3 months x $2K (P & I) = $6K :: Debt Coverage = $2.5K X 60 months = $150K Total Needed = $156K Total Residual Assets = $230K ($230K > $156K = Loan Qualifies) 17

18 Alt Doc Asset Qual: Potholes Simple, but important points Verified Assets: Always include 6 Months of Statements to verify assets. Business Account NOT allowed. Variance: Look for balance variances exceeding 15% and get the story before submitting LOEs: If you see large deposits and/or withdrawals address prior to submission and include LOE with supporting documentation when necessary Income: Do not put income into the income section, this is a No Income/No Employment Loan (No DTI). Do NOT include Tax Returns or Purchases: For Purchases, make sure you pull the down payment AND closing costs from total funds BEFORE Residual Asset Calculation 18

19 Investor: Program Highlights For experienced investors Unlimited Financed Properties Qualified Off of Subject Property Cash Flow ONLY (DCR of 1.0) No Vacancy Factor No Income/No Employment No Tax Returns/4506 No DTI Tips for Partners Leverage Realtor Relationships Keep Real Estate Investors Investing Reduce total overhead, tap into equity, invest more 19

20 Investor: Qualifying Run an idasl full underwrite Use a DCR of 1.0 with No Vacancy Factor to establish the Max PITIA Example: Rent is $1000/1.0=$1000, PITIA cannot exceed this number DCR Change Effective 2/1/17. YES, it is that simple 20

21 Investor: Potholes Things to review before submitting Investor Experience: Does the borrower have experience owning & managing? The Cover Letter: Include expected rent. Rent Used to Qualify: Is the property currently tenant occupied or are we using future rent? Does current rent meet DCR? Cash Out: Does Cash Out Letter explain the business purposes of funds? 21

22 Foreign National: Program Highlights For International buyers FICO/Credit Report Not Required Full Doc or Asset Qualification Option Available Loan Amounts to $2M 30/15 Year Fixed and ARM Options Available Interest Only Option DTI to 50% No Payment Shock 22

23 Foreign National: Qualifying Tips to a complete package Include idasl Full Underwrite For Full Doc Option follow Agency Plus Guidelines For Asset Qualification Option follow Asset Qual. Guidelines BUT remember 12 Months of Statements are required vs the standard 6 months 23

24 Foreign National: Potholes Common issues and clarification Foreign Nationals: Ensure they live and work in another country Asset Qual. Program: Funds must be in a bank that is on our Acceptable Bank List, OR, funds have been seasoned in the U.S. for at least 6 months. (Please see guidelines for Acceptable Bank List) Visa: Must have a current and valid Visa if they are not from a country that participates in a Visa Waiver program Letters, Currency & Language: All Letters and Statements need to be in the Native Language and Currency of their home country. Use a 3 rd party vendor for translation and published currency data for currency exchange Statements: Always include 12 Months when using Asset Qual. Option Credit Report or NO Credit Report: When there is No Credit Report, include Credit Reference Letter on Institution Letterhead in Borrower s Native Language with Money Amounts reflected in National Currency. When there IS a credit report, borrower must meet credit requirements (Min FICO and 5 trade line requirement apply) 24

25 The iqm Series TOOLS AU, WORKSHEETS & CHECKLISTS 25

26 Submission Form Checklist Minimum submission requirements at a glance 26

27 Forms & Worksheets 27

28 idasl: iqm AUS Scenarios & loan decisions in seconds Run single or batch scenarios to identify program qualification 28

29 Thank you