Correspondent Lending Chase DU/LP Overlay Matrix

Transcription

1 Agency Collateral Overlays 2070 & 2075 Appraisals CB12-18 The Fannie Mae Desktop Underwriter Property Inspection Report 2075 and Freddie Mac Loan Prospector Property Inspection Report 2070 do not contain sufficient information to meet new MISMO reporting requirements for condo loans. Therefore, Chase does not permit 2075 and 2070 Property Inspection Reports on condo transactions Appraiser Requirements CP/Collateral/Appraiser Appraisal must be completed by a Certified appraiser Requirements Copy of the appraiser s licensee must be included in all agency closed loan files. Correspondent must check the Ineligible Appraiser List on every loan (Refer to Chase Ineligible Status Appraiser policies for detailed Appraisal Updates CB10-37 CP/Collateral/Appraisal Updates requirements) An Appraisal Update (Form 1004D) is no longer an acceptable document for validating that the appraised value has not changed. Instead, Correspondent must obtain a new appraisal on all loans with an appraisal greater than 120 days old. Note: The new appraisal type must match the existing appraisal type (i.e. if the original appraisal was an Interior Appraisal then the new appraisal must also be an Interior Appraisal) Assigned Appraisals CP/Collateral/ Appraisals Assigned Appraisals are not permitted by Chase. AVMs CP/Collateral/ Appraisals Freddie Mac Property Inspection Alternative available through LP is not permitted. Any AVM, Property Inspection Waiver (PIW) or other alternative valuation obtained prior to a disaster will require a new interior appraisal AVMs are not permitted on REO properties Condominiums Ineligible Condo List SA10-27 Correspondents must review the Chase Declined Condo List prior to locking a Condo loan with Chase to ensure the project is not declined by Chase Conversion of Primary Conversion of Primary AVM and BPOs are not permitted; interior or exterior appraisal is required. Residence Residence Matrix Deed Restricted Properties CB & CP/Collateral/ General Requirements All Deed restricted properties MUST be reviewed and approved by Chase prior to delivering the loan for purchase with the exception of age restrictions and other miscellaneous restrictions detailed in Chase Credit Policy. See Credit Policy>Collateral>Collateral General Interested Third Party Contributions Agency Amort. Fixed, Agency Amort. ARM Guide & Agency Interest Only Guide Requirements for detailed policies and procedures. Contribution limits are defined in the applicable product guide and feature page. Contributions guidelines are defined in Chase Credit Policy Agency High Balance: Maximum Interested Party Contribution is 3% Property State- Amherst NY CP/Collateral/ Chase Specific Appraisal Requirements A full appraisal with interior inspection is required for all properties located within the following zip codes: 14051, 14068, 14221, 14226, 14228, 14260, Property- Arizona, Michigan and Nevada CB / Product Guides Primary Purchase & NCO Refinance 1 Unit/Condo/PUD limited to a maximum LTV/CLTV of 90/90% Note: LTV/CLTV restriction does not apply to DU Refi Plus, LP Open Access, MyCommunityMortgage or HomePossible transactions. Property - Florida Properties Product Guides Condos not permitted on Second Home transactions Fannie Mae Special Designation Condos/Freddie Mac Condominium Effort condos are not permitted Investment transactions not permitted Credit Policy Guide and the applicable product guide apply. This document should not be relied upon or treated as legal advice. February 19, 2013 Page 1

2 Property Co-op Correspondent Lending Agency Collateral Overlays Primary Purchase & NCO 1 Unit limited to maximum LTV/CLTV of 90% Primary Cash Out Refinance 1 Unit limited to maximum LTV/CLTV of 80%/85% Primary Cash Out Refinance Attached Housing limited to maximum LTV/CLTV of 80% Primary Purchase, NCO and Cash Out Refinance Condo limited to maximum LTV/CLTV of 65% Second Home Purchase, NCO and Cash Out Attached/Detached SFD and PUD limited to maximum LTV/CLTV of 70% Property Listed For Sale Property - Manufactured Home Agency Co-op Policies & Product Guides CP/Collateral/ General Requirements Appraisal-Property Requirements/Property Type Chase restricts the purchase of Co-op loans to the City of New York, consisting of the five (5) boroughs (Bronx, Brooklyn, Manhattan, Staten Island and Queens) and the four (4) counties near New York City (Nassau, Rockland, Suffolk and Westchester) unless otherwise restricted by the applicable product guide/feature page. Chase policy requires Fannie Mae Appraisal Form 2090, regardless of AU Findings. Fannie Mae Form 2095 (exterior only) is not an acceptable appraisal option. All Co-op projects must be approved by Chase, and loans must be underwritten by Chase Underwriting Not eligible on 5/1 IO High Balance ARM cash out refinance transactions If the property was listed for sale within the prior 12 months but is not currently for sale, then the transaction may be considered for a: Cash out Refinance if the listing has been expired or withdrawn 180 days prior to the application date, PLUS The appraised value should be at least 10% less than the lowest listing price. If the apprised value is not at least 10% less than the lowest listing price, a full second appraisal is required to validate a higher value. Delegated Correspondents are encouraged, but not required to obtain the second appraisal Manufactured Homes are not permitted Credit Policy Guide and the applicable product guide apply. This document should not be relied upon or treated as legal advice. February 19, 2013 Page 2

3 Agency Collateral Overlays Property - Attached PUDs PUD Reference Guide - Agency and Non-Agency CB & CB12-90 The following additional appraisal requirements apply for attached PUDs except when AU Property Inspection Report (2075/2070) or DU Property Inspection Waiver (PIW) is used: IF the HOA is controlled by THEN Appraiser AND Developer, must complete the PUD topic in the appraisal, Homeowners, does not complete the PUD topic in the appraisal, Appraiser must address all PUD requirements detailed below in the selection of the comparables and appraisal commentary. Attached PUD Appraisal Requirements: Uniform Residential Appraisal Report 1004 (interior/exterior) is required for all attached PUDs submitted to Chase Project Approval Group (PAG) for review and approval. Include the PUD legal name Include the homeowners' association (HOA) dues and assessments Indicate the property rights (fee simple or leasehold) for the subject and each comparable sale Identify, report on the condition and include a description of the common elements and amenities of the subject unit PUD Condition of the amenities can be addressed in Appraiser commentary, or Improvements section of the appraisal (refer to PUD Reference Guide - Agency and Non-Agency for complete details) Provide a comparison of the subject PUD common elements and amenities with those of competing developments If comparables consist of single family dwellings located outside of PUD developments, the appraiser must: Provide analysis to support the inclusion of non-pud comparables Comment on the impact deed restrictions on the subject s marketability and value Credit Policy Guide and the applicable product guide apply. This document should not be relied upon or treated as legal advice. February 19, 2013 Page 3

4 1/1 & 3/1 ARMS CB10-34 Not eligible, effective with loans locked on or after 4/19/10 5/1, 7/1 & 10/1 Agency Agency Amortizing ARM Maximum LTV/CLTV is more restrictive of LTV/CLTV stated in the product guide or 90% Amortizing ARMs Guide Exclusion: This policy does not apply to DU Refi Plus and LP Open Access Transactions 1031 Exchanges Agency and Non-Agency 1031 Exchanges are not permitted and are not an eligible asset type 4506-T/Tax Transcript Requirements Age of Documents Guides CP/General Income Statement/Verification Requirements CP/Credit Administration/Approvals- Exceptions A 4506-T must be signed at application and at closing on all loans, Chase does NOT require a copy of the initial 4506T signed at application to be included in the file delivered to Chase for Funding. However, the Correspondent must obtain the signed initial 4506T and must use that document to obtain tax transcript/documentation from the IRS Chase continues to require 4506T completed to IRS/Chase requirements, signed by the borrower(s) at closing be provided in the closed loan file Tax transcripts are required only for the year(s) of income used to qualify the borrower(s) All delegated loan files submitted for purchase and all non-delegated loan files submitted to Chase Underwriting must include tax transcripts/documentation for the income used to qualify the borrowers regardless of loan type, transaction type or income type REMINDER: Information obtained through fully processing the 4506-T must be considered when underwriting the loan. Maximum age of documents used to verify employment, income, credit and assets as well as maximum age of the credit report is based on whether the property is existing or proposed construction: Existing: 90 days Proposed Construction: 120 days Note: The age of documents is measured from the date of the documentation to the date the Note (or Modification for Construction to Perm loans) is signed A-Minus/Expanded Approval Chase Underwriting Expanded Approval/A Minus findings are not eligible Annuitization of Assets CB Annuitization of Assets is not eligible on Freddie Mac loan transactions. Credit Policy Guide and the applicable product guide apply. This document should not be relied upon or treated as legal advice. February 19, 2013 Page 4

5 Business Assets CB12-10 In accordance with Agency policy, business assets are generally not an eligible source of funds as these funds are typically needed to meet current overhead and future capital requirements. However, when business assets are used, the Underwriter must document a cash flow analysis of the borrower s business using the individual and/or business tax returns, as applicable. Construction to Perm with Modification (Single Close) Single Close Construction to Perm with Modification Guide CB10-99 There is no required format for analyzing the business assets. However, Chase requires the closed loan file contain the Underwriter s written cash flow analysis and conclusion that withdrawal of the business funds will not affect the operation of the business. The following are business types that can meet these requirements. Businesses other than these types may require additional supportive documentation: Sole proprietor Sub Chapter S Individually owned Corporation Regardless of LTV/CLTV/HCLTV, A Verbal Verification of Employment (VVOE) is required on all transactions and must be dated within 10 business days of the Modification Date for salaried borrowers and within 30 calendar days of the Modification Date on self-employed borrowers, AND A new appraisal dated within 60 days of delivery to Chase is required (Appraisal Update/Recertification of Value will not clear this requirement) Loans with Consumer Credit Counseling necessitate the need for review by an underwriter prior to issuing final approval Consumer Credit Counseling CP/Credit History/Derogatory Credit Credit Inquiries CB11-09 All credit inquires within 120 days of the credit report are required to be addressed, Credit Score CB09-41,CB09-35, CB12-25 Minimum 740 FICO for LTVs >80% and 660 FICO for LTVs <= 80%is required on all loans except DU Refi Plus/LP Open Access, Interest Agency Amort. Fixed, Agency Only and High Balance products Amort. ARM Guide & Agency All borrowers must have a valid credit score Interest Only Guide Non-Traditional credit not permitted (Note: If any repository indicates a credit score of zero for any borrower, then the transaction is considered to be a non-traditional credit loan) Custodial Accounts for CB Custodial accounts for children or others are not an acceptable source of funds Children or Others Derogatory Credit CB11-71/CB12-08 Follow AUS Findings. Plus: Chase requires all items that may impact title to the subject property or Chase first lien position to be paid in full or satisfied by the borrower prior to closing All reported delinquent Chase accounts/mortgages must be brought current prior to or at the time of closing. o Verification of sufficient funds to pay derogatory items is required and use of such funds must be accounted for in reserve calculations and requirements. Credit Policy Guide and the applicable product guide apply. This document should not be relied upon or treated as legal advice. February 19, 2013 Page 5

6 o Exception: Chase delinquent account overlay does not apply to DU Refi Plus and LP Open Access transactions Down Payment CB Must be from borrower s own funds, or Gifts permitted for Primary Residence & Second/Vacation Homes. Minimum 5% from borrower s own funds required for > 80% LTV/CLTV. Refer to Correspondent Lending Guide for eligible funds for down payment, closing costs and prepaid items Minimum 5% Down Payment Assistance Programs Credit Policy/Assets/Housing Assistance Program All Down Payment Assistance Programs MUST be reviewed and approved by Chase Seller funded programs are not permitted. 401K and other Secured Loans CB12-10 To exclude payment from the DTI calculation on a loan secured by liquid assets (i.e. 401K/IRA accounts, CDs, stocks, bonds, marketable securities, etc), the value or balance of the account must be sufficient to repay the loan obligation. If the balance in the account is not sufficient, the loan is not fully secured. In the case where the account value is less than the loan balance, the transaction requires the payment to be included DTI calculation. DU Refi Plus/LP Open Access 105% LTV DU Refi Plus/LP Open Access Non-Chase Serviced Employment Contracts Agency Amort. Fixed & Agency Amort. ARM Guide Agency Amort. Fixed & Agency Amort. ARM Guide CB12-80 and Employment Income Salaried Sources Loan must be serviced by Chase/WAMU Maximum LTV is 105% Note: PIA and HVE not eligible on LPOA transactions. DU Refi Plus /LP Open Access Non-Chase Serviced Loans must meet the following requirements: Primary 1-4 Unit/Condo/PUD/Co-op 95/95% LTV/CLTV with 740 FICO Primary 1-4 Unit/Condo/PUD/Co-op 80/90% LTV/CLTV with 680 FICO Second Home 1 Unit/Condo/PUD/ Co-op LTV/CLTV 80%/80% with 700 FICO Primary with properties located in AZ, FL or NV LTV/CLTV 80/80% with 680 FICO Bankruptcy Discharged 48 months No foreclosure in last 84 months 0 X 30 in the lesser of the life of loan or most recent 12 months Project approval required for condo/co-ops.appraisal requirement as recommended by AUS Findings, plus o For Condo appraisal requirements refer to Chase Credit Policy/Appraisals/Property Requirements PIW is not permitted on Condominiums, Co-ops and Attached PUDs Max DTI 45% Note: PIA and HVE not eligible on LPOA transactions. When an employment contract (including employment agreement or offer letter) meets all requirements and employment begins within 60 days after the loan closes, an additional six months reserves (plus any reserves required by DU or LP and Chase Product Guides) must be documented in the file. Credit Policy Guide and the applicable product guide apply. This document should not be relied upon or treated as legal advice. February 19, 2013 Page 6

7 Note: Eligible for Freddie Mac (LP) and Non-Agency 1-unit primary residence purchase transactions only (employment must begin prior to closing for all Fannie Mae (DU) transactions). Employment Stability Borrowers on Mandatory Furlough Credit Policy/Employment Stability Standards Borrowers that are on a Mandatory Furlough from their job (i.e. plant shutdown, temporary layoff, etc) must return to work prior to the closing of the loan in order to use the income for qualifying purposes. Additionally, the following documentation is required: Verbal Verification from the employer reflecting that the borrower has returned to work under the same terms as prior to the furlough Copy of most recent pay stub(s) verifying that the borrower has returned to work and supporting the qualifying income used for the loan. Not eligible Fannie Mae Enegry Efficient Agency Guides Mortgage Program Foreclosure CB and CB Loans require 84 months seasoning regardless of reason, see below for effective dates based on AUS submission type o Loan Prospector submissions or resubmissions on or after November 21, 2010 o ZiPPY submissions or re-submissions on or after November 23, 2010 o DU submission or re-submissions on or after December 11, 2010 Foreign Borrowers CB12-74; Foreign Borrower topic The following work visa types require review and approval by Chase: E-3 H-1B1 O-1 TN Submit a secure to correspondent.customer.support@chase.com with the following information: Foreign Income Documentation Borrower name(s) and loan number in subject line Detailed summary of the individual s residency status Images of all relevant documentation, including: Passport Visa I-94; Arrival/Departure Record Any other supporting documentation CB Copies of 2 years signed Federal Income Tax Returns, and Standard income documentation (i.e. YTD paystubs and W-2 for prior years) All income must be translated to US Dollars Credit Policy Guide and the applicable product guide apply. This document should not be relied upon or treated as legal advice. February 19, 2013 Page 7

8 Short Sale/Forgiveness of Debt/ CB10-50 CPG/Derogatory Credit Concurrent Short Sales are not eligible for delivery to Chase under any circumstances Previous Short Sale due to hardship must be seasoned at least 36 months. o If seasoned >36 months but < 84 months minimum down payment of 10% is required. o If seasoned 84 months standard down payment policies apply Previous Short Sale NOT due to hardship must be seasoned at least 48 months. o If seasoned >48 months but < 84 months minimum down payment of 10% is required. o If seasoned 84 months standard down payment policies apply Principal Reduction Modification due to hardship must be seasoned at least 36 months. o Standard down payment policies apply Principal Reduction Modification NOT due to hardship must be seasoned at least 48 months. o Standard down payment policies apply High Balance Agency Amort. Fixed & Agency Amort. ARM Guide Loans must meet permanent high balance rules, plus the following transactions are NOT eligible: 10, 20, and 25 year loan terms 1/1, 3/1, 7/1 and 10/1 ARMS Temporary Buydowns 3-4 Unit Properties High LTV Products CB08-30 and CB Flex 97 and Alt 97 programs are not eligible for sale to Chase Fannie Mae standard Amortizing Fixed and ARM product limited to maximum LTV of 95% Note: 97% LTV only available under Chase MyCommunityMortgage product offering Income Ineligible Sources Credit Policy/Income and The following income sources are not permitted CB Boarder Income (except with MyCommunityMortgage or HomePossible transactions) Capital Gains Income Annuitization of retirement/pension assets (except on DU decisioned loans) Income-Trust Credit Policy/Income If trust income is greater than 20% of total qualifying income, trust agreement must be reviewed by Chase Legal Department Max # of Financed Properties CB09-19 CB08-68 CB12-21 Agency Amort. Fixed, Agency Amort. ARM Guide The maximum number of financed residential properties is limited to a maximum of 4 properties, regardless of occupancy. The limits for the maximum number of properties financed are determined at the time of application. Paying off mortgages on properties after the loan application date or with the proceeds of the transaction in order to meet the requirements of this policy is not permitted. & Agency Interest Only Guide Mortgage Credit Certificate (MCC) CB MCCs not permitted for qualifying purposes. May be used for tax credit purposes only Credit Policy Guide and the applicable product guide apply. This document should not be relied upon or treated as legal advice. February 19, 2013 Page 8

9 MyCommunityMortgage MyCommunityMortgage The following programs/features are not eligible on MyCommunityMortgage transactions delivered to Chase: Product Guide 40, 25 and 20 year mortgages Community HomeChoice option Community Renovation option Non-Affordable Second Mortgages Financed Mortgage Insurance Expanded Approvals Non-Resident Alien (Foreign Nationals) Agency Amort. Fixed, Agency Amort. ARM Guide Foreign National Borrowers are not eligible with any Agency product Non-Owner Occupied Transactions Agency Interest Only Guide Agency Amort. Fixed, Agency Amort. ARM Guide Agency Interest Only Guide Not eligible on Interest Only May not be affiliated with the builder/developer or property seller Gift funds not permitted Principal Curtailments CB11-11 Principal Curtailment is allowed at the time of closing up to $500 and must be clearly reflected on the HUD1 All loans must continue to comply with all current product eligibility guidelines and program requirements regarding cash-back to the borrower. Qualifying Ratios CB09-66 Agency Amort. Fixed, Agency Amort. ARM Guide & Agency Interest Only Guide The maximum qualifying ratio is the more restrictive of the AUS Findings or 50% Notes: The maximum DTI of 50% does not apply to Chase/WaMu Serviced DU Refi Plus and Chase/WaMu Serviced LP Open Access transactions For Chase/WaMu Serviced DU Refi Plus and Chase/WaMu Serviced LP Open Access transactions follow DU/LP findings Additionally, this policy does not apply to Non-Chase/WaMu Serviced DU Refi Plus and Non-Chase/WaMu Serviced LP Open Access transactions as the maximum DTI on these transactions is limited to the more restrictive of AUS findings or 45% Seasoning CB12-11 Maximum number of calendar days from Note date (the printed date on page 1 of the Note) to loan delivery and loan purchase is as follows: Complete closed loan file received by Chase: 45 Loan is purchased by Chase: 60 Note: If the transaction is a single close construction-to-permanent loan, the modification cannot be older than 45 calendar days at the time of file receipt to Chase. Self-Employed Income Documentation Requirements CB Effective with effective with all new automated underwriting submissions on or after October 20, Commissioned borrowers >=25% o Most recent paystub, W-2s and personal tax returns covering most recent two-year period required Self-Employed/Second Job (self-employed) o Personal and business tax returns covering most recent two-year period required Credit Policy Guide and the applicable product guide apply. This document should not be relied upon or treated as legal advice. February 19, 2013 Page 9

10 New documentation requirement associated with loans submitted to DU 9.0. Documentation overlay applies to LP and ZiPPY underwritten Agency loans. Documentation overlay does not apply to LP Open Access transactions. Subordinate Note Agency Loans CB Both Fannie Mae and Freddie Mac require that the Lender verify the terms of the second lien meets the agency s requirements. To ensure compliance with Fannie Mae and Freddie Mac policies, Chase requires a copy of the Subordinate Note in the closed loan package on all loans with subordinate financing. Tax Transcripts CB Tax extensions filed after October 15 th not acceptable for salaried and self-employed borrowers who have not filed taxes. The current year s tax return must have been filed with the IRS, or the loan is not eligible for delivery to Chase. Temporary Buydowns ARMS CB11-20 Not permitted Temporary Buydowns Fixed CB11-20 Not Permitted Rate TPO Originations CB09-02 TPO originations are not eligible for sale to Chase. Underwriting Agency Amort. Fixed, Agency Amort. ARM Guide Agency Interest Only Guide All Agency loans must be submitted to an automated underwriting engine (DU, LP or ZiPPY) Manual underwriting is NOT permitted Credit Policy Guide and the applicable product guide apply. This document should not be relied upon or treated as legal advice. February 19, 2013 Page 10