Portfolio Program - Quick Reference Guide

Transcription

1 Portfolio Program - Quick Reference Guide Self-Employed Bank Statement Income Program Product Details Product Guidelines Income- for self employed individuals will consider 12 consecutive months' personal bank statements (one account only) to verify ability to repay. Additionally, the self employed borrower must be able to provide, from a third party, acceptable documentation reflecting their self employed business and percentage of * Personal Account (only one account maybe used to determine qualifying income you cannot mix checking and savings) * Deposits must be consistent and typical * Large Deposits more than 25% of the total monthly qualified income and/or typical depositssource. must be sourced to determine if funds came from a business source. * If another person is on the bank statements (and not on the loan) other than the borrower who is 50% owner of the business only 50% of the total deposits can be used. * Non borrowing spouse on the bank statements you must determine which portion of the income is the borrower. * If the borrower owns rental properties you must provide a copy of the Sch. E and the monthly rental income must be backed out of the total deposits for the average of the total S/E qualified income. * Determined Total monthly average deposited and divided by 12 to determine the qualifying income Bank Statements * No non-sufficient funds AND no negative balances on the bank statements. Deposits that cannot be used in the average of the total S/E qualifying income are as follows * Credit back from credit/debit returns * Direct Deposit for spouses income * Direct Deposits for VA/SSI/Disability * Transfers from another account (if borrower transfers money from his business account to pay themselves the transfers must be consistent and not on off's) * Interest paid * Child Support or Foster Care income * Payroll Advance * Rental Income * Large Deposits by more than 25% of total income that can't be determined as an income source In some instances may allow business bank statements to be used. If the following: * The borrower(s) use their personal bank account as their business bank account * The borrower is 100% owner of the business and uses business account for all transactions * The borrower is paid 1099 and files a schedule C vs. Corporate returns

2 Maximum Number of Properties There is no maximum number of properties, but the total indebtedness to a single entity may not exceed $1 million. * Log cabins * Geodesic domes Ineligible Property Types: * Cooperatives * CondoHotels * Mobile homes * Manufactured homes * Non warrantable condos (generally) * Floating homes * Could not have been purchased for cash in past six months using "gift funds." Purchases Any transactions less than 6 months from acquisition must source all funds. * Interested (Third) Party Contributions not to exceed 3% * If current residence is being converted to rental or retained as second home the LTV on that property should be verified and leverage should not exceed 70% * Can't be listed for sale in previous 6 months prior to the application date * 6 months seasoning and must clearly reflect a benefit to the borrower R/T Refinances * Subordinate lien is purchase money second or was financed over 12 months if second lien is a HELOC document no withdraws in the last 12 months. * Payoff of 1st lien and purchase money seconds only Transactions * Payoff's of delinquent taxes, subordination cost or Hazard premiums are considered cash out * Can't be listed for sale 6 months prior to the application date * 12 Months seasoning * Cash out refinance within 12 months of acquisition max LTV 65%. Will consider 75% LTV with C/O Refinances value supported by an acceptable appraisal and loan request must be less than the total of 75% of acquisition plus hard dollar improvements (cost of improvements must be documented). Properties Purchased for Cash in past 12 months: Max LTV 65% value supported by an acceptable appraisal and loan request must be less than the total of 65% of acquisition plus hard dollar improvements (cost of improvements must be documented and

3 Occupancy Delegation Occupancy * Owner Occupied * Second homes * Second homes * Non Owner Requires Investor approval. Process speed subject to MCFI & Investor's combined turn-times * U.S. Citizen * Permanent Resident Alien (Green Card) * Non Permanent Resident Aliens with acceptable Visa (must permanently reside in the US and have 2 years residency, 2 years employment) * Many vesting options available including LLC's and LLP's Cesting * When Vesting in the Name of an LLC's and LLP's the borrowers must sign a Limited Liability Company Resolution to Borrow/Grant Collateral. If the borrower is not 100% owner all owners must sign. A copy of the Articles of Incorporation and/or By Laws * Non eligible vesting Irrevocable Trusts * Minimum 3 trade lines open and active must have depth of credit. Ideally, one trade would include installment debt * Non-traditional credit not acceptable for this program * Min Credit Score 700 (Middle of three scores and Lowest of all borrowers listed on the application) Credit History * Tri-merged report within 60 days of the Note Date (all mortgage ratings must be current for the month due) * Bankruptcy, short sale or foreclosure 7 years from date of discharge less than 7 year will be considered on a case by case basis with a satisfactory written explanation (and will require a reduced LTV) * No mortgage later in past 12 months and no more than 1x30 in the last 24 months with a satisfactory explanation * Judgments must be released and over 24 months old etc. * Must include Cleared OFAC name check and SSN Fraud Verification 50% Max * Must include the following when calculating the debt to income ratio for recurring obligations: Other continuing Obligations (example 401K loans) Debt Ratio * Revolving account monthly payment calculation if the credit report reflects an outstanding balance but no specific minimum payment, the payment must be calculated as the greater of 5% of the outstanding balance or $ * Contingent liability on Co-signed debt must be included in the debt unless documented proof that the other obligor has been making regular payments during the previous 12 months, and does not have a history of delinquent payments on the loan. Assets Reverses * No non occpant co-borrowers allowed * All assets used to qualify a borrower must be sourced and verified (12 months statements) * Gift funds are not allowed. * All loans require 6 months PITI in verified liquid reserves. * Borrowers who own additional rental properties must have 6 months PITI for each additional financed property.

4 * Must be executed by all parties and include all addendums Purchase Contracts * No assignments of contract * Must not include personal property in the purchase price * Must not be expired at time of funding Appraisa * All loans require a full appraisal * No health and safety issues with property * Escrow holdbacks are discouraged, and if permitted by exception they cannot exceed 3% of appraised value No Flip Transactions Maximum of 2 refinances in a 12 month period (Field Review required, maximum appreciation is 10%) Full Alta Policy only: Title Policy * Effective date of 90 days or less from the Note Date * Must included all applicable endorsements * Fee Simple only

5 5/1 ARM 12MONTH BANK STATEMENT 3.50 Margin + 1 Year LIBOR/NO Prepay Loan Amount Base Prices Minimum Maximum Cash Out Limit $100,000 1,000,000 $300,000 Note Rate Price Par* Apptaisal *Borrower Paid Comp. Only All appaisals must be completed by a state-certified appraiser Note Rate Adjustments Loan Amt > $650,000 <=$1,000, *Standard Portfolio Cash Out to $300,000 LTV 65.01% 0.25 O/O & SFR N/O/O N/O/O 2 to 4 Units Loan Amounts to $1 Million Purchases and No Cash Out Refinance Cash Out 75% 65% 70% 65% 2-4 Units LTV < 70.01% 0.25 Pur & R/T Cash Out Occupancy LTV LTV Non Owner Occupancy 0.25 Owner nd Home Other NOO 1 Unit Caps (Initial/Periodic/Life) 5/2/ Yr Index NOO 2-4 Unit Underwriting Registration and Rate Lock Credit score = 700 Ratelocks are for a 21 day period Reserves: 6 Months 12 months Personal bank statements - Borrower must be Self Employed Recent Tax Return & 4506 for self employed verification