FGMC Correspondent Announcement: First Guaranty Mortgage Corporation Correspondent Lending Seller Guide Updates

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1 FGMC Correspondent Announcement: First Guaranty Mortgage Corporation Correspondent Lending Seller Guide Updates The Seller Guide has been updated to include changes to the following: Loan delivery Deadline Extended Commitment Policy Update Pair-Off Policy Interest Credits at Closing Flood Insurance Disaster Valuation and Inspection Requirements Escrow Waiver Non-Delegated Loan Delivery VA Sponsorship Final Document Loan Delivery Address Update Web Portal Instructions Submitting Documents to FGMC The following Seller Guide updates are noted below including their section(s) of the Seller guide and their effective date. Each Correspondent should understand the changes and how they would affect their organization. For any other questions, please contact your Account Executive. Elliot Salzman Sr. Director of Credit Operations Page 1 of 6

2 Loan delivery Deadline Extended Loans must be delivered to FGMC in fundable condition (credit and closed loan package) before 45:00 PM ET on day of lock expiration. If FGMC detects a deficiency during the funding review process, suspense conditions will be issued via the online portal for the Correspondent to access or through direct contact with the Correspondent. It is the Correspondent s responsibility to review and clear these suspense items quickly in order to avoid extension charges. Updated Seller Guide Section Lock Periods Commitment Policy Update Pair-Off Policy Rolling Mandatory Trade Desk Transactions The undelivered balance of any Mandatory Trade Desk transaction may be rolled to the next settlement month at a cost of 30 basis points for 30 days. There is a maximum of 3 rolls for any Mandatory Trade Desk transaction. An automatic pair off of the undelivered balance will be calculated and billed to the correspondent on the day following the lock expiration of the third roll. Note: It is important to monitor commitment pipelines closely, and notify the FGMC Mandatory Trade Desk of any transactions that cannot be filled to mitigate pair-off exposure during periods of market volatility. Swaps Correspondents may substitute a loan in a mini-bulk or bulk transaction. The substitution does must match the original commitment s security type, coupon, and loan amount within 2 percent. A new trade commitment will be established, canceling the swapped undelivered amount from the original commitment Pair-Off Policy Page 2 of 6

3 Interest Credits at Closing FGMC will allow interest credits at closing through the seventh calendar day of the month in which the mortgage loan is closed Interest Credits at Closing Flood Insurance Prior to loan purchase, a Flood Zone Determination Certification (FZD or Flood Cert) is required for each loan file. Flood Insurance is federally mandated for all residential buildings on the mortgaged premises if any part of the structure is located within a Special Flood Hazard Area (SFHA) which has federally mandated flood insurance purchase specifications. Properties located in SFHA designated by the symbols A and V on a Flood Insurance Rate Map (FIRM) require flood insurance which must be escrowed. The following table describes when flood insurance is required. If any part of the principal structure on a property securing the mortgage loan is located in an SFHA, a non-residential detached structure attached to the land on a property securing the mortgage loan has any part located in an SFHA with a value of $10,000 or more, a non-residential detached structure attached to the land on a property securing the mortgage loan has any part located in an SFHA with a value less than $10,000, a residential detached structure on a property securing the mortgage loan has any part located in an SFHA, Then flood insurance is required on the principal structure and must be escrowed. required on the non-residential detached structure and must be escrowed. not required on the non-residential detached structure. required on the residential detached structure and must be escrowed. NOTE: FGMC s definition of a residential structure: A detached structure or outbuilding which has any of the following amenities: sleeping quarters, bathroom, or kitchen facilities. 7.8 Flood Insurance Page 3 of 6

4 Disaster Valuation and Inspection Requirements For all loans, in addition to any specific requirements set by the government agencies regarding property inspection, FGMC requires, at a minimum, a 1004D on all loan types where an initial appraisal was completed. The 1004D should be completed by the original appraiser when possible, or any approved FHA or VA inspector. For Loans without an appraisal, FNMA 2075 is required when the loan will close within 90 days of the FEMA declaration. FGMC does not have the responsibility to provide notification to the Correspondent of disaster areas. If at any time after loan purchase, FGMC or a subsequent investor, determines that the subject property was damaged and not in fully marketable condition at time of sale, the loan is subject to repurchase Valuation and Inspection Requirements Escrow Waiver Correspondents must ensure that escrow waivers are not based solely on the LTV ratio of a loan, but also on whether the borrower has the financial ability to handle the lump sum payments of taxes, insurance, and other items described above Escrow Waiver Non-Delegated Loan Delivery VA Sponsorship To deliver a VA Non-Delegated file, Correspondents must designate FGMC as their sponsor annually. To initiate a first time VA sponsorship request, the Non-Delegated Correspondent must send the FGMC VA Sponsorship form along with a check for $100. If the Non-Delegated Correspondent is renewing from the previous year, the VA Sponsorship form is not required to accompany the check, however the check must be received by FGMC no later than December 31st of the most recently approved year or access to deliver VA Non Delegated loans will be restricted until receipt. For both first time requests and annual renewals, VA loan creation will be allowed within the loan delivery portal upon receipt of the check at FGMC Clear to Close Page 4 of 6

5 Final Document Loan Delivery Address Update The address to direct any questions regarding Final Documents has been updated to 7 Delivery Procedures Delivery Web Portal Instructions Submitting Documents to FGMC Uploading Scanned, Imaged File Once the loan is registered, the file needs to be uploaded to the FGMC Web Portal. Step Action 1 To upload the imaged file, locate the loan in the Pipeline View, and click the View/Edit button for that loan. 2 On the Loan Details page, click on the tab labeled Conditions & Documents. 3 **Non-Delegated Correspondent Only** To add the scanned, imaged file for initial submission to underwriting, click on Add File on the same row for Correspondent Non-Delegated Credit Package Upload (#3 in the image below). 4 To add the scanned, imaged closing package for the closed loan purchase review to the Correspondent Closed Loan Package folder (#1 in the image below), click on Add File on the same row for Correspondent Closed Loan Package. 5 To upload a file, click on Add File. A pop-up will appear. Click the Browse button and located the file that needs to be uploaded to the Web Portal. Then click the Upload File button. The uploaded file will appear on the Correspondent Closed Loan Package row in the Documents and Conditions section. Note: Files can vary in size for many reasons. For instance, higher resolution files and/or lots of graphics can increase a file s size. FGMC s Web Portal will allow an upload of up to 40 megabytes (MB) per upload. So if the upload exceeds 40 MB, the file will need to be split into sections smaller than 40 MB each prior to attempting an upload. Note: Upload any additional files by repeating Step 4 until all files have been uploaded. 6 Once the complete file has been uploaded, scroll to the top of the screen and click on the Submit Loan button on the lefthand side of the screen under Loan Details/Loan Actions. 7 Once all mandatory fields are populated, scroll down to the bottom of the screen and click the Submit Loan button again. Note: Once the loan is successfully submitted, the Loan Details page will be displayed with the highlighted message The loan has been submitted. Page 5 of 6

6 How to Check for and Upload Conditions Contact the designated Account Executive for current FGMC turn times. Once the file has been reviewed by the FGMC Due Diligence Team, the status will change to Decisioned. Step Action 1 To access the Loan Details page, click on the loan s View/Edit link from the Pipeline View. 2 On the Loan Details page, click on Conditions & Documents. Locate the row labeled DD Review. Click on the File Name column to display a PDF document that lists all outstanding conditions. (To download the document, click on the file link.) NOTE: Individual conditions will be listed in the Conditions section (#4 in the image below). Below is the FGMC Due Diligence Review Report which lists conditions in two parts: Prior to Purchase Conditions Required and Post Purchase Conditions Required. All Prior to Purchase Conditions must be cleared before closing. 3 To upload conditions to the FGMC Web Portal, click on the Conditions & Documents tab on the Loan Details page. Note: If possible, upload all conditions to FGMC at the same time. However, if satisfying some of the conditions will take much longer than others, documents can be uploaded separately as they are prepared. 4 Under the Documents section, upload conditions to the Correspondent Conditions Submission (#2 in the image below) folder, by clicking on the Add File link on the row for Correspondent Conditions Submission. The designated underwriter will be automatically notified of the new documents Uploading Scanned, Imaged File 10.3 How to Check for and Upload Conditions This change is effective 02/06/2017. Page 6 of 6 ###