AINSWORTH FINANCIAL MORTGAGE CORPORATION 2017 LOAN ORIGINATOR TRAINING COURSE MANUAL

Transcription

1 2017 LOAN ORIGINATOR TRAINING COURSE MANUAL Ainsworth Financial Mortgage Corporation 2015 Privacy Policy. The training course material is attended for official use of AFMC only. NMLS # Ainsworth Financial Mortgage Corporation

2 Loan Originator Course Overview Training Course 1 Qualifying the Borrower(s) How to complete a Prospect Summary Obtaining Borrower(s) Credit Report How to merge credit into Calyx Point How to complete a Uniform Loan Application (1003) Training Course 2 Credit Reports/Closing Cost/Pre-Approvals How to read a credit report How to complete a Loan Estimate and Fee Worksheet Fannie Mae DO/DU Approval & Lender Approval Training Class 3 Debt Ratios and Programs Rate Sheets Programs Scenarios FHA/VA Requirements: Debt Guidelines Conventional Requirements Training Course 4 Disclosures: Conventional FHA VA Reverse Mortgage Documents: Credit Report Last 2 Year Tax Returns / W2 s Last 2 Month Pay Stubs Last 2 Month Bank Statements Driver License and Social Security Picture Retirement Statement / 401k/ Pension/Stocks 401K Terms and Conditions Social Security Income / Disability Income Child Support Uploading Documents /Attachments: 1. Lender Back Office 2. Attachments to AFMC 2

3 LOAN ORIGINATOR TRAINING COURSE 1 How to complete a Prospect Summary Attachment The Prospect Summary is very important. This is where the loan originator establish rapport with the potential borrower(s). This process can make or break a potential opportunity to qualify a borrower(s). When a potential borrower(s) gives the LO the required information, especially their social security number. The LO has establish some trust with the potential borrower(s). Once this trust is establish, the LO should perform and execute their professional duties. Note: You can download the Prospect Summary Obtaining credit for potential borrower(s) After you have establish some rapport with the potential borrower(s) Running the potential borrower(s) credit is what we would like to do first. The LO is required to run the borrower(s) credit to see if the potential borrower(s) meets the credit guidelines of qualifying for a loan. This is key, because you can waste a lot of time not knowing what their credit scores are and what s on the borrower(s) credit report. Also, AFMC will have to obtain a credit report for all potential borrower(s) in order to submit the loan to the Lender s. If a borrower has already run their credit report, the LO can ask to see a copy of that credit report. The LO can manually input the liabilities into point to determine the borrower(s) debt ratios. Along with the borrower(s) provided income the LO can determine if the borrower(s) can pre-qualify for a loan. If the borrower(s) is prequalified and would like to proceed with the loan process. The LO would have to run the borrower(s) credit with AFMC to submit to the Lender for pre-approval. If the borrower(s) gives the LO the approval to run their credit, the LO has done a great job establishing some rapport. The LO would need to send the borrower(s) a Borrower Authorization and Credit Card Authorization to run their credit. If a borrower does not want the LO to run their credit for any reason. The LO should ask the borrower(s) to go online to Apply and ask the borrower(s) what they think their credit scores are. If the borrowers(s) does not want to go online to Apply or complete a 1003 over the phone or in person. Most likely that particular borrower(s) is not ready to obtain a loan at that time. If the borrower(s) will go online to Apply that s a sign that they are interested even without running the borrower(s) credit. Also, the LO can recommend to the borrower(s) to go online to websites that provide a simulation of the borrower(s) credit scores. Advise the 3

4 borrower(s) the online website that offer credit scores are not the actually credit scores but they can see what is being reported on their credit. If the LO determines the borrower(s) can pre-qualify, the LO will have to run the borrowers(s) credit to proceed with the loan process. *The outcome is to run the potential borrower(s) credit report and complete a to see if the borrower(s) can qualify for a potential loan. Merge Credit into Calyx Point After the credit is ran, than the credit report is merge into Calyx Point. It will populate the credit report right into the 1003 application. Uniform Residential Loan Application (1003) After the credit is merged into point. We can know manually complete the 1003 or merge the AFMC online application right into point. The breakdown of the (1003) l. Type of Mortgage and terms of loan Select the mortgage applied (complete all fields) II. Property Information and Purpose of Loan Legal Description ( Input See Prelim ) III. Borrower Information Completed all fields IV. Employment Information 2 years of employment needed If less than 2 years on a job, you will need to provide the previous employer information. The borrower must have worked in the same job field to use the previous employer. On VA loans, 1 year of employment is required with the approval of the Lender. V. Monthly Income and combined housing expense information W2 employee, the income is calculated from the Gross Income. Pay Stubs, are calculated from the gross paystubs: That includes, bonuses, overtime, commission and other related income that is on the paystubs. Self Employed Income (Schedule C) is calculated from the net income after deductions. The income is calculated by using the last 2 year net income divided by 24 months will determine the potential borrower(s) monthly income. Corporate Income and LLC income form (K1) it is reported on your personal taxes as Schedule (A) income. Housing expenses are from the current home you leave in. (Rent or Own) 4

5 VI. Assets and Liabilities Assets: Checking, Savings, 401K, Stocks, Pension, Child Support, Social Security Income, Disability Income Liabilities: All items that show up on the borrower credit report V1. Details of Transaction The breakdown of all the closing cost and loan amount VII. Declaration The declaration section is questions about a borrower financial situation and citizenship. Questions that are answer with a yes you should review and go over with potential borrower. Here are the questions to review if answered with yes: a. Judgments against you b. Bankruptcy in the last 7 years c. Foreclosed properties upon a given title d. Lawsuit e. Foreclosed property with a loan f. Delinquent or default on any Federal Debt g. If a borrower is paying alimony, child support, or separate maintenance IX. Acknowledgement and Agreement The borrower can select (I do not wish to furnish this information about (Ethnicity and Race). If the borrower checks that box, the loan originator is required to check the Sex box (Male or Female) The date that the Uniform Residential Application (1003) is signed, the loan originator has 3 business days to provide the borrower with the required disclosures. NOTE: You can download the 1003 (Practice filling out the 1003 using a pre-made up borrower) 5

6 LOAN ORIGINATOR TRAINING COURSE 2 Reading a credit report Credit Scores Credit scores will determine the different loan programs that the borrower(s) can qualify for and potential lender credit or cost to the borrower(s). Lattes Lattes can determine the outcome of the borrower(s) qualifying for a loan. One key item that is highly looked at on the credit report is Mortgages that are late in the past 12 months. Mortgage lattes can determine whether or not the borrower(s) can qualify for a loan. Charge Offs Accounts Charge accounts for FHA does not have to be paid. Some lenders might still have their own overlays and require the charge off to be paid off. Bankruptcy Chapter 7 & 13 Bankruptcy can determine whether or not the loan will be preapproved. FHA/VA and Conventional loans have different guidelines for bankruptcy seasoning. FHA (Chapter 7) 2 years from discharge date FHA (Chapter 13) 1 year of the payout must elapse & payment performance must be satisfactory - buyer must receive permission from the court to enter into a mortgage VA - (Chapter 7) 2 years from discharge date VA - (Chapter 13) 1 year of the payout must elapse & payment performance must be satisfactory - buyer must receive permission from the court to enter into a mortgage Conventional (Chapter 7) 4 years from discharge date Conventional (Chapter 13) 2 years from discharge date (Chapter 13) Short Sales & Deed In Lieu Of Foreclosure Short Sales can determine whether or not the loan will be preapproved. FHA/VA and Conventional loans have different guidelines. FHA 3 years from discharge date VA 2 years from discharge date Conventional 4 years from discharge date 6

7 Foreclosure Foreclosure can determine whether or not the loan will be preapproved. FHA/VA and Conventional loans have different guidelines. FHA 3 years from discharge date VA 2 years from discharge date Conventional - 7 years discharge date Collections Accounts Collection Accounts can determine whether or not the loan will be preapproved. FHA/VA and Conventional loans have different guidelines for collection accounts FHA Collections account will have to be paid before closing VA Collections account have to be seasoned for 12 months Conventional Collections account have to be seasoned for 12 months Public Records / Judgements Public Records/ Judgement can determine whether or not the loan will be preapproved. Unpaid balance will have to be paid off before closing, Loan Estimate (LE) The LE is very a very important document. It details all the fees and closing cost for a potential borrower(s) The LE must be provided to the borrower(s) within 3 business days of taking a Uniform Loan Application (1003) The Fee Worksheet is a detail outline of all the fees broken down separately. Service Providers & Estimated Fee s (Use to complete the Fee Worksheet) Appraisal Fee: Broker will order appraisal with Lender or AMC $ $ estimated price Escrow Fee: Refinance: $ Purchase: $ per Thousand Notary: $ Doc Preparation: $ Title: Owner Title: see price sheet Lender Title: see price sheet 7

8 Property Taxes: Purchase price x property tax / 12 = monthly payment Example: 100,000 x 1.25% /12 = $ Transfer Taxes: (Will vary per County) Loan Amount / 1000 x 1.10 Example: 100,000 /1000 =100 x $1.10 = $110 Transfer Tax San Bernardino County $1.10 Riverside County $2.10 Home Inspection: Any Reliable $ $ Hazard Insurance: Any Reliable Loan amount x.3% / 12 = monthly payment Example: 100,000 x.3% = 300 / 12 = $25.00 per month Fannie Mae DU/DO Approval or Lender Approval The DU/DO approval is provided when a potential borrower(s) have provided all the required income and asset documents. The DU/DO underwriting is calculated when all factors are considered credit, income, assets, employment, and loan amount. If the following requirements meet the required guidelines the borrower(s) will be given an Approved Eligible. The Approved/Eligible can be provided to the realtors when they submit offers on behalf of the potential borrower(s) Lender Approval The Lender Approval with conditions are given when the underwriter for a particular lender has reviewed the loan file and determine if the loan can be approved with conditions or denied. 8

9 LOAN ORIGINATOR TRAINING COURSE 3 Rate Sheets: attachment Rate sheets are used to establish a certain rate for the borrower(s) and will identify the cost or credit for that rate. Note: You can down load one of our lender rate sheet to view and study. Lender cost consist of: Lower credit scores, non-owner occupied, investment property, LTV, and lower interest rates Lender credit consist of: Higher Credit score, LTV, higher rate Loan Programs #1. FHA #2. Reverse Mortgage #3. Harp 2 #4. VA #5. FHA Stream Line #6. Conventional #7. Commercial / Hard Money/ Standard # Residential Hard Money #9. Stated Income 9

10 Loan Program Scenarios: 1. 0% Down Payment / 620+ FHA (Sapphire Program) 2. 0% Down Payment / 640+ FHA Cal HFA % Down Payment FHA 4. 5% - 10% Down Payment Conventional (With or Without PMI) 5. 20% Down Payment Conventional ( NO PMI) 6. No Income / No Assets / Equity Reverse Mortgage 7. Freddie Mack / Fannie Mae / No appraisal/ 620 Fico HARP No appraisal / No Income / Mortgage History last 12 months no lattes FHA Streamline 9. 65% LTV / Credit Score Stated Income % - 65% LTV / No Credit Score / Commercial / Complete Loan Prospect Profile Commercial Hard Money % - 65% LTV / NO Credit Score / 1-4 units / Complete Loan Prospect Profile Residential Hard Money FHA Debt Ratios Requirements & Guidelines In order to prevent homebuyers from getting into a home they cannot afford, FHA requirements and guidelines have been set in place requiring borrowers and/or their spouse to qualify according to set debt to income ratios. These ratios are used to calculate whether or not the potential borrower is in a financial position that would allow them to meet the demands that are often included in owning a home. The two ratios are as follows: If you get an AUS approval, the maximum DTI ratio can be quite high. 10

11 1) Mortgage Payment Expense to Effective Income (Front-End Ratio) Add up the total mortgage payment (principal and interest, escrow deposits for taxes, hazard insurance, mortgage insurance premium, homeowners' dues, etc.). Then, take that amount and divide it by the gross monthly income. The maximum ratio to qualify is 31%. See the following example: Total amount of new house payment: $750 Borrower's gross monthly income (including spouse, if married): $2,850 Divide total house payment by gross monthly income: $750/$2,850 Debt to income ratio: 26.32% 2) Total Fixed Payment to Effective Income (Back-End Ratios) Add up the total mortgage payment (principal and interest, escrow deposits for taxes, hazard insurance, mortgage insurance premium, homeowners' dues, etc.) and all recurring monthly revolving and installment debt (car loans, personal loans, student loans, credit cards, etc.). Then, take that amount and divide it by the gross monthly income. The maximum ratio to qualify is 43%. See the following example: Total amount of new house payment: $750 Total amount of monthly recurring debt: $400 Total amount of monthly debt: $1,150 Borrower's gross monthly income (including spouse, if married) 11 $2,850

12 Divide total monthly debt by gross monthly income: $1,150/$2,850 Debt to income ratio: 40.35% Back-End Ratios the minimum required monthly payments on all the following: Auto Loans- (except if there is less than 9 months left tom pay off) Student Loans- (except if there is less than 9 months left tom pay off) Personal Loans- (except if there is less than 9 months left tom pay off) Child Support- (except if there is less than 9 months left tom pay off) Alimony- (except if there is less than 9 months left tom pay off) Federal Tax Lien Repayment Schedules- (except if there is less than 9 months left tom pay off) Charge Cards minimum required payments only Following are monthly liabilities that are not used to calculate debt ratios: Utility Bills Car &Health Insurance Cell Phone Bills Any bills not reflected on your credit report Please note that the above indicators do not exclusively determine whether or not a candidate will qualify for an FHA loan. Other factors will be considered, including credit history and job stability FHA FIXED RATE LOANS By serving as an umbrella under which lenders have the confidence to extend loans to those who may not meet conventional loan requirements, FHA's mortgage insurance allows individuals to qualify who may have been previously denied for a home loan by conventional underwriting guidelines. FHA loans benefit those who would like to purchase a home but haven't been able to put money away for the purchase, like recent college graduates, newlyweds, or people who are still trying to complete their education. It also allows individuals to qualify for a FHA loan whose credit has been marred by bankruptcy or foreclosure. 12

13 FHA LOAN LIMITS: To find loan limits in other Counties: Go to VA Debt Ratios Max DTI Ratio for VA Loans For VA loans, the same automated/manual UW rules apply. If you get an AUS approval, the maximum DTI ratio can be quite high. However, if it s manually underwritten then the maximum debt-to-income ratio is 41% (back-end). There is no front-end requirement for VA loans. Again, as with FHA loans, if you have compensating factors and the lender allows it, you can exceed the 41% threshold. Specifically, if your residual income is 120% of the acceptable limit for your geography, the 41% DTI limit can be exceeded, so long as the lender gives you the go-ahead. In other words, most of these limits aren t set in stone, assuming you re a sound borrower otherwise VA Fixed Rate Loans In 1944, President Franklin D. Roosevelt signed the Servicemen's Readjustment Act into law. This bill, which eventually became known as the GI Bill, allowed veterans to purchase homes without making a down payment. Like other fixed rate loans, the VA Fixed Rate Loan gives borrowers the option of financing their mortgage in 15, 20, 25, or 30 year terms with the interest rate remaining fixed for the life of the loan. VA loans are guaranteed by the Department of Veterans Affairs and can be used to purchase a single family home, including a townhouse or condominium unit in a VA approved project, to build a home, and purchase and improve a home. Loans are assumable under certain conditions and do not have a prepayment penalty. VA financing is designed to benefit veterans of the armed services, those currently in active duty or the reserves, and their spouses. In order to qualify for a VA loan veterans must be eligible as defined by the Department of Veterans Affairs. Veterans can qualify to put zero down on a loan up to $417,000. VA Fixed Rate Loans are full documentation loans. Before closing, a funding fee must be collected from the borrower and can be financed into the loan. Funding fee exemption is possible upon proper verification of disability California VA Loan Limits: Go to: 13

14 Conventional Debt Ratios Requirements The income requirements for conforming loans are practical and easy to understand. Like other mortgage programs, conforming loans use debt-to-income (DTI) ratios to qualify applicant income and determine their ability to make their payments on time. The two debt-to-ratios used are called the front ratio, also known as top ratio and the back ratio, also known as the bottom ratio. The front ratio measures the applicants new proposed housing payment with principal, interest, taxes, and insurance (PITI) as a percentage of their total monthly income. The back ratio measures the applicants newly proposed total monthly payments, including the new housing payment and all current monthly obligations, as a percentage of their total monthly income. The back ratio includes the borrower s current credit cards payments, car payments, student loan payments, and any monthly obligations. Conforming loan income guidelines include the following components: The applicant must be gainfully employed for at least two years. The applicant must adhere to the conforming debt-to-income requirements of 33/45 via documented income. 33% Front Ratio The new housing payment may not exceed 33 percent of the applicants combined monthly income. 45% Back Ratio The new total monthly debt amount, including new home payment, may not exceed 45 percent of the applicant s combined monthly income. Flexibility up to 50% DTI may be offered for certain applicants with strong compensating factors. Conventional Fixed Rate Loan Conventional Conforming Fixed Rate Loans are fixed in 15, 20, 25, or 30 year terms with the interest rate remaining fixed for the life of the loan. These loans follow the strictest guidelines for eligibility in terms of loan amounts. They are not assumable and may not contain a prepayment penalty.* Conforming Loan Limits Conventional conforming loan limits for one-unit homes has remained unchanged at $417,000 for the last eight years, except in some high-cost areas of the country where limits may be higher. In these high-cost areas, the single-family loan limits may be as high as $625,500. In extremely costly areas outside the lower 48 states, single-family limits can climb even higher to $938,

15 2017 General Conforming Loan Limits Go to: Today s conforming loan limits are set at $424,100 for areas that aren t considered high-cost by the FHFA. Units Continental U.S. and Puerto Rico 1 $424,100 2 $543,000 3 $656,350 4 $815, High-Cost Conforming Loan Limits Conventional mortgages issued after October 1st, 2011 use what s known as Permanent High-Cost Limits to determine the maximum high-cost loan amounts. These high-cost limits are figured by calculating 115% of the median home price of the area up to a maximum of 50% above the baseline limit ($625,500). High-cost areas of the country that have elevated conventional limits include New York City, San Francisco, Los Angeles, Washington D.C. and Boston. Units Continental U.S. and Puerto Rico 1 $636,150 2 $814,500 3 $984,525 4 $1,223,475 15

16 LOAN ORIGINATOR TRAINING COURSE 4 Disclosures: At the time of loan application when borrowers apply for a mortgage loan, mortgage brokers and/or lenders must give the borrowers: A Special Information Booklet, which contains consumer information regarding various real estate settlement services. (Required for purchase transactions only) and A Loan Estimate (LE) of settlement costs, which lists the charges the buyer is likely to pay at settlement. Depending on the type of charge and service provider selected, the difference between the estimated costs (LE) and actual costs at settlement (Closing Dislosures) may be subject to tolerance levels. If tolerance requirements are exceeded, then the borrower may be due a refund from the lender. When a loan originator permits a borrower to shop for third-party settlement services, the loan originator must provide the borrower with a written list of settlement service providers at the time of the LE. A Mortgage Servicing Disclosure Statement, which discloses to the borrower whether the lender intends to service the loan or transfer it to another lender. If the borrowers don't get these documents at the time of application, the lender must mail them within three business days of receiving the loan application. Conventional Refer to Calyx Point or Lender for all updated CA required disclosures After the Uniform Residential Loan Application (1003) is completed and signed the following disclosures highlighted in red must be mailed, ed, faxed or given to the borrower face to face within 3 business Days. Loan Estimate (LE) - 3 business days Servicing Disclosure Statement - 3 business days Uniform Residential Loan Application 1003 (disclosure are sent within 3 business days after signing & completing application. Intent To Proceed with Application (ITOP) Borrowers Certification and Authorization 1008 Anti-Steering - Point CA Fair Lending Notice Notice of Right to Receive Copy of Appraisal Credit Score Disclosure CA Insurance Disclosure 4506-T T W2 VOE - Point MLDS - Point Mortgage Broker Fee Agreement Point GFE Service Providers List 16

17 Social Security Number Verifications (SSA-89) FHA Refer to Calyx Point and Lender to get updated FHA and CA disclosures After the Uniform Residential Loan Application (1003) is completed and signed the following disclosures highlighted in red must be mailed, ed, faxed or given to the borrower face to face within 3 business Days. HUD/VA Addendum to Uniform Residential loan application Loan Estimate (LE) - 3 business days Servicing Disclosure Statement - 3 business days Uniform Residential Loan Application 1003 (disclosure are sent within 3 business days after signing & completing application Intent To Proceed with Application (ITOP) Borrowers Certification and Authorization 1008 Anti-Steering - Point CA Fair Lending Notice Notice of Right to Receive Copy of Appraisal Credit Score Disclosure CA Insurance Disclosure 4506-T T W2 VOE - Point MLDS - Point Mortgage Broker Fee Agreement Point GFE Service Providers List Social Security Number Verifications (SSA-89 17

18 VA - Refer to Calyx Point and lender to get updated VA and CA disclosures After the Uniform Residential Loan Application (1003) is completed and signed the following disclosures highlighted in red must be mailed, ed, faxed or given to the borrower face to face within 3 business Days. VA request for a certificate of eligibility HUD/VA Addendum to Uniform Residential loan application Loan Estimate (LE) - 3 business day Servicing Disclosure Statement - 3 business days Uniform Residential Loan Application 1003 (disclosure are sent within 3 business days after signing & completing application. Intent to Proceed with Application Borrowers Certification and Authorization 1008 Anti-Steering - Point CA Fair Lending Notice Notice of Right to Receive Copy of Appraisal Credit Score Disclosure CA Insurance Disclosure 4506-T T W2 VOE - Point MLDS - Point Mortgage Broker Fee Agreement Point GFE Service Providers List Social Security Number Verifications (SSA-89) Reverse Mortgage (Reverse Vision provided all disclosures and loan application) 18

19 Uploading Documents/Attachments Uploading the required documents and attachments will produce: Approved with Conditions from the selected lender and will increase faster turnaround to close loans. Attachments: Example: All documents must be in separate attachments. documents to: Documents: Credit Report Last 2 Year Tax Returns / W2 s Last 2 Month Pay Stubs Last 2 Month Bank Statements Driver License and Social Security Picture Retirement Statement / 401k/ Pension/Stocks 401K Terms and Conditions Social Security Income / Disability Income Child Support Documents to upload for a Purchase loan: 1003 FNM file Purchase Agreement & Counter Offer Last 2 months Bank Statements Last 2 year W2 s Retirement Statement Child Support Documents SSI Awards Letter Disability Statement Credit Report Driver s License Social Security Card Last 2 recent Paystubs 19

20 Documents to upload for a Refinance 1003 FNM file Last 2 months Bank Statements Last 2 year W2 s Retirement Statement Child Support Documents SSI Awards Letter Disability Statement Credit Report Driver s License Social Security Card Last 2 recent Paystubs Mortgage Statement Homeowners Insurance Credit Report Note: The upload process will vary per Lender PLEASE DOWNLOAD AND REVIEW THE FOLLOWING DOCUMENTS: MORTGAGE GLOSSARY PROSPECT SUMMARY UNIFORM RESIDENTAL LOAN APPLICATION(1003) TITLE FEES AFMC BORROWER AUTHORIZATION WAYS TO HOLD TITLE PLEASE REVIEW THE FOLLWING CALCULATORS: INCOME DTI LTV/CLVT GRI 20

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