Annuitization of Assets Eligible Borrowers Principal Curtailments (also known as principal reduction)

Transcription

1 Chase Correspondent Lending / Products / Non-Agency (Jumbo) Amortizing Fixed (05/14/18) Non-Agency (Jumbo) Amortizing Fixed (05/14/18) Table of Contents Included in this document are: Product Specifications Chase Overlays Market Types & Loan Terms Special Features Amortization Type Delegated Correspondent Eligibility Non-Delegated Correspondent Eligibility Minimum Loan Amount Maximum and Minimum Credit Score High LTV Transactions Underwriting Specifications Annuitization of Assets Eligible Borrowers Principal Curtailments (also known as principal reduction) Appraisals Eligible Funds Private Mortgage Insurance Assumability Escrow Waivers Property Type Bankruptcy & Foreclosure Geographic Restrictions Purchase Transaction Definition Buydown (Temporary) Interested Party Contributions Qualifying Ratios Completion Escrows Legal Documents Recast Option Construction to Perm Financing Requirements Live Free Mortgages Redemption Rights Continuity of Obligation Multiple Property Ownership Refinance (Cash-Out) Conversion of Primary Residence Non-Occupant Co-Borrower Refinance (No Cash-Out) Conversion Option Non-U.S. Citizen Relocation or Trailing Co-Borrower Credit History Predatory or High Cost Loan Reserves Credit Only Applications Occupancy Subordinate Financing Deed Restricted Properties Prepayment Option Title/Deed Restrictions Disputed Derogatory Credit Documentation Uniform Appraisal Dataset /(UAD) Requirements Underwriting Method Appendix A PRODUCT SPECIFICATIONS Chase Overlays Not applicable. Non-Agency loans must be underwritten in accordance with Chase guidelines Market Types & Loan Terms Product Market Type Year Fixed Rate Year Fixed Rate and 15-Year Fixed Rate 623 Special Features Eligible features: Texas 50(a)(6) Amortization Type Fully Amortizing Delegated Correspondent Eligibility To be eligible to underwrite Non-Agency loans under Delegated Non-Agency authority, Correspondents must meet all of the following criteria:

2 Must be in Good Standing as defined in the Correspondent Seller Eligibility Standards Must receive written approval from Chase prior to participating Must have been previously approved for Conventional Delegated Authority and Non-Delegated, Non-Agency authority Minimum HUD adjusted net worth of $10 million Must maintain a minimum of 20% of HUD adjusted net worth in liquid assets Must execute the Delegated Non-Agency Underwriting Addendum to the Correspondent Origination and Sales Agreement prior to delivering Delegated Non-Agency loans for purchase In addition, Correspondents must successfully complete an underwriting test case process Non-Delegated Correspondent Eligibility To be eligible to deliver Non-Agency loans to Chase, Correspondents must meet all of the following criteria: Must receive written approval from Chase prior to participating Minimum HUD adjusted net worth of $2.5 million Overall satisfactory performance with no billings > 90 days and delinquency below standard compare ratio requirements Minimum Loan Amount Minimum Loan amounts apply as follows: For products and features that are: Available under the Chase Agency High Balance programs Not available under the Chase Agency High Balance programs The minimum loan amount is: The HERA Agency High Balance loans limits as specified for the county, state and number of units, plus $1 The conforming loan limit as specified for the state and number of units, plus $1 Refer to Appendix A for detailed requirements. Maximum and Minimum Credit Score Primary Residence Primary Residence All States Maximum Loan Amount $3,000,000 (except for > 85%) Transaction Type Property Type Maximum Minimum Credit Score Maximum DTI Purchase and No Cash- Out Refinance 1 Unit / PUD / Condo* / Co-op 85/85/85% 80/80/80% % 2 Units 80/80/80% Cannot use rental income from subject to qualify for s > 75% % 3-4 Units 75/75/75% % Cash Out Refinance 1 Unit / PUD / Condo / Coop 80/80/80% 75/75/75% % 2-4 Units Note: Maximum LTV/CLTV for condominiums in Miami-Dade County, Florida is 80/80% **More restrictive LTV/CLTV may apply if Condo Project Review Type is Limited Review. Refer to Chase Limited Review for Established Condo Project topic for additional information. Second Home Second/Vacation Home All States Maximum Loan Amount $3,000,000 Transaction Type Property Type Maximum Minimum Credit Score Maximum DTI Purchase and No Cash- Out Refinance 1 Unit / PUD / Condo / Coop 80/80/80% % Cash-out Refinance Investment Investment All States Maximum Loan Amount $1,000,000

3 Transaction Type Property Type Maximum Minimum Credit Score Maximum DTI Purchase and No Cash-Out Refinance 1 Unit / PUD 75/75/75% % Condo / Co-op 2-4 Units Cash-Out Refinance *Co-op eligible in NY only. Condos may have LTV restrictions based on review type. See Geographic Restrictions and Property Type sections in this topic **More restrictive LTV/CLTV may apply if Condo Project Review Type is Limited Review. Refer to Chase Limited Review for Established Condo Project topic for additional information. *** Non-QM, and Non-Occupant Co-borrower transactions are not permitted on loans with LTVs >80% Correspondents can deliver cooperative share loans secured by second homes in New York City when: Second home is the only cooperative unit owned by the borrower, and Borrower's primary residence is not located in New York City Additional Criteria for Correspondents with Delegated Non-Agency Authority: Maximum Loan Amount: $2MM for Primary and Second Home transactions and $1,000,000 for Investment transactions Minimum Credit Score: More restrictive of the credit score outlined above for transaction type or 680. QM Designation: Must be QM-Safe Harbor or QM-Rebuttable presumption. Delegated Non-Agency amortizing transactions with a Non-QM designation are not eligible. Notes: Loans with loan amounts >$2MM (Primary and Second Home) that otherwise meet the Non-Agency eligibility requirements, must be submitted to Chase Underwriting prior to closing. Transactions secured by a co-op must be underwritten by Chase and must continue to be submitted to Chase for review; however, Correspondents with existing Delegated Co-op and Delegated Non-Agency authority must underwrite Non-Agency Primary and Second Home co-op transactions with loan amounts $2MM High LTV Transactions High LTV Maximum and Minimum Credit Score The following limits and credit scores apply for High LTV Non-Agency transactions (s greater than 85%): High LTV Primary Residence Only Non-Agency Amortizing Fixed Transaction Type Property Type Maximum Minimum Credit Score Maximum DTI Purchase and No Cash- Out Refinance (Chaseto-Chase only) 1 Unit / PUD / Condo / Co-op 89.99/89.99/89.99% (see additional requirements below) % High LTV Maximum Loan Amounts The following maximum loan amounts apply for High LTV Non-Agency transactions (s greater than 85%): State/MSA Counties Maximum Loan Amount Counties with standard loan limits* $750,000 Counties that allow high balance loan limits* $1,000,000 *Refer to Fannie Mae and Freddie Mac Maximum Loan Limits California/ Los Angeles-Long Beach-Anaheim California/ San Francisco-Oakland-Hayward California/ Los Angeles Orange Alameda Contra Costa Marin San Francisco San Mateo San Benito $2,000,000

4 San Jose-Sunnyvale-Santa Clara Connecticut Bridgeport-Stamford-Norwalk New York, New Jersey, Pennsylvania/ New York-Newark-Jersey City, NY-NJ-PA Santa Clara Fairfield New York counties: Bronx, Dutchess, Kings, Nassau, New York, Orange, Putnam, Queens, Richmond, Rockland, Suffolk, and Westchester New Jersey counties: Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, Sussex, and Union Pennsylvania county: Pike Ineligible MSAs High LTV The following Metropolitan Statistical Areas (MSAs) are not eligible for the High LTV Non-Agency product: State/MSA Arizona/Phoenix-Mesa-Scottsdale California/Riverside-San Bernardino Ontario California/Sacramento-Roseville-Arden-Arcade Florida/Miami-Fort Lauderdale-West Palm Beach Counties Maricopa Pinal Riverside San Bernardino El Dorado Placer Sacramento Yolo Broward Miami-Dade Palm Beach Additional Requirements for LTV/CLTV/ HCLTVs greater than 85% The following additional requirements apply for high LTV Non-Agency transactions (s greater than 85%: Maximum 89.99% unrounded Refinance transactions are limited to Chase-to-Chase When transaction involves subordinate financing and the CLTV exceeds 89.00%, ChaseLoanManager will return a message instructing the Correspondent to submit an Assistance Request through ChaseLoanManager to lock the loan A loan with unrounded LTV of 90.00% is not eligible for purchase by Chase; a principal curtailment to bring to the LTV to 89.99% is not allowed Minimum of 30 months of reserves UNDERWRITING SPECIFICATIONS Annuitization of Assets Refer to Credit Guide Non-Agency > Income Non-Agency > Other Income Non-Agency > Annuitization of Employment-Related Assets for requirements. Appraisals Follow requirements noted in Chase Credit Guide, plus An interior inspection is required. Two appraisals are required for loan amounts >$2 million <= $3 million Assumability Loans are not assumable Bankruptcy & Foreclosure Refer to Credit Guide>Credit History>Credit Requirements and Analysis for detailed requirements Buydown (Temporary) Not available Completion Escrows Eligible on Purchase transactions only (all occupancy types). Refer to Escrow Holdback/Completion Escrow Requirements for detailed requirements Construction to Perm Financing Requirements

5 Two Time Close Requirements: A Two Time Close transaction involves two separate closing transactions, one for the construction phase and another closing for the permanent financing Limited Cash Out (NCO) or Cash Out Refinance) Use the maximum refinance The LTV is calculated by dividing the loan amount of the construction-to-permanent financing by the as-completed appraised value of the property (lot and improvements) See Refinance Cash Out and Refinance No Cash Out sections for additional requirements on refinance transactions Continuity of Obligation Refer to Correspondent Lending Guide > Credit Guide > Definition Purchase, Refinance, Land Contract, Construction to Perm Conversion of Primary Residence See Credit Guide Non-Agency > Occupancy Non-Agency > Conversion of Primary Residence Non-Agency. Conversion Option None Credit History Follow Chase Credit Guide, plus: Minimum two years established credit history is required. A minimum credit risk score is required. See the Maximum & Minimum Credit Score topic for minimum score requirements. Credit Only Applications Deed Restricted Properties Deed Restrictions that negatively impact marketability or are considered prejudicial (i.e. restrictions based on buyers marital status, race, religion, etc.) are not eligible. Code, Covenant and Restrictions (including, but not limited to, restrictions requiring home must be maintained or HOA must approve addition, colors, etc.) are permitted and do not require Chase approval See Appraisal and Property Requirements > General Requirements > Deed Restricted Properties section for detailed requirements. Disputed Derogatory Credit Refer to Credit Guide Non-Agency > Credit History Non-Agency > Derogatory Credit Non-Agency > Disputed Derogatory Credit. Documentation Full Doc Only Fully processed 4506T with transcripts required for all borrowers NOTE: Refer to the Underwriting > Credit Documents and Appraisal Expiration and Underwriting > Chase Underwriting topics for additional guidance on successfully documenting and underwriting loan files Eligible Borrowers U.S. Citizens Permanent Resident Aliens* Non-Permanent Resident Aliens* Note: LTVs > % are permitted on U.S. Citizen and Permanent Resident Alien transactions only. *Refer to Foreign Borrowers, Income, Assets, and Documentation Considerations for detailed requirements Eligible Funds Refer to Credit Guide>Assets>Asset Types section of the Correspondent Lending Guide for eligible funds for down payment, closing costs and prepaid items Escrow Waivers Eligible, see Closed Loan Documentation > Closed Loan Documentation Requirements > Escrow Waivers for funding requirements See Registration and Pricing > Best Efforts > Service Release Premium for information on applicable service release premiums Underwriter approval required for LTV >80% Geographic Restrictions Texas 50(a)(6) Homestead Properties: Limited to a maximum of 80/80%. See Texas Refinance Product Guide under products>texas Refinance Transactions Co-ops: Eligible in NY only Refer to Co-op Guide > Cooperative Share Lending Overview > Chase Cooperative Lending Areas

6 Miscellaneous State Legislation Requirements: Follow your state-specific guidelines Interested Party Contributions Occupancy Type Maximum IPC Primary Residence and Second Homes >75% 6% <= 75% 9% Investment All LTVs 2% NOTE: May include seller paid prepaid items and other costs (may not exceed the allowed percentage as dictated by the. The CLTV limitations include secondary financing from all sources Legal Documents Standard documentation applies Live Free Mortgages Note: These loans are originated by lenders at relatively high rates and sold with the intent of specifically targeting these same borrowers with a low/no cost refinance in the near future. Thus the originating lender would quickly generate an additional service release premium. This unethical practice often includes an arrangement whereby the originating lender agrees to pay a number of installments on the loan ( live free ). Chase will not purchase any loan made under these circumstances or any seasoned loan that the lender has agreed to refinance or that is in the process of refinancing. Multiple Property Ownership If the subject property is: Primary Residence: Unlimited Second Home/Investment: 4 Refer to Correspondent Lending Guide>Credit Guide>Occupancy>Multiple Property Ownership for specific guidelines. Non-Occupant Co-Borrower Refer to Non-Occupant Co-Borrower Non-Agency for requirements. Non-U.S. Citizen Non-Permanent Resident Borrower: Eligible with proof of valid Visa Must be occupying borrower Primary Residence only Maximum is lesser of: stated in product guide, or 80% If LTV > 70%, borrower must be established in U.S. with two years residence and employment history When a temporary (non-permanent) resident s visa will expire within 12 months of application date, a letter from the employer indicating intent to sponsor the employee s visa renewal is required. If Non-U.S. citizen signing with a U.S. Citizen, and is not a major contributor to qualifying income, cash reserves or other credit aspects of the loan, underwrite as U.S. Citizen. Must have valid Visa. Refer to Foreign Borrowers, Income, Assets, and Documentation Considerations for acceptable Visa types Non-Resident Borrower: Permanent Resident Borrower: Eligible with proof of lawful permanent residency Underwritten the same as U.S. citizen Occupancy Primary Only, Second Homes and Investment Predatory or High Cost Loan Chase Correspondent will not purchase loans defined as a high cost or predatory mortgage loan. Refer to Compliance-Related Topics > High Cost. Prepayment Option None Principal Curtailments (also known as principal reduction)

7 All loans must comply with current guidelines and program requirements regarding cash-back to the borrower. Refer to TILA-RESPA Integrated Disclosure (TRID) topic for information. Private Mortgage Insurance Not applicable Property Type Primary Residence: 1-4 Unit, Condo/PUD/Co-op* Second Homes: 1 Unit, Condo/PUD/Co-op* Investment: Notes: 1 Unit PUD Co-ops eligible in New York Condotel/lodging units properties are not eligible Detached PUDs are considered Single Family Residential Correspondents with Delegated Non-Agency Authority may rep and warrant that the condominium or Attached PUD meets Chase and Agency condominium project approval guidelines as evidenced by including a completed Delegated Correspondent Certification of Eligibility for Condominiums and Attached PUDs, 1008 or Condo/PUD Warranty Form (Correspondent s own form) in the closed loan file, Otherwise, condominium projects and attached PUDs must be submitted to Chase Project Approval Group for consideration under the Chase Project Review for Established Projects, Chase Project Review of New Projects and Conversions, or Chase Limited Review of Established Attached Condo Projects Purchase Transaction Definition A purchase-money transaction is defined as one in which the proceeds are used to finance the purchase of a home. This includes: A mortgage transaction, in which all of the proceeds are used to retire an outstanding balance on an installment land contract, including costs incurred for rehabilitation, renovation, or energy conservation improvements. A new mortgage created by modifying an interim construction loan within 180 days from completion as long as the borrower does not receive cash back at closing. Note: If the conversion occurs more than 180 days after completion, the transaction must be treated as a refinance. Additionally, an option is available in which the transaction can be considered a purchase used to finance the purchase of the home. Refer to Credit Guide Non-Agency > Definition Purchase, Refinance, Land Contract,Construction to Perm Non-Agency for Delayed Financing/Technical Refinance requirements. Qualifying Ratios Refer to maximum and Minimum Credit Score section of this guide for maximum DTI based on, credit score, transaction and property type. Qualify at the Note Rate Non-Occupant Co-Borrowers Qualify Occupant Borrower at lower of max DTI permitted based on credit score or 35/43% Qualify combined Incomes lower of max DTI permitted based on credit score or 28/36% Sum of all borrowers Income & Debt must qualify within Program Parameters Refer to Non-U.S. Citizens in this topic for additional requirements. Recast Option A recast option allows the principal and interest payment amount to be recalculated when an additional principal reduction is applied to the loan (also known as reamortization or re-amortization). The calculation is based on the remaining principal balance after the curtailment (amount is excess of the minimum required principal) is made. The interest rate and term of the loan remain unchanged. Amount of escrow payment is reviewed and calculated on an annual basis. All recast requests must be made after the loan is purchased by Chase and set up for Servicing. The request should be direct to the Servicing Department at or faxed to , Attention: Recasts Department. Typical recast guidelines are listed below: Recast request are considered on a case-by-case basis. All Agency and Non-Agency product request are contingent upon investor requirements. Minimum curtailment amount if generally $5,000, but may vary by product. A processing fee (generally $150-$300) may be charged. Redemption Rights Chase will not purchase loans with an unexpired redemption period regardless if the risk is covered by an insurance policy, redemption policy, redemption bond, or other risk mitigant. Loans sold to Chase must have clear, marketable title. Refinance (Cash Out) Maximum cash-out $250,000

8 Refer to Credit Guide Non-Agency > Definition Purchase, Refinance, Land Contract, Construction to Perm >Cash-Out Refinance Definition for detailed requirements for Cash-Out Refinance transactions. Refinance (No Cash Out) Refer to Credit Guide > Definition Purchase, Refinance, Land Contract, Construction to Perm >No Cash-Out Refinance Definition for detailed requirements for No Cash-Out Refinance transactions. Relocating Trailing Co-Borrower Corporate Relocation Permitted. Refer to Credit Guide> Employment > Corporate Relocation for detail requirements Trailing Co-Borrower Not permitted Reserves Reserve Requirements 80% 6* > 80 to 85% 18 months > 85% 30 months *12 months reserves required when any retirement account is used as a qualifying asset Note: For Second Home and Investment Property transactions, two months additional reserves required for each additional financed Second/Vacation or Investment Property owned. Refer to Assets > Asset Types Non-Agency > Reserves for additional requirements. Additional requirements may apply based on the transaction. Refer to the following topics for details: Conversion of Primary Residence Non-Agency Employment Income Salaried Sources Non-Agency Rental or Investment Property Income Non-Agency Subordinate Financing Refer to Credit Guide > Debt/Liabilities > Sub Financing for detailed requirements Title/Deed Restrictions The following are ineligible for delivery to Chase: Life Estates Blind Trusts Irrevocable Trusts Community Land Trusts Non-Permitted Additions outside of Chase published guidelines Uniform Appraisal Dataset (UAD) Requirements Non-Agency loans must comply with the UAD requirements. Note: Refer to Appraisal and Property Requirements > Appraisals for an outline of UAD requirements. Underwriting Method Eligible Underwriting Methods: Chase Underwriting Delegated Underwriting Manual Underwrite only Choice MI Underwriting are not permitted Appendix A NOTE: Minimum Loan Amounts apply to Non-Agency Amortizing Fixed Rate loans as outlined below: Primary Residence, Second/Vacation Homes and Investment* Non-Agency Product/Market Type Loan Term Transaction Type Property Type Minimum Loan amounts 47 Contiguous AK/HI Non- Agency Amortizing Fixed 15 Year Term 30-Year Term Purchase/No Cash- Out Refinance 1 Unit/PUD Condo*

9 Co-op* 2 Unit 3 Unit 4 Unit Cash-Out Refinance 1 Unit/PUD Condo* Co-op* 10 Year Term 20 Year Term 25 Year Term Purchase/No Cash- Out Refinance Cash-Out Refinance 2 Unit NA NA 3 Unit NA NA 4 Unit NA NA 1 Unit/PUD Condo* Co-op* 2 Unit $580,150 $870,225 3 Unit $701,250 $1,051,875 4 Unit $871,450 $1,307,175 1 Unit/PUD Condo Co-op 2 Unit NA NA 3 Unit NA NA 4 Unit NA NA *Condo and co-ops are allowed for Primary and Second Home transactions only and are not permitted on Investment Property transactions.