Section 1 Pricing Policies and Procedures

Section 1 Pricing Policies and Procedures For quicker navigation, click on Bookmarks Tab on the top left of the PDF. Pricing Policies and Procedures Loans with borrower FICO Scores below 680 will not be purchased by Nationwide Bank. Nationwide follows Fannie convention of lower of 2, middle of 3 scores. Additionally, FHA Streamline and VA interest rate reduction loans will require a credit report to ensure borrower FICO scores meet this guideline (at this time Nationwide Bank is not purchasing FHA Streamlines). Nationwide Bank s 5-Day Best Efforts Lock Period Option is explained on page 6. LOCK-IN A loan may be reserved at the time of application for a reservation period in accordance with the terms of Nationwide Standard Daily Price Sheet. The rate and points may be Locked-In for the specified period and will remain the same until the expiration date. If the loan is not closed, disbursed, and delivered to Nationwide Bank on or before the expiration date, the rate and points go to float. When this occurs, the price can be relocked for up to a thirty (30) day period at worse case pricing. Worse case pricing is the lesser of the original lock-in price or the current market price with a minimum of.125 charged. FLOAT When a loan application is reserved, the lender may choose to float the rate and points rather than Lock-In. Lock-in must occur on or before closing. When the lender chooses the float option, the rate and points may be subsequently locked in at anytime during the process of the loan, at the then current Nationwide price for up to a ninety (90) day period, that ninety (90) day period to begin on the date of Lock-In. The rate and points will be quoted from our Standard Daily Price Sheet. *The rate and points may be Locked-In for the specified period and will remain the same until the expiration date of the reservation period. If the loan is not closed, disbursed, and delivered to Nationwide Bank on or before the expiration date, the rate and points go to float. When this occurs, the price can be relocked for up to a thirty (30) day period Nationwide Bank 1

Pricing Policies and Procedures at worse case pricing. Worse case pricing is the lesser of the original lock-in price or the current market price with a minimum of.125 charged. All refinances must be closed and funds disbursed on or before the loan expiration date. Rescission time should be included within the lock period. Loan must be delivered on or before the expiration date. EXPIRATION OF THE LOCK-IN PERIOD: A. When a Lock-In reservation period expires prior to loan closing, the rate and points go to float. When this occurs, the price can be re-locked for up to a thirty (30) day period. The rate will be re-locked at worse case pricing. Worse case pricing is the lesser of the original lock-in price or the current market price with a minimum of.125 charged. B. When the loan involves a 3-day Right of Rescission, the loan must pay-out (disburse) no later than the lock expiration date and delivered in order to remain at the locked in rate and points. C. When the expiration date falls on a Saturday, Sunday, or a Holiday, Nationwide will extend the reservation expiration date to the following business day. (Nationwide will only recognize Holidays when Nationwide is not open for business). A change in terms, loan type, or loan status may render the loan subject to the current market price at the company s discretion. WHEN SHOULD A CHANGE TO A RESERVATION BE CALLED INTO NATIONWIDE RESERVATION DESK: Any change in loan type, terms, or loan amount over $1,000.00 requires a call to the Reservation Desk to make the change, and may necessitate resubmission to Underwriting. The loan may be re-priced at the company s discretion. LOAN DELIVERY: Correspondent partners must close, disburse, and deliver the closed loan file in purchasable form on or before the lock expiration date. Electronic closed loan files successfully submitted via the Nationwide Bank Correspondent website are considered to be delivered for interest rate lock protection. If the loan is received after the lock expiration date, the loan will be re-priced at worse case pricing. In addition to the closed loan file delivery requirements, correspondent Nationwide Bank 2

Pricing Policies and Procedures partners must ship the paper collateral file so that Nationwide Bank receives it no later than the business day following the closed loan file. INCOMPLETE FILE DELIVERY AND PENDED LOANS If Nationwide Bank receives the closed loan file before the interest rate lock has expired, the correspondent partner will have the greater of the rate lock expiration date or 10 calendar days from the date of the first On Hold Notice to clear funding deficiencies without any pricing penalty. Loans with funding deficiencies not cleared within this time period will be subject to a Deficiency Fee of 2.5 basis points per calendar day. Any loan with outstanding deficiencies for more than 30 days will be subject to worse case pricing in addition to the Deficiency Fee. EXTENSION POLICY: A rate lock extension is available to correspondent partners if requested on or before the rate lock expiration date. When an expiration date falls on a Saturday, Sunday or a holiday, Nationwide Bank will extend the rate lock expiration date to the following business day. (Nationwide Bank will only recognize holidays when Nationwide Bank is not open for business.) The extension fee will be based on the schedule listed below. (This schedule is subject to change.) Extension Fee Schedule Calendar Days Extended Extension Fee 1-2 days Free 3-5 days 0.125 6-10 days 0.250 11-15 days 0.375 16 20 days 0.500 21 30 days.625 31 or more days Worse case pricing* *Worse case pricing is the lesser of the original lock-in price or the current market price with a minimum of 0.125 charged. A loan can only be extended a maximum of 30 days or the length of the original lock period, whichever is less, at one time. Nationwide Bank 3

Pricing Policies and Procedures Extension days and fees are cumulative. A first extension of 5 days would be 0.125. A second extension of 10 additional days would be an additional 0.25 for total of 0.375 pts. A third extension of 15 additional days would be an additional 0.25 for a total of 0.625. Once a loan has been extended over 30 days in total, it will be at worse case. When an extension is requested after the rate lock expiration date, the loan is at worse case pricing. RATE LOCK NEGOTIATION POLICY: The terms of this policy are as follows: Total pricing to the correspondent partner must not improve. The benefit must be passed on to the borrower (i.e. the renegotiated rate must not be higher than the highest rate, based on current pricing, which will allow the partner to be paid the equivalent or lower of its original pricing). The borrower must have requested the renegotiation. The expiration date of the negotiated rate lock will be the lesser of the existing expiration date or 30 days from the renegotiation date. The loan file must be delivered by the expiration date. Renegotiation of pricing is a one-time option for a locked loan. A renegotiated loan may be extended one time for a maximum of 15 days at Nationwide Bank s standard extension pricing. All-in pricing on a renegotiated lock will be determined with the SRP schedule in effect for current day s pricing. In order to be considered eligible for a rate-lock renegotiation, the customer s rate must drop by a minimum of.375% for the same lock period (i.e. the Base Price* associated with the current rate.375% below the original lock must be greater than or equal to the original base price). Loan is subject to a 0.50 pt renegotiation fee Example: Original Lock Current Pricing Renegotiated Lock Terms (07/21/12) (08/10/12) Exp 09/19/12 4.50% 4.125% 4.125% ** Nationwide Bank 4

Pricing Policies and Procedures 60-Day 60-Day 09/09/12 Exp Date 100.5 Base Price 100.75 Base Price* 100.25 Base Price * This loan is eligible for a renegotiated lock based on the fact that the Base Price for an interest rate.375% lower than the current rate (for the same original lock period) is equal to or higher than the original Base Price. ** The interest rate is reduced to a point where the New Base Price (net of the.5% renegotiation fee) is no greater than the original base price. Once you have determined that your request meets all criteria of the Rate Lock Renegotiation Policy, please email the request to mtg_reservation_desk@nationwide.com. The renegotiated pricing will be determined based upon the rate sheet in effect at the time of the email submission. 5-Day Best Efforts Lock Period Option This option is available for our fixed rate conventional loan programs. The 5 day lock option is on our Correspondent rate sheet. You also have the ability to select a 5 day lock for loans registered via our website. Loans registered and delivered under our 5 Day BE Lock option are subject to all Nationwide Bank Correspondent Guide and Announcements requirements. The only exceptions to our standard policies and procedures are: Rate Lock Renegotiations and Rate Lock Extensions: Rate Lock Renegotiations: Loans registered as 5 Day BE locks are not eligible for our Rate Lock Renegotiation Policy. Rate Lock Extensions: Rate lock extensions of up to 15 days are available for 5 Day BE loans. The Extension Fee table applicable to 5 Day BE loans is as follows: Calendar Days Extension Fee Extended 1 5 days 0.125 6 10 days 0.250 11 15 days 0.375 Nationwide Bank 5

16 or more days Worse case pricing Daily Rates and Reserving Funds OBTAINING DAILY RATES: Nationwide will make available prices at which it will purchase loans, depending on the loan amount and interest rate. Prices will be made available daily after 9:30 a.m., CST. Prices will cut off the following day at 8:30 a.m., CST., (i.e., a price quoted at 9:30 a.m. on Monday would be in effect through 8:30 a.m. on Tuesday. At 9:30 a.m. on Tuesday, the new price would be in effect). Daily Rates and Reserving Funds Rates may be emailed to multiple persons within your office. If e-mail is unavailable you can access rates from our website at https://www.nationwidebankmortgage.com/correspondent/community.aspx, using your personal user name and password. (Please contact the Correspondent Lending Department to obtain your user name and password or to inquire about receiving rates through e-mail). ALL PRICES ARE SUBJECT TO CHANGE DAILY, AT ANYTIME, OR PENDING ON MARKET CONDITIONS. HOW TO RESERVE FUNDS: Funds may be reserved either by Internet, fax, or telephone. Internet Reservations can be made through https://www.nationwidebankmortgage.com/correspondent/community.aspx. When reserving your loan on the internet you can have immediate access to your loan confirmation on-line. Reservation Page Enhancements Correspondent Lenders can import a 1003 on the Reservation page to reduce manual entry and ensure the reserved loan matches the 1003. This will auto-populate many of the data fields that you would otherwise have to enter. The following bullet points highlight the scope of the enhancements: Correspondent Lenders should import the 1003 prior to using the Price A Loan function on the reservation page. If the 1003 is imported after pricing a loan then the 1003 information will override the Price A Loan information. 1003s can be uploaded in a.dat,.exp or.fnm format. An error is displayed if in any other format. The Reservation page will accept Full or Quick 1003s. Nationwide Bank 6

Note: While a Quick 1003 or Full 1003 are accepted on the Reservation page, a Full 1003 is required for all other website functions. Correspondent Lenders will receive a pop-up displaying the data from the 1003 to ensure the correct information is being uploaded. Any required reservation field that does not auto-populate will need entered before submitting. To fax in a reservation, please use Nationwide Bank s Loan Registration Form. Only faxes sent to 800-231-2034 will be honored. A Loan Registration Form is located in the Forms section on our website. Reservations made via fax will receive their loan confirmation by fax or posted on the web with your loan number. Daily Rates and Reserving Funds Telephone. The reservation desk is available from 8:00 AM CST and 4:30 CST. Outside of these hours a voice message will be accepted. Nationwide Bank s Reservation Desk can be reached at 800-233-5895. Reservations made via telephone will have their loan confirmation posted on the web with your loan number. Please have the fieldman number that was assigned to your company available when calling for reservations. A date of expiration of commitment will be given at this time. Your confirmation of your lock will be posted on the web with your loan number. The Reservation Desk resets daily prices between 8:30 AM CST and 9:30 AM CST, Monday Friday. Loan reservations cannot be placed during this time frame. Nationwide Bank reserves the right at, our sole discretion, to close the Reservation Desk at anytime due to market conditions. It is the correspondent s responsibility to report any discrepancies on the confirmation upon receipt. 120 Day Float Down New Construction RESERVATION TIME: 120 DAYS RATE CAP: Increase rate chosen from price sheet by.50 POINTS & FEES: Same as shown on price sheet on day of reservation Nationwide Bank 7

LOCK-IN: Lock-in within sixty (60) days of closing (not to exceed the original 120 day expiration date) at current rate and points shown on current price sheet or at cap rate and points established at reservation, whichever is most advantageous to borrower. UPFRONT FEE: A 1.0% fee (based on loan amount) is to be collected upfront. The 1.0% fee is refundable prior to closing only in the event Nationwide rejects the loan. The fee is to be remitted to Nationwide within three (3) business days after reservation of funds and will be credited back at funding or returned if the loan is rejected. The reservation will be cancelled if the fee is not received within this time frame. This fee is to be mailed to the attention of the Reservation Desk. UNDERWRITING: The borrowers will be qualified at the cap rate. Nationwide s Fees Charged Per Loan ADMINISTRATION FEE: All purchased loans will be assessed an Administration Fee of $221.00. This fee will be netted from the funding at the time of purchase. UNDERWRITING FEE: The fees are as follows: Conventional DO: $210 (Correspondent provides loan file with DO findings) Conventional DU: $210 (Nationwide Bank runs loan application through DU) All Types of VA/FHA: $210 Appraisal Review Only $75 Appraisal Waiver: $75* Condo Approval (CPM) $75 (Delegated Lenders Only) *If a file has been approved through DO/DU and granted an appraisal waiver, an appraisal waiver fee of $75 will be charged if a property appraisal is not ordered. Delegated lenders that do not have access to Fannie Mae's condo project approval system, Condo Project Manager (CPM), may submit the completed Condo Questionnaire, Budget and Master Condo Insurance Policy to Nationwide Bank Underwriting via our website for review before you underwrite the file. We will charge a $75 fee for the review. If the loan funds, the fee will be withheld (net funded) from Nationwide Bank 8

the funding amount. If the loan cancels or is withdrawn, the lender will be billed the fee. NATIONWIDE BANK will not charge a fee on loan applications which have been denied. Loans underwritten by Nationwide Bank that are subsequently withdrawn will be charged an underwriting fee of $210. Conventional, FHA Direct Endorsement, and VA Authorized Agency loans are to be submitted to Nationwide for underwriting prior to closing. Please put the reference number from the billing on your check and send to the attention of the Accounting Department. Nationwide s Fees Charged Per Loan FLOOD CERTIFICATION: Unless a life of loan flood certification from First American Flood Data Services, Inc. (FDSI) has been provided, the lender will be assessed a $7.00 fee to cover the cost of the life of loan certification needed to accompany the basic third party flood certification that you have provided. Forms are provided in the Closing Requirements and Information Section of this manual. FEE FOR WAIVER OF TAX AND HAZARD INSURANCE ESCROW: A fee of.25% is charged to waive escrows on conventional loans with an LTV of 80% or less. This fee is charged to waive any or all portions of the escrows. A required form for Waiver of Escrow is provided in the Escrow Policies and Procedures Section of this manual. TAX SERVICE FEE: All loans are listed with a Tax Service Company and assessed a tax service fee, even though special arrangements may have been made for the borrowers to pay their own taxes. This fee will be netted at funding. The fee is $64. Nationwide Bank 9

Funding Procedures For Closed Loans DELIVERY DATE EXPIRATION: Lenders are expected to close, disburse and deliver the loan in purchasable form on or before the lock expiration date. There is no additional delivery period offered. If the loan is received after the lock expiration date, the loan will be re-priced at worse case pricing. FUNDING CUTOFF: Nationwide s cutoff for funding (with the next month s payment due to Nationwide) is the 15 th or the 25 th of the month, in accordance with arrangements made at time of lender approval. A Funding Cutoff Authorization form is included in the application package. Depending on which date you choose, if, for any reason, the loan is not purchased from you on or prior to that date, and the first payment is due the first of the next month, we will expect you to keep that principal and interest payment. We will amortize down the balance and purchase that amount from you. Keep in mind, if the loan being purchased has Private Mortgage Insurance or FHA MIP, you would be expected to transmit that month s insurance payment to the proper agency. Funding Procedures For Closed Loans Interest to date of funding, as well as discount, premium and any applicable fees will be netted at funding. Every effort will be made to fund loans within five (5) business days after receipt of the closed loan package, provided all required documentation is received in acceptable form. The correspondent will receive notification of the details of loan purchase prior to receipt of the wire funding. WIRE TRANSFER FUNDING: Nationwide purchases loans with wire transfers on the day of funding. A Purchase Advice report will be uploaded to the Correspondent website for your review. IRS FORM 1098 REPORTING OF INTEREST: On IRS Form 1098, Nationwide Bank reports to the IRS, all interest that is paid by the borrower to Nationwide through monthly principal and interest payments. This will include interest that was credited back to the lender in the funding if that interest was then included in a monthly payment to Nationwide from the borrower. Loan Registration Information RESERVATION OF FUNDS: The following list provides all the information needed prior to reserving loans on-line or making your call to the Nationwide Reservation Desk. In the event the phone is busy during business hours, 8:00 am CST to Nationwide Bank 10

4:30 pm CST, a timed voice message system is available. Leave a message with your name, phone number, and number of locks and your call will be returned during business hours. Please have the following information readily available. Loan Registration Information Lender Name Your Name Fieldman #/Lender Code Lender Phone # Lender Loan # Borrower s Name (First, Middle, Last) Borrower FICO Score Co-Borrower s Name Co-Borrower FICO Score Property Address (required if locking) City State/Zip County Application Date (MM/DD/YYYY) Loan Type Term Fixed Rate/Arm Loan w/ Margin Buydown Mtg Program (This option will be removed Nationwide Bank will no longer purchase loans with interest buydowns). Purchase/Refinance Refinance Type Subordinate Financing Amount Property Type Property Class (Condo/PUD/Neither) # of Units Loan Amount Sales Price/Estimated Value Waive Escrow s (On Conv. Loans 80% LTV or Less) Lock/Float Length of Lock (15, 30, 45, 60, 90, or 120 days) Lock In Date (MM/DD/YYYY) Interest Rate Price SRP Total Price Construction Permanent Document Type Comments Nationwide Bank 11

Loans with any form of loan-level pricing adjustments as described in the Underwriting Policies section of this manual, must be identified as such at the time of lock. Instructions to the Loan Reservation Section of Our Website ** PLEASE NOTE THAT A USER NAME AND PASSWORD IS REQUIRED TO ACCESS THIS PORTION OF OUR WEBSITE. A USER NAME AND PASSWORD IS ASSIGNED TO APPROVED CORRESPONDENTS ONLY. IF YOU NEED TO OBTAIN THIS INFORMATION, PLEASE CONTACT THE CORRESPONDENT LENDING DEPARTMENT. ** * Access http://www.nationwidebankmortgage.com * Enter Login ID and Password * Select Continue * On the far left of this page, under Lender Tools, select Reserve a Loan On-line * Complete the Correspondent Loan Reservation Form * Select submit Loan Registration Information CHANGE IN LOAN STATUS: When the status of a loan changes (i.e. change in loan amount more than $1,000.00, change from float to lock-in, change in points, waiver of escrows requested, etc.) Nationwide must be informed of the change. Nationwide recommends that changes are called in to the Reservation Desk at 800-233-5895 or emailed at mtg_reservation_desk@nationwide.com. Loans that are registered through the Internet with Nationwide at float status: When accessing the Internet to lock the same loan, complete the Float to Lock screen under the Loan Center tab on Nationwide s Correspondent website. If you are making a change to an already registered loan and still wish to use the Internet: To request an extension, complete the Loan Extension screen under the Loan Center tab on Nationwide s Correspondent website. To cancel a loan, complete the Loan Cancellation screen under the Loan Center tab on Nationwide s Correspondent website. To make changes to an existing reservation, send an email to: mtg_reservation_desk@nationwide.com. CONFIRMATION LETTER: Once a loan is reserved with Nationwide, the confirmation letter will be posted on the web with your loan number within 24 hours. The lender is responsible for the accuracy of the information. Discrepancies MUST be called in to the Reservation Desk immediately. Failure to do so may jeopardize the price at Nationwide s discretion. Nationwide Bank 12

LOAN DENIAL/CANCELLATION CODES: Loans reserved at float will remain active in our pipeline for a period of 180 days from the application date, if there has been no activity to the loan the reservation will be cancelled. Loans that are locked and expire will be cancelled from the pipeline after 60 days from the expiration date if no activity. Loans received for underwriting that are approved or credit approved but have no activity for 180 days from the approved date will be cancelled. Loans rejected or deemed incomplete will be cancelled 90 days from the reject or incompletion date, if no additional documentation for review is received. It is the lenders responsibility to contact the Reservation Desk to save the reservation if the loan is not to be cancelled. Early Payoff Policy For any Mortgage Loan that is prepaid in full on or before 120 days following the applicable Sale Date, the Correspondent shall refund to Nationwide Bank, within 30 days after Nationwide Bank notifies the Correspondent of the prepayment, an amount equal to (i) the servicing release premium paid for such Mortgage Loan, plus (ii) any premium pricing paid to the Correspondent less any discount pricing. Geographic Restrictions Nationwide Advantage Mortgage Company does not purchase loans in Puerto Rico. Nationwide Bank 13