CORRESPONDENT TRAINING - Kentucky Housing Corporation and...CORRESPONDENT TRAINING Kentucky Housing...

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CORRESPONDENTTRAINING

Kentucky Housing Corporation

SEC ONDA RY MARKET

KHC Funding Source

Lender Relationship

Correspondent Lender Originate

Process

Credit Underwrite for FHA, VA, RHS - KHC does compliance

CONVENTIONAL programs - KHC does both credit and compliance underwrite

Closing & Post Closing

Compensation and fees 2.5% of total loan amount

Customary & Reasonable fees to include $495 UnderwritingFee paid to KHC on all RHS/CONV Loans

Administration Fee of $125 paid to KHC on all loans

Program Guides

All KHC Program Guides are on AllRegs

Secondary Market Funding Source

Applicants Income Only

Income Limits ($103,600 - $137,025)

Based on County of property location

Purchase Price & Refinance Limit $301,294

First time and Repeat Homebuyers Statewide

Secondary Market Income Limits

Secondary MarketApplicant’s Income

Jefferson:$125,125

Fayette:$122,675

Northern KY:$137,025

Program

Guides & Quick

Reference

Cards and link

to AllRegs if not

a member.

Compliance & Effective Income

Compliance Income (Income Limit) Funding Source

Secondary Market – Applicant’s Income ONLY MRB / KHC’s Homebuyer Tax Credit– Household Income Affordable DAP – Applicant’s Income ONLY

All possible income projected over the next 12 months Over-time Second Job Child Support Bonuses

Effective Income (Qualifying Income) Per Agency guidelines

These Income Calculations will be different amounts!

KHC’s Income Calcuator

Items needed to complete Income Calculator

Verbal VOE with a Start Date

Most recent 30-days worth of paystubs

Should ALWAYS default to Secondary

Market unless loan includes KHC’s Tax

Credit

Check the income sources

that apply to your applicant or

household if KHC’s

Homebuyer Tax Credit!

The start date automatically defaults to

January 1st of the current year. You only

need to change it if their employment

start date was later in the year.

KHC’s income calculator compares

your applicant’s income to all the

other income limits. Place your final

version of this calculator in the file.

Income Tips

Compliance Income When in doubt count it!

The following should be counted in Compliance Income:Base Pay

Overtime

Bonuses

Commission

Child Support/Alimony

Profit Sharing

Tip Income

Non-taxable Income (SSI, Disability)

Car Allowances

Schedule C or E Income

Income Tips

Compliance Income

If Child Support is not consistent then average over 12 months.

Conventional – exception – must be consistent.

One Time Payments – Do NOT count for Compliance

Performance Bonus

Enlistment Bonus

Inheritance

Insurance Settlement

Income – Large Deposits

Deposits for Compliance Income.

No individual deposits under $500 require documentation.

If deposit is over $500, KHC underwriting will amortize over 12 months, add back to total income.

If under compliance income – KHC UW moves on.

If over compliance income – borrower to address source.

If deposit from employer, SS, VA or child support not listed on 1003 – borrower to address source.

If KHC UW adds up any of the above & still under compliance income – KHC UW moves on.

KHC First Mortgage Programs

First Mortgage ProgramsPurchase & Refinance

Purchase FHA

Conventional 97% No MI Program

Conventional 97% With MI Program

Reduced Charter Coverage

Refinance FHA Streamline (Non-credit Qualifying) Refinance

FHA Streamline (Credit Qualifying) Refinance

FHA Simple Refinance

FHA Rate Term Refinance

RHS Streamlined-Assist Refinance Program

Property Guidelines

Single family, 1-unit, owner occupied in KY

New & existing property

Manufactured Housin FHA/VA Existing

RHS – New

Conventional 95% LTV / 105% CLTV

Can ignore findings that state exceed CLTV if Approve/Ineligible

Affidavit of Conversion to Real Estate

Condominiums

Agency Guidelines

FHA, VA & RHSPrograms

$301,294 Purchase Price Limit

620 Credit Score

40% / 50% Max Ratios AUS Approval or Manual UW

for FHA & VA

GUS for RHS or Manual UW

Secondary Market Income Limit-Applicant Only

Conventional 97

No MI & With MI

$301,294 PurchasePrice Limit

660 Credit Score

40% / 50% Max Ratios

DU Approve/Eligible Required LP not accepted

Secondary Market Income Limit-Applicant Only

KHC Credit Overlays

SPEC IAL DESI GN ATIONS

Conventional Programs

Entering Conventional with & withoutMI Program in DU

In DU select Additional Data Screen

Under Community Lending Information

› Choose “HFA Preferred Risk Sharing” for Conventional without MI

› Special Feature Code: 820

› Choose “HFA Preferred” for Conventional with MI

› Community Seconds: HHF, Regular or Affordable DAP

Additional Data

Screen

Community Lending

Information

Choose HFA Preferred Risk Sharing when utilizing

Conventionalwith NO MI

Choose HFA Preferred when utilizing

Conventional with MIHome Ready

Reduced Conventional Interest Rates in Underserved Markets

Duty To Serve Initiative (DTS)

Conventional first mortgage programs.

Interest Rate lowered by .25%-.375%.

Property located in one of the counties considered Middle Appalachia or Lower Mississippi Delta.

Applicant(s) income limited to 100% AMI.

Limited to the first 100 families.

Effective with new reservations 8/21/2018.

Must be reserved by 12/31/2018.

Homebuyer EducationConventional Only

Follow your DU findings

First time homebuyers

At least one borrower complete pre-purchase counseling

Online session, workshop, telephone, or classroom

MGIC or other MI Companies -- Free

Homebuyer EducationConventional Only

Follow your DU findings

First time homebuyers

At least one borrower complete pre-purchase counseling

Online session, workshop, telephone, or classroom

MGIC or other MI Companies -- Free

HFA Preferred & Preferred Risk Sharing

✓ Higher Income Limits

✓ Secondary Market 175% AMI

✓ DAP access

✓ No MI option

✓ Lower MI payments

Home Ready

✓ Lower Income Limits

✓ 100% AMI

✓ No DAP

✓ Higher MI payments

KHC Conventional vs. Home Ready

Mortgage Insurance

Home Ready Coverage97 – 95.01% = 25%

95 – 90.01% = 25%

90 – 85.01% = 12%

85 – 81% = 6%

MI Companies Arch MI

Essent

Genworth

KHC Charter Coverage 97 – 95.01% = 18%

95 – 90.01% = 16%

90 – 85.01% = 12%

85 – 81% = 6%

Single Pay Premium - Upfront Borrower Paid

Terms FHA Conventional

Preferred (with MI)Conventional Preferred Risk (with NO MI)

Interest Rate 5.25% 5.25% 5.75%

Base First Mortgage $144,750 $145,500 $145,500

Financed MI $2,533 N/A N/A

Total First Mortgage Amount

$147,283 $145,500 $145,500

Monthly MI $102.53 $50.15 N/A

Monthly Payment $915.53 $853.15 $849.00

Monthly Savings N/A $62.38 Savings $66.53 Savings

Based on $150,000 purchase price and 30 year fixed interest rate

Down Payment Assistance ProgramsDAP

Regular DAP

Affordable

HHF DAP(when available)

Continuously Funded DAPs

Regular DAP

$6,0005.50% interest rate for 10 years

Income under the Secondary Market Income Limit.

New construction and existing property.

Affordable DAP

$6,0001% interest rate for 10 years

Applicant’s Income under Affordable Income Limits.

New construction and existing property.

Affordable DAP Applicant(s)Income Limits

HHF DAPAvailable in Christian County Only

$10,000Non-repayable forgiven over 5 years

Secondary Income limits. Home purchase must be located in Christian County. First time home buyers (no ownership interest in last 3 years). Existing Property.

No New Construction.

Does not meet TRID requirements so utilize GFE and HUD-1.

Available with New Reservations on 11/15/18.

KHC DAPs

All take a second lien position.

DAPs can be used with:

Non-KHC DAPs.

As long as KHC’s DAP stays in 2nd Lien position.

Non-KHC DAP must meet agency guidelines.

Welcome Home Funds.

Seller Paid Closing Costs.

Gifts.

Borrower’s own funds.

PR ICED WI TH & WI TH OUT DAP

45 DA Y LOC K

Interest Rates

Scroll down to

the bottom of

KHC’s Home

Changes to Loan Reservation

Change/Extend/Cancel

7 days at .125%.

15 days at .25%.

30 days at .50%.

Email: khcuw@kyhousing.org to change the following: Address.

Social Security Number.

First Mortgage Loan Type.

Loan Amount or Purchase Price.

Addition/Deletion of DAP.

Duplicate Loan.

Worse Case Pricing after 30 day extension.

502-564-7630 ext. 291

KHC’s Loan ReservationSystem

RESER VE FI RST MORTGA GE

AND DA P

You will need:

•Broker ID

•User Name

•Password

Specific to YOU

If you do not have the ID,

User Name and Password

then contact

your company’s KHC System Administrator

Once you enter Broker ID,

click on “Log In”

Click on “Import Loan”

Click on “Select File”

Select the file to upload

Once the file is selected then

click on “Import File”

You can follow status

Once the file is imported then

the Loan Review Screen

will appear

Wherever you see the

“Thumbnail” you can

open or collapse

1. Review information for accuracy

2. Choose Property Type

3. Choose Intended Loan Type

After completion of the Loan

Review Screen then click on

“Additional Loan Info” under workflow on left side

Choose Loan Officer

Choose Loan Processor

All fields with an

“Asterisk” need to be

completed

These are the people that will be

contacted electronically when file is

underwritten

Input credit score &

select Repository

KHC Annual Income

Add Affordable Closing Costs Gran t?

Complete ALL fields

with an Asterisk

Attaching a DAP?

Closing Agent Question

When complete click

on “Rate Lock”

Click on “Select Product”

Check Product and

click on “Apply”

The Product highlighted in

green is the one chosen. If

correct click

“Close Window”

Click on

“Select Pricing”

Click on “Apply”and close window.

The loan is NOT Locked yet until you

CLICK on “Lock

Loan”

NOW the Loan is LOCKED!

See Lock Expiration

Click “OK”

Status is changed to

Reserved

Since this loan has a DAP

then you will need to click

on “Add DAP Loan”

Click “OK” and 1003 data

from First Mortgage will

automatically upload!

Click “OK” unless you do

NOT need the DAP

Since a second loan (DAP) has

been created you now need to

Click on “Switch Loan”

Type in DAP Loan Amount –

Round-up to Nearest $100

Click on

“Select Product”

Scroll down to bottom -- Check

Product and click on “Apply”. HHF DAP will show up here when

available

The Product highlighted in

green is the one chosen. If

correct click

“Close Window”

Click on

“Select Pricing”

Click on “Apply”

The interest rate highlighted

in green is the one chosen. If

correct click

“Close Window”

The loan is NOT Locked yet until you

CLICK on “Lock

Loan”

NOW the Loan is LOCKED!

Click “OK”

Status is changed to

Reserved

Once the DAP Rate is

Locked then click on “TRID

Documents Printing”

FIRST:Make sure in

DRAFT Mode

SECOND:Click “Get Package

Docs” to generate

DRAFT-TRID DAP

Documents

Lender may select all

documents or

view/print/email a

particular document

DRAFT DAP LE

Fees are already hard coded

($26 Recording Fee & $50

Doc Prep to Closing Agent)

DRAFT watermark

FIRST:

When ready to FINALIZE:Be sure all fees are correct,

because once the mode is changed

to FINAL the fees are locked down

unless a change of circumstance

occurs.

SECOND:Click “Get Package

Docs” to generate

FINAL-TRID

Documents

Click View/Print

Finalized Initial DAP LE

without the DRAFT

watermark

Click on “SWITCH LOAN” to

go back to the first

mortgage

1. Click on Document

Printing for the First

Mortgage

All documents will populate to be printed:

Reservation Confirmation

Underwriting File Upload Checklist

2. Once printing is completed

then Exit Loan click EXIT LOAN

KHC Underwriting Checklist

KHC Reservation Confirmation

200111

Changes to Loan Reservation

Choose applicable loan

To make changes to the

Expiration Date click on

“RATE LOCK”

You can extend for a total of

30 days (7 days, two 15 day

intervals or all at once)—see

applicable fees

The confirmation of the loan

being extended for both the

First Mortgage and DAP if

applicable

It will then populate

the Extension Fee

amount & new Lock

Expiration Date

You have the option to cancel loan.

If a loan is NOT a viable deal

promptly CANCEL.

Electronic Upload

KH C ’S RESER VATI ON SYSTEM

Document Upload

For Multi‐Function Devices and scanners the below settings will need to be made standard so that the quality of scanned files is optimal: 300 dpi

Black & White (not grayscale as that will create significantly larger image files

Auto-Sense Page Size

No Page Scaling

Don’t Compress or Zip Files

If you have questions please contact your technical support staff.

Document UploadOnly one “BUNDLE” PDF File

“BUNDLE” checklist of items needed prints whenreservation is made

Correspondent Lenders: Upload:

Underwriting File

Appraisal – separate upload from Underwriting File

Underwriting Pend Conditions

Closed Loan File

Post Closing Trailing Documents

Electronic Upload

UN DER WR ITI NG FILE

Click on “Document

Upload”

Select Underwriting

Appraisal is uploaded

separately

Click on “Select

File”

File needs to be ONE

“BUNDLE” PDF file

Select Borrower Name

Once file has been

selected then click on

“UPLOAD” button

Once the UW File is listed

under Task then file has been

successfully uploaded!

You can go into this tab –

Document Upload to view

specifically what has been

uploaded at any given time.

Electronic Upload

APPR AISA L

Select Appraisal

Correspondent

Lenders will upload

ALL Appraisals

Workflow

KH C UN DER WR ITI NG

KHC Underwriting

Compliance Underwrite

FHA, VA and RHS

Credit and Compliance Underwrite

Conventional

Typically 3-4 business day turn-time

If item(s) are left out of initial electronic UnderwritingFile upload AND the file has not been underwritten byKHC then send those items to khcuw@kyhousing.org

Loan Status Changes

After initial underwriting review Loan Officer and Loan Processor (the ones selected in Additional Data Screen) will receive email notification

“The status on the above referenced loan has been changed, please log into KHC website for details”

Lender will go to Document Printing to print the PendLetter, Approved Letter or Denial Letter

Electronically Upload the Underwriting Pend Conditions of specific loan in KHC’s Loan Reservation System Underwriting Pend Conditions.

Clearing Pend ConditionsB Fu

Approved Loan

KH C ’S COMMI TMEN T LETTER

Choose the applicable

Approved Loan by clicking

on the pencil/tablet to the

left of name

Printing”

Will open on Rate Lock

Print KHC Commitment

Letter

Lender

Approved – can set closing

Access to First Mortgage and DAP Closing Documents

Approved Loan -- ClosingB Fu

Closing

TH RU LOAN PUR CHASE

Choose the applicable

Approved Loan by clicking on

the pencil/tablet to the left of

name. Or search by name or

reservation number

Click on “Set Closing”

Will open on Rate Lock

Choose the Closing Date & Time,

Closing Agent, MERS MIN # and

Warehouse Lender

The KHC DAP Section will not

show up unless the loan is

reserved with a DAP

If DAP is applicable then

required to get DAP closing

documents

Once you choose a Date and Time

the First Payment Date will

populate

Whoever is setting the closing is choosing the Post Closer in

the drop down box. This person is who will get an email in

regards to missing 10 day documents once the 10 day closing

package is reviewed. Missing documents may affect the

purchase of the loan.

System Administrators Role

Post Closers ideally will all have a generic Post Closing Email listed so ALL Post closers will receive the email notification.

The other option is to add multiple emails to every post closer so if Jane Doe is chosen then Joe Doe will also receive the email notification

When setting up Post Closers add generic email for all Post closers or add multiple individuals emails with a; between each email address

Post Closing

Click on “SUBMIT”

Once you submit loan then

Printing”

Print all applicable First

Mortgage Closing

Documents

When finished printing First Mortgage

Documents need to Click on “SWITCHLOANS” in order to print DAP Documents

Security Document Checklist

Closing Disclosure for DAP

Lender select Document Printing to print the Note, Mortgage, and Temporary Payment Coupons Prints in the Lender’s name

DAP Endorsement on last page of note

Sign over to KHC

Click on

“DOCUMENT PRINTING”

Print all DAP Documents

Then Click on “TILA-

RESPA” Tab

Hit the dropdown arrow

Click on Transfer

servicing of your loan

Choose Delivery Method:

Mail, E-mail, or Face to

Add Initial CD date

issued

Once complete

then click on

The DAP Fees auto-populate:

$50 Title Services – Bucket B

$26 Estimated Recording Fee – Bucket E

THESE are the ONLY fees allowable on a

DAP Loan

Title Services

in Bucket B

Recording Fee

in Bucket E

The DAP Fees auto-populate:

$50 Title Services -- Bucket B

$26 Recording Fee – Bucket E

Once complete

then click on

TRID Documents

Printing

FIRST:Make sure in

DRAFT ModeSECOND:

Click “Get Package

Docs” to generate

DRAFT-TRID Closing

documents or

view/print/email a

particular document

To generate

finalized version

click on Final

documents or

view/print/email a

particular document

complete

then Exit

Loan Closes

After the actual loan closing Upload the 10 Day Closed Loan Package

Mail Original Note (First Mortgage and DAP) within 10 Calendar Days of NOTE Date to:

KHC Single Family Closing & Quality Review

1231 Louisville Road

Frankfort, Kentucky 40601

Do NOT send check for Principal Reduction

Insure Endorsement or Allonge completed

Failure to provide closed loan file to KHC within ten calendar days may result in a penalty being issued to the lender.

***The 20th of the month is the deadline for upload & original note –will not be purchased after the 25th***

Closed Loan Checklist

Closing

Choose the applicable Closed

Loan by clicking on the

pencil/tablet to the left of

name. Or search by name or

reservation number

To Submit for Purchase

1. Select “Document

Upload”

2. Choose “Closed Loan File”

and upload one PDF Bundle

This will trigger KHC to purchase the loan.

***Trailing Documents are a separate

upload***

3. Be sure to overnight

the Original Note

Purchase

KHC Purchases loan

Emails the Warehouse Lender/Contact of Purchase

Purchase Advice is available upon purchase

Retrieve copy in KHC’s Reservation System under DocumentPrinting Tab

Ensure “Post Closing” contact is correct in order toreceive notice of outstanding items

Transfer MERS Servicing Rights to 1005950 –Kentucky Housing Corporation 48 hours after

purchase

Legal Documents

Security Documents must be ORIGINALS and mailed to KHC’s Single Family Closing and Quality Review Team:

1231 Louisville Road

Frankfort, Kentucky 40601

Recorded Mortgage, First and Second Mortgage Note (shouldbe part of the 10 Day Closing Package), DAP Assignment, andTitle Policy

Failure to provide within 90 days of closing could result in Penalties

Repeated failure to provide closing & post closing docs in a timely manner could result in penalties, suspension of reservations or purchases, & even repurchase of loan.

Post Closing Reports

Click on “REPORTS”

Click on “All Post Closing

Issues Report (External)”

Enter Date Range and Company

Home Office Broker ID

Then click on View Report

Print out and clear up conditions—

you will notice dates of multiple

contacts to get these documents

Post Closing Issues

Purchasing Issues ORIGINAL First Mortgage and DAP Note

Endorsement/Allonge

Closing Disclosure for First Mortgage and DAP

10 day Uploaded Closed Loan Package

Post Closing Issues Title Commitment and Final Policy – Name of Insured to include MERS

Language (page 5 of Closing Guide)

Title Short Form Policy MUST include 8.1 Environmental Endorsement

UW Approval Closing Conditions

Hazard and Flood Certification (Endorsement Letter) (KHC’sMortgagee Clause – (page 3 of Closing Guide)

Signed and dated Final 1003 by lender

Signed 4506T

Closing & Quality ReviewContact Information

Questions regarding Purchases, Funding, DAP Funds, Wires, Post-Closing (10-Day Docs), MCC Review, and MERS should

be directed to:

Julie Key: jkey@kyhousing.org or 502-564-7630 ext.402

Kelly Taylor: ktaylor@kyhousing.org or 502-564-7630 ext. 255

Questions regarding Post Closing (10-Day Docs) Review, MCC Review, or Outstanding Docs should be directed to:

Denise Stucker: dstucker@kyhousing.org or 502-564-7630 ext. 322

Kelly Taylor: ktaylor@kyhousing.org or 502-564-7630 ext. 255

Cindy Israel: cisrael@kyhousing.org or 502-564-7630 ext. 294

Loretta Hoskins: lhoskins@kyhouisng.org or 502-564-7630 ext. 254

Questions regarding Security Documents (90-Day Docs) review, Outstanding Docs or Penalties should be directed to:

Julie Nopper: jnopper@kyhousing.org or 502-564-7630 ext. 397

Manager of Closing and Quality Review

Michele Byer: mbyer@kyhousing.org or 502-564-7630 ext. 340

khcpc@kyhousing.org

In the Loop

KH C ’S EGRAM

Sign up for

Choose

“Lenders” Email

KHC Contacts

KHC Underwriting Mailbox khcuw@kyhousing.org

Homeownership Hotline 502-564-7630 EXT. 291

Jamie Swindler, Mortgage Production Administrator

jswindler@kyhousing.org

502-564-7630 ext. 329

Cindy Bradley, Mortgage Production Administrator

cbradley@kyhousing.org

502-564-7630 ext. 347

Thank You