Delivery and Funding

Delivery and FundingDelivery and Funding

A shipper’s Bible

What’s New?

Effective June 1, 2004 The Leader Mortgage Company

became

U.S.U.S. Bank Home MortgageBank Home Mortgage

Note EndorsementsNote Endorsements:

U.S. BANK N.A.

Assignments / MERS*:Assignments / MERS*:

U.S. BANK N.A.

Payment Address:Payment Address:

U.S. Bank Home

Mortgage P.O. Box 790415

St. Louis, MO 63179-0415*USB’s MERS ID #1000212

Hazard Insurance Hazard Insurance Loss PayeeLoss PayeeClause:Clause:

U.S. BANK N.A.

its successors and or assigns as their interest mayappear.

c/o U.S. Bank Home Mortgage

P.O. Box 7298

Springfield, OH 45501-7298

Borrower website:Borrower website:

www.usbankhomemortgage.com

Program ManagerExceptions Specialist

Lender Support Specialist

Program Development

Manager

Loan Review Supervisor

RESTRUCTURE FOR ENHANCEDLENDER SUPPORT

Lender Support Program Support

Underwriting Manager

Underwriting Tips

Fannie Mae

• Program-specific Fannie Mae products only

• 100% Fannie Mae, Flexible Product and Expanded Approval Products are not allowed in the Bond Program ** MCM conf call on Monday.

• Refer to the Fannie Mae Seller/Servicer Guide

• Refer to the enhanced Underwriting Guidelines

Underwriting TipsMaking Sound Credit Decisions

Remember . . .• FHA, VA, USDA-RD and Fannie Mae/Freddie Mac guidelines apply

• Follow all applicable HFA Program guidelines

• Data Integrity is a MUST!

• USBHM does not re-underwrite your loans

• All Lenders Rep and Warrant their files

• All Loan files are subject to Internal Audit and Agency Audits

Underwriting TipsMORTGAGE INSURANCE

• Copy of Mortgage Insurance Certificate• Correct Amount of Coverage for loan product and loan to value

NOTE! Regardless of method of Underwriting – do notselect the Lower MI Option

AUTOMATED UNDERWRITING – DU, LP• DU Underwriting only for Fannie Mae Conventional Products• LP Underwriting for FHA Loans• Document Approval Recommendations• Follow Desk Top Recommendations

FANNIE MAE SPECIALTY LOAN PRODUCTS MAYREQUIRE MANUAL UNDERWRITING

• FHA LOANS ONLYConventional, VA, RHS not allowableMust meet FHA guidelines and be insured by FHA.Please call USBHM’s Underwriting Department ifyou have any questions.

• Rita Connelly, Underwriting Manager [email protected] (216) 475 - 8251

Underwriting Tips

Manufactured Homes

Secondary Financing

• USBHM must approve any type of secondaryfinancing to be used in conjunction with the firstmortgage.

Documentation needed for approval includes:

– Program description– Note– Mortgage– Completed Fannie Mae checklist

Fannie Mae Seconds ChecklistChecklist Questions

1. Does the combined loan-to-value ratio for the first and subordinate liens exceed 100%? Yes ____ No_____ If “Yes”, this element of the program would nevertheless comply with Fannie Mae guidelines

if the answers to both of the following questions is “No”.• Does the combined loan-to-value ratio exceed 105%?

Yes ____ No____• Does the program description fail to address how the second mortgage lien should be

handled on the occurrence of a catastrophic event that results in the property’s having to be sold?Yes ____ No____

2. Do the subsidized second mortgage documents include any conditions for declaration of a default other than the following?

• The borrower’s failure to make any scheduled, periodic payments due underthe subsidized second mortgage;

• The borrower’s sale or transfer of the property in violation of the subsidy provider’s policies. (Transfers that result from marriage, divorce, death of aspouse, or that are otherwise allowed under applicable federal law may not bea condition for default, although the subsidy provider may require the transfereeto assume the transferor’s obligations.);

• The borrower’s failure to occupy the property as a principal residence;• The subsidy provider’s determination that the borrower misrepresented a required

condition for obtaining the subsidized second mortgage (such as a misrepresentationof income);

• The borrower’s cash-out refinancing or full repayment of the first mortgage;• The first mortgage lender’s declaration of default under the first mortgage; and• The borrower’s voluntary termination of his or her employment (for any reason other

than disability), if the employer is providing the subsidy.Yes ____ No____

• Does the subsidized second mortgage provide for negative amortization (accrual of interestinterest during a period when payments are otherwise deferred)?

Yes ____ No____

4. If interest is charged on the subsidized second mortgage, is the rate higher than the interest rate of thefirst mortgage?

Yes ____ No____

• If the subsidized second mortgage provides for the subsidy provider to share in any appreciation in thevalue of the property, does the subsidy provider’s share exceed the percentage calculated by dividing theoriginal principal balance of the subsidized second mortgage by the value of the property (as it wasdetermined in connection with the origination of the first mortgage)?

Yes____ No____

• If the subsidized second mortgage provides for the subsidy provider to share in any appreciation in thevalue of the property, is interest also charged on the subsidized second mortgage?

Yes____ No____

• Does the subsidized second mortgage provide for a balloon payment that (1) is larger than the periodicpayment required to amortize the loan and (2) becomes due and payable before the maturity date of thefirst mortgage?

Yes____ No____

• Are there any covenants or restrictions recorded against the property (including, but not limited to,provisions in the subsidized second mortgage documents) that restrict the use and resale of the property,and which would not otherwise be terminated on foreclosure of the first mortgage or would reattach inconnection with subsequent transfers of the property?

Yes____ No____

• Will the subsidized second mortgage documents constitute a lien that is a prior lien to the first mortgage?

Yes____ No____

10. If the first mortgage is originated as a Fannie 3/2 mortgage or a Fannie 97 mortgage, is the downpaymentfrom the borrower’s own funds less than 3% of the purchase price of the property?Yes____ No____

If the first mortgage is originated as one of Fannie Mae’s other conventional mortgage products (other than aFlexible 97 mortgage or a Flexible 100 mortgage), is the downpayment from the borrower’s own funds lessthan 5% of the purchase price of the property?Yes____ No____

11. Is the percentage downpayment from the borrower’s own funds based on a subsidized sales price (I.e., thesales price to the borrower reduced by the amount of any downpayment assistance, such as that providedby the subsidized second mortgage)?Yes____ No____

FHA Underwriting• Lender must use FHA Standard Underwriting

Guidelines• Refer to the HUD Handbook 4155.1Rev 5 and

mortgagee letters

VA Underwriting

• Lender must use the VA Underwriting guidelines

• VA Lender Handbook and Circular updates

RHS Underwriting

• Lender must use RHS Underwriting Guidelines

Underwriting Tips

FHA TOTAL Scorecard

• Mandatory May 1, 2004

• DU and LP accepted

USBHM Delivery Package• Use correct checklist for loan type being delivered

• Use boxes on checklist to indicate special loan product being delivered

• Make sure all documents are completed andcorrectly executed before shipping the

loan file.

Delivery and Funding

U.S. Bank Home Mortgage, MRBP DivisionYOUR TEAM CONTACTS

Joreatha Polk, Loan Review Supervisor [email protected] (216) 475-8420

Liz Hejduk, Operations Lender Support Specialist [email protected] (216) 475-8392

Charese English, Exception Specialist [email protected] (216) 475-8396

Sheryl Krocek, Client Support Executive [email protected] (216) 475-7719

Shermaine Weathersby, Product Development Manager [email protected] (216) 475-8237


Documentation and Manuals

•• Review Delivery and Funding Guidelines, Checklists, Forms and Program Information available on McWeb

• Share information with Originators, Closers & Shippers

• Use USBHM’s Contact Directory

Delivery Instructions

• Provide Complete Contact Information and Wiring instructions

• Submit closed Mortgage Loan File

• Loan must be shipped immediately after closing, within the required timeframes from reservation

• Advise borrower loan will be sold to USBHM

• 72 hour turnaround from receipt to purchase on “clean”, compliance approved files

• 17500 ROCKSIDE ROAD BEDFORD, OH 44146-2099


U.S. Bank Home Mortgage

Participating Lender: ________________________Program: SETH / Galveston 2004 B & 2004 C

Mailing Address: _______________ _______________________________________

Main Phone Number: ____________________________*Customer “800” Number: *Required Contact PhoneAdministrative: ______________________ _______________Shipping Super: ______________________ _______________Shipping Staff: ______________________ _______________Shipping Staff: ______________________ _______________Fax # for above: ______________________E-Mail address: ______________________Final Documents: ______________________ _______________Fax # for above: _____________________E-Mail address:Do you have the ability to interim service loans?

Yes ________ NO __________ (Requires loan purchase at original balance).

Wire Instructions:ABA Number: _________________________

Account Number: _________________________

Bank Name: _________________________

Purchase Advice Attn: _________________________

Fax # for Purchase Advice: _________________________

E-Mail address: _________________________

Please complete and fax to 216-475-8627 Attn: Amy Giersz

Loan files submitted to USBHM

• Loan file is time/date stamped upon receipt

• Loan Review following submission checklists for each loan type – Valid Collateral is key to timely purchase

• Viable, Compliance-approved loans are moved to purchase status

Delivery and FundingThe Review Process

Loans with Exceptions

• Mortgage file exceptions are communicated by email/phone/letter with a weekly recap report posted on web-site• Loan is moved to Purchase status once all exceptions are cleared and removed• Loans are purchased daily, on an amortized basis• Purchase summary/detail is faxed to lenders• Loans purchased are transferred to USBHM’s servicing system



Notes and Security Instruments

Note, Mortgage, Riders• Complete Notary Section

• Tax Exempt Riders – Required

• Co-Signers – Execute NOTE only

• Indicate Marital Status on Mortgage, if required

• FHA Docs preferred for Rural Housing Loans

• Properly Endorsed, Executed and Assigned to:

U.S. Bank N.A.U.S. Bank N.A.


Hazard Insurance• Complete & Accurate Homeowners Information• One year proof of payment (POC n/a)

Flood• Flood Certifications required

– Life of Loan– Transferable to USBHM

• Proof of Insurance & Payment, if applicable


Property Taxes• Submit complete information (Tax Certification and/or Title Commitment) to ensure timely loan purchase

• Provide proof of Tax Payment

Mortgage Insurance• Lenders are required to make monthly MI Payments prior to loan purchase


The Review Process Termite Reports

• Any infestation requires treatment• Damage resulting from any previous infestation requires a structural engineer to assess the damage and make recommendations if repairs are required


The Review Process

•• First Payment Letter• Form 4506 (only if self-employed)• Underwriter Approval• W-9 Form• Survey• Final 1003• Final TIL• Applicable Disclosures

OVERCOMING COMMON LOAN FILE EXCEPTIONSPosted online, Lenders notified via email, report sent weekly

Collateral – Incomplete Note, Mortgage, AssignmentNOTE:• Note missing endorsement or Leader’s name incorrect• First/last payment dates incorrect• MIN number is missing/incorrect for MERS• FHA/VA case number missing digit or doesn’t match other docs in the file• Lender name inconsistent with other documents in file• Late charge % is incorrect for loan type• Borrowers undersign (need name affidavit)


OVERCOMING COMMON LOAN FILE EXCEPTIONS

MORTGAGE:

• Mortgage is not complete – pages missing• Legal description missing or doesn’t match appraisal• Maturity date is incomplete• Notary section not completed• Tax Exempt Rider is missing• Rider (any applicable) is missing or incomplete


OVERCOMING COMMON COMPLIANCE EXCEPTIONS

FHA LOANS:• MCAW missing• Proof if FHA insurance missing

VA LOANS:• VA form 26-1899 (Loan Guaranty) missing

CONVENTIONAL LOANS:• 1008 – Special Feature Codes not listed/Product not clearly identified.• DU findings missing• Insufficient MI coverage or cert missing• Homebuyer Education Certificate Missing (product specific)

RHS LOANS:• Loan Note Guaranty Missing


OVERCOMING COMMON LOAN FILE EXCEPTIONS

GENERAL – all loan types:

• Accrued per diem interest calculation on HUD I shown as incorrect $ amount• HUD I – discrepancy on or missing figures (I.e. contract sales price)• Bond Exhibits missing• Proof of Hazard Insurance is missing/dwelling amount is insufficient• Appraiser’s Certification and/or signature is missing• Final Inspection to clear all items is missing• Sales/Purchase contract is missing• Current pay history not included• Missing Disclosures• Final Application not signed by interviewer and borrowers


Identify File Exceptions

• Separate cover sheet for each loan• Include copy of report identifying

specific exception items• Partial submissions are welcome

Submission of File Exceptions


Reasons for Purchase Delay/Cancellation• Late delivery of Loan Files (after 90 days)• Mortgage or Compliance Exceptions(over 30)• Uninsured Loans (over 90)• Repurchase Obligation (audit findings)

Lender communication to discuss any deliverydelay is the key to postponing any action

Ineligible Loans


Delivery and FundingFunding Information

• Loans purchased Daily / Amortized

• Provide loan histories – Highlight reductions

• Net Purchase: (no checks)

• Current principal balance, interest, SRP

• Net determined starting escrow

• Compliance Review Fee - $165

• Tax Service Fee – $65

• Funding and Review Fee $65

• Purchase summaries faxed


Final Document Delivery

• Organize documents according to checklist

• Due in 90 days

• A late fee of $50 will be assessed after 90 days

• Deliver toDocument Control17500 Rockside RoadBedford, Ohio 44146-2099

• Exceptions - Contact Final Doc SupervisorDarlene Kreigh – [email protected]

(216) 475-7739

TIPS• Use telephone list/email addresses provided

• Complete online Purchase Review Contacts &Wire Instructions

• Customer Service Website: www.usbankhomemortgage.com

• Provide loan histories / highlight special activity

• MERS Member: Contact Pat Bishop 216-475-8403

Thanks forattending and

forparticipating!

We appreciate yourcommitment to

Affordable Housing

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