cal strs home loan prog

February 20, 2009

February 20, 2009

CalSTRS HOME LOAN PROGRAM

The CalSTRS Home Loan Program was created in 1984 and

restructured in July of 2004.

Countrywide is the Program Administrator since July of 2004.

The Program was designed to offer CalSTRS members a great

choice of mortgage loans with competitive rates, along with first-

class service.

Money Works for Pension Fund

- Borrowers can obtain a great loan with a competitive rate—and their money works for them, since income derived from mortgage payments goes directly into the Teachers’ Retirement Fund.

February 20, 2009

Agenda

General CalSTRS Home Loan Program Guidelines

Standard Conventional Product

Conforming

Non-Conforming

Second Loan Products

80/17

95/5 (Suspended)

Underwriting Guidelines

Rate Locks and Float Downs

Countrywide Fees

CalSTRS Marketing Guidelines

February 20, 2009

CalSTRS Home Loan Products

Standard Conventional

80/17

February 20, 2009

General CalSTRS Guidelines

Eligible Properties

Properties located within the State of California

Owner occupied

Principal residences only

No Manufactured Homes

February 20, 2009


Eligible Borrowers

Employees of a California public school district and/or a member of the California State Teachers' Retirement System

Employees of a CA Community College

As proof of eligibility, a copy of a CalSTRS benefits statement, or a pay stub or VOE from a California public school district must be included in the purchase file sent to Countrywide

Borrowers must have a valid social security number

Qualified inter vivos revocable trusts are permitted

February 20, 2009


Temporary and permanent buydowns are not permitted

All CalSTRS loans require escrow impounds regardless of LTV

Loans are not assumable

No prepayment penalties are allowed

Title Policies are required

Title Policy for 80/17 must cover 1st and 2nd loan amounts, including recording info of 2nd

Alt docs are permitted, according to Fannie Mae and Freddie Mac guidelines, Appraisal or property inspection required according to AUS cert, unless waived by AUS cert (fee assessed)

February 20, 2009

Standard Conventional

Purchases

Refinances (including Cash Out Refi’s)

15 and 30 Year Fixed Rate Conforming

15 and 30 Year Fixed Rate Non-Conforming

February 20, 2009

Standard Conventional Summary

Eligible PropertiesOwner-occupied 2- to 4-units; attached and detached SFRs;

condos; and PUDs

Term 15 or 30 years

Conforming Loan Amount Up to $417,000

Non-Conforming Loan Amount $417,001 to $834,000

Loan-to-Value (LTV) of 1st Mortgage 95%

Down Payment Standard Fannie Mae Guidelines

Sources of Closing Costs Standard Fannie Mae Guidelines

2nd Mortgage Standard Fannie Mae Guidelines – LIMITED TO 80% CLTV

February 20, 2009

Conforming Standard Conventional

Loan Type Units Max Min FICO Loan-LevelPricing

AdjustmentLTV/CLTV

Conf Purch/Rate and Term Refi

1 90.01% - 95%< = 90%

700680

Refer to Platinum

CalSTRS Price Guide.


2 90.01% - 95%< = 90%

700680


3-4 80% 680

Conf Cash-Out Refi 1-2 70% 680

Conf Cash-Out Refi 1-2 70.01% - 80% 720


Conf Cash-Out Refi 3-4 70% 680


February 20, 2009

Non-Conforming Standard Conventional

Loan Amount $417,001 to $834,000

Non-Conforming Parameters Loan Level Price Adjustment

Loan balances > $650,000 to $834,000 & credit score < 660

0.25%

Condos 0.375%

2-unit property 0.375%

3-4 unit property 1.00%

LTV > 65% and CLTV 80.01% - 90% 0.25%

LTV > 65% and CLTV 90.01% - 95% 0.375%

February 20, 2009

Non-Conforming Standard Conventional

February 20, 2009

Standard Conventional Underwriting Guidelines

Homebuyer education is not required Non-occupant co-borrowers and co-signers are permitted5% minimum down payment from borrowers own funds (Subject to MI availability)Closing costs may be paid by third partyAutomated underwriting approval required

DU- Approve/Eligible LP- Accept

Borrowers may own other property, but only one CalSTRS loan at a timeNon-permanent resident aliens are eligible on the Standard Conventional Program ONLY (LTV is limited to 75%)

Conforming:Ratios and Reserves:Standard Fannie/Freddie Guidelines

Non Conforming:Ratios: 41% Reserves: 2 months

*Please see Seller’s Guide in Platinum for Countrywide Standard Guidelines

February 20, 2009

Mortgage Insurance

Required on all loans exceeding 80% LTV

Any CHL approved MI Co is eligible to insure first mortgage loans.

If DU allows reduced coverage for Standard Conv loans, it must be given to the borrower.

Lower Cost MI is an option, if borrower pays for it

LTV Standard MI% Reduced MI% No Cost

80.01% to 85% 12% N/A

85.01% to 90% 25% 17%

90.01% to 95% 30% 25%

February 20, 2009

80/17 Product

80/17

Purchase Only

30 Year Conforming

30 Year Non-Conforming

February 20, 2009

80/17 Summary

Eligible PropertiesOwner-occupied SFRs; approved condos; approved attached and

detached PUDs

Term 30 years (1st and 2nd mortgages)

Conforming 1st Loan Amount Up to $417,000

Non-Conforming 1st Loan Amount $536,082

Loan-to-Value (LTV) of 1st Mortgage 80%

Loan-to-Value (LTV) of 2nd Mortgage 17%

Maximum Combined Loan-to-Value (CLTV) of 1st and 2nd

Mortgages 97%

Down Payment 3%

Sources of Closing CostsBorrower’s own funds, seller contributions up to 3%, gift from

relative, or unsecured grant from approved government agency

2nd Mortgage Deferred payments on the 17% 2nd mortgage for the first 5 years

Loan Level Price Adjustments Refer to Platinum CalSTRS Price Guide

February 20, 2009

Second Mortgage Loans

Interest rates for the second mortgage loan carries the same rate as the first mortgage

30-year term with a five-year deferred payment structure

Simple interest calculation will be used for years 1 through 5, no principal or interest payments shall be due during the first 5 years / 60 months.

CalSTRS Note and Deed must be used

Year 6 / payment number 61:

The accrued simple interest balance from the deferral period will be added to the original loan balance.

The new loan amount will be amortized over the remaining 25 years / 300 months, and the borrower will then make monthly payments for the remaining life of the 2nd loan.

February 20, 2009

80/17

Loan Type *LTV: 1st

*LTV: 2nd

Max Loan Amt: 1

stMax Loan Amt: 2

ndMaxCombinedLoan Amt

MaxPurchase Price

Conforming 80% 17% $417,000 $88,612 $505,612 $521,250

Non-Conforming

80% 17% $536,082 $113,918 $650,000 $670,103

February 20, 2009

80/17 Underwriting Guidelines

Homebuyer Education is required for 1st Time HomebuyersBorrower(s) cannot own other propertyNon-occupant co-borrowers and co-signers are not permitted3% down payment is required, a minimum of 1% must come from the borrower’s own funds. Remainder may come from:

Gift from a relative if repayment is not requiredGrant from a government agency or an employer- assisted housing

program, which has been approved Countrywide

! A FICO score of 620 is required for all combined loan amounts up to $400,000

! A FICO score of 680 for combined loan amounts between $400,001 to $650,000.

Conforming:Ratios and Reserves:Standard Fannie/Freddie Guidelines

Non Conforming:Ratios: 38%Reserves: 2 months

February 20, 2009

UNDERWRITING GUIDELINES

! Lenders are responsible for underwriting all mortgage loans that they originate. Automated underwriting approval required (DU Approve/Eligible or LP Accept)

! The 80/17 Program loans run through DU will have Flex underwriting criteria.

! Effective August 25, 2008, indicate that the second mortgage is a Community second.

NOTE: If CLOUT is used, the second mortgage cannot be input as a community second.Therefore, it may not receive as favorable finding; please go to DU directly for this product.

February 20, 2009

UNDERWRITING GUIDELINES

February 20, 2009

Second Loan P& I Calculation Example

2) INTEREST

Interest will be charged at the rate of ___________________________________ percent (_______%) on the unpaid principal until the full amount of principal has been paid. I will pay simple interest until one month before the first payment date shown in Section 3(B) and then compounded interest until the earlier of the Maturity Date (as defined below) or the date this Note is repaid in full.

Example:$59,160 loan amountx 7% interest rate_________$4141.20 accrued interestx 5 yrs deferral period________$20,706.00 total accrued interest for 5yrs

+$59,160.00 original loan balance__________$79,866.00+ $ 147.49 13 days of interest from 7/19/2007(sett date) on 08/01/2007(one month prior to 1st payment)__________$80,013.49

$80,013.49 amortized for 25 years = $565.52

February 20, 2009

Additional Fees

All CalSTRS conforming conventional loans are subject to the Fannie Mae 0.25% Adverse

Market Delivery Fee and the new loan level pricing adjustments per LTV and FICO.

New Fannie Mae Adverse Market Delivery Fee and Loan Level Pricing Adjustments

Announcements:

Fannie Mae Announcement 08-24




February 20, 2009

Rate Locks and Commitment

Locks for 80/17 1st and 2nd mortgages must be made concurrently

Property changes require new lock

No fee for cancellations, all loans that will not be delivered must be cancelled

Worst Case Extension

Loans that have not closed after all other extensions have been

exhausted:

Rate will be the higher of original lock or current market rate with a .125% fee

February 20, 2009

Fees

Origination Fee: 1.00% Standard Conventional

1.25% 80/17 (only on 1st loan)

Discount Points: not allowed

Other Closing Costs: Normal and customary fees including

an appraisal fee, credit report fee, survey fee, title insurance

premium, and other closing costs as permitted by the respective

agency. Must be fully disclosed on the HUD-1.

cal strs home loan prog

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