fgmc seller guide - fgmc correspondent correspondent seller guide.… · 7.2.11 underwriting...

Correspondent Lending

Seller Guide

Effective Date: 12/10/2015

Last Updated: 6/1/2018

First Guaranty Mortgage Corporation ®

Version 1.9 Correspondent Lending Seller Guide 2 CONFIDENTIAL DOCUMENT First Guaranty Mortgage Corporation must give prior written permission for this work, or any part thereof, to be used, reproduced, or transmitted in any form or by any means, by or to any party outside of First Guaranty Mortgage Corporation, its regulators and investors.

Document is Not Legal or Compliance Advice This document should not be construed as legal or compliance advice. FGMC encourages Correspondents to consult with their legal and/or compliance counsel for any legal or compliance matters.

Document Version Matrix Version Changes Date

1.0 Initial Version Finalized 12/21/2015 1.1 Update 01/19/2016 1.2 Update 04/15/2016 1.3 Update 07/28/2016 1.4 Update 10/25/2016 1.5 Update 01/30/2017 1.6 Update 05/10/2017 1.7 Update 07/31/2017 1.8 Update 08/30/2017 1.9 Update 02/27/2018 2.0 Update 05/01/2018 2.1 Update 06/01/2018



1 INTRODUCTION ............................................................................................................... 8

1.1 Purpose............................................................................................................................. 8 1.2 Applicability ...................................................................................................................... 8 1.3 Correspondent Lending .................................................................................................... 8 1.4 Correspondent Loan Process ........................................................................................... 8

2 GETTING STARTED ........................................................................................................... 8

2.1 Overview .......................................................................................................................... 8 2.2 Approval ........................................................................................................................... 8 2.3 Setup .............................................................................................................................. 10

2.3.1 Resources ................................................................................................................ 10 2.3.1.1 FGMC Correspondent Website ........................................................................... 10 2.3.1.2 Portal Training ..................................................................................................... 10 2.3.1.3 Loan Submission .................................................................................................. 10 2.3.1.4 Submitting Files for Underwriting ....................................................................... 11 2.3.1.5 General Information ............................................................................................ 11 2.3.1.6 Pricing .................................................................................................................. 12 2.3.1.7 Original Collateral/Notes ..................................................................................... 12 2.3.1.8 Final Documents .................................................................................................. 12 2.3.1.9 Compliance .......................................................................................................... 12 2.3.1.10 Important Addresses ........................................................................................... 12

3 CORRESPONDENT ELIGIBILITY ........................................................................................ 13

3.1 Overview ........................................................................................................................ 13 3.2 Eligibility ......................................................................................................................... 13

3.2.1 Requirements .......................................................................................................... 13 3.3 Approval Levels .............................................................................................................. 14

3.3.1 Loan Purchase Eligibility ......................................................................................... 14 3.3.2 FHA Loan Purchase Eligibility .................................................................................. 14

3.4 Maintaining Eligibility ..................................................................................................... 15 3.4.1 Notification of Significant Changes ......................................................................... 15 3.4.2 Changes to Corporate Authority and Banking Relationships ................................. 15 3.4.3 Compliance Reporting Requirements ..................................................................... 15 3.4.4 Periodic Reviews ..................................................................................................... 16 3.4.5 Early Payoff Remedies ............................................................................................ 16 3.4.6 Audits ...................................................................................................................... 16 3.4.7 Correspondent Annual Recertification ................................................................... 16 3.4.8 Financial Statement Delivery Requirements .......................................................... 17

3.5 Loan Defects ................................................................................................................... 17 3.5.1 Early Payment Default ............................................................................................ 17 3.5.2 Loan Defects Detected ............................................................................................ 17

4 CREDIT PARAMETERS .................................................................................................... 17

4.1 Overview ........................................................................................................................ 17 4.2 Product Options ............................................................................................................. 17 4.3 Exclusionary Lists ............................................................................................................ 17



5 APPRAISAL REQUIREMENTS .......................................................................................... 18

5.1 Overview ........................................................................................................................ 18 5.2 Correspondent Certification........................................................................................... 18 5.3 Appraisal Requirements ................................................................................................. 18 5.4 Enhanced Appraisal Requirements ................................................................................ 19

6 COMMITMENT POLICY/LOAN LOCKS ............................................................................. 19

6.1 Overview ........................................................................................................................ 19 6.2 Best Efforts/Mandatory Locks ........................................................................................ 20

6.2.1 Best Efforts Definition ............................................................................................. 20 6.2.2 Mandatory Lock Definition ..................................................................................... 20 6.2.3 Service Release Premium ........................................................................................ 20 6.2.4 Loan Registration .................................................................................................... 20

6.2.4.1 Lock Confirmations .............................................................................................. 20 6.2.4.2 Off-Sheet Pricing Request ................................................................................... 21 6.2.4.3 Duplicate Locks .................................................................................................... 21 6.2.4.4 Fallout .................................................................................................................. 21 6.2.4.5 Lock Periods ........................................................................................................ 21 6.2.4.6 Lock Expiration Date............................................................................................ 22 6.2.4.7 Lock Extensions ................................................................................................... 22 6.2.4.8 Relocks ................................................................................................................. 22 6.2.4.9 Renegotiations .................................................................................................... 23 6.2.4.10 Pair-Offs via Mandatory Rate Sheet Locks .......................................................... 23 6.2.4.11 Canceling Mandatory Locks via Rate Sheet ........................................................ 23 6.2.4.12 Swaps on Mandatory Locks via Rate Sheet ......................................................... 24 6.2.4.13 FGMC Mandatory Trade Desk ............................................................................. 24 6.2.4.14 Trade Confirmations ............................................................................................ 24 6.2.4.15 Delivery Timeframes ........................................................................................... 24 6.2.4.16 Delivery Tolerance ............................................................................................... 24

6.2.5 Settlement Dates .................................................................................................... 24 6.2.6 Roll/Extension Fees ................................................................................................. 25 6.2.7 Roll/Extension Periods ............................................................................................ 25 6.2.8 Pair Offs Calculations .............................................................................................. 25

7 DELIVERY PROCEDURES ................................................................................................. 26

7.1 Overview ........................................................................................................................ 27 7.1.1 Document Upload ................................................................................................... 27 7.1.2 Purchasable Form ................................................................................................... 28 7.1.3 Collateral Package ................................................................................................... 28 7.1.4 Uniform Closing Dataset (UCD) Requirements ....................................................... 29

7.2 Closed Loan Documentation .......................................................................................... 29 7.2.1 Ability to Repay and Qualified Mortgage Rule ....................................................... 29 7.2.2 Required Forms and Reference Data ...................................................................... 30 7.2.3 Bailee Specifications ............................................................................................... 30 7.2.4 General Closing Specifications ................................................................................ 30 7.2.5 Note Endorsement .................................................................................................. 31



7.2.6 Due-On Sale Clause ................................................................................................. 31 7.2.7 Initial Application Date ........................................................................................... 31 7.2.8 Late Charge ............................................................................................................. 31 7.2.9 Mortgagee Clause ................................................................................................... 31 7.2.10 HUD-1 Settlement Statement/Closing Disclosure .................................................. 32 7.2.11 Underwriting Conditions ......................................................................................... 32 7.2.12 Tax Requirements ................................................................................................... 32 7.2.13 Satisfaction of Risk Screening Conditions ............................................................... 35 7.2.14 Eligible Loan Modifications ..................................................................................... 35

7.3 Assignment of Mortgage ................................................................................................ 35 7.4 Mortgage Loan Purchase ............................................................................................... 36

7.4.1 Calculation of Purchase Proceeds ........................................................................... 36 7.4.2 Decline to Purchase ................................................................................................ 37 7.4.3 Principal Balance Purchased ................................................................................... 37 7.4.4 Accrued Interest ...................................................................................................... 37 7.4.5 Interest Credits at Closing ....................................................................................... 37 7.4.6 Escrow Waiver Fees ................................................................................................ 37 7.4.7 Power of Attorney (POA) ........................................................................................ 38 7.4.8 Trust Review Guidelines ......................................................................................... 38 7.4.9 Signature Specifications .......................................................................................... 39 7.4.10 New York Consolidation, Extension & Modification Agreement (NY CEMA) ......... 40

7.5 Title Insurance Specifications ......................................................................................... 40 7.6 Private Mortgage Insurance ........................................................................................... 41 7.7 Hazard Insurance ............................................................................................................ 42

7.7.1 Hazard Insurance General Specifications ............................................................... 42 7.7.2 Types of Hazard Insurance Coverage ...................................................................... 42 7.7.3 Amount of Hazard Insurance Coverage .................................................................. 43 7.7.4 Hazard Insurance Deductible .................................................................................. 43 7.7.5 Additional Hazard Insurance Coverage ................................................................... 43 7.7.6 Special Endorsements ............................................................................................. 44

7.8 Flood Insurance .............................................................................................................. 45 7.8.1 Non-Participating Communities.............................................................................. 45 7.8.2 Flood Determination Certification .......................................................................... 45 7.8.3 Required Documentation ....................................................................................... 45 7.8.4 Elevation Certificate ................................................................................................ 46 7.8.5 Required Coverage .................................................................................................. 46 7.8.6 Deductible Amount ................................................................................................. 46

7.9 Disaster Policy ................................................................................................................ 47 7.9.1 Determining Affected Areas ................................................................................... 47 7.9.2 Valuation Requirements for Property in Affected Areas ........................................ 47 7.9.3 Valuation and Inspection Requirements ................................................................ 47 7.9.4 Current Disaster Updates........................................................................................ 48

7.10 Real Estate Taxes ............................................................................................................ 48 7.11 Escrow/Impound Accounts ............................................................................................ 48

7.11.1 Escrow Waiver ........................................................................................................ 49



7.12 Loan Sale Notification .................................................................................................... 49 7.12.1 Due Dates ................................................................................................................ 49 7.12.2 Borrower Notification ............................................................................................. 49 7.12.3 Servicing Information .............................................................................................. 50 7.12.4 Vendor Notifications ............................................................................................... 50 7.12.5 Payment Processing Requirements ........................................................................ 51 7.12.6 Non-Sufficient Funds ............................................................................................... 51 7.12.7 Corporate Advances/Invoice Requirements ........................................................... 51 7.12.8 Wire Instructions..................................................................................................... 51 7.12.9 MERS/Transfer of Mortgage Instructions ............................................................... 52 7.12.10 Hazard Insurance .................................................................................................... 52 7.12.11 Tax Instructions ....................................................................................................... 52 7.12.12 PMI & MIP Instructions ........................................................................................... 53 7.12.13 Escrows ................................................................................................................... 53

7.13 Final Documents ............................................................................................................. 54 7.13.1 Delivery ................................................................................................................... 54 7.13.2 Shipping Procedures ............................................................................................... 55 7.13.3 Recovery .................................................................................................................. 55 7.13.4 Government Insuring Documents........................................................................... 55 7.13.5 Government Insuring Delivery ................................................................................ 56 7.13.6 Final Title Policy Delivery ........................................................................................ 56 7.13.7 Billing ....................................................................................................................... 57

7.14 Reporting ........................................................................................................................ 57 7.15 Responsible Lending ....................................................................................................... 57 7.16 Funding Fees................................................................................................................... 57 7.17 Non-Delegated Loan Delivery ........................................................................................ 57

7.17.1 Non-Delegated Setup .............................................................................................. 58 7.17.2 Loan Package........................................................................................................... 58 7.17.3 Loan Programs ........................................................................................................ 58 7.17.4 Package Review ....................................................................................................... 60 7.17.5 Credit Denials .......................................................................................................... 60 7.17.6 Clear to Close .......................................................................................................... 61

7.18 Renovation and Construction Loan Programs ............................................................... 62 7.19 Property Value for Loans Sold More than Four Months from Note Date ..................... 62

8 Appendix ...................................................................................................................... 63

8.1 Exhibit A – Lock Request Form ....................................................................................... 63 8.2 Exhibit B – Notice of Servicing Transfer (“Goodbye Letter”) ......................................... 64 8.3 Exhibit C – Final Documents Transmittal ....................................................................... 65 8.4 Exhibit D – Non-Delegated Correspondent Checklists/Stacking Orders ........................ 66

8.4.1 FGMC FHA Stacking Order ...................................................................................... 66 8.4.2 FGMC FHA Streamline Stacking Order .................................................................... 68 8.4.3 FGMC VA Stacking Order ........................................................................................ 69 8.4.4 FGMC VA IRRRL Stacking Order .............................................................................. 70 8.4.5 FGMC USDA Stacking Order .................................................................................... 71



8.4.6 FGMC USDA Streamlined Assist Stacking Order ..................................................... 72 8.4.7 FGMC Conventional Stacking Order ....................................................................... 73

8.5 Definitions ...................................................................................................................... 74 8.6 Contents of each Mortgage File ..................................................................................... 77

9 Forms ............................................................................................................................ 79

10 Web Portal Instructions ................................................................................................. 80

10.1 Registering a New Loan .................................................................................................. 80 10.2 Uploading Scanned, Imaged File .................................................................................... 80 10.3 How to Check for and Upload Conditions ...................................................................... 81



1 INTRODUCTION 1.1 Purpose The Correspondent Lending Division of First Guaranty Mortgage Corporation (FGMC) purchases loans from approved sellers. This Correspondent Lending Seller Guide details the terms and conditions that govern Correspondent participation in the FGMC Correspondent Lending Program. Occasionally, FGMC communicates updates and revisions to this Guide through email communications and online bulletins located on the FGMC Correspondent website. Each bulletin will indicate its effective date. The basic terms and conditions of the Mortgage Loan Purchase and Sale Agreement (MLPSA) have been incorporated into this Guide, however in the event of a conflict with this document the MLPSA will govern.

1.2 Applicability This Guide shall apply to FGMC in its entirety including all divisions, departments, subsidiaries, and affiliates.

1.3 Correspondent Lending A Correspondent, as defined by FGMC, is an FGMC-approved mortgage lender that originates, funds, and closes mortgages in their name. The Correspondent then submits the loan to FGMC for review (and/or underwriting), purchase, and funding. 1.4 Correspondent Loan Process All Correspondents should use this Guide to ensure that loans are prepared in accordance with FGMC requirements, thus increasing the chance of acceptance, purchase, and funding. After Correspondents create the loan, the loan package will proceed through the pipeline as follows:

• Started – Loan has either been registered or submitted through the FGMC Correspondent website and is in an active folder at FGMC.

• Processing – Once document upload is complete, loan processing begins. Correspondent sends required (

• Collateral Package) documentation for review. • Submitted – Awaiting a list of requirements from FGMC Underwriter or File Reviewer. • Decisioned – Loan has been conditioned and FGMC is waiting for suspense or condition uploads

to clear. • Resubmitted – Cleared loan is ready for submission. • Approved – Loan is ready for purchase. FGMC must receive either reverse Bailee letters or original

documents prior to purchase. • Closing – The loan is progressing through the purchase queue, has been confirmed locked, and

the required documents received. • Funding – FGMC delivers package to Document Custodian; Purchase Advice has been created and

sent to Correspondent and Funding Department. • Final Docs – Correspondent ships Final Documents as required.

2 GETTING STARTED 2.1 Overview First Guaranty Mortgage Corporation (FGMC) is in the business of providing the best possible service to its clients and customers. To begin a relationship as an FGMC Correspondent, Sellers can visit the Comergence Compliance LLC website. There, a Seller can log in or create a new account to get started.

2.2 Approval The following is an overview of documents necessary for Correspondent approval. These will be requested and maintained by Comergence as part of the approval process.

http://www.fgmccorrespondent.com/

https://www.comergence.com/RealmWeb.html?link=%2B3l0YAe90Oe7xKnfjg9X41P31e7x%2FvEt



• Two (2) most recent years audited financial statements • Interim financial statements (most recent available) • Resumes of Key Management (all applicable):

o Chief Executive Officer o Chief Financial Officer o Head of Secondary Marketing o Head of Operations o Head of Production o Head of Compliance o Underwriting Manager(s) o Closing Manager o Funding Manager o Post-Closing Manager

• Resumes of Underwriters (CHUMS Numbers required, if applicable) • Appraiser Independence Requirements (AIR) Certification of Compliance • Anti-Money Laundering (AML) Bulletin • AML Certification • Company Formation/Corporate By-laws • Corporate Resolutions • FACT Act Compliance (Red Flag Policy) • FGMC Mortgage Loan Purchase and Sale Agreement • Investor Scorecards for most recent quarter for all investors providing scorecards • IRS Form W-9 • Letter of Reference from Primary Warehouse Bank • Quality Control Policy and Procedure Documents • Surety/Fidelity Bond insurance ($300,000 minimum) • Copies of all of the following that are available:

o Appraisal Management Policy o Compliance Management Program o Credit Policy o Complaint Management Program o Fraud Management Policy

Comergence will conduct a background and licensing check consisting of the following steps: • Background check of ownership • Office of Foreign Assets Control (OFAC) check • HUD Limited Denial List check • Licensing review • Federal criminal/civil records check • Secretary of State check • Regulatory sanctions check • Review for bankruptcy, foreclosures, or liens/judgments • State/local criminal records check

Next, FGMC will perform the following due diligence: • Financial review • Quality Control review • Comprehensive Risk Assessment (Business, Operations, Compliance) • Consumer and Social Media review



• HUD Neighborhood Watch review - Minimum requirements for all approvals (except Non-Delegated Approval) is current and trailing 3-month average Compare Ratio < 150

In addition, the following requirements will be necessary for FGMC risk review: • All Approval Requests (Non-Delegated, Delegated, Mandatory, Third Party Origination (TPO)):

o FGMC Business Questionnaire o FGMC Unfair, Deceptive, or Abusive Acts and Practices (UDAAP) Questionnaire o FGMC Information Security Questionnaire

• Mandatory Approval Requests Only: o Hedging Policy o Pricing Policy o Copy of hedging vendor agreement o Full set of most recent month’s hedging reports

• Third Party Origination Approval Requests Only: o Copy of TPO Approval and Monitoring Program o FGMC TPO Questionnaire

2.3 Setup Once FGMC has sent approval, the Correspondent needs to fill out the Company Setup Application and email the completed form to [email protected]. This is the first step in getting properly setup on the FGMC Web Portal. The FGMC Help Desk will set up individual users once the completed form has been received.

The Correspondent will be assigned an Account Executive (AE) as the main point of contact. The Correspondent will also be classified as Delegated or Non-Delegated based on FGMC-established requirements. The Delegated Correspondent performs the loan underwriting while the 7.17 Non-Delegated Loan Delivery requires loans to be underwritten by FGMC and follows a slightly different process.

2.3.1 Resources These important resources will provide Correspondents with learning opportunities in order to quickly establish a working relationship with FGMC.

2.3.1.1 FGMC Correspondent Website www.fgmccorrespondent.com

Resources Learning Center

• Bulletins • Forms • Correspondent Checklist • NMLS Consumer Access

• Product Option Guides • Loan Submission • Delivery Information • TRID Resource Center

2.3.1.2 Portal Training Live FGMC Web Portal training is provided every Thursday at 2:00 PM ET. The session usually lasts 45 minutes and will help Correspondents better understand how to register, submit, and lock loans and upload conditions. The webinar is an online meeting available to all clients. Correspondents can contact their Account Executive (AE) for details and a training schedule. If a Correspondent encounters an issue or error when submitting a file, uploading conditions, or locking, the FGMC Help Desk is available for assistance by emailing [email protected].

2.3.1.3 Loan Submission Submission and Condition instructions and Loan Submission Form:

http://4085984450.secure-onlineorigination.com/UploadFiles/4085984450/Website%20Company%20Set%20Up%20Application.pdf

mailto:[email protected]


http://www.fgmccorrespondent.com/bulletins.html

http://www.fgmccorrespondent.com/bulletins.html

http://www.fgmccorrespondent.com/forms.html

http://www.fgmccorrespondent.com/correspondent-checklist.html

http://www.fgmccorrespondent.com/correspondent-checklist.html

http://www.nmlsconsumeraccess.org/

http://www.fgmccorrespondent.com/product-matrices.html


http://www.fgmccorrespondent.com/loan-submission.html

http://www.fgmccorrespondent.com/loan-submission.html

http://www.fgmccorrespondent.com/delivery-information.html

http://www.fgmccorrespondent.com/delivery-information.html

http://fgmc.com/trid/index.html




• Instructions for submitting loans and uploading conditions to FGMC can be found here: o See Delivery Procedures o If at any time there is an issue or error submitting a file, uploading conditions, or

locking a loan, the FGMC Help Desk is available for assistance by emailing [email protected].

• Be sure to include the FGMC Correspondent Loan Submission Form on all loan submissions.

2.3.1.4 Submitting Files for Underwriting Correspondents are advised to provide a full, complete file at the time of submission; however, if some items are not available at the time of submission, packages will be accepted with the minimum docs required below. Please refer to the minimum requirements for each submitted file. These items may not be applicable to all files, but this provides Correspondents with a basic list of documents needed to proceed.

• FGMC Submission Form • Automated Underwriting System (AUS) Findings – FNMA Desktop Underwriter (DU) only,

FHA/VA DU or Loan Prospector (LP) • 1003 Loan Application (unsigned OK) • Assets / Income • Sales Contract, if applicable

NOTE: If a submission form is not provided clearly identifying the correct channel, the FGMC Input Department will hold the file until received (status/milestone will show as PROCESSING). FGMC will accept a TBD file for review for purchase transactions only. Be aware that the less documentation provided upfront for initial Underwriter review, the more conditions will be added to the loan approval.

2.3.1.5 General Information The FHA Case Assignments document provides information related to FHA Connection. FGMC ID Numbers:

• FHA ID number is 7516800469 • VA ID Number is 6852450000 • MERS ID is 1000314 • NMLS Number is 2917 • Rushmore Servicer ID is 30941

Once a loan is fully submitted into the FGMC pipeline, the loan will be routed to the Input Department. The system milestone will show as STARTED. Once the file is reviewed, the system is updated as necessary and the Correspondent is notified of any missing items. If the loan is put on hold for any reason, the milestone will show as PROCESSING. Once the loan has moved through input, it will then be put into the reviewer’s queue. At this time the milestone will show as SUBMITTAL.

Pre Purchase Review and Conditions Once in the SUBMITTAL stage, the loan is in queue for underwriting/review on a first-in/first-out basis. Turn times (posted at www.fgmccorrespondent.com) begin the day AFTER the loan was fully submitted to FGMC to account for one (1) full business day.

Closed Loans Once the loan is decisioned, the review/approval will be uploaded to the FGMC Web Portal for retrieval any time. The milestone will show as DECISIONED.

NOTE: Once the conditions have been uploaded, the Correspondent must click the SUBMIT FOR REVIEW button located above the Conditions section on the upload screen. This is the only way the Underwriter is notified that conditions have been submitted for review.


http://www.fgmccorrespondent.com/docs/forms/FGMC_Correspondent_Loan_Submission_Form.pdf

http://www.fgmccorrespondent.com/docs/forms/FHA%20Case%20Assignments_05_15_2015.pdf

https://entp.hud.gov/clas/index.cfm




2.3.1.6 Pricing Correspondents should contact their Account Executive for all pricing questions and issues. Locking/Pricing is completed through the FGMC Web Portal. Correspondents can contact [email protected] for the associated lock/pricing username or other assistance. See COMMITMENT POLICY/LOAN LOCKS for more details.

2.3.1.7 Original Collateral/Notes FGMC requires the original final Collateral Documents on all Conforming Mortgage Loans and on Government Mortgage Loans when applicable. The Collateral Package must be shipped to the FGMC custodian no later than the same day that the Loan Package is delivered (via the FGMC Web Portal) to FGMC. For more information, see Collateral Package.

2.3.1.8 Final Documents For complete details about the procedure for shipping documents, see DELIVERY PROCEDURES and Final Documents.

2.3.1.9 Compliance FGMC strictly adheres to federal, state, and agency laws and regulations. It is the Lender’s responsibility for Delegated and Non-Delegated loans to adhere to all applicable federal, state, and agency laws and regulations prior to closing the loans. Note: Correspondents are responsible for ensuring all loans sold to FGMC are originated and closed in accordance with all federal, state, city, county, and agency high-cost/predatory lending regulations. FGMC will not purchase any loan (Agency, Non-Agency, FHA, VA, or USDA) that meets the definition of a “subprime loan” under New York State Law.

2.3.1.10 Important Addresses The submission process for documents (Imaged, Collateral, and Final/Trailing) is covered in detail in the DELIVERY PROCEDURES section. For quick reference, applicable addresses are as follows: Collateral Documents: Final Documents:

Deutsche Bank National Trust Company First Guaranty Mortgage Corporation Post Closing Dept Attn: Team FGMC/Correspondent c/o First American CleanFile Solutions 1761 East St. Andrews Place Mail Code 1016K Santa Ana, CA 92705 4795 Regent Boulevard Irving, TX 75063

Compliance Actions: Borrower’s First Payment: First Guaranty Mortgage Corporation Rushmore Loan Management Services LLC Attn: Client Administration PO Box 514707 1900 Gallows Road, Suite 800 Los Angeles, CA 90051-4707 Tysons Corner, VA 22182 Overnight Payments may be sent to:

Rushmore Loan Management Services LLC 15480 Laguna Canyon Road, Suite 100 Irvine, CA 92618 Vendor Notification: Borrower’s General Correspondence:

First Guaranty Mortgage Corporation Rushmore Loan Management Services LLC Attn: Servicing Dept. Attn: Customer Service 5280 Corporate Drive B200 1755 Wittington Place, Suite 400, Frederick, MD 21703 Dallas, TX 75234


3 CORRESPONDENT ELIGIBILITY 3.1 Overview With respect to loans sold to FGMC and in addition to the Mortgage Loan Purchase and Sale Agreement and other legal agreements between FGMC and the Correspondent, each Correspondent is bound by the provisions of this Guide. 3.2 Eligibility

The requirements stated below, unless waived by FGMC at its sole and absolute discretion, must be met by Lenders in order to be eligible for participation in the FGMC Correspondent Program. FGMC reserves the right, in its sole discretion, to determine whether a prospective Correspondent meets these eligibility requirements. Once approved, Correspondents are required to maintain the eligibility requirements. If a Correspondent fails to maintain one or more of the eligibility requirements, FGMC may suspend purchasing mortgage loans from the Correspondent and/or terminate its business relationship with the Correspondent.

3.2.1 Requirements Correspondents must follow the requirements listed below.

Experience The Correspondent must have been an active originator of first lien, investment-quality residential mortgage loans using Fannie Mae’s Desktop Underwriter (DU) or Freddie Mac’s Loan Product Advisor Automated Underwriting System (AUS) engine during the previous two years. Facilities The Correspondent must have adequate facilities with which to originate first lien residential mortgage loans.

Selling Standards • The Correspondent must follow generally accepted mortgage lending practices with respect to its

mortgage loan origination activities. • The Correspondent’s company must be an organization which is committed to, and engages in,

responsible lending practices.

Capital Requirements The Correspondent and the Correspondent’s parent corporation, if any, must meet the capital requirements of each state and federal regulatory agency with jurisdiction over any of the Correspondent’s or parent corporation’s activities, as applicable. Minimum requirements are:

• Delegated Loans: $500,000 net worth (NW) and 20% NW in cash. • Non-Delegated Loans: $150,000 NW and $50,000 in cash. • Mandatory Locks: $1,000,000 NW and 20% of NW in cash. • Delivery of Third-Party Originated (TPO) Loans: $1,000,000 NW and 20% of NW in cash.

Legal Standing • The Correspondent must be duly organized, validly existing, and in good standing under the laws of the

jurisdiction of its organization and qualified to transact business and properly licensed in each jurisdiction where it originates or services mortgage loans.

• The Correspondent must be in good standing with all applicable regulatory authorities and not subject to any extraordinary supervision of its operations.

• The Correspondent must have the power and authority to enter into the FGMC Correspondent Mortgage Loan Purchase and Sale Agreement.

• The Correspondent’s compliance with the terms and conditions of the agreement, including the terms and conditions of this Guide, must not violate any of the provisions of its articles of incorporation, charter



or bylaws or any other instrument relating to the conduct of the Correspondent’s business, the ownership of its property or any other agreement to which it is a party or by which it is bound.

Licensing The Correspondent must possess and maintain all required licenses necessary to conduct its activities in each jurisdiction in which any mortgaged property is located or otherwise be exempt from such requirements.

Insurance Correspondents that are not federally insured must maintain a blanket fidelity bond and errors and omissions insurance coverage in the amount of $300,000 each. The deductible may not exceed the greater of $100,000 or 5% of the face amount of the bond.

3.3 Approval Levels 3.3.1 Loan Purchase Eligibility

• Delegated Correspondents must underwrite and close all loans delivered to FGMC for purchase. • Loans must meet FGMC and Investor guidelines. • AUS decision required in accordance with the following:

o Conventional: Desktop Underwriter (DU) approval. o FHA: DU or LP TOTAL Scorecard approval. Streamline transactions do not require a TOTAL Scorecard

approval. o VA: DU approval, LP approval, or manual underwrite per Product Profile. Interest Rate Reduction

Refinance Loans (IRRRL) transactions do not require an AUS approval. o Rural: USDA Guaranteed Underwriting System (GUS) approval or manual underwrite per Product

Profile.

Loans underwritten by a nationally recognized Mortgage Insurance (MI) contract underwriting company that meet the above criteria are eligible for purchase.

Correspondents must be aware of the following when utilizing MI contract underwriting: • The Correspondent must establish and utilize its own contract underwriting agreement with the MI

Company. FGMC will not be a party to these agreements. • The Correspondent is responsible for all representations and warranties to FGMC for underwriting

decisions. • The Correspondent must perform normal due diligence in processing and underwriting the loan prior to

submitting the loan to the contract underwriter. • Even though the MI Company will be underwriting as an agent of the Correspondent, Correspondents are

still responsible for all origination activities. • Correspondents are responsible for complying with federal and state reporting requirements, including

but not limited to, reporting under the Home Mortgage Disclosure Act (HMDA) and Nationwide Licensing System Mortgage (NLSM) call reports and financial statements.

• A contract underwriting decision issued by the MI Company on behalf of the Correspondent will not impact or change the Correspondent’s responsibility and obligation to sell FGMC loans that are in full compliance with the Guide and the Mortgage Loan Purchase and Sale Agreement.

3.3.2 FHA Loan Purchase Eligibility

In addition to the Purchase Eligibility requirements for FHA Loans, Correspondents must: • Meet all other eligibility requirements, as applicable. • Meet HUD’s loan insurance requirements. • Realize any government loan not insured within 60 days of loan closing may be subject to repurchase or

collection of an uninsured loan fee. • Be HUD approved and have a DE Underwriter on staff. • Provide a copy of their HUD approval letter.



• Be in good standing with HUD and other applicable agencies.

3.4 Maintaining Eligibility

Any Correspondent approved for participation in the FGMC Correspondent Program must continue to meet the eligibility requirements herein to maintain its eligibility and approval to participate.

3.4.1 Notification of Significant Changes The Correspondent must send FGMC written notice of any contemplated major changes in its organization, including its notice copies of any filings with, or approvals from, its regulators. FGMC requires notice of, among other things, the following significant changes relating to the Correspondent:

• Any mergers, consolidations, or reorganizations. • Any direct or indirect material change in ownership. An “indirect change in ownership” includes any

change in the ownership of the Correspondent’s parent, any owner of the parent, or any beneficial owner of the Correspondent that does not own a direct interest in the Correspondent.

• Any change in corporate name. • Any change from a federal charter to a state charter (or vice versa) if the Correspondent is a savings and

loan association or a bank. • Material changes in financial condition.

3.4.2 Changes to Corporate Authority and Banking Relationships In the event that there is any change in corporate authority, the lender must immediately deliver to FGMC a replacement Corporate Resolution, which accurately reflects the corporate authorizations granted by the lender, or a Funding Instructions Notification which accurately describes the banking relationships in effect, as applicable.

FGMC will not recognize any changes in the Correspondent’s corporate authorizations or funding instructions until the replacement Corporate Resolution, or Funding Instructions Notification, as applicable, is received by FGMC.

3.4.3 Compliance Reporting Requirements If the Correspondent is subject to the jurisdiction of any governmental agency or quasi-governmental agency, including but not limited to, state regulatory entities, the Consumer Financial Protection Bureau (CFPB), Fannie Mae, Freddie Mac, Department of Housing and Urban Development (HUD) or Federal Deposit Insurance Corporation (FDIC), FGMC may request copies of any audit reports issued by such agencies.

If any disciplinary action is taken by any such agency, including suspension or termination of the Correspondent’s selling or servicing rights, the Correspondent must notify FGMC within three (3) business days of such action. Any reports or notices to be delivered to FGMC pursuant to this section of the Guide must be delivered to the following address:

First Guaranty Mortgage Corporation Attn: Client Administration

1900 Gallows Road, Suite 800 Tysons Corner, VA 22182



3.4.4 Periodic Reviews FGMC will routinely review each Correspondent’s book of business to monitor performance. The reviews may include, but are not limited to, the following:

• Product mix • Best-effort commitment pull through rate • Mark-to-market (MTM) exposure • Delinquency data • HUD compare ratios • Repurchase activity • Defective delivery rate • Number of Early Payment Default (EPD) loans • Number of Early Payoffs (EPO) and overall portfolio turnover

3.4.5 Early Payoff Remedies Consistent with the prepayment review process of the Agencies, FGMC routinely reviews each Correspondent’s portfolio of loans to monitor levels of prepayments. If such analysis identifies unusual prepayment behavior (as defined by one or more of the Agencies) by an FGMC Correspondent, the originating broker or loan officer, FGMC may seek additional protections, including an extended EPO period on future loan purchases or disallowing loans to be submitted from identified brokers or loan officers prior to purchasing any additional mortgage loans from a Correspondent. Further, if FGMC receives invoices from an investor due to unusual prepayment speeds, the cost (which may include an EPO recapture of all amounts paid in excess of the loan amount) will be passed on to and borne by the Correspondent.

See the FGMC Mortgage Loan Purchase and Sale Agreement regarding solicitation, Government-Sponsored Enterprise (GSE) eligible loans, and the GSE’s policy regarding prepayment behavior.

3.4.6 Audits FGMC may audit the Correspondent’s mortgage loan origination operations and examine the books and records relating to any mortgage loan sold by the Correspondent to FGMC. The Correspondent will facilitate such audits and provide FGMC and its agents with access to the Correspondent’s offices, books and records at reasonable times during the Correspondent’s normal business hours.

3.4.7 Correspondent Annual Recertification Within 30 days of their yearly initial approval date, all Correspondents will be advised to complete the Correspondent Annual Recertification form as part of the Correspondent Annual Recertification Process. In addition, Correspondents are required to provide the following:

• Most recent years audited financial statements • Interim financial statements (most recent available) • Resumes of key management (revised or additional) that differ from those previously provided to FGMC • Resumes of current Underwriters (CHUMS Numbers required, if applicable) • Anti-Money Laundering (AML) Bulletin • AML Certification • Corporate Resolutions • Corporate Formation/Corporate Bylaws • FGMC Mortgage Loan Purchase and Sale Agreement (previous version can remain unchanged) • Letter of Reference from Primary Warehouse Bank • QC reports with management responses for most recent quarter • Surety/Fidelity Bond insurance ($300,000 minimum) • Fair and Accurate Credit Transactions (FACT) Act Compliance (Red Flag Policy)



• Copies of any policies, procedures or programs (revised or additional) that differ from those previously provided to FGMC

Comergence will work with FGMC to perform the required background checks and verifications, including past performance with FGMC, and then provide Correspondent with the results. 3.4.8 Financial Statement Delivery Requirements All Correspondents are required to provide audited financials within 120 days of fiscal year end.

3.5 Loan Defects 3.5.1 Early Payment Default If, at any time, within the first six (6) months following purchase of the Loan, any scheduled Monthly Payment on such Mortgage Loan is or becomes ninety (90) days delinquent with respect to a monthly payment, Seller shall be obligated to repurchase the affected Mortgage Loan upon the occurrence of one or more of the following circumstances (each, a “Repurchase Obligation”) affecting a Mortgage Loan:

Where an Early Payment Default has occurred with respect to the Mortgage Loan;

The Purchaser (FGMC) reserves the right to, in lieu of repurchase, recapture the Service Release Premium (SRP), an administrative fee of $3,000 and any estimated associated loss in respect to the Mortgage Loan.

3.5.2 Loan Defects Detected For all loans acquired by Purchaser that are determined to have eligibility violations, the Purchaser will inform the Seller, in writing, and provide a response time in accordance to the Mortgage Loan Purchase and Sale Agreement.

If a Seller provides a response within the allotted time in accordance to the Mortgage Loan Purchase and Sale Agreement and both the Purchaser and/or Purchaser’s investor agree with the provided rebuttal, the repurchase demand will be rescinded.

If a Seller cannot cure the eligibility violation but is able to refinance the existing mortgage loan, the Purchaser reserves the right to recapture the Service Release Premium (SRP) paid in respect to such mortgage loan, if the eligibility violation is detected within three (3) years of the Funding Date. Additional holding fees may be applicable if the refinance extends beyond the Agency repurchase due date.

If the eligibility violation cannot be cured, an effective repurchase due date will be set. The repurchase due date will be the greater of the investor repurchase date or 30 days from initial repurchase notification. If funds are not remitted by the repurchase due date, the Purchaser reserves the right to charge the Seller a daily or monthly holding fee until the full Repurchase Price is remitted.

4 CREDIT PARAMETERS 4.1 Overview As outlined in the Mortgage Loan Purchase and Sale Agreement, loans sold to FGMC by the Correspondent are bound by the provisions in this Guide.

4.2 Product Options • Refer to Product Option Guides for details on each FGMC product. • For Non-Delegated loans, see Non-Delegated Loan Delivery.

4.3 Exclusionary Lists Correspondents are required to adhere to all applicable agency requirements, including those requiring lenders to check loan participants against exclusionary lists. Individuals or entities confirmed to be on an exclusionary list may not be a party to a loan sold to FGMC. Agency exclusionary lists include, but may not be limited to:




• U.S. General Services Administration (GSA) Excluded Party List (EPL) available through GSA’s System of Award Management (SAM) website;

• HUD’s Limited Denial of Participation List (LDP); • Federal Housing Finance Agency’s (FHFA) Suspended Counterparty Program (SCP); and • Freddie Mac’s Exclusionary List.

5 APPRAISAL REQUIREMENTS 5.1 Overview FGMC allows Correspondent Sellers to order appraisal reports following their own internal appraisal management policies. Each appraisal report submitted to FGMC requires the individual appraiser to fully comply with all Uniform Standards of Professional Appraisal Practice (USPAP), Financial Institutions Reform Recovery and Enforcement Act (FIRREA) appraisal regulatory standards, and the Federal Housing Finance Agency (FHFA) which issued the Appraiser Independence Requirements (AIR). Additionally, all reports must meet all minimum appraisal requirements as set forth by the secondary market, including Government-Sponsored Enterprises (GSEs), Federal Housing Administration (FHA) and Department of Veterans Affairs (VA).

Correspondent Sellers must comply with FGMC standards for meeting AIR. They must have documented internal appraisal procedures, including, but not limited to, if they utilize Appraisal Management Companies (AMCs) and/or a panel of approved appraisers as outlined under FGMC Policy – Requirements for Correspondent Use of Appraisal Management Companies (AMCs) and/or Proprietary Panel of Approved Appraiser. FGMC will review Correspondent Seller policies and procedures for meeting AIR, to determine if the Correspondent’s documented internal appraisal procedures utilize AMCs and/or a panel of approved appraisers, and if they meet all standards outlined in the FGMC Policy. 5.2 Correspondent Certification With every appraisal report submitted to FGMC, the Correspondent certifies:

• The appraisal has been conducted by a licensed or certified appraiser. Correspondent certifies that it has adequate controls to ensure the appraiser is in good standing and licenses/certifications are current.

• The Correspondent has thoroughly reviewed the report and has concluded that the property is adequate collateral to support the loan.

• The report complies with FGMC, Uniform Standards of Professional Appraisal Practice (USPAP) and agency standards.

• Any information known to the Correspondent that could adversely affect value or marketability was disclosed to the appraiser.

• The appraiser has adequately supported any assumptions, data, analysis, rationale, and conclusions made or used to determine value and marketability.

• The information on the report is accurate, consistent, clearly written, and sufficiently documented. • Appraiser comments addressing declining property value (if any) are acted upon appropriately. • By delivering loans to FGMC, the Correspondent represents and warrants that their appraisal process and

appraisal reports are in compliance with all agency and HUD requirements, as well as all applicable state or federal statutes in all aspects of ordering, evaluating, disclosures and processing appraisals. Appraisals provided by a third party, such as a mortgage or real estate broker, are not acceptable.

5.3 Appraisal Requirements • Determined by AUS Findings. Property Inspection Waivers are permitted by FGMC when offered by

Desktop Underwriter (DU). • A Market Conditions Addendum (Fannie Mae Form 1004MC/Freddie Mac Form 71) is required for all loans

delivered with appraisals of one to four unit properties. It must be included with appraisal Forms 1004/70, 1025/72, 1073/465, 1075/466, 2055/2075.



• A full appraisal is required, regardless of AUS findings, if any of the following conditions exist: o Purchase transactions of REO properties and all purchases of properties whose most recent

transaction was a foreclosure sale. o Apparent adverse physical deficiencies or conditions. o Apparent adverse environmental conditions. o The subject property does not conform to the neighborhood.

• First generation PDF of the Appraisal Report. • Summary Submissions Report (SSR) if submitted to Fannie Mae Uniform Collateral Data Portal (UCDP) or

FHA/Department of Housing and Urban Development (HUD) Electronic Appraisal Delivery (EAD) Portal (effective June 27, 2016). (Note: The SSR document must have a status of “Successful” to be acceptable.)

• The VA Form (26-1805) must have the Client/Broker listed as the Originating Lender and FGMC listed as the Sponsor for Non-Delegated Correspondent loans.

5.4 Enhanced Appraisal Requirements With every appraisal report submitted to FGMC, the Correspondent certifies:

• The appraisal has been conducted by a licensed or certified appraiser. Correspondent certifies that it has adequate controls to ensure the appraiser is in good standing and licenses/certifications are current.

• The Correspondent has thoroughly reviewed the report and has concluded that the property is adequate collateral to support the loan.

• The report complies with FGMC, USPAP, and agency standards. • Any information known to the Correspondent that could adversely affect value or marketability was

disclosed to the appraiser. • The appraiser has adequately supported any assumptions, data, analysis, rationale, and conclusions made

or used to determine value and marketability. • The information on the report is accurate, consistent, clearly written, and sufficiently documented. • Appraiser comments addressing declining property value (if any) are acted upon appropriately. • By delivering loans to FGMC, the Correspondent represents and warrants that their appraisal process and

appraisal reports are in compliance with the all agency and HUD requirements as well as all applicable state or federal statutes in all aspects of ordering, evaluating, disclosures and processing appraisals. Appraisals provided by a third party, such as a mortgage or real estate broker, are not acceptable.

6 COMMITMENT POLICY/LOAN LOCKS All loans are required to be locked with the lock desk at FGMC prior to authorization to clear a loan for purchase. Loan files that are not locked and/or have a lock expired at the time of review will receive a condition indicating the loan must be locked. This condition must be satisfied before FGMC will clear the loan for purchase. 6.1 Overview All Correspondents have the ability to submit locks, extensions, and change requests. For detailed instructions, Correspondents can reference the Locking and Change Request Manual or contact their Account Executive. Assistance with the online portal or the locking process can also be obtained by emailing [email protected].

The FGMC Lock Desk is open until 9:00 PM ET for all products. New locks and extension requests received through the correspondent website will be processed the same day with exception of FHA 203k, VA and all High Balance products. All online profile changes, emails, relocks and manual lock requests submitted between 7:00 PM – 9:00 PM ET will be processed the next business day. Manual lock requests and relocks received after 9:00 PM ET will be processed the following business day once pricing is made available. Pricing is made available every morning once Rate Sheets have been updated and sent. Pricing is updated between 9:45 AM and 10:30 AM ET every business day. Pricing may also be updated throughout the day as needed and new Rate Sheets will be sent out. FGMC does not offer overnight price protection.

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Note: Correspondents may access historical pricing via the FGMC online locking system if available, but it is the responsibility of the Correspondent to keep historical records of FGMC rate sheets and lock confirmations. Off-sheet pricing requests, transactions requiring a manual lock request, or locks done via FGMC extended lock option need to be submitted using Exhibit A – Lock Request Form and emailing to [email protected].. Currently transactions that require a manual lock request are:

• GNMA High Balance loans collateralized by a manufactured home, • GNMA ARM loans collateralized by a manufactured home, • Fannie Mae Loans with non-traditional credit, • Any loan product to be locked at an interest rate not published on the rate sheet, or • Fannie Mae DU Refi Plus with credit scores below 620.

6.2 Best Efforts/Mandatory Locks FGMC offers Correspondents two options for selling mortgage loans—Best Efforts and Mandatory, each with its own benefits. An explanation of the two types of locks can be found below. Note that loans cannot be switched from Best Efforts to Mandatory option (or from Mandatory to Best Efforts) after a loan has been locked.

6.2.1 Best Efforts Definition A Best Efforts Lock is an agreement between FGMC and the Correspondent for the purchase and sale of a specified, eligible mortgage loan by a specific date and for a specific price. Correspondents commit to providing their best effort to sell this loan to FGMC. A Best Efforts Lock is borrower and property specific. Choosing this option means that the Correspondent will not incur borrower-driven fallout risk prior to the loan closing. Things to remember:

• For loans that do not close, Correspondents may cancel the lock without incurring a pair-off fee. • For Re-Locks, Correspondents are obligated to perform within the Re-Lock terms of this policy.

Notes: • A loan may not be switched from Best Efforts to Mandatory after a loan has been locked. • A pair-off fee is a fee assessed when the aggregate principal balance of a mortgage funded or purchased

under a delivery commitment falls below the tolerance specified. (See Error! Reference source not found..) 6.2.2 Mandatory Lock Definition A Mandatory Lock is an agreement between FGMC and the Correspondent for the purchase and sale of a specified, eligible mortgage loan by a specific date and for a specific price. The Correspondent commits to sell the loan(s) to FGMC and failure to do so may result in a pair-off fee.

Note: A loan may not be switched from Mandatory to Best Efforts after the loan has been locked.

6.2.3 Service Release Premium FGMC pays the Correspondent a Service Release Premium (SRP) on each loan based on specific loan criteria. The SRP is included in the GNMA (FHA, VA, USDA loans) and Fannie Mae TPO base pricing.

6.2.4 Loan Registration All loans must be registered prior to requesting a lock. All bulk registrations must be completed within 48 hours of commitment. For instructions on how to register a loan, refer to the Web Portal Instructions located on the FGMC Correspondent website under Forms or go to the Registering a New Loan section of this Guide.

6.2.4.1 Lock Confirmations Lock confirmations are sent automatically via email to the Correspondent upon FGMC confirming a lock was requested via FGMC’s online locking system. All lock confirmations will be sent to the email assigned to the User during the online Web Portal setup. If a lock confirmation is not received upon locking a loan online, the Correspondent should email [email protected] to ensure that FGMC has the most recent contact email on file.

In addition, all lock confirmations for loans that are locked online may be retrieved after a loan is locked by the


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Correspondent, at any time. For instructions on how to retrieve lock confirmations online, refer to the Locking and Change Request Manual located on the FGMC Correspondent website under “Resources/Forms” or contact the assigned Account Executive.

Lock confirmations for all manual requests will be sent via email by the FGMC Lock Desk within 24 hours of request.

6.2.4.2 Off-Sheet Pricing Request Requests for off-sheet pricing must be submitted to: [email protected] no later than 4:00 PM ET and confirmed with FGMC no later than 5:00 PM ET. In addition, off-sheet pricing is only available as a mandatory delivery.

6.2.4.3 Duplicate Locks Correspondents must monitor their pipeline to prevent duplicate loans and double locks (same borrower, same property address, etc.). A lock commitment is associated with one specific physical address. If a property address changes, a new lock is required and will not be considered a duplicate lock. In the event that the Correspondent locks a loan with the same property address more than once, the following procedures will apply:

If two loans are registered and locked with same borrower/ property address and…

Then the...

Both loans have locks that are active, Original loan will remain active and FGMC will apply worst case pricing between the two locks. The second loan will be canceled and will count against the Correspondent’s fallout percentage.

The original loan is canceled and a new loan, with the same property address, is locked ≤ 30 days from the cancellation date,

Worst case pricing and applicable relock fee will apply, in addition to all previous relock and extension fees. The second loan will be canceled and will count against the Correspondent’s fallout percentage.

Note: In the event that the Correspondent locks a loan Mandatory with the same property address more than once and both locks are active, the second loan will be canceled and subject to a pair-off fee and count towards the Correspondent’s fallout percentage.

6.2.4.4 Fallout FGMC will monitor the Correspondent’s fallout percentages. FGMC will contact any Correspondent with excessive fallout percentages (typically over 20%) to determine the origin.

6.2.4.5 Lock Periods The standard lock periods include 15, 30, 45, and 60 days, however extended locks are available. Remember that before a lock can be tracked and confirmed from FGMC’s system, the loan must be registered in the portal. Additionally:

• Loans must be in Approval status prior to lock expiration (i.e. cleared for purchase) o The closed loan package must be received, AND o Loan has been reviewed and cleared by FGMC Due Diligence for all prior-to-purchase (suspense)

conditions. • Closed loan packages delivered to FGMC by 5 p.m. ET on the day of lock expiration, will receive a free,

automatic 10-day extension. The 10-day free extension will provide additional time to clear prior-to-purchase suspense conditions.

• If the loan has not been cleared for purchase after the free 10 days, automatic extensions will be charged per the rate sheet in increments of 15 days.

• After 45 days of automatic extensions at a charge, the lock will expire and is subject to re-lock or pair-off fees per this policy.

Note: Lock Periods section of this policy DO NOT apply to Mandatory Trade Desk loans. Loans must be delivered to FGMC in fundable condition (credit and closed loan package) before 5:00 PM ET on day of lock expiration. If






FGMC detects a deficiency during the funding review process, suspense conditions will be issued via the online portal for the Correspondent to access or through direct email contact with the Correspondent. It is the Correspondent’s responsibility to review and clear these suspense items quickly in order to avoid extension charges.

6.2.4.6 Lock Expiration Date When the initial lock expiration date falls on a weekend or holiday, the lock expiration date is automatically moved to the next business day.

Loans must be delivered in fundable condition (credit and closed loan package) on or before 5:00 PM ET on the day of lock expiration date. Loans delivered after the lock expiration date will be subject to FGMC re-lock policies. A free 10-day extension will provide additional time to clear any prior-to-purchase suspense conditions, if applicable.

6.2.4.7 Lock Extensions (Only applies to lock extensions done prior to delivery of loan to FGMC. Otherwise, charged Auto Extensions apply as listed in “Lock Periods” section of this policy.) Correspondent Sellers may request an extension on or before the lock expiration date. If a lock is expired an extension may not be requested and the loan must be relocked. When requesting an extension before the lock expiration date, the request may only be submitted and will only be granted by FGMC when the loan is within 15 days of lock expiration. For example, if a loan is locked on the 1st of the month for 30 days then an extension can be submitted any day after the 16th of that same month. The number of days selected for extension will be added to the expiration date. Lock extension days are available in 7, 15, or 30 day increments at the extension price listed on the FGMC Correspondent Rate Sheet. See below for the maximum number of extensions and the total maximum of extension days.

Conforming Max extension requests 3

Max extension days 45

Extension Days Extension Cost 7 Days (.125) 15 Days (.250) 30 Days (.500)

All extension requests done prior to delivery of loan to FGMC must be submitted online. FGMC will only accept email extension request for loans that were originally locked manually.

6.2.4.8 Relocks Relocks may only be submitted on expired locks. If a loan has been expired for at least 30 days, then it is considered a new lock and pricing will be based on current market. Loans that have been expired for less than 30 can be relocked for 15 or 30 days (Correspondent Rate Sheet). Relocks for loans expired for less than 30 are subject to worse case pricing plus the applicable relock fee, and all previous extension/relock fees. Relock fees can be found on the table below. Loans may only be relocked one time.

Relock Days Relock Fee 15 Days (.250) 30 Days (.500)

Note: Relock fee applied to FGMC Delegated and Non-Delegated Rate Sheets only. If at the time of Relock the rate has increased, the worst of pricing between existing price and current price on the new rate lock will apply. If at the time of Relock the product is changed, the worst of pricing between the existing price on the original



product and the current price on the new product will apply. The price may not improve regardless of product change.

6.2.4.9 Renegotiations Correspondents may submit a Renegotiation Request from the time the first Rate Sheet is generated until 4:00 PM ET to [email protected]. Correspondents are responsible for calculating the renegotiated gross price using the Renegotiated Price Calculation below. The renegotiation price is based on the FGMC Correspondent Rate Sheet that is in effect when the request is received. Requests received after 4:00 PM ET will not be processed and a new request must be submitted the next business day within the renegotiation hours listed in this policy.

Renegotiated rate must result in a minimum of 0.125 improvement in rate to the borrower. Only one renegotiation is permitted per loan and product changes are only permitted if requested at the same time of the renegotiation. The final pricing for the renegotiated product and/or rate cannot exceed the final pricing from the original product and rate. Re-locked loans are not eligible for renegotiation. Conforming Renegotiation Price Calculation:

Current 60-day Base Price + Renegotiation fee (-0.25) +/- Current day price adjustments - Prior extension or relock fees + Current day SRP (if applicable) = Renegotiated Gross Price

6.2.4.10 Pair-Offs via Mandatory Rate Sheet Locks Mandatory locks are subject to a pair-off when current market price is greater than the market price when the lock was originally committed or when the mandatory lock has been extended. Pair-offs apply to Canceled locks, Non-delivery prior to lock expiration, and Duplicate locks. Example of pair-off fee calculation:

Locked loan amount: $100,000.00 Original Price: 100.00 Current Price: 100.25 Positive Market Movement: .25 Roll Charges (25 days) .25 Total Pair-off 0.50

$100,000 x (0.25% + 0.25%) = $500 (pair-off fee due to FGMC) Amount x (Market Movement + Extension Cost) = Pair-off fee due

Note: FGMC will not remit for negative market movement pair-offs.

Pair-off fees are due within 15 calendar days and must be sent to:

Mail: Wire: First Guaranty Mortgage Corporation Texas Capital Bank National Association Attn: Accounts Receivable 2350 Lakeside Blvd, Suite 800 1900 Gallows Road, Suite 800 Richmond, TX 75082 Tysons Corner, VA 22182 Account Number: 2111035230 Reference: Pair-off Fee ABA Number: 111017979 (FGMC Loan Number), (Borrower Name) Account Name: First Guaranty Mortgage Corporation Reference: Pair-off Fee (FGMC Loan Number), (Borrower Name)

6.2.4.11 Canceling Mandatory Locks via Rate Sheet Correspondents may cancel the lock, but may be subject to a pair-off fee if current market pricing is higher than




market price from the original lock date.

6.2.4.12 Swaps on Mandatory Locks via Rate Sheet Swaps will be considered on Mandatory commitment locks via the FGMC Correspondent Rate Sheet on a case by case basis. All requests should be sent to [email protected] by 4:00 PM ET for consideration. Swaps should be the same product and will be subject to a 2% loan amount tolerance.

6.2.4.13 FGMC Mandatory Trade Desk

FGMC has a mandatory trade desk that offers bid indications on mini-bulk, bulks, forwards, and supports Assignment of Trade (AOT) transactions. To receive a bid indication, a data tape should be sent to [email protected]. A sample data tape can be found on the FGMC Correspondent website under Forms.

For any inquiries, contact the designated Account Executive. Mandatory Trade Desk Transaction Types

Definition

Mini-bulk or Bulk Correspondent submits a pool of loans on data tape to: [email protected]. If the trade is awarded, the pool of loans is then delivered to FGMC under the specified trade commitment terms. Pools must be a minimum of $2 million in unpurchased principal balance per trade. Exceptions can be considered upon request.

Assignment of Trade (AOT)

Correspondent is responsible for negotiating a trade price directly with FGMC trade desk, and the applicable security must be taken out via an FGMC-approved Broker/Dealer. Upon completion, the trade is assigned to FGMC, and the pool of loans is delivered under the specified commitment terms. The minimum AOT commitment amount is $2 million in unpurchased principal balance. Exceptions can be considered upon request. AOT letters must be sent to [email protected].

Forward Trades Correspondent negotiates a forward trade price that is non-loan specific directly with FGMC, and a pool of loans are delivered to fill the forward commitment under the specified forward commitment terms. A Commitment Report will need to be sent to [email protected] reflecting new loans as they are added. The minimum forward commitment amount is $2 million in unpurchased principal balance. Exceptions can be considered upon request.

NOTE: The free 10 day extension does not apply to Mandatory Trade Desk loans.

6.2.4.14 Trade Confirmations Trade confirmations will be provided via email after a bid indication is awarded and final acceptance of the final price is made by FGMC. All bid indications are subject to market movement prior to confirmation and may require a re-price without notice.

6.2.4.15 Delivery Timeframes Terms and conditions of trades will be available at the time a bid indication is provided. Loans are required to be registered on the FGMC Web Portal within 72 hours, or the commitment may be cancelled and pair-offs assessed if applicable. Bulk registration options are available by request.

6.2.4.16 Delivery Tolerance All Mandatory Trade Desk transactions must be filled to within 2% (above or below) of the commitment amount. Full re-pricing may occur if any material loan characteristic changes appear during delivery. 6.2.5 Settlement Dates Settlement dates for loans committed in pools are defined as the last date a loan(s) can be purchased by FGMC before the seller would incur extension fees. FGMC settlement dates will be determined by the seller’s request on their bid tape. If the seller requests a specific settlement date, FGMC will price the pool to the date requested. Settlement dates for seller that provides delivery days with the bid tape will be determined by adding 7 calendar days to the delivery days provided. For instance, if 7 delivery days are requested an additional 7 calendar days will be added for a total of 14 days from the



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bid date to the settlement date. Seller’s that do not specify a delivery or settlement date with the bid tape will be priced using a 12 days settlement date. When the initial lock expiration date falls on a weekend or holiday, the lock expiration date is automatically moved to the next business day. 6.2.6 Roll/Extension Fees Loans not purchased by the settlement will incur a roll fee of 2 bps per calendar day. At time of funding, a roll fee will be applied to loans if the funding date is after the original settlement date. The roll fee will be calculated using the following formula; (funding date - original settlement date) * 2 bps per calendar day. 6.2.7 Roll/Extension Periods Loans that are not purchased by the settlement date will be automatically rolled (extended) up to a maximum of 60 days. After 60 days, the client may request up to an additional 30 days. If the loan is not purchased after 90 days of extensions, the Sr. Director of TPO Production will need to approve additional extensions requested by the client. Loans that are not purchased or approved by the Sr. Director of TPO Production for addition extensions after 90 days will be subjected to a Pair Off. 6.2.8 Pair Offs Calculations Loan(s) commitment through the Trade Desk are subject to a pair-off when current market price is greater than the market price when the loan(s) was originally committed or when the commitment loan(s) have been extended. Extension fees for Pair-off purposes will be calculated at 1 basis point per day. Pair-offs apply to Canceled locks, Non-delivery prior to settlement date, and Duplicate loan(s). Example of pair-off fee calculation: Locked loan amount: $100,000.00 Original Price: 100.000 Current Price: 100.250

Positive Market Movement: .25 0.250 Extension calculated at 1 bps per day (10 days) 0.100 Total Pair-off 0.350

$100,000 x (0.25% + 0.10%) = $350 (pair-off fee due to FGMC) Amount x (Market Movement + Extension Cost) = Pair-off fee due

Note: FGMC will not remit for negative market movement pair-offs. Pair-off fees are due within 15 calendar days and must be sent to:

Mail: Wire: First Guaranty Mortgage Corporation Texas Capital Bank National Association Attn: Accounts Receivable 2350 Lakeside Blvd, Suite 800 1900 Gallows Road, Suite 800 Richmond, TX 75082 Tysons Corner, VA 22182 Account Number: 2111035230 Reference: Pair-off Fee ABA Number: 111017979



(FGMC Loan Number), (Borrower Name) Account Name: First Guaranty Mortgage Corporation Reference: Pair-off Fee (FGMC Loan Number), (Borrower Name)

Swaps Correspondents may substitute a loan in a mini-bulk or bulk transaction. The substitution must match the original commitment’s security type, coupon, and loan amount within 2 percent. A new trade commitment will be established, canceling the swapped undelivered amount from the original commitment.

Canceling a Mandatory Trade Desk Transaction To cancel a Mandatory Trade Desk transaction, email a request to [email protected]. Pair-offs may be assessed (if applicable) according to Mandatory pair-off rules and calculations listed in this policy. A single cancellation request can be made while in due diligence by notifying the assigned Transaction Manager and Account Executive.

7 DELIVERY PROCEDURES At this point, the Correspondent has been approved, attended training for the FGMC Web Portal, and determined the best loan delivery option (such as importing a DU 3.2 file and uploading PDFs of the Credit, Collateral and Closing documents). See the GETTING STARTED section.

For document delivery, the Correspondent follows this procedure:

Step/Status Action

1 Started

Log on to the FGMC Web Portal to allow direct access for Document Upload based on the loan type, refer to Appendix E for FGMC's stacking order for each product.

Correspondent fee will apply as follows (to be netted from proceeds):

Delegated Correspondent Non-Delegated Correspondent Closed Loan $375– After performing the underwriting, deliver the closed loan package for review

All Loans $595 - FGMC fully underwrites the loan.

Note: On loans where FGMC administers the escrow account, supplemental origination charges will be incurred.

2 Processing

Once document upload is complete, loan processing begins. Correspondent sends the Collateral Package to FGMC internal file reviewer:

Deutsche Bank National Trust Company Attn: Team FGMC/Correspondent

1761 East St. Andrews Place Santa Ana, CA 92705

Note: Correspondent should email the tracking information to [email protected] 3

Submitted

Await a list of pre-purchase conditions from FGMC.

4 Decisioned

Loan has been conditioned; waiting for conditions from Correspondent.

5 Resubmitted

Conditions received from Correspondent pending FGMC review. Note: Non-Delegated “Resubmitted” is utilized when the loan is submitted for a clear to close review.

6 Approved

Loan is ready for purchase. FGMC must receive either reverse Bailee letters or original Collateral prior to purchase. Note: Non-Delegated “Approved” is utilized when the loan is cleared to close.


https://fgmccorrespondent.secure-onlineorigination.com/TPOLogin.aspx




7 Closing

The loan is progressing through the purchase queue, has been confirmed locked and the required documents have been received. Note: Non-Delegated “Closing” is utilized to perform the pre-purchase review.

8 Funding

FGMC delivers package to Document Custodian; Purchase Advice has been created and sent to Correspondent and Funding Department.

9 Final Docs

Ship Final Documents using Exhibit C – Final Documents Transmittal which provides more details about how to prepare and send the loan package.

Step Action

1 Correspondent collects all Final Documents for the loan.

2 Correspondent sends all completed documents to FGMC using the Transmittal Form and loan account number.

3 FGMC receives the documents and updates the file as received.

4 FGMC notifies the Correspondent of any exceptions found during the Quality Control (QC) review.

5 Once all exceptions are cleared, QC sends the documents to the Document Custodian.

6 Document Custodian removes any delinquent report or update with the new exception.

To: First Guaranty Mortgage Corporation Post Closing Department c/o First American CleanFile Solutions

Mail Code 1016K 4795 Regent Boulevard

Irving, TX 75063 877-532-6993*

*This phone number is for use on shipping labels only; all questions related to Final Docs, should be directed to: [email protected].

7.1 Overview The Closed Loan Package of any mortgage loan that is being considered for purchase by FGMC must be delivered prior to the expiration date of the related Lock Confirmation. “Delivered” means the Closed Loan Package and any supporting documentation, except for Collateral documents (which are required to be delivered as original documents), have been submitted through the FGMC Web Portal. Next, Collateral documents are submitted. And finally, once the loan is cleared, approved and funded, Final Documents are shipped. 7.1.1 Document Upload The following critical documents should be included in the imaged loan package upload:

• Completed FGMC Correspondent Loan Submission Form. • All documents, except for original Collateral documents (which are required to be submitted as original

documents), must be delivered using the FGMC Web Portal by image. • Copy of the original Mortgage Note with intervening endorsements, endorsed “Pay to the order of FGMC,

without recourse.” • Copy of the original Mortgage/Deed of Trust, and any riders as indicated on the Mortgage/Deed of Trust.

Deed of Trust copy must be stamped as a certified true copy of the original and include a signature along with the name of the company making the certification.

• Copy of the original Title Insurance Policy or if the original policy has not been issued, the irrevocable commitment to issue the same.

• Copy of the Power of Attorney, if used to execute Note or Mortgage/Deed of Trust. Power of Attorney copy must be stamped as a certified true copy of the original and include a signature along with the name of the company making the certification.

• Copy of the Private Mortgage Insurance Certificate, if required by program guidelines.


http://fgmccorrespondent.com/docs/forms/FGMC_Correspondent_Loan_Submission_Form.pdf



• Evidence of adherence to all applicable local, state and federal regulations as well as compliance with all FNMA (Fannie Mae), FHLMC (Freddie Mac), FHA, VA and USDA specific disclosures and forms.

7.1.2 Purchasable Form

The COMMITMENT POLICY/LOAN LOCKS section of this Guide details the possible penalties associated with delivering files that are not in purchasable form.

FGMC considers a delivered file to be in purchasable form if it meets all product and program parameters, federal, state and local laws and regulations, industry standards, including FGMC-specific documentation requirements. All loans will be reviewed in a timely manner after receipt and the Correspondent will be notified of any issues which impact the purchase of the loan.

Note: FGMC will not purchase any loan that is not current. Payments must be up to date.

7.1.3 Collateral Package FGMC requires the original final Collateral Documents on all Conforming Mortgage Loans and on Government Mortgage Loans when applicable, with the exception of Mortgages (Deeds) that are pending recordation in the appropriate jurisdiction, for which a Certified True Copy will be provided. The Collateral Package must be shipped no later than the same day that the loan package is delivered (via the FGMC Web Portal) to FGMC.

The Collateral File for each loan submitted for purchase by FGMC should include the following: • Original Note with intervening endorsements, endorsed “Pay to the order of First Guaranty Mortgage

Corporation, without recourse” and signed by an authorized officer of the Correspondent • Allonge, if necessary, must be permanently affixed as required by the applicable Uniform Commercial

Code • Wiring instructions or Bailee Letter, as applicable • Power of Attorney, if applicable • Copy of certified true copy of Mortgage/Deed of Trust • Riders to Mortgage/Deed of Trust, as applicable • Legal description • Title commitment • Name Affidavit for all borrowers, if applicable • NY CEMA Package, if applicable

The Collateral Package is reviewed prior to the mortgage loan being approved for purchase. Any deficiencies are noted as “Loan Conditions” which may require that the Correspondent send additional documentation. For purchased mortgage loans, FGMC requires Correspondents to use express shipping service to track shipments and ensure timely delivery of the Collateral Package. Correspondents should ensure that all Collateral is addressed exactly as follows:

Deutsche Bank National Trust Company Attn: Team FGMC/Correspondent

1761 East St. Andrews Place Santa Ana, CA 92705

Note: Correspondent should email the tracking information to [email protected] once documents have been shipped.

FGMC will perform a compliance review including, but not limited to, the following: • Confirm legal documents are complete and conform to requirements • Review final HUD-1, Good Faith Estimate (GFE) and Truth-in-Lending (TIL) forms for completeness and

accuracy • Review (applications taken on and after 10/03/15) final Closing Disclosure (CD) and Loan Estimate (LE)

for completeness and accuracy




• Confirm Annual Percentage Rate (APR) accuracy and execute all applicable compliance tests • Validate compliance with Qualified Mortgage (QM) and Ability to Repay (ATR) requirements • Validate loan collateral (Note) • Reverse Bailee • Copy of the Note • Allonge/Allonge validation • Endorsement to FGMC is accurate

If a Note defect is identified prior to purchase, FGMC will contact the Correspondent and may allow changes to be made provided the correction is accompanied by the borrower(s) initials.

7.1.4 Uniform Closing Dataset (UCD) Requirements

Fannie Mae and Freddie Mac (collectively, “GSEs”) will begin to require the collection and delivery of the Uniform Closing Dataset (UCD) for loans with notes dated on and after September 25, 2017. FGMC has defined the following delivery procedures to prepare for the UCD requirement:

• Lenders are required to submit UCD data to the GSEs with note dates on and after 9/25/2017. • Lenders are not required to submit Seller UCD data until 2018 (specific date yet to be determined and

only relevant for purchase transactions). • If the loan was closed with a split disclosure (borrower vs. seller), each must be submitted independently

to the GSEs. • Lenders are required to provide the UCD Feedback Certificate for both GSEs in the closed loan package

folder. • The UCD Feedback Certificate must reflect a successful UCD submission response. • No Fatal Errors noted on FNMA UCD Feedback Certificate. • No red critical errors on FHLMC Loan Closing Advisor Certificate. • FNMA UCD submission must reflect the DU Casefile ID associated with the loan.

7.2 Closed Loan Documentation The Correspondent’s Closed Loan delivery package documentation should adhere to the following policies. These requirements will help ensure that all applicable documentation is accurate and complete in order to avoid delays in the review and purchase of a loan.

7.2.1 Ability to Repay and Qualified Mortgage Rule FGMC complies with the Consumer Financial Protection Bureau’s (CFPB) Ability-to-Repay (ATR) and Qualified Mortgage (QM) Rule (“Rule”). FGMC requires Correspondents to also comply with the Rule’s ATR and QM provisions. In accordance with the Rule, it is the policy of FGMC to ensure that the Lender makes a reasonable good faith ATR determination using verified and documented information.

Eligible for Delivery to FGMC FGMC will only purchase loans that meet the requirements for Qualified Mortgages under the Truth in Lending Act (TILA), including, but not limited to, ATR, maximum allowed points and fees, and prohibited loan features. FGMC will accept QMs that meet the TILA requirements for either Safe Harbor or Rebuttable Presumption QMs. Correspondents should consult with their compliance and/or legal counsel for more information on compliance with the ATR-QM rule.

ATR-QM Compliance Requirements • Loans must be originated, underwritten and closed in accordance with the ATR-QM regulations. • Lender must evidence compliance with the ATR-QM rules by:



o Ensuring underwriting documentation clearly defines how income, liabilities and resulting DTI were calculated. This can be documented on the FGMC Income Data Worksheet or by using a Lender’s own form with materially the same information.

o Identifying any affiliate business relationships on the Affiliate Disclosure Form. o Completing the FGMC Correspondent Loan Submission Form: Identify loan application date information Identify loan lock information (lock with the borrower, not with FGMC) Accurately identify the proper ATR-QM designation Identify how points and fees were determined and provide documentation Indicate QM points and fees test utilized Identify any bona fide discount points excluded and provide information to support them

o Ensuring loans are underwritten and documented (as appropriate to loan program) according to the following guidelines: Fannie Mae - DU as Approved/Eligible only for Correspondent FHA – TOTAL Mortgage Scorecard – DU and LP accepted VA - DU and LP accepted RHS/USDA – GUS

7.2.2 Required Forms and Reference Data Forms (all forms are required with each loan submission):

• FGMC Correspondent Loan Submission Form (only this form may be provided) • Certification of Seller Paid Points (this form or a similar form may be provided) • Affiliate Disclosure Form (this form or a similar form may be provided) if applicable • FGMC Income Data Worksheet and Instructions (this form or a similar form may be provided)

Links: • FGMC Correspondent Website: www.fgmccorrespondent.com • Average Prime Offer Rates (APOR) Index: https://www.ffiec.gov/ratespread/aportables.htm

7.2.3 Bailee Specifications For each Mortgage Loan that is delivered to FGMC and for which a third party holds an interest, a Bailee Letter must be included in each file and be identified sufficiently. The Bailee Letter should include:

• Correspondent name, • Loan number, • Principal balance, and • Wiring or payment instructions.

When the Note is delivered, the Bailee Letter must be included with the Note. A Bailee or Trust arrangement is not established and a security interest in the mortgage loan is not valid if a Bailee Letter is sent to FGMC separate from the applicable Note. 7.2.4 General Closing Specifications Correspondent loan documents must conform to the specifications of the applicable mortgage loan program and all applicable federal, state and local laws and regulations.

Mortgage loans must incorporate the most current Fannie Mae/Freddie Mac Note and Security Instruments, including all applicable riders and addenda.

The Correspondent warrants that all delivered loans comply with the restrictions on transactions with Specially Designated Nationals and Blocked Persons and the Sanctioned Nations administered by the Office of Foreign Assets Control of the US Department of the Treasury.

http://fgmccorrespondent.com/docs/forms/FGMC%20Income%20Data%20Worksheet.xls

http://fgmccorrespondent.com/docs/forms/FGMC%20Affiliate%20Disclosure%20Form.pdf



http://fgmccorrespondent.com/docs/forms/Certification%20of%20Seller%20Paid%20Points.pdf

http://fgmccorrespondent.com/docs/forms/FGMC%20Affiliate%20Disclosure%20Form.pdf

http://fgmccorrespondent.com/docs/forms/FGMC%20Income%20Data%20Worksheet.xls


https://www.ffiec.gov/ratespread/aportables.htm



7.2.5 Note Endorsement

For each mortgage delivered to FGMC, the original of the Note must be delivered with the Final Documents according to the requirements of this Guide and the Note must bear the following endorsement by the Correspondent:

All other states: PAY TO THE ORDER OF FIRST GUARANTY MORTGAGE CORPORATION WITHOUT RECOURSE

New York: PAY TO THE ORDER OF FGMC IN LIEU OF TRUE CORPORATE NAME FIRST GUARANTY MORTGAGE CORPORATION

North Dakota: PAY TO THE ORDER OF FIRST GUARANTY MORTGAGE CORPORATION DBA FGMC

___________________________________________________________

(Correspondent Company Name exactly as shown on the face of the Note)

___________________________________________________________

Signature of Duly Authorized Officer (Typed name and Title of Authorized Signer)

7.2.6 Due-On Sale Clause

The uniform instruments include provisions governing whether the loan will be accelerated if the borrower sells or transfers the mortgaged premises or any interest in the mortgaged premises or whether instead the loan may be assumed by a third party who acquires the mortgaged premises, or any interest in the mortgaged premises by sale or transfer. These provisions are sometimes referred to as “due-on sale” clauses.

• Uniform instruments for different mortgage products may have different due-on-sale clauses. • The type of due-on sale clause set forth in the uniform instruments used to originate a particular

mortgage determines whether or not the mortgage is assumable by the party to whom the mortgaged premises are transferred.

7.2.7 Initial Application Date

At the time of registration/commitment of a Best Effort loan, the Correspondent must identify the initial application date.

7.2.8 Late Charge

The Note for a conventional first mortgage must provide for the borrower to pay a 5% late charge on any installment that is not received by the 15th day after it is due. If state law does not allow a charge at that rate, the maximum amount that is allowed should be used. The late charge should be computed on the principal and interest (P&I) installment only, not on the full monthly payment – Principal, Interest, Taxes, Insurance (PITI).

7.2.9 Mortgagee Clause

It is the Correspondent’s sole responsibility to ensure that all vendors are notified to change the mortgagee clause, depending on the subject property state, to:

North Dakota: First Guaranty Mortgage Corporation dba FGMC, ISAOA ATIMA C/O Rushmore Loan Management Services LLC P.O. Box 692409 San Antonio, TX 78269-2409



New York: FGMC in lieu of true corporate name First Guaranty Mortgage Corporation, ISAOA ATIMA C/O Rushmore Loan Management Services LLC P.O. Box 692409 San Antonio, TX 78269-2409 All Other States: First Guaranty Mortgage Corporation, ISAOA ATIMA C/O Rushmore Loan Management Services LLC P.O. Box 692409 San Antonio, TX 78269-2409 NOTE: If the mortgagee clause for North Dakota or New York is too long, the first line may be substituted as follows: FGMC, ISAOA ATIMA

7.2.10 HUD-1 Settlement Statement/Closing Disclosure

A completed and signed original/certified copy of the Closing Disclosure is required by FGMC, and must be included in the closing file for purchase.

7.2.11 Underwriting Conditions All underwriting conditions, such as prior-to-close and at-closing, must be satisfied prior to purchase. (Non-Delegated loans cannot close prior to FGMC issuing the clear to close)

7.2.12 Tax Requirements IRS Form 4506-T Requirements Correspondents are required to submit a borrower-signed Request for Transcript of Tax Return Form 4506-T signed by each borrower and dated at closing.

Tax Transcripts

• FHA & VA: When tax returns are utilized for income calculation, validation of personal tax returns is required. Wage-earner and/or business transcripts are required only at the discretion of the underwriter, or as required by the applicable investor/agency guidelines. However, FGMC will not require Tax Return Verifications (TRVs) or Wage & Tax Statements for non-credit qualifying transactions (e.g. FHA Streamline, VA IRRRL).

• Conventional Loans: FGMC requires TRVs whenever any part of the borrower’s income is being documented with their personal and/or business tax returns. When the Borrower’s personal and/or business tax returns are NOT being used to document the borrower’s income, a Wage & Tax Statement must be requested. However, if Day 1 Certainty DU Validation is utilized for income verification, TRV’s will not be required as per the Fannie Mae Selling Guide, Section B3-2-02: DU Validation Service.

• USDA: FGMC requires TRVs for all adult household members, regardless of income source. The Underwriter must determine what transcripts are necessary to validate the household income–including USDA Streamlines. NOTE: Effective 12/21/2017, USDA has suspended the requirement for TRVs for all adult household members until further notice. When tax returns are utilized for income calculation, validation of personal tax returns is required.

https://www.fanniemae.com/content/guide/selling/b3/2/02.html#Authorized.20Vendors.20and.20Verification.20Reports



Tax Return Verification (TRV) Rejections When the IRS rejects the request for the borrower’s Tax Return Verification (TRV) transcripts due to identity theft (IRS rejection code 10), FGMC will accept alternative documentation. The information noted below should NOT be used when a “no record found” or “data does not match” response is received from the IRS. The following documentation will be accepted:

When the Reason for IRS Rejection is….

Then Provide…

Identity Theft • A copy of the notification from the IRS alerting the tax payer to the possible identification theft (IRS rejection code 10)

• Validation of the reported income on the tax returns by providing the following documentation:

o Borrower obtained Record of Account Transcript, in pdf format, for all applicable years missing from www.irs.gov, or all of the following: W-2 or 1099 transcripts which match

the W-2 or 1099 income reflected on transcripts,

Validation of prior tax year(s) income (income for the current year must be comparable to prior year(s)

Do not use the guidelines reflected above when a “no record found” or “data does not match” response is received from the IRS.

http://www.irs.gov/



Federal Income Tax Return Due Dates Some sources of income require personal federal income tax returns and/or business returns. The requirements below are based on application date and disbursement date of which annual personal federal income tax returns and/or business returns are necessary.



Transcripts not Available:

Note: For business tax returns, if the borrower’s business uses a fiscal year (a year ending on the last day of any month except December), the lender may adjust the dates in the above chart to determine what year(s) of business tax returns are required in relation to the application date/disbursement date of the new mortgage loan. The dates reflected in the table above are for examples only and will vary from year to year, consult IRS.gov for specific filing dates, etc.

7.2.13 Satisfaction of Risk Screening Conditions

FGMC may, at its sole discretion, utilize third-party risk screening services for any group or category of loans.

7.2.14 Eligible Loan Modifications

Any eligible loan modification must be signed by all borrowers on the Note and/or Mortgage, as appropriate based on the scope of the modification, and the signed modification must be provided to FGMC prior to purchase. Loan modifications presented to FGMC after purchase may not be accepted and repurchase may be required—these are considered on a case-by-case basis.

7.3 Assignment of Mortgage All Correspondents must be Mortgage Electronic Registration Systems (MERS) members, able to register and transfer loans through MERS. All loans must be registered with MERS at time of delivery to FGMC and a MERS transfer of beneficial rights and transfer of servicing rights must be initiated by the Correspondent.

Note: FGMC can assist the Correspondent in registering loans if they are awaiting membership confirmation from MERS. Correspondent will provide paper assignment to FGMC, FGMC will record the loan with MERS, and Correspondent will submit Collateral and Final Docs as required.

https://www.irs.gov/



If a mortgage is registered with MERS and MERS is not the original mortgagee of record, the lender must ensure that:

• An assignment to MERS has been prepared, duly executed and recorded prior to delivery for purchase. • The chain of assignments is complete and recorded from the original mortgagee to MERS. • The Mortgage Identification Number (MIN) is located on the bottom center of the assignment. • The MERS phone number (888-679-6377) must be printed at the bottom of the page.

If a mortgage is registered with MERS naming MERS as original mortgagee of record, no assignments are necessary if:

• The mortgage is originated naming MERS as the original mortgagee of record, solely as nominee for the lender named in the Security Instrument and the Note, and the lender's successors and assigns.

• The lender has ensured that the Security Instrument is properly executed, acknowledged, delivered and recorded in all places necessary to perfect a first lien security interest in the mortgaged premises in favor of MERS, solely as nominee for the lender named in the Security Instrument and the Note, and lender's successors and assigns.

• The MIN must be placed on the Security Instrument to the right of or below the form title, but NOT within the recording margin of the document.

• Additional verbiage approved by the agency must be added to the Mortgage/Security Instrument. MERS Corporate Office can provide the correct state-specific verbiage.

7.4 Mortgage Loan Purchase Once the Correspondent has successfully delivered the loan file, FGMC performs a thorough review, which includes an examination of documentation and a verification of adherence to all applicable underwriting guidelines and federal, state and agency regulatory compliance.

Requirements • A loan file is not ready for purchase consideration until the Collateral has been received and reviewed by

FGMC. • The funding method will be selected based on the file type and individual Correspondent agreement. • A Purchase Advice will be created for each loan (or group of loans) and provided to the Correspondent for

review. • Once the loan is reviewed, it will be classified as “approved” or “declined.” For approved loans, the funds

are wired to the account/institution as provided to FGMC. For declined loans, the Correspondent is notified and given an opportunity to rectify and resubmit.

Loan Options • Closed

o Loans are submitted for review after the loan has closed in the Correspondent’s name. o File review is completed and any material items are addressed with the Correspondent. o Once material items have been addressed, loan can be purchased.

Note: In most cases, FGMC will wire funds for purchase of a mortgage loan within 24-48 hours after the date of FGMC’s approval to purchase the loan, provided loan re-pricing is not required.

7.4.1 Calculation of Purchase Proceeds To accurately determine the amount of purchase funds, FGMC starts with the base price as indicated in the confirmation letter and then adds or subtracts from the loan total as follows:

• Addition of any applicable pricing specials. • Increase or decrease for accrued interest based on the funding date. • Decrease for any applicable price adjustments. • Decrease for escrow and buy-down account funds collected. • Decrease for any outstanding unpaid fees due to FGMC.



7.4.2 Decline to Purchase In some cases, FGMC may have declined a mortgage loan for purchase. In those instances, the Correspondent will be notified of the identified issues and provided with a timeframe to correct any errors and resubmit the loan for purchase consideration.

Common errors include, but are not limited to, the following: • Original promissory note is not properly endorsed. • Original Note is missing. • Underwriting approval is missing or incomplete. • No Mortgage Insurance Certificate. • Inaccurate escrow calculations on the HUD-1.

Note: Any instances of suspected fraud in the origination of the mortgage loan or a breach of any other representation, warranty or covenant made with respect to the mortgage loan as stated in the Guide or in the Correspondent’s Loan Purchase Agreement will be cause for immediate rejection.

7.4.3 Principal Balance Purchased FGMC determines the principal balance at the time of purchase as follows:

• The first loan payment due for loans that have been purchased on or after the first day of the month will not be amortized.

• The first loan payment due for loans purchased on/after the twelfth day of the month will be amortized. • FGMC will also withhold all PMI/MIP funds associated with amortized payments. Prior to loan purchase,

Correspondents are responsible for ensuring timely remittance of PMI/MIP payments on these loans as well as any late fees incurred.

• To request a refund on a previously remitted PMI/MIP payment, the Correspondent must provide a copy of evidence of payment.

7.4.4 Accrued Interest Accrued interest will be paid to the Correspondent or deducted from the purchase proceeds based on the first scheduled principal and interest payment due to FGMC:

• For principal and interest payments due to FGMC scheduled for the first day of the month following the month in which a mortgage loan was purchased, FGMC will pay the Correspondent accrued interest at the interest rate stated in the applicable note from the first day of the month of purchase through the day prior to the date of purchase.

• For principal and interest payment due to FGMC on the first day of the second month after the month of purchase, the purchase proceeds paid by FGMC will be reduced by an amount equal to interest accrued at the interest rate stated in the applicable note from the date of purchase through the last day of the month of purchase.

All loan products will accrue interest using a 365 day interest factor at time of purchase, although they can be closed using 360 days or 365 days interest factor.

7.4.5 Interest Credits at Closing FGMC will allow interest credits at closing through the seventh calendar day of the month in which the mortgage loan is closed.

7.4.6 Escrow Waiver Fees The Escrow Waiver Fee is a deduction from the base price of the loan. The Correspondent can refer to the Loan Pricing Adjustments (LPA) to determine any applicable escrow waiver fee. LPAs are listed on the FGMC Correspondent Rate Sheet.



7.4.7 Power of Attorney (POA) All POAs must be reviewed and approved by FGMC prior to purchase (prior to closing for Non-Delegated Correspondents only) to ensure that legal, agency, and investor requirements are met.

POA Guidelines - General • The POA must comply with state and federal laws. • The POA must be durable (the POA survives the subsequent incapacity or disability of the principal). • The POA should be specific to the transaction (e.g., should contain a description of the property). • The POA must specifically authorize the actions necessary to close the loan, whether it is a purchase or

refinance, and the terms of the loan cannot exceed the authority in the POA • The title company must always approve the POA as they are the party insuring the loan. The title company

should review the POA to ensure it complies with state and local requirements regarding validity, signature and acknowledgment.

• The Final Title Policy must not contain any exceptions relating to the POA. • The POA must be recorded with the Mortgage/Deed of Trust. • A POA should only be used in extraordinary circumstances. • A letter of explanation providing the reason for the necessity of the POA must be included in the loan file. • The POA must be properly executed in accordance with the laws of the state in which the borrower

executes it. o Examples of state law requirements, while not exhaustive, include:

• Number of witnesses • Particular witness attestation language • Particular state notarial act requirements • Disinterested witness requirements, including whether notary can serve as witness • Specific language required to be included in the POA • State laws requiring itemized authorization by principal • That there is no order of conservatorship that conflicts with the authority of the POA

• Correspondents must provide a certified copy of the POA in the closed loan package. Failure to provide a certified copy will result in funding delays and the loan may be subject to re-pricing.

• Correspondent lender must complete the initial review to confirm the POA is still effective and not expired at the time the closing documents are executed.

• Additional agency and investor guidelines must be met. • Unless it is a proper military POA under Title 10 of the United States Code, POA signed outside of the

United States must be acknowledged before the United States embassy or consulate. • Please note that, in addition to the specifications set out in this Section, there may be additional

requirements and conditions specified by applicable Agencies and Investors that will need to be fulfilled prior to the acceptance of a mortgage loan by FGMC with respect to proper execution of closing documents and/or the use of POA’s and Trust authorizations as set out herein.

7.4.8 Trust Review Guidelines FGMC may purchase loans where the property is held in a revocable trust provided that the trust meets investor and FGMC guidelines. All trusts (where property is closing in a trust or the property is deeded out of the trust prior to closing) must be reviewed and approved by FGMC. At a minimum, FGMC will require a copy of the trust documents and the title commitment documents. In most cases, a current trust certification or affidavit which confirms the powers of the trustees and the continuing existence of the trust will also be required. Additional conditions may apply.

• The review will include the following criteria:



• A complete copy of the trust including all referenced schedules and amendments except in those states where an executed Certificate of Trust is acceptable instead of the entire trust agreement. The trust should be signed, notarized, and dated by all applicable parties.

• Trust affidavit or certificate of trust signed by the trustees shortly before or at closing. • The individual(s) establishing the trust (“Grantor” or “Settlor”) is alive at the time of loan application, and

loan closing/funding.

• The trust has been established in writing by a natural person and is to be effective during their lifetime. (The trust is not created in a will or codicil.)

• The Grantor(s) has the right to revoke or alter the trust.

• The primary beneficiary of the trust is the Grantor(s) (the interest and principal of the trust estate is applied for their benefit) and the mortgage has been underwritten as if the Grantor (or at least one of the Grantors) is the borrower (or the co-borrower, if there are additional individuals whose income or assets will be used to qualify for the mortgage.)

• The loan applicant(s) are both the Grantor(s) and the trustee (or one of the co-trustees).

• The trustees must include at least one of the Grantors, if there are two or more, or an institutional trustee that customarily performs trust functions (i.e., a bank).

• The trustee(s) has the power to mortgage and borrow money.

• The trust does not contain an unusual risk or impairment of the lender’s rights (i.e., distributions required to be made in specified amounts from other than net income).

• The title must be vested: in the name of one trust; jointly in the trustee (s) of the inter vivos revocable trust and in the name(s) of an individual borrower(s); or in the trustee(s) name if more than one inter vivos revocable trust.

• The title policy assures full protection to the lender, its successors, and/or assigns, and must state that title to the property is vested in the trustee(s) of the trust. (It must not list any exceptions arising from the trust ownership of the property.)

The agency or investor signature requirements must be met. See also, signature requirements set out in Section 7.4.8. Trust documents must be provided FGMC at least four (4) business days prior to anticipated purchase by FGMC. 7.4.9 Signature Specifications

Signatures on all closing documents must meet the following specifications: • Each borrower’s name and signature must be consistent on all closing documents; matching to the names

appearing on the title insurance policy. • Signatures must appear exactly as they are typed on the document. Each borrower’s signature must

appear directly above his or her typed name in the signature portion of each signed document. • FGMC does not accept electronic signatures on closing documents. • If corrections to the documents are required, then ONLY strike-overs are permitted and any change must

be initialed by each borrower.

Note: All loans will be reviewed for these signatures as stated above please see examples below.

The preprinted signature should indicate that the borrower is signing through a Power of Attorney (POA) and preprinted signature should match the signature of the borrower By way of example, the following is acceptable:



Mary Jones, by John Smith attorney in fact Mary Jones by John Smith attorney in fact Mary Jones as attorney in fact for John Smith Mary Jones by John Smith attorney in fact By way of example, the following is not acceptable: Mary Jones, by John Smith attorney in fact Mary Jones Mary Jones Mary Jones by John Doe, attorney in fact Mary Jones Mary Jones, attorney in fact

The preprinted signature should indicate that the borrower is signing in their capacity as a Trustee and the preprinted signature should match the actual signature of the borrower.

By way of example, the following is acceptable: NOTE: Mary Jones, individually and as trustee of the Jones Family Trust Mary Jones, individually and as trustee of the Jones Family Trust MORTGAGE/DEED OF TRUST: Mary Jones, trustee of the Jones Family Trust Mary Jones, trustee of the Jones Family Trust

7.4.10 New York Consolidation, Extension & Modification Agreement (NY CEMA) For all FGMC refinance products, property located in the state of New York may be structured as a Consolidation, Extension, and Modification Agreement (CEMA) transaction. The most current version of Fannie Mae/Freddie Mac Uniform Instrument (Form 3172) must be used. The following documentation must be provided:

• NY Consolidation, Extension and Modification Agreement (Form 3172) • Original Note(s) – Original documents signed by the borrower • Gap Note and Gap Mortgage, if applicable • Consolidated Note – Original documents signed by the borrower • Exhibit A – Listing of all Notes & Mortgages being consolidated, extended and modified • Exhibit B – Legal description of the subject property • Exhibit C – Copy of the consolidated Notes (and addenda where applicable) • Exhibit D – Copy of the consolidated Mortgage (and riders where applicable)

All documentation listed above must be sent to the custodian, while copies of the above documents must be submitted to FGMC in the closed loan package. Lost Note Affidavits are not an acceptable substitute for any of the required documents. If original documentation cannot be provided per above, then a CEMA is not eligible for purchase.

7.5 Title Insurance Specifications The mortgage loan must be covered by an ALTA (American Land Title Association) lender’s title insurance policy



or a title insurance policy which provides the same coverage as the equivalent ALTA form. The insurance policy must adhere to the following requirements:

• The policy must be issued by a title insurer, acceptable to the applicable Agency that is qualified to do business in the jurisdiction where the mortgaged property is located.

• The policy must ensure that the Correspondent, its successors and/or assigns, is in a first priority lien position.

• The policy must insure the Correspondent, its successors and/or assigns, is insured for the full mortgage loan amount.

The previous requirements are subject only to the following exceptions: • The lien of current real property taxes and assessments not yet due and payable. • Covenants, conditions and restrictions, rights of way, easements and other matters of public record as of

the date of recording acceptable to mortgage lending institutions generally and specifically referred to in the lender’s title insurance policy delivered to the originator of the mortgage loan and (i) referred to or otherwise considered in the appraisal made for the originator of the mortgage loan or (ii) which do not adversely affect the appraised value of the mortgaged property set forth in such appraisal.

Where required by state law or regulation, the Mortgagor has been given the opportunity to choose the carrier of the required title insurance. Additionally, such lender’s title insurance policy affirmatively insures ingress and egress, and against encroachments by or upon the mortgaged property or any interest therein.

The Correspondent is the sole insured of such lender’s title insurance policy, and such lender’s title insurance policy is in full force and effect and will be in force and effect upon the consummation of the transactions contemplated by this Agreement. No claims have been made under such lender’s title insurance policy, and no prior holder of the Mortgage, including the Correspondent, has done, by act or omission, anything which would impair the coverage of such lender’s title insurance policy including without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other person or entity, and no such unlawful items have been received, retained or realized by the Correspondent.

Each loan file prior to purchase shall contain: • Closing Protection Letter (CPL) dated no later than thirty (30) days from the date of the Note. • Title binder dated no later than sixty (60) days from the date of the Note.

7.6 Private Mortgage Insurance The Correspondent is required to purchase a commitment/policy from an Agency-approved private mortgage insurer prior to the mortgage loan closing for all loans requiring Private Mortgage Insurance (PMI). The Correspondent must forward a Change of Servicer notification to the PMI Company once FGMC has purchased the loan, if the Correspondent’s name appears in the mortgagee clause.

Proper Disclosure of PMI Premium The Correspondent ensures that as of the date a mortgage loan is purchased, PMI has been secured and any upfront premiums for PMI have been paid. If PMI cost has not been properly disclosed to the borrowers, the Correspondent is responsible for correcting the error at no charge to the borrower. FGMC will order the correct mortgage insurance coverage amount and invoice the Correspondent for the actual cost if necessary.

Captive Re-Insurance All PMI policies must be eligible for reinsurance by FGMC or its affiliates.

Acceptable PMI Types • Borrower Paid Monthly • Borrower Paid Single Premium



• Financed: Gross LTV cannot exceed FGMC program maximum • Split Premium • Lender Paid Single Premium

Unacceptable PMI Types • Lender Paid Monthly • Lender Paid Annual • Borrower Paid Annual • Reduced coverage • Any MI type not listed as acceptable

7.7 Hazard Insurance 7.7.1 Hazard Insurance General Specifications

HAZARD INSURANCE POLICY - MORTGAGEE CLAUSE The mortgagee clause for hazard insurance will be determined by the subject property state in corresponding with those mortgagee clauses outlined in section 7.2.9 Mortgagee Clause.

ADDITIONAL INFORMATION Abbreviations: If an abbreviation in North Dakota or New York is necessary, “FGMC” may be substituted for First Guaranty Mortgage Corporation. TITLE INSURANCE POLICY - NAME OF INSURED

The mortgagee clause for title insurance will be determined by the subject property state as follows: North Dakota: First Guaranty Mortgage Corporation dba FGMC, ISAOA ATIMA New York: FGMC in lieu of true corporate name First Guaranty Mortgage Corporation, ISAOA ATIMA All Other States: First Guaranty Mortgage Corporation, ISAOA ATIMA

7.7.2 Types of Hazard Insurance Coverage One-to-Four Family Residences One-to-four family residences must protect against loss or damage from fire and other hazards covered by the standard extended coverage endorsement. The coverage should be of the type that provides for claims to be settled on a replacement cost basis. FGMC will not accept hazard insurance policies that limit or exclude from coverage (in whole or in part) windstorm, hurricane, hail damages, or any other perils that normally are included under an extended coverage endorsement. A lender should advise borrowers that they may not obtain hazard insurance policies that include such limitations or exclusions—unless they are able to obtain a separate policy or endorsement from another commercial insurer that provides adequate coverage for the limited or excluded peril or from an insurance pool that the state has established to cover the limitations or exclusions. The coverage should be of the type that provides for claims to be settled on a current replacement cost basis.

PUD Individual insurance policies are required on Planned Unit Development (PUD) units unless the PUD unit is covered under the project’s blanket policy and the PUD project’s constituent documents allow the individual PUD units to be included in the projects blanket policy. In addition, the homeowner association must maintain a policy which covers the common areas, fixtures, equipment, personal property and supplies of the project, unless the common elements have minimal or no value, then coverage on the common elements will not be required.

Condominium

On a condominium unit, an individual hazard insurance policy is not required. Before delivering a mortgage loan to FGMC, the Correspondent must verify that coverage is in force for the entire project.



7.7.3 Amount of Hazard Insurance Coverage For first lien home mortgages on 1-4 unit properties, the hazard insurance coverage must be equal to lesser of:

• 100% of the insurable value of the improvements—as established by the property insurer or • Guaranteed Replacement Cost Endorsement, which provides that the insurer agrees to replace the

insurable property, regardless of the cost or the Replacement Cost Endorsement or • The unpaid principal balance of the mortgage, as long as it equals the minimum amount (80%) of the

insurable value (total appraised value minus the estimated site value) required to compensate for damage or loss calculated on a replacement cost basis.

If the hazard insurance is not equal to at least one of the above minimum coverage amounts, then additional hazard coverage that meets the minimum coverage amounts must be obtained before the loan can be purchased.

If the estimated site value, opinion site value, or an appraisal addendum signed by the appraiser is not available on the appraisal, the documents below are acceptable in the following order:

1. Insurance value from the insurance agency. 2. Third party vendor may have been used by the vendor. 3. If the site value is not noted, the tax assessor value from the title policy/commitment or tax assessment

form may be used for the calculation.

Hazard insurance policies that include optional coverage not required by FGMC are acceptable provided that FGMC is not obligated to renew any part of the coverage not required hereunder.

7.7.4 Hazard Insurance Deductible The deductible for hazard policies must conform to agency guidelines unless otherwise specified below.

7.7.5 Additional Hazard Insurance Coverage PUD Requirements for 1-4 unit properties apply to similar residential properties within a PUD or a ground lease community. If the individual units are covered by insurance purchased by their respective owners or leasehold lessees, the PUD homeowner association or the fee simple landowner/lessor of the ground lease community must maintain "all risk" coverage for common areas and property for 100% of their insurable value and provide for loss or damage settlement on a replacement cost basis. The association or fee simple landowner/lessor must also obtain any additional coverage commonly required by private mortgage investors for developments similar in construction, location and use, including the following where applicable and available:

• Agreed amount • Demolition cost • Increased cost of construction • Boiler and machinery

The insurer's minimum liability per accident under boiler and machinery coverage must equal the insurable value of the building housing such boiler or machinery or $2 million, whichever is less.

FGMC will also accept blanket insurance covering all units in the PUD or ground lease community as well as insurable common areas and property, if called for in the PUD's governing documents or in the lease. Such coverage must meet the requirements applicable to each PUD or ground lease community unit and those applicable to insurable common areas and property. Deductibles are allowed under this blanket coverage under the terms and conditions stipulated above.

The PUD's or ground lease community fee simple owners' insurance policy must name the insured in substantially the same language as follows: Association of the Owners of the Planned Unit Development for the use and benefit of the individual owners (designated by name, if required by law or the governing documents).



Condominiums Condominiums must be covered by an insurance policy which protects against fire, and all other hazards that are normally covered by the standard extended coverage endorsement, and all other perils customarily insured against by similar types of projects, including those covered by the standard “all risk” endorsement. If the policy does not include an “all risk” endorsement, FGMC will accept a policy that includes the “broad form” covered causes of loss. The homeowner association must maintain the hazard insurance policies described in this Guide. Premiums with respect to such policies should be considered a common expense of the project.

Policies covering the common elements for a condominium project must cover all of the common elements except for those that are normally excluded from coverage, such as land, foundation, excavations, etc. Fixtures and building service equipment that are considered part of the common elements, as well as common personal property and supplies, should be covered. FGMC will accept such policies in satisfaction of the insurance specifications for the units, if the project’s legal documents allow for blanket insurance policies to cover both the individual units and common elements.

The “master” or “blanket” policy covering the common elements of a condominium project must cover all of the general and limited common elements that are normally included in coverage such as fixtures, building service equipment and common personal property and supplies belonging to the homeowner association.

The policy must also insure fixtures, equipment, and other personal property inside individual units if they will be financed, whether or not the property is part of the common elements. The condominium owners association must maintain blanket “all risk” coverage for the following:

• General and limited common elements within the condominium project • Fixtures, machinery, equipment and supplies maintained for the service for the condominium project • Fixtures, improvements, alterations and equipment within the individual condominium units

Coverage must be for 100% of the insurable value of the common elements or property described above and provide for loss or damage settlement on a replacement cost basis. The additional coverage required for PUD homeowner associations is also required for condominium owner associations where applicable and available. The deductible for fire, water (not caused by flooding) or wind damage to the insured improvements (generally designated as "building" in the insurance policy) may not exceed 5% of the limit maintained for building coverage.

The insurance policy of the condominium owners association must name the insured in substantially the same language as follows: Association of Owners of the _______ Condominium for the use and benefit of the individual owners (designated by name, if required by law or the governing documents).

If the mortgaged premises are in a Detached Condominium Project and the condominium governing documents so permit, FGMC will accept insurance for the mortgaged premises that meets the requirements of 1-4-unit properties. The condominium unit owners association must maintain all other applicable insurance coverages required.

7.7.6 Special Endorsements The following endorsements are required for PUD and condominium projects:

• Inflation Guard Endorsement, if available; • Construction Code Endorsement, if there is a construction code provision that would require changes to

undamaged portions of the subject project’s building(s) even when only a part of a building is destroyed by an insured hazard;

• Steam Boiler and Machinery Coverage Endorsement, if the project has central heating or cooling. The minimum coverage per accident must be at least equal to the lesser of $2 million or the insurable value of the building(s) containing the boiler or machinery. Separate stand-alone boiler and machinery coverage may be purchased in lieu of obtaining this endorsement.

In addition, policies covering a condominium project should provide that:



• Insurance trust agreements will be recognized; • The right of subrogation against unit owners will be waived; • The insurance will not be prejudiced by any acts or omissions of individual unit owners that are not under

the control of the homeowner association; and • The policy will be primary, even if a unit owner has other insurance that covers the same loss.

These provisions are usually covered by a Special Condominium Endorsement.

7.8 Flood Insurance

Prior to loan purchase, a Flood Zone Determination Certification (FZD or Flood Cert) is required for each loan file. Flood Insurance is federally mandated for all residential buildings on the mortgaged premises if any part of the structure is located within a Special Flood Hazard Area (SFHA) which has federally mandated flood insurance purchase specifications. Properties located in SFHA designated by the symbols “A” and “V” on a Flood Insurance Rate Map (FIRM) require flood insurance which must be escrowed. The following table describes when flood insurance is required.

If… Then flood insurance is…

any part of the principal structure on a property securing the mortgage loan is located in an SFHA,

required on the principal structure and must be escrowed.

a non-residential detached structure attached to the land on a property securing the mortgage loan has any part located in an SFHA with a value of $10,000 or more,

required on the non-residential detached structure and must be escrowed.

a non-residential detached structure attached to the land on a property securing the mortgage loan has any part located in an SFHA with a value less than $10,000,

not required on the non-residential detached structure.

a residential detached structure on a property securing the mortgage loan has any part located in an SFHA, NOTE: FGMC’s definition of a residential structure: A detached structure or outbuilding which has any of the following amenities: sleeping quarters, bathroom, or kitchen facilities.

required on the residential detached structure and must be escrowed.

7.8.1 Non-Participating Communities

FGMC does not purchase mortgages secured by properties which are determined to be in an SFHA and which are located in areas where the community does not participate in the National Flood Insurance Program.

7.8.2 Flood Determination Certification

If the property is located in an SFHA requiring flood insurance, the Correspondent represents and warrants that, as of the date a mortgage loan has been purchased, flood insurance has been purchased and the premiums for flood insurance have been paid.

7.8.3 Required Documentation

Flood insurance generally should be in the form of the standard policy issued under the National Flood Insurance Program. Additionally, Correspondents are required to notify their borrowers within a reasonable period prior to closing that the subject property is located in a Special Flood Hazard Area. The declaration page of a policy is acceptable evidence of flood insurance coverage.



If flood insurance is required, the mortgage loan must close with one of the following: • A complete flood insurance policy containing a standard mortgagee clause which must read as described

in the Guide; or • A complete application to the National Flood Insurance Program (NFIP) with evidence that the first year

premium on the policy has been paid and an elevation certificate if the property was constructed after the date on the FIRM—however it should be noted that a binder is NOT acceptable according to the NFIP.

7.8.4 Elevation Certificate

A new elevation certificate may be obtained from a private engineer, architect, land surveyor, or a local community permit official who obtains the information by transcribing data from the building permit records provided that the data has been certified.

FGMC will accept the following alternative documentation: • A copy of the property seller’s elevation certificate; • A copy of the property seller’s flood insurance declaration page (provided the elevation information is on

the declaration page); or • A completed application to the NFIP with evidence that the first year premium on the policy has been

paid, and a completed Flood Insurance Certification Form if the property was constructed before the FIRM date.

With respect to new construction, elevation information may be obtained from the city engineer or the developer’s site planning engineer. To determine whether a property was constructed before or after the FIRM date, consult the Community Status Book published by the NFIP.

7.8.5 Required Coverage

The insurance coverage amounts for all policies covering improvements on the subject property must be equal to or greater than the lowest of the following:

• The unpaid principal balance of the mortgage (if there will be a second mortgage subordinate to the proposed first mortgage, then the insurance must be calculated on the aggregate unpaid principal balance of the first and second mortgages);

• The maximum amount of coverage available under NFIP ($250,000 for each building use of residential purposes); or

• The replacement cost of the insurable improvements, as determined by the property insurer.

Condominium and PUD Projects

The amount of condominium flood insurance coverage in a Master Policy is sufficient if: • 80% of the replacement cost; or • The maximum insurance available from NFIP per unit (which is currently $250,000).

For PUD units, a Master Policy must cover any common element buildings and any other common property located in an SFHA. The unit allocation from the Master Policy must meet the one- to four-unit coverage requirements. The same flood insurance for individual PUD units that is required for other one- to four-unit properties. A stand-alone dwelling policy may be maintained to meet these requirements.

If the coverage amount does not meet one of the above criteria, the borrower must obtain an individual dwelling policy to cover the deficiency.

7.8.6 Deductible Amount

Deductible amounts must meet the minimum applicable agency requirements. In addition to any flood insurance required with respect to a specific condominium or PUD unit, if any parts of a project’s common elements are in



a Special Flood Hazard Area, the homeowner association must maintain a “master” or “blanket” policy of flood insurance and collect premiums from its members as it would any other common expense.

The specifications for condominiums and PUDs are:

• For PUD projects, the master policy should cover any common elements in the buildings and other common property.

• For Condominium projects, the policy should cover common elements in the buildings and any other common property. When the project consists of high-rise or other vertical buildings, the owner’s association must have a separate flood insurance policy for each building that contains dwelling units.

7.9 Disaster Policy Disasters—including (but not limited to) earthquakes, fires, floods, hail, hurricanes, landslides, lightning, tornadoes—may impact a subject property adversely. While FEMA is the primary source for this information, it does not always issue declarations immediately following a disaster. Regardless of the issuance of a FEMA Disaster Notification, anyone with knowledge of potentially adverse conditions within the subject property should take action to ensure the property meets FGMC’s requirements for purchase. Potentially affected property should be evaluated for habitability, marketability and any adverse effect on valuation. FGMC will purchase loans on properties located in FEMA Disaster Declaration Areas provided they meet the requirements as outlined in this policy.

Note: Specific policies may apply based on the exact type of disaster and may require its own certification form.

7.9.1 Determining Affected Areas It is the Correspondent’s sole responsibility to be aware of disasters within their lending area. Additionally, the Correspondent should use available contacts and resources to determine if a property has been impacted by a disaster and may require repairs. Any damage to the subject property will need to be repaired and property inspection completed to verify completion of repairs prior to purchase of the loan. FGMC reserves the right to request additional documentation as proof/certification of the properties habitability, marketability or value. 7.9.2 Valuation Requirements for Property in Affected Areas In general, this Disaster Policy should be followed during an ongoing disaster and up to 90 days from the disaster, FEMA Declaration and/or an area in which FGMC has identified a natural disaster. 7.9.3 Valuation and Inspection Requirements

For loans in areas where the federal government issued a FEMA Disaster Declaration requiring individual assistance or in an area in which FGMC has identified a natural disaster requiring individual assistance:

• For all loans, in addition to any specific requirements set by the agencies regarding property inspection, FGMC requires, at a minimum, a 1004D on all loan types where an initial appraisal was completed. The 1004D should be completed by the original appraiser when possible, or any approved FHA or VA inspector. For Loans without an appraisal, FNMA 2075 is required when the loan will close within 90 days of the FEMA declaration. All inspection types should, at a minimum, have: o Exterior photo of the subject property, evidencing no damage. o The date of the inspection, indicating it occurred after the end date of the disaster (as indicated on

the FEMA site). o Appraiser or inspector certification that the subject property is free from damage and in the same

condition or better condition since original inspection. If not, the original inspector/appraiser must indicate completion of an interior and exterior inspection of the subject to determine no damage to the subject property.

o If applicable, comments from the appraiser/inspector should reference any adverse conditions in the area that could negatively impact habitability, marketability, and/or value.



o Additional certification is required on all VA loans as per the VA Guidance on Natural Disasters policy; this certification must be provided by the Correspondent lender.

All inspection reports are subject to review by a member of the FGMC review team or senior management. FGMC reserves the right to require additional documentation prior to the purchase of any property in a Federally Declared Disaster Area.

If a property has sustained damage, FGMC will not purchase the subject loan until all damage has been repaired and the subject has been inspected to reflect a condition acceptable to FGMC and meets all applicable agency requirements. This final inspection type must be an interior and exterior inspection.

FGMC does not have the responsibility to provide notification to the Correspondent of disaster areas. If at any time after loan purchase, FGMC or a subsequent investor determines that the subject property was damaged and not in fully marketable condition at time of sale, the loan is subject to repurchase.

7.9.4 Current Disaster Updates Correspondents are responsible for checking the FEMA website often for applicable updates. FEMA website: https://www.fema.gov/disasters. 7.10 Real Estate Taxes

To facilitate the review of each loan package, it is important for the Correspondent to ensure that all real estate taxes are paid prior to submission of the loan package to FGMC. Correspondents are also responsible for any tax penalties incurred by FGMC as a result of the delinquent payment of real estate taxes on the subject property. The following tax payment guidelines also apply:

• Correspondent is required to ensure that all real estate tax payments are current prior to loan purchase by FGMC. This includes any unpaid taxes that will become due within 60 days from the loan purchase date.

• FGMC will withhold the escrow deposit after purchase of the loan to ensure payment in full of any outstanding taxes or assessments by the due date.

• Correspondent must provide FGMC with evidence of all tax bills paid. • Any funds collected by, or on behalf of, the Correspondent after purchase of the loan must be submitted

to FGMC within three (3) business days of receipt. • In the event of an overpayment of taxes by the Correspondent, FGMC will process a refund after receiving

acceptable proof of payment. • Correspondent must submit all current or new tax information with the closed loan package. • FGMC will deduct a tax service fee of $85 at funding regardless of whether a tax service fee was collected

from the borrower at time of closing.

7.11 Escrow/Impound Accounts The Correspondent must establish an escrow/impound account for each mortgage loan sold to FGMC, except as outlined in PUD and Condos below.

Note: The escrow/impound account must include a two-month escrow deposit for all items with the exception of mortgage insurance, in which no cushion is to be established.

The Correspondent is responsible for complying with all applicable federal, state, and local laws and regulations relating to the creation of escrow/impound accounts and prior to the transfer of the escrow account to FGMC.

The following defines the premiums that may be paid from a FGMC Escrow/Impound account: Held and paid from the Escrow Account (as applicable):

• Real estate taxes • Hazard insurance premiums • Flood insurance premiums

https://www.fema.gov/disasters



• Mortgage insurance premiums

Not held or paid from the Escrow Account: • Ground rents • Water or sewer taxes • Homeowner association dues • Fire hydrant taxes • Refuse taxes • Tax service fees • Special assessments

PUD and Condos Escrow/impound deposits are not required to cover hazard insurance premiums for individual condominium or PUD units if the project containing the unit is adequately covered by a blanket hazard insurance policy purchased by the homeowner association.

7.11.1 Escrow Waiver The Correspondent may waive the escrow/impound account specification with respect to conventional mortgage loans if the loan to value (LTV) is 80% or less (90% in California), but the standard escrow provision must remain in the mortgage loan documents. Partial waivers are not allowed. If a waiver is used, there will be a pricing impact as noted on the rate sheet. The Correspondent’s waiver of the right to collect escrow/impound funds must not weaken the right of FGMC to subsequently enforce the escrow provision contained in the mortgage loan documents in the event that the borrower fails to act responsibly. Correspondents must ensure that escrow waivers are not based solely on the LTV ratio of a loan, but also on whether the borrower has the financial ability to handle the lump sum payments of taxes, insurance, and other items described above.

7.12 Loan Sale Notification

After FGMC purchases and funds a loan, the Correspondent is required to notify the borrower and any applicable vendors of the sale of the mortgage loan to FGMC.

Note: FGMC requires all applicable federal, state, and agency laws to be followed in the transfer of loan servicing.

7.12.1 Due Dates

For all purchases on or after the 16th of any month, the first date due to FGMC will be adjusted forward one month accordingly. For example, a loan purchased on September 15th will have a first payment due to FGMC on October 1st. A loan purchased on September 16th will have a first payment due to FGMC on November 1st. Once FGMC owns the loan, the borrower(s) will receive information about future billing statements, payment details, etc.

7.12.2 Borrower Notification

Correspondents are required to comply with all applicable federal, state, and agency laws and regulations regarding the transfer of servicing. Once the Correspondent receives notification that the loan has been purchased and funded, the Correspondent must notify the borrower, in writing, within 15 days of the purchase.

At a minimum, the notification—Notice of Servicing Transfer (“Goodbye Letter”) must include the following (see Exhibit B: Notice of Servicing Transfer (“Goodbye Letter”)):

• Effective date of transfer. • The name, address, a toll-free telephone number, and hours of operation for an employee or department

at the Correspondent’s office who can answer servicing transfer inquires. • The name, address, a toll-free telephone number, and hours of operation for an employee or department

at FGMC’s office who can answer servicing transfer inquires. • Date Correspondent will stop accepting payments.



• Date FGMC will begin accepting payments. • Any applicable information regarding optional insurance (such as mortgage life or disability) and actions

borrower must take to maintain coverage. • A statement that servicing does not affect any agreed-upon terms or conditions of the mortgage

documents other than those directly related to loan servicing. • A statement that, under Federal law, during the 60-day period following the effective date of the transfer

of the loan servicing, a loan payment received by the old servicer on or before its due date may not be treated by the new servicer as late, and a late fee may not be imposed on you.

• Letter must also indicate that Rushmore Loan Management Services LLC will be the new servicer for the loan.

7.12.3 Servicing Information

Once FGMC assumes the loan, the borrower(s) will receive information about future billing statements, payment details, etc. Borrowers will remit first payment to:

Rushmore Loan Management Services LLC PO Box 514707 Los Angeles, CA 90051-4707

Overnight payments may be sent to:

Rushmore Loan Management Services LLC 15480 Laguna Canyon Road, Suite 100 Irvine, CA 92618

Notes: • If the previous lender received payment from the borrower, then the Correspondent must promptly

forward the payment to Rushmore to ensure the payment is posted timely.. • Any payments made by the borrower to Rushmore Loan Management Services LLC that were due to

Correspondent, must be requested by the Correspondent from FGMC within 60 days from time of loan purchase.

• Any servicing or payment discrepancies that require attention must be submitted by Correspondent to FGMC within 60 days from time of loan purchase.

• If there are any questions, Correspondents should contact FGMC Servicing Oversight Team at [email protected].

Borrower general correspondence should be directed to: Rushmore Loan Management Services LLC Attn: Customer Service 1755 Wittington Place, Suite 400 Dallas, TX 75234

Note: Customer correspondence should not be included with payments.

Rushmore Customer Service contact information: Toll free: 888-504-6700, Monday – Thursday 6:00 AM to 7:00 PM (Pacific Time) Friday 6:00 AM to 6:00 PM (Pacific Time) Website: https://www.rushmorelm.com

7.12.4 Vendor Notifications

Correspondents must notify all vendors associated with a loan within 15 days of the transfer date. All notifications must advise the vendor that the sold loan is now being serviced by FGMC and all future notices, tax


https://www.rushmorelm.com/



bills, insurance statements, and any other information must be delivered to the appropriate address. Refer to section 7.2.9 for Mortgagee Clause and address information.

7.12.5 Payment Processing Requirements Borrower funds must always be forwarded separately from Settlement funds (escrows, unapplied funds, tax contract fees, etc.). Borrower funds are funds received by the seller after the transfer date that are to be posted to a loan, such as normal payments, bankruptcy trustee payments, payoffs, short payoffs, third-party payoffs and REO liquidations proceeds.

All payments/borrower funds received prior to the transfer date are to be properly posted by Correspondent/Servicer unless otherwise directed. Payments/borrower funds received after the transfer date should not be posted. All payments/borrower funds, including checks received after the transfer date, must be clearly identified with borrower name, FGMC loan number, and date the payment is received. This must be properly endorsed to First Guaranty Mortgage Corporation without recourse. The purpose of each check should be clearly identified (payment, payoff, etc.). The same information must be provided for any wires. All payments/borrower funds must be forwarded via overnight delivery to FGMC on a daily basis for a period of thirty (30) days following the date of transfer and weekly thereafter. All such payments that are received by the Correspondent after the first 60 days following the date of transfer shall be returned to the mortgagor. All other funds pertaining to the Mortgage Loans received by Correspondent, including recoveries of advances shall be forwarded by Correspondent, at Correspondent’s expense, to FGMC or its designee within two business days following seller’s receipt.

7.12.6 Non-Sufficient Funds Non-Sufficient Fund (NSF) reimbursement requests must be submitted with the following information to the same physical address (Serving Dept.) as that used for borrower payments.

• Provide the original NSF check, or legible front and back copy of the NSF check. • Provide payment history showing detail of the posted amount (breakdown of amounts applied to

principal, interest, fees, etc.). • Provide mailing instructions for the reimbursement remittance to the Correspondent. • Provide contact information for the requestor.

7.12.7 Corporate Advances/Invoice Requirements All advances paid during interim servicing (between purchase date and transfer date) by Correspondent should be posted to the loan and be included in the final trial balance provided to FGMC. Invoices related to advances during interim servicing must be submitted to FGMC. FGMC will not reimburse Correspondent for any advances incurred prior to purchase date.

7.12.8 Wire Instructions Borrower payments must always be forwarded separately from Settlement funds. Settlement funds include escrows, unapplied funds, tax contract fees, etc.). See the instructions above for borrower payments.

**FGMC does not permit netting of escrow or suspense funds**

FGMC Operating Acct. BB&T: 8280 Greensboro Drive

ABA# 051404260 Account# 5136294964 ATTN: Servicing Dept.

GROSS ESCROW AND SUSPENSE FUNDS MUST BE TRANSFERRED ANY ESCROW ADVANCE WILL BE FUNDED WITHIN FIVE (5) BUSINESS DAYS OF TRANSFER DATE SUBJECT TO

APPROPRIATE SUBSTANTIATION



All funds wired to FGMC must include the following: Please send a notification email to [email protected] referencing the total amount of the wire and the date sent. An electronic report providing loan level details for the wire amount must be provided. This report should be sent as an attachment to the wire notification email and include:

• Loan numbers • Borrower name • Loan level itemization of balances being transferred (escrow, restricted escrow, suspense, etc.)

7.12.9 MERS/Transfer of Mortgage Instructions MERS Org ID: First Guaranty Mortgage Corporation: 1000314 Subservicer Rushmore: 1009644

• Correspondent/Servicer is responsible for creating a transfer of beneficial rights and/or transfer of servicing rights within MERS no later than three (3) business days after purchase date.

• Correspondent must provide proof of transfer to: [email protected]. • The following items shall be verified upon completion:

o A Registered MERS MIN number o MERS as Original Mortgagee (MOM) flags, if applicable o MOM value, if applicable o Borrower name & address o Note date o Note amount o Owner occupancy

• If the Correspondent is not a MERS member, they must provide a recorded paper assignment to First Guaranty Mortgage Corporation, upload a copy, and include original with Final Docs.

• If the MIN number has not been transferred within three (3) business days, an administrative fee shall be incurred by Correspondent/Servicer.

7.12.10 Hazard Insurance • Correspondent/Servicer is responsible for cancelling all force-placed policies on loans effective the date

of transfer. • Correspondent/Servicer is responsible for paying all items due up to 30 days after the date of transfer. • Correspondent/Servicer is responsible for providing the following:

o A report of payee codes and payee names for all loans. o A report of loans that have temporary binder coverage as of the transfer date. o A report of loans which had been covered under a force-placed policy, including carrier name

address, and phone number. o A report of pending loss drafts, including amounts and servicing files. o A file from a flood certification vendor containing the flood zone, community, community status,

map date, certificate number, service type and certificate date for all loans.

All reports must include loan number, borrower name, policy number, and applicable dates. This information must be received by the transfer date. 7.12.11 Tax Instructions Tax Service: CoreLogic. Customer ID: Life of Loan 10820; Periodic 11120 Correspondent/Servicer is responsible for providing all notifications to CoreLogic for life-of-loan, and transfer the life-of-loan tax contract.

• Correspondent/Servicer is responsible for payment of all items due up to 30 days after the date of





transfer. • Correspondent/Servicer is responsible for providing the following:

o A detailed report by state including loan number, borrower name, payee code, and tax parcel number for all delinquent taxes on non-escrowed loans.

o A reverse adds file, or tax tape, shall be provided no later than 5 days after the transfer date. o An open items report for escrowed loans for all pending activity through the transfer date + 30 days. o A detailed report of any outstanding tax issues including appropriate correspondence and

explanation of the situation as of the transfer date. o A report of all open items and send any tax bills and original tax receipts that relate to such loans. o A report of all loans with multiple tax parcels. o A file from your tax service (Excel format) containing all loan-level tax data. o A report of payee codes and payee names for all loans. o The tax bills and receipts must be sent daily to FGMC via overnight mail.

7.12.12 PMI & MIP Instructions • Correspondent/Servicer is responsible for payment of all items up to 30 days after the date of transfer. • Correspondent/Servicer is responsible for transferring loans to FGMC:

o HUD Holder: 75168 o HUD Servicer: 71274-0000-1 o USDA Holder: 54-1429575 o USDA Servicer: 38-2734984

7.12.13 Escrows It is the responsibility of the Correspondent/Servicer to pay all escrow-related expenses due prior to and 30 days after the date of transfer and provide to FGMC documentation of payment. Escrow Reconciliation Requests If the Correspondent is due escrow funds from FGMC, then a written request including supporting documentation must be submitted to the FGMC Servicing Department within 60 days following Mortgage Loan Purchase date.

Correspondent must provide the following documentation: • Request Escrow Funds or Monthly Payment • HUD-1 Settlement Statement • Mortgage Loan History • Copy of Check (If tax or insurance was paid, or if check was sent to Borrower)

If the required documentation listed above is not received, then the request will be denied pending further documentation. The Correspondent will have 15 days to respond to the denial letter. If the information is not received within 15 days, then FGMC will remove all analysis and disbursement stops on the escrow account.

If FGMC approves the request, then the funds will be forwarded to the Correspondent. If the request is denied, then FGMC will send a letter to the Correspondent outlining the reason for the denial.

If FGMC is due escrow funds from the Correspondent, then a request accompanied by a detailed explanation will be submitted to the Correspondent requesting the additional escrow funds. If additional information is required, then the Correspondent should contact the FGMC Servicing Department. All requests receiving no response will be added to the Correspondent’s monthly invoice.

After the 60-day timeframe, neither FGMC nor the borrower is responsible for returning escrow funds to the Correspondent. FGMC will not be responsible for reimbursement of escrow funds to the Correspondent for loans paid in full or sold.



FGMC may request reimbursement from the Correspondent through 12 months after the purchase of the mortgage loan. Correspondent is responsible for escrow errors for a complete 12-month cycle after the date of purchase.

7.13 Final Documents Final Documents are the original recorded Security Instruments, Assignments and Final Title Policies that must be submitted to FGMC after closing and recording. It is important that all Final Documents are submitted to FGMC within a reasonable amount of time in case any issues with the lien or chain of assignment need to be remedied. All Final Documents must be delivered to FGMC as they become available, and not to exceed sixty (60) days from the date of funding. If any Final Document is incorrect and or not delivered to FGMC within ninety (90) days from funding, FGMC will consider the document “overdue” and will take steps to remedy the missing or incorrect document(s). FGMC maintains the right to assess a penalty and/or hold back a portion (ten percent) of current loan funding proceeds as a result of overdue/incorrect Final Document(s). This could include the cost of a replacement document or the manner to correct the defect, plus recording fees (when applicable). A repurchase will be required, at FGMC discretion, at any time when a defect and/or missing document is not corrected in the time frame mentioned above.

These documents include, but are not limited to, the following:

Document Type When Required

Final Documents Transmittal Form with Final Docs Mortgage and all Riders Certified copy prior to Purchase / Final Doc – Original

recorded to FGMC

Original Assignment all intervening assignments for non-MOM

Certified copy prior to Purchase / Orig. recorded final doc to FGMC

Original Assumptions, Extensions, Written Assurance or Modifications or Substitutions

Certified copy prior to Purchase / Recorded original Final Doc to FGMC

Original Final Title Insurance Policy Title prior to Purchase / Final policy with Final Docs to FGMC

Original Power of Attorney, if applicable Certified copy prior to Purchase / Recorded original Final Doc to FGMC

Originals of all Intervening Assignments (allowed by Endorsement only)

Certified copy prior to Purchase / Original recorded / Final Doc to FGMC

Private Mortgage Insurance Policy Final Doc to FGMC

Please refer to Section 7.13.4 for Government Insuring Documents requirements and Section 7.13.6 for Final Title Policy Delivery. 7.13.1 Delivery Correspondents should ship the required documents using Exhibit C – Final Documents Transmittal which provides more details about how to prepare and send the loan package. Forward all Final Documentation to:

First Guaranty Mortgage Corporation Post Closing Department

c/o First American CleanFile Solutions Mail Code 1016K

4795 Regent Boulevard Irving, TX 75063



877-532-6993* *This phone number is for use on shipping labels only; all questions related to Final Documents should be directed to: [email protected]. 7.13.2 Shipping Procedures

Correspondents are responsible for forwarding all Final Documents in accordance with the following procedure. Step Action

1 FGMC notifies Correspondent that loan has funded.

2 Correspondent collects all Final Documents for the loan.

3 Correspondent sends all completed documents to FGMC using the Transmittal Form and loan account number.

4 FGMC receives the documents and updates the file as received.

5 FGMC notifies the Correspondent of any exceptions found during the Quality Control (QC) review.

6 Once all exceptions are cleared, QC sends the documents to the Document Custodian.

7 Document Custodian removes any delinquent report or update with the new exception.

Note: Allow FGMC time to perform the QC review before inquiring about the file review status. 7.13.3 Recovery Correspondents will be given sixty (60) days from the day that FGMC purchases the loan to send all Final Documents. After sixty (60) days, the following will apply:

• A letter will be sent to the Correspondent stating that if the docs are not received within thirty (30) days, FGMC will require a third-party vendor to take over efforts to remedy the outstanding document(s). When this is necessary, FGMC may, at its sole discretion:

o Pass the third-charge vendor fee to the Seller; o Assess late penalty fees to the Seller; and or o Hold back up to ten percent (10%) of current loan funding proceeds.

• If after thirty (30) days the document(s) are not received, the loan may be subject to re-purchase. • If after 30 days from when the re-purchase letter was sent, the Correspondent has not agreed to

repurchase the loan, the Sellers account may be subject to suspension, locked loans may be subject to cancellation, and any scheduled funding may be cancelled.

• If at any time a Correspondent has a loan that reaches six (6) months, that account will be suspended.

7.13.4 Government Insuring Documents FGMC requires the Seller to obtain the FHA Mortgage Insurance Certificate (MIC), USDA/RHS Loan Note Guarantee (LNG) and/or VA Loan Guaranty Certificate (LGC) within the timeframes mandated by the applicable Agency. For files cleared for purchased within forty-five (45) days of closing, FGMC will verify that the loan has been Insured after purchase of the loan. FGMC requires that the applicable Insuring Document is included in the loan file when submitted for purchase more than forty-five (45) days after closing. Additionally, FGMC may choose, in its sole discretion, to require satisfactory evidence of the Insuring Document prior to the purchase of additional government loans from the Seller. If FGMC discovers that the FHA Mortgage Insurance Certificate (MIC) has not been obtained within sixty (60) days from the loan disbursement date, the loan will be subject to repurchase. If the MIC is subsequently obtained prior to the repurchase being completed, a Late Endorsement Fee of $1,000 will be assessed for each occurrence.




7.13.5 Government Insuring Delivery When providing Government Mortgage Insuring documents on loans after the FGMC purchase date, Correspondents should follow this procedure:

Step Action

1 FGMC purchases the Government-Insured loan.

2 Correspondent emails the acceptable documents in PDF format to FGMC at [email protected]. Acceptable Government Mortgage Insuring Documents are:

• FHA Mortgage Insurance Certificate (MIC) • USDA/RHS Loan Note Guarantee (LNG) • VA Loan Guaranty Certificate (LGC)

3 Once the FGMC Insuring Department has processed the documents, the Correspondent will receive an acknowledgement of receipt.

4 In the event of any Government Insuring defect, the Correspondent is required to contact FGMC at [email protected] within seven (7) business days of notification.

Note: • Any joint loan for which the veteran will hold title to the property with any person other than the veteran’s spouse must be submitted for prior approval to the VA before the loan closing. Additionally, the VA will only guaranty the portion of the loan that is allocable to the veteran’s interest in the property. No portion of the guaranty will be applied to the portion of the loan allocated to the non-veteran, non-spouse. In this particular case, FGMC will only purchase loans with a minimum 25% guaranty, therefore a down payment may be required, if the transaction is a purchase, or the property must contain sufficient equity, if a refinance, to meet the 25% guaranty. • USDA/RHS Loan Note Guaranty (LNG) information:

Rushmore Loan Management Services LLC, (Servicing Lender)

Tax ID # 26341-6474 Agency assigned branch # 001

15480 Laguna Canyon Road Irvine, CA 92618

FGMC (Holding Lender) Tax ID# 54-1429575

Agency assigned branch # 001 1900 Gallows Road, Suite 800

Tysons Corner, VA 22182

7.13.6 Final Title Policy Delivery FGMC will accept Original Final Title Policies with an electronic signature (eSigned) via email to [email protected]. If the Title Policy is:

• A photo copy of the original that contains a wet/live signature, or • A photo copy of the original that contains an electronic signature,

Then it must contain a Certified True Copy stamp with a wet signature from an employee of the Correspondent or the Settlement Agent. This Title Policy must be delivered via FedEx, UPS or USPS; it will not be accepted via email. Mail the Final Title Policy to:

First Guaranty Mortgage Corporation






Post Closing Department c/o First American CleanFile Solutions

Mail Code 1016K 4795 Regent Boulevard

Irving, TX 75063 877-532-6993*

Per FGMC Document Custody Standards, a photo-copy that is not certified true and correct cannot be accepted. *This phone number is for use on shipping labels only; all questions related to Final Documents should be directed to [email protected].

7.13.7 Billing All third-party charges will be billed to Correspondents on a quarterly basis in arrears for outstanding documents. In addition, a fee may be billed to the Correspondent for each Final Document that is not received within ninety (90) days of the FGMC loan purchase date.

7.14 Reporting As required by the Internal Revenue Service, FGMC reports mortgage interest only for interest paid by the borrower to FGMC on or after the transfer of servicing from the lender to FGMC. All 1098 reporting for interest paid at closing or prior to the transfer of servicing to FGMC is the responsibility of the lender.

7.15 Responsible Lending

Correspondents must engage in fair and responsible lending in accordance with all applicable state and federal laws, including but not limited to the federal Equal Credit Opportunity Act (ECOA), the Federal Reserve Board's Regulation B (which implements ECOA) and the Fair Housing Act. Correspondents must work to ensure fair lending and equal access to credit and prevent unlawful discriminatory practices in relation to its lending activities.

7.16 Funding Fees The fees charged for each submitted loan package are based on the type of review required from FGMC. Once FGMC completes a satisfactory review and/or underwrite, the fees are deducted from the Correspondent’s proceeds at the time of funding.

Delegated Correspondents Closed

• Delegated Correspondent closes the loan and submits the loan package for review. • FGMC completes the file review and notifies Correspondent of any issues or follow-up requests. • After FGMC is satisfied that all conditions have been met, the loan is funded.

Funding Fees Delegated Correspondent Non-Delegated Correspondent Closed Loan $375 – After performing the underwriting, deliver the closed loan package for review.

All Loans $595 - FGMC fully underwrites the loan.

Note: On loans where FGMC administers the escrow account, supplemental origination charges will be incurred. 7.17 Non-Delegated Loan Delivery Correspondents approved for non-delegated loan delivery follow a slightly different procedure to allow FGMC to properly review and underwrite submitted loans. As always, the Account Executive (AE) contact that was provided upon FGMC approval is the primary contact for questions regarding the Non-Delegated Correspondent (NDC)




procedure. For step by step instructions to upload the initial loan package, conditions, and final loan package see Section 10 Web Portal Instructions.

7.17.1 Non-Delegated Setup A Correspondent setup as a Non-Delegate follows the same procedure as outlined in this Guide to include:

• Email notification from the FGMC IT Department indicating approval and AE contact. • Training provided. • Log-in credentials to allow for file uploads as required.

7.17.2 Loan Package Correspondents are advised to provide a full, complete package at the time of submission (Exhibit D – Non-Delegated Correspondent Checklists/Stacking Order); however, if some items are not available at the time of submission, packages will be accepted with the minimum docs required below.

Please refer to the minimum requirements for each submitted file. These items may not be applicable to all files, but this provides Correspondents with a list of documents needed to proceed.

• FGMC Correspondent Loan Submission Form • Appraisal (not required for submission of a USDA NDC file) • Sales Contract (if applicable) • 1003 (Unsigned OK) • Assets / Income • Credit Report • Non-Purchaser Special Credit Authorization (If Applicable) • AUS Findings – FNMA DU only, FHA/VA LP or DU Borrower Credit Authorization (on USDA files, GUS

findings are run in-house)

NOTE: If a submission form is not provided clearly identifying the correct channel, the FGMC Input Department will hold the file until received (status/milestone will show as PROCESSING). FGMC will accept a TBD file for review as long as it’s NOT a renovation loan.

Be aware that the less documentation provided upfront for initial underwriter review, the more conditions will be added to the loan approval.

After receiving a Clear-to-Close from the FGMC Underwriter, the Correspondent can go to Settlement with the borrower(s). Once Settlement has taken place, the Correspondent has three (3) business days to deliver the Closing Package to FGMC.

7.17.3 Loan Programs The FGMC Non-Delegated Loan Programs follow the policies outlined in this section based on the type of loan that is submitted for review.

FHA Policy Correspondents approved by FGMC for Non-Delegated loan delivery that are also approved FHA mortgagees originating and closing loans in their own name, must use FGMC’s Non-Delegated underwriting services for loan review, decision, and clearance. These loans may be sold to FGMC as closed FHA loans with FHA case assignments that adhere to the following requirements:

• The case assignment must reflect FGMC as the Sponsor at the time the loan is submitted for the initial underwriting decision.

• The case assignment reflects the Correspondent as the Originator. • The case assignment is a Sponsored Originator Case using the Correspondent’s EIN (removes

neighborhood watch delinquency risk, does not reflect in originating lender’s FHA compare ratio) or the Correspondent’s FHA ID (origination will still be reflected in the neighborhood watch).





• FHA Test Cases will require a copy of the Firm Commitment issued by HUD in the closed loan file submitted for purchase. Files that receive a NOR will be suspended until the NOR is cleared and a Firm Commitment is received.

NOTES: • On Non-Delegated transactions, Correspondents are responsible for paying the Up Front Mortgage

Insurance Premium (UFMIP) on FHA loans and VA Funding Fee (VAFF) on VA loans prior to FGMC purchasing the loan. Proof of the UFMIP or VAFF must be included in the closed loan file. FGMC will condition prior to funding all Non-Delegated FHA or VA loans that do not contain proof of payment in the loan file and will not purchase until proof is provided. Correspondents will be responsible for all lock extension costs resulting from failure to provide proof of payment of the UFMIP or VAFF prior to funding. FGMC will continue to net fund from the Correspondent’s Purchase Advice the upfront MIP on USDA Non-Delegated loans only.

• FHA test cases cannot be underwritten as Non-Delegated and should be underwritten by the test case lender and sent to the appropriate FHA Homeownership Center (HOC) for commitment. FGMC may purchase FHA test cases that have a commitment. The lender is required to obtain the FHA MIC after closing, and provide it to FGMC within 45 days of closing.

• FGMC cannot perform Non-Delegated underwriting on loans originated by a third-party originator (TPO) (Correspondent’s TPO production). FGMC will only underwrite a Correspondent’s retail production through the Non-Delegated channel. (FGMC may purchase delegated TPO loans.)

Setup There are two options to properly set up the case assignment as a Sponsored Origination. All Non-Delegated FHA loans must reflect FGMC as the Sponsor/Agent.

Option A: Allow FGMC to order the case assignment. Step Action

1 Sign into the FGMC Web Portal at www.FGMCcorrespondent.com using assigned credentials (or contact assigned AE).

2 Fill out the secure Case Assignment request form. Be sure to include your company EIN.

3 Await case assignment reflecting FGMC as the Sponsor/Agent and your company as the Sponsored Originator.

Option B: Transfer an existing case assignment to FGMC. Step Action

1 The case assignment must already have been ordered in the name of the Correspondent.

2 The Correspondent must be reflected on the Sponsored Originator List. If not, email [email protected] to be added.





3 Go to the Case Transfer screen in FHA Connection.

4 Select Sponsored Originator EIN in the dropdown.

5 Enter your company (Correspondent Lender) EIN.

6 Enter New Sponsor/Agent ID (FGMC Sponsor ID: 7516800469).

7 Complete Date of Assignment Letter (input the Day of Request/Change).

8 Click Submit.

7.17.4 Package Review As the loan moves through the review process, the website will be updated with the current status. The Non-Delegated Correspondent should check the website for loan status updates.

The AE will monitor each loan and assist the Correspondent with any issues that require follow-up. The Correspondent may need to upload requested documents to the FGMC portal to fulfill any requests for outstanding information. The AE will contact the Correspondent to communicate the loan decision. For USDA loans, the Underwriter communicates suspense and denials, and the Processor sends approval notifications. Questions regarding the conditional approval, denial, or suspense should be directed to the Underwriter. Note: Conditions must always be uploaded through the FGMC online portal and placed in the folder labeled CORRESPONDENT CONDITIONS SUBMISSION.

7.17.5 Credit Denials FGMC is required to provide the originating correspondent with a Statement of Credit Denial, Termination, or Change on all loans denied. FGMC will upload the Statement of Credit Denial, Termination, or Change to the FGMC portal. It is the Correspondent’s responsibility to provide the adverse action notification to the applicant in accordance with the following guidelines:



• If the loan was denied for non-credit history related reasons and the applicant expressly accepts the credit offered by another lender, a Statement of Credit Denial, Termination, or Change disclosure is not required to be sent to the applicant by the correspondent.

• If a loan denial is based either solely or partly on information derived from a consumer credit report, the completed Statement of Credit Denial, Termination, or Change disclosure must include the name, address and telephone number of the Credit Reporting Agency that provided the information used in the decision. The Correspondent lender is required to deliver the disclosure regardless of whether or not the loan is placed with another lender.

• The provisions set forth in the Fair Credit Reporting Act (FCRA) and the Equal Credit Opportunity Act (ECOA), also known as Reg. B, require creditors to provide applicants with notification of adverse action in a timely manner.

• The Statement of Credit Denial, Termination, or Change disclosure must be provided to the applicant within thirty (30) days of the date the completed application was received for underwriting.

• The term “completed application” is defined as a loan application inclusive of all of the necessary documentation needed to make a credit decision. The thirty (30)-day requirement does not begin until the final document that was used in the decision to deny the file was received.

7.17.6 Clear to Close Here are a few things to remember once the loan has been approved:

• A final property appraisal may be issued. • File stays in a “decisioned” status until the closed loan package is uploaded (which should be within three

days of the loan closing). • Any required government loan fees must be paid. • PMI is obtained by the Correspondent. • USDA guarantee fees are paid by FGMC. These amounts are netted from the funds upon purchase of the

closed loan. Automated Underwriting System (AUS) The Non-Delegated Correspondent must run the AUS using Desktop Originator (DO)/Desktop Underwriter (DU) to obtain an automated approval with findings that may need to be satisfied. If not currently registered with Fannie Mae, the Correspondent must choose the Investor option on the dropdown menu and select FGMC.

• Correspondents can transfer files to FGMC using their EIN. (Case query will notify FGMC of the transfer.) • Must be completed prior to Clear-to-Close.

VA Sponsorship To deliver a VA Non-Delegated file, Correspondents must designate FGMC as their sponsor annually. To initiate a first time VA sponsorship request, the Non-Delegated Correspondent must send the FGMC VA Sponsorship form along with a check for $100. If the Non-Delegated Correspondent is renewing from the previous year, the VA Sponsorship form is not required to accompany the check, however the check must be received by FGMC no later than December 31st of the most recently approved year or access to deliver VA Non Delegated loans will be restricted until receipt. For both first time requests and annual renewals, VA loan creation will be allowed within the loan delivery portal upon receipt of the check at FGMC. Note: FGMC may accept Loan Prospector (LP) results for VA and FHA loans. In those cases, there is no need for file transfer or drop-down selection. VA Underwriting

• Must order case assistant and appraisals. • Correspondent must obtain Lender Appraisal Processing Program (LAPP) approval, which will allow for

expedited loan processing. • Correspondents should be set up as IND.



• When Correspondent IND is transferred to FGMC, a Lender Notice of Value (LNOV) will be issued. • FGMC reviews the VA Portal for completed appraisals of Non-Delegated VA loans. • The VA Staff Appraisal Reviewer (SAR) will complete their review within the VA allotted time.

7.18 Renovation and Construction Loan Programs

RESERVED

7.19 Property Value for Loans Sold More than Four Months from Note Date FGMC will allow the Fannie Mae Form 1004D/Freddie Mac Form 442, dated within thirty days of the delivery of the loan, to evidence that the current value of the property is not less than the original value as long as:

1) Summary Appraisal Update Report section is completed by the appraiser 2) Appraiser has checked off that the Market Value of the Subject Property has not declined

For Seasoned Mortgages, which are mortgages that are more than one year old from the first payment date, additional conditions may apply for the loan to be eligible to be sold to Fannie Mae.



8 Appendix 8.1 Exhibit A – Lock Request Form



8.2 Exhibit B – Notice of Servicing Transfer (“Goodbye Letter”)

NOTICE OF SERVICING TRANSFER The servicing of your mortgage loan is being transferred, effective _____________ [Date]. This means that after this date, a new servicer will be collecting your mortgage loan payments from you. Nothing else about your mortgage loan will change. _____________ [Name of present servicer] is now collecting your payments. _____________ [Name of present servicer] will stop accepting payments received from you after _____________ [Date]. Rushmore Loan Management Services LLC will collect your payments going forward. Your new servicer will start accepting payments received from you on _____________ [Date]. Send all payments due on or after _____________ [Date] to Rushmore Loan Management Services LLC at this address:

Rushmore Loan Management Services LLC P. O. Box 514707 Los Angeles, CA 90051

If you have any questions for either your present servicer, _____________ [Name of present servicer] or your new servicer Rushmore Loan Management Services LLC, about your mortgage loan or this transfer, please contact them using the information below:

Current Servicer: New Servicer: [Name of present servicer] Rushmore Loan Management Services LLC [Individual or Department] Attn: Customer Service [Telephone Number] (888) 504-6700 [Address] 1755 Wittington Place, Suite 400 [Address] Dallas, TX 75234

Important note about insurance: If you have mortgage life or disability insurance or any other type of optional insurance, the transfer of servicing rights may affect your insurance in the following way: ___________________________________________________________________________________________________ You should do the following to maintain coverage: ___________________________________________________________________________________________________ Under Federal law, during the 60-day period following the effective date of the transfer of the loan servicing, a loan payment received by your old servicer on or before its due date may not be treated by the new servicer as late, and a late fee may not be imposed on you. ____________________________________________ [NAME OF PRESENT SERVICER] _____________________________________________ Date [and] [or] ____________________________________________ [NAME OF NEW SERVICER] _____________________________________________ Date



8.3 Exhibit C – Final Documents Transmittal



8.4 Exhibit D – Non-Delegated Correspondent Checklists/Stacking Orders 8.4.1 FGMC FHA Stacking Order CREDIT PACKAGE � FHA Connection Case Assignment � FHA Refinance Authorization (FHA to FHA) � FHA CAIVRS Print Out � TOTAL AUS Approval � 92900-LT Transmittal Summary � Final & Initial 1003 � 92900-A Addendum to URLA (final) � 92900-A Addendum to URLA (initial) � Credit Report & Supplements � VOR � BK/Collection/Charge Off/Judgement docs � Verbal Verification of Employment (VVOE) � Income Documentation (Per AUS or manual UW) � Income Calculation Worksheet � Self-Employment Income Analysis � Tax Return Transcripts (per AUS) � 4506T (Final) � Verification of Deposit (VOD) � Asset Documentation (Per AUS or manual UW) � Gift Letter with proof of transfer � FHA Appraisal � Appraisal Acknowledgement Disclosure � Final Inspection (If applies) � Homeownership Counseling Disclosure plus list � Sales Contract and all addendum(s) � Amendatory Clause � Real Estate Certification � Conditional Commitment 92800.5b � LDP/SAM (Fraud Guard/DRIVE will suffice in lieu of

screen prints) � HUD 92561 Borrower contract with respect to Hotel

and Transient Use (2-4 units only) � Energy Efficient Form (EEM only) � Identity of Interest Disclosure (IOI only) � HUD 92900b Important Notice to Home Buyers � FHA Informed Consumer Choice Disclosure � Notice to Homeowner-Assumption (Assumption

only) � Termite Cert with clearance (if applicable)

NEW CONSTRUCTION

� Engineer Certificate (if Mfg.) � BOOL worksheet (if applies) � HUD 92541 – Builder Certification � HUD 92544 – Builders Warranty of Construction

� Local Health Authority Well Water Analysis (if applicable)

� Septic Report (if applies) � NPMA 99a Subterranean Termite Protection Builder

Guarantee � NPMA 99b New Construction Subterranean Termite

Service Record � Building Permit and Certificate of Occupancy OR 3

compliance Inspections by FHA inspector OR 10-year Warranty and Final Inspection by an FHA Inspector 203K

� Maximum Mortgage Worksheet � 203(k) Borrower Acknowledgement � Borrower Certification – Identity of Interest � Homeowner/Contractor Agreement � Rehabilitation Loan Agreement � Rehabilitation Loan Rider

CLOSING PACKAGE � Lender Compliance report � Rate Lock Confirmation � Initial Disclosures

o Loan Estimate (with Service Provider List) o GFE (pre-TRID) o Change of Circumstance(s) o Service Provider List (Pre-TRID)

� Final Executed Closing Disclosure � Sellers Closing Disclosure (if applicable) � Escrow Holdback Agreement � Borrower ID(s) � Patriot Act Disclosure � Proof of payment UFMIP (NDU only) � Initial Escrow Account Disclosure � Homeowners Insurance � Master Hazard Insurance (if applies) � HO-6 Policy (for projects when master insurance

policy does not contain walls-in coverage) � Flood Certificate � Flood Insurance (if applies) � Signed SFHA Notice (if applies) � Payoff(s) (refinance) � Note � Mortgage/Deed of Trust � ARM Disclosure (if applies) � Rider to Mortgage



� Modification � Affidavit of Affixation (Mfg) � Limited POA (Mfg) � POA (if applies) � Trust (if applies) � Itemization of Amount Financed (Pre-TRID) � Notice of Right to Cancel (if applies)

� Escrow/Closing Instruction (Dry States) � Preliminary Title Commitment � CPL or Closing Attorney E&O � Payoff (if refinance) � Property Tax Information form (if not in title

commitment) � Subordination Agreement (if applies)



8.4.2 FGMC FHA Streamline Stacking Order CREDIT PACKAGE � FHA Connection Case Assignment � FHA Refinance Authorization � 92900-LT Transmittal Summary � Final & Initial 1003 � 92900-A Addendum to URLA (final) � 92900-A Addendum to URLA (initial) � Credit Report & Supplements � Verbal Verification of Employment (VVOE) � 4506T (Final) � Assets (if funds to close needed) � Appraisal (if applies) � Appraisal Acknowledgement Disclosure (if applies) � Conditional Commitment 92800.5b (if applies) � Homeownership Counseling Disclosure plus list � LDP/SAM (Fraud Guard/DRIVE will suffice in lieu of

screen prints) � HUD 92561 Borrower contract with respect to Hotel

and Transient Use (2-4 units only) � FHA Informed Consumer Choice Disclosure



� Final Executed Closing Disclosure � Borrower ID(s) � Patriot Act Disclosure � Proof of payment UFMIP (NDU only) � Initial Escrow Account Disclosure � Homeowners Insurance � Master Hazard Insurance (if applicable) � HO-6 Policy (for projects only when master

insurance policy does not contain walls-in coverage) � Flood Certificate � Flood Insurance (if applicable) � Signed SFHA Notice (if applicable Mortgage � Payoff(s) � Note � Mortgage/Deed of Trust � ARM Disclosure (if applies) � Rider to Mortgage � Affidavit of Affixation (Mfg) � Limited POA (Mfg) � POA (if applies) � Trust (if applies) � Itemization of Amount Financed (Pre-TRID) � Notice of Right to Cancel (if applies) � Escrow/Closing Instruction (Dry States) � Preliminary Title Commitment � CPL or Closing Attorney E&O � Property Tax Information form (if not in title

commitment) � Subordination Agreement (if applies) � Copy of 2nd lien note (if applies) � Payoff � Compliance Agreement/Errors & Omission � AKA/Name Affidavit Disclosure � W-9 � First payment Letter � Assignment (if Non MERS member)



8.4.3 FGMC VA Stacking Order CREDIT PACKAGE � AUS (DU/LP) � VA Loan Analysis (26-6393) � Final & Initial 1003 � Addendum to URLA Initial & Final (26-1802a) � CAIVRS � Credit Report & Supplements � VOR � BK/Collection/Charge Off/Judgement docs � VA 26-1880 Request for COE � VA Certificate of Eligibility � Verbal Verification of Employment (VVOE) � Income Documentation (Per AUS/Manual UW) � Income Calculation Worksheet � 4506T (Final) � Tax Return Transcripts (if per AUS) � Verification of Deposit (VOD) � Asset Documentation (Per AUS/Manual UW) � Gift letter with proof of transfer (if applies) � VA Appraisal � VA Notice of Value � Final Inspection (If applies) � Termite Report with Clearance � Appraisal Acknowledgement Disclosure � Sales Contract and all addendum(s) � VA Amendatory Clause � VA Case Assignment (any WEBLG doc) � VA Counseling Checklist (Active Duty Only) � VA Child Care Statement (if applies) � VA Certificate of Duty (Still in Active Service) � Initial Disclosures including but not limited

NEW CONSTRUCTION � Warranty of Completion � Certificate of Occupancy � VA/HUD 10-year protection plan � Builder 1-year warranty � NPMA 99a Subterranean Termite Protection Builder

Guarantee � NPMA 99b New Construction Subterranean Termite

Service Record



� Final Executed Closing Disclosure � Sellers Closing Disclosure (if applicable) � Escrow Holdback Agreement � Borrower ID(s) � Patriot Act Disclosure � Proof of payment Funding Fee (NDU only) � Initial Escrow Account Disclosure � Homeowners Insurance � Master Hazard Insurance (if applies) � HO-6 Policy (for projects when master insurance

policy does not contain walls-in coverage) � Flood Certificate � Flood Insurance (if applies) � Signed SFHA Notice (if applies) � Payoff(s) (refinance) � Note � Mortgage/Deed of Trust � ARM Disclosure (if applies) � Rider to Mortgage � Modification � Affidavit of Affixation (Mfg) � Limited POA (Mfg) � POA (if applies) � Trust (if applies) � Itemization of Amount Financed (Pre-TRID) � Notice of Right to Cancel (if applies) � Escrow/Closing Instruction (Dry States) � Preliminary Title Commitment � CPL or Closing Attorney E&O � Property Tax Information form (if not in title

commitment) � Subordination Agreement (if applies) � Copy of 2nd lien note (if applies) � Payoff (if refinance) � Compliance Agreement/Errors & Omission � AKA/Name Affidavit Disclosure � W-9 � First payment Letter � Assignment (if Non MERS member)

8.4.4 FGMC VA IRRRL Stacking Order CREDIT PACKAGE � IRRRL Rate Reduction worksheet (form 26-8923) � Final & Initial 1003 � Addendum to URLA Initial & Final (26-1802a) � CAIVRS � Credit Report & Supplements � Prior Loan Validation (verify Case assignment &

funding fee status; exempt/non-exempt) � VA Loan Comparison Form (Old loan vs New loan) � Verbal Verification of Employment (VVOE) � 4506T (Final) � Verification of Deposit (VOD) � Asset Documentation (if applies)



� Final Executed Closing Disclosure � Borrower ID(s) � Patriot Act Disclosure � Proof of payment Funding Fee (NDU only) � Initial Escrow Account Disclosure � Homeowners Insurance � Master Hazard Insurance (if applies) � HO-6 Policy (for projects when master insurance

policy does not contain walls-in coverage) � Flood Certificate � Flood Insurance (if applies) � Signed SFHA Notice (if applies) � Payoff(s) (refinance) � Note � Mortgage/Deed of Trust � ARM Disclosure (if applies) � Rider to Mortgage � Modification � Affidavit of Affixation (MFG) � Limited POA (MFG) � POA (if applies) � Trust (if applies) � Itemization of Amount Financed (Pre-TRID) � Notice of Right to Cancel (if applies) � Escrow/Closing Instruction (Dry States) � Preliminary Title Commitment � CPL or Closing Attorney E&O � Property Tax Information form (if not in title


8.4.5 FGMC USDA Stacking Order CREDIT PACKAGE � Conditional Commitment 3555-18 � Request for Single Family Housing Loan Guarantee

3555-21 � GUS � Final 1008 � Final & Initial 1003 � Credit Report & Supplements � VOR � BK/Collection/Charge Off/Judgement docs � Verbal Verification of Employment (VVOE) � Income Documentation (Per GUS or manual UW) � Tax Return Transcripts (per GUS) � 4506T (Final) � Asset Documentation (Per GUS or manual UW, if

applies) � Gift Letter with proof of transfer � Appraisal � Appraisal Acknowledgement Disclosure � Final Inspection (If applies) � Homeownership Counseling Disclosure plus list � Sales Contract and all addendum(s) � LDP/SAM (Fraud Guard/DRIVE will suffice in lieu of

screen prints)



� Final Executed Closing Disclosure � Sellers Closing Disclosure (if applicable) � Escrow Holdback Agreement � Borrower ID(s) � Patriot Act Disclosure � Initial Escrow Account Disclosure � Homeowners Insurance � Master Hazard Insurance (if applies) � HO-6 Policy (for projects when master insurance

policy does not contain walls-in coverage) � Flood Certificate � Flood Insurance (if applies) � Signed SFHA Notice (if applies) � Payoff(s) (refinance) � Note � Mortgage/Deed of Trust � Rider to Mortgage � Modification � Affidavit of Affixation (Mfg) � POA (if applies) � Trust (if applies) � Itemization of Amount Financed (Pre-TRID) � Notice of Right to Cancel (if applies) � Escrow/Closing Instruction (Dry States) � Preliminary Title Commitment � CPL or Closing Attorney E&O � Property Tax Information form (if not in title




8.4.6 FGMC USDA Streamlined Assist Stacking Order CREDIT PACKAGE � Conditional Commitment 3555-18 � Request for Single Family Housing Loan Guarantee

3555-21 � Final 1008 � Final & Initial 1003 � Mortgage Only Credit Report � Original Mortgage Note � FHA CAIVRS Print Out � Verbal Verification of Employment (VVOE) � Income Documentation (all household members) � Tax Return Transcripts (all household members) � 4506T (Final) � Asset Documentation � LDP/SAM (Fraud Guard/DRIVE will suffice in lieu of

screen prints)



� Final Executed Closing Disclosure � Sellers Closing Disclosure (if applicable) � Escrow Holdback Agreement � Borrower ID(s) � Patriot Act Disclosure � Initial Escrow Account Disclosure � Homeowners Insurance � Master Hazard Insurance (if applies) � HO-6 Policy (for projects when master insurance

policy does not contain walls-in coverage) � Flood Certificate � Flood Insurance (if applies) � Signed SFHA Notice (if applies) � Payoff(s) (refinance) � Note � Mortgage/Deed of Trust � Rider to Mortgage � Modification � Affidavit of Affixation (Mfg) � POA (if applies) � Trust (if applies) � Itemization of Amount Financed (Pre-TRID) � Notice of Right to Cancel � Escrow/Closing Instruction (Dry States) � Preliminary Title Commitment � CPL or Closing Attorney E&O � Property Tax Information form (if not in title




8.4.7 FGMC Conventional Stacking Order CREDIT PACKAGE � AUS (Desktop Underwriter or Loan Product Advisor) � Final and Initial 1003 � 1008 � Credit Report & Supplements � VOR � BK/Collection/Charge Off/Judgement docs � Borrower(s) authorization to release information

(including non-borrowing spouse if applicable) � Verbal Verification of Employment (VVOE) � Income Documentation (Per DU) � Self-Employment Income Analysis � Income Calculation Worksheet � Rental Income Worksheet (FNMA 1038) � Tax Return Transcripts (per AUS) � 4506T (Final) � Verification of Deposit (VOD) � Asset Documentation (Per DU) � Gift Letter with proof of transfer � Appraisal � Condo docs � FNMA SSR/UCDP � PMI Certificate � Final Inspection (If applicable) � Homeownership Counseling Disclosure � Sales Contract and all addendum(s)



� Final Executed Closing Disclosure � Sellers Closing Disclosure (if applicable)

� Escrow Holdback Agreement � Borrower ID(s) � Patriot Act Disclosure � Initial Escrow Account Disclosure � Homeowners Insurance � Master Hazard Insurance (if applies) � HO-6 Policy (for projects when master insurance

policy does not contain walls-in coverage) � Flood Certificate � Flood Insurance (if applies) � Signed SFHA Notice (if applies) � Payoff(s) (refinance) � Note � Mortgage/Deed of Trust � ARM Disclosure (if applies) � Rider to Mortgage � Modification � Affidavit of Affixation (Mfg) � Limited POA (Mfg) � POA (if applies) � Trust (if applies) � Itemization of Amount Financed (Pre-TRID) � Notice of Right to Cancel (if applies) � Escrow/Closing Instruction (Dry States) � Preliminary Title Commitment � CPL or Closing Attorney E&O � Property Tax Information form (if not in title




8.5 Definitions The following terms are defined as set forth below: Accepted Servicing Practices With respect to any Mortgage Loan, those mortgage servicing practices of prudent

mortgage lending institutions which service mortgage loans of the same type as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located.

ALTA The American Land Title Association or any successor thereto. Appraised Value The value set forth in an appraisal made by a Qualified Appraiser in connection with the

origination of the related Mortgage Loan as the value of the Mortgaged Property. Approved Flood Policy Insurer A nationally recognized flood insurer approved by Fannie Mae, Ginnie Mae and HUD, or

other insurer as may be approved by Purchaser from time to time. Approved Tax Service Contract Provider

A nationally recognized tax service contract vendor approved by Fannie Mae, Ginnie Mae and HUD, or other similar vendor as may be approved by Purchaser from time to time.

Assignment of Mortgage An assignment of the Mortgage, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect the sale of the Mortgage to the Purchaser.

Business Day Any day other than (i) a Saturday or Sunday, or (ii) a day on which banking and savings and loan institutions in the Commonwealth of Virginia are authorized or obligated by law or executive order to be closed.

Closing Date The relevant date on which the Purchaser from time to time shall purchase and the Seller from time to time shall sell the Mortgage Loans listed on the related Mortgage Loan Schedule.

Condemnation Proceeds All awards or settlements in respect of a Mortgaged Property, whether permanent or temporary, partial or entire, by exercise of the power of eminent domain or condemnation, to the extent not required to be released to a Mortgagor in accordance with the terms of the related Mortgage Loan Documents or applicable law.

Cut-off Date The first day of the month in which the Closing Date occurs or as otherwise set forth in the Trade Confirmation.

Deleted Mortgage Loan A Mortgage Loan which is repurchased or substituted with a Qualified Substitute Mortgage Loan by the Seller in accordance with the terms of this Agreement.

Escrow Payments With respect to any Mortgage Loan, the amounts constituting ground rents, taxes, assessments, water rates, sewer rents, municipal charges, mortgage insurance premiums, fire and hazard insurance premiums, condominium charges, and any other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.

Fannie Mae The Federal National Mortgage Association or any successor thereto. FHA The Federal Housing Administration, or any successor thereto. FICO Score Statistical credit scores obtained by mortgage lenders in connection with the loan

application to help assess a borrower’s credit worthiness. The FICO Score shall be the lower of two, or the middle of three, credit scores.

Freddie Mac The Federal Home Loan Mortgage Corporation, or any successor thereto. GLB Gramm-Leach- Bliley Act, 15 USC. § 6801 et seq. Also known as the Financial Services

Modernization Act of 1999. Ginnie Mae The Government National Mortgage Association or any successor thereto. HUD US Department of Housing and Urban Development. Insurance Proceeds With respect to each Mortgage Loan, proceeds of insurance policies insuring the

Mortgage Loan or the related Mortgaged Property. Liquidation Proceeds Cash received in connection with the liquidation of a defaulted Mortgage Loan, whether

through the sale or assignment of such Mortgage Loan, trustee’s sale, foreclosure sale or otherwise, or the sale of the related Mortgaged Property if the Mortgaged Property is acquired or foreclosed upon in satisfaction of the Mortgage Loan.



LPMI Fee The portion of the Mortgage Interest Rate relating to any LPMI Loan, which is set forth on the Mortgage Loan Schedule, to be retained by the Seller to pay the premium due on the Primary Insurance Policy with respect to such LPMI Loan.

LPMI Loan Any Mortgage Loan with respect to which the Seller is responsible for paying the premium due on the related Primary Insurance Policy with the proceeds generated by the LPMI Fee relating to such Mortgage Loan, as set forth on the Mortgage Loan Schedule.

Material Adverse Change (a) A material adverse change in, or a material adverse effect upon, the operations, business, properties, condition (financial or otherwise) or prospects of the Seller; (b) a material impairment of the ability of Seller to perform under this Agreement or any related agreements; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability of this Agreement or any related agreements against Seller.

MERS Mortgage Electronic Registration Systems, Inc. or any successor thereto. MERS Mortgage Loan Any Mortgage Loan registered with MERS on the MERS System. MERS System The system of recording transfers of mortgages electronically maintained by MERS. MI Fee Any mortgage insurance fee and/or other private insurance fee and/or any monthly fee

payable to HUD with respect to mortgage insurance. Monthly Payment The meaning set forth in Section 8(c) hereof. Mortgage The mortgage, deed of trust or other instrument securing a Mortgage Note, which

creates a first or second lien, as applicable, on an unsubordinated estate in fee simple in real property securing the Mortgage Note.

Mortgage File The items pertaining to a particular Mortgage Loan referred to in Exhibit B annexed hereto, and any additional documents required to be added to the Mortgage File pursuant to this Agreement.

Mortgage Interest Rate The annual rate of interest borne on a Mortgage Note. Mortgage Loan An individual Mortgage Loan which is the subject of this Agreement, each Mortgage Loan

originally sold and subject to this Agreement being identified on the related Mortgage Loan Schedule, which Mortgage Loan includes without limitation the Mortgage File, the Monthly Payments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition Proceeds, all Servicing Rights and all other rights, benefits, proceeds and obligations arising from or in connection with such Mortgage Loan.

Mortgage Loan Documents The documents contained in the Mortgage File pertaining to each Mortgage Loan. Mortgage Loan Package One or more Mortgage Loans sold to the Purchaser by the Seller on a Closing Date. Mortgage Loan Schedule With respect to each Mortgage Loan Package, a schedule of Mortgage Loans delivered by

Seller to Purchaser at least two (2) Business Days prior to the applicable Closing Date, such schedule setting forth the specific information requested by Purchaser with respect to each Mortgage Loan, the Mortgaged Property and the Mortgagor.

Mortgage Note The note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage. Mortgaged Property The real property securing repayment of the debt evidenced by a Mortgage Note. Mortgagor The obligor on a Mortgage Note. Net Mortgage Interest Rate With respect to any Mortgage Loan, as of any date of determination, a per annum rate of

interest equal to the then applicable Mortgage Interest Rate for such Mortgage Loan minus the MI Fee, if applicable.

Officer’s Certificate A certificate signed by the Chairman of the Board or the Vice Chairman of the Board or the President or a Vice President and by the Treasurer or the Secretary or one of the Assistant Treasurers or Assistant Secretaries of the Seller, and delivered to the Purchaser as required by this Agreement.

Person Any individual, corporation, limited liability company, limited liability partnership, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof.

Premium The meaning set forth in Section 8(e). Primary Insurance Policy A policy of primary mortgage guaranty insurance issued by a Qualified Insurer. Purchase Price The price paid by the Purchaser to the Seller in exchange for the Mortgage Loans pursuant

to Section 3 of this Agreement.



Purchase Price Percentage The percentage of par as stated in the Trade Confirmation (subject to adjustment as provided therein).

Qualified Appraiser An appraiser, duly appointed by the Seller, who had no interest, direct or indirect, in the Mortgaged Property or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Mortgage Loan, and such appraiser and the appraisal made by such appraiser both satisfy the applicable Underwriting Guides.

Qualified Insurer A primary mortgage insurer acceptable to Fannie Mae. REO Disposition Proceeds All amounts received with respect to an REO disposition. Repurchase Price The meaning set forth in Section 8(f) hereof. Securitization Date The date on which Purchaser has completed its securitization of a pool of Mortgage Loans

that includes the applicable Mortgage Loan. Underwriting Guides The eligibility requirements established by any applicable agencies, including but not

limited to, FHA, Fannie Mae, Freddie Mac, Ginnie Mae, VA and/or USDA, as identified by the Purchaser and that must be satisfied by a Mortgage Loan originator to sell Mortgage Loans to the Purchaser. Includes the underwriting guidelines and specifications that a Mortgage Loan must meet, and the requirements that it must satisfy, to qualify for the Purchaser’s program of Mortgage Loan purchases, as such requirements and specifications may be revised, supplemented or replaced from time to time.

Servicing File With respect to each Mortgage Loan the file retained by the Seller until the applicable Transfer Date consisting of originals of all documents in the Mortgage File, which are not delivered to the Purchaser or the Purchaser’s designee on or before the Closing Date, and copies of the Mortgage Loan Documents listed on Exhibit B hereto.

Servicing Rights Any and all of the following: (a) any and all rights to service the Mortgage Loans; (b) any payments to or monies received by the Seller for servicing the Mortgage Loans; (c) any late fees, penalties or similar payments with respect to the Mortgage Loans; (d) all agreements or documents creating, defining or evidencing any such servicing rights to the extent they relate to such servicing rights and all rights of the Seller there under; (e) Escrow Payments or other similar payments with respect to the Mortgage Loans and any amounts actually collected by the Seller with respect thereto; (f) all accounts and other rights to payment related to any of the property described in this paragraph; and (g) any and all documents, files, records, servicing files, servicing documents, servicing records, data tapes, computer records, or other information pertaining to the Mortgage Loans or pertaining to the past, present or prospective servicing of the Mortgage Loans.

Stated Principal Balance As to each Mortgage Loan, (i) the principal balance of the Mortgage Loan at the related Closing Date after giving effect to payments of principal received on or before such date, minus (ii) all amounts previously distributed to the Purchaser or Purchaser’s designee with respect to the related Mortgage Loan representing payments or recoveries of principal or advances in lieu thereof.

Trade Confirmation With respect to the Mortgage Loans purchased and sold on the Closing Date, the letter agreement between the Purchaser and the Seller, in the form annexed hereto as Exhibit C (including any exhibits, schedules and attachments thereto), setting forth the terms and conditions of such transaction and describing the Mortgage Loans to be purchased by the Purchaser on the Closing Date.

Transfer Date The date on which the Purchaser, or its designee, shall receive the transfer of servicing responsibilities and begin to perform the servicing of the related Mortgage Loans, and the Seller shall cease all servicing responsibilities. Such date shall be the date specified by Purchaser in its sole and absolute discretion.

USDA The US Department of Agriculture. VA The US Department of Veterans’ Affairs.



8.6 Contents of each Mortgage File With respect to each Mortgage Loan, the Mortgage File shall include each of the following items, which shall be

available for inspection by the Purchaser and any prospective Purchaser, and which shall be delivered to the Purchaser pursuant to Section 2 of the Purchase Agreement to which this Exhibit is attached (the “Agreement”):

1. The original1 Mortgage Note, indorsed “Pay to the order of , without recourse” and signed in the name of the Seller by an authorized officer of Seller. If an allonge is provided by the Seller the allonge must be permanently affixed as required by the applicable Uniform Commercial Code. The Mortgage Note shall include all intervening indorsements showing a complete chain of title from the originator to the Seller. 2. The original of any guarantee executed in connection with the Mortgage Note. 3. The original Mortgage, with evidence of recording thereon, together with an Assignment of Mortgage for any non-MERS loan and originals of any intervening Assignments of Mortgage with evidence of recording thereon. If in connection with any Mortgage Loan, the Seller cannot deliver or cause to be delivered the original Mortgage or any intervening Assignment of Mortgage with evidence of recording thereon on or prior to the related Closing Date because of a delay caused by the public recording office where such Mortgage or any intervening Assignment of Mortgage has been delivered for recordation or because such Mortgage or any intervening Assignment of Mortgage has been lost or because such public recording office retains the original recorded Mortgage or any intervening Assignment of Mortgage, the Seller shall deliver or cause to be delivered to the Purchaser, a photocopy of such Mortgage or any intervening Assignment of Mortgage, together with (i) in the case of a delay caused by the public recording office, an Officer’s Certificate of the Seller stating that such Mortgage and any intervening Assignment of Mortgage has been dispatched to the appropriate public recording office for recordation and that the original recorded Mortgage and any intervening Assignment of Mortgage or a copy of such Mortgage and any intervening Assignment of Mortgage certified by such public recording office to be a true and complete copy of the original recorded Mortgage and any intervening Assignment of Mortgage will be promptly delivered to the Purchaser upon receipt thereof by the Seller; or (ii) in the case of a Mortgage or any intervening Assignment of Mortgage where a public recording office retains the original recorded Mortgage or any intervening Assignment of Mortgage or in the case where a Mortgage or any intervening Assignment of Mortgage is lost after recordation in a public recording office, a copy of such Mortgage or any intervening Assignment of Mortgage certified by such public recording office to be a true and complete copy of the original recorded Mortgage or any intervening Assignment of Mortgage. In any event, the Seller shall deliver to the Purchaser the original recorded Mortgage or any intervening Assignment of Mortgage (in the case of clause (i) above) or a certified copy (in the case of clause (ii) above) within 120 days after the related Closing Date. 4. The originals of all assumption, modification, consolidation or extension agreements, with evidence of recording thereon. 5. The original mortgagee policy of title insurance, or, if the original policy has not yet been released by the insurer, the related binders. In any event, the Seller shall deliver to the Purchaser the original policy of title insurance within 120 days after the related Closing Date. The policy must be properly endorsed, any necessary notices of transfer must be forwarded and any other action required to be taken must be taken in order to fully protect, under the terms of the policy and applicable law, Purchaser’s interest as first mortgagee. 6. Original MIC, LGC, LNG (as defined herein), and/or or evidence of PMI (as defined herein) as applicable and as required. 7. Any security agreement, chattel mortgage or equivalent executed in connection with the Mortgage. 8. The original hazard insurance policy and, if required by law, flood insurance policy, in accordance with Section 7(f) of the Agreement. F:\99021\001\Loan Purchase and Sale Agt 8 22 09.doc 9. Residential loan application. 10. Mortgage Loan closing statement. 11. Verification of employment and income except for Mortgage Loans originated under a Limited Documentation Program. 1 In each instance where an original document is requested, if applicable, a certified copy of the document may be acceptable. 12. Verification of acceptable evidence of source and amount of down payment. 13. Credit report on the Mortgagor. 14. Residential appraisal report, including interior, exterior and street view pictures of the subject property along with pictures of all comparables. 15. Survey of the Mortgaged Property, if any.



16. Copy of each instrument necessary to complete identification of any exception set forth in the exception schedule in the title policy, i.e., map or plat, restrictions, easements, sewer agreements, home association declarations, etc. 17. All required disclosure statements. 18. If available, termite report, structural engineer’s report, water potability and septic certification. 19. Sales contract. 20. Tax receipts, insurance premium receipts, ledger sheets, payment history from date of origination, insurance claim files, correspondence, current and historical computerized data files, and all other processing, underwriting and closing papers and records which are customarily contained in a mortgage loan file and which are required to document the Mortgage Loan or to service the Mortgage Loan. 21. Amortization schedule.



9 Forms The FORMS page of the FGMC Correspondent Website provides links to common documents that are used during the loan process such as:

• Builder-General Contractor Attestation Letter • Builder Profile Package • Contractor Identity of interest • Locking and Change Request Manual • Manual Lock Change Request Form • FGMC Correspondent Loan Submission Form • Certification of Seller Paid Points • FGMC Affiliate Disclosure Form • FGMC Income Data Worksheet and Instructions (a similar form may be provided) • Web Portal Instructions • Correspondent Disaster Certification • FGMC Disaster Policy • Non-Exclusive Correspondent Sales Agreement • Correspondent Lock Request Form • Company Setup Application • FGMC - DataTapeTemplate • VA Sponsorship Request-Fillable • FGMC Compliance Information Form • 203k Docs • FHA Case Assignments • Non-Delegated Conventional Submission Checklist • Non-Delegated VA Submission Checklist • Non-Delegated FHA Submission Checklist • Correspondent Lock/Price Exception Request • FHA Stacking Order • FHA Streamline Credit/Closing Stacking Order • FNMA Credit and Closing Stacking Order • USDA Credit and Closing Stacking Order • VA Credit and Closing Stacking Order • VA IRRRL Credit and Closing Stacking Order • 203k Renovation Fees Quick Guide • 203k Standard and Limited FGMC Program Reference Guide • Contractor Profile Report • Important Notice Regarding Contingency Funds Disclosure • Rehabilitation Loan Permit Certification[Prior to Closing] • Rehabilitation Loan Permit Certification[Post Closing] • Renovation Loan Borrower's Disclosure

http://www.fgmccorrespondent.com/forms.html

http://www.fgmccorrespondent.com/docs/forms/Builder-General%20Contractor%20Attestation%20Letter.pdf

http://www.fgmccorrespondent.com/docs/forms/FGMC_Builder_Retailer_Profile_Report_20160718.pdf

http://www.fgmccorrespondent.com/docs/forms/Contractor%20Identity%20of%20Interest.pdf

http://www.fgmccorrespondent.com/docs/forms/Correspondent%20-%20Locking%20and%20Change%20Request%20Manual.pdf

http://www.fgmccorrespondent.com/docs/forms/FGMC_Change_Request_Form_20151208.pdf

http://www.fgmccorrespondent.com/docs/forms/FGMC_Correspondent_Loan_Submission_Form.pdf

http://www.fgmccorrespondent.com/docs/forms/Certification%20of%20Seller%20Paid%20Points.pdf

http://www.fgmccorrespondent.com/docs/forms/FGMC%20Affiliate%20Disclosure%20Form.pdf

http://www.fgmccorrespondent.com/docs/forms/FGMC%20Income%20Data%20Worksheet.xls

http://www.fgmccorrespondent.com/docs/forms/FGMC%20Web%20Portal%20Instructions%2005.13.15.pdf

http://www.fgmccorrespondent.com/docs/forms/FGMC%20ND%20Correspondent%20Certification.pdf

http://www.fgmccorrespondent.com/docs/forms/FGMC%20Disaster%20Policy%20v11_1.pdf

http://www.fgmccorrespondent.com/docs/forms/Non-Exclusive%20Correspondent%20Sales%20Agreement.pdf

http://www.fgmccorrespondent.com/docs/forms/Corr-Flow%20Lock%20Request%20Form%20(2013_10_18pe).pdf

http://www.fgmccorrespondent.com/docs/forms/Website%20Company%20Set%20Up%20Application.pdf

http://www.fgmccorrespondent.com/docs/forms/FGMC%20-%20DataTapeTemplate.xls

http://www.fgmccorrespondent.com/docs/forms/VA%20Sponsorship%20Request-Fillable.pdf

http://www.fgmccorrespondent.com/docs/forms/FGMC%20Compliance%20Information%20Form.pdf

http://www.fgmccorrespondent.com/docs/forms/203k_Docs.pdf

http://www.fgmccorrespondent.com/docs/forms/FHA%20Case%20Assignments_05_15_2015.pdf

http://www.fgmccorrespondent.com/docs/forms/FGMC_NonDelConventionalChecklist_050615.pdf

http://www.fgmccorrespondent.com/docs/forms/FGMC_VA_SubmissionChecklist.pdf

http://www.fgmccorrespondent.com/docs/forms/FGMC_FHA_SubmissionChecklist.pdf

http://www.fgmccorrespondent.com/docs/forms/FGMC_Correspondent_LockPrice_Exception_Request.pdf

http://www.fgmccorrespondent.com/docs/forms/FGMC_FHA_Stacking_Order.pdf

http://www.fgmccorrespondent.com/docs/forms/FGMC_FHA_Streamline_Stacking_Order.pdf

http://www.fgmccorrespondent.com/docs/forms/FGMC_FNMA_Credit_Closing_Stacking_Order.pdf

http://www.fgmccorrespondent.com/docs/forms/FGMC_USDA_Credit_Closing_Stacking_Order.pdf

http://www.fgmccorrespondent.com/docs/forms/FGMC_VA_Credit_and_Closing_Stacking_Order.pdf

http://www.fgmccorrespondent.com/docs/forms/FGMC_VA_IRRRL_Credit_Closing_Stacking_Order.pdf

http://www.fgmccorrespondent.com/docs/forms/FGMC_203k_Renovation_Fees_Quick_Guide.pdf

http://www.fgmccorrespondent.com/docs/forms/FGMC_203k_Standard_Limited_FGMC_Program_Reference_Guide.pdf

http://www.fgmccorrespondent.com/docs/forms/Contractor%20Profile%20Report.pdf

http://www.fgmccorrespondent.com/docs/forms/Important%20Notice%20Regarding%20Contingency%20Funds%20Disclosure.pdf

http://www.fgmccorrespondent.com/docs/forms/Rehabilitation%20Loan%20Permit%20Certification%5bPrior%20to%20Closing%5d.pdf

http://www.fgmccorrespondent.com/docs/forms/Rehabilitation%20Loan%20Permit%20Certification%5bPost%20Closing%5d.pdf

http://www.fgmccorrespondent.com/docs/forms/Renovation%20Loan%20Borrower's%20Disclosure.pdf



10 Web Portal Instructions 10.1 Registering a New Loan

Step Action

1 . In order to register a new loan, have the data file downloaded from the Loan Origination System (LOS). File format needs to be FNMA 3.2.

2 . Open a web browser and go to www.fgmccorrespondent.com.

3 . Log in to the FGMC Web Portal using assigned log-in credentials provided during FGMC setup.

4 . Enter log-in credentials in the log-in section of the main page.

5 . From the Welcome page, click on the button for New Loan.

6 . Once the file is downloaded, select the radio button for DU 3.2 File (*.fnm) and then click on the Next button.

7 . Select the Browse button on the DU Import Loan page. Browse for the designated file, select, and then click Import.

8 . On the 1003 page, click Save. When the Current loan has been saved message is displayed, the loan has been successfully registered.

Note: The loan is now visible in the Pipeline view accessed either by using the link labeled Pipeline or by returning to the Welcome Page and clicking on the View Pipeline button.

10.2 Uploading Scanned, Imaged File Once the loan is registered, the file needs to be uploaded to the FGMC Web Portal.

Step Action

1 To upload the imaged file, locate the loan in the Pipeline View, and click the View/Edit button for that loan.

2 On the Loan Details page, click on the tab labeled Conditions & Documents.

3 **Non-Delegated Correspondent Only** To add the scanned, imaged file for initial submission to underwriting, click on Add File on the same row for Correspondent Non-Delegated Credit Package Upload (#3 in the image below).

4 To add the scanned, imaged closing package for the closed loan purchase review to the Correspondent Closed Loan Package folder (#1 in the image below), click on Add File on the same row for Correspondent Closed Loan Package.

5 To upload a file, click on Add File. A pop-up will appear. Click the Browse button and located the file that needs to be uploaded to the Web Portal. Then click the Upload File button. The uploaded file will appear on the Correspondent Closed Loan Package row in the Documents and Conditions section. Note: Files can vary in size for many reasons. For instance, higher resolution files and/or lots of graphics can increase a file’s size. FGMC’s Web Portal will allow an upload of up to 40 megabytes (MB) per upload. So if the upload exceeds 40 MB, the file will need to be split into sections smaller than 40 MB each prior to attempting an upload.

Note: Upload any additional files by repeating Step 4 until all files have been uploaded.

6 Once the complete file has been uploaded, scroll to the top of the screen and click on the Submit Loan button on the left-hand side of the screen under Loan Details/Loan Actions.

7 Once all mandatory fields are populated, scroll down to the bottom of the screen and click the Submit Loan button again.

Note: Once the loan is successfully submitted, the Loan Details page will be displayed with the highlighted message “The loan has been submitted.”




10.3 How to Check for and Upload Conditions Contact the designated Account Executive for current FGMC turn times. Once the file has been reviewed by the FGMC Due Diligence Team, the status will change to Decisioned.

Step Action

1 To access the Loan Details page, click on the loan’s View/Edit link from the Pipeline View.

2 On the Loan Details page, click on Conditions & Documents. • Locate the row labeled DD Review. • Click on the File Name column to display a PDF document that lists all outstanding conditions. (To

download the document, click on the file link.) • NOTE: Individual conditions will be listed in the “Conditions” section (#4 in the image below).

Below is the FGMC Due Diligence Review Report which lists conditions in two parts: Prior to Purchase Conditions Required and Post Purchase Conditions Required. All Prior to Purchase Conditions must be cleared before closing.

3 To upload conditions to the FGMC Web Portal, click on the Conditions & Documents tab on the Loan Details page.

Note: If possible, upload all conditions to FGMC at the same time. However, if satisfying some of the conditions will take much longer than others, documents can be uploaded separately as they are prepared.

4 Under the “Documents” section, upload conditions to the Correspondent Conditions Submission (#2 in the image below) folder by clicking on the Add File link on the row for Correspondent Conditions Submission.

The designated underwriter will be automatically notified of the new documents.

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