offered through first mortgage corporation
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. Offered through FIRST MORTGAGE CORPORATION. CHF ACCESS Training. - PowerPoint PPT PresentationTRANSCRIPT
Offered through FIRST MORTGAGE CORPORATION
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CHF ACCESS Training
Desktop Underwriter is a registered trademark of Fannie Mae. Loan Prospector is a registered trademark of Freddie Mac. This presentation is a summary and is not complete. This information is for mortgage professionals only and should not be distributed to or used by consumers or other third-parties. Information is accurate as of the date shown below and is subject to change without notice. 6/12/2013
Agenda
• Introduction
• CHF Access Programs
– Program Highlights
– Income Calculation
– Eligibility Guidelines
– Underwriting Guidelines
– Access Fees
• What’s New? Upcoming changes…
• Marketing & Support
Since 1975, First Mortgage Corporation has been opening doors to the American Dream. It’s all we do and we do it well.
Discover today why First Mortgage Corporation is your First Time Home Buyer and Down Payment Assistance Headquarters!
Don’t wait! Call us today!
INTRODUCTION
First Mortgage CorporationWho is CHF?State RestrictionsMarket Challenges & Access Solution
Introduction to First Mortgage Corporation
• First Mortgage Corporation is an independent residential Mortgage Banking firm with branch offices located throughout the west.
• Founded in 1975, FMC is a direct-lending mortgage banker approved as a lender and/or loan servicer by the Federal Housing Administration (FHA); the Veterans Administration (VA); the Federal National Mortgage Association (Fannie Mae); the Government National Mortgage Association (Ginnie Mae); the National Homebuyers Fund (NHF); and many other major secondary market institutions.
First Mortgage Corporation is currently rated the #5 FHA Lender in CA!
• Having funded in excess of $20 billion in residential real estate loans, FMC has assisted thousands of families with their mortgage needs. FMC enables families to enjoy the American Dream of Homeownership…“it’s the only thing we do.”
• FMC has a longstanding tradition of providing unparalleled customer service and a reputation built on adding value to the home loan process. That’s why FMC should be considered…“YOUR FIRST LENDING RESOURCE”.
Introduction to CHF
Who they are…◦ In 1993, a group called the “Regional Council of Rural
Counties or RCRC” (made up of 30 rural counties in CA) formed the California Rural Home Mortgage Finance Authority (CRHMFA) aka as Cal Rural to help increase homeownership opportunities.
◦ In 2002, CRHMFA sponsored the Homebuyers Fund, Inc., now known as CHF.
Who they serve…o Families and individuals who can afford a mortgage loan
but do not have the resources for the down payment and closing costs
What they provide…o CHF offers financing up to 99.50% designed to increase
homeownership opportunities to low-to-moderate income individuals and families in CA.,
SPONSOR: CHF(CRHMFA Homebuyers Fund)
PARTICIPANT LENDER & SERVICER: FMC(First Mortgage Corporation)
ADMINISTRATOR: NHF(National Homebuyer’s Fund)
(NHF is strictly providing administrative services; i.e. marketing, training, support, etc.)
CHF Programs
CHF “Affordable Housing” Programs:
1. CHF “ACCESS” (Available exclusively through FMC only)2. CHF “Platinum” (Available through FMC)3. Mortgage Credit Certificate (Tax Credit available through FMC)
CHF “ACCESS” State Restriction:
FHA Loans: Available throughout CA ONLY!◦ Available exclusively through First Mortgage ONLY!
Today’s Challenges
Seller paid DAPs discontinued (Nehemiah, etc.)
More restrictive guidelines/products
Slow market
Struggling Economy
Maxed out sellers
Higher cost of living = Less money to save
Over $7.2 Billion in 1st & 2nd loan
financing since 1993 (53,000 properties)
What “CHF ACCESS” offers
15-Year Fully Amortized 2nd
Up to 3% of lower of Sales Price or Appraised Value
CLTV up to 99.50%
LITTLE TO NO MONEY OUT OF POCKET
1st Loan 2nd Loan Home Ownership
FHA up to 96.50% LTV
CHF ACCESS PROGRAMS
Eligible 1st Mortgage Program Down Payment & Closing Cost Assistance Sample Calculations Income Limit Calculation
CHF ACCESS Program
Topic Program Description
State Restriction Available throughout the WHOLE STATE OF CALIFORNIA ONLY!
Program Types FHA 30 Year Fixed
Max LTV 96.50%
Max CLTV 99.50% (ACCESS 1st and 2nd combined)
Maximum Loan Amount
Conforming: Up to $417,000Jumbo: > $417,000 to $729,750 based on county where property is locatedFHA Loan Limits
Loan Purpose Purchase
Occupancy Owner Occupied
Down Payment Assistance
CHF ACCESS 2nd: • CAN be used to fulfill the borrower’s equity contribution required
on FHA 1st Mortgage
CHF ACCESS 2nd Program
Topic Program Description Program Types CHF ACCESS 2nd Fixed
Term 15-yrs Fixed-Rate Fully Amortizing
Maximum Loan Amount
Sized up to 3% of the lower of the Sales Price or Appraised Value
Interest Rate 8.25%
Max CLTV 99.50% (ACCESS 1st and 2nd combined)
Use of Funds Proceeds may be used for: DOWN PAYMENT CLOSING COSTS Price Adjustments Up Front or Single Premium MI
No cash back to the borrower from the 2nd loan proceeds• Any overage over POCs must be used to reduce principal
balance• Any overage over $500 results in redraw of loan
documents
Fees on 2nd Flat $350.00 plus applicable Escrow and Title Fees on the 2nd
•Added to the Underwriting Fee on the ACCESS 1st
Sample Scenario: (Purchase Price: $325,000)
Sample 1: Borrower has little or NO money Down - Seller contributing for costs…
CHF ACCESS 1st: 96.50% ($325,000 x 96.50%) $313,625.00 +
CHF ACCESS 2nd (Down Payment): 3% ($325,000 x 3%) $9,750.00 +
Total Financing 1st & 2nd: 99.5% of SP or AV $323,375.00 =
Borrower Required Down Payment: .5% ($325,000 x .5%) $1,625.00
Borrower Contribution: .50% ($1,625) for DP (Seller pay for Closing Costs)
Sample 2: Borrower HAS Down Payment but NO money for Closing Costs...
CHF ACCESS 1st: 96.50% ($325,000 x 96.50%) $313,625.00 +
Borrower Funds (Down Payment): 3.5% ($325,000 x 3.5%) $11,375.00 +
CHF ACCESS 2nd (Closing Costs): 3% ($325,000 x 3%) $9,750.00
Total Financing 1st & 2nd: 99.50% of SP or AV $325,000.00 =
Borrower Contribution: 3.5% ($11,375) for DP
Sample Scenario: (Purchase Price: $325,000)
Sample 3: Borrower has NO money for D/P OR C/C - Receiving Gift Funds of 5%...
CHF ACCESS 1st: 96.50% ($325,000 x 96.50%) $313,625.00 +
CHF ACCESS 2nd (Down Payment): 3% ($325,000 x 3%) $9,750.00
Total Financing 1st & 2nd: 99.50% of SP or AV $323,375.00 =
Gift Funds Received 5% ($325,000 x 5%) $16,250.00
.5% given for DP 0.5% ($325,000 x .5%) $1,625.00
4.5% towards CC 4.5% ($325,000 x 4.5%) $14,625.00
Borrower Contribution: ZERO ($0)
INCOME LIMITS / CALCULATIONS
Program Income LimitsIncome Limit CalculationQualifying Borrower Income
Program Income Limits
Topic Guidelines
Income Limit
115% of HUD AMI
Website to use
To calculate the Program Income Limit by County, refer to:
http://www.huduser.org/datasets/il.html
2013 CHF ACCESS Income Limits
Borrower Qualifying
Topic Guidelines
Borrower Qualifying Income
Qualify Borrower based on Qualifying (Repayment) Income (not Household Income)
Only the income used for Qualifying is considered in order to meet the Program Income Limits. Eg.,
DU Income – Income you input in DU to see if borrower qualifies for loan
UW Income – Income used by UW to calculated Debt to Income Ratios to qualify borrower for loan
Sample Qualifying Income
Sample: Husband, Wife, 2 kids, Grandma will be moving into home (5 ppl)
Who has earned income?
Husband & Wife both work – 2+ yr history Son works PT – 6 month history Grandma gets SSI – 2+ yr history
Who’s going on the loan? Husband Wife Son
Who’s income do we use to qualify borrower for ACCESS Program?Qualifying Income (ACCESS)
USE ONLY INCOME from: Husband Wife
Do not use income from: Son: because he doesn’t have 2 year required to be effective
income Grandma: because she’s not going on the loan
ADDITIONAL GUIDELINES
Eligibility GuidelinesGeneral Underwriting GuidelinesPricing, Costs and Fees
Eligibility Guidelines
Topic GuidelinesBorrower Eligibility Purchase of Owner-Occupied Primary Residences Only
NO 1st Time Homebuyer Requirement MAY OWN OTHER PROPERTIES – must meet FHA requirements
Property Eligibility Single Family Residences PUD’s FHA Approved Condos 2 Units with 640 minimum fico and 1% hit to price
Income Limits 115% of HUD Area Median Income (AMI) – See Income Limit sheet
Sales Price Limits Not Applicable
First Time Homebuyer Not Required
Non Occupying Co-Borrowers/Co-Signers
NOT ALLOWED
Homebuyer Education Required
Minimum Homebuyer Contribution
NONE required
Underwriting Guidelines
Topic GuidelinesUnderwriting UW Method:
DU allowed – Must be risk scored by FHA Scorecard Approve/Eligible recommendation
Manual UW allowed – FMC Overlays apply
**Unless specifically specified, Follow Standard FHA guidelines PLUS First Mortgage FHA overlays**
Minimum Credit Scores
580+ Fico Score: Maximum Financing allowed 0 Score or Non-Traditional Tradeline borrower: Maximum
Financing allowed Follow HUD 4155 guidelines plus ML 2010-29 PLUS FMC overlays Price Adjustments apply – See First Mortgage rate sheet
Max Debt Ratio
**REVISED**
Less than 620 Fico: Up to 43% max DTI Ficos 620 – 659: Up to 45% max DTI Ficos 660 or higher: Up to 48.9% max DTI
Comp Factors Ratios > 43% requires a minimum of two (2) strong compensating factors from HUD 4155
Reserves NONE required
Mortgage Ins. Follow standard FHA MIP
UW Guidelines cont’d…
Topic GuidelinesSeller Contributions
Allowed up to 6%
Buy-downs Allowed
Gift Funds Allowed from family members – Follow 4155
Other Sources of Assistance
Gift Funds 401k loans Grants
Prepayment Penalty
No Prepayment Penalty
Assumability Allowed per FHA guidelines
*** All other requirements – Follow FHA 4155.1 guidelinesPLUS FMC overlays***
FMC - FHA Overlays (Applies to all FMC products – not specific to ACCESS)
FMC - FHA Overlays (Applies to all FMC products – not specific to ACCESS)
ACCESS RATES & FEES
ACCESS Interest RatesACCESS Allowable Fees
ACCESS Interest Rates
ACCESS Fees & Charges
Topic GuidelinesInterest Rates Interest Rates available on the FMC Rate Sheet, OR
For Retail – Contact Secondary Marketing For WS Brokers – Contact your A/E
Origination Fees
No max required - Follow new HUD RESPA rules
Discount Fees Buyer or Seller Discounts allowed subject to consumer laws – Discount Points allowed only for loan level price adjustments
(subject to FMC’s discretion)
Rebate/Discount Pricing
See FMC rate sheet
FMC Fees See doc order form or contact your Branch Manager or (Account Executive for W/S) for lender fees
Allowable Fees Must be reasonable and customary and fully disclosed to the borrower in accordance with all agencies, federal, state and local laws
Follow FMC rules on limitation of fees for FHA loans
Fees on 2nd • Flat $350.00 plus applicable Escrow and Title Fees on the 2nd
MISCELLANEOUS
What’s New? Upcoming Changes…Marketing Materials – English and SpanishSelling FeaturesFMC Support
Funding Process
Topic Guidelines
Funding Process
Due to regulatory requirements, the Access 2nd must be funded by CHF directly. Therefore, ALL CHF Access 2nd transactions now require an additional 24 hours for the Funding Department review.
Prior to requesting the wire from CHF, First Mortgage must verify that all conditions have been cleared. Same day fundings will not be scheduled for Access transactions.
In order to provide excellent service for our Access Product the Funding Department will pre-fund the transaction at the time of requesting the wire from CHF.
Funding Process cont’d…
Topic Guidelines
Required Documentation
The following documents must accompany the funding request:
1.Escrow Instructions
2.Estimated HUD-1 (for both 1st and 2nd)
3.Copy of FMC Lock
Additional Requirements
When funding the Access 2nd mortgage, please ensure that the Note and Deed of Trust are Non-MERS instruments and show CRHMFA Homebuyers Fund as the Lender on the Note and Beneficiary on the Deed. If the docs are drawn through a doc prep vendor, such as DocMagic, please specify that the instruments are Non-MERS documents.
Funding Process cont’d…
Topic Guidelines
Retail / Builder / Wholesale Divisions
Follow the procedures from the previous slides with regards to funding the ACCESS 2nds.
Correspondent Division
Please go to the Correspondent website for instructions on the new funding process for ACCESS 2nds, or contact your FMC Account Executive for more details.
www.fmccorrespondent.com
New ACCESS States…
Topic Guidelines
Retail / Builder Coming soon….
ARIZONA NEVADA TEXAS
Wholesale Following shortly after Retail / Builder
Correspondent Follow shortly after Wholesale
Other states Will be reviewed and selected after roll out to the three states above
Marketing Materials
NOT Limited to First Time Home Buyers
NO “Recapture Tax” if home is sold later
NO Sales Price Limits
No additional “Compliance Review” required
Financing available for Down Payment and Closing Costs
CLTV’s up to 99.50% = little to no money down & no out of pocket closing costs
No Minimum Borrower Contribution Required
Ratios stretched up to 48.9% DTI
2 Units allowed with minimum 640 fico score
Buyer or Seller Discount Fees allowedSelli
ng F
eatu
res
FAQ’s Frequently Asked Questions is available on
the First Mortgage website.
Hot Question!Can you refinance the ACCESS program for
a lower rate? Is the 2nd re-subordinated or will it need to be paid off with the new refinanced 1st mortgage?
F A
Q ‘
S
FMC Support
WEB SITE
Go to our FMC websites for:
1. RATE SHEETS
2. TRAINING MATERIALS
3. GUIDELINES
4. FORMS
5. CALCULATORS
6. TOOLS
7. MARKETING
SUPPORT
Retail: Loan Help
Wholesale: Your FMC Account Executive
For help with your:• Scenarios• Pricing / Fees• Guidelines• Loan
Submissions• Trainings
On behalf of First Mortgage, thank you for joining today’s training and we hope the
information provided will help you build your business!
• The main purpose of First Mortgage Corporation’s (FMC) training documents is to assist real estate and mortgage professionals in developing entry-level competence with loan programs.
• While FMC staff, employees, contractors and contributors take care to ensure the accuracy of the content of training documents, FMC makes no warranties as to the accuracy of the information contained within these materials. Furthermore, every user of this material uses it understanding that he or she must still conduct his or her own original legal research, analysis and drafting. In addition, every user must refer to the relevant legislation, case law, administrative guidelines, rules and other primary sources.
• FMC specifically disclaims any liability for any loss or damage any user may suffer as a result of information contained within this training material.
• While the information contained in FMC’s training material addresses guidelines and issues surrounding mortgage programs, these materials do not constitute legal advice. All non-legal professionals are urged to seek legal advice from a lawyer.