purchasing hints and tips

21
Purchasing Hints Purchasing Hints and Tips and Tips What You Need To Know To What You Need To Know To Get a Closing Package Get a Closing Package Purchased on the First Purchased on the First Try Try

Upload: kinipela-aidan

Post on 31-Dec-2015

54 views

Category:

Documents


2 download

DESCRIPTION

Purchasing Hints and Tips. What You Need To Know To Get a Closing Package Purchased on the First Try. Our bank name should always appear as Merchants Bank, National Association. - PowerPoint PPT Presentation

TRANSCRIPT

Page 1: Purchasing Hints and Tips

Purchasing Hints Purchasing Hints and Tipsand Tips

What You Need To Know To What You Need To Know To Get a Closing Package Get a Closing Package

Purchased on the First TryPurchased on the First Try

Page 2: Purchasing Hints and Tips

Preparing the Closing Preparing the Closing PackagePackage

• Our bank name Our bank name should always appear should always appear as Merchants Bank, as Merchants Bank, National Association.National Association.

• Every closing package Every closing package should include the should include the Closed Loan File Closed Loan File Stacking Order Stacking Order Checklist, all UW At Checklist, all UW At Close conditions, and Close conditions, and all required closing all required closing documents. documents.

• The original note and The original note and allonge should be mailed to allonge should be mailed to 62 W 362 W 3rdrd St Winona, MN St Winona, MN 55987.55987.

• The remainder of the The remainder of the closing package is uploaded closing package is uploaded electronically to the Calyx electronically to the Calyx Path file.Path file.

• Purchasing can be Purchasing can be contacted with questions contacted with questions via email at via email at [email protected], 800-732-0115 option #2, , 800-732-0115 option #2, or internal extension or internal extension 11421.11421.

Page 3: Purchasing Hints and Tips

Miscellaneous Items to Miscellaneous Items to RememberRemember

• Please complete the Appraisal screen in Calyx Please complete the Appraisal screen in Calyx Path including the individual appraiser Path including the individual appraiser information.information.

• The file in Calyx Path must contain a rate lock The file in Calyx Path must contain a rate lock agreement signed and dated by the borrower and agreement signed and dated by the borrower and lender showing the interest rate has been locked. lender showing the interest rate has been locked. This must be dated on or after the date of the This must be dated on or after the date of the initial application.initial application.

• The file in Calyx Path must contain an initial The file in Calyx Path must contain an initial application that is signed and dated by the application that is signed and dated by the lender.lender.

• All loan terms must match between DU or LP, All loan terms must match between DU or LP, the rate lock, and the closing documents.the rate lock, and the closing documents.

Page 4: Purchasing Hints and Tips

Underwriting At Close Underwriting At Close ConditionsConditions

• All necessary documentation to satisfy All necessary documentation to satisfy the UW At Close conditions must be the UW At Close conditions must be included in the closing package.included in the closing package.

• Please contact the UW Department Please contact the UW Department PRIOR to loan closing if there are any PRIOR to loan closing if there are any questions or concerns regarding the questions or concerns regarding the conditions. This is especially important conditions. This is especially important if the cash to / from borrower is not if the cash to / from borrower is not going to meet the condition.going to meet the condition.

Page 5: Purchasing Hints and Tips

Subject Property AddressSubject Property Address• Review the submitted DU address and the Review the submitted DU address and the

standardized DU address for discrepancies!standardized DU address for discrepancies!– If there are no discrepancies, the loan documents If there are no discrepancies, the loan documents

should match both addresses.should match both addresses.– If the submitted and standardized addresses do If the submitted and standardized addresses do

not match, the first page of the appraisal must not match, the first page of the appraisal must match the standardized address and there must match the standardized address and there must be an addendum to the appraisal showing the be an addendum to the appraisal showing the submitted address and language stating the two submitted address and language stating the two addresses are one in the same.addresses are one in the same.• The LPS flood certificate must show a determination The LPS flood certificate must show a determination

address that matches the standardized address.address that matches the standardized address.• The hazard insurance must match the submitted The hazard insurance must match the submitted

address.address.• The note, mortgage, and all remaining closing The note, mortgage, and all remaining closing

documents must match the submitted address.documents must match the submitted address.

Page 6: Purchasing Hints and Tips

SSA-89 / SSA-3288SSA-89 / SSA-3288• The SSA-89 is required for The SSA-89 is required for

all borrowers and must be all borrowers and must be included in every closing included in every closing package.package.

• A fully completed sample A fully completed sample of this form is available in of this form is available in Chapter 8 of the manual.Chapter 8 of the manual.

• NO alterations may be NO alterations may be made to the form even made to the form even with the borrower’s with the borrower’s initials (cross offs, write initials (cross offs, write overs, etc.).overs, etc.).

• The SSA-89 may The SSA-89 may notnot be be signed by a POAsigned by a POA..

• The SSA-3288 is required The SSA-3288 is required for every borrower that for every borrower that qualifies using Social qualifies using Social Security income (SSI).Security income (SSI).

• A fully completed sample A fully completed sample of this form is available in of this form is available in Chapter 8 of the manual.Chapter 8 of the manual.

• NO alterations may be NO alterations may be made to the form even made to the form even with the borrower’s with the borrower’s initials (cross offs, write initials (cross offs, write overs, etc.).overs, etc.).

• The SSA-3288 may The SSA-3288 may notnot be be signed by a POA.signed by a POA.

Page 7: Purchasing Hints and Tips

Right of RescissionRight of Rescission

• The Right of Rescission may never The Right of Rescission may never be re-executed.be re-executed.

• We do not require the borrower to We do not require the borrower to sign after the 3 day period has sign after the 3 day period has ended.ended.

• Any changes/alterations made to the Any changes/alterations made to the document MUST be initialed by the document MUST be initialed by the borrower.borrower.

Page 8: Purchasing Hints and Tips

Power of AttorneyPower of Attorney• When a Power of When a Power of

Attorney is used by one Attorney is used by one or both borrowers to or both borrowers to sign the closing sign the closing documents we will documents we will require the following:require the following:– A fully completed and A fully completed and

executed POA form. A executed POA form. A signed certified copy may signed certified copy may be provided in the closing be provided in the closing package however a package however a recorded copy is required recorded copy is required to be included with your to be included with your trailing documents.trailing documents.

– The signature lines must The signature lines must be typed and signed per be typed and signed per one of the options outlined one of the options outlined in the investor guidelines. in the investor guidelines. Best Practice : John Doe Best Practice : John Doe by Jane Doe as POAby Jane Doe as POA

• When a Power of When a Power of Attorney is used by one Attorney is used by one or both sellers for a or both sellers for a purchase transaction we purchase transaction we will require the following:will require the following:– A fully completed and A fully completed and

executed POA form.executed POA form.– If the POA is used only for If the POA is used only for

the HUD a copy is the HUD a copy is sufficient.sufficient.

– If the POA is used to sign If the POA is used to sign the warranty deed a the warranty deed a recorded copy will be recorded copy will be required for our Trailing required for our Trailing Documents Department.Documents Department.

– A POA is NOT required if A POA is NOT required if the property is being sold the property is being sold by a company or institution. by a company or institution.

Page 9: Purchasing Hints and Tips

ApplicationApplication

• The Purchasing Department will review the final The Purchasing Department will review the final application for the items shown below, however application for the items shown below, however for compliance reasons the application must be for compliance reasons the application must be completed in it’s entirety.completed in it’s entirety.- Date of Birth, Home Phone Number, Marital Status- Date of Birth, Home Phone Number, Marital Status- First Time Homebuyer information must be consistent between - First Time Homebuyer information must be consistent between sections III and VIII.sections III and VIII.

- Signed by the borrower and dated with the closing date.- Signed by the borrower and dated with the closing date.- Signed by the Loan Originator and dated with the closing date.- Signed by the Loan Originator and dated with the closing date.- Loan Originator Identifier and Loan Originator Company Identifier - Loan Originator Identifier and Loan Originator Company Identifier

fields must both be fields must both be completed.completed.- Government Monitoring must have the race, sex, and ethnicity - Government Monitoring must have the race, sex, and ethnicity

completed if application was taken completed if application was taken face-to-face.face-to-face.

Page 10: Purchasing Hints and Tips

NoteNote• The payment address should be that of your The payment address should be that of your

bank’s location. bank’s location. • The late fee section must reflect 5% charge after The late fee section must reflect 5% charge after

15 days.15 days.• Borrower’s name must be typed exactly the same Borrower’s name must be typed exactly the same

between the note, all 3 locations on the between the note, all 3 locations on the mortgage, and the assignment of mortgage.mortgage, and the assignment of mortgage.

• Fannie Mae loans have a P&I tolerance of .01 Fannie Mae loans have a P&I tolerance of .01 less than the DU findings or up to $1.00 over the less than the DU findings or up to $1.00 over the DU findings.DU findings.

• Freddie Mac loans have a $0 tolerance for the Freddie Mac loans have a $0 tolerance for the P&I.*P&I.**For UW Approval P&I see Loan Transmittal (1008)*For UW Approval P&I see Loan Transmittal (1008)

Page 11: Purchasing Hints and Tips

FKA / AKA LanguageFKA / AKA Language• The borrower’s name is one of the most The borrower’s name is one of the most

common reasons a file is pended. Please common reasons a file is pended. Please follow the guidelines below in order to avoid follow the guidelines below in order to avoid having the file suspended.having the file suspended.– When FKA / AKA language is used it must be used When FKA / AKA language is used it must be used

on the signature lines of the note and mortgage, on the signature lines of the note and mortgage, the preamble of the mortgage, notary section of the preamble of the mortgage, notary section of the mortgage, and the assignment of mortgage.the mortgage, and the assignment of mortgage.

– If the borrower’s name is different than how it If the borrower’s name is different than how it appears on title (completely different name; not appears on title (completely different name; not just a variation) you must either use the FKA / just a variation) you must either use the FKA / AKA language or execute a Quit Claim Deed. You AKA language or execute a Quit Claim Deed. You may execute a name affidavit if there is only a may execute a name affidavit if there is only a minor variation such as using a middle initial vs a minor variation such as using a middle initial vs a full middle name.full middle name.

Page 12: Purchasing Hints and Tips

Title CommitmentsTitle Commitments• The title commitment must have an effective date The title commitment must have an effective date

within 90 days of closing.within 90 days of closing.• The Proposed Insured must read either your bank The Proposed Insured must read either your bank

name plus ISAOA language OR Merchants Bank name plus ISAOA language OR Merchants Bank National Association plus ISAOA language. Our bank National Association plus ISAOA language. Our bank name may not be abbreviated in any way.name may not be abbreviated in any way.

• A purchase transaction must include a copy of the A purchase transaction must include a copy of the warranty deed in the closing package with the title warranty deed in the closing package with the title commitment.commitment.

• Please include a copy of any documents referenced in Please include a copy of any documents referenced in the commitment such as driveway or well agreements, the commitment such as driveway or well agreements, conditional use permits, easements, and conditional use permits, easements, and encroachments. Please be pro-active and contact the encroachments. Please be pro-active and contact the UW or Purchasing Help Desks if you are questioning UW or Purchasing Help Desks if you are questioning whether or not a document will be required for whether or not a document will be required for Purchasing or Trailing Docs.Purchasing or Trailing Docs.

Page 13: Purchasing Hints and Tips

MortgageMortgage• Please include all pages of the mortgage and Please include all pages of the mortgage and

provide a signed certified copy. This means the provide a signed certified copy. This means the mortgage must be stamped as certified and also mortgage must be stamped as certified and also signed by the person who is certifying the signed by the person who is certifying the document.document.

• The notary section must include the City, State, The notary section must include the City, State, date of acknowledgement, and signature of the date of acknowledgement, and signature of the notary.notary.

• The preamble must include the marital status The preamble must include the marital status (joint tenants is not sufficient).(joint tenants is not sufficient).

• Names must be typed consistently between the Names must be typed consistently between the preamble, signature lines, and notary section.preamble, signature lines, and notary section.

• Names must be typed exactly as they appear on Names must be typed exactly as they appear on the note.the note.

Page 14: Purchasing Hints and Tips

Mortgage RidersMortgage Riders• One or more of the riders One or more of the riders

listed may be required listed may be required based on the DU findings, based on the DU findings, and these may not always be and these may not always be listed as UW At Close listed as UW At Close condition. condition.

• Please contact UW prior to Please contact UW prior to close if you are questioning close if you are questioning the need for a rider. the need for a rider.

• The mortgage must have the The mortgage must have the applicable box checked if applicable box checked if any rider is attached.any rider is attached.

• The borrower’s name must The borrower’s name must be typed below the be typed below the signature line on all riders, signature line on all riders, and it must be typed as it and it must be typed as it appears on the mortgage.appears on the mortgage.

• Second HomeSecond Home• Investment Property (1-4 Investment Property (1-4

Family & Assignment of Family & Assignment of Rents)Rents)

• Primary Residence 2-4 Primary Residence 2-4 Family (1-4 Family & Family (1-4 Family & Assignment of Rents)Assignment of Rents)

• Condominium (Association Condominium (Association name must be included)name must be included)

• Planned Unit Development Planned Unit Development – PUD (Project name must – PUD (Project name must be included)be included)

• Adjustable Rate Mortgage Adjustable Rate Mortgage - ARM- ARM

Page 15: Purchasing Hints and Tips

ModificationsModifications

• These must be completed on Fannie Mae form These must be completed on Fannie Mae form 3179 for a fixed rate and form 3161 for an ARM 3179 for a fixed rate and form 3161 for an ARM product.product.

• The original recorded mortgage must be The original recorded mortgage must be included in the closing package, as well as any included in the closing package, as well as any other modifications done prior to the final other modifications done prior to the final modification.modification.

• The modification must include the document The modification must include the document number and date of the original mortgage.number and date of the original mortgage.

• The borrower’s name must appear as it did on The borrower’s name must appear as it did on the original mortgage.the original mortgage.

• The modification must be signed by lender and The modification must be signed by lender and include their typed name, title, and the date.include their typed name, title, and the date.

Page 16: Purchasing Hints and Tips

Hazard InsuranceHazard Insurance• Every closing package must contain a binder, policy, or Every closing package must contain a binder, policy, or

declarations page for the subject property that includes declarations page for the subject property that includes the following criteria:the following criteria:– Mortgagee can appear as your bank name OR Merchants Mortgagee can appear as your bank name OR Merchants

Bank with ISAOA language included.Bank with ISAOA language included.– The address of the subject property must exactly match how it The address of the subject property must exactly match how it

appears on the note (including the placement of any appears on the note (including the placement of any directionals). Watch UNIT #s.directionals). Watch UNIT #s.

– The effective date must be on or before the closing date. It is The effective date must be on or before the closing date. It is not acceptable to send the binder for the upcoming policy not acceptable to send the binder for the upcoming policy term. We also cannot use the “change effective date” if there term. We also cannot use the “change effective date” if there is one – we only consider the effective date of the policy.is one – we only consider the effective date of the policy.

– All purchase transactions must show the first year’s premium All purchase transactions must show the first year’s premium either Paid At Closing on the HUD or a paid receipt must be either Paid At Closing on the HUD or a paid receipt must be provided. This is required regardless of the borrower’s choice provided. This is required regardless of the borrower’s choice to escrow.to escrow.

– The premium must be included on the hazard insurance The premium must be included on the hazard insurance regardless of the borrower’s choice to escrow.regardless of the borrower’s choice to escrow.

– Coverage requirements follow investor guidelines.Coverage requirements follow investor guidelines.

Page 17: Purchasing Hints and Tips

HUD Settlement Statement HUD Settlement Statement and Initial Escrow and Initial Escrow

DisclosureDisclosure• All pages of the HUD must be All pages of the HUD must be

provided.provided.• The settlement and disbursement The settlement and disbursement

dates must be completed and correct.dates must be completed and correct.• The monthly escrow payments (lines The monthly escrow payments (lines

1001-1004) must match the monthly 1001-1004) must match the monthly escrow payment on the Initial Escrow.escrow payment on the Initial Escrow.

• The opening escrow amount collected The opening escrow amount collected on the HUD must match the opening on the HUD must match the opening escrow balance on the Initial Escrow.escrow balance on the Initial Escrow.

• When a principal curtailment is done When a principal curtailment is done it must appear on the HUD and a it must appear on the HUD and a check for the curtailment amount check for the curtailment amount must be sent along with your original must be sent along with your original note and allonge.note and allonge.

• Files with a LTV greater than 80% Files with a LTV greater than 80% must escrow regardless of the product must escrow regardless of the product type.type.

• Property taxes or hazard insurance Property taxes or hazard insurance premiums that are due within 6 weeks premiums that are due within 6 weeks of closing must be paid at closing if of closing must be paid at closing if the borrower is choosing to escrow.the borrower is choosing to escrow.

• If the borrower is waiving escrows for If the borrower is waiving escrows for either hazard insurance, property either hazard insurance, property taxes, or both the closing package taxes, or both the closing package must include a signed original Escrow must include a signed original Escrow Waiver form.Waiver form.

• The amount used for property The amount used for property taxes and hazard insurance must taxes and hazard insurance must be supported by documentation be supported by documentation in the closing package. For in the closing package. For hazard insurance, the amount hazard insurance, the amount used should always match the used should always match the binder/policy provided. For binder/policy provided. For property taxes, the amount used property taxes, the amount used must match the title commitment, must match the title commitment, appraisal, or documentation from appraisal, or documentation from the county.the county.

• A construction to permanent loan A construction to permanent loan may not use an estimate for the may not use an estimate for the property taxes (the 1% used by property taxes (the 1% used by UW may not be used for UW may not be used for Purchasing). We do allow you to Purchasing). We do allow you to use the mill rate obtained from use the mill rate obtained from the county times the appraised or the county times the appraised or assessed value in order to assessed value in order to calculate the property tax calculate the property tax amount.amount.

• The Cushion Selected by Servicer The Cushion Selected by Servicer on the Initial Escrow must equal on the Initial Escrow must equal one month, and the escrow one month, and the escrow account balance on the right side account balance on the right side must also go down to the one must also go down to the one month cushion.month cushion.

Page 18: Purchasing Hints and Tips

Authorization for Automatic Authorization for Automatic PaymentsPayments

• Please encourage ACH as an option for your Please encourage ACH as an option for your borrowers. A fully completed form must include borrowers. A fully completed form must include the following:the following:– Loan number, routing number, account number, bank Loan number, routing number, account number, bank

name and address.name and address.– The Payment Amount must equal the P&I plus any The Payment Amount must equal the P&I plus any

applicable escrow amounts, and the Automatic Payment applicable escrow amounts, and the Automatic Payment Amount should be completed with the amount the Amount should be completed with the amount the borrower would like to pay every month.borrower would like to pay every month.

– The Automatic Payment Start Date must be completed, The Automatic Payment Start Date must be completed, and may be anywhere from the 1and may be anywhere from the 1stst through the 15 through the 15thth of of the month. Please note after 8 days the borrower will the month. Please note after 8 days the borrower will receive a late fee reminder, so it is important the receive a late fee reminder, so it is important the borrower is aware of that if choosing the 9borrower is aware of that if choosing the 9thth through through the 15the 15thth of the month. of the month.

Page 19: Purchasing Hints and Tips

First Payment LetterFirst Payment Letter

– Payment information is correct and is Payment information is correct and is broken down accordingly (taxes and broken down accordingly (taxes and insurance must be listed separately).insurance must be listed separately).

– Our bank name must appear as Our bank name must appear as Merchants Bank National Association Merchants Bank National Association and include our address of PO Box 248 and include our address of PO Box 248 Winona, MN 55987.Winona, MN 55987.

– The first payment date must match the The first payment date must match the note.note.

Page 20: Purchasing Hints and Tips

I Received a Notice of I Received a Notice of Suspense… Now What?Suspense… Now What?

• Please call or email the Purchasing Help Desk Please call or email the Purchasing Help Desk with any questions.with any questions.

• Please read the suspense conditions carefully Please read the suspense conditions carefully and upload the applicable documents to the and upload the applicable documents to the Calyx Path file. Submit the conditions within Calyx Path file. Submit the conditions within the system to notify Purchasing.the system to notify Purchasing.

• Review the extension fee start date and Review the extension fee start date and deficiency cure deadline date displayed on the deficiency cure deadline date displayed on the Loan Summary screen.Loan Summary screen.

• Please forward any original documents that Please forward any original documents that have been requested. Please do not forward have been requested. Please do not forward originals if they have not been requested.originals if they have not been requested.

Page 21: Purchasing Hints and Tips

Ready to Fund!Ready to Fund!

• Once all suspense conditions have been Once all suspense conditions have been cleared (or there were no conditions to begin cleared (or there were no conditions to begin with) you will receive a notice that your with) you will receive a notice that your Purchase Advice (PA) is available.Purchase Advice (PA) is available.

• The PA will reflect all fees and credits and The PA will reflect all fees and credits and indicate the final amount and date that you indicate the final amount and date that you will be funded.will be funded.

• Please review your PA as soon as possible so Please review your PA as soon as possible so that any necessary corrections may be that any necessary corrections may be processed prior to us completing the white processed prior to us completing the white sheets.sheets.