Conforming Expanded Criteria
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Transcript of Conforming Expanded Criteria
Conforming Expanded CriteriaDecember 3, 2007
Give the gift of home ownership with this dynamic product offering
December 3, 2007 PAGE 2
Conforming Expanded Criteria
What Is Conforming Expanded Criteria
The Conforming Expanded Criteria program provides qualified borrowers with good credit histories a cost-effective loan that enables them to choose alternative documentation options including: Reduced, No Ratio, and No Income/No Assets (NINA)—allowing you to help borrowers who are self-employed or have difficult-to-document income/assets, by offering loans that require minimal documentation which may help to expedite the loan closing.
More borrowers qualify for conforming programs
Agency-based pricing
Diverse documentation options
December 3, 2007 PAGE 3
Conforming Expanded Criteria
Current Market
The market continues to slow down
Availability of products in the marketplace continues to shrink, challenging lenders to find alternative financing solutions
Non-Agency products continue to experience liquidity issues
Purchases, refinances, and new home construction are declining
Overall home values are flat or depreciating throughout the country
There is a shift in the market to Agency and Government products
Agency and Government products may offer a better alternative to increase originations, lessen risk, and grow market share in this turbulent environment
December 3, 2007 PAGE 4
Conforming Expanded Criteria
Opportunity
There are still borrowers who
Are self-employed, salaried, or commissioned
Have passive or unearned income, such as income from a retirement plan, child support, trust, rental, etc.
Have difficult to document income sources
Have complex assets
Have good credit histories
Can document their income and assets, but prefer not to
December 3, 2007 PAGE 5
Conforming Expanded Criteria
Solution
Provide qualified borrowers with a conforming loan program that allows flexible income and asset documentation, by offering
SIVA, No Ratio, and NINA documentation types
Conventional financing option for borrowers with strong credit histories
More favorable rates associated with conventional financing
Up to 90% LTV (SIVA documentation only)
Purchase, rate/term, and cash-out refinances
1-4 unit primary residences, 1-unit second homes, and 1-4 unit investment properties allowed
Current offering adjustable-rate mortgages (ARMs)
Interest Only option (SIVA documentation only)
Up to 6% interested party contributions
Non-occupant co-borrower income allowed
December 3, 2007 PAGE 6
Conforming Expanded Criteria
Borrower Scenario #1
The owner of a successful dry cleaning business would like a $50,000 cash-out refinance to remodel his kitchen. His home is worth $325,000 and he owes $280,000. He has a 690 credit score and his credit report reflects a 1x30 mortgage late 10 months ago. He inherited the business from his parents and owns the building where it is located. He is able to verify his employment and assets, but prefers to state his income.
The SIVA documentation option is a great solution for borrowers whose primary source of income is difficult to verify. The primary source of income must be verified, while the amount of income, although disclosed, is not verified.
The presented scenarios are only hypothetical examples of how promoted loan programs might be useful. For illustration purposes only. All borrowers must meet loan program guidelines..
December 3, 2007 PAGE 7
Conforming Expanded Criteria
SIVA Documentation
Employment: stated and verified
Income: stated and not verified
Assets: stated and verified
Target audience: salaried, commissioned, self-employed, passive income borrowers
1-4 units owner-occupied, 1-unit second homes, and 1-4 unit investment properties
Purchase, rate/term, and cash-out refinance
Fixed period ARMs (currently 7/1 or 10/1)with an Interest Only option
Temporary buydowns allowed (owner-occupied only)
December 3, 2007 PAGE 8
Conforming Expanded Criteria
SIVA Documentation
Maximum LTV: 90% on purchase, rate/term and cash-out refinanceInstitutional secondary financing allowedMaximum 80% LTV on owner-occupied 3-4 units
Maximum DTI: 38% Higher DTIs may be approved through Investor AUS
Minimum credit score640 for purchase and rate/term at 75% LTV and 660 for 90% LTV660 for cash-out at 75% LTV and 680 for 90% LTV
3-month reserves required on owner-occupied properties6 months reserves required on second homes and investment properties
Mortgage lates1x30 in last 12 months0x60 in last 24 months
Bankruptcy, foreclosure, deed-in-lieu, and short sale: 48 months or greater Interested party contributions up to 6%
Second homes and investment properties with LTVs > 80% allow for a maximum 3%
December 3, 2007 PAGE 9
Conforming Expanded Criteria
Borrower Scenario #2
After four years of retirement, a couple is looking to purchase a second home to be near their grandchildren. Their monthly income comes from a variety of sources including his pension plan, their combined Social Security benefits, dividend income, and rental income on a 2-unit duplex they own free-and-clear. In addition, the couple has no mortgage on their primary residence. They have excellent credit scores (his: 720 and hers: 700) and are receiving 3% from the property seller to be used towards closing costs. They are purchasing a $175,000 condominium and putting 20% down to avoid paying mortgage insurance.
The No Ratio documentation option is an attractive option for this couple. With excellent credit and no mortgage delinquencies, borrowers with multiple income sources and complicated assets can qualify for a expedited loan process.
The presented scenarios are only hypothetical examples of how promoted loan programs might be useful. For illustration purposes only. All borrowers must meet loan program guidelines.
.
December 3, 2007 PAGE 10
Conforming Expanded Criteria
No Ratio Documentation
Employment: stated and verified
Income: not stated or verified
Assets: stated and verified
Target audience: salaried, commissioned, self-employed, passive income borrowers
1-4 units owner-occupied, 1-unit second homes, and 1-4 unit investment properties
Purchase, rate/term, and cash-out refinance
Fixed period ARMs (currently 7/1 or 10/1)
Secondary financing not allowed
Temporary buydowns not allowed
December 3, 2007 PAGE 11
Conforming Expanded Criteria
No Ratio Documentation
Maximum LTV: 90% on purchase, rate/term, and cash-out refinanceMaximum 80% LTV on owner-occupied 3-4 units
Maximum DTI: not calculated
Minimum credit score640 for purchase and rate/term at 75% LTV and 660 for 90% LTV
660 for cash-out at 75% LTV and 680 for 90% LTV
3-month reserves required on owner occupied properties6 months reserves required on second homes and investment properties
Mortgage lates0x30 in last 12 months
0x60 in last 24 months
Bankruptcy, foreclosure, deed-in-lieu, and short sale: seven years
Interested party contributions up to 6%Second homes and investment properties with LTVs > 80% allow for a maximum 3%
December 3, 2007 PAGE 12
Conforming Expanded Criteria
Borrower Scenario #3
A husband and wife are both police officers and provide part-time security on their days off and weekends. They have more than five years on the police force and their private security business just passed its three year anniversary. The couple is hoping to start a family and has made an offer on a larger home and have just put their condominium on the market. Both borrowers have good credit, two years remaining on an auto loan, and some credit card debt.
The NINA documentation option is a great solution for these law enforcement professionals. Their employment can easily be stated and verified, but they prefer to not state their income or assets.
December 3, 2007 PAGE 13
Conforming Expanded Criteria
NINA Documentation
Employment: stated and verified
Income: not stated or verified
Assets: not stated or verified
Target audience: salaried and self-employed borrowers
1-4 unit owner-occupied, 1-unit second homes, and 1-4 unit investment properties
Fixed period ARMs (currently 7/1 or 10/1)
Secondary financing not allowed
Temporary buydowns not allowed
December 3, 2007 PAGE 14
Conforming Expanded Criteria
NINA Documentation
Maximum LTV: 90% purchase and rate/term refinance75% LTV on cash-out refinance
Maximum DTI: not calculated
Minimum credit score680 for purchase and rate/term at 75% LTV and 700 for 90% LTV
700 for cash-out at 75% LTV and 90% LTV not applicable
Reserves: Not applicable
Mortgage lates0x30 in last 12 months
0x60 in last 24 months
Bankruptcy, foreclosure, deed-in-lieu, and short sale: seven years
Interested party contributions up to 6%Second homes and investment properties with LTVs > 80% allow for a maximum 3%
December 3, 2007 PAGE 15
Conforming Expanded Criteria
Loan Limits
$801,950 4-units
$645,300 3-units
$533,850 2-units
$417,000 1-unit
Loan LimitsProperty Type
December 3, 2007 PAGE 16
Conforming Expanded Criteria
Resources
Visit our website at http://www.ahedirect.comASAP Pricer
ASAP Pipeline- View loans - Lock requests- View conditions - View reports
Ratesheets & Forms
Contact Sales staff
December 3, 2007 PAGE 17
Conforming Expanded Criteria
For More Information
Contact your Account Executive
or call our National Headquarters at
877-945-9500
American Home Equity Corp2677 N. Main Street, Suite 225
Santa Ana, CA 92705
December 3, 2007 PAGE 18
Conforming Expanded Criteria
American Home Equity Corp is an Equal Housing Lenders. © 2008 American Home Equity Corp (“AHEC”). AHEC is licensed by the California Department of Real Estate.
Provided to mortgage professionals only and not intended or authorized for public distribution.