Welcome Compliance Processing and File Delivery Dial in number: (209) 647-1000 Participant Access...

WelcomeCompliance Processing and File Delivery

Dial in number: (209) 647-1000Participant Access Code: 965519#

201/06/2015

Homeownership Staff

• Erik Nore, Director of Homeownership• Anita Racicot, Homeownership Specialist• Cynthia Marquez, Compliance Specialist• Shawn Rasmussen, Lending Specialist• Lisa Romero, Lending Specialist• Barbara Tashkandy, Lending Coordinator• Teri Baca, Homeownership Representative• Eunice Duran, Homeownership Representative

301/06/2015

Reservation Process

• Reservation of Funds – Household Size Even though the income may not be counted, loans must

be reserved showing all household members so that the correct household size is referenced on the Mortgage Purchase/Funding Agreements

401/06/2015

Reservation ProcessAll Programs

• Availability of On-Line Reservation System

The MFA On-Line Reservation System is available from 9:00 am – 5:00 pm Monday – Friday (excluding federal or bank holidays) MST

On-line reservation system will not accept reservations before or after the available time.

Be sure to submit and complete the reservation request prior to 5:00 pm

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• Reservation period

Loan must be purchased by Master Servicer no later than 60 days from the loan reservation date

First mortgage loans that are not purchased within the applicable timeframe must be extended or cancelled by the Lender. No exceptions, for any reason will be made to the reservation policies.

601/06/2015

Reservation ProcessFirst Mortgage Loan Products

• Changes between loan programs are not permitted. A loan reservation is for a specific loan program and is

attached to the borrower

A loan reservation cannot be transferred between programs (i.e. $aver to Zero, Zero to Plus, Plus to HERO, etc.)

701/06/2015


• Extension Fees

Lender can request either a 15 day or a 30 day extension for the loan delivery, for a fee:

15 day extension (0.1875% of the loan amount)30 day extension (0.3750% of the loan amount)

Only ONE extension is allowed

Extension fee applies to first mortgage only

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• Extension Fees In the event that a loan is not purchased by the Master

Servicer within 60 days of loan reservation, a 30 day extension will automatically be applied, unless the Lender requests a 15 day extension from MFA prior to the 60 day loan reservation expiration date.

The extension fee may be charged to the borrower

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• Extension Fees

– If loan is not purchased within 75 (15 day extension) or 90 (30 day extension) days of the date of reservation (including extension), loan can still be delivered, but will be purchased from Mortgage Lender on a worst case, Mark-to-Market basis that is determined at the time of purchase.

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Reservation ProcessMortgage$aver Programs

• Targeted Areas

– When reserving property in Targeted Area (Census Tract) the lender is required to contact MFA to obtain the lowest rate in the last 12 months from the reservations date and to receive Targeted Area acquisition cost and income limits.

– Targeted Area Maps can be accessed at housingnm.org/targeted-area-census-tracts

01/06/2015 11

Reservation ProcessMortgage$aver Programs

• Section 184 Indian Housing Loan– When reserving property using a Section 184 loan on

Federally Designated Tribal Land or Fee Simple Land the lender is required to contact MFA to receive Targeted Area acquisition cost and income limits.

– If property is on Fee Simple Land, the borrower will receive the current applicable program interest rate.

– If property is on Federally Designated Tribal Land ONLY, the lender is required to contact MFA to obtain the rate (0.50% below the applicable program interest rate).

01/06/2015 12

MFA Guidelines

• Definition of “Household Income”

– Income that is considered “Household Income” includes:

• All forms of income from the mortgagor (Borrower) or co-mortgagor (Co-Borrower) will be considered as Household Income for the purposes of qualifying for the single-family loan program.

• If the Borrower is taking title as sole and separate, all forms of income from the non-purchasing spouse

01/06/2015 13

MFA Guidelines

• Definition of “Household Income”

– Income that is not considered “Household Income” includes:

• All forms of income earned by a family member or household member that do not have ownership interest in the property and are not liable for the mortgage debt.

01/06/2015 14

MFA Guidelines

• Definition of “Household Income”– Only the borrower or co-borrower’s income will be

included in the income calculation for the Compliance Review

– If the borrower is married, the income of the spouse must be included in the income calculation for Compliance Review

– Income from any other person living in the home (family member, significant other, etc.) will not be included in the income calculation for Compliance Review

01/06/2015 15

MFA Guidelines

• Definition of “Household Income”– However, the definition of “Household Income”

remains “all household members age 18 or over” for the Payment$aver and Helping Hand Programs because of the Federal HOME Guidelines.

01/06/2015 16

MFA Guidelines

• Definition of “Ownership Interest” for the 3-year Requirement– For purposes of documenting the 3-year requirement

(i.e. no ownership interest in a principle residence at any time during the 3 year period prior to the date the mortgage is executed)

01/06/2015 17

MFA Guidelines

• Definition of “Ownership Interest” for the 3-year Requirement– “Ownership Interest” is defined as including the

following:

• A fee simple interest

• A joint tenancy, a tenancy in common or tenancy by the entirety

• The interest of a tenant-shareholder in a cooperative

01/06/2015 18

MFA Guidelines

• Definition of “Ownership Interest” for the 3-year Requirement– “Ownership Interest” is defined as including the

following:

• A life estate

• A land contract (i.e. a contract pursuant to which possession and the benefits/burdens of ownership are transferred, although legal title is not transferred until some later time) and

• An interest held in trust for the mortgagor, whether or not it was created by the mortgagor

01/06/2015 19

MFA Guidelines

• Definition of “Ownership Interest” for the 3-year Requirement– Prior “Ownership Interest” by the spouse of the

borrower is considered prior “Ownership Interest” of the borrower, regardless of when the borrower and spouse were married

01/06/2015 20

MFA Guidelines

• Electronic/Digital Signature Policy– MFA now accepts electronic/digital signatures on all

documents except for the following:

• Income disclosure letter• Any Borrower explanation letter• Lender certification/letter of explanation• YTD Profit and Loss for self-employed borrowers• Rental verification letters from Landlords• Original Note• Original Mortgage• Signature Affidavit

01/06/2015 21

MFA Guidelines

• Tax Returns (For ALL Borrowers on the loan and if applicable Non-Purchasing Spouse)– Three (3) years Tax Returns are not required if

borrower has at least one creditor with a three year credit history on their credit report

– Two (2) years Tax Returns are required for all Self-Employed borrowers, only, unless they do not have a three year credit history, then three years of Tax Returns are required

01/06/2015 22

MFA Guidelines

• Minimum Credit Score of 620– Except for manual underwrite with HFA Preferred

Product which has a minimum of 660• If credit report provides 3 credit scores (tri-merge),

then the middle credit score must be at least 620 for each borrower• If credit report only provides 2 credit scores, the

lowest credit score must be at least 620 for each borrower

01/06/2015 23

MFA Guidelines

• Minimum Credit Score of 620/660– If the credit report only provides 1 credit score that

score must be at least a 620/660 for each borrower

– If either borrower has no credit score, due to insufficient or stale credit, MFA will accept a manually underwritten loan. In addition, the loan must be underwritten to applicable secondary market guidelines

01/06/2015 24

MFA Guidelines

• Minimum Credit Score of 620/660– When reserving a borrower without a credit score, the

system will not allow you to move to the next screen without entering a score. A 620 score must be entered to get to the next page. After the reservation is complete you must call MFA so that the score can be changed and notes added to the reservation screen.

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MFA Guidelines

• Minimum borrower cash contribution

– MFA requires a minimum borrower cash contribution of $500.00, regardless of program type. HERO Program requires a $1,000.00 contribution.

– Funds must be from the borrower and cannot be derived from any type of gift, grant, pro-rated taxes or down payment.

01/06/2015 26

MFA Guidelines

• Minimum borrower cash contribution

– MFA requires the lender to provide proof of borrower’s funds on the Final First Mortgage Application in Section VII and on the Final HUD 1

– If the borrower contributes more than $500 to the transaction (i.e. Earnest Money, POC Appraisal Fee) the borrower can get those funds back at closing

01/06/2015 27

MFA Guidelines

• Use of Mortgage Booster Funds

– May only be used for minimum down payment and allowable closing costs

– MFA will allow a principal reduction of up to $100 if the final Mortgage Booster loan is too high. The principal reduction must be applied to the first mortgage

01/06/2015 28

MFA Guidelines

• Reasons for Sole and Separate– One Spouse of a married couple is not able to enter

into a contract (i.e. not of legal age), the spouse that is able to enter into a contract will be allowed to purchase the home as their Sole and Separate property.

• Proof that spouse is not of legal age must be provided

** All household income needs to be counted toward income eligibility **

01/06/2015 29

MFA Guidelines

• Reasons for Sole and Separate– One spouse of a married couple has insufficient credit

history (no credit score), which does not allow for the married couple to qualify for the mortgage jointly, the spouse with the credit score will be allowed to purchase the home as their Sole and Separate property.

• Proof of no credit history must be provided


01/06/2015 30

MFA Guidelines

• Reasons for Sole and Separate

– One spouse of a married couple does have a Social Security number and the other spouse does not have a Social Security number or has an Individual Tax Identification Number (ITIN), the spouse with the Social Security number will be allowed to purchase the home as their Sole and Separate property.

• Proof of no Social Security number or proof of ITIN must be provided


01/06/2015 31

MFA Guidelines

• Reasons for Sole and Separate– One spouse of a married couple has a poor credit

history (a credit score of less than 620), which does not allow for the married couple to qualify for the mortgage jointly, the spouse with the credit score above 620 will be allowed to purchase the home as their Sole and Separate property, with the following restrictions;

**All household income needs to be counted toward income eligibility **

01/06/2015 32

MFA Guidelines

• Reasons for Sole and Separate A maximum debt-to-income (“DTI”) of 45% for the

purchasing spouse, regardless of the automated underwriting system (“AUS”) approval criteria.

Both spouses need to provide proof that they both qualify for any and all First Time Homebuyer Requirements that might apply, including total household Income and prior homeownership. (First Time Homebuyer Requirements do not apply to the HERO Program)

Proof of poor credit history must be provided

**All household income needs to be counted toward income eligibility **

01/06/2015 33

MFA Guidelines

• Mandatory Homebuyer Counseling

– All MFA Borrowers are required to take pre-purchase homebuyer counseling regardless of program type.

– HERO Program only if the borrower is a first-time homebuyer

Counseling Certificates cannot be older than One (1) Year

01/06/2015 34

MFA Guidelines

• Mandatory Homebuyer Counseling– The pre-purchase homebuyer counseling will be either:

• Face to Face pre-purchase housing counseling provided in either a classroom or one-on-one setting by an MFA approved housing counseling agency

Face to Face counseling must be used for the Payment$aver and Helping Hand Programs (the on-line counseling is not acceptable for these two programs

Borrowers preferring to go to a counselor instead of taking the eHomeAmerica class on-line is also acceptable for the Mortgage$aver, HERO and Mortgage Booster Programs

01/06/2015 35

MFA Guidelines

• Mandatory Homebuyer Counseling– Pre-purchase homebuyer counseling

• eHomeAmerica on-line Housing counseling

Borrowers may take the course married, unmarried or jointly for one fee of $45 paid at the time of registration. When registering type both names so that the certificate of completion will print correctly.

The $45 fee can be reimbursed at closing and included with the closing costs included in the second mortgage loan

01/06/2015 36

MFA Guidelines

• Mandatory Homebuyer Counseling– Pre-purchase homebuyer counseling

• Link to the eHomeAmerica site is on the MFA Home Page

• Be sure to refer all borrowers to the MFA Home Page to ensure MFA is chosen as their administrator.

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HFA Preferred Loan ProgramSpecial Housing Finance Agency Conventional Loan Product

• Definition of “Ownership Interest” for the HFA Preferred Loan Program

– An ownership interest is defined as a borrower whose name appears on the deed to any residential property. Residential properties include single family detached, townhomes, condos, manufactured homes, investment properties and vacation homes.

– MFA requires the borrower to be a first-time homebuyer.

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• Eligible Occupancy for the HFA Preferred Loan Program

– The property must be owner-occupied and the borrower may not have an ownership interest in any other residential dwelling at the time of loan closing.

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• Term Sheet– Posted on the MFA website

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Compliance Guidelines

Questions?

01/06/2015 41

MFA GuidelinesHERO Program

• Eligible Borrower(s)

– The borrower does not have to be a first-time homebuyer (FTHB) under the HERO Program

• Homebuyer Counseling– Required for first-time Homebuyers (FTHB) only

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• Owning Property

– Old Definition: The borrower may not own any other Real Property at the time of closing

– New Definition: The HERO program may only be used to purchase a primary residence and the borrower must occupy the property within 60 days of closing

• Documentation submitted for Compliance Approval regarding ownership of property

– Old Definition: Verification of no other real property is owned by borrower at loan closing

– New Definition: Verification that the property financed will be the borrower’s primary residence

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• Eligible Program Type:

– FHA ONLY

• Eligible Property Type:

– Must be owner-occupied single family residence

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Questions?

01/06/2015 45

Mortgage Booster

• Use with Mortgage$aver OR Mortgage$aver Zero with FHA, Conv, RHS, or HUD Section 184 (not allowed with VA)

• Maximum loan amount of $8,000 (must follow loan guidelines for CLTV)– Use of funds are limited to cover the minimum down

payment and allowable closing costs

• 30 year amortization, 6.00%

01/06/2015 46

Second Mortgage RESPA

• Lender must provide a Truth in Lending (TIL) Statement and Good Faith Estimate (GFE) to the borrower for the Mortgage Booster Program per RESPA Guidelines– Lender must re-disclose for MFA if the loan

amount increases– NOTE: The Payment$aver and Helping Hand

programs are exempt because they are 0.00% non amortizing loans

4701/06/2015

Second Mortgage Allowable Fees

Lender may charge an Origination Fee for Mortgage Booster only of:

$100.00

Recording Fee (DPA Mortgages) Actual Cost

Daily Interest Charges Actual Cost

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Questions?

01/06/2015 49


• Completing the FHA Loan Underwriting and Transmittal Summary when there is a second mortgage

– MFA’s EIN# must be completed – 85-0252748– Check the Government box– Enter 2nd mortgage loan amount– 2nd mortgage is not a gift– If using CHUMS ID # as ZFHA make sure DU Findings

are attached– If not using ZFHA then underwriter must sign

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• Completing the FHA Loan Underwriting and Transmittal Summary when there is premium pricing (Mortgage$aver Plus or HERO)

– MFA’s EIN# must be completed in the Gift section – 85-0252748

– Check the Government box– Enter total “Gift” amount including the cents– If using CHUMS ID # as ZFHA make sure DU Findings

are attached– If not using ZFHA then underwriter must sign

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• Income Calculation

– ALL Household income is considered

• Example: John Doe is purchasing a home and is married. John Doe is taking title as his Sole & Separate property because his wife has bad credit. The wife’s income must be counted toward household income according to MFA Guidelines.

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• Income Calculation

– Common mistake with the current pay stub

• The date that MUST be within 30 days of submitting the package is the pay period paid through date NOT the check date or the pay date.

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Compliance GuidelinesVerification of Employment Income

Monthly gross income includes, but is not limited to:Monthly gross pay(wages, salary, tips, etc.)

Interest and dividends

Overtime SSIPart-time Disability IncomeBonuses Child SupportBusiness Income AlimonyVA Compensation Rental IncomeOther Income

01/06/2015 54


• Compliance File Documentation Requirements

– MFA has revised and simplified the documentation requirements

• One year, most recent Verification of Rent (VOR)

• One month most recent bank statement from each bank account (No VODs). However, VODs or two months of bank statements are required for the Payment$aver and Helping Hand programs.

• NEW Income Disclosure Letter to be signed by all borrowers at application.

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• Loan Break Down Form

– Preliminary Loan Break Down Form to be completed at the time of submitting the Compliance Package (This is an estimate of the down payment and closing costs)

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Payment$aver & Helping HandCompliance Guidelines

• Borrower is not allowed to have more than 6 months income in the bank as cash assets at the time of closing

• If liquid assets exceed $5,000 an asset test is required to be performed per the following example:

– Borrower has $20,000 in liquid assets

• $20,000 × 2% = $400.00• $400.00 ÷ 12 (months) = 33.33

– $33.33 will be added to borrower’s monthly income

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• Face to Face Homebuyer Counseling is required by MFA Approved Housing Counseling Agency

• Non-Profit Agency providing the counseling will provide the lender with the following completed forms:

Completion Certificate Request for Reimbursement

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• HQS (Housing Quality Standards) Inspection is required if home was built prior to 1978 (no matter what type of loan the first mortgage is)

• HQS inspection is required for homes built after 1978 if loan type is Conventional (FNMA), VA or Rural Housing. (Except if home is a new construction or if there is an FHA appraisal)

• List of HQS inspectors available from MFA– HQS Inspector will provide

• Copy of signed inspection indicating if the property failed or passed• Request for Reimbursement(s) (If the property failed need two

separate Reimbursements, 1 for the pass and 1 for the fail)

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• Fund Use Form

– Preliminary Fund Use Form to be completed at the time of submitting the Compliance Package (This is an estimate of the down payment and closing costs)

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• Original completed, signed and dated Certification of Asset Form

• Certification of Status Form (Documentation regarding disability status form signed by doctor) (Required for Helping Hand loans only)

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• Bank Statements– Copies of full 2 months bank statements OR– 1 printout from bank showing average balance over

the last 2 months OR– Written statement from bank that borrower does not

have a 2 month history but has X months history with them and average balance over X months OR

– If borrower does not have a bank account an original signed and notarized statement will be accepted

Note: If a printout is received from the bank in must be stamped and signed or initialed by bank personnel.

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Payment$aver/SmartChoice

• With Mortgage$aver or Mortgage$aver Zero

• Maximum loan amount is 8% of the sales price OR $8,000 which ever is less

• SmartChoice Program – Borrower must be in possession of a Section 8 Housing Voucher. Loan amount is $15,000, no more and no less

• 0% non-amortizing loan due on sale, transfer or refinance

01/06/2015 63

Payment$aver/SmartChoice

• Borrower may finance down payment, temporary buydowns, closing costs (excluding pre-paids)

– Use of funds are limited to cover the down payment and allowable closing costs. Borrower may finance additional down payment if needed to help in qualifying.

• Income limits vary by county and household size

• Face to face Housing Counseling class required by MFA approved Housing Counseling Agency

• Available statewide except in the City Limits of Albuquerque

01/06/2015 64

Helping Hand

• One person in the household meets the ADA definition of disabled

• With Mortgage$aver or Mortgage$aver Zero

• Loan amount is $8,000, no more and no less

• 0% non-amortizing loan due on sale, transfer or refinance

• Available statewide including in the City Limits of Albuquerque

01/06/2015 65

Helping Hand

• Borrower may finance down payment, temporary buydowns, closing costs (including pre-paids)

Use of funds are limited to cover the down payment and allowable closing costs. Borrower may finance additional down payment if needed to help in qualifying.

• Income limits vary by county and household size

• Face to face Housing Counseling class required by MFA approved Housing Counseling Agency (Suggested agency is ILRC/Housing Division)

01/06/2015 66

Compliance File Delivery

• Checklists redesigned and simplified.– Descriptions of the required items relocated to the

Compliance Manual

• Checklists available on MFA website– Mortgage$aver and Mortgage$aver Zero– Mortgage$aver Plus– Mortgage$aver and Mortgage$aver Zero with Booster– Mortgage$aver and Mortgage$aver Zero with Payment$aver or

Helping Hand– HERO

01/06/2015 67

Compliance File Delivery

• Use most current check list and forms from MFA’s web site

• Two hole punch and Accofasten package (no paperclips)

• Do not place in file folder

01/06/2015 68


Review of Compliance

Checklist

01/06/2015 69

Compliance File Review

• Compliance review time is:– Three (3) business days after receipt of file

• Clearing suspense conditions:– Please send all suspense conditions at once – this will

speed up the process.– Policy for clearing conditions on loans with less than 5

conditions 24 (business) hour turnaround time. Files with 5 or more conditions 48 (business) hour turnaround time.

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Questions?

01/06/2015 71

DPA Funding Process

• Per HUD’s Directive, MFA must fund DPA directly to the title company

– DPA must be Compliance Approved prior to MFA sending the wire to the title company

01/06/2015 72

DPA Funding Process

• Lender must provide to MFA 24 hours prior to closing

Wire Request Form (Current form from MFA website)

Wire Instructions to the Title Company

Copy of the FINAL pre-close HUD 1

Need two (2) HUDs, if borrower obtaining a Mortgage Booster, Payment$aver, Helping Hand along with the MFA First Mortgage Loan

01/06/2015 73

DPA Funding Process

– Copy of unsigned documents for funds being wired to title company

Note andMortgage

– E-mail Wire Request and Attachments to [email protected]

01/06/2015 74

DPA Funding Process

• MFA prepares wire requests once a day

– Cut off time to receive wire requests/corrections is 10:00 am for wire to be sent out same day

– Wires will be sent out by 3:00 pm to arrive at the title company by 5:00 pm same day

– If property is a HUD or Bank owned property the funds need to be at title at the time of signing, be sure to request the funds to be sent to title the day before closing.

01/06/2015 75

DPA Funding Process

• Mortgage$aver Plus DPA– MFA will wire 3.50% of final loan amount (must be entire 3.50%

including cents)

• HERO DPA– MFA will wire 3.00% of final loan amount (must be entire 3.00%

including cents)

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Thank you from all of us at the MFA for your participation in

our programs

Welcome Compliance Processing and File Delivery Dial in number: (209) 647-1000 Participant Access...

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Transcript of Welcome Compliance Processing and File Delivery Dial in number: (209) 647-1000 Participant Access...