Locks, Registrations, and Closing Docs

1. CBCMA Training Series #2: Locks, Registrations, and Closing Documents

2. Chenoa Fund by CBC Mortgage Agency: General Overview • The Chenoa Fund offers three different programs with 1-2 products each. • The Rate Advantage and DPA Edge Programs are issued in conjunction with FHA insured loan. • The Conventional 97 and Conventional Products are issued in conjunction with conventional loans. • Only the DPA Edge program includes a forgivable second option. • CBCMA offers the Rate Advantage Product to provide a lower interest rate for the borrower, and to provide a better YSP for the lender.

3. Chenoa Fund Overview Continued • The programs are allowed in all states except New York. • All programs offer 3.5% for the second mortgage. • Up-front fees are limited only by the 3% points and fees rule. • The first mortgage must be sold to CBC Mortgage Agency. • Your underwriter underwrites the file. • Approved property types include SFR, PUD, Townhome, Condo, Attached, Detached, and Modular Homes. • No Manufactured Homes. • HPML (Rebuttable Presumption) is allowed, but no High Cost Mortgages.

4. PRODUCT: Rate Advantage

5. • Qualifying Income: < or = 115% AMI; Household Income Worksheets are no longer required. • Requires monthly payment. • FICO Scores 640 minimum. • 10-Year term 8% Interest rate. • Non-occupant co-borrowers are not allowed. • No concurrent homeownership. • Max DTI 50% • Manual underwrites are not allowed. Note: Look to this one first to benefit you and your client. Rate Advantage Program

6. PRODUCTS: DPA EDGE Soft Second Repayable Second

7. • Only Qualifying Income used for AMI calculations. • FICO Scores minimum of 620. • Non-occupant co-borrowers are allowed. • DTI per AUS or FHA manual underwriting guides. Advantages with the DPA Edge Program DPA Edge FHA Overlays • Only offered for single-family and two unit properties. • Three to four unit properties not allowed.

8. • Qualifying Income: < or = 115% AMI. • No monthly payment. • FICO Scores 620 minimum. • 0% Interest Rate and 30-year Term. • Forgiven after 36 consecutive on-time payments on FHA 1st Mortgage. 1. No Payment 2. 0% Interest Rate and 30-year Term 3. Forgiven after 36 consecutive on-time payments on FHA 1st Mortgage 4. Qualifying Income <= 115% AMI 5. FICO Scores down to 620 6. Section H of 1003 must indicate down payment borrowed 7. Requires Funding Obligation Letter Issued prior to closing-only CBCMA signature Chenoa Fund Soft SecondChenoa Fund Soft Second

9. • Qualifying Income: > 115% AMI. • Requires monthly payment. • FICO Scores 620 minimum. • 10-Year term 0% interest rate. • 30-Year term 5% interest rate. Chenoa Fund Repayable Second

10. 97% LTV Conventional Mortgage Financing and 97% LTV Conventional Program

11. Note: In order to offer conventional products, you must be FNMA approved.

12. Conventional 97 Product 1. No borrower investment required. 2. Single family only. 3. No income limits. 4. Purchase only. 5. All borrowers must have a minimum FICO score of 640. 6. 30-year Fixed Rate Mortgage. 7. Second lien is a 10-year Fixed Rate Mortgage with an interest rate 2% higher than the first mortgage. 8. MI Coverage 35%. 9. DU Only – to 97. 10. Concurrent Homeownership Allowed, but at least one borrower must be first-time homebuyer. 11. No Homebuyer Education class required.

13. 1. No borrower investment required. 2. Single family only. 3. No income limits in low-income census tracts. 4. 100% of area median income (AMI) in all other census tracts. 5. Purchase Only. 6. All borrowers must have a minimum FICO score of 640. 7. 30-year Fixed Rate Mortgage. 8. Second lien is a 10-year Fixed Rate Mortgage with an interest rate 2% higher than the first mortgage. 9. Mortgage Insurance (MI) – 25% MI coverage for LTVs 90.01-97%; Reduced MI available for standard LLPA. 10. DU Only – to 97. 11. Concurrent Homeownership Allowed. 12. Requires borrower to take Homebuyer Education class. Conventional Product

14. Rate Advantage a.) CBCMA offers 3.5% to cover down payment. b.) 2nd mortgage repayable. c.) 8% with 10 year term. d.) 640 minimum FICO score. e.) Qualifying Income less than or equal to 115% AMI. f.) Max DTI 50%. DPA Edge: Repayable Second a.) CBCMA offers 3.5% to cover down payment. b.) 2nd mortgage repayable. c.) 0% interest with 10 year term or 5% interest with 30 year term. d.) 620 minimum FICO score. e.) Qualifying Income greater than 115% AMI. f.) DTI restrictions per AUS guidelines. DPA Edge: Soft Second a.) CBCMA offers 3.5% to cover down payment. b.) 2nd mortgage forgivable. c.) Forgivable after 36 consecutive on-time payments on the 1st mortgage. d.) 620 minimum FICO score. e.) Qualifying Income less than or equal to 115% AMI. f.) DTI restrictions per AUS guidelines. Conventional 97 a.) CBCMA offers 3% to cover down payment, 0.5% to cover closing costs. b.) 2nd mortgage repayable. c.) 10 year term, with an interest rate 2% higher than the first mortgage. d.) 640 minimum FICO score. e.) No income limits. f.) DTI restrictions per AUS guidelines. Conventional a.) CBCMA offers 3% to cover down payment, 0.5% to cover closing costs. b.) 2nd mortgage repayable. c.) 10 year term, with an interest rate 2% higher than the first mortgage. d.) 640 minimum FICO score. e.) No income limits in low-income census tracts; 100% AMI in all other income tracts. f.) DTI restrictions per AUS guidelines. Quick Comparison Matrix: All Products

15. • Go to the HUD Area Median Income Site: https://www.huduser.gov/po rtal/datasets/il.html • Select the most recent fiscal year. Calculating Area Median Income

16. • Select the state. • Select the county. • Click “View County Calculations.” Note: This is a third party site. CBCMA State Restrictions still apply, even if you see the option here. Calculating Area Median Income

17. Calculating Area Median Income: Primary Method • For families with a size of 1-4, you’ll want to pull the number from the “Median Family Income” column. This is outlined in red. • You determine the AMI by multiplying the Median Family Income by 115%. Example: $69,100.00 x 115% = $79,465.00

18. Calculating Area Median Income: Alternative Method There is an alternative calculation method allowed within the UW comments on the 1008. For families with a size greater than 4 (5 and up), use this method. • First, locate the appropriate family size underneath the “Persons in Family” column, in the “Very Low (50%) Income Limits” row. • Find the appropriate income limit, and then multiply that number by two. • Then, multiply that number by 115%. Example, using a family of 6: $40,100 x 2 = $80,200 X 115% = $92,230

19. Pre-Registration: The 1003

20. Both the First and Second Mortgage require a full set of TRID compliant disclosures, which should include the … • 1003 • LE • Initial CD • Final CD For a comprehensive list of all the documents we require the borrower to sign, please refer to our Program Guidelines, which can be found at ChenoaFund.org. 1003: Important To Remember

21. Image: List secondary financing as follows on the 1003. Secondary Financing on 1003 (1st Mortgage)

22. Image: Where to disclose the DPA. Declarations Page of 1003 (1st Mortgage)

23. Reflecting Secondary Financing in DU (1st Mortgage) Page 2-Types, Terms, & Property Page 7-Transaction Details

24. Reflecting Secondary Financing in DU (1st Mortgage) Please use Special Feature Code 118 when running your conventional loans through Desktop Underwriter.

25. Image: You will see this screen if you are using Secondary Financing LP system. Secondary Financing LP (1st Mortgage)

26. Image: The DPA must be listed as “CBC Mortgage Agency 2nd Lien” under section L04 or under Other Credits. 1st Lien Closing Disclosure (1st Mortgage)

27. Important Reminder • You must deliver disclosures to borrower following the TRID guidelines. • The LE must be mail stamped or signed by borrower within 3 days of the 1003. • Digital signatures are acceptable.

28. Registering and Locking Loans Through the ChenoaFund.org Portal

29. When registering a Chenoa Fund loan, or obtaining any relevant closing documents, be sure to use the ChenoaFund.org portal in addition to your usual process. • First, confirm with your Lock Desk that your email address has been granted access. • Select “Client Portal Login” at the top center of the webpage. Go to ChenoaFund.org

30. When you go to the ChenoaFund.org portal for the first time, you will need to retrieve your password. • Enter your work email address, then click reset. • When you receive the appropriate email, follow the instructions to set up your permanent password. Note: If your Lock Desk has not confirmed that your email address has been granted access, then you will not be able to follow this process. Enter Your Login Credentials

31. Select ‘Loan Registration/Lock/Pricing’ from the side bar menu. Note: All interactions with open loans will take place in this section. Where to Begin Registrations

32. ‘Global Loan Status’ will display a list of all the loans that you have previously locked and registered. Note: You can Search loans by the borrower’s loan number or last name. When adding a new loan, select ‘Add New Loan’ from the left side bar menu. Global Loan Status Homepage

33. When adding a new loan into the system, follow the below steps. • ‘Select ‘Choose File’ (Image: Indicator 1) • Locate the Fannie Mae 3.2 file you wish to upload. • Select ‘Upload’ (Image: Indicator 2) • Don’t forget to complete any required fields. Anything marked with a red asterisk should be completed. (Image: Indicator 3) Our system will extract information so CBCMA’s registration team can perform the registration process on your behalf. Adding New Loan

34. 1. When adding a new loan into the system, upload a 3.2 file. Do not hand-enter information in the data fields until after you’ve uploaded. 2. The data fields above the horizontal black line are for the First Mortgage registration. 3. The data fields below said black line are for Secondary Financing. 4. You can register and lock the first mortgage without completing Secondary Financing information, but the file cannot be approved until both sections are completed. 5. All required fields regarding the Secondary Financing must be filled out even if you will be producing your own LEs. More Details: Uploading a Fannie Mae 3.2 File

35. Select the correct program type you wish to utilize. • Conventional 97 • Home Ready 97 • DPA Edge • DPA High Balance • DPA Rate Advantage Program Note: Each program has its own DTI or credit score requirements. Select the Correct Program

36. Select the DPA type: • Second 30 Year Amoritized • Second 10 Year No Interest • Second 10 Year Rate Advantage Select the Correct DPA Select the DPA type: • Second 30 Year Amoritized • Second 10 Year No Interest • Second 10 Year Rate Advantage Select the Correct DPA Note: Make sure you know the guidelines for each individual program.

37. • This example registration screen information has been extracted from a Fannie Mae 3.2 file. • Notice that fields such as Property Information and Loan Information have been automatically filled. • To calculate the base loan amount and the DPA amount, place your curser in the ‘Purchase price’ field and press Tab. The fields will auto populate. Calculate the Base Loan and DPA Amount

38. • The black line near the middle of the page separates the first and second mortgage information. • In order to secure an approval, you must complete all required data fields in both sections. • To register the loan, complete all asterisked (*) items above the black line (arrow 1) and then select the ’Price’ button. Lock the First Mortgage

39. The Loan Price Results screen will show you your price. At this point you may: • FLOAT the first mortgage by selecting ‘Register.’ • LOCK the first mortgage by selecting ‘Lock Price.’ • Or you may REJECT the pricing and return to the input screen to select a different rate. Loan Price Results

40. Once you register or lock your loan, click the ‘Print Confirmation’ button to obtain your Registration Confirmation or Lock Confirmation. Print Confirmation

41. • This is a sample Registration/Float Confirmation. • This form of confirmation means that the first mortgage is floating. • If you have a document that looks like this, you will need to come back in and lock the loan at a later date to ensure delivery. Sample Registration Confirmation

42. • This is a sample Lock Confirmation. • This document breaks down when the loan was locked, the lock term, and, most importantly, the lock expiration. • The lock period needs to go through clearing for purchase. NOTE: After printing the Registration or Lock, close the tab, which will return you to the previous screen Sample Lock Confirmation

43. • Once you have registered and/or locked your loan, you cannot make any additional changes to the information in the data entry form above the black line. • To receive an LE, you must complete the asterisked (*) data below the black line. Receive LE

44. For the LE, ensure that the Doc set request field shows ’Upfront.’ Receive LE when Field Shows ‘Upfront’

45. • Check the box by each fee charged for closing the secondary financing. • Also ensure the fee is placed in the appropriate column. Add Fees for Second Mortgage

46. • The Funding Obligation Letter and Loan Estimate can be drawn once the file has been reviewed and approved by CBCMA. • Once the file has been approved, you can pull the lock confirmation and FOL by searching in Global Loan Status and using the links there. How to Obtain Remaining Documents

47. • You can locate your funding obligation letter by clicking the ‘Open Folder’ icon. Make sure the icon is blue first. • If you would like to reprint the confirmation (Lock or Float), click on the ’Padlock’ icon. Funding Obligation Letter

48. The funding obligation letter is required in the Closed Loan package for all programs. • Soft Second • Repayable Second • Rate Advantage • Home Ready 97 • Conventional 97 The letter states… • Where the down payment is coming from • Borrower’s personal information • Property address • Form of Assistance • Rate Advantage (Amortized Second or Rate Advantage Option) Funding Obligation Letter 600 N 100 E Cedar City, UT 84721 Lender: ABC Lender Loan Application Number: 151110001 FHA Case Number 123-230598230-704 Borrower(s): John Doe Jane Doe Purchase Price of Property: $200,000.00 Property Address: 123 Main Street Anywhere, TN 34222 Form of Assistance: Soft Second Amount of Assistance: $7,000.00 Interest Rate (If Applicable): 0 Term (If Applicable): 360 Monthly Payment Amount (If Applicable): $0.00 Commitment Date: 11/10/15 As of the commitment date, CBC Mortgage Agency has incurred a legally enforceable obligation to provide the funds towards the Borrower(s)’ Minimum Required Investment. Lender should deliver funds for the MRI to the closing entity prior to or at the time of loan closing. CBCMA will reimburse Lender from funds legally belonging to CBCMA at or before closing under this obligation once the following conditions are met: • The first mortgage associated with this assistance must be closed and delivered to CBCMA for purchase. • All purchase conditions for the first mortgage associated with this assistance must be satisfied. If these items are not delivered to CBCMA, this obligation will be void. WARNING: Failure of CBCMA to satisfy the obligation may result in a determination that the funds for the Borrower(s)’ MRI were provided by a prohibited source and the first mortgage obligation may not be insurable under the FHA insurance program. Sincerely, MRI Funding Obligation Image: Soft Second FOL

49. Once all fields are complete, you have a choice. • Update/Have Chenoa Fund Draw Docs – CBC will send a copy of the FOL, LE, and confirmation. • Draw My Own Docs – You will be able to pull the LE documents from the website yourself. Note: CBCMA’s Lock Desk closes at 3pm Mountain Time. Return to the loan file to draw the LE.

50. You will receive the following via email. • CBCMA loan Registration Confirmation or a Lock Confirmation*. • Funding Obligation Letter**. • Loan Estimate and initial state disclosures (for Secondary Financing). Reminder: If you want to find these documents again, you can search for the loan in the Global Loan Status and select these icons to view/print them. * – The “Padlock” icon. ** – The “Open Folder” icon. You will then Receive…

51. Document will allow you walk the borrower through the program and teach them about the down payment they are receiving. Allows borrowers to prepare for their second monthly payment and not be blindsided by any misunderstandings. Required Document: Secondary Financing Disclosure Disclosure of Secondary Financing Chenoa Fund I (We) acknowledge that I (we) have applied for TWO loans in order to complete the purchase of a home. BOTH of these loans will be recorded against the title records of my (our) property. I (We) may be required to make regular monthly payments on BOTH loans. If monthly payments are required on the second mortgage, these payments will be made to a DIFFERENT lender than the first mortgage. The first mortgage will be issued by: [Lender] _________________________________________________________ The second mortgage will be issued by: CBC Mortgage Agency The amount of the second mortgage will be ___________________. The secondary mortgage interest rate will be ___________________. The second mortgage for my down payment can be forgiven after I make 36 consecutive (in a row) payments on time on my FIRST MORTGAGE. I (We) will be required to make estimated regular monthly payments on the second mortgage in the amount of ___________________ for a total of ________________ years. I (We) acknowledge that by borrowing our down payment from CBC Mortgage Agency, the first mortgage may be subject to a higher rate of interest than if I/we provide the funds for our own down payment. I (we) understand the above and agree to the terms disclosed. Date Date

52. Requesting Closing Documents from CBCMA’s Portal

53. • Process your loan file as usual. • Submit to your underwriter. • Clear conditions. • You will need to request loan closing documents from CBCMA for secondary financing. • In order to do this, log back into the Chenoa Fund portal and access the Global Loan Status homepage. How to Request These Documents

54. You will find yourself in the Global Loan Status. This is where you will be able to see a list of all the loans that you have previously locked and registered. • Search loans by borrower’s loan number or last name. Global Loan Status Homepage

55. Return to the data fields under the black line. NOTE: If any changes need to be made to information above the black line you will need to email submissions@chenoafund.org to have those documents updated. Completing Fields Below Black Line

56. • Before you complete any data fields, change the Doc Set Request field from Upfront to Final. • This will create some new fields and add additional asterisks on the data fields required to complete the loan documents. • All fields with red asterisk are 100% required. Note: NA, 0, etc, are not acceptable answers. All Asterisk Fields are Required

57. • You can select either “Update/Have Chenoa Fund Draw Docs” or ”Draw My Own Docs.” • The differences will be explained in the following slides. Select How You Would like to Get Docs

58. Have Chenoa Fund Draw Docs • Selecting this option will send a notification to our inbox. • This notification will only be sent one time. • That one time is after you change the Doc Set Request field from Upfront to Final, then click the “Have Chenoa Fund Draw Docs” button. • Any following updates or changes will need to be sent to submissions@chenoafund.org • If CBC prepares the docs, you will be subject to our standard processing times.

59. If you instead click “Draw My Own Docs,” a second screen will open with the package selection options. Note: in order for this to work, you must have pop-ups enabled. Draw My Own Docs

60. Draw My Own Docs • Select the package you are requesting and click “Prepare Package.” • It will take a moment for your package to generate.

61. You can download the CD and Closing package by clicking “Preview Loan PDF.” Preview Loan PDF

62. Make Any Changes You Like • To make changes, you will need to search for the loan again in the Global Loan Status. • There is not a limit to how many times you can generate a package. • There is no waiting in the queue for your docs to be prepared.

63. • CD disclosing for both the first and second Mortgage must follow TRID Guidelines. • Initial CD must be issued 3 days prior to consummation, just like the first mortgage, and is sent with the final CD and closing documents. Closing Disclosure

64. Important CBC Mortgage Agency Contacts General Information info@chenoafund.org Portal Questions submissions@Chenoafund.org Underwriting Questions scenariodesk@chenoafund.org Purchase Clearing Please contact the Purchase Clearing specialist for the specific loan you’re working on. Collateral/Shipping finaldocs@chenoafund.org

65. Conclusion

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