Purchase Clearing

1. CBCMA Training Series #4: Purchase Clearing

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. Purchase Clearing

16. • CBC Mortgage Agency’s Due Diligence Partner completes an initial review of the loan from the initial package that the correspondent uploads. • It is critical that you use the Stacking Order document available on our website to organize your documents BEFORE uploading. • This will improve the indexing results and produce fewer repetitious conditions for documentation that may have already been included in the initial upload, but are indexed incorrectly due to not following the stacking order. Initial Upload Instructions

17. Stacking Order • CBC Mortgage Agency provides a worksheet outlining the stacking order. • It is strongly recommended that you utilize this document in your uploading process. • If you follow our specific stacking order, then your review times will decrease, along with your turn time to purchase.

18. Make sure you upload these commonly missed files to avoid added conditions. Credit Package • Soft pull credit report within 10 days of close. • Case Query to show UFMIP is paid. • Appraisal logging. • Both the 1st and 2nd Mortgage 1003s. Closing Package • MRI FOL. • First Note and Deed of Trust/Mortgage. • Second Note and Deed of Trust/Mortgage. Commonly Missed Documents

19. DON’T FORGET … • … Soft pull credit report within 10 days of close (or, alternatively, provide Evidence of Credit Monitoring). • … the MRI Funding Obligation Letter (FOL). • … a copy of the second Note and Deed of Trust/Mortgage (the Soft Second and Amortized Seconds). • … an executed copy of the assignment of a second Deed of Trust/Mortgage or evidence of second Deed of Trust/Mortgage MIN transfer in MERS. Commonly Missed Documents: Further Clarification

20. • Upload a closed loan through the ChenoaFund.org portal. • Do not upload any documents until the file has been closed. Upload Closed Loan

21. Follow these steps when logging in for the first time. • Enter your work email address and click reset. • You should receive an email in your inbox. • Follow the steps in the email to set up your permanent password. Enter Your Login Credentials

22. Select the Upload Menu. Uploading Closed Loan Documents

23. The only option in the dropdown is Chenoa Fund. Click on Dropdown

24. • After you select Chenoa Fund as the lender, a popup will appear. • Drag and drop files for upload to be reviewed. • CBC Mortgage Agency requires specific naming conventions. • Please refer to the following few slides for more details on these naming conventions. Drag and Drop Files to Upload 1

25. Supported File Formats • The best file format is PDF, but other files must be in one of the following formats: • BMP, DOC, DOCX, GIF, HTM, HTML, JPEG, JPG, MSG, PDF, PJPG, PNG, TIF, TIFF, TXT XLS, XLSX, XML, XPS • Files should not be password protected or encrypted. • Loan image must be uploaded with Seller Loan Number as the leading characters of the file name. • The Seller Loan Number must be the FIRST LIEN loan number for all uploads. Naming Convention Standards

26. For this example, follow this format to name a loan document. 1. Start with the Seller, or your, loan number. 2. Underscore. 3. Borrower’s last name. 4. Underscore. 5. Document type. Example: 312015_Smith_Credit File.pdf Note: 50 MB maximum PER upload. If you have a file near the 50 MB limit, split the file into two uploads. Loan Documents: Required File Naming Convention

27. • The review can take up to 5 business days, but sometimes takes less time. • A notification email can be sent once the review has been completed. If you are not receiving these notification emails, please reach out to info@chenoafund.org. Investor (Chenoa Fund Conditions)

28. Once a file has been reviewed, log back in through the same ChenoaFund.org portal. Log Back In

29. Searching for an Uploaded Loan Search for the loan using either … • … the seller loan number. • … CBCMA’s loan number.

30. Example of Loan Search Ensure you have the correct loan by reviewing the information found beneath the black boxes in the picture on the right.

31. Uploading Documents to Clear Conditions • You will receive a list of any outstanding conditions that need to be cleared. • Clear conditions by uploading the needed documents. • You can accomplish this by clicking on the link labelled “Upload Files To Clear.” • You will be presented with a popup where you can drag and drop the file. • You can also upload conditions here.

32. • Drag and drop conditions to be reviewed. • Reminder: Chenoa Fund requires a specific naming convention (see next slide). Drag and Drop Files to Upload

33. For this example, follow this format to name a trailing document. 1. Start with the Seller, or your, loan number. 2. Underscore. 3. Borrower’s last name. 4. Underscore. 5. TDOC. 6. Underscore. 7. Document type. Example: 312015_Smith_TDOC_Appraisal.pdf Note: 50 MB maximum PER upload. If you have a file near the 50 MB limit, split the file into two uploads. Trailing Docs (TDOC): Required File Naming Convention

34. Uploaded Documents Added to List Uploaded documents will be added to the bottom of the list. Do not send documents via email. Each document will include date and time stamp. • The condition will be uploaded as a TDOC PDF.

35. • If you would like to dispute a condition, we do offer an escalation log. • Keep in mind that our Due Diligence Provider conditions each loan; a Purchase Clearing Specialist is assigned to each loan but is not responsible for the initial upload review nor conditioning the file. • Use the Escalation log if… • … the condition is unclear and requires clarification. • … you disagree with the validity of the condition and wish to explain why. Escalation Log / Dispute a condition

36. How to Escalate a Condition Click on the Escalation Log.

37. Deficiency Menu Click on deficiency.

38. List of Conditions • Select the condition you’re hoping to escalate. 1

39. Escalation Description PLEASE REMEMBER to type your summary in the Escalation Description box and then select Add New Escalation. (See Screenshot). • An escalation can take up to 24 hours. • Once the escalation has been reviewed, you will receive an email notification. • Come back to the escalation log to see reviewer’s response.

40. View Auditor’s Response • On this screen, view the auditor’s response regarding the outstanding conditions. • The auditor’s response will explain whether the condition has been waived, or if it remains outstanding.

41. Further Steps • If the response from our due diligence review team is unclear, or if further escalation is needed: • Please contact the assigned Purchase Clearing Specialist for further assistance. Note: You may receive a faster response by following the escalation process as previously outlined (usually within 24 hours), as opposed to waiting for the assigned Purchase Clearing Specialist to respond to your email.

42. Specialists • To check to see who your Purchase Clearing Specialist is, go to the screen with the conditions list. You will see the Specialist listed for that particular file.

View Video