WO90
Wells Fargo
Home Equity
|
|
≤80% CLTV (Loans/Lines) |
> 80% to 100% CLTV (Loans/Lines) |
|
Primary Wage Earner FICO Score |
≥ 620 |
≥ 660** |
|
Employment |
Salaried/Professional ≥ 1 yr. Self-employed ≥ 2 yrs. Same job or line of business2 |
Salaried/Professional ≥1yr. Self-employed ≥ 3 yrs. Same job or line of business2 |
|
Property Type |
SF Det/Att/Condo/PUD Owner Occupied 2-4 Unit |
SF Det/Att, Condo/PUD |
|
CLTV |
Owner Occupied/Second Home Up to 80% CLTV Non-owner Occupied SFR only (No manufactured or mobile) Max 70% CLTV |
Owner Occupied Principal Residence Up to 100% CLTV Second Home Max 90% CLTV |
|
Minimum Loan/Line |
$10,000 |
$10,000 |
|
Maximum Loan/Line |
Owner Occupied Principle Residence: $500,000 (prior approval from Investor) $250,000 (delegated) Second/Vacation Home $250,000 Non owner Occupied: $100,000 |
Owner Occupied Principle Residence: The amount of the loan/line in excess of 80% CLTV is limited to $100,000 1 |
|
Maximum Debt to Income ratio (DTI) |
Mo. Income: < $8000 – 45/50%* Mo. Income: > $8000 – 50/55%* *The higher DTI for the income level is allowed if CLTV < 70% or Primary Income Earner’s loan score > 680 |
Mo. Income: < $8000 – 45/50%* Mo. Income: > $8000 – 50/55%* *The higher DTI for the income level is allowed if Primary Income Earner's loan score > 680 660-679 Mo. Income <$8000 – 45%** 660-679 Mo. Income >$8000 – 50%** |
|
Loan score Requirement for Non-primary wage earners |
All applicants that contribute income must meet a minimum loan score of > 600 |
All applicants that contribute income must meet a minimum loan score of > 600 |
|
Stated Income Doc. Eligible |
Primary Income Earner’s loan score ≥ 700 $100,000 Max Any Home Equity Loans/Lines of Credit < $25,000 ( FICO > 620) |
Primary Income Earner’s loan score ≥ 700 $100,000 Max |
(1) Example of Max Loan Amount over 80%: Sale Price or Value $750,000. 1st mortgage = 400,000. 2nd Equity = $300,000. 80% of value = $600,000, 2nd at 80% is $200,000, max loan amount over 80% is 100,000, total loan amount $300,000.
(2) Same job or line of business: Salaried and Professional Self-Employed borrowers must be in an existing job, business, or same profession for the outlined time frame. For Non-Professional Self- Employed borrowers, the time requirement should be applied to the opening date of the current business of ownership.
Note: All simultaneous close transactions must meet first mortgage salability requirements.
We have reviewed the investor product and verified that they have asterick(s) and they do not specifically go any where or it reference corresponding information within the text box.NP
This product is for eligible simultaneous close Home Equity Loans/Home Equity Lines of Credit transactions to be used for either Purchase Money, Non-Purchase Money or Rate and Term Refinance that will originate simultaneously with the first mortgage or for a stand-alone transaction.
Any exception to the following parameters will require investor approval.
This is a Fixed Rate, fully amortized (or with a balloon) Second Mortgage that may be used for various purposes, including a Home Purchase or Refinance of existing Second Mortgage.
Terms of 5, 7, 10, 15, 20, 25 or 30/5,30/10 and 30/15 are available dependent on dollar amount (see below):
$50,000 - $250,000 – 25 years
$25,000 - $49,999 – 20 years
$10,000 - $24,999 – 15 Years
Fully amortized over term of Loan
30/5, 30/10 and 30/15 terms are amortized over 30 years with a balloon payment due in 5, 10, or 15 years.
Minimum loan amount is $10,000.
Based on full amortization at the note rate.
Calculated on the full commitment amount based on interest-only at the fully indexed rate.
Monthly income < $8,000: 45/50*
Monthly income > $8,000: 50/55*
*The higher DTI for the income level is allowed if CLTV < 70% or if Minimum for Primary Wage Earner is >680
Monthly income < $8,000: 45/50*
Monthly income > $8,000: 50/55*
660-679 - Monthly Income <$8,000: 45%
660-679 - Monthly Income >$8,000: 50%
*The higher DTI for the income level is allowed if Minimum for Primary Wage Earner is > 680:
Unavailable
Walls Street Journal Prime Index
The initial index will be equal to the Index rate in effect on the last day of the month prior to the month in which Home Equity Loan/Line of Credit is closed
The effective date of the WSJP rate change is the 1st day of the following month.
A defined annual rate that is +/- the index to determine the daily periodic rate
This rate remains fixed until the maturity date
18%.
10 years.
Line of Credit available can be drawn at any time (available or remaining balance).
Not available
Not applicable
Not required
Not required
None
Not allowed
Information below is product specific, click HERE for full underwriting guidelines.
Income and liabilities for all applicants for the Home Equity Loans/Lines of Credit are to be considered in the underwriting decision.
All applicants must be of legal age (or legally emancipated) and a US citizen or permanent resident alien.
Those borrowers with a Non Resident Alien status who meet the reliability criteria OR who apply with a co-borrower who meets the reliability criteria are eligible for the same financing terms as a U.S. Citizen.
Borrowers are allowed equity loans/lines on a maximum of four properties.
Non-occupant co-borrowers are not allowed.
Not considered in the underwriting process.
At least one of the applicants earning income must be vested on title.
All employee loan/lines must be prior approved by Investor
Employee loans are defined as:
Any borrower who is currently employed or formally employed by the seller,
receives commissions from the seller,
has ownership interest in the company,
is a broker or employee of a broker providing applications to seller/Corespondent (any Third Party Origination).
All seller's employee loan/lines must be identified as employee loan/line when submitting the loan/line to investor for prior approval.
Seller must clearly identify employee loan/line on investor submission form and application.
Employee loan/lines are not eligible for stated or reduced income documentation programs.
For employee loans/lines which are non purchase money transaction with CLTV's greater than or equal to 80%, the collateral must be owned by the borrower for 12 months.
For employee loans/lines which are purchase money transaction a full appraisal is required and fair market value for CLTV purposes will be based upon the lower of purchase price or appraised value.
Information below is product specific, click HERE for full underwriting guidelines.
Currently trades are those reported within the past six months.
All trades considered for opening date, major derogatory, delinquencies, bankruptcies and foreclosures.
Only currently reporting trades are included in the calculations for the debt to income ratio.
Credit reports must be from an acceptable bureau. Acceptable bureaus are Equifax, Experian and Transunion.
Credit reports must be no older than 3 months on the date of final underwriting.
All 9000 series or unreliable loan score are considered a “no score” and will require review by Investor
A dual or tri-merge credit report using acceptable bureaus is required.
Credit reports must be no older than 3 months on the date of final underwriting.
See Matrices above.
Any borrower contributing income must meet the minimum score of > 600.
loan score > 700
Primary wage earner’s credit score between 620 and 659
CLTV to 60% now available for 2-4 unit properties
CLTV to 70% remains available for 1 unit* investment properties
Primary wage earner’s credit score of 660 or greater
CLTV to 70% now allowed on 2-4 unit properties
CLTV to 80% now permitted for 1 unit investment properties
Loan scores utilized in the underwriting process must meet the following reliability criteria:
Minimum of 5 trades in file with at least 2 trades currently reported (within the past 6 months) as current (not currently delinquent).
Age of file > 36 months
Loan score must be > 300 and < 899. Loan scores outside this range are invalid.
Applicants other than the primary wage earner that provide income are required to have a loan score > 600 ( the loan score form other applicants is not required to meet the reliability criteria stated above )
Trades may not be combined from multiple credit reporting agencies for the purpose of meeting the reliability criteria.
Currently reporting trades are those reported within the past six months
The loan score from the primary income-earning borrower is used to both qualify the credit and to determine qualification for other underwriting guidelines.
For standard home equity loans/lines, a reliable loan score > 660 is required for CLTV’s >80%.
A reliable loan score > 620 is required for CLTV’s < 80%
Applicants other than the primary income earner that provide significant income (defined as >25% of total income) are required to have a loan score > 600 (the loan score from the other applicants is not required to meet the reliability criteria outlined above.)
Notes:
Trades may not be combined from multiple credit reporting agencies for the purpose of meeting the reliability criteria.
Currently reporting trades are those reported within the past six months
The loan score from the primary income-earning borrower is used to both qualify the credit and to determine qualification for other underwriting guidelines
For standard home equity loans/lines, a reliable loan score > 660 is required for CLTV’s >80%.
A reliable loan score > 620 is required for CLTV’s <80%.
Applicants other than the primary income earner that provide income are required to have a loan score > 600 (the loan score from the other applicants is not required to meet the reliability criteria outlined above.)
When utilizing a tri-merge, the middle of the primary income earner should be utilized in the credit decision
With a dual merge, the lowest of the primary wage earner should be utilized.
The loan score utilized must meet the above outlined reliability criteria.
If less than 2 loan scores are reporting on a dual or tri-merge bureau for the primary borrower, use the single reported score.
Note: This single score must meet the above outlined reliability criteria.
The loan score utilized must meet the above outlined reliability criteria. If a reliable loan score for the primary income earner is not available from any of the 3 major credit-reporting agencies, then a reliable loan score from the borrower with the next highest income may be used. (using the same above methodology for tri-merges and dual merges when applicable).
If there are no reliable loan scores for any borrower from any credit bureau, the file must be denied or sent into Investor for review.
An unreliable score does not qualify for use of stated income or other underwriting criteria that specify a minimum loan score
A trade with a continuing accesses to credit whereby the balance may increase or decrease from month to month.
A revolving trade issued buy a financial institution that allows access to cash as well as the ability to purchase good and services.
A revolving trade issued through a financial institution in conjunction with a retail establishment for the purpose of purchasing that retailer's goods.
It appears similar to a bankcard however is only acceptable at the particular retail establishment and does not allow access to cash
A trade that generally has a specified term and payment.
The full amount of credit is accessed at origination and the balance will decrease as payments are made until the debt is satisfied.
The type may be either secured or unsecured.
A trade that allows access to credit in which the balance owed must be paid on a monthly basis.
These trades may also allow access to cash.
Typically, a mortgage loan obtained through a mortgage lender.
Mortgage Loans that have been refinanced as a home equity Loan may appear on the credit report as an installment Loan.
The presence of any of the following derogatory credit items will be considered an exception to policy. Prior review and approval from investor must be obtained:
Unpaid charge-off from a financial institution in excess of $200**
Paid or Unpaid Investor or Affiliate charge-off
** A financial institution is defined as a Bank, Credit Union, or Mortgage Company
Discretion should be used in considering all other types of derogatory credit. The credit report should be carefully reviewed to consider the severity of the derogatory credit prior to making the credit decision.
Bankruptcy within the past 7 years will be considered an exception to policy.
Prior review and approval from investor must be obtained:
Foreclosure/Repossession within the past 7 years will be considered an exception to policy.
Prior review and approval from investor must be obtained:
For loan scores in the range of 620-659, CLTV may exceed 80% to a maximum of 90% only when
The mortgage/rent history is no worse than a 1 X 30 in the last 12 month period and
when loan/line is simultaneously closed behind an Investor 1st Mortgage or
when the loan/line is a Standalone closed behind an existing Investor 1st Mortgage.
The property must be an owner occupied principal residence or a second home.
The property type must be Single Family Detached, Single Family Attached, Condo or PUD.
Borrower may also finance up to a 90% CLTV when the loan or line of credit will be in first lien position.
Written verification of mortgage/rent is required using the following criteria:
A verification of Mortgage/Rent is required for loan scores 620-659 (primary wage earner ) with a CLTV greater than 80% but less than or equal to 90% on the applicants primary residence as well as the property being used for collateral if not the primary residence.
Current balance, current status and payment amount must also be verified.
The Mortgage/Rent rating is based on the worst mortgage/rent history from the prior 12 months on any mortgage loan/rental lease upon which the applicant(s) is obligated.
In the event of a recent refinance or account transfer, a combination of payment performance from multiple lenders for the same collateral may be used to complete the 12 month history requirement in order to assign the credit grade.
a combination of payment performance from a prior property or rental payments may be used to complete the 12 month history requirement in order to assign the credit grade.
A gap in mortgage/rental payment history of up to six (6) months is allowed by obtaining the most recent 12 month history over the past 18 months.
For example, if the applicant(s) have no mortgage/rental history for the most recent 4 months because they were living with relatives, then the mortgage/rental history for the 12 months prior to the most recent 4 months can be used.
When the mortgage/rental history verification is required, it must be third party verified for the last 12 month period described above by one of the following:
Current credit bureau rating;
Written Verification of Mortgage/Rent (VOM/VOR) from the institutional source;
Current statement of payment history from the institutional source;
Canceled checks (both front and back copies) from the applicant(s) showing one payment per month;
Bank statements showing one payment per month;
Documents provided must display payment performance for period provided
No exceptions to the above mortgage/rental history or verification criteria is allowed.
All other credit and program guidelines apply.
Monthly payments on installment debts that extend beyond ten months – Auto leases will always be considered debt regardless of term.
Monthly payments on revolving debts with balances greater than $200.
Any regular alimony, child support and maintenance payments with more than ten months remaining.
If the credit bureau does not reflect a payment on a current reporting liability, a payment should be calculated as follows:
Revolving: 3% of outstanding balance
Installment: 2.5% of original high credit
To exclude credit card payments paid by the applicant’s employer from the DEBT TO INCOME RATIO, written documentation must be obtained and the file noted.
Completed credit application
Credit bureau report
All supporting documentation (i.e. income, collateral, etc.).
Information below is product specific, click HERE for full underwriting guidelines.
If an applicant's income is to be considered in meeting the debt to income ratio requirement , the applicant must meet the length of employment requirements.
If any applicant does not meet these standards, the transaction would be considered an exception to policy.
For the first Mortgage transaction, Investor will generally rely on the income documentation obtained by the Seller.
The obtained documentation must conform to Fannie Mae/Freddie Mac guidelines.
However, in certain situations Investor may require additional documentation at the discretion of the underwriter as follows:
All income used in the underwriting decision must be pre-tax (gross) income
Non taxable income will be “grossed up”- by multiplying by 1.25 - to equate to gross income.
The income of all applicants must be aggregated when evaluating the application, regardless of marital status.
If income documentation is required, non-wage income should have sufficient documentation to verify it is ongoing.
Continuance of non-wage income should always be verified and noted in the Loan file.
Education benefits
Retained earnings in a company
Any source of income that cannot be verified
Any unstable sources of income (e.g. significant year-to-year decreases in income for self-employed Borrowers)
Illegal activities
An applicant is to have demonstrated stability in his or her present job or field of employment.
Length of employment for salaried borrowers is determined by the applicant’s time on the job or in the same field, whichever is greater.
Length of employment for self-employed borrowers is determined by the applicant’s time of ownership of the current business.
Salaried/Professional > 1 year
Self-employed > 2 years
Same job or line of business1
Salaried/Professional > 1 years
Self-employed > 3 years
Same job or line of business1
(1) Salaried and professional self employed borrowers must be in an existing job, business, or same profession for the outlined time frame. For non professional employed borrowers, the time requirements should be applied to the opening date of the current business of ownership.
Allowed
Applications with a reliable primary income-earner loan score of > 700 may be approved without documentation of income, with the exception of liquid assets that are used as income.
Other criteria (e.g. employment, property type, exposure > 80% CLTV) continue to apply to applications that are underwritten for Stated Income.
Any loans/lines < $25,000 and < 80% CLTV ,primary wage earner loan score > 620).
Investor reserves the right to request verification of income.
First mortgage documentation must adhere to the investors seller guides.
Employee loans/lines are not eligible for stated income products.
Investor will implement the following revisions for all home equity loans and HELOCs using our Stated Income option.
Our Stated Income option will only be available for 1-unit, primary residence or second home transactions.
The following are no longer eligible for Stated Income:
Investment properties
2-4 unit properties
Manufactured/mobile homes
Additionally, the following parameters will apply to all Self-employed Borrowers (as addressed above, this includes any borrower with variable income exceeding 50% of his/her qualifying income) using Stated Income.
|
Self-employed Borrowers |
||
|
Credit Score |
Maximum CLTV |
Maximum loan/line |
|
700 to 739 |
Primary or Second home: 90% |
$100,000 |
|
> 740 Primary |
Primary:100% Second home: 90% |
$100,000 |
This included salary, overtime, bonus and commission income whether full or part time.
Second job income may be considered provided it meets the length of employment requirements.
Any verified wage income expected to continue from employment. Refer to program requirements for any additional information.
Current pay stub(s) (must show year-to-date earnings, should not be handwritten).
Paystubs must be within 45 days of final underwriting.
Paystubs > 45 days and less than 120 days may be used subject to verbal verification of employment performed by the lender and documented in the closed loan file.
W-2 from previous year-end
1040 tax return from previous year-end (with schedules, if applicable)
1099's
Independent third party verification of income, either written or verbal verification must be documented in the loan file
Income from bonus, commission or a combination thereof that makes up >50% of an applicant's total annual income will require the following documentation:
Current pay stub(s) (must show year-to-date earnings, should not be handwritten).
W-2 from previous year-end
2 years 1040 tax return (with schedules, if applicable)
Additionally, those borrowers who earn > 50% of their total annual income in the form of bonus, commission, or a combination thereof, must meet self-employed guidelines.
For both Delegated and Investor Prior Approval loans, Sellers must include a verbal verification of employment in the closed loan package for all loans/lines of credit approved under the Stated Income option.
The verbal VOE must include the following:
Employer’s telephone number and where it was obtained (e.g., yellow pages, Web site, etc); the telephone number should be verified via an independent source.
Date of the call
Name of Seller’s employee who contacted the employer
Employer/Company name, and the name and job title of person providing the employment verification
Start date of the Borrower’s employment
Borrower’s job title
Investor reserves the right to require evidence of time on job for self-employed borrowers as well as documentation of income for any Stated Income loan.
CLTV ≤ 80%: Self-employed a minimum of two years
CLTV > 80.01 – 100%: Self-employed a minimum of three years
The application should be considered under Self-Employed guidelines if the majority of the total income comes:
from a business where the applicant has > 25% ownership in the business, or
where income from rental properties is > 25% of total qualifying income
If self-employed income is unstable and declining, use most recent year
If self-employed incomes is unstable and rising, use an average of the past two years.
Examples of a professional include:
Doctor
Dentist
Attorney
CPA
Veterinarian
Optometrist
Physical Therapist
Psychiatrist
Psychologist
Chiropractor
Architect
Self employed applicants not specifically listed as professional.
Income or loss expected to continue that has been consistent for the past two years and verified during the underwriting process.
Refer to program requirements for any additional information.
1040 tax return (with schedules, if applicable)
Corporate or Partnership tax returns with applicable schedules.
Income statements
1099's
Independent third party verification
Note: If an applicant files a partnership or corporate return, both personal; and business returns may be required.
Investor requires that any borrower with variable income (e.g., bonus, commission, overtime, etc) be considered using the guidelines and parameters for self-employeds when that variable income exceeds 50% of the borrower’s qualifying income.
Sellers should keep in mind that in addition to impacting the minimum time on job to be considered stable income, the maximum CLTV may be limited.
Any non-taxable income source may be multiplied by 1.25 to equal gross income.
The grossed up calculation must be documented in the Loan file.
Additional sources of income should be considered only if they are expected to continue and have been verified during the underwriting process.
Refer to program requirements for any additional information.
Verification of income, except for "Liquid Assets ", need not be verified if the applicant(s) qualify for reduced income documentation.
However, continuance should always be verified and noted in the loan file.
Gross rents less all known on going property-related expenses
Ownership < 1 year: Copy of lease/rental agreement AND canceled checks, or receipts or bank statements (gross receipts should be reduced by 25% for maintenance and vacancy) OR
Ownership > 1 year: Copy of lease or 1040 tax returns with schedule E:
1-4 unit residential requires previous calendar year;
commercial rental properties require previous two years.(gross receipts should be reduced by 25% for maintenance and vacancy)
Income that has been received for a minimum of three months and will continue for the next three years
Divorce decree or other third party verification AND one of the following:
Canceled checks (last 3 months)
Deposit slips (last 3 months)
Bank statements
Tax returns (only for Alimony)
Average income over prior two years if expected to continue for the next three years;
if decrease is >25% from year to year, use most current year only.
Capital gain income from sale of stocks, real estate, etc. (only if expected to continue for a minimum of 3 years).
Tax return, (with schedules, if applicable)
1099 statements
Must have proof it will continue for at least 3 years.
Copy of note AND
1040 tax returns or bank statement or canceled checks/deposit slips
Must have proof it will continue for at least 3 years.
Copy of Trust, account statement or third party document to verify principal/distributions
Income that will continue for the next three years.
1040 tax returns, bank statements, account statements or distribution letter
Income that will continue for the next three years.
Letters from the organization
Retirement award letter
Tax return, W-2p, or 1099
Check stub
Bank statement indicating the automatic deposit
Income that will continue for the next three years.
Social Security Benefit Check
Social Security Administration award letter
Tax return,
W-2p, or 1099
Bank statement indicating the automatic deposit
Verifiable non-business related liquid assets may be converted to income for the use in the underwriting process.
0.5% of verifiable assets (stocks, bonds, CD’s, etc.) as an addition to monthly household income. This equates to 6% annual return on the assets
Bank/brokerage statements (most recent)
Third party-generated documentation
Please Note: Verification of liquid assets must be obtained for all applicants if used as an income source
Income is acceptable, where history of receipt can be demonstrated and the applicant is a seasonal worker who is routinely laid off.
1040 tax return from previous two years
Benefit income is acceptable if expected to continue for at least 3 years
Benefit income is often tax-free, and the appropriate adjustment should be made to tax-free benefit income for underwriting purposes.
Grossing Up Non-Taxable Income:
Any non-taxable income source may be multiplied by 1.25.
The grossed up calculation must be documented in the Loan file
Examples of Benefit income include, but are not limited to:
Welfare benefits
Food stamps
Worker’s compensation benefits
Social security retirement (non taxable portion)
Supplemental security income
Military allowance other than base pay
Disability, retirement payments and other benefits paid by the worker’s compensation benefits, insurance, damages, etc. for injury or sickness
Minister’s allowances other than base pay/salary
Government pension
Military retirement
Automobile allowance
There are no product specific guidelines, click HERE for full underwriting guidelines.
Information below is product specific, click HERE for full underwriting guidelines.
All first Mortgage transactions submitted to Investor must adhere to the Investor Seller Guide.
All simultaneous close Home Equity Loans/Lines of Credit submitted to Investor must adhere to the credit criteria in the Investor Seller Guide as well as the Home Equity Seller Guide.
All stand alone transactions must adhere to the requirements in the Home Equity.
A Home Equity Loan or Home Equity Line of Credit where the proceeds are wholly used for the purchase of the real property securing the Home Equity Loans/Lines of credit.
A Home Equity Loan or Home Equity Line of Credit where the proceeds may be used for a variety of financial needs and is secured by the real property.
A Home Equity Loan or Home Equity Line of Credit used to pay off or pay down an existing 1st or 2nd mortgage by extending a new obligation with no cash-out to the borrower and secured by a dwelling.
A Home Equity Loan or Home Equity Line of Credit used independent of a 1st mortgage transaction for a variety of financial needs, and secured by a dwelling
Information for this transaction may be obtained from the first mortgage transaction for a period up to 45 days from the closing.
However, credit reports must be no older than 3 months on the date of final underwriting.
CLTV is the sum of all remaining Mortgages and/or liens plus the Investor's second Mortgage lien, as a percentage of the property value.
Investor will take only first or second lien position. However, Investor will take a third lien position behind an existing Investor second lien.
A Investor existing lien must be included in CLTV calculations. Those underwriting guidelines outlined in this section must be applied to the newly requested loan amount.
Effective with all new submissions as of July 1, 2003, Investor will apply the following criteria for calculating the CLTV on all non-purchase transactions:
For properties purchased within the last six months, the CLTV for all non-purchase transactions must be calculated using the lesser of the purchase price or current appraised value, except
If the property is located in the state of Nevada, the borrower must have owned the property for 12 months and the CLTV will be calculated using the current appraised value.
Information below is product specific, click HERE for full underwriting guidelines.
Designed for the use of one to four families
Planned Unit Development (PUD)
Condominiums
2-4 unit
1-unit, primary residence or second home transactions only.
Title is vested in a living person(s) or a revocable Living Trust(must comply with applicable state law). (see Ineligible Properties section for exceptions to this) A certified original copy of the notarized Trust Certification must be in the loan file
Fee simple ownership
Private Party First Mortgage: ALTA Title Policy and copy of 1st Mortgage Note required.
Negative Amortization First Mortgage (note: when calculating CLTV and payment, must use maximum 1st mortgage balance and payment. Lender to provide copy of 1st mortgage note with closed loan file)
Properties located in the State of Texas that are qualified Purchase Money Closed End Second Mortgage up to 95% CLTV (no cash out) or Non Cash-Out Second Lien Refinances of Homestead.
The following conditions will render an application ineligible for a Investor Equity Loans/Line of Credit:
Any part of the collateral is non-residential in nature.
The value of the property cannot be determined by a standard residential appraisal or evaluation
This may include but is not limited to:
Unusual architectural designs e.g., geodesic domes, molehill homes, subterranean homes, etc.
The area is undeveloped.
The property has a known hazard/liability situation. This includes but is not limited to:
Environmental hazards attributable to the property or immediately surrounding area.
Evidence of current geological activity threatening the subject site and/or structures.
Existing structural deficiencies, excessive work in progress, or evidence of a level of deferred maintenance that threatens the integrity of the property or significantly inhibits marketability.
There may be an obstacle to foreclosure. This includes but is not limited to:
The property is a co-op.
All or part of the property is generating income as a commercial property.
The property is currently listed for sale
The property has homestead status and/or is held in trust in the state of Texas (Primary residence properties are considered homestead properties in the State of Texas.)
The subject property site is greater than 40 acres.
Non-owner occupied multi-family property (duplex, triplex, etc.) where owner is not occupying at least one of the units.
Leasehold
Co-Ops
Reverse first mortgages are considered an ineligible first mortgage product
Timeshares
Unimproved land
Non owner occupied or vacation /second homes classified as Manufactured or Mobile homes.
Investment properties
2-4 unit properties
Manufactured/mobile homes
Investor will rely on the appraised value prepared for a financial institution, obtained by the Seller
The appraised value obtained must conform to Fannie Mae/Freddie Mac guidelines.
The minimum required valuation product is based upon the Loan amount as follows:
< $250,000: An evaluation of the real estate.
> $250,000: A Limited walk-thru or USPAP conforming (full) appraisal.
A walk-thru (2055 interior) or full appraisal ordered by another Investor may be utilized as a full appraisal provided it was performed within the past 6 months and has been reviewed for conformity to Investor’s appraisal standards.
A recertification of value may be accepted on an appraisal exceeding 6 months but not more than 12 months.
The following appraisal standards must be met:
Be written
Be conducted by a licensed appraiser
Include the preparer’s name, address, and signature, and the effective date
Describe the real estate collateral, its condition, its current and projected use
Describe the sources of information used in the analysis
Provide an estimate of the real estate’s market value, with any limiting conditions
With a purchase money transaction, the lower of the sales price or appraised value should be utilized for collateral valuation purposes.
For a stand-alone transaction, the appraised value may always be utilized for collateral valuation.
|
High Income Earner's Loan score |
< 680 |
> 680 or CLTV < 60% |
|
Loan amount < $100,000 |
Approved Evaluation Statistical * Desktop Tax Valuation Documented Sales Price (< 6month) |
Approved Evaluation Statistical * Desk Top Tax Valuation Documented sales price (< 6 month ) |
|
> $100,000 - $250,000 |
Desktop Drive By Limited Walk Thru (2055 interior) Full Appraisal |
Approved Evaluation Statistical * DeskTop Tax Valuation Documented sales price (< 6 month ) |
|
> $250,000 |
Limited Walk Thru (2055 interior) Full Appraisal |
Limited Walk Thru (2055 interior), |
Note:The above matrix should be used as a guideline, however, the underwriter may require a higher level valuation if deemed appropriate.
All above valuation products must be dated < 6 months at time of Investor funding date
if the appraisal is date between 6-12 months at time of the funding, a recertification of value may be acceptable.
The collateral must be owned by the applicant for 12 months if the loan/line is a non-purchase money transaction and the CLTV is greater than or equal to 80%.
For purchase money transactions, a full appraisal is required and fair market value for CLTV purposes will be based upon the lower of the purchase price or appraised value
When utilizing an automated valuation product that returns three different values, the middle value should be utilized for collateral valuation purposes.
With a purchase money transaction, the lower of the sales price or appraised value should be utilized for collateral valuation purposes
For a standalone transaction, the appraised value may always be utilized for collateral valuation.
The following represents an exclusive list of those vendors and products that may be utilized for automated valuations:
|
Vendor |
Product |
|
Solimar |
PASS |
|
Data Quick |
HVE |
|
1st American Real Estate Solutions |
Value Point |
The acceptable age of an appraisal is 6 months. Any equity product using an appraisal dated more than 6 months prior to the investor's funding date will not be accepted.
The acceptable age of the documented sales price for use in lieu of an acceptable evaluation is 6 months. Any equity product using the documented sales price dated more than 6 months prior to the investor's funding dated will not be accepted.
Ineligible for financing as investment property.
Owner Occupied Manufactured housing that in addition to meeting the above requirements in the acceptable properties section above are eligible..
The subject property must be a residential structure
The property must conform to the following conditions:
Designed for the use of one to four families.
Classified as real property
Permanently affixed to a foundation – must adhere to secondary market guidelines.
Ineligible for financing as investment property.
The home is the applicants primary residence
The applicant also holds the underlying lot in fee simple ownership
The home must be legally classified as real estate
The home is permanently affixed to the foundation with wheels unattached
The home must be double-wide design and constructed after 1976 to comply with Federal Home Construction and Safety Standards
Limited coverage policy is required for this property type
Refer to Geographic restriction with reference to Texas