conforming expanded criteria

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American Home Equity Corp's Conforming Expanded Criteria Program Overview

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  • 1.Conforming Expanded Criteria December 3, 2007Give the gift of home ownership with this dynamic product offering

2. Conforming Expanded CriteriaWhat Is Conforming Expanded CriteriaThe Conforming Expanded Criteria program providesqualified borrowers with good credit histories a cost-effectiveloan that enables them to choose alternative documentationoptions including: Reduced, No Ratio, and No Income/NoAssets (NINA)allowing you to help borrowers who are self-employed or have difficult-to-document income/assets, byoffering loans that require minimal documentation which mayhelp to expedite the loan closing.More borrowers qualify for conforming programsAgency-based pricingDiverse documentation optionsDecember 3, 2007 PAGE 2 3. Conforming Expanded CriteriaCurrent MarketThe market continues to slow down Availability of products in the marketplace continues to shrink,challenging lenders to find alternative financing solutions Non-Agency products continue to experience liquidity issues Purchases, refinances, and new home construction are declining Overall home values are flat or depreciating throughout the country There is a shift in the market to Agency and Government products Agency and Government products may offer a better alternative toincrease originations, lessen risk, and grow market share in thisturbulent environment December 3, 2007 PAGE 3 4. Conforming Expanded CriteriaOpportunityThere are still borrowers whoAre self-employed, salaried, or commissionedHave passive or unearned income, such as income from aretirement plan, child support, trust, rental, etc.Have difficult to document income sourcesHave complex assetsHave good credit historiesCan document their income and assets, but prefer not toDecember 3, 2007 PAGE 4 5. Conforming Expanded CriteriaSolution Provide qualified borrowers with a conforming loan program thatallows flexible income and asset documentation, by offeringSIVA, No Ratio, and NINA documentation typesConventional financing option for borrowers with strong credit historiesMore favorable rates associated with conventional financingUp to 90% LTV (SIVA documentation only)Purchase, rate/term, and cash-out refinances1-4 unit primary residences, 1-unit second homes, and 1-4 unitinvestment properties allowedCurrent offering adjustable-rate mortgages (ARMs)Interest Only option (SIVA documentation only)Up to 6% interested party contributionsNon-occupant co-borrower income allowed December 3, 2007 PAGE 5 6. Conforming Expanded CriteriaBorrower Scenario #1The owner of a successful dry cleaning business would like a$50,000 cash-out refinance to remodel his kitchen. His homeis worth $325,000 and he owes $280,000. He has a 690credit score and his credit report reflects a 1x30 mortgagelate 10 months ago. He inherited the business from hisparents and owns the building where it is located. He is ableto verify his employment and assets, but prefers to state hisincome.The SIVA documentation option is a great solution for borrowers whose primary source of income is difficult to verify. The primary source of income must be verified, while the amount of income, although disclosed, is not verified.The presented scenarios are only hypothetical examples of how promoted loan programs might be useful. For illustration purposes only. All borrowers must meet loan program guidelines.. December 3, 2007 PAGE 6 7. Conforming Expanded CriteriaSIVA DocumentationEmployment: stated and verifiedIncome: stated and not verifiedAssets: stated and verifiedTarget audience: salaried, commissioned, self-employed,passive income borrowers1-4 units owner-occupied, 1-unit second homes, and 1-4 unitinvestment propertiesPurchase, rate/term, and cash-out refinanceFixed period ARMs (currently 7/1 or 10/1)with an Interest Only optionTemporary buydowns allowed (owner-occupied only)December 3, 2007 PAGE 7 8. Conforming Expanded CriteriaSIVA Documentation Maximum LTV: 90% on purchase, rate/term and cash-out refinanceInstitutional secondary financing allowedMaximum 80% LTV on owner-occupied 3-4 unitsMaximum DTI: 38%Higher DTIs may be approved through Investor AUSMinimum credit score640 for purchase and rate/term at 75% LTV and 660 for 90% LTV660 for cash-out at 75% LTV and 680 for 90% LTV3-month reserves required on owner-occupied properties6 months reserves required on second homes and investment propertiesMortgage lates1x30 in last 12 months0x60 in last 24 monthsBankruptcy, foreclosure, deed-in-lieu, and short sale: 48 months orgreaterInterested party contributions up to 6%Second homes and investment properties with LTVs > 80% allow for amaximum 3%December 3, 2007 PAGE 8 9. Conforming Expanded CriteriaBorrower Scenario #2 After four years of retirement, a couple is looking to purchase a second home to be near their grandchildren. Their monthly income comes from a variety of sources including his pension plan, their combined Social Security benefits, dividend income, and rental income on a 2-unit duplex they own free-and-clear. In addition, the couple has no mortgage on their primary residence. They have excellent credit scores (his: 720 and hers: 700) and are receiving 3% from the property seller to be used towards closing costs. They are purchasing a $175,000 condominium and putting 20% down to avoid paying mortgage insurance.The No Ratio documentation option is an attractive option for this couple.With excellent credit and no mortgage delinquencies, borrowers with multiple income sources and complicated assets can qualify for a expedited loan process.The presented scenarios are only hypothetical examples of how promoted loan programs might be useful. For illustration purposes only. All borrowers must meet loan program guidelines. . December 3, 2007 PAGE 9 10. Conforming Expanded CriteriaNo Ratio DocumentationEmployment: stated and verifiedIncome: not stated or verifiedAssets: stated and verifiedTarget audience: salaried, commissioned, self-employed,passive income borrowers1-4 units owner-occupied, 1-unit second homes, and 1-4 unitinvestment propertiesPurchase, rate/term, and cash-out refinanceFixed period ARMs (currently 7/1 or 10/1)Secondary financing not allowedTemporary buydowns not allowed December 3, 2007 PAGE 10 11. Conforming Expanded CriteriaNo Ratio DocumentationMaximum LTV: 90% on purchase, rate/term, and cash-out refinanceMaximum 80% LTV on owner-occupied 3-4 unitsMaximum DTI: not calculatedMinimum credit score640 for purchase and rate/term at 75% LTV and 660 for 90% LTV660 for cash-out at 75% LTV and 680 for 90% LTV3-month reserves required on owner occupied properties6 months reserves required on second homes and investment propertiesMortgage lates0x30 in last 12 months0x60 in last 24 monthsBankruptcy, foreclosure, deed-in-lieu, and short sale: seven yearsInterested party contributions up to 6%Second homes and investment properties with LTVs > 80% allow for amaximum 3% December 3, 2007 PAGE 11 12. Conforming Expanded CriteriaBorrower Scenario #3A husband and wife are both police officers and provide part-time security on their days off and weekends. They havemore than five years on the police force and their privatesecurity business just passed its three year anniversary. Thecouple is hoping to start a family and has made an offer on alarger home and have just put their condominium on themarket. Both borrowers have good credit, two yearsremaining on an auto loan, and some credit card debt. The NINA documentation option is a great solution for these lawenforcement professionals. Their employment can easily bestated and verified, but they prefer to not state their income orassets. December 3, 2007 PAGE 12 13. Conforming Expanded CriteriaNINA DocumentationEmployment: stated and verifiedIncome: not stated or verifiedAssets: not stated or verifiedTarget audience: salaried and self-employed borrowers1-4 unit owner-occupied, 1-unit second homes, and 1-4 unitinvestment propertiesFixed period ARMs (currently 7/1 or 10/1)Secondary financing not allowedTemporary buydowns not allowed December 3, 2007 PAGE 13 14. Conforming Expanded CriteriaNINA DocumentationMaximum LTV: 90% purchase and rate/term refinance75% LTV on cash-out refinanceMaximum DTI: not calculatedMinimum credit score680 for purchase and rate/term at 75% LTV and 700 for 90% LTV700 for cash-out at 75% LTV and 90% LTV not applicableReserves: Not applicableMortgage lates0x30 in last 12 months0x60 in last 24 monthsBankruptcy, foreclosure, deed-in-lieu, and short sale: seven yearsInterested party contributions up to 6%Second homes and investment properties with LTVs > 80% allow for amaximum 3%December 3, 2007 PAGE 14 15. Conforming Expanded CriteriaLoan Limits Property TypeLoan Limits 1-unit$417,000 2-units $533,850 3-units $645,300 4-units $801,950December 3, 2007 PAGE 15 16. Conforming Expanded CriteriaResourcesVisit our website at http://www.ahedirect.comASAP PricerASAP Pipeline - View loans - Lock requests - View conditions - View reportsRatesheets & FormsContact Sales staffDecember 3, 2007 PAGE 16 17. Conforming Expanded CriteriaFor More Information Contact your Account Executiveor call our National Headquarters at877-945-9500 American Home Equity Corp2677 N. Main Street, Suite 225Santa Ana, CA 92705 December 3, 2007 PAGE 17 18. Conforming Expanded CriteriaAmerican Home Equity Corp is an Equal Housing Lenders. 2008 American Home Equity Corp(AHEC). AHEC is licensed by the California Department of Real Estate. Provided to mortgage professionals only and not intended or authorized for public distribution.December 3, 2007 PAGE 18

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