Correspondent Seller's Guide - CCMC Correspondent Lending

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Correspondent Sellers Guide Table of Contents 100 OVERVIEW ........................................................................................................................................ 4 101 Key Lending Policies ................................................................................................................. 4 101.a Credit Policy ......................................................................................................................... 4 101.b Fee Policy............................................................................................................................... 5 101.c High Cost Loans/Predatory Lending Policy................................................................. 5 101.d Eligible States ...................................................................................................................... 6 101.e Escrow Waiver ..................................................................................................................... 6 101.f Quality Control/Due Diligence Review ........................................................................ 6 101.g Qualified Mortgage (QM) and Ability to Repay (ATR) Provisions ....................... 6 101.h Prepayment Penalty Options ........................................................................................... 7 101.i State Specific Requirements & Licensing ..................................................................... 7 101.j Appraisal Independence Requirements ...................................................................... 7 102 Seller Approval ........................................................................................................................... 7 102.a Seller Criteria ....................................................................................................................... 8 102.b Loan Fraud Zero Tolerance ............................................................................................. 8 102.c Annual Review and Recertification ............................................................................... 8 103 Website Information ................................................................................................................. 9 200 LOCK POLICY .................................................................................................................................... 9 201 Pricing Desk .............................................................................................................................. 10 202 Best Effort and Mandatory Pricing ..................................................................................... 10 202.a Daily Rate sheets ............................................................................................................. 10 203 Rate Lock .................................................................................................................................... 11 203.a Rate Lock Programs ...................................................................................................... 11 203.b Registration/Rate Lock and Lock Confirmation .................................................. 11 204 Loan Terms Discrepancies ................................................................................................. 12 204.a Changes – Loan Program ............................................................................................. 12 205 Lock Expirations ...................................................................................................................... 13 206 Lock Extensions ....................................................................................................................... 13 207 Expired Rate Locks/Re-Locks ............................................................................................. 14

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208 Renegotiation ........................................................................................................................... 14 209 Pair-Off Fees .............................................................................................................................. 14 209.a Best Effort Commitments ............................................................................................... 14 209.b Mandatory Commitments.............................................................................................. 15 210 Commitment Management ................................................................................................... 15 211 Miscellaneous Pricing Information ................................................................................... 15 300 PRODUCTS ...................................................................................................................................... 16 301 Product List.......................................................................................................................... 16-17 400 ELIGIBLE TRANSACTIONS ......................................................................................................... 16 401 Borrower(s) Eligibility .......................................................................................................... 17 402 Loan Purpose ............................................................................................................................ 18 403 Loan Amounts ........................................................................................................................... 20 404 Ratios ........................................................................................................................................... 20 405 Documentation Types............................................................................................................ 21 406 Eligible Properties .................................................................................................................. 21 406.a Property Underwriting Considerations ..................................................................... 22 406.b Rural Properties .............................................................................................................. 22 406.c Special Housing Types .................................................................................................... 22 406.d Condominium Projects ................................................................................................... 22 406.e PUD Projects ...................................................................................................................... 25 406.f Geographic Restrictions ................................................................................................. 25 500 UNDERWRITING POLICIES AND PROCEDURES.................................................................. 26 501 Automated Underwriting ..................................................................................................... 26 501.a Submission to DU ............................................................................................................. 26 501.b Submission to LP .............................................................................................................. 27 502 Credit Package Submission Minimum Standards......................................................... 27 503 Credit Package Submission Process.................................................................................. 28 504 Loan Submission: Non-Delegated Underwriting or Pre-Approval Request......... 28 505 Conditional Approvals ........................................................................................................... 29 506 Clear to Purchase ..................................................................................................................... 29 507 Clear to Close ............................................................................................................................ 29 600 CLOSING POLICIES AND PROCEDURES ................................................................................ 29 601 Closing the Loan ....................................................................................................................... 29 602 Escrow Holdback Policy ........................................................................................................ 29 603 Pre-paid Interest Policy ........................................................................................................ 29 604 Impound/Escrow Accounts .................................................................................................. 30 605 Requirements for Trust Closings ....................................................................................... 30 606 Insurance Requirements ...................................................................................................... 31 2

606.a Property Insurance ........................................................................................................ 31 606.b Flood Insurance.............................................................................................................. 32 606.c Hazard Policy Ratings ................................................................................................... 33 606.d Title Insurance ................................................................................................................. 33 607 Mortgage Electronic Registration Systems (MERS®) ................................................. 34 607.a Transferring a Mortgage Using MERS ...................................................................... 34 607.b Registering a Loan with MERS..................................................................................... 34 607.c Transfer of Servicing and Beneficial Rights 1, 2 .................................................... 34 700 PRE-PURCHASE PROCESS ......................................................................................................... 35 701 Submission Process ................................................................................................................ 35 702 Documentation Deficiencies ............................................................................................... 35 703 Collateral Delivery……………………………………..…………………………………………………..36 800 LOAN PURCHASE ......................................................................................................................... 36 801 Wire Detail ................................................................................................................................ 36 802 Net Escrow Funds from Purchase Wire ........................................................................... 36 803 First Payment Issues .............................................................................................................. 36 804 Loan History .............................................................................................................................. 37 805 PMI for Conventional Loans ................................................................................................ 37 900 POST PURCHASE REQUIREMENTS ......................................................................................... 37 901 Seller Document Responsibilities ..................................................................................... 37 902 Government Loans .................................................................................................................. 37 903 Post Purchase Documentation ........................................................................................... 37 904 Sellers Transfer Responsibilities ...................................................................................... 38 1000 CORRESPONDENT COVENANTS.............................................................................................. 38 1001 Early Loan Payoff/Purchase Price Protection .............................................................. 38 1002 Repurchase ................................................................................................................................ 38 1003 Early Payment Default ........................................................................................................... 39 EXHIBIT A: Counter Party Application Package Requirements .................................... 40 EXHIBIT B: Required Documents for Loan Submission ................................................... 41

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Correspondent Lending Program 100 OVERVIEW Cherry Creek Mortgage Company Correspondent Lending program is designed specifically for, and is open to lending institutions such as mortgage lenders, banks, and credit unions. This “Guide” is designed to assist approved “Sellers” in doing business with Cherry Creek Mortgage Company in the most efficient and profitable manner. Additionally, the Guide sets forth terms and conditions governing a Seller’s participation with Cherry Creek Mortgage Company’s Correspondent Lending program.

Cherry Creek Mortgage Company Correspondent Lending Division strives to provide best-inclass customer service. Our focus is to purchase quality loans that have been prudently underwritten from quality partners who share similar core values.

The Guide will be updated periodically, with updates made available to Sellers. All loans purchased by Cherry Creek Mortgage Company are subject to programs, matrices, guidelines, policies, and regulations in effect at the time a loan is purchased.

101 Key Lending Policies This section of the Guide provides an overview of Cherry Creek Mortgage Company general policies related to the Correspondent Lending Program. Sellers will find product-specific requirements and guidelines on the Cherry Creek Mortgage Company website.

101.a Credit Policy Cherry Creek Mortgage Company purchases eligible loans regardless of borrower race, color, religion, sex, ethnic origin, familial or handicapped status, marital status, or any other prohibitive basis.

Cherry Creek Mortgage Company purchases loans eligible for sale in the secondary market that meet established product guidelines. Product requirements, features, restrictions, and required documentation must consistently apply to all mortgages.

Cherry Creek Mortgage Company requires that all loans must close in compliance with requirements, restrictions, and laws set forth by applicable agencies, federal, state, and local municipalities. Cherry Creek Mortgage Company does not purchase high-cost/Section 32 loans or loans subject to HOEPA. Sellers must provide all loan applicants with all required initial disclosures. The fees charged must be appropriate to assure compliance with specific Predatory Lending Laws, as they may differ from state to state and are for the protection of the borrower.

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101.b Fee Policy Cherry Creek Mortgage Company by policy does not purchase loans that are considered to be high-cost loans, loans subject to HOEPA, or loans that would be deemed predatory for the jurisdiction where the property is located and as such Cherry Creek Mortgage Company will run an audit of fees charged on the loan as part of the purchase process. Sellers will receive a notification if the fees are in excess of allowable amounts; however any testing performed by Cherry Creek Mortgage Company does not reduce or eliminate Sellers’ obligations.

FHA and VA loans have certain restrictions on the types and amounts of fees that can be collected on each transaction and may have additional restrictions on fees that may be charged to a buyer or the Veteran. Fees must follow the guidelines of each individual loan program.

Cherry Creek Mortgage Company charges a Funding Fee, Tax Service Fee on loans as applicable and an Underwriting Fee as applicable. These Fees will be deducted at purchase and reflected on the purchase advice to the Seller. Funding and Tax Service fees are the same regardless of loan type. As applicable, Underwriting Fee schedule are noted below.

Fee Schedule Types of Service Funding Fee Tax Service Fee Delegated Pre-Approval Non-delegated Underwriting Conventional Non-delegated Underwriting - Government Non-delegated Underwriting - Jumbo

Cost of Service $ 275.00 $ 75.00 $ 100.00 $ $ $

125.00 200.00 325.00

For purposes of APR disclosure, certain fees are considered prepaid finance charges.

101.c High Cost Loans/Predatory Lending Policy Selected states have passed laws prohibiting predatory lending, which may be referenced by any of these terms: “high-cost,” “high rate,” “high point,” “subprime,” “non-prime”, etc. Loans that fall into this category are not eligible for the Cherry Creek Mortgage Company Correspondent Lending program.

It is each Seller’s responsibility to understand state specific requirements and to follow the requirements for specific disclosures and documentation, including but not limited to the net tangible benefit requirement. Each of these states require documentation of the net tangible benefit to borrower or other disclosures related to refinance transactions to prove they are not high-cost loans. Refer to state restrictions for additional specific requirements. Please note that effective January 10, 2014 new revised HOEPA thresholds will go into effect.

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101.d Eligible States Cherry Creek Mortgage Company Correspondent Lending Division participates in purchasing loans in all continental states, with the exception of Alaska, Hawaii, New York, West Virginia, Maine, North Carolina, New Hampshire, Kentucky, Mississippi, Georgia, Guam, Puerto Rico, and the U.S. Virgin Islands. Geographical restrictions are listed under property types. Please refer to Cherry Creek Mortgage Company Product Guides for specifics. Additionally, Cherry Creek Mortgage Company adheres to all state-specific regulatory requirements.

101.e Escrow Waiver Cherry Creek Mortgage Company will allow escrow waivers on conventional loans and VA loan products.

Conventional loans must be made for primary residences with an LTV less than or equal to 80% (90% for California) unless otherwise defined by state law. The pricing for loans with escrow waivers may include increases to rate and/or pricing, depending on specific program guidelines. H06 and Flood insurance, if applicable, must also be escrowed per LTV limits.

101.f Quality Control/Due Diligence Review Cherry Creek Mortgage Company will apply its Quality Control Policy and Procedures to loans originated by Sellers and will report findings, as appropriate, to Sellers for their use in prevention of similar occurrences. Cherry Creek Mortgage Company requires that Sellers perform quality control procedures, as specified in the plan submitted to Cherry Creek Mortgage Company, to assure the quality of the originations submitted to Cherry Creek Mortgage Company for underwriting and purchase.

If any irregularities or discrepancies are discovered during Cherry Creek Mortgage Company routine review, Cherry Creek Mortgage Company may expand the scope of the quality control reviews or loan samples on Seller's loans to ensure all problem areas are identified.

Cherry Creek Mortgage Company will provide audit review reports to Sellers as deemed necessary. Sellers will be required to respond to any findings of moderate risk or greater or to any indications of trends toward risk findings. Sellers should investigate and must provide a written response to the report addressing each item noted and the corrective action taken by the Seller.

Serious issues with quality, adverse, material findings, or failure to respond to the report findings can result in termination of the Seller’s approval with Cherry Creek Mortgage Company.

101.g Qualified Mortgage (QM) and Ability to Repay (ATR) Provisions Cherry Creek Mortgage Company only purchases loans that are QM/ATR compliant.

This rule generally applies to closed-end consumer credit transactions that are secured by a dwelling for which you receive an application on or after January 10, 2014.

See http://files.consumerfinance.gov/f/201304_cfpb_compliance-guide_atr-qm-rule.pdf 6

101.h Prepayment Penalty Options Cherry Creek Mortgage Company does not offer products with prepayment penalty options.

101.i State Specific Requirements & Licensing If Seller is not exempt from licensing, Seller must meet all licensing requirements for the state where the property is located; this includes the institution and the originator listed on the mortgage application.

Various states and local municipalities have passed laws regarding mortgage lending activities.

Sellers must follow all the laws in effect where the subject property is located, and are responsible for all required documentation related to state specific requirements.

101.j Appraisal Independence Requirements The Federal Housing Finance Agency (FHFA) has issued its Appraiser Independence Requirements (AIR) effective on November 1, 2010. Each Seller must ensure that its origination appraisal practices are in compliance with the AIR and represents and warrants to Cherry Creek Mortgage Company that each appraisal, and all appraisal practices used in the origination of any loan, conform to the requirements of Fannie Mae, Freddie Mac, FHA, and VA. Additionally, all loans must be compliant with the ECOA Valuation Rule going into effect January 18, 2014.

See http://files.consumerfinance.gov/f/201310_cfpb_updated-sticker_ecoa-implementationguide.pdf Cherry Creek Mortgage Company will not accept appraisals or approve appraisers who are on exclusionary lists such as the HUD LDP/GSA, MARI, or other investor lists.

Appraisers must have a valid license for the state where the property is located and current Errors and Omissions (E&O) insurance. Appraisals must be in Seller’s name at time of submission to Cherry Creek Mortgage Company.

102 Seller Approval Sellers are required to obtain and maintain Cherry Creek Mortgage Company counter approval to deliver loans for purchase to the Bank. Seller is to complete Counter Party Application package and meet Correspondent Criteria (refer to section 1.2.a).

Note: Please see Exhibit “A” for Counter Party Application Package Requirements.

Client Administration will review application documents along with external due diligence reports ordered on potential Sellers. Upon analysis, Cherry Creek Mortgage Company will contact Seller Applicants with any questions in regards to findings. These findings include but are not limited to any disruptions of state licenses, underwriting and compliance staff resumes, loan product guidelines, and violations, if any cited, and how they were cured as well as procedures set in place for compliance of regulatory requirements.

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Sellers are approved solely at the discretion of Cherry Creek Mortgage Company Management Review.

102.a Seller Criteria  Be properly licensed and authorized to originate and sell loans meeting Cherry Creek Mortgage Company product line and underwriting requirements.  Company has been in business for at least two years. In cases of newer firms, principals should have a minimum of ten years’ experience in mortgage lending.  Uphold a good reputation in the industry with proven references, a high level of professionalism, and strong ethical standards.  Maintain a minimum tangible and verifiable net worth of $500,000 derived from financial statements audited by a Certified Public Accountant.  Maintain a current Errors & Omissions Insurance Policy and Fidelity Bond with a minimum coverage of $300,000 per occurrence.  Uphold a “good standing” rating with all governmental licensing and revenue collection agencies, including a public record clear of any civil or criminal judgments. A Seller whose firm has been suspended, is currently under investigation by any governmental agencies or has an open judgment in excess of $10,000 will not be approved and will not be renewed to do business with Cherry Creek Mortgage Company.  All principal officers, owners and /or partners must have an acceptable personal credit profile. In the case of corporations, the entity must have a satisfactory corporate report.

Past credit difficulties will be reviewed on a case-by-case basis. A letter from the Seller explaining the derogatory item(s) is required. Financial institutions subject to oversight by the FDIC, NCUA, OTS, Federal Reserve or Comptroller of the Currency may have this requirement waived.

102.b Loan Fraud Zero Tolerance Each approved Seller must be aware that a Mortgage Lender bears the responsibility for all actions of his or her employees or licenses. The Lender is responsible for the content and quality of each application taken and each loan submitted Cherry Creek Mortgage Company, Correspondent Lending Division.

102.c Annual Review and Recertification An annual review and recertification of the Seller will be conducted requiring audited financials and any changes, or updates from prior approval. In addition, the Seller is obligated to provide Cherry Creek Mortgage Company with notice of any changes or updates that occur between reviews. The Seller is required to immediately update and forward any material financial, organizational and procedural changes to Cherry Creek Mortgage Company.

Seller must immediately advise Cherry Creek Mortgage Company of any suspension or termination of its licensing or lending authority. If the Seller is under investigation or suspended from any one of the governmental agencies, Seller must immediately notify and forward such notices or documentation to Cherry Creek Mortgage Company.

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Seller is required to re-execute the Mortgage Loan Purchaser and Sale Agreement (MLPSA) reflecting any updates by Cherry Creek Mortgage Company.

103 Website Information Cherry Creek Mortgage Company Correspondent Website provides a variety of information to assist Sellers in doing business with Cherry Creek Mortgage Company. Upon approval with Cherry Creek Mortgage Company, each Seller will be issued a unique login ID and password to the website. Instructions for accessing and changing the password(s) will be provided. Seller is responsible for controlling who has access to sign-on IDs and Passwords. Login ID will grant access to the secured website to register, lock, submit, and upload packages to Cherry Creek Mortgage Company.

Cherry Creek Mortgage Company website: http://www.cherrycreekmortgage.com/correspondent       



Available information via the website includes: Pricing/Locking, Registration, and Loan Submission Documents Upload News/Announcements FAQs Correspondent Lending Sellers Guide Program Guide – All Regs Link Forms

Loan File Submission Sellers may access website via the link available on the Cherry Creek Mortgage Company website. From this website Sellers may:  Upload loan documents (FNMA 3.2/pdf ) to Cherry Creek Mortgage Company’s Correspondent website, “Welcome to Loan Interface”.  Upload documents to Cherry Creek Mortgage Company, including but not limited to initial disclosures, asset & income documentation, appraisal, and any other documentation required

200 LOCK POLICY Cherry Creek Mortgage Company Correspondent Lending Lock Policy outlines the terms under which Sellers can commit loans for purchase to Cherry Creek Mortgage Company. Rate lock commitments made to Sellers, by Cherry Creek Mortgage Company; offer a specific interest rate for certain period of time. Whenever a rate lock commitment is granted to Sellers, Sellers’ price is guaranteed; however, the market continues to move. Loans must be delivered to Cherry Creek Mortgage Company and purchased on or before the lock expiration date.

This policy addresses Seller registration and pricing requirements including rate lock and delivery options for Best Effort and Mandatory commitments. Cherry Creek Mortgage Company delivers a Best Effort Rate Sheet on a daily basis to approved Sellers.

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201 Pricing Desk The Pricing Desk shall be responsible for reviewing lock requests, validating loan pricing, maintaining the pricing engine, managing lock exception requests, and confirming rate locks.

FLOW lock requests and BULK bid pricing are accepted during Pricing Desk hours of operation.

Please refer to Mandatory Commitments – BULK Bids for pricing timeline expectations.

Incomplete and/or inaccurate lock requests may cause delays and/or be rejected.

Hours of Operation The Pricing Desk is open from the time the daily rates are published (generally before 9:00 AM MST) until 5:00 PM MST Monday through Friday; however, the Pricing Desk will be closed on Bank designated holidays.

Lock requests must be submitted by 5:00 PM MST to be locked for that day’s requested price.

FLOW: Locks@ccmclending.com BULK: Bulk@ccmclending.com 202 Best Effort and Mandatory Pricing Pricing reflected on Cherry Creek Mortgage Company’s Best Effort Rate Sheet is indicative of specific market conditions and is subject to changes throughout the business day without prior notice. Rates and prices are valid until 5:00 PM MST same day.

Rate sheets include loan level price adjustments (LLPAs) as applicable to specific loan features. **Note: Product eligibility is not determined by LLPAs; refer to product matrices and underwriting guidelines for available Agency, Government, USDA, and Non-Agency programs.

Pricing for both Best Effort and Mandatory Bulk commitment options include the service release premium (SRP).

Pricing Information Daily Rate sheets CCMC Rate sheets are distributed to Sellers at least once each business day, or more, each business day depending on market conditions.

Rate sheets are generally available and distributed by 9:00 AM MST each day. Cherry Creek Mortgage Company reserves the right to change rates at any time during the day.

Overnight Protection Lock requests will be accepted up to 5:00 PM MST for current day’s rate. If received after 5:00 PM MST, it is subject to next day’s market. There is no overnight or weekend protection, including holidays. Rate locks will be priced based on the rates in effect at the time the lock request is submitted.

Intra-Day Price Changes Cherry Creek Mortgage Company reserves the right to publish new product pricing based on market movements. Cherry Creek Mortgage Company will attempt to provide advance 10

notification. Regardless, Sellers are subject to Intra-Day price changes at any time. Updated Rate sheets will be distributed for each Intra-Day price change by Cherry Creek Mortgage Company.

203 Rate Lock Rate Lock Programs Cherry Creek Mortgage Company offers the following rate lock commitments:  Acceptable lock periods are 15, 30, and 45 days for Conventional Agency, Government Agency, USDA, and Non-Agency products.  Extended locks are available up to 90 days depending on loan program. Contact the Pricing Desk for information.

Registration/Rate Lock and Lock Confirmation All lock requests or loan submissions must be uploaded into our pricing page on the Cherry Creek website with a FNMA 3.2 data file or manual input for loan registration by 5:00 PM MST. A rate lock request does not become a rate lock commitment until it has been accepted and processed by the Pricing Desk. The Pricing Desk will confirm rate lock acceptance by sending a Lock or Trade Confirmation notice to Sellers. Sellers are expected to use every effort to have all loans purchased for which they have received a rate lock commitment within the allotted time frame; failure to do so may have a negative impact of the future pricing that Sellers may receive.

Note: Confirmation of a rate lock does not constitute loan approval. All loans must meet Cherry Creek Mortgage Company lending criteria including Due Diligence or Underwriting review.

Best Effort Commitments Seller commits to deliver an individual mortgage loan of a specified principal amount and program criteria to Cherry Creek Mortgage Company. The Seller makes a best effort to deliver the loan to Cherry Creek Mortgage Company prior to the commitment expiration date.    

Seller is to complete Rate Lock Request form with FNMA 3.2 data file applying necessary adjustments based on loan parameters. Completed form is to be submitted to Cherry Creek Mortgage Company associate.

Seasoned loans price adjustments are based on Note Date and the age of loan and are determined at the time of bid.

Loans are subject to 100% due diligence review and must comply with Cherry Creek Mortgage Company product guidelines.

Closed loans should reflect terms of original commitment. However; o Final audits are conducted to ensure loans are funded as expected. Sellers are notified of any pricing adjustments needed at time of loan purchase if pricing is not correct. o Loans resubmitted after being denied cannot lock in until the new loan is approved

Note: To the extent a loan closes, failure to deliver the closed loan will result in a "pair-off" fee.

Refer to the Pair-Off Fee section of this policy for more information.

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Mandatory Commitments – BULK Bids Sellers may lock in rates and prices for periods of 15, 30, or 45 days. Bulk pricing is dynamic and changes throughout the day with the market: Pricing for bulk commitments must be executed by 1:00 PM MST. Unless otherwise requested, all bids are indicative pricing and are subject to due diligence review and market movement. Once Seller agrees to the terms of the bulk commitment, Cherry Creek Mortgage Company provides a Trade Confirmation. Seller must provide a FNMA 3.2 data file to Cherry Creek Mortgage Company on the trade date by 4:00 PM MST.     

Bulk pricing is available for a specific pool of loans, or an individual loan that cannot be priced using Best Effort Rate Sheet pricing.

Individual loan deliveries are acceptable throughout the term of the commitment period.

Loans must fit Cherry Creek Mortgage Company product and underwriting guidelines for conventional fixed/ARM and government fixed.

Loans are subject to 100% due diligence review and must comply with Cherry Creek Mortgage Company product guidelines.

Final audits are conducted to ensure loans are closed and funded as expected. Sellers are notified of any pricing adjustments needed at time of loan purchase if pricing is not correct.

204 Loan Term Discrepancies Changes – Loan Parameters Once a loan is locked, any change in the locked loan terms may result in a change in the locked price, including but not limited to:  Loan Amount  Borrower or Co-borrower FICO score  Sales Price or Appraised Value  LTV/CLTV  DTI The following items cannot change on a loan for which a lock commitment has been received from the Pricing Desk:  Borrower’s and co-borrower’s name(s) (other than corrections)  Borrower’s and co-borrower’s social security number(s)  Property address, city, state, or zip code Any change in one of the foregoing items will be treated as a new application and should be priced using the current pricing.

Changes – Loan Program A locked loan, prior to its expiration, can be changed to another product at the price which prevailed for that product on the original day it locked. A request must be sent to Pricing Desk as soon as it is known that the product is to be changed, and it will be re-priced based upon the original rate sheet. This does not include changes from Fixed to ARM, ARM to Fixed, Conv to FHA or FHA to Conv, which are treated as Loan Feature below.

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A loan program change does not constitute a new lock request and Seller is cautioned against submitting a new lock with the new loan program.

Interest Rate Changes A locked loan can be changed to any available rate/point combination that was available on the original rate sheet on the date the loan locked.

Loan Feature Changes If at any time it is discovered that a loan has changes in its characteristics that affect the value (for example the LTV or occupancy changes, fixed to ARM, Conv to FHA, FHA to Conv, conforming to jumbo, jumbo to conforming), the Pricing Desk should be notified and the loan will be re-priced, if necessary, based upon the cost of those loan features at the time the request is made. The Pricing Desk will make the necessary changes and the system will reflect the revised price.

205 Lock Expirations If rate lock expiration falls on a Saturday, Sunday, or Holiday, the lock commitment will expire the following business day. In all cases, a loan must be purchased by Cherry Creek Mortgage Company on or before the rate lock commitment expiration date. Loans not purchased within the lock period may result in re-pricing, which is typically the lower of original lock price and current market price.

Loans delivered under a Best Effort commitment that are not purchased by the revised lock expiration date are subject to the re-lock policy below.

Loans delivered under a Mandatory commitment that are not purchased by the revised lock expiration date are subject to a pair-off fee.

206 Lock Extensions Sellers may submit lock extension requests to an unexpired Mandatory or Best Effort rate lock to the Pricing Desk via email to locks@ccmclending.com. The request must be received prior to or on the expiration of the lock commitment by 5:00 PM MTN. A lock can be extended for any of the time periods listed below but will not be extended more than twice or for more than a total of 30 days from the expiration date of the original rate lock commitment. The extension periods are calculated starting from the current lock expiration date.

Failure to timely request an extension will result in the loan being re-locked in accordance with the applicable re-lock procedure. A rate lock extension will NOT be given to a lock that has expired. If the lock extension request is approved, the price for the lock extension will generally be changed as follows: Extension Period 1 days 5 days 15 days 30 days

Extension Fee 0.025% 0.125% 0.375% 0.750% 13

Please note that a lock may only be extended a maximum of two (2) times for up to a maximum of 75 days. If more time is needed to close, disburse, and deliver the loan, it will be considered on a case-by-case or treated as a re-lock.

When the requested change has been reviewed and processed, the Pricing Desk will send updated rate lock confirmation to Seller.

207 Expired Rate Locks/Re-Locks All locked loans must be purchased by Cherry Creek Mortgage Company on or before the lock expiration date.

If a rate lock commitment has expired without obtaining an extension, Seller has the option to reestablish a commitment for Best Effort locks only. Only one re-lock request will generally be accepted per loan.

A re-lock at current market may be issued for a rate lock that has expired or was cancelled for more than 30 days, even if the current market is better. A loan that does not fund by its lock expiration date and has not been extended is subject to worst case pricing. A re-lock fee of 0.125% and extension fees may apply. Re-locks restrictions noted below are as applicable:  Additional restrictions apply to ARM, Jumbo, and USDA products and may not be eligible under terms for re-locks or subject to additional fees.  Re-lock will exist for an additional 15 days only.  Worst case pricing is calculated by comparing the base price from the original lock date to the current market base price, and using the lower price.  Loans re-locked within 30 days of the lock expiration will use worst case pricing and be priced off the term of the original lock.  Loans re-locked more than 30 days after the lock expiration will be re-locked at current market price.  Previous cost structure of the loan applies (e.g., original lock for 30 days priced at 30 days), including any extension fees.  LLPAs applied to the pricing when loan was relocked will be used to calculate the new pricing structure of the re-lock.  Maximum of two re-locks will be allowed. Any additional requests will be considered on a case-by-case basis.

208 Renegotiation In a sharply lower interest rate environment, Cherry Creek Mortgage Company may attempt to accommodate likely loan fallout due to pricing consideration and potential Seller withdrawal.

Renegotiations are reviewed and approved case-by-case with management 209 Pair-Off Fees 209.a Best Effort Commitments If a closed loan is delivered for purchase on a best efforts delivery and the Correspondent Seller decides to withdraw or cancel the loan, Cherry Creek Mortgage will assess a withdrawal/pair-off fee of 12.5 BPS. However, this fee will not be charged if the loan delivered for purchase does not 14

meet Cherry Creek Mortgage Company eligibility requirements and is rejected for purchase or if the loan does not close and lock is cancelled.

209.b Mandatory Commitments Pair-off fees are calculated using the original benchmark instrument price in effect on the day of lock vs. the price on the day of loan cancellation/withdrawal or the day after lock expiration. The minimum pair-off fee is 12.5 basis points.

The example below compares benchmark pricing between the original lock terms to the current lock terms: Based on $300,000 loan Current Market Worse

Better

Benchmark price day of lock

103.500

103.500

Current benchmark price

102.750

104.000

Price Spread

0.000

0.500

Pair-off fee (minimum)

0.125

0.000

Net pair off fee (minimum net pair-off of 0.125%)

0.125

0.500

210 Commitment Management Seller is solely responsible to ensure only authorized persons enter into commitments with Cherry Creek Mortgage Company.

Note: Lists of authorized employees for the Seller are not maintained by Cherry Creek Mortgage Company

Cherry Creek Mortgage Company relies on the Seller to provide accurate data with all commitment requests. Loans locked with inaccurate information are subject to a pair-off fee if the loan cannot be purchased by Cherry Creek Mortgage Company.

211 Miscellaneous Pricing Information Cherry Creek Mortgage Company reserves the right to charge an upfront fee for delivery commitments to Sellers with excessive fallout. Confirmed double Best Effort commitments will be subject to a pair-off fee. Renegotiation of loan terms and pricing of any existing delivery commitment is not allowed.

Cancellations/Fallout If Seller knows a loan will not close within the lock period, Seller should notify the Pricing Desk and modify the lock as soon as possible to ensure Cherry Creek Mortgage Company can mitigate the expense of providing hedge coverage for the lock.

Excessive cancellations, fallout, or pair-offs will be grounds for review and reconsideration of Seller approval. Cherry Creek Mortgage Company will research cancelled Best Effort commitments; should Cherry Creek Mortgage Company determine the loan did close, the Seller will be assessed a pair-off fee for the non-delivery of the full commitment amount.

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Errors and Omissions Cherry Creek Mortgage Company is responsible for providing updated loan program information and accurate pricing. Cherry Creek Mortgage Company reserves the right to correct any published pricing or product error. The pricing adjustment matrix should not be used to determine product eligibility.

300 PRODUCTS Sellers will have access to a variety of Cherry Creek Mortgage Company lending products and programs. The Cherry Creek Mortgage Company Correspondent website provides a listing of the approved programs and products available.

301 Product List Conventional Fixed & Adjustable Rate Products  30, 20, 15, and 10 (Fannie only) Year Fixed Rate  5/1, 7/1, and 10/1 LIBOR ARM  30 and 15 Year Fixed Rate - Fannie Mae DU Refinance Plus and Freddie Relief Refinance Government Agency Fixed & Adjustable Rate Products  30, 20, and 15 Year Fixed Rate Non-Agency Fixed and Adjustable Rate Products  30 and 15 Year Fixed Rate  5/1, 7/1, and 10/1 LIBOR ARM

400 ELIGIBLE TRANSACTIONS Cherry Creek Mortgage Company will purchase Agency, Government Agency, USDA, and NonAgency loans that meet the quality standards required by private institutional investors or agencies, including conformity to maximum and minimum loan amounts and loan-to-value (LTV) ratios.

The information in this section is based on generally accepted guidelines for Conventional Agency, Government Agency, USDA, and Non-Agency agency products. Specific products may have more detailed requirements and Sellers should refer to Cherry Creek Mortgage Company product guidelines to assure all requirements are met.

Eligible transactions are defined in more detail in the following sections but not limited to: 401 Borrower Eligibility 402 Loan Purpose 403 Loan Amounts 404 Ratios 405 Documentation Types 406 Eligible Properties 16

Note: Seller is responsible for ensuring loans submitted to Cherry Creek Mortgage Company for purchase meet all state specific requirements.

401 Borrower(s) Eligibility Legal Entity Cherry Creek Mortgage Company will purchase mortgages made to natural persons only. If the borrowers are another type of legal entity or hold title in another type of legal entity, the loan is not eligible for the Cherry Creek Mortgage Company Correspondent Lending program.

Ineligible borrowers  Corporation or S Corporation (exceptions on a case-by case basis)  General Partnership (exceptions on a case-by-case basis)  Irrevocable inter Vivos Trusts  Life Estate  Land Trust  Real Estate Syndication  LLC (exceptions on a case-by-case basis) Co-borrowers Co-borrowers are allowed on mortgages. Refer to specific product guidelines for complete information as to occupancy requirements and other particular situations.

Inquiries Reporting on Credit Recent inquiries may indicate that the borrower has been actively seeking new credit accounts.

When the credit report indicates that recent inquiries have taken place, the lender must confirm that the borrower has not obtained any additional credit that is not reflected in the credit report or the mortgage application. All inquiries showing on the credit report must be individually explained and the letter must be signed by the borrower. If additional credit was obtained, a verification of that debt must be provided and the borrower must be qualified with the monthly payment.

Signing Restrictions Unless specific program guidelines restrict the use, Cherry Creek Mortgage Company will accept a Power of Attorney (POA) that references the property and authorizes the attorney-in-fact to enter into a real estate transaction to purchase the mortgage property. Cherry Creek Mortgage Company will not allow loan documents to be signed on the behalf of any borrower, nonborrower spouse, or vested owner by any means other than the Specific Power of Attorney. POA requirements are outlined in the Underwriting Policy and Procedures section of this Seller’s Guide.

Ownership/Titleholders Title to the property must generally be in the name of individual borrowers only. Some programs allow ownership by revocable Inter Vivos Trusts. Additional requirements for closing mortgage loans in the name of a Revocable Trust are included in the Closing Policies and Procedures section of this Seller Guide.

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POA Cherry Creek Mortgage Company does not allow the use of a POA for any Trustee or Co-Trustee.

Borrower’s Age All borrowers must have reached the age at which the mortgage Note can be legally enforced in the jurisdiction where the property is located. There is no maximum age limit for borrowers. All applicants are evaluated on their ability to meet Cherry Creek Mortgage Company underwriting guidelines.

Non-Purchasing Spouse To perfect a lien under governing state law when a married applicant purchases or refinances a property without involving a spouse, Cherry Creek Mortgage Company requires the spouse to sign applicable documentation to confirm relinquishing all rights to the property. As required by state jurisdiction, Cherry Creek Mortgage Company will accept different documentation, provided Cherry Creek Mortgage Company is guaranteed a lien position that is superior to that of the non- borrowing spouse.

Non-Arm’s Length Transactions Non-arm's length transactions are purchase transactions in which there is a relationship or business affiliation between the seller and the buyer of the property. Cherry Creek Mortgage Company allows Non-Arm’s length transactions for the purchase of existing properties unless specifically forbidden for the particular scenario, such as delayed financing. For the purchase of newly constructed properties, if the borrower has a relationship or business affiliation (any ownership interest, or employment) with the builder, developer, or seller of the property, Cherry Creek Mortgage Company will only purchase mortgage loans secured by a primary residence.

Cherry Creek Mortgage Company will not purchase mortgage loans on newly constructed homes secured by a second home or investment property if the borrower has a relationship or business affiliation with the builder, developer, or seller of the property.

Residency and Immigration Status Cherry Creek Mortgage Company will purchase loans only if the borrower and co-borrower are either United States citizens or Permanent Resident Aliens. Documentation will be required according to applicable investor guidelines. The borrowers must have a social security number.

Tax identification numbers are not accepted.

Multiple Mortgages to the Same Borrower(s) The occupancy of the property being financed determines how many other financed one-to-four family properties the borrower may own. For all loans, the borrower's primary residence, subject property and any properties owned separately by a co-borrower must be included in the total. Joint ownership in residential property is considered the same as total ownership for limitation purposes. All mortgages funded for the same borrower must be submitted to Cherry Creek Mortgage Company for purchase at the same time.

402 Loan Purpose Cherry Creek Mortgage Company will purchase residential, single family, mortgage transactions only for the purpose of purchasing property, refinancing rate and term of an existing mortgage and cash-out refinance transactions.

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Purchase Transactions Purchase money transactions (“purchases”) are transactions with the proceeds used to finance the purchase of the subject property, as defined in a sale and purchase agreement executed by the borrower and seller.

Subordinate Lien Transactions Creek Mortgage Company does not offer second lien transactions but will allow concurrent closings of second mortgages or HELOCs. Some restrictions may apply. Please refer to product guidelines.

Only one second mortgage is allowed and must meet the following terms: Closed End Second Mortgages  Must be subordinated if already in place at the time of closing of first mortgage  Mortgage with regular payments that cover at least the interest due so that a negative amortization does not occur  Must be standard market program  Must be a standard market rate at time of closing  No prepayment penalties Home Equity Line of Credit (HELOC)  Must be subordinated to Cherry Creek Mortgage Company first lien  Ratios are calculated on the monthly payment of the (HELOC). If the HELOC has a balance but no monthly payment is reported, the correspondent must obtain documentation verifying the payment amount or use a minimum of 1% of the balance  No prepayment penalties Refinance Transactions There must be at least one borrower on the new loan who was a borrower on the existing loan being refinanced. A refinance transaction can also include loans where the property owner obtains a mortgage on a property that does not have a mortgage lien against it or where the proceeds are used to pay off an outstanding balance on a land contract including any documented costs the borrower incurred for rehabilitation, renovation or energy conservation improvements, provided the land contract was executed at least 12 months before the application date for the new loan.

Eligible Refinance Transactions Cherry Creek Mortgage Company will purchase the following refinance transactions subject to product guidelines:  Rate-and-term  Cash-out  Property-related  Restructured Loans  HPML  Delayed Financing  FHA Streamline and VA IRRRL 19

Ineligible Refinance Transactions  Short Payoffs  High-Cost Loans Special Refinance File Requirements Regardless of Automated Underwriting System (AUS) approval findings, a payoff demand statement is required in each loan file on all refinance transactions. The payoff demand statement must reflect the following about the loan being paid off:  Is not more than 30 days delinquent  Does not contain charges associated with default/forbearance  Does not indicate a curtailment of principal or interest (for example, a short pay)  Meets the mortgage derogatory requirements 403 Loan Amounts Cherry Creek Mortgage Company has established a minimum loan amount of $50,000 for all programs. The maximum loan amount will be the same as the loan limits established by Agency, Government Agency, USDA, and Non-Agency guidelines.

404 Ratios General LTV/CLTV Ratio Guidelines The following general requirements apply when determining loan-to-value (LTV) and combined- loan-to-value (CLTV) ratios.  LTV Ratio: Loan-to-value is determined by dividing the loan amount by the lesser of the purchase price or appraised value.  CLTV Ratio: Combined loan-to-value ratio is determined by dividing the sum of the unpaid principal balance of the first mortgage and the unpaid principal balance of all subordinate mortgages by the lesser of the sales price or appraised value. For HELOCs, use the maximum line amount to calculate the CLTV ratio.

Ratios – Housing Expenses The maximum monthly housing expense-to-income ratio for mortgages is AUS-driven but will be determined by product guidelines. Refer to the specific product guidelines for additional requirements.

Ratios - Calculation The monthly housing expense is the sum of the following:  The fixed installment for the mortgage in the borrowers primary residence  Monthly premium for the hazard insurance  Real estate taxes and mortgage insurance premium  Homeowner’s association dues, including utility charges that are attributable to the common areas but excluding any master utility charges that apply to the individual units  Ground rent  Special assessments  If applicable, any HO6 condo insurance premiums and/or flood insurance premiums 20



Any payments required for subordinate financing o If the subordinate financing is an interest-only fixed-rate closed-end second, monthly payment must be based on the fully amortized, fully indexed rate to qualify the borrower o If the subordinate financing is a HELOC (new or the subordination of an existing HELOC secured by the subject property), monthly payments equal to 1% of the total line amount must be used in qualifying the borrower. For HELOCs with written evidence of a line modification, the modified limit will be used to calculate the 1% monthly payment.

405 Documentation Types The type of loan documentation used to verify the borrower’s employment, income and asset information in the loan application varies depending on the loan program and program requirements. Not all documentation types can be used on all loan programs. Always refer to the specific loan program and the AUS findings report to determine documentation eligibility.

Note: A full appraisal and triple merge credit report are required on all loans regardless of AUS findings.

IRS Form 4506-T The Seller is required to submit a completed, signed, and executed IRS Form 4506-T at application with applicable transcripts in the credit file for underwriting. The closed loan file must contain an additional IRS Form 4506-T completed and signed at closing.

Paystub Requirements A current Paystub is required on every loan regardless of AUS requirements.

Documentation for Conforming and Non-Conforming Loans Certain loan programs may contain criteria that are more restrictive and different from the standard guidelines. Always refer to the individual loan program in the Seller Guide and AUS findings for documentation eligibility and specific requirements for loan documentation.

406 Eligible Properties Cherry Creek Mortgage Company will purchase Agency, Government Agency, USDA, and NonAgency loans secured by residential 1-4 family properties based on description, zoning, and present use of the subject property. Some eligible properties may not be acceptable under all program and product types, as specific programs and products may have more restrictive guidelines. Refer to the specific loan program to determine property eligibility.

The dwelling may be located in urban or suburban areas:  On an individual lot  In a condominium  Within a PUD project All properties with lot sizes greater than 10 acres are subject to rural housing guidelines, even if the property is not designated as rural in the appraisal. Rural area properties are eligible only under select loan programs; refer to specific loan product guidelines.

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406.a Property Underwriting Considerations Certain aspects of the location of a property require special consideration. Appraisers and underwriters will identify and address these for each loan application submitted.

• Geographical areas that have a limited diversification of employers will be carefully analyzed since the discontinuance of the operations of a single industry can affect housing stability in the whole area.

• Seasonal/Vacation Properties, regardless of their location, are acceptable only if they are suitable for year-round use.  For all properties, the appraiser must consider the present or anticipated use of any adjoining property that may adversely affect the value or marketability of the subject property.

• All properties, especially rural properties, must be readily accessible by all-weather roads that meet local standards and must have adequate utilities available and in service.

• An individual or spot auction, due to probate reasons or non-tract non-builder foreclosure, is generally acceptable, but these will be reviewed on a case-by-case basis.

Furniture Package Condominium units or other properties where the sales contract indicates personal property is being conveyed (other than normal appliances) with the sale will have adjustments to the sales price for the personal property according to agency guidelines.

406.b Rural Properties Cherry Creek Mortgage Company will purchase mortgages secured by residential properties in rural areas when allowed by program guidelines. A rural area relates to the county or anything beyond the suburban area. All properties with lot sizes greater than 10 acres are subject to rural housing guidelines, even if the property is not designated as rural in the appraisal. Properties with significant outbuildings suitable for agricultural uses will be reviewed with great care, regardless of whether the appraiser assigns any value to them or not. Properties with minimal outbuildings that are of relatively insignificant value in relation to the total appraised value are acceptable if they are typical residential improvements and support the residential use for the location and property type. The buildings must not be used to support commercial or agricultural enterprise.

Note: Comparable sales with similar improvements should show they are typical and have an existing market. A property with an atypical minimal outbuilding is still acceptable as long as the appraiser’s analysis reflects little or no value for it.

406.c Special Housing Types Some programs may allow special types of housing design or construction, such as log houses.

Restrictions apply to all types of special housing, and the Seller must follow all the requirements for these properties. Product guidelines will specify any restrictions on property types.

406.d Condominium Projects Acceptable Condominium Properties Cherry Creek Mortgage Company will purchase first mortgage loans on condominium units that meet the eligibility requirements set forth in this section, are in full compliance with applicable 22

state law, requirements of the jurisdiction in which the condo project is located, and do not have any of the characteristics listed in this section under the heading Ineligible Condominium Projects.

In addition, the project must be warrantable. A warrantable condominium is a condominium project that meets Agency eligibility standards. The Seller is responsible for ensuring the condominium project, and the reps and warrants for the property they have submitted, is an eligible property. Cherry Creek Mortgage Company will not be responsible for performing Initial, Full, or CPM reviews for eligibility.

Site Condominium Properties Single family detached dwellings encumbered by a declaration of condominium covenants or condominium form of ownership are acceptable. If there is not an HOA, the borrower is to provide a satisfactory letter in regards to the liability insurance for injuries, etc. on property line.

LTV on Condos Cherry Creek Mortgage Company will purchase eligible condominium units. Please refer to Cherry Creek Mortgage Company guidelines for maximum LTV/CLTV on condominium units.

Review Requirements Sellers should refer to the DU/FNMA guidelines for options for reviews and particular details for each option. Cherry Creek Mortgage Company will review the Seller’s eligibility documentation of all condominium projects. Each loan must have a HOA certification (See sample HOA Certification form via Correspondent website).

FNMA 1028 Project Approval New projects with FNMA 1028 project approval are eligible for purchase if run through DU. Sellers must include a copy of the 1028 Project Approval in the underwriting submission file. The FNMA approval must not have expired and must specify the subject phase.

FNMA CPM (Condo Project Manager) Primary residences with LTVs exceeding 90%, second homes with LTVs exceeding 75%, and all investment properties require FNMA CPM approval. In order to utilize this process, the project must meet all the requirements for limited/streamline review plus the following: • A review of the budget must provide for a setback of at least 10% in a reserve account for capital expenditures and deferred maintenance.

• Project must receive an approval status through FNMA’s Condo Project Manager(CPM) Note: Freddie Mac accepts FNMA’s CPM approval under reciprocal review

Limited/Streamline Review Cherry Creek Mortgage Company will purchase loans for condominium units if DU findings are Approve/Eligible or LP findings are Accept/Eligible for a Limited Review Process of the Condominium Project. Limited review (DU) or streamline review (LP) is available for primary residences with LTV’s of 80% or less and second homes with LTV’s of 75% or less. Investment 23

properties are not eligible for limited review. Refer to the following Fannie Mae Limited Review Guidelines or Freddie Mac Streamline Review Guidelines as follows: • AUS Findings must be DU Approve/Eligible or LP Accept/Eligible.

• Eligibility is restricted to established projects; to qualify as an established project, all of the following conditions must be met: o The project is 100% complete, meaning all units, common elements and amenities must be 100% complete and the project cannot be subject to additional phasing or annexation. o 90% or more of the total units have been conveyed to unit purchasers.

The control of the Homeowners’ Association has been turned over to the unit purchasers.

• The project is not an ineligible project according to FNMA/FHLMC guidelines • The project is not part of a manufactured home project.

• The project must meet the insurance requirements for Hazard, Liability, Flood and Fidelity Bond.

Note: Fidelity bond is not required for projects with fewer than 20 units

Projects in Litigation Generally, Cherry Creek Mortgage Company does not accept loans with condominium projects involved in litigation. However, on a case-by-case basis Cherry Creek Mortgage Company may agree to review required documentation to determine if the loan is eligible for the Cherry Creek Mortgage Company Correspondent Lending program.

Commercial Property Allocation No more than 20 percent of the property's total floor area in a project can be used for commercial purposes. The commercial portion of the project must be of a nature that is homogenous with residential use, which is free of adverse conditions to the occupants of the individual condominium units.

Investor Concentration No more than 10 percent of the units may be owned by one individual/ investor. This will apply to developers/builders that subsequently rent vacant and unsold units. For two and three unit condominium projects, no single entity may own more than one unit within the project; all units, common elements, and facilities within the project must be 100 percent complete; and only one unit can be conveyed to non-owner occupants.

Ineligible Condominium Projects • Non-Warrantable Projects • New Projects (without FNMA 1028 approval) or Newly Converted Projects • Project or legal phase is not fully complete, or • Less than 90% of the total units have been conveyed to unit purchasers, or • The control of the homeowners’ association has not been turned over to the individual unit owners.

• Condominium Hotel/Condotels • Resort Condominiums • New Gut Rehab Projects 24

• • •

Mixed Use Condominiums Combination Units Condominiums Cooperatives

406.e PUD Projects Cherry Creek Mortgage Company will accept files for purchase only if the project is Type E eligible. The credit file must contain the Uniform Underwriting and Transmittal Summary (1008) with the Type/Class indicated on the form.

Type E Project Summary for Attached PUDs Type E projects are an established PUD in which control of the homeowners’ association has been turned over to the unit purchasers. Loans that meet the requirements of a type E PUD should be coded as E-PUD in the Project Classification section of Fannie Mae form 1008. Refer to Fannie Mae guidelines and Cherry Creek Mortgage Company Eligibility Matrices for complete information.

Fannie Mae guidelines are used for all PUD Project descriptions and requirements. A Planned Unit Development (PUD) is a project that consists of common property and improvements that are owned and maintained by the homeowners’ association for the benefit and use of the individual PUD units. The project may consist of attached dwellings or stand-alone detached dwellings. The key difference between condominiums and PUDs is that a condo owner receives title to a unit and a PUD owner receives title to a lot which includes the dwelling.

PUD Classifications: • Detached PUDs – No review is required for mortgages secured by a new or established detached PUD dwelling (regardless of whether the project consists of detached dwellings only or a combination of attached and detached dwellings). No project approval certificate is required for the loan file. A detached PUD is processed the same as a singlefamily residence.

• Attached PUDs – Cherry Creek Mortgage Company must perform a review of a PUD project if the mortgage is secured by an attached dwelling. No project approval certificate is required for the loan file.

Requirements for PUDs with Attached 2-4 Unit Properties No single entity may own more than one unit within the project. All but one unit in the project must have been conveyed to an owner-occupied principal residence or second home purchaser.

The units in the project must be owned in fee simple ownership and unit owners must be the sole owners of, and have the right to the use of, the project facilities, common elements and limited common elements.

406.f Geographic Restrictions Soft Markets Cherry Creek Mortgage Company will purchase mortgage loans secured by properties in all continental states, Alaska, and Hawaii, with the exception of New York, West Virginia, Maine, North Carolina, New Hampshire, Guam, Puerto Rico, and the U.S. Virgin Islands. Geographical 25

restrictions are listed under property types. Please refer to Cherry Creek Mortgage Company Product Guides for specifics.

It is acceptable that mortgage loans may be secured by properties located in declining markets.

It is also expected that the appraiser will utilize generally accepted appraisal standards and appraisal report forms that require the appraiser to research, analyze, and report on the factors in the neighborhood that may affect the market value or marketability of the properties in the market area.

Note: Some products are subject to a 5% reduction to CLTV in soft markets. Please refer to product guidelines for more details.

The definition of a soft market is any area that shows evidence of: • Declining property values, and/or • An oversupply of homes for sale, and/or • A marketing time over six months While Cherry Creek Mortgage Company follows Fannie Mae guidance as it pertains to declining markets, soft market areas should be treated conservatively.

Appraisals All loans are subject to the enhanced appraisal requirements as specified in program guidelines.

Underwriters will carefully review appraisals to ensure that the appraiser has appropriately analyzed property value trends and overall market conditions to arrive at the value provided. A field review may be required if the underwriter feels that the market value may be overstated.

Cherry Creek Mortgage Company may require additional review if there are concerns regarding overstated value, which could result in a reduction of value.

Sellers must demonstrate proof the appraisal meets AIR guidelines and Fannie Mae LQI requirements. In addition, Sellers must meet any additional geographic or program restrictions of the MI provider for the loan file.

500 UNDERWRITING POLICIES AND PROCEDURES 501 Automated Underwriting Sellers are responsible for submitting the loan application through DO, DU, or LP. 501.a Submission to DU Complete DU submission using your LOS access to Fannie Mae DU. Complete the AUS underwriting process and generate a final DU Underwriting Determination and Underwriting Analysis report to be submitted with the Underwriting Submission package to Cherry Creek Mortgage Company for review. Only loans that have a Risk Class or Eligibility decision of Approved/Eligible from DU are eligible for purchase by Cherry Creek Mortgage Company. Loan data contained in the DU Underwriting Determination must match the loan documentation exactly, or the AUS process will need to be re-run by the Seller, thus delaying and/or preventing the approval process.

Note: Manual underwrite is available only for some pre-foreclosure and short sale circumstances. Please see product guidelines for further details.

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501.b Submission to LP Complete LP submission using Sellers LOS access to Freddie Mac LP. Sellers must have the final LP Full Feedback Certificate with a Risk Class or Eligibility decision of Accept. Loans with an LP decision of Caution are not eligible for purchase by Cherry Creek Mortgage Company. Loan data contained in the LP Full Feedback Certificate must match the loan documentation exactly, or the AUS process will need to be re-run by the Seller, thus delaying and/or preventing the Cherry Creek Mortgage Company approval process.

Note: Manual underwrite is available only for some pre-foreclosure and short sale circumstances. Please see product guidelines for further details.

502 Credit Package Submission Minimum Standards Documentation types are discussed in detail in section 4.5 Documentation Types. The type of loan documentation used to verify the borrower’s employment, income and asset information in the loan application varies depending on the loan program and program requirements. Always refer to the specific loan product and the AUS findings report to determine documentation eligibility.

In addition to any AUS or program requirements, Cherry Creek Mortgage Company also requires the following documentation in each file submitted for underwriting. Missing items will be conditions to be met prior to purchasing the loan.

IRS Form 4506-T Seller is required to submit a completed, signed, and executed IRS Form 4506-T at application with applicable transcripts in the credit file for underwriting. The closed loan file must contain an additional IRS Form 4506-T completed and signed at closing.

Fannie Mae LQI Compliance Documentation All loans must show evidence of compliance with FNMA’s Loan Quality Initiative, including but not limited to updated credit report prior to closing, verification on MERS regarding borrower and property liens, third party fraud checks prior to closing, and data integrity check on AUS findings. These items will not all be available at the time of Underwriting, but the Cherry Creek Mortgage Company underwriter or due diligence vendor will condition for them and the items must be included in the closed loan file.

POA Closings For any loan closing with a Power of Attorney a copy of the POA must be included in the credit package. In addition, the following requirements must be met.

• POA requirements for ALL loans: o Must be Specific POA o Specific language to the purpose of the real estate transaction o Statement that the attorney-in-fact has no financial interest in the transaction (i.e. real estate agent, broker) o No exceptions to POA and guaranteed first lien position in title commitment o POA notarized and includes a notary acknowledgement.

•

Specific to FHA: o All borrowers must sign the initial 1003 and 92900 individually.

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•

Specific to VA: o For all Veterans on active duty, the following documentation is required:  “Alive and Well” statement from Veteran’s Commanding Officer, OR  Documentation of bona fide effort made to obtain certification and results.  Veteran must have signed the sales contract individually.  Veteran must have signed the initial application individually.

Note: No cash-out transactions, with the exception of VA loan products, will be allowed when a POA is being utilized.

503 Credit Package Submission Process Sellers are responsible for delivery of required disclosures within the mandated timeframes and for all interaction with the borrower(s) at all times until Cherry Creek Mortgage Company purchases the loan file. Sellers will be responsible for input to the AUS for findings and for gathering the documentation as required by the program guidelines and AUS findings.

Minimum Delegated Submission Standards All loan files must have the following documentation:  Fully completed and executed 1003 • All required disclosures, properly executed • AUS findings, including credit report • Signed and Executed IRS 4506-T with applicable transcripts • All documentation as required by the AUS • Appraisal containing color photos, delivered electronically in first generation .pdf format • Sales Contract and any required addenda or disclosures, signed and dated by all parties Minimum Non-Delegated Submission Standards All loan files must have the following documentation:  Fully completed and executed 1003  Completed Submission Form • All required disclosures, properly executed • AUS findings, including credit report • Signed and Executed IRS 4506-T • W2s, 1040s, 1065 and 1140s, as applicable, for the past two years. For retired borrowers, the most recent Social Security/Pension/Annuity Award letter(s).

• Sales Contract and any required addenda or disclosures along with EMD check and source of funds • Current Mortgage statement • Hazard Ins Policy • Payoff Demand • Preliminary Title Report 504 Loan Submission: Non-Delegated Underwriting or Pre-Approval Request When the file is ready for submission, Sellers will complete Underwriting Loan Submission form available via website and submit to http://www.cherrycreekmortgage.com/correspondent Seller will also deliver the loan file securely through this Cherry Creek Mortgage Company website according to Cherry Creek Mortgage Company document requirements.

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505 Conditional Approvals Delegated: Due Diligence will review all documentation in the file including the appraisal. Due Diligence will also perform a compliance check and any red flag fraud indicators that may require more information within the file to clear any questionable items. Cherry Creek Mortgage Company reserves the right to pull loans for full in-house review at any time to ensure quality is being maintained on the loans Cherry Creek Mortgage Company chooses to purchase. The process will remain the same with the exception that conditions will come from an internal e-mail address as opposed to an online portal.

Once Due Diligence has thoroughly reviewed the file, Due Diligence will issue a conditional approval. Sellers are responsible for obtaining additional documentation or information to clear these conditions. To ensure the conditions are handled quickly and efficiently, Sellers will upload the documents or information required to meet conditions.

506 Clear to Purchase For Delegated (closed loans) submissions, Due Diligence and Cherry Creek Mortgage Company conditions are fulfilled by the Seller. Purchaser prepares for funding.

507 Clear to Close For Non-Delegated underwriting submissions, once the Underwriter has cleared all conditions; the Correspondent will be given a Clear-to-Close (CTC) approval to execute the closing. Sellers will fund in their name. Closing documents and any conditions that were made prior to funding are required to be submitted to Cherry Creek Mortgage Company for review prior to purchase.

600 CLOSING POLICIES AND PROCEDURES 601 Closing the Loan Cherry Creek Mortgage Company will purchase loans only when all conditions have been met and cleared by Due Diligence and Cherry Creek Mortgage Company Purchaser or Underwriter as applicable. Loans closed without these conditions cleared may be ineligible for purchase by Cherry Creek Mortgage Company. Closed loans submitted for purchase to Cherry Creek Mortgage Company must comply with the standards as described in this section.

602 Escrow Holdback Policy Cherry Creek Mortgage Company will not purchase loans with outstanding escrow holdbacks.

Sellers may close with escrow holdbacks, but Cherry Creek Mortgage Company will review files prior to purchase to ensure all documentation for the release of funds is acceptable and all funds have been released. Sellers are responsible for handling all monthly payments from borrowers until the loan is purchased. Cherry Creek Mortgage Company will require a payment history at the time the closed loan is submitted for purchase.

603 Pre-paid Interest Policy On an exception basis, Cherry Creek Mortgage Company will purchase loans with interest credits available for loans closing through the 10th of each month. Sellers are responsible for collection of any payments due that may be required prior to the purchase date of the loan.

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604 Impound/Escrow Accounts Impound/escrow accounts will be maintained as a general rule on all loans. Program guidelines may allow the waiver of escrows of taxes and insurance in specific instances. There may also be an additional fee for the waiving of escrow accounts. Refer to program guidelines and pricing policy for this information.

Sellers are responsible for all escrow payments due to insurance provider, county tax recorder, and mortgage insurance carrier (as applicable), etc. until Cherry Creek Mortgage Company’s first payment date.

605 Requirements for Trust Closings Inter Vivos (Revocable) Trust Cherry Creek Mortgage Company will purchase loans held in Inter Vivos “Living” Trusts provided Trust review conditions have been met and approved by the Cherry Creek Mortgage Company Underwriter. All loans closing in the name of Trusts must meet all of the following requirements.

The complete trust documents, or trust certification from the Title Company, must be received prior to doc drawing or funding of the loan designated for sale to Cherry Creek Mortgage Company.

Note: Some products restrict the closing of loans in trusts. Review product guidelines for eligibility.

Requirements for all Trusts: • Primary or second homes only • Borrower(s) must be creator(s) of the Trust. (The creators are usually called the Grantor(s), Settler(s), or Trustor(s)).

• Borrower(s) must be the Trustee(s) of the Trust.

• The Trust must be revocable.

• The Borrower(s) must be the primary beneficiaries of the Trust.

• The Trustee(s) must have the authority to borrow money and pledge the Trust property as security.

For any loan closing in the name of an Inter Vivos Trust, the following documents are required for submission to underwriting: • Copy of trust and certification letter from an attorney • Title commitment showing complete 12-month history must identify transfer dates, all Correspondents, all buyers, and all sales prices.

Trust documents or Trust Certification by the Title Company is required for review and must meet Cherry Creek Mortgage Company and Agency requirements for approval.

Cherry Creek Mortgage Company requires the following for signatures on loans closing in Trusts. Failure to have the documents signed correctly will result in the loan not being eligible 30

for purchase, and could require the loan documents to be redone and re-recorded with an endorsement to the title policy. Costs to cure any issues will be the responsibility of the Seller.

Required Signatures All Trustees or Co-Trustees of the Trust that the loan is closing in must sign the Note and Addenda even if they are not borrowers on the Note because the loan is closing in the Trust.

Formats for Signatures Signatures must include the name and date of the Trust as well as the name and title of Trustees.

Those individuals on the Trust as borrowers must sign both as Trustee or Co-Trustee and individually: • Jane Doe, individually, and as Co-Trustee of the Jane Doe Revocable Trust under Trust instrument dated month, day, year for the benefit of Jane Doe. Any individual who is a Trustee but NOT a borrower will sign only as a Trustee: • John Doe, Co-Trustee of the Jane Doe Revocable Trust under instrument dated month, day, year for the benefit of Jane Doe. If there is a borrower on the Note who is not a Trustee or co-Trustee of the Trust that the loan is closing in, that Borrower must sign as an individual only.

Example: John Jones (borrower 1) is not a Trustee or Co-Trustee of the Trust that the loan is closing in. Jane Jones (Borrower 2) is the only trustee of the Trust that the loan is closing in. Signature lines should be as follows:  John Jones, Individually  Jane Jones, Individually, and as Trustee for the Jane Jones Revocable Trust under Trust instrument dated month, day, year for the benefit of Jane Jones.

Cherry Creek Mortgage Company does not allow the use of a POA for any Trustee or Co-Trustee.

606 Insurance Requirements The closed loan file must contain insurance policies with effective dates no later than the closing date on the HUD-1.

606.a Property Insurance Cherry Creek Mortgage Company requires property insurance in an amount established by Cherry Creek Mortgage Company’s Underwriter to ensure Cherry Creek Mortgage Company’s interest in a property is adequately protected. This usually equates to the rebuild cost from the appraisal, or a cost estimator, provided directly from the insurance company, showing they believe there is adequate coverage to ensure rebuilding costs. This can also be confirmed with a 100% Replacement Cost insurance policy. The insurance coverage will include at a minimum 31

Hazard Insurance, Flood Insurance for properties in a designated flood zone, and Wind Insurance if the hazard policy does not cover wind damage.

For attached condominium and PUD projects, the file must contain a copy of the project master policy (“blanket” policy) and a “walls-in” hazard insurance coverage policy (commonly known as HO-6 policy) unless Seller can document that the master insurance policy of the HOA covers the interior of the unit. The HO-6 policy must provide coverage in the amount of at least 20% of the appraised value with a 5% maximum deductible. Additionally, the “walls-in” policy must be escrowed on any loan where impounds are required.

Escrow Requirements When a loan has escrows for taxes, hazard insurance or any other charges, Cherry Creek Mortgage Company will also require the escrow of flood insurance premiums and fees, when applicable. The HO-6 policy must be escrowed as well.

Insurance on Refinance Loans Refinance loans must have a minimum of two (2) months remaining coverage on all policies at the time the Seller funds the loan.

Hazard Insurance Deductibles For single-family and multiple-unit properties, the maximum deductible may be up to 5% of the amount of the policy, unless a higher maximum amount is required by state law. If individual deductibles apply to losses from named perils (such as fire, water not caused by flooding, or wind), then each deductible may not exceed 5% of the dwelling coverage. The deductible must apply to either fire or extended coverage, or both.

606.b Flood Insurance Sellers must provide a Standard Flood Hazard Determination (flood certificate) for all loans.

Cherry Creek Mortgage Company requires Life of Loan Certificate coverage on all loans purchased. Flood insurance is required if all or part of the property improvements are located in a Special Flood Hazard Area (SFHA). Flood insurance is required even if the mortgaged premises (such as a condominium unit on the fourth floor) is above the 100-year flood boundary. The amount of insurance required is the lesser of: the outstanding principle balance of the loan, the value of the improved property, or the maximum coverage available for the particular type of property (usually $250,000 for 1-4 family structure).

Special Flood Insurance Areas Flood insurance is required on properties located within the following SFHA zones: • “A” zones regardless of second designation • V, V1-V30, and VE If the Flood Designation Area on the flood certificate indicates “None” because the subject area has not yet been mapped by FEMA, Cherry Creek Mortgage Company does not require flood insurance.

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606.c Hazard Policy Ratings Policies covering 1-4 unit properties must meet one of the following eligibility criteria: • Coverage must be provided by Lloyd’s of London.

Or • Be covered under a FAIR Plan (Fair Access to Insurance Requirements Plan), if it is the only coverage available at a reasonable cost. FAIR Plan is a program established within a state to provide access to insurance for property owners in designated areas of high risk.

Or • Be issued by a company that meets the rating requirements of one of the following agencies: Rating Agent Demotech, Inc.

A.M. Best Co.

Rating An “A” or better rating in Demotech’s Hazard Insurance Financial Stability Ratings.

A “B” or better general policyholder’s rating or a “6” or better financial performance index rating in Best’s Key Rating Guide.

Or An “A” or better general policyholder’s rating and a financial size category of “VIII” or better in Best’s Insurance Reports-International Edition.

606.d Title Insurance The title policy must name the Seller, ISAOA, as the insured. Title must be vested in the mortgagors’ names, or in the name of an eligible Inter Vivos Trust, if allowed under program guidelines.

Chain of Title Review The title policy and/or title work must include a minimum six months’ history of property ownership from the effective date of the policy or preliminary report. Some programs require 12 or 24 months to be reviewed. The Sellers may contact the Cherry Creek Mortgage Company Closing Purchaser or Underwriter for specific questions or issues regarding title review.

Refinance Transactions If the six-month history indicates that the property has been vested to the borrower for less than six months, documentation must be provided as follows: • Date of any transfers that have occurred within the last six months • Transfer values, as applicable • Satisfactory explanation of the short vesting • Satisfactory support that all transactions are bona fide Policy Underwriter A nationally recognized insurer or reinsurer that has received one of the following ratings must have underwritten the title insurance policy: 33

• • • • •

BBB or better rating from Duff and Phelps Credit Rating Company.

C or better rating from LACE Financial Corporation.

Baa or better rating from Moody’s Investors Service.

BBB or better rating from Standard and Poor’s, Inc. A Financial Stability Rating of S (Substantial) or better, or a Statutory Accounting Rating of C (Average) or better from Demotech, Inc.

607 Mortgage Electronic Registration Systems (MERS®) Loans must be closed using MOM documents, and Sellers are responsible for the following MERS transactions, using the MIN associated with the loan and Cherry Creek Mortgage Company MERS Org ID #1000302: • Registration in MERS within 7 days of closing or prior to delivery of the closed loan file to Cherry Creek Mortgage Company Information is provided in this Correspondent Sellers Guide regarding MERS requirements and transactions as a convenience to Seller. Additional details about registering loans and the available connections to MERS are outlined in the MERS Procedures Manual and the MERS Integration Handbook at this address: http://www.mersinc.org/MersProducts/manuals.aspx?mpid=1 Sellers may contact MERS by mail, phone, or fax as follows: MERS 1818 Library Street, Suite 300 Reston, VA 20190 Phone: (800) 646-6377 Fax: (703) 748-0183 607.a Transferring a Mortgage Using MERS The Sellers must use MERS (Mortgage Electronic Registration Systems, Inc.) when selling loans to Cherry Creek Mortgage Company. MIN # will be generated as a part of the closing process but the Sellers will be responsible for registering the loan with MERS and transferring the beneficiary and/or servicing rights to Cherry Creek Mortgage Company.

607.b Registering a Loan with MERS Loans delivered must be registered by the Sellers with MERS at time of delivery. A MERS transfer of beneficial rights (TOB) and transfer of servicing rights (TOS) must be initiated by the Seller to Cherry Creek Mortgage Company (ORG ID#1000302), within 48 hours of purchase by Cherry Creek Mortgage Company.

The registration process will be performed by MERS member via either: • MERS Online, a secure internet connection with MERS • Batch transactions, use of a computer to computer interface with MERS 607.c Transfer of Servicing and Beneficial Rights 1, 2 A MERS transfer of beneficial rights (TOB) and transfer of servicing rights (TOS) must be initiated by the Seller to Cherry Creek Mortgage Company (ORG ID#1000302), within two(2) business days of purchase by Cherry Creek Mortgage Company.

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Seller must be named as the servicer and investor at the time of registration. Once Seller receives the purchase advice from Cherry Creek Mortgage Company, Seller must initiate the MERS transfer of beneficial rights (TOB) and transfer of servicing rights (TOS) to Cherry Creek Mortgage Company. Seller must email Cherry Creek Interim Servicing at: postclosing@ccmclending.com once MERS transfer has been initiated.

700 PRE-PURCHASE PROCESS 701 Submission Process Purchase of a locked loan is required before the lock expiration date. Cherry Creek Mortgage Company requires all conditions met by Seller and ready for purchase before or on lock expiration date by 2:15 PM MST. 702 Documentation Deficiencies Once the closed loan package has been reviewed and it is determined that the loan file contains missing and/or incorrect documentation, the loan file will be conditioned. The Purchaser will coordinate with the Seller to ensure timely clearance of conditions for purchase. If the lock expiration date is approaching or passed, Purchaser will communicate with the Seller that the rate will need to be extended. Sellers are subject to the cost associated with rate lock extensions.

It is the Correspondent’s responsibility to manage their funding suspense pipeline to ensure that all outstanding loan issues are resolved and the loan purchased/funded timely.

703 Collateral Delivery A complete Collateral Package is required on all loans. Collateral Package documents must be acco-fastened in a manila file folder and delivered to Cherry Creek’s Document Custodian, Deutsche Bank: Deutsche Bank National Trust Company Global Transaction Banking Trust & Agency Services Attn: Carlos Falconi -Team Cherry Creek 1761 East St. Andrew Place Santa Ana, CA 92705-4934 Phone # 714-247-6061 FAX: 714-656-2610 The Collateral Package must have a label on the tab with the following: Mortgagor’s Last Name, First Name, Middle Initial Property Address Cherry Creek Loan Number Seller Loan Number Purchaser’s Commitment Number

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Every Collateral Package must include, in the following order: • Bailee Letter, Form (or equivalent). Should reference Loan Number, MIN Number, Borrower Name and Note Amount. It should also reference the items listed below: o Receiving Bank: o Receiving Bank Address: o ABA Number: o Account Name: o Account Number: o Attention:

•

Original Note (and applicable addenda), reflecting all applicable endorsements, including final endorsement from Seller, to “in blank”.

•

Copies of the Note, DOT, and POA (POA if applicable)

All outstanding collateral conditions must be satisfied before the Loan Purchase Advice is generated for funding. Once the Cherry Creek Operations Team validates the Collateral Package and Deutsche Bank has certified the Original Note, the CCMC Accounting Department will release the Purchase Advice and fund the loan.

800 LOAN PURCHASE 801 Wire Detail Cherry Creek Mortgage Company will issue a Purchase Advice to Seller for each loan that is purchased, detailing all financial calculations used to determine the final purchase price of the loan.

802 Net Escrow Funds from Purchase Wire With the exception of any escrow payments that are the Seller’s responsibility, the following items will be netted from the Seller’s purchase proceeds for a loan with an escrow:  Escrows deposited with Seller  Escrow amounts included in any payments due Seller  Cherry Creek Mortgage Company fees as applicable Seller is also responsible for payment from the escrow account of any insurance or tax payments that were due or will be due by or before Cherry Creek Mortgage Company’s first payment date.

If escrows have been waived and a bill for taxes or insurance is due, Seller is responsible for obtaining proof of payment from the borrower.

803 First Payment Issues Seller is responsible to collect borrower’s mortgage payments up to Cherry Creek Mortgage Company’s first payment due date. If a payment for a loan is due during the same month in which Cherry Creek Mortgage Company purchases the loan, Cherry Creek Mortgage Company will require Seller to collect that payment and the loan purchase balance will reflect the reduced principal balance.

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804 Loan History A payment history will be required on all loans prior to purchase, when payment could have conceivably been made to the seller. The payment history must show the loan is current at the time of purchase.

805 PMI for Conventional Loans Seller must pay any escrowed PMI, financed or Seller paid lump sum mortgage insurance premiums prior to delivery of the closed loan package to Cherry Creek Mortgage Company.

Evidence of payment in the form of a copy of the check payable to the mortgage insurance company is required.

900 POST PURCHASE REQUIREMENTS 901 Seller Document Responsibilities Sellers are responsible for the submission of final recorded documents and title policies with all endorsements after the loan has been purchased. Cherry Creek Mortgage Company requires the submission of these documents in a timely manner and will notify Seller when documents have not been received within 60 days of the date of purchase.

Cherry Creek Mortgage Company reserves the right to assess fees for documents not received within 90 days of the date of purchase per the Agreement. Such fees may be deducted and held in reserve from proceeds of other loan purchases until the documents have been received.

902 Government Loans All government loans sold to Cherry Creek Mortgage Company must be insured prior to the first payment due date. This insurance requirement applies to FHA, VA and Rural Housing transactions and insurance will be verified as follows: • FHA loans will be verified via FHA Connection • VA loans require the delivery of the Loan Guaranty Certificate • Rural Housing loans require delivery of the Loan Note Guaranty Documentation submission for VA and Rural Housing must occur prior to the first payment due date. If Seller fails to obtain the required insurance prior to the first payment due date, Seller shall, at the discretion of Cherry Creek Mortgage Company, repurchase the affected loan.

903 Post Purchase Documentation Sellers are responsible for delivery of the following documents on all loans purchased by Cherry Creek Mortgage Company: • Recorded Security Instrument and all riders.

• Any intervening Assignments of Mortgage required ensuring the interests of Cherry Creek Mortgage Company.

• Mortgage Insurance Certificate (FHA) / Loan Guaranty Certificate (VA) / Loan Note Guaranty (USDA) • Title Policy and all endorsements 37

Note: Re-recording fees for inaccurate Security Instruments or for additional Assignments and any costs for additional endorsements are the responsibility of the Seller.

Final Document Delivery Address: Cherry Creek Mortgage Company, Inc. Attn: Final Documents Department 7600 E. Orchard Rd., Ste. 250-N Greenwood Village, CO 80111 303-320-4040 904 Sellers Transfer Responsibilities Sellers are also responsible for the following: • MERS transfer of servicing and beneficial interest transactions (TOSR/TOB) • Mailing “Goodbye Letter”/Transfer of Serving Rights to borrower – Sample in Exhibit • Notification to insurance providers of transfer to Cherry Creek Mortgage Company, including, but not limited to, and as applicable the following:  Hazard, including fire, wind, condominium master and HO-6  Flood Certification  Flood Insurance  Mortgage Insurance (MI) – Conventional Loans  MIC, LGC, LNG – Government Loans  Notice of Record/Lender Change on FHA/USDA

1000 CORRESPONDENT COVENANTS 1001 Early Loan Payoff/Purchase Price Protection With respect to any Mortgage Loan that prepays in full on or prior to the last day of the third full month following the related Closing Date (or such other earlier date set forth in the related PPTL), the Seller shall reimburse the Purchaser an amount equal to the product of (a) the amount by which Purchase Price Percentage paid by the Purchaser to the Seller for such Mortgage Loan exceeds 100% and (b) the outstanding principal balance of the Mortgage Loan as of the Cut-off Date. Such payment shall be made within thirty (30) days of such payoff.

1002 Repurchase It is understood and agreed that the representations and warranties set forth shall survive the sale of the Mortgage Loans and delivery of the Mortgage File to Cherry Creek Mortgage Company.

Upon discovery by Cherry Creek Mortgage Company of a breach of any of the foregoing representations and warranties which materially and adversely affects the value of the Mortgage Loans or the interest of Cherry Creek Mortgage Company, Seller is to indemnify Cherry Creek Mortgage Company.

The Seller shall have a period of thirty (30) days from the earlier of its discovery or its receipt of notice of any such breach within which to correct or cure such breach. If Seller is unable to cure, the repurchase process will be initiated.

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Any such repurchase shall be accomplished by wire transfer of the amount of the Repurchase Price to an account designated by the Cherry Creek Mortgage Company.

1003 Early Payment Default A Mortgagor shall be considered delinquent with respect to a monthly payment if that payment is not received by Cherry Creek Mortgage Company or its assigns on or before its due date. Each delinquent monthly payment shall accrue another day of delinquency for each consecutive day that passes without Cherry Creek Mortgage Company or its assigns receiving that monthly payment. Furthermore, for each full calendar month that passes without Cherry Creek Mortgage Company or its assigns receiving the delinquent monthly payment, the monthly payment shall be considered thirty (30) days delinquent regardless of the number of days in that month.

Seller shall repurchase a Mortgage Loan at the Repurchase Price and in accordance with the procedures within five (5) Business Days following receipt of notice from Cherry Creek Mortgage Company of the occurrence of any of the following events with respect to such Mortgage Loan: 1. The Mortgagor fails to make the first scheduled payment due Cherry Creek Mortgage Company under the related Mortgage Note for any Mortgage Loan within the calendar month such payment is due; OR 2. Any of the first four (4) scheduled monthly payments due Cherry Creek Mortgage Company on a Mortgage Loan becomes sixty (60) days delinquent. **End of Guide, Exhibit Section Follows**

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EXHIBIT A: Seller Application Package Requirements 

Completed Application – signed & dated



Two (2) executed Master Loan Purchase Agreements



Most recent 2 years audited financials, If audited unavailable, then unaudited financials YTD and two years business tax returns



Copies of current E&O Insurance and Fidelity Bond



Organizational documents for the Applicant, which should include a list of the name and title of each officer and the following Articles of Incorporation and Bylaws.



Date Incorporated __________________



Completed W-9 form



MERS Number: ______________________



Corporate Resolution



Power of Attorney – completed, signed and notarized



Copies of mortgage licenses through NMLS for main office and branches and exemption letters (if applicable)



Copies of all agency approval letters (i.e. FHA/HUD, Ginnie Mae, Fannie Mae, Freddie Mac)



Copy of Quality Control procedures



Results of the last Quality Control Audit with Management’s response to the audit



Investor report cards



Copies of most recent state regulatory and HUD audit along with Company’s response “(in those cases where exams are confidential a summary of the regulatory concerns, findings, fines or sanctions will suffice)”.



Organizational chart including contact information for all Department Management



Resumes of principal officers reflecting their current responsibilities and length of time in the Mortgage Industry



Anti-Money Laundering/SAR Attestation Form



Fair Lending Policy Acknowledgment



Company’s Appraisal Independence Requirements (AIR) Policy

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EXHIBIT B: Required Documents for Loan Submission  Rate lock confirmation with Cherry Creek Mortgage Company (verified as accurate against closing docs)  Current pay history with Seller (proof paid for MI, taxes, insurance, if applicable) reflecting current UPB, current escrow account balance, and next payment due date. No lates.  Copy of Original Note with all applicable addenda  Copy of Power of Attorney  Copy of Deed of Trust/Mortgage with all riders, legal description, jurat (if applicable)  Trust Documents (if applicable)  MERS assignment (if not on Note & Deed of Trust/Mortgage)  Wire Instructions/Bailee Letter (where Cherry Creek Mortgage Company will send purchasing wire – not the wire instructions for escrow/title when loan was originally funded)  Closing Protection Letter  Title Commitment/Prelim (12 month chain, survey/plat map, legal description, CCR’s, etc.)  Copy of Warranty Deed, Quit Claim  Subordination Agreement (if applicable)  Copy of 2nd lien Note & Deed of Trust/Mortgage (if applicable)  Final HUD-1 with all applicable addendums signed by all borrowers or stamped True & Certified and signed by closing agent  Closing Instructions/Funding Sheet  Notice of Right to Cancel (Owner Occupied Refinances)  Final Truth In Lending  Itemization of Amount Financed  Initial Escrow Account Disclosure or Escrow Waiver  Under disclosure cure documentation  First Payment Letter  Copy of Signature Affidavit(s)/Name Affidavit(s)  MI Certificate  Evidence of Hazard Insurance (1st lien and 2nd lien, if applicable)  Flood Insurance (1st lien and 2nd lien, if applicable)  Elevation Certificate, if applicable  All other applicable insurance on property  Tax Information Sheet, Tax Certificate (if applicable)  NJ/NY Tax Authorization  Photo Identification - Driver’s License, Permanent Resident Alien card, VISA, passport, etc.  Final Loan Application(s)

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Required Documents for Loan Submission (continued)  Final AUS Approval (DU, LP, GUS – if streamline: FHA Transmittal/FHA Connection, VA Summary/Loan Analysis/Cert of Eligibility)  1008/Signed Underwriting Approval  W-9 Request for Taxpayer Identification Number  Request for copy or Transcript of Tax Form 4506-T  Credit Report(s)/Social Security Number Search/Alert  Credit Supplements and all Explanation Letters  Verification of Funds & Assets Documentation (incl. gift funds)  Verification of Employment and Income Documentation  Rental Agreements  442 Final Inspection, if applicable  442 or 2055 if disaster has occurred since funding of the loan  AVM if aged loan and supporting current value  Appraisal with clear photos and all addenda (incl. appraiser’s license)  Review Appraisal, if applicable  Condo/PUD Warranty, all applicable Condo/PUD questionnaires/documentation  All applicable inspections (termite, roof, water, septic, etc.) and proof of repair (if applicable)  Leasehold documentation  Purchase Contract with all addenda fully executed and dated by all parties  Fully executed escrow instructions  All GFEs and corresponding Change of Circumstance documentation  Evidence of Rate Lock (for HPML testing)  Initial 1003  Initial TIL  Credit Release Authorization  ECOA Notice  Appraisal Notice  Affiliated Business Disclosure  Transfer of Service Disclosure  Flood Disclosure Notice  All applicable docs specific to VA, FHA, USDA  CAIVRS  All applicable program disclosures, HOEPA disclosures & other disclosures that may apply

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