Summit Eligible Product Guide - CCMC Correspondent Lending

Summit Matrix

Owner Occupancy Purchase

Eligible Product Guidelines

Credit Score

LTV

Maximum Loan Amount (Min. Loan $417,001)

Reserves

720

80

$1,500,000

9 months

700

75

$1,000,000

12 months

740

$1,500,000 80

9 months

720

$1,000,000

720

$1,500,000

Owner Occupancy Rate-Term Refinance 75 700

12 months $1,000,000

740

70

$1,000,000 ($250k cash out)

9 months

$1,000,000 ($300k cash out) 65 Owner Occupancy Cash Out Refinance 720

740 Second Home Purchase/Rate-Term Refinance

Second Home Cash Out Refinance

$1,500,000 ($350k cash out)

60

$1,500,000 ($400k cash out)

55

$1,500,000 ($500k cash out)

18 months

50

$1,500,000 ($750k cash out)

18 months

75

$1,500,000

9 months

75

$1,000,000

9 months

70

$1,500,000

12 months

70

$1,000,000 ($250k cash out)

12 months

720

740

Parameters Terms

Qualifying Ratios

12 months

Owner Occupancy and Second Home: FRM: 15 and 30 year terms.

Owner Occupancy: 43% maximum DTI Second Home Purchase / Rate-Term: 43% maximum DTI Second Home Cash Out Refinance: 40% maximum DTI (See additional overlays for Non-Occupant Co-Borrowers)

Š2014 Cherry Creek Mortgage NMLS ID 3001. THIS INFORMATION IS SOLELY FOR MORTGAGE PROFESSIONALS AND SHOULD NOT BE PROVIDED TO CONSUMERS OR THIRD-PARTIES. INFORMATION IS ACCURATE AS OF 08/01/2014 AND IS SUBJECT TO CHANGE WITHOUT NOTICE.

Subordinate Financing

Ineligible Transactions

Reserves

Institutional only, up to the program LTV/CLTV maximum. Must be recorded and clearly subordinate to the first mortgage lien.           

Interest Only Property Flips Escrow Holdback Non-Arms Length Texas Equity Temporary Buydowns Builder Bailout Conversion Loans Prepayment Penalties Balloon Loans Negative Amortization

An additional 6 months reserves are required for each financed property. 6 months additional reserves are based on PITI plus any HOA fees of the other financed properties.

Gift and/or Business funds may not be used for reserves  

Eligible Borrowers

Ineligible Borrowers

U.S. Citizens Permanent Resident Aliens o Must provide acceptable documentation to verify the borrower is legally present in the U.S. o Must be employed in the U.S. for at least the past 24 months o Proof that income and employment are likely to continue for at least 3 years  Inter-Vivos Revocable Trust  Non-Occupant Co-Borrowers  First Time Home Buyers (See additional overlays for Non-Occupant Co-Borrowers and First Time Home Buyers) )       

Non-Permanent Resident Aliens Irrevocable or “Blind” Trusts Foreign Nationals or Borrowers with Diplomatic Immunity, A1, A2, or A3 Visas Land Trusts LLC, Partnerships, Corporations, Limited Partnerships Borrowers without a credit score or Social Security Number Co-signors or guarantors who will not take title

Non-Occupant CoBorrowers

Occupying borrower must qualify with a max DTI of 50% and the max combined DTI cannot exceed 40%. Occupying borrower must independently meet credit tradeline requirements.

First Time Home Buyer

720 FICO: 75% max LTV, $1,500,000 max loan, 12 mos. reserves, 200% max payment shock – gift funds allowed 740 FICO: 80% max LTV, $1,000,000 max loan, 12 mos. reserves, 200% max payment shock – NO gift funds allowed

AUS

Minimum Loan Size

ATR/QM Rule

DU: Approve/Ineligible findings are required. Loan size is the only allowable reason for ineligibility; no DU documentation waivers are allowed. Loans will also be manually underwritten by lender $417,001

For loans subject to the ATR/QM rule, Cherry Creek Mortgage Company will only purchase loans that comply with the ATR/QM requirements.  Correspondents are responsible for providing evidence of compliance with the ATR/QM rules.

Clear itemization of fees and application of all credits that indicate paid by/to is required on all loans.

©2014 Cherry Creek Mortgage NMLS ID 3001. THIS INFORMATION IS SOLELY FOR MORTGAGE PROFESSIONALS AND SHOULD NOT BE PROVIDED TO CONSUMERS OR THIRD-PARTIES. INFORMATION IS ACCURATE AS OF 08/01/2014 AND IS SUBJECT TO CHANGE WITHOUT NOTICE.

A tri-merge in-file credit report from all three repositories is required.

The representative FICO score is defined as the middle of 3 scores, or the lesser of two scores.

Each borrower must have a minimum of 3 open trade lines, one of which must be open and active for two years. At least one of these required trades must be an installment or mortgage account and the remaining trades must be rated for at least 12 months. Authorized user accounts cannot be used to satisfy the minimum trade line or FICO requirements.

Two open trades are acceptable if the borrowers have a two-year mortgage history within the past five years (Purchase Transactions only).

If a borrower cannot meet the minimum trade line requirement , it can be considered without exception if ALL of the following criteria are met:  10 or more trade lines reported one of which must be a mortgage  A minimum of 10 years established credit history,  At least one trade line open and reporting for a minimum of 12 months

Credit

*A borrower who is not using income to qualify or is not employed does not need to meet the above minimum credit requirements.

Additional Credit Requirements:  All trade lines with a delinquency in the past 12 months require a written explanation from the borrower 

No prior bankruptcies of any type allowed



No prior foreclosure, short-sale, deed-in-lieu, modifications, Consumer Credit Counseling are allowed



All judgments, all liens affecting title, and all Non-title Charge-offs/Collections must be paid off at, or prior to, closing



Past due accounts must be brought current prior to closing



A written explanation for all inquiries occurring within 120 days of application is required



No major adverse credit reported in the last 24 months on revolving or installment accounts

Housing History: Requirements apply to all borrowers on the loan  24-month housing history is required on all loans  0x30 in the last 24 months (Mortgage/Rent) Rental history is to be verified by an Institutional VOR or 24 months proof of payment

Income

Full income documentation is required for all borrowers. All borrowers must be qualified using current, verifiable, not projected, income. A minimum of 2 years employment/income history is required.  Wage-earners: o Most recent paystub showing YTD earnings (covering at least 30 days), two years W2s, and a written Verification Of Employment (WVOE). Paystubs must be computer-generated and clearly show the borrower as the employee. If paid hourly, the paystubs must show the number of hours. If issued via e-mail or downloaded from the Internet, stubs must show the URL address, date and time printed, and verify place of origin and/or author of the documentation. 

Self-employed borrowers: o Two years personal returns, with all schedules, and business tax returns for the business(es) used for qualification where the borrower has at least 25% ownership interest. Businesses used for selfemployed income qualification must be in existence at least 4 years. All tax returns must be signed and dated.

Continued…

©2014 Cherry Creek Mortgage NMLS ID 3001. THIS INFORMATION IS SOLELY FOR MORTGAGE PROFESSIONALS AND SHOULD NOT BE PROVIDED TO CONSUMERS OR THIRD-PARTIES. INFORMATION IS ACCURATE AS OF 08/01/2014 AND IS SUBJECT TO CHANGE WITHOUT NOTICE.

A Verbal Verification of Employment (VVOE), completed within 10 days prior to the Note date, is required for ALL borrowers.  Wage-earners: o VVOE must include company name, address and phone number, method and source used to obtain the phone number, name and title of contact, name and title of the party completing the VVOE , date of contact, borrower’s title/description, hire date, and employment status. 

Income Cont.

Self-employed borrowers o VVOE must include verification of an address and phone listing for the business AND verification through a third-party such as a CPA, regulatory agency, or applicable licensing bureau. Listing and address of the borrower’s business using telephone book, internet, or directory assistance. A borrower’s website is not acceptable. Name and title of the person completing the verification. .

IRS Form 4506T/Tax Transcripts: A completed, signed, and dated IRS 4506T must be completed for all borrowers, whose income is used to qualify, at closing. The 4506T must be processed, and tax returns obtained for each year requested, to validate all tax returns (and/or W-2 forms) used for qualifying. For self-employed borrowers, this applies to both business (where borrower has at least 25% ownership) and personal returns, regardless of whether or not income is used to qualify. A separate form must be completed for each business entity. Tax transcripts must match the documentation in the file.

In the case where taxes have been filed, but the transcripts are not available from the IRS, evidence of filing must be provided and the IRS response to the transcript request must reflect No Record Found. In these cases, an additional prior year’s transcript should be provided. Large increases in income that cannot be validated via a transcript may only be considered for qualifying on a case-by case basis.

The loan file must include an Income Analysis form detailing income calculations. The FNMA form 1084 or equivalent lender form consistently used by the lender is acceptable. Income analysis for borrowers with multiple businesses must show income/loss details separately, not in aggregate.

Full asset documentation is required for both funds to close and reserves. The two most recent, consecutive months’ statements for each account are required. All pages to all statements are required. Large or atypical deposits must be documented. Earnest Money Deposit must be sourced/verified on all loans.

Business accounts may be used for down payment and/or closing; however, not to meet reserve requirements. In order to use business funds, all of the following must be met:  Cash flow analysis using 3 months business bank statements is required to determine no negative impact to the business. 

A letter from the CPA, or equivalent, confirming that the use of business funds will not negatively impact the business must be obtained and must also confirm: o Borrower has access to the funds.

Assets

o

The funds are not a loan. The borrower(s) must be the sole proprietor or 100% owner(s) of the business

o

The accountant may not be related to the borrower or be an interested party to the transaction.

Stocks, Bonds, Mutual Funds: 70% may be used for reserves. Non-vested or restricted stock accounts are not eligible for use as down payment or reserves.

Vested Retirement Accounts: 60% may be considered for reserves (certain eligible plans may use 100% if the borrower is >59 ½, i.e. 401K plan) *If needed for closing, verification that funds have been liquidated is required. Liquidation terms are also required.

Retirement accounts that do not allow any type of withdrawal are ineligible for use as reserves.

Continued…

©2014 Cherry Creek Mortgage NMLS ID 3001. THIS INFORMATION IS SOLELY FOR MORTGAGE PROFESSIONALS AND SHOULD NOT BE PROVIDED TO CONSUMERS OR THIRD-PARTIES. INFORMATION IS ACCURATE AS OF 08/01/2014 AND IS SUBJECT TO CHANGE WITHOUT NOTICE.

Assets Cont.

Asset Depletion for Income

Unacceptable Funds:  Gift of Equity  Cash on Hand  Unsecured Loans  Grant Funds  Pooled Funds  Builder Profits  Employer Assistance  Assets being used for income (Asset Depletion) may not be used to meet reserve requirements  Sale of an asset other than real property or publicly traded stocks      

Borrower must be retirement age or under certain circumstances, i.e. sale of a company.

Purchase or Rate/Term only 70% max LTV Borrower must not be currently using the eligible assets as a source of income Source and amount of the asset must be reasonable and stable Written analysis of the asset qualification source must be included in the file

Calculation: Use the balance of the eligible asset less any funds required to complete the transaction (down payment, closing costs, reserves, etc.) using a 3% rate of return over the life of the loan If the assets or a portion of the assets are being used for down payment or closing costs, those assets should be excluded from the balance before analyzing the portfolio for income qualification.

Gift Funds

Property Eligibility

Gift Funds are allowed for purchase transactions with the following requirements:  Must be from an immediate family member; proof of relationship is required  The borrower must have a minimum of 5% of their own funds in the transaction  Signed, dated gift letter showing amount, donor’s name, address, phone number, and relationship  Proof of donor’s ability to gift and evidence of funds transfer  Gifts of equity are not allowed  Gift funds may not be used for reserves

Owner Occupancy:  SFR  Warrantable Condos  PUD  2-4 unit (where common to the area and adequate comparables can be found) Second Home:  SFR  Warrantable Condos  PUD

Ineligible Properties

             

Manufactured Homes Log Homes Condotels Co-ops Unique Properties Multi (3-4) Unit Hobby or Working Farms Mixed Use Properties Agriculturally Zoned Properties with more than 10 acres Properties under 750 square feet Modular Properties subject to existing oil or gas leases Properties in Hawaii Lava Zones 1 & 2

©2014 Cherry Creek Mortgage NMLS ID 3001. THIS INFORMATION IS SOLELY FOR MORTGAGE PROFESSIONALS AND SHOULD NOT BE PROVIDED TO CONSUMERS OR THIRD-PARTIES. INFORMATION IS ACCURATE AS OF 08/01/2014 AND IS SUBJECT TO CHANGE WITHOUT NOTICE.

Condos

  

Must be warrantable types S, T, or U New condominium projects (Type R) with Condo Project Manager (CPM) or PERS approval Site (Detached) condos

All appraisals must comply with, and conform to, USPAP and the Appraisal Independence Requirements (AIR). The appraiser must not have any interest, direct or indirect, financial or otherwise, in the property or transaction. Selection criteria should ensure that the appraiser is independent of the transaction and is capable of rendering an unbiased opinion.

An appraisal prepared by an appraiser who was selected or engaged by a borrower, property seller, real estate agent, or other interested party is not acceptable, even if selected from an Approved Appraiser List. Appraisal reports that are altered by the appraiser to replace any references to the original client with a new lender’s name are not acceptable.

Appraisal Requirements

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Condition rating must be: C1, C2, C3, or C4 Quality rating must be: Q1, Q2, Q3, Q4, or Q5 Comparables should not be older than 6 months at the time of underwriting review The Market Conditions Addendum (Form 1004MC) is required for all loans

For properties recently purchased by the seller (within 90 days of the fully executed purchase contract), the following requirements must be met:  Two appraisals required  Property seller on the purchase contract must be the owner of record  Increases in value must be documented with commentary from the appraiser and recent paired sales Sellers are required to obtain a Collateral Desktop Analysis (CDA) from Clear Capital that substantially validates the origination appraisal.

Third Party Appraisal Review

A 10% variance (+/-) is allowed for LTVs ≤70%.

A 5% variance (+/-) is allowed for LTVs > 70% If a Field Review is required in the Clear Capital findings, a BPO and reconciliation to the Origination Appraisal/CDA will be required in lieu of. Variances greater than the tolerance levels will be considered on a case-by case basis.

Age of Documents

Assignment of Mortgage

Financing Concession

Other Financed Properties State Exclusions

 

Credit report, Title Commitment, Income, and Assets are valid for 90 days prior to the Note signing date Appraisals are valid for 120 days prior to the Note signing date

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.

LTV/CLTV: 75.01% - 80% = 3% LTV/CLTV: ≤75% = 6%

Any one borrower can have a maximum of 4 financed properties. Exceptions considered on a case-by-case basis.

Alaska, Georgia, Hawaii, Kentucky, Maine, Mississippi, New Hampshire, New York, North Carolina, and West Virginia

©2014 Cherry Creek Mortgage NMLS ID 3001. THIS INFORMATION IS SOLELY FOR MORTGAGE PROFESSIONALS AND SHOULD NOT BE PROVIDED TO CONSUMERS OR THIRD-PARTIES. INFORMATION IS ACCURATE AS OF 08/01/2014 AND IS SUBJECT TO CHANGE WITHOUT NOTICE.