Commission
Income A YTD paystub documenting at least 30 days of income, dated no earlier than 30 days prior to the initial loan application date and no more than 90 days old on the date the note is signed is required.
Paystub must clearly identify the borrower as the employee, with all necessary information to calculate income, including gross YTD earnings, base salary with pay period specified, and must clearly specify the employer’s name; OR
Copies of the most recent one year filed personal income tax returns signed by the borrower (s).
Self-Employment Copies of the most recent one year filed Personal income tax returns sign by the borrower (s).
Verification of existence of the business through a third party source no more than 30 calendar days prior to the Note Date.
NOTE: DU Messaging regarding Self-Employment Duration documentation requirements may be disregarded in its entirety.
Alimony or
Child Support Copy of the divorce decree or property settlement agreement, court order or equivalent documentation.
One month documentation of receipt. (i.e. bank statement showing direct deposit, deposit ticket, etc.).
NOTE: DU Messaging regarding minimum 6 month documentation and three year continuance may be disregarded.
Employment-Related Assets as Qualifying Income
Standard documentation as described within the Conventional Lending Guide.
DU Refi Plus Summary
General Underwriting Guidelines, Continued
Rental Income Acceptable Lease or one year personal tax return (Form 1007 is not required). Applies to rental income from subject or other properties owned by the borrower.
NOTE: Any DU Message requirements regarding principal residence conversion documentation may be disregarded.
Retirement
and Pension One of the following: award letter, one year personal tax return, W-2 or 1099 form, or one month bank statement reflecting direct deposit.
NOTE: DU Messaging regarding three year continuance may be disregarded.
Social Security One of the following: award letter, one year personal tax return, Form SSA- 1099, or one month bank statement reflecting direct deposit.
Temporary
Leave Income A paystub or written VOE documenting pre-leave income.
The borrower’s written confirmation of his or her intent to return to work,
No evidence or information from the borrower’s employer indicating that the borrower does not have the right to return to work after the leave period.
Regardless of the date of return, the amount of the “regular
employment income” the borrower received prior to the temporary leave must be used to qualify.
Continued on next page
DU Refi Plus Summary
General Underwriting Guidelines, Continued
Unemployment
Income Unemployment benefits may be used in qualifying an applicant for a DU Refi Plus loan whether the benefits are seasonal or non-seasonal.
Most recent one-month bank statement or other equivalent documentation evidencing receipt of the income, or
Other third-party documentation showing income type, source, amount;
NOTE: Lenders are not required to establish a minimum history of receiving income or make a determination that the income can be expected to continue for at least three years
Projected
Income Future income is not acceptable for qualifying purposes.
IRS Form
4506-T Required to be signed at application and closing; however, not to be processed.
Continued on next page
DU Refi Plus Summary
General Underwriting Guidelines, Continued
Housing
History 0x30 days lates in the most recent 12 months on any mortgage trade lines.
Not applicable for loans being refinanced that are currently serviced by Ocwen Loan Servicing, LLC.
Payoff statement required to be documented in the loan file.
Continued on next page
DU Refi Plus Summary
General Underwriting Guidelines, Continued
Assets If asset verification is required per DU, the most recent one month, quarterly, or annual statement showing the asset balance is required.
IMPORTANT: A written VOD is not acceptable without bank statements.
Large deposits that appear on bank or other asset statements for DU Refi Plus loans does not require further investigation or
documentation.
Proof of liquidation of assets (i.e. sale of stock) is not required even if the borrower uses those assets for closing costs.
Self-employed borrowers may use business funds to satisfy the asset verification requirements regardless of percentage of business
ownership.
Grant-like unsecured financing provided to the borrower through a HFA's HHF (Hardest Hit Funds) program for the purpose of paying down the outstanding mortgage balance at the time of closing
resulting in a lower new loan amount is permitted. The HHFs may also be used for the payment of closing costs.
The following requirements apply to HHFs:
The funds must be reflected in the Uniform Residential Loan Application (Form 1003 or 1003(S)) (and in the online loan application for DU Refi Plus) in Section VII, Details of Transaction as an Other Credit.
The loan file must be documented with a copy of the promissory note or other documentation specifying the terms and conditions of the loan.
If repayment of the HHF is indicated in the supporting
documentation, the monthly payment must be included in the debt to income ratio unless repayment is only due upon sale or default.
The transfer of the loan proceeds must be reflected on the Closing Disclosure (or HUD-1 Settlement Statement).
DU Refi Plus Summary
General Underwriting Guidelines, Continued
DU Estimated
Value Message IMPORTANT: DU Estimated Value Message to be retired and will no longer be issued with DU Version 9.1 loans.
When FNMA is able to confirm the property address with the USPS database and FNMA’s databases have sufficient information on the property to issue a value, DU will issue the following:
“Based on the standardized address, DU estimates the value of the property at $<estimated value>. This estimated value was developed by internal proprietary models to help determine eligibility for a DU Refi Plus property fieldwork waiver. It is not the result of an appraisal nor was it developed by a state licensed or certified appraiser. This estimate is intended to be used solely by the lender to underwrite the refinance of the borrower’s mortgage loan.”
IMPORTANT: The loan case file does not need to be resubmitted using the estimated value provided by DU. The waiver should be exercised using the value that was initially entered into DU.
PIW Offering Final submission of the loan case file to DU must indicate a PIW is permitted.
The PIW offering may not be more than four months old on the date of the note and mortgage.
During any post-closing corrections/modifications, if the re-run DU recommendation subsequently requires a full appraisal, then a full appraisal must be obtained.
NOTE: Utilization of appraisal waivers requires the borrower to be provided and sign the Notice About Appraisal of Your Property disclosure.
Year built must be listed on the 1003 application.
Not permitted for Manufactured Homes.
Continued on next page
DU Refi Plus Summary
General Underwriting Guidelines, Continued
Full Appraisal
Requirements Property fieldwork/appraisal type is acceptable as issued by DU.
Property Condition/Quality Rating for loans being refinanced that are currently serviced by Ocwen Loan Servicing, LLC
If an appraisal is obtained, Ocwen will accept appraisal reports with a property condition rating of C6 and/or quality rating of Q6 completed on an “as-is” basis. The appraisal does not have to be completed “subject to”
repairs being made.
For Investment properties, a Form 1007 Comp Rent Schedule is not required.
Property Condition/Quality Rating for loans being refinanced that are currently NOT serviced by Ocwen Loan Servicing, LLC
If an appraisal is obtained, Ocwen will only purchase loans where the appraisal is completed “as is” with the property’s conditions rating C1 – C5 and the quality of construction rating Q1- Q5.
IMPORTANT: For Manufactured Homes, a full appraisal Form FHLMC 70B or FNMA 1004c is required.
Transferred
Appraisals Not Permitted.
Bedroom
Count &
Monthly Rents
In ALL situations, FNMA requires the Bedroom Count AND Estimated Monthly Rents to be captured for All Investment properties.
This information may be obtained from any viable source and must be documented on the 1008 by the Underwriter.
Continued on next page
DU Refi Plus Summary
General Underwriting Guidelines, Continued
Manufactured Homes
Defined
A manufactured home is described as a dwelling built on a permanent chassis and attached to a permanent foundation. The manufactured home and the land on which it is situated must be titled as real property.
Other factory-built housing (not built on a permanent chassis) – such as modular, prefabricated, panelized, or sectional housing – is not considered manufactured housing and is eligible for purchase by Ocwen.
Continued on next page
DU Refi Plus Summary
General Underwriting Guidelines, Continued
Manufactured Home
Property Requirements
The borrower must own the land on which the manufactured home is situated in fee simple, unless the manufactured home is located in a condo project;
leasehold properties are not permitted.
The manufactured home must be a one-unit dwelling unit that is legally classified as real property.
The towing hitch, wheels, and axles must be removed.
The dwelling must assume the same characteristics of site-built housing.
Multi-width manufactured homes may be located either on an individual lot or in a project development.
Condo project developments must be Fannie Mae-approved.
The manufactured home must have sufficient square footage and room dimensions to be acceptable to typical purchasers in the subject market area.
The manufactured home must be defined as a double-wide home.
Fannie Mae does not specify other minimum requirements for size, roof pitch, or any other specific construction details for HUD-coded manufactured homes.
The manufactured home must be built in compliance with:
The Federal Manufactured Home Construction and Safety Standards that were established June 15, 1976 as amended and in force at the time the home is manufactured; and
Additional requirements that appear in HUD regulations at 24 C.F.R. Part 3280.
NOTE: Compliance with these standards will be evidenced by the
presence of both a HUD Data Plate and the HUD Certification Label (tag).
Site preparation for delivery of the manufactured home must be completed.
The manufactured home must be attached to a permanent foundation system in accordance with the manufacturer’s requirements for anchoring, support, stability, and maintenance.
The foundation system must be appropriate for the soil conditions for the site and meet local and state codes.
The manufactured home must be permanently connected to a septic tank or sewage system, and to other utilities in accordance with local and state requirements.
DU Refi Plus Summary
General Underwriting Guidelines, Continued
Manufactured Home
Appraisal Requirements
The manufactured home appraisal must be completed on Form 1004C,
Manufactured Home Appraisal Report. Manufactured homes are not eligible for streamlined appraisals.
Fannie Mae’s appraisal report forms require appraisers to develop an opinion of value solely for the real property as completed consisting of the manufactured home, site improvements, and the land on which the home is situated.
Fannie Mae requires market-based property valuations for manufactured homes demonstrated by a well-developed sales comparison approach to value that is further supported by the cost approach to value.
NOTE: See below for discussion regarding the cost approach to value.
An appraiser who is unable to locate sales of manufactured homes that are truly comparable to the subject property may decide that it is appropriate to use either older sales of similar manufactured homes or sales of similar manufactured homes that are located in a competing market so that he or she can establish a baseline for the “sales comparison analysis” and determine sound adjustments to reflect the differences between the comparable sales that are available and the subject property.
The appraisal must address more directly, in a standardized format construction quality, property condition, market acceptance, indicated value by the cost approach, and support for the contributory value of the site.
The property site must be of a size, shape, and topography that is conforming and acceptable in the market area.
The appraisal report also must indicate whether or not the site is compatible with the neighborhood.
The property site must have competitive utilities, street improvements, adequate vehicular access, and other amenities.
The appraiser must comment on the conformity of the manufactured home to other manufactured homes in the neighborhood.
The appraiser must address both the marketability and comparability of a
manufactured home by selecting comparable sales of similar manufactured homes.
Since amenities, easements, and encroachments may either detract from or enhance the marketability of a site, the appraiser must reflect them in the analysis and valuation.
If the site has adverse conditions or is not typical for the neighborhood, the appraiser must comment.
The appraiser must use a minimum of two comparable sales of similar
DU Refi Plus Summary
General Underwriting Guidelines, Continued
Manufactured
Manufactured housing security instrument must include the following information:
Year manufactured
Make
Model
Serial number/VIN number(s)
Any other information required by applicable law.
One of the following title policy endorsements must be provided for a Manufactured Home:
An ALTA Form 7.1, where available, or ALTA Form 7 endorsement, or
An endorsement required in the applicable jurisdiction that insures that the Manufactured Home constitutes real property, such as the T-31 endorsement in the State of Texas.
Subject property must be taxed as real estate or personal property according to state law and local taxing authority.
FEMA Declared
Disaster Areas Regardless of the Property Fieldwork requirements used for the DU Refi Plus loan, an additional inspection and/or new appraisal of the property are not necessary after a disaster.
A property secured by a DU Refi Plus mortgage that was damaged as a result of a disaster will not be required to be repaired prior to closing as long as the loan meets the property insurance requirements for Hazard Insurance and Flood Insurance as stated within the
Conventional Lending Guide.
Provided DU offers the property fieldwork waiver on the final
submission of the loan case file to DU, the waiver may be exercised as long as the waiver offer is not more than four months old on the date
DU Refi Plus Summary
General Underwriting Guidelines, Continued
Validation
Requirements Ocwen will assess all properties and appraisals to confirm values are well supported. It will be at the Underwriter’s discretion to utilize any
additional validation tools at their disposal to escalate value concerns.
Escrow
Holdbacks Holdbacks of any kind are not permitted.
Interest Only
Option Not Permitted
Continued on next page
DU Refi Plus Summary
General Underwriting Guidelines, Continued
Mortgage
Insurance The DU Findings will state if the current loan has Mortgage insurance. The MI Company and the percentage of coverage will be identified in the findings.
Must obtain the mortgage insurance on the new loan from the same company that is insuring the loan being paid off. The percentage of coverage, frequency and renewal type MUST remain the same on the new loan.
If the loan being refinanced currently has Mortgage Insurance and the new loan has a LTV greater than 80% LTV, then the new loan will require Mortgage Insurance.
Underwriter must process or work with the MI Partner to process the MI transfer/modification.
Must provide the MI Certification in the closed loan file reflecting the appropriate coverage amount.
Lender Paid Monthly MI premiums are not eligible unless Ocwen is servicing the loan that is being refinanced. Premium types may be modified to borrower paid options if correctly disclosed and accepted by the borrower.
IMPORTANT: MI Partners can take 30 days or more to process a same servicer HARP modification request; Brokers are responsible for managing expectations (i.e. rate lock expiration) accordingly.
Instructions for completing HARP modification request with each MI Partner:
Genworth
http://mortgageinsurance.genworth.com/RatesAndGuidelines/MakingHomeAffordable.aspx United Guaranty
https://www.ugcorp.com/services/affordability.html MGIC
http://www.mgic.com/underwriting/refi-to-mod.html Radian
http://www.radian.biz/page?name=HASPSameServicerPerf PMI (PMI is only permitted under the HARP program)
DU Refi Plus Summary
General Underwriting Guidelines, Continued
Multiple
Properties There is not a limit on the number of financed properties for DU Refi Plus eligible loans, regardless of occupancy type.
Non-Occupant
Co-Borrowers An existing borrower may be removed from the new loan for any reason provided at least one of the original borrower(s) remains on the new loan. Any person who has ownership interest in the subject property must sign the security instrument (or any other document required to perfect our lien position or satisfy an Regulation), regardless if the person applied for the loan.
Borrowers may be added in the new transaction provided the original borrowers remain on the loan.
Non-Traditional Credit History
Not Permitted.
NOTE: If there are no usable credit scores due to insufficient information or inaccurate information, the loan is ineligible.
Qualifying
Ratios Ocwen will accept loans with the maximum Debt-To-Income (DTI) ratios accepted by the DU’s approve/eligible recommendation:
The loan characteristics are... Maximum DTI
DU Refi Plus As permitted by DU recommendations
For ARMs:
5/1: Greater of Note Rate + 2.00% OR the Fully Indexed Rate
7/1, 10/1: Greater of Note Rate OR the Fully Indexed Rate
Continued on next page
DU Refi Plus Summary
General Underwriting Guidelines, Continued
Refinance
Requirements Refinance under the DU Refi Plus may include the following:
Pay off the existing first mortgage
Closing costs, prepaid costs and discount points
The borrower may receive up to $250 at closing from loan proceeds (not permitted to come from premium pricing) (excluding Texas primary residence in which the borrower may not receive any cash back). If the amount exceeds $250, then refer to the next bullet point regarding principal curtailments.
A Principal Curtailment to the new refinance mortgage at closing is allowed for the excess funds and must be clearly reflected on the Closing Disclosure (or HUD-1 form) or other equivalent closing statement. Not permitted for Borrower Paid Transactions.
Texas Section 50a6 scenarios are not permitted.
Continued on next page
DU Refi Plus Summary
General Underwriting Guidelines, Continued
Net Tangible
Benefit Transaction must represent a net tangible benefit to the borrower and be documented by the Underwriter on the 1008.
IMPORTANT: DU does not have the ability to make the determination that the transaction will benefit the borrower. This review must be performed manually by the Underwriter.
The monthly principal and interest payment is decreasing.
Payment increases are only permitted if the loan is refinancing into a more stable product (i.e. ARM to Fixed, IO to fully amortizing, shorter term, etc.).
If the mortgage loan type changes from a FRM to an ARM, a reduction in principal and interest payment is required.
NOTE: Movement from a FRM to an ARM is not considered a movement to a more stable mortgage product. It is encouraged to provide a FRM mortgage to borrowers whenever possible. FRM mortgages are required if the LTV ratio exceeds 105%.
The amortization period is shortened.
Interest rate is reduced
The amortization period is extended (i.e. from 15 to 30 years) provided there is a reduction in the principal and interest payment.
An extension of the amortization period is not considered
movement to a more stable product; the reduction of P&I MUST be present as well.
Listed for Sale Properties that have been listed for sale are eligible if the property has
Listed for Sale Properties that have been listed for sale are eligible if the property has