HARP II - DU Refi Plus And Refi Plus - Enact MI

HARP II - DU Refi Plus and Refi Plus March 2017Genworth Mortgage Insurance Corporation 2017 Genworth Financial, Inc. All rights reserved.

Homeowner Affordability and Stability PlanHASPHome Affordable Refinance Program HARP Fannie Mae Refi Plus Fannie Mae DU Refi Plus Freddie Mac Relief Refinance Mortgage - SameServicer Freddie Mac Relief Refinance Mortgage - OpenAccessDU Refi Plus and Refi PlusHome Affordable Modification ProgramHAMP Fannie Mae Home Affordable Modification Freddie Mac Home Affordable Modification2

Homeowner Affordability and Stability PlanHASPHome Affordable Refinance ProgramsHARP Fannie Mae Refi Plus Fannie Mae DU Refi Plus Freddie Mac Relief Refinance Mortgage - SameServicer Freddie Mac Relief Refinance Mortgage - OpenAccessDU Refi Plus and Refi PlusHome Affordable Modification ProgramsHAMP Fannie Mae Home Affordable Modification Freddie Mac Home Affordable Modification3

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DU Refi Plus and Refi Plus OptionsHome Affordable Refinance Opportunities– Borrowers Existing Fannie Mae loan An acceptable mortgage payment history Unable to:– Refinance to obtain a lower payment, or– Move to a more stable product.– Lenders Automated underwriting (DU Refi Plus) and manual underwriting (Refi Plus) options Fannie Mae to Fannie Mae refinancesDU Refi Plus and Refi Plus6

DU Refi Plus and Refi Plus OptionsBorrower Benefit– The lender must represent and warrant that the borrower is receiving a benefitDU Refi Plus and Refi Plus7

Fannie Mae FAQ’sDU Refi Plus and Refi Plus8

Recommendations in Desktop UnderwriterDU 10.0DU Refi Plus and Refi Plus9

Allowable Business ChannelDU Refi PlusRefi Plus– Retail– Wholesale– Correspondent– Retail OnlyDU Refi Plus and Refi Plus10

Existing ServicerDU Refi PlusRefi Plus– The originating lender is not required tobe the current servicer of the existingmortgage– The originating lender (or an affiliate orsubsidiary) must be the current servicerof the existing mortgageDU Refi Plus and Refi Plus11

Underwriting MethodDU Refi PlusRefi Plus– Automated Underwriting (DU) only– Eligibility:– Manual Underwriting Only Determined by DU Identified in the DU Findings Report– Loans may be converted to Refi Plus(manual) only when: The lender is the current servicer The lender complies with all Refi PlusrequirementsDU Refi Plus and Refi Plus12

Loan PurposeDU Refi PlusRefi Plus– Limited Cash Out Refi (LCOR) only– Limited Cash Out Refi (LCOR) only Payoff of existing first-lien mortgage Financing of closing costs No more than 250 cash to borrowerDU Refi Plus and Refi Plus Payoff of existing first-lien mortgage Financing of closing costs No more than 250 cash to borrower13

Maximum LTVDU Refi PlusRefi Plus– Unlimited:– Unlimited: Fully amortizing fixed rate mortgages (FRM)with terms up to 30 years– Up to 105%: ARMs with initial fixed periods of 5 years orgreaterDU Refi Plus and Refi Plus Fully amortizing fixed rate mortgages (FRM)with terms up to 30 years– Up to 105%: ARMs with initial fixed periods of 5 years orgreater14

Subordinate FinancingDU Refi PlusRefi Plus– Existing subordinate financing:– Existing subordinate financing: Must be resubordinated No restrictions on terms Must be resubordinated No restrictions on terms– New subordinate financing:– New subordinate financing: Not permittedDU Refi Plus and Refi Plus Not permitted15

Eligible BorrowersDU Refi PlusRefi Plus– Borrowers may be removed for anyreason– Borrowers may be removed for anyreason provided: The borrower being removed is not requiredto be removed from the deed– Borrowers may be added in the newtransaction At least one of the original borrowersremains on the loan The borrower being removed is not requiredto be removed from the deed Remaining borrower(s) shows proof ofmaking payments for 12 months or– Verification of borrower’s ability to pay, overlaysapply as per 20% increase of PITI– If a borrower is removed due to death, evidenceof 12 months payments is not required– Borrowers may be added in the newtransaction At least one of the original borrowers remainon the loanDU Refi Plus and Refi Plus16

Loan LimitsDU Refi PlusRefi Plus– Existing Jumbo Conforming and HighBalance mortgage loans are eligible– The new loan must meet loan limitsapplicable at the time of delivery– Existing Jumbo Conforming and HighBalance mortgage loans are eligible– The new loan must meet loan limitsapplicable at the time of delivery Even if higher limits might have applied tothe existing loan being refinancedDU Refi Plus and Refi Plus Even if higher limits might have applied tothe existing loan being refinanced17

Occupancy and Property TypeDU Refi PlusRefi Plus– Occupancy– Occupancy 1-4 unit primary residences Second homes 1-4 unit investment properties– All property types including: Condos Co-ops Manufactured housing PUDsDU Refi Plus and Refi Plus 1-4 unit primary residences Second homes 1-4 unit investment properties– All property types including: Condos Co-ops Manufactured housing PUDs18

Payment HistoryDU Refi PlusRefi Plus– No 60-day late in last 12 months– Existing mortgage must be current– No delinquency in the most recent 6month period– No more than one 30-day delinquency onexisting mortgage in months 7-12 Any mortgage tradeline– No limit on payment increaseDU Refi Plus and Refi Plus19

Income DocumentationDU Refi PlusRefi Plus– DU minimum documentation or see 201209 attachment for minimal documentationrequirements– Salary/hourly/bonus:– Verbal Verification of Employment required– Non-employment income: One paystub Verbal Verification of Employment (VOE)– Commission/self-employed: One paystub or One-year federal tax return– SEB One-year federal tax return– Child Support/Alimony Court Order and 1 month proof of receipt– See Additional Income Types Verification of source required– If monthly P&L is increasing more than20%, the following is needed:– Verification of income: Salary/hourly/bonus:– One paystub– Verbal Verification of Employment (VOE) Commission/self-employed– One paystub or– One-year federal tax return. SEB– One-year federal tax return Child Support/Alimony– Court Order and 1 month proof of receipt– See Additional Income TypesMinimum Documentation Requirements Will Be Reflected In The DU Findings Report(9.1). See DO/DU 9.1 Release Notes For Full Details.DU Refi Plus and Refi Plus20

Asset DocumentationDU Refi PlusRefi Plus– One recent statement from asset accountshowing balance– N/A– If monthly P&L is increasing more than20%, the following is needed: Verification of assets– 1 statementDU Refi Plus and Refi Plus21

Income and Asset Documentation SEL2012-09 AttachmentDU Refi Plus and Refi Plus22

Minimum Credit ScoreDU Refi PlusRefi Plus– DU does not apply minimum credit scorerequirements to DU Refi Plus casefilesunless the P & L is increasing– See below 9.1 guidelines– No minimum credit score required foreligibility– If monthly P & L is increasing more than20%: Minimum 620 credit score requiredJust casefiles identified as HPML will have a minimum credit score of 620Current Representative Credit Score Required At Loan DeliveryFor Pricing Purposes.DU Refi Plus and Refi Plus23

Maximum Debt-to-Income RatioDU Refi PlusRefi Plus– Subject to the maximum allowable debtto-income ratio in DU– Loans that have been identified as HPMLwill have a maximum DTI of 45%– None. Not required to be calculated Lender must ensure borrower’s paymenthistory meets requirements– Loans that have been identified as HPMLwill have a maximum DTI of 45%Just casefiles identified as HPML will have a max DTI of 45%DU Refi Plus and Refi Plus24

Bankruptcy and ForeclosureDU Refi PlusRefi Plus– Standard Selling Guide and DU policieswill no longer apply regarding priorbankruptcy or foreclosure– See 9.1 guidelines below– Standard Selling Guide and DU policiesdo not apply regarding prior bankruptcyor foreclosureDU Refi Plus and Refi Plus25

Property ValuationDU Refi PlusRefi Plus– DU Refi Plus property fieldwork waiveroffered on certain loan casefiles– Otherwise follow the DU findings reportfor appraisal requirements– As per 2012-14 A new appraisal isrequired and the Lender is relieved fromits reps and warrants with respect to thevalue, condition and marketability of theproperty*DU Refi Plus and Refi Plus26

Condo/Co-op/PUD Project ReviewDU Refi PlusRefi Plus– No new project review required– Fannie Mae will rely on the originalproject eligibility determination made bythe lender, including required insurancecoverage Lender must confirm property is not a condo,co-op, hotel or motel– In addition lender must rep/warrant thatproperty is NOT subject to a timeshare orsegmented ownership agreement or isnot in a houseboat project– Lender must confirm hazard, flood,liability, and fidelity insurance coverage,per Selling Guide requirementsDU Refi Plus and Refi Plus27

https://www.fanniemae.com/content/eligibility information/eligibility-matrix.pdfDU Refi Plus and Refi Plus28

Loan-Level Price Adjustments for Refi Plusand DU Refi PlusThere are differences to LLPAs that apply to HARP mortgage pa-matrix-refi-plus.pdfDU Refi Plus and Refi Plus29

DU Refi Plus EnhancementsMaximum LTV Ratios and Eligible Products– The maximum LTV ratio has been removed for DU Refi Plus fixed-rate mortgages withterms up to 30 years– There will continue to be no CLTV or HCLTV ratios limitsDU Refi Plus and Refi Plus30

Fannie Mae Loan Lookuphttps://knowyouroptions.com/loanlookup/DU Refi Plus and Refi Plus31

Refinance ProceedsThe proceeds of the DU Refi Plus Mortgagemust be used only to:– Pay off the first lien mortgage– Pay related closing costs, financing costs andprepaids/escrows– Provide Limited Cash-Out of 250 or lessNot allowed:– Increase in the UPB of any junior lean Simultaneous refinancing of a subordinate lien isallowed on Refi Plus loans and will be acceptable on DURefi Plus loans submitted into DU 9.0All junior liens must be resubordinatedAnnouncements 09-04 and 09-13; efanniemae.comDU Refi Plus and Refi Plus32

DU Refi Plus Override OptionIndicating a loan should be underwrittenas a Limited Cash Out Refinance(LCOR)– Lenders will enter in the productdescription field “Standard LCOR”– The loan file will NOT be underwritten as aDU Refi Plus– Field can be found on the “additional data”screen in DUDU Refi Plus and Refi Plus33

DU Credit ProcessingCredit Report– Tri-Merged Credit Report– The credit report used for underwriting must be the one DU analyzed– Standard Fannie Mae DU Policies are applicable, including: All open revolving accounts with balances need to be:– Entered in DU– Included in the DTI, effective with 8.2 release Installment debt with 10 months to pay:– The system excludes installment debt if balance is ten months to pay– You do NOT need to omit Alimony/child support and separate maintenance payments:– Included if they continue for more than 10 months Contingent or co-signed loans:– Try to qualify with the debt– If ratios too high, follow Fannie Mae Seller Guide Deferred Loans:– Must always be included, unless your investor has a variance– Student Loans-If no payment listed on credit report, use 1% of the balance, unless shows the actual or proposedmonthly paymentException: If the actual documented payment is less than 1% of the outstanding balance and it will fully amortize the loan with nopayment adjustments, the lender may use the lower, fully-amortizing monthly payment to qualify the borrower.Continues on Next Slide DU Refi Plus and Refi Plus34