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LENDER MANUAL
Mortgage Revenue Bond Program
LENDER MANUAL
Mortgage Revenue Bond Program
TABLE OF CONTENTS
Select any topic within the Table of Contents to navigate through the manual
INTRODUCTION....................................................................................................I-1
Special Terms.................................................................................................I-2
Doing Business with MRBP ..........................................................................I-4
Originating Lenders .......................................................................................I-5
Annual Correspondent Lender Recertification ..............................................I-6
Directory for MRBP Division........................................................................I-7
SECTION 1 – COMPLIANCE AND PREDATORY LENDING
COMPLIANCE..............................................................................................C-1
Equal Credit Opportunity Act............................................................C-1
Fair Credit Reporting Act ..................................................................C-2
Fair Housing Act................................................................................C-3
National Flood Insurance Act ............................................................C-4
Real Estate Settlement Procedures Act..............................................C-5
Truth in Lending Act .........................................................................C-8
Home Mortgage Disclosure Act ........................................................C-9
Anti-Predatory Lending Policy ..........................................................C-9
Bank Secrecy Act...............................................................................C-11
Anti-Money Laundering ....................................................................C-13
Office of Foreign Assets Control.......................................................C-13
USA Patriot Act .................................................................................C-13
General Information...............................................................C-13
Customer Notification............................................................C-14
Minimum Identification Requirements for New Applicants .C-15
Customer Verification Procedures.........................................C-16
Lack of Documentation to Verify Identity of Customer........C-17
Denial Procedures ..................................................................C-17
Customer Identification Program and OFAC Screening .......C-18
Record Keeping .....................................................................C-19
Fair and Accurate Credit Transactions Act........................................C-19
Additional Representation or Warranties for ALT A ........................C-21
TABLE OF CONTENTS / PAGE 2
PREDATORY LENDING.............................................................................P-1
States that have Anti-Predatory Lending Restrictions .......................P-1
Disclosure Requirements ...................................................................P-2
Certificate of Compliance Requirements...........................................P-2
Points and Fees Thresholds................................................................P-2
SECTION 2 – UNDERWRITING GUIDELINES
CONVENTIONAL UNDERWRITING........................................................U-1
General Information...........................................................................U-1
Underwriting Documentation ............................................................U-1
General Requirements for Verifying Documents ..............................U-1
Eligible Borrowers .............................................................................U-2
Delinquent Federal or State Debts .....................................................U-3
Secondary Financing and other Financing Agreements ....................U-3
Private Mortgage Insurance ...............................................................U-3
Monthly Payment Escrows ................................................................U-4
Anti-Flipping Policy ..........................................................................U-4
Eligible Properties..............................................................................U-4
Natural Disaster Procedures...............................................................U-5
Shared Roads, Wells, and Septic Systems .........................................U-6
Termite Inspection .............................................................................U-6
Work Completion Escrows ................................................................U-7
Fannie Mae or Freddie Mac Tools.....................................................U-7
FHA UNDERWRITING ...............................................................................U-8
General Information...........................................................................U-8
Underwriting Documentation ............................................................U-8
Eligible Borrowers .............................................................................U-9
Funds for Closing...............................................................................U-10
Collection, Judgments, and Previous Mortgage Foreclosure.............U-11
Delinquent Federal or State Debts .....................................................U-11
Credit Underwriting ...........................................................................U-11
Manufactured Housing.......................................................................U-11
Anti-Flipping......................................................................................U-12
Shared Roads, Wells and Septic System............................................U-13
Termite Inspection .............................................................................U-13
Work Completion Escrow..................................................................U-13
Natural Disaster Procedures...............................................................U-14
FHA Tools .........................................................................................U-14
TABLE OF CONTENTS / PAGE 3
VA UNDERWRITING..................................................................................U-15
General Information...........................................................................U-15
Underwriting Documentation ............................................................U-15
Co-Signers..........................................................................................U-15
Down Payment / Maximum Mortgage ..............................................U-15
Funds for Closing...............................................................................U-16
Credit Underwriting ...........................................................................U-16
Collection, Judgments and Previous Mortgage Foreclosure..............U-16
Delinquent Federal Debts ..................................................................U-16
Manufactured Housing.......................................................................U-17
Shared Roads, Wells and Septic System............................................U-17
Termite Inspection .............................................................................U-18
Work Completion Escrows ................................................................U-18
Natural Disaster Procedures...............................................................U-18
Payment of Funding Fee and Submission for Loan Guaranty...........U-19
VA Tools............................................................................................U-19
RURAL DEVELOPMENT LOANS .............................................................U-20
General Information...........................................................................U-20
Eligible Borrowers .............................................................................U-20
Manufactured Housing.......................................................................U-21
Delinquent Federal or State Debts .....................................................U-21
Monthly Payment Escrows ................................................................U-21
Anti-Flipping Policy ..........................................................................U-21
Eligible Properties..............................................................................U-22
Natural Disaster Procedures...............................................................U-22
Property Standards: Shared Roads, Wells and Septic Systems .........U-23
Acreage ..............................................................................................U-23
Termite Inspection .............................................................................U-23
Work Completion Escrows ................................................................U-23
USDA Tools.......................................................................................U-23
TABLE OF CONTENTS / PAGE 4
SECTION 3 – GENERAL CLOSING REQUIREMENTS
General Information.......................................................................................GC-1
Delivery Instructions......................................................................................GC-2
Funding Documentation Requirements .........................................................GC-3
Note....................................................................................................GC-3
Name Affidavit ..................................................................................GC-5
Power of Attorney..............................................................................GC-5
Deed of Trust/Mortgage.....................................................................GC-6
Corporate Assignment .......................................................................GC-7
2nd Note ..............................................................................................GC-8
2nd Deed of Trust/Mortgage ...............................................................GC-8
Mortgage Riders.................................................................................GC-9
First Payment Letter...........................................................................GC-9
HUD-1 Settlement Statement ............................................................GC-10
Summary of Borrower’s Transaction.................................................GC-10
Down Payment Acknowledgement Form..........................................GC-11
Temporary Buydown .........................................................................GC-11
Title Commitment..............................................................................GC-11
Tax Certification ................................................................................GC-12
Surveys or Plat Survey.......................................................................GC-12
Flood Certification .............................................................................GC-12
Hazard Insurance ...............................................................................GC-12
Flood Insurance..................................................................................GC-14
Private Mortgage Insurance ...............................................................GC-15
Truth-In-Lending ...............................................................................GC-15
Notice to Mortgagor Regarding Actual Transfer of Servicing ..........GC-16
Homebuyer Education/Borrower Authorization for Counseling.......GC-16
Typed Loan Application ....................................................................GC-17
Appraisal ............................................................................................GC-17
W-9 Form...........................................................................................GC-18
IRS Form 4506...................................................................................GC-18
Termite Inspection .............................................................................GC-18
Miscellaneous Documentation...........................................................GC-18
Tax Information .............................................................................................GC-19
Aggregate Escrows ........................................................................................GC-19
First Payment Date.........................................................................................GC-19
Notes Delivered by Warehouse Bank ............................................................GC-20
Exception (Suspended) Loans........................................................................GC-20
Purchase Funding...........................................................................................GC-21
Natural Disasters............................................................................................GC-22
Manufactured Housing Requirements ...........................................................GC-23
Final Documentation......................................................................................GC-24
Title Insurance Requirements ........................................................................GC-25
Required Endorsements .....................................................................GC-27
General Title Waivers ........................................................................GC-28
TABLE OF CONTENTS / PAGE 5
SECTION 4 – TABLE FUNDING
Table Funding Procedures .............................................................................T-1
Overview............................................................................................T-1
Requesting Funds...............................................................................T-1
Delivery Instructions..........................................................................T-2
Post-Delivery Considerations ............................................................T-3
MERS and Table Funding with US Bank Home Mortgage .........................T-4
Tips to Correspondents for Avoiding Exceptions & Deficiencies.................T-8
Frequently Asked Questions ..........................................................................T-10
SECTION 5 – EXHIBITS
Wet Funding Request & Checklist
Lender Contact Information
Finance and Non-Finance Charge Items
MERS Contact Information
Final Document Delivery
Quick Reference Information
Introduction
Mortgage Revenue Bond Program Division
WELCOME TO
U. S. BANK HOME MORTGAGE-MRBP DIVISION
Thank you for your decision to become an Originating Lender in this Single Family Mortgage
Revenue Bond program. U.S. Bank Home Mortgage is the Master Servicer for this program and
will purchase from you the loans that you close in the MRB program.
This manual is a comprehensive guide of our policies and procedures which govern mortgage loans
originated in a Single Family Mortgage Revenue Bond program. It is an important source of
information to assist you in the delivery of loans and to insure compliance with all the MRB
program parameters.
At U.S. Bank Home Mortgage, we understand the Mortgage Revenue Bond (MRB) business and
have over 19 years of experience as a Master Servicer in both local and state issued bond programs.
You will be working with a staff that is dedicated to provide you with superior quality service.
We value your participation in this MRB program and look forward to doing business with your
organization.
Please note:
x
Originating Lenders who are new participants in a MRB program or need to update company
contact and/or wiring information must complete and submit the Participating Lender
Information form. (Copy available in the Exhibit Section of this manual)
x
U.S. Bank Home Mortgage reserves the right to make periodic bulletins and/or changes to this
guide.
Rev. (04/11/2007) - Introduction
I-1
SPECIAL TERMS
The following represents some of the special terms and abbreviations that are used throughout this
manual.
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Also Known As
American Land Title Association Title Co.
Anti-Money Laundering
Bureau of Citizenship and Immigration Services
Bank Secrecy Act
Currency Transaction Reports
Direct Endorsement
Desktop Originator
Downpayment Assistance
Desktop Underwriter
Errors and Omissions
Expanded Approval Level
Equal Credit Opportunity Act
Fair and Accurate Credit Transactions Act
Fair Credit Reporting Act
Funding Fee
Fair Housing Act
Federal Home Loan Mortgage Corporation
Federal National Mortgage Association
Good Faith Estimate
Government National Mortgage Association
Housing Finance Agency
Home Mortgage Disclosure Act
Homeownership Equity Protection Act
Department of Housing and Urban Development
Institute for Building Technology and Safety
Immigration and Naturalization Service
Internal Revenue Service
Lender Appraisal Processing Program
Loan Guaranty Certificate
Loan Note Guarantee
Loan Note Guaranty
Loan Prospector
Loan-to-Value
Mortgage Asset Research Institute
Mortgage Credit Analysis Worksheet
MyCommunityMortgage
Rev. (04/11/2007) - Introduction
AKA
ALTA
AML
BCIS
BSA
CTRs
DE
DO
DPA
DU
E&O
EAI / EAII
ECOA
FACT
FCRA
FF
FHA
FHLMC / Freddie Mac
FNMA / Fannie Mae
GFE
GNMA or Ginnie Mae
HFA
HMDA
HOEPA
HUD
IBTS
INS
IRS
LAPP
LGC
LNG
LNG
LP
LTV
MARI / MIDEX
MCAW
MCM
I-2
SPECIAL TERMS CONTINUED
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Mortgage Electronic Registration System
Mortgage Insurance Certificate
Mortgage Industry Data Exchange
Monetary Instrument Logs
Mortgage Identification Number
Mortgage Insurance Premium
Money Laundering Control Act
MERS Original Mortgagee
Mortgage Revenue Bond
Metropolitan Statistical Area
National Flood Insurance Program
Net Tangible Benefit
Office of the Comptroller of the Currency
Office of Foreign Assets Control
Private Mortgage Insurance
Paid Outside Closing
Planned Unit Development
Real Estate Settlement Procedures Act
Request for Proposal
Suspicious Activity Reports
Specially Designated Nationals
Service Release Premium
Federal Truth –in-Lending Law
U.S. Bank Home Mortgage
U.S. Department of Agriculture
Department of Veterans Affairs
MERS
MIC
MIDEX
MILs
MIN
MIP
MLCA
MOM
MRB
MSA
NFIP
NTB
OCC
OFAC
PMI
POC
PUD
RESPA
RFP
SARs
SDN
SRP
TIL
USBHM
USDA / RHS / RD
VA
USBHM is referencing the Mortgage Revenue Bond Division in Bedford, Ohio
Rev. (04/11/2007) - Introduction
I-3
DOING BUSINESS WITH MRBP
When originating in a MRB program, there are different considerations for an Originating Lender. The following
highlight those differences and address common questions Originating Lenders frequently have with respect to the
process. (Specific MRB program guidelines should be referenced for information relative to the program in which
you are participating)
How do we reserve funds / register the loan?
Originating Lenders are required to qualify a borrower for the MRB program relative to credit, income, property
location, etc. Borrowers must have a purchase contract in order to reserve bond money. The loan must then be
reserved in Housing Agency/Authority or Program Administrator’s reservation system.
What special documentation is required in a MRB program?
Originating Lenders are to obtain all MRB compliance documentation from Housing Agency or Program
Administrator’s website. The MRB documentation is to be reviewed for appropriate time lines, and for signatures
that are required by the parties involved, i.e. Seller and Borrower. Additional documentation may be required in order
for the Underwriter to determine compliance to Housing Agency guidelines (i.e. 3 yr. tax returns)
What is my responsibility with respect to Non-HFA subordinate financing?
It is the responsibility of the Originating Lender to approve all Non-HFA sponsored types of secondary financing
used in conjunction with the first mortgage. Originating Lenders should adhere to all Fannie Mae / Freddie Mac /
HUD / VA / Ginnie Mae / Rural Development guidelines pertaining to subordinate financing.
Originating Lenders must provide U.S. Bank Home Mortgage, in the closed loan file, the following information for
all forms of secondary financing:
x Copy of Promissory Note
x Copy of Mortgage
x Copy of Gift/Grant Letter
x Other supporting documentation
Closed loan files are required to have a Down Payment Assistance Acknowledgement form for HFA bond sponsored
secondary financing.
Only Originating Lenders for whom we provide underwriting services should submit product description and legal
documentation to U.S. Bank Home Mortgage Division (Attention: Client Support) for review and approval of these
programs.
Who prepares closing instructions / closing documents?
Originating Lenders are responsible to prepare MRB documentation (specifically done at closing) for execution.
They should provide the closing agent with proper closing instructions as well as all bond compliance documentation
and any other specific closing documentation (i.e., Tax Exempt Rider, 2nd Mortgage documents, DPA
acknowledgement forms, etc.)
What should I delivery to have my loan purchased?
There is a two stage file delivery and approval process that is required in MRB programs. (1)The completed closed
loan mortgage file is to be sent to U.S. Bank Home Mortgage, utilizing the specific MRB program Loan Delivery
Checklist. (See Delivery Instructions) (2) MRB programs require the submission of a MRB compliance package.
This is a separate file submitted with the closed loan file or to the Housing Agency/Program Administrator.
(Reference Housing Agency/Program Administrator’s website for applicable Compliance File Checklist)
Rev. (04/11/2007) - Introduction
I-4
ORIGINATING LENDERS
When you were approved to do business with U.S. Bank Home Mortgage you received a Lender Contact Information
Sheet. Please complete and return prior to submission of your first loan, Attention: Help Desk, to assure that you can
be properly set-up in our system.
All loans must close in the name of the Originating Lender. U.S. Bank Home Mortgage does not provide closing
instructions or document preparation service. The mortgage loans must meet Housing Agency guidelines, FHA, VA,
RD, Fannie Mae, Freddie Mac, Ginnie Mae, U.S. Bank Home Mortgage, and Bond Compliance, and must comply
with all procedures contained in this Lender Manual.
Originating Lenders are responsible for full compliance with RESPA, Truth-in-Lending and other applicable lending
laws and must supply correct information in order to comply with HMDA. Please follow the Finance and NonFinance Charge Chart provided in your application approval package (see Forms Section).
Originating Lenders are responsible for preparation and execution of all legal documents. This includes, but is not
limited to closing statements, HUD-1 and Truth-in-Lending forms. U.S. Bank Home Mortgage reserves the right to
request additional documentation to enhance a loan file on a case-by-case basis.
Originating Lenders are responsible for all mutual premium payments of FHA MIP/VA Funding Fee/RD Guaranty
Fee or Conventional PMI premiums.
U.S. Bank Home Mortgage will submit for insurance or guaranty packages to HUD/VA on all loans underwritten by
U.S. Bank Home Mortgage.
Table Funded Originating Lenders
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Review the Table Funding Supplemental (See Exhibit) for complete instructions.
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Request MIN # and loan number by fax or e-mail to Help Desk.
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Are permitted to request funds once they have obtained a “clear to close” from our Underwriting Department
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Must submit “Wet Funding Request” and Checklist (Reference Table Funding Supplement) via fax to: (216)
475-8699 by 2:00 p.m. ET and no later than two (2) business days prior to the scheduled closing.
x
Complete loan file must be shipped to U.S. Bank Home Mortgage within 5 business days of loan closing. A
penalty fee of $50 per day will be assessed for late deliveries.
x
Upon notification by U.S. Bank Home Mortgage, any exceptions discovered during review of closed loan file
are to be cleared immediately.
SEE FOLLOWING PAGES FOR US BANK HOME MORTGAGE - MRBP CONTACT LIST
Rev. (04/11/2007) - Introduction
I-5
ANNUAL CORRESPONDENT LENDER RECERTIFICATION
On an annual basis, a Correspondent Lender is required to submit the following:
1) Most recent year-end audited financial statement (audited are preferred but not required)
2) Evidence of current Fidelity Bond, E & O or Surety Bond
3) Copies of current state licenses for all states where the Correspondent Lender originates loans or
certification of existing licenses through a third party service such as MARI/MIDEX
4) An updated contact list, quality control plan, appraisal policy or other documentation that may have
changed since the last update.
5) Names and resumes of new officers or managers and/or any organizational changes that may have
occurred since the last update.
6) Housing Agency approvals (validate whether or not Housing Agency approvals have changed or
remain the same). If approval status with a Housing Agency has changed since the original approval
date, provide U.S. Bank Home Mortgage with an updated policy.
7) The above documentation is required no later than 90 days after the Correspondent Lender’s fiscal
year end.
As it relates to the content of this manual, the term Correspondent Lender is defined as an Originating
Lender who receives Underwriting, Table Funding and/or any other service from U.S. Bank Home
Mortgage on a Fee Basis.
Rev. (04/11/2007) - Introduction
I-6
CONTACT
Directory for MRBP Division
Corporate Office Mailing Address:
U. S. Bank Home Mortgage-MRBP Division
17500 Rockside Road, Bedford, Ohio 44146
ACCOUNT EXECUTIVE
Name
Title
Phone #
Trish Storm
Sheryl Krocek
Account Executive
Account Executive
(216) 475-8273
(216) 475-7719
Fax #
Name
Title
Phone #
Fax #
Elaine Wojtowicz
Manager, Client Support
(216) 475-8268
(216) 475-8619
Lou Caresani
Client Support Executive
OH/PA/CT/MN/IN
Client Support Executive
AK/AZ/NE/MT/KS/TX
Client Support Executive
FL/LA/OK/MS
(216) 475-8275
(216) 475-8619
(216) 475-7685
(216) 475-8619
(216) 475-8379
(216) 475-8619
(216) 475-8619
(216) 475-8619
CLIENT SUPPORT
Elmer Helbig
Sally Mazzola
EXECUTIVE
Name
Title
Phone #
Fax #
James Coreno
Larry Ball
Managing Director
Senior Vice- President
(216) 475-7299
(216) 475-8448
(216) 475-8619
(216) 475-8619
Name
Title
Phone #
Fax #
David Sparks
Cathy Coates
Ralph Pasterak
Manager, Program Admin.
Program Administrator
Program Administrator
(216) 475-7715
(216) 475-7714
(216) 475-8442
(866) 476-5584
(866) 350-5156
(866) 404-8094
HELP DESK
UNDERWRITING
Name
Title
Phone #
Fax #
Rita Connelly
Lynda Davis
Judy Pudelski
Jeanne Zielinski
Karen Brys
Manager
Underwriter
Underwriter
Underwriter
Underwriter
(216) 475-8251
(216) 475-8246
(216) 475-8317
(248) 945-8257
(248) 945-5267
(216) 475-8628
(216) 475-8628
(216) 475-8628
(248) 356-3713
(248) 356-3713
Rev. (04/11/2007) - Introduction
I-7
Directory for MRBP Division
LOAN REVIEW
Name
Title
Phone #
Fax #
Ronald Moore
Laurel Kleinhenz
Jacqueline White
Loan Review Manager
Lender Support Specialist
Exception Specialist
(216) 475-8693
(216) 475-8323
(216) 475-8388
(216) 475-8627
(216) 475-8627
(216) 475-8627
Name
Title
Phone #
Fax #
Donna Allison
Ellen Hart
Robin Nicolosi
Loan Funding Manager
Table Funding
Table Funding
(216) 475-8417
(216) 475-8324
(216) 475-8325
(216) 475-8699
(216) 475-8699
(216) 475-8699
Rodney Martin
VP - Oper, Loan Review & Funding (216) 475-8236
(216) 475-8699
LOAN FUNDING
DOCUMENT CONTROL
Name
Title
Phone #
Fax #
Darlene Kreigh
Carolyn Blackshear
Final Document Manager
Team Lead
(216) 475-7739
(216) 475-7743
(216) 475-8606
(216) 475-8606
MRBP Help Desk Phone: (800) 562-5165
Hours of Operation: 8:30 a.m. to 5:00 p.m. ET
Loan Servicing - Customer Service Phone: (800) 240-7890
Hours of Operation: 7:00 a.m. to 8:00 p.m. ET
Rev. (04/11/2007) - Introduction
I-8
Compliance
Mortgage Revenue Bond Program Division
COMPLIANCE
U.S. Bank Home Mortgage requires that each Originating Lender maintain compliance in
lending with all applicable local, state, and federal regulations. The regulations discussed in this
section cover the primary compliance concerns that U.S. Bank Home Mortgage requires of each
Originating Lender. This presentation is not a comprehensive compilation of compliance issues,
and Originating Lenders are encouraged to consult their legal counsel for complete
interpretation.
A.
EQUAL CREDIT OPPORTUNITY ACT (ECOA – REGULATION B)
The purpose of the Equal Credit Opportunity Act (ECOA) is to ensure that no person is denied
access to credit due to prohibited discrimination. Under ECOA, a creditor cannot discriminate
against an applicant on the basis of race, color, religion, national origin, sex, marital status, age,
receipt of public assistance benefits, or good faith exercise of consumer credit rights under
federal or state law. A creditor is defined as any person who in the ordinary course of business
regularly participates in a credit decision, including setting the terms of the credit or who
regularly refers applicants to creditors.
Regulation B also requires that a creditor must notify an applicant of its credit decision within 30
days of receipt of a “completed application.” If the application is rejected, the creditor must send
a written “adverse action” notice to the applicant. An application is complete when the creditor
has obtained all the information it normally considers in making a credit decision. A creditor
must act with reasonable diligence to collect all the information needed to complete the
application. For example, a creditor must request information from third parties promptly after
receiving the application. If additional information is needed from the applicant, such as an
address or telephone number needed to verify employment, the creditor must contact the
applicant promptly.
Therefore, Originating Lender warrants and represents to U.S. Bank Home Mortgage that it shall
at all times comply with the requirements of ECOA and Regulation B. Specifically, the
Originating Lender represents and warrants as follows:
1. Originating Lender shall not discriminate in its lending policy, and must make its
lending policy available for inspection by U.S. Bank Home Mortgage, upon reasonable
notice.
2. Originating Lender shall not discourage or dissuade any person from contemplating an
application based upon any attribute of the applicant which is protected under ECOA
(race, color, etc.).
Rev (04/11/2007) – Compliance
C-1
(Equal Credit Opportunity Act continued)
3. Originating Lender shall use only such application forms as have been approved by
U.S. Bank Home Mortgage.
4. Originating Lender shall not request information regarding an applicant’s receipt of
child support, separate maintenance, or alimony payments unless Originating Lender
has informed the applicant that he/she is not required to provide information but may
choose to include this income as a basis for repaying the loan.
5. Originating Lender shall diligently collect all information necessary to complete an
application file, and shall promptly forward each complete application file to U.S. Bank
Home Mortgage. Originating Lender shall request all necessary information from third
parties promptly after receiving an application and, if additional information is needed
from the applicant, Originating Lender shall contact the applicant promptly.
6. Originating Lender shall provide the written “adverse action” notice required by
Regulation B to all rejected applicants identifying itself as the creditor. If such
rejection is based upon U.S. Bank Home Mortgage’s rejection of the application,
Originating Lender shall notify the applicant promptly upon receiving the NonPurchase Notice from U.S. Bank Home Mortgage.
B.
FAIR CREDIT REPORTING ACT
The Fair Credit Reporting Act (FCRA) is primarily designed to assure that “Consumer Reporting
Agencies” exercise fairness, confidentiality, and accuracy in preparing and disclosing consumer
information, and that the information is not used for an improper purpose. The FCRA limits the
furnishing of consumer reports to those authorized to receive them, and it places obligations on
the users of consumer reports. The FCRA permits consumers to obtain credit information
regarding themselves from credit bureaus and to dispute inaccurate or incomplete information.
A creditor is prohibited from requesting or using a consumer report for improper purposes. A
creditor may generally only seek, and a consumer reporting agency may only provide, a
consumer report:
x
In connection with a credit transaction involving the consumer, or
x
Where the creditor has a legitimate business need for the information in connection
with the business transaction involving the consumer.
The FCRA also requires a creditor to make certain disclosures to a consumer when the creditor
takes “adverse action” based in whole or in part on information received from third parties.
Therefore, the Originating Lender represents and warrants to U.S. Bank Home Mortgage as
follows:
1. Originating Lender shall not request consumer information from a consumer reporting
agency or other third party for any improper purpose or before an application has been
received.
Rev (04/11/2007) – Compliance
C-2
(Fair Credit Reporting Act continued)
2. Originating Lender shall not release consumer information to anyone other than
employees of Originating Lender, U.S. Bank Home Mortgage, any agency or company
which may insure or guaranty the loan, or other mortgagee involved in the transfer of
the application to an investor. Specifically, Originating Lender shall not release
consumer information to the seller, real estate broker, or any other third party, including
the borrower (except for information provided by the borrower).
3. Originating Lender shall identify (Name, Address) any consumer reporting agency that
provided information to the Originating Lender in any Adverse Action Notice sent by
Originating Lender to a rejected applicant.
4. Originating Lender shall disclose in each adverse action notice whether information
was obtained from a third party other than a consumer reporting agency and shall
clearly and accurately disclose to the consumer his right to receive a disclosure of the
nature of the information within 60 days of the date of adverse action.
C.
FAIR HOUSING ACT
The Fair Housing Act, Title VIII of the Civil Rights Act of 1968, prohibits discrimination in the
sale, rental, or financing of housing and the provision of brokerage services on the basis of race,
color, religion, national origin, sex, handicap, or family status. The Act encompasses all
segments of the real estate industry including brokers, builders, apartment owners, sellers,
appraisers, and mortgage lenders, and applies to both single family and Multi-family housing.
The FHA specifically prohibits the following practices:
1. Failing or refusing to provide to any person information regarding the availability of
loans; application requirements; or procedures for the review and approval of loans;
2. Providing information that is inaccurate or different to persons because of their race,
color, etc.
3. Using an appraisal if the user knows, or reasonably should know, that the appraisal
improperly takes into account race, color, etc.
Therefore, Originating Lender represents and warrants to U.S. Bank Home Mortgage as follows:
1. Originating Lender shall give the same level of oral and written information to
everyone.
2. Originating Lender shall encourage anyone who inquires about credit or loans to apply
and/or complete a loan application.
3. Originating Lender shall offer the same levels of assistance to all applicants/customers.
Rev (04/11/2007) – Compliance
C-3
D.
NATIONAL FLOOD INSURANCE ACT
The National Flood Insurance Act, Title XIII of the Housing and Urban Development Act of
1968, authorized a program, the National Flood Insurance Program (NFIP), to make flood
insurance available nationwide through the efforts of the federal government and the private
insurance industry. Private mortgage companies are not directly subject to the NFIP because
they are not supervised by a “federal instrumentality”. However, investors in the secondary
market, such as U.S. Bank Home Mortgage, are subject to the requirements of the program, and
they look to the loan originator to protect their interest. Therefore, Originating Lender must be
familiar with the program and Originating Lender represents and warrants to U.S. Bank Home
Mortgage as follows:
1. Originating Lender shall determine whether any of the communities in their trade area
have designated special flood hazard areas, and whether or not any of the communities
are participating in the National Flood Insurance Program.
2. Originating Lender shall determine whether improved real estate that will secure a loan
is located in a special flood hazard area using up-to-date records for the community.
3. Originating Lender shall provide written notice, if applicable, to borrowers informing
them that the property securing a loan is in a special flood hazard area and whether or
not federal disaster relief assistance will be available if the property is damaged by
flooding. This notice must be provided at least 10 days prior to closing or at the time of
commitment if this occurs less than 10 days before the closing.
4. Originating Lender shall obtain written acknowledgments from the borrowers
indicating their understanding that the property securing the loan is or will be located in
a special flood hazard area and that they have received the notice regarding the
availability of federal disaster relief assistance.
5. If the improvements are in a special flood hazard area and the community is
participating in the NFIP, flood insurance is required for the lesser of the loan amount
or the maximum insurance available for the duration of the loan. If the property and/or
improvements are located in a secondary zone, flood insurance is recommended.
6. If the property and/or improvements are located in a special flood hazard area, in any
Zone designated in A or V, i.e., A, AE, V, VE, etc., and the community does not
participate in the National Flood Insurance Program, flood insurance is not available
and the loan cannot be made.
Rev (04/11/2007) – Compliance
C-4
(National Flood Insurance Act continued)
6. Originating Lenders must order their own flood certification from an outside vendor.
The certificate must show life of loan coverage. A change of mortgagee letter or
notification must be sent to the vendor changing the mortgagee clause to:
U. S. Bank N.A.
Its Successors and/or Assigns as Their Interest May Appear
c/o U.S. Bank Home Mortgage
P. O. Box 7298
Springfield, OH 45501-7298
A flood certification fee must be disclosed on the Good Faith Estimate (GFE). It is
acceptable for the seller or lender to pay this fee for the borrower. If the lender is
paying the flood certification fee, the fee must still be listed on the GFE as a Paid
Outside Closing (POC) by Lender.
The flood certification fee should be included in the finance charges for calculation of
Annual Percentage Rage (APR).
E.
REAL ESTATE SETTLEMENT PROCEDURES ACT
The Real Estate Settlement Procedures Act (RESPA) was designed to give home buyers full
disclosure of the settlement costs and, where possible, to assist in reducing settlement costs.
Originating Lender represents and warrants to U.S. Bank Home Mortgage as follows:
1. Originating Lender shall provide the borrower a Good Faith Estimate (GFE) of cost for
Settlement Services in the format required by Real Estate Settlement Act (RESPA),
along with the HUD Booklet of Settlement Costs, at the time of application for all
mortgage loans secured by a first lien on residential real property.
For table funded loans that will close in the Originating Lender’s name, the Originating
Lender is shown as the lender on the GFE and U.S. Bank Home Mortgage is not
required to provide a separate GFE to the borrower. Any fees paid to a Originating
Lender must be for services actually performed in the mortgage process and must be
reasonable within an individual market area. Any fee or payment received by the
Originating Lender from U.S. Bank Home Mortgage, such as a servicing release
premium or yield spread premium, is to be shown on the GFE.
If at the time of application the Originating Lender has not determined to which “table
funder” they will sell the loan, the Originating Lender may estimate a range of discount
points, yield spread premiums, and the Service Release Premium (SRP) that will be
paid by the borrower (discount) or paid by U.S. Bank Home Mortgage (yield spread or
SRP). Refer to Exhibit Section for a recommended format for disclosure of Estimated
Payments Received by Originating Lenders Outside of Closing.
Rev (04/11/2007) – Compliance
C-5
(Real Estate Settlement Procedures Act continued)
2. Originating Lender shall not pay or receive any kickbacks or unearned payment from
any settlement service provider.
3. Originating Lender shall provide a written disclosure in the format required by HUD to
borrowers at application for any purchase money or refinance loan regarding the
intention of Originating Lender to transfer the borrower’s loan and the percentage of
loans made by the Originating Lender that have been transferred in the last three years.
4. Originating Lender shall provide a Notice of Assignment, sale or Transfer of Servicing
Rights (Refer to Exhibit Section) in the format required by HUD (VMP Form #553) at
loan closing for any purchase money or refinance loan.
5. Originating Lender shall prepare and provide, for each loan, a completed HUD-1
Settlement Statement showing all actual settlement costs. Originating Lender shall
make this available to borrowers at least one day before closing and shall deliver it to
borrowers at closing. If U.S. Bank Home Mortgage “table funds” the loan, the
Originating Lender shall separately itemize its portion of the loan origination fee and
U.S. Bank Home Mortgage’s portion on the HUD-1.
Originating Lender shall comply with the required provision of Section 3500.7 of RESPA.
Specifically, if the Originating Lender maintains a “controlled list” of required providers or relies
on a list maintained by others, and at the time of application the Originating Lender has not yet
decided which provider will be selected from the list, then the Originating Lender must:
1. Provide the borrower with a written statement on or with the Good Faith Estimate (GFE)
that the lender will require a particular provider from a lender controlled or approved list;
and
2. Provide in the Good Faith Estimate the range of costs for the required providers; and
3. Provide the name of the specific provider and the actual cost on the HUD-1 or HUD-1A.
HUD-1 Settlement Statement and Table Funded Transactions
Disclosure of discount points passed through from the Originating Lender to U.S. Bank Home
Mortgage must be itemized as paid to U.S. Bank Home Mortgage. Also, any fee or payment
received by the Originating Lender from U.S. Bank Home Mortgage, such as SRP or yield
spread premium, is to be listed in the 800 series of the HUD-l. Proper disclosure regarding
potential volume incentive payments must be included both on the GFE and the HUD-l in order
for a loan to be included in quarterly volume totals for potential incentive payments.
Rev (04/11/2007) – Compliance
C-6
(Hud-1 Settlement Statement and Table Funded Transactions continued)
Instructions for completing the HUD-l are as follows (until further clarification from HUD):
EXAMPLE:
Originating Lender closes the loan in own name, transaction table funded by U.S.
Bank Home Mortgage and loan is immediately assigned to U.S. Bank N.A.
Loan Amount:
SRP Paid to Originating Lender:
$100,000.00
1% (P.O.C.)
Example A:
Buy price to Originating Lender = 99.00 (1% discount)
Price to borrower 98.00 (2% discount)
Pass through underwriting fee $160.00 to borrower
HUD-1
802
808
809
810
Item
Borrower Paid
Loan Discount 1% to U.S. Bank Home Mortgage
$1000
Loan Discount 1% to Originating Lender
$1000
SRP to Originating Lender 1% (P.O.C.)
$1000
Additional compensation may be received from U.S. Bank Home
Mortgage based on the volume and quality of the transaction closed in a
given quarter.
Example B:
Buy price to Originating Lender 101.00 (1% yield spread)
Price to Borrower 99.00 (1% discount)
HUD-1
802
808
809
810
Item
Borrower Paid
Loan Discount to Originating Lender 1%
$1000
SRP to Originating Lender 1% (P.O.C.)
$1000
Yield Spread Premium to Originating Lender 1% (P.O.C.)
$1000
Additional compensation may be received from U.S. Bank Home
Mortgage based on the volume and quality of the transaction closed in a
given quarter.
Example C:
Buy Price to Originating Lender 103.00 (3% yield spread)
No Fees to Borrower
No Discount to Borrower
HUD-1
809
810
Item
Borrower Paid
SRP to Originating Lender 1% (P.O.C.)
$1000
Yield Spread Premium to Originating Lender 3%(P.O.C.)
$3000
Additional compensation may be received from U.S. Bank Home
Mortgage based on the volume and quality of the transaction closed in a
given quarter.
Originating Lender shall prepare and provide, for each loan, a completed HUD-1 Settlement
Statement showing all actual settlement costs. Originating Lender shall make this available to
borrowers at least one day before closing and shall deliver it to borrowers at closing.
Rev (04/11/2007) – Compliance
C-7
F.
TRUTH IN LENDING ACT
The Truth-in-Lending (TIL) Act is aimed at promoting the informed use of consumer credit by
requiring various disclosures about its term and costs.
Therefore, Originating Lender represents and warrants to U.S. Bank Home Mortgage as follows:
1. Originating Lender shall provide applicants with an estimated TIL disclosure within
three business days of application for loans subject to the Good Faith Estimate
requirements of RESPA. An estimated TIL must be re-disclosed when a loan program
changes. A final TIL disclosure must be given at closing and reflect the actual terms of
the loan.
2. Originating Lender shall provide each consumer with final Truth-in-Lending
disclosures, formatted in compliance with the requirements of Regulation Z, prior to
consummation of any loan. All fees considered a finance charge must be included as
such in the calculation of total finance charges and the APR on the Truth In Lending
Disclosure. Fees that are not considered a finance charge should not be included in the
calculation of the total finance charge and APR. A Finance and Non-Finance Charge
Chart (see Forms Section) details fees, which are and are not considered finance
charges as determined by Regulation Z and as interpreted by U.S. Bank Home
Mortgage Compliance Department.
The Annual Percentage Rate (APR) tolerance is .25% for ARM loans and .125% for all other
products.
1. TIL disclosures shall reflect the terms of the legal obligation or if any terms are
unknown, the disclosures shall be based upon the best information reasonably available
to the Originating Lender and shall be designated as an estimate (“e”).
2. In refinance transactions, each person who has an ownership interest in the dwelling
shall be given a copy of the final TIL disclosure and two copies of the “Notice of Right
to Cancel”.
a. Funds shall not be disbursed prior to the expiration of the rescission period on
rescindable transactions. The rescission period expires at midnight of the third
business day after the last to occur of the following:
x The date of the transaction;
x The date the customer received their TIL disclosures; or
x The date the customer receives their Notice of Right to Cancel.
b. For rescission purposes, a “business day” means all calendar days except Sunday
and Federal holidays (any day in which mail is not delivered).
Rev (04/11/2007) – Compliance
C-8
G.
HOME MORTGAGE DISCLOSURE ACT
The purpose of the Home Mortgage Disclosure Act (HMDA) is to make mortgage lending
policies more visible by requiring that financial institutions collect data regarding home loans.
Collected data is submitted to federal agencies which compile the data into reports that are
returned to the lender. The lender must keep the HMDA Report and make it available to the
public. HMDA applies to U.S. Bank Home Mortgage and in order that we satisfy our reporting
requirements, we must gather information from our Originating Lenders with respect to each
home purchase or refinance loan submitted for purchase. Therefore, Originating Lender
represents and warrants to U.S. Bank Home Mortgage that it will collect the following
information regarding each loan application that it receives:
1. Property Information
a. MSA (Metropolitan Statistical Area)
b. County
c. Census Tract
2. Application Information (each applicant)
a. Race
Government Monitoring Information
b. Gender
c. Combined Annual Income for all Applicants
d. Method of Application
Government monitoring information shall be requested from all borrowers on the initial
application; or the interviewer shall obtain the borrower’s initials that they do not desire to
provide that information and the interviewer shall indicate the borrowers’ race and gender by
visual observation and/or surname for all face-to-face applications taken.
H.
ANTI - PREDATORY LENDING POLICY
Predatory Lending consists of any of a number of fraudulent, deceptive, discriminatory, or
unfavorable lending practices. Many of these practices are illegal, while others are legal but not
in the best interest of the borrower(s). According to the definition, a loan is considered to be
predatory if the terms are unfavorable relative to other loans “offered to similarly qualified
borrowers.” Unfavorable terms include placing a consumer in a loan at more onerous terms,
charging the customer a higher a interest rate, discount points, or other fees, or such as charging
prepayment penalties that the consumer could have avoided had they shopped other sources for
the same loan at the same time. The unfavorable terms and overcharging of fees to a consumer
result in what is referred to as a “high-cost loan.”
Rev (04/11/2007) – Compliance
C-9
(Anti-Predatory Lending Policy continued)
As defined by federal law and U. S. Bank Home Mortgage, high-cost loans are loans that meet
one of two thresholds. The thresholds are:
1. The points and fees charged on the loan times the “Total Loan Amount” exceed more
than 5 percent. (This threshold may vary based on the points and fees threshold
established by the state’s predatory lending law pursuant to where the property is
located).
2. The APR of the loan exceeds comparable U.S. Treasury rates plus 8 percentage points for
first-lien loans and comparable U.S. Treasury rates plus 9 percentage points for
subordinate lien loans. (This threshold may vary based on APR or interest rate thresholds
established by the state’s predatory lending law pursuant to where the property is
located).
Exceeding either of these two thresholds means the loan is a “high cost loan.”
To combat predatory lending activities, many states have enacted laws that prohibit a lender
from engaging in any type of predatory lending practices. In order to comply with most
predatory lending laws, a lender must monitor each state’s laws not only to ensure that they do
not originate high cost loans, but also to take additional steps to ensure that their mortgage
lending practices discourage as well as prohibit any type of abusive, unfair or deceptive lending
practices.
The following are examples of predatory lending practices:
x
Intentionally placing consumers in loan products with significantly worse terms and/or
higher costs than loans offered to similarly qualified consumers in the region for the
primary purpose of enriching the originator and with little or no regard for the costs to the
consumer.
x
Making unaffordable loans based on the assets of the borrower rather than the borrower’s
ability to repay the loan.
x
Inducing a borrower to refinance a loan repeatedly in order to charge high points and fees
each time the loan is refinanced.
x
Engaging in fraud or deception to conceal the true nature of the loan obligation from an
unsuspecting or unsophisticated borrower.
x
Refinancing a specially subsidized mortgage loan (such as a zero interest loan) the
borrower may currently have to a mortgage with more adverse repayment terms; or
where the refinance transaction does not result a “reasonable tangible net benefit” to the
borrower.
Rev (04/11/2007) – Compliance
C-10
(Anti-Predatory Lending Policy continued)
U. S. Bank Home Mortgage does not engage in any abusive or predatory lending practices either
directly through its loan originators or indirectly through its mortgage brokers or Originating
Lender lending activities. U. S. Bank Home Mortgage does not originate or purchase any loan
that is a high-cost loan subject to any individual state "predatory or high cost" lending law or any
loan subject to the federal Homeownership Equity Protection Act (HOEPA).
I.
BANK SECRECY ACT (BSA) – ANTI-MONEY LAUNDERING (AML) AND
OFFICE OF FOREIGN ASSETS CONTROL (OFAC) POLICY
Bank Secrecy Act (BSA)
The Currency and Foreign Transactions Reporting Act, also known as the Bank Secrecy
Act (BSA), is a tool the U.S. Government uses to combat drug trafficking, money
laundering, and other crimes, including (effective with passage of the USA Patriot Act)
terrorism. Congress enacted the Bank Secrecy Act to prevent banks and other financial
service providers from being used as intermediaries for, or to hide, the transfer or deposit of
money derived from criminal activity. In conjunction with the Bank Secrecy Act financial
institutions are required to maintain accurate financial records and to report unusual
financial transactions or activities. The Act contains a number of reporting requirements
that are designed to aid federal authorities in criminal, tax, and regulatory investigations.
By filing Currency Transaction Reports (CTRs), Suspicious Activity Reports (SARs), and
Monetary Instrument Logs (MILs) financial institutions make the Bank Secrecy Act the
focal point of efforts to track money laundering. The Office of the Comptroller of the
Currency (OCC) monitors national bank compliance with the BSA and 31 CFR 103, the
implementing regulations of the BSA.
The Money Laundering Control Act of 1986 (MLCA) strengthened the government’s
ability to fight money laundering by making it a criminal activity. Currently more than 170
crimes are listed in the federal money laundering statutes. They range from drug
trafficking, gunrunning, murder for hire, fraud, acts of terrorism, illegal use of wetlands,
and certain foreign crimes. Therefore, a financial institution must educate its employees,
understand, and be able to identify its customers and their businesses. In addition, they also
must have systems and procedures in place to distinguish routine transactions from ones
that rise to the level of suspicious activity.
The most recent amendment to the Bank Secrecy Act is the USA Patriot Act; passed in the
wake of the September 11, 2001 terrorist attacks on the United States. This amendment
established a variety of new requirements to which financial institutions must comply; all
designed to combat terrorism. Most notably, the section of the USA Patriot Act which
affects most lines of business within a financial institution is Section 326 of the USA
Patriot Act. This Section requires financial institutions to clearly know and verify each
customer through the Bank’s customer identification program.
Rev (04/11/2007) – Compliance
C-11
(Bank Secrecy Act continued)
The Originating Lender warrants and represents to U.S. Bank Home Mortgage that it shall
at all times comply fully with all BSA and related anti-money laundering regulations
imposed upon financial institutions.
Terminology Associated with the Bank Secrecy Act
To better understand the Bank Secrecy Act and crimes associated with money laundering it
is important to be familiar with the terms associated with the Act. The Bank Secrecy Act
has several key terms that define "suspicious activity.” The definitions of those terms are
defined below:
Ɣ Criminal violation refers to a known or suspected crime or pattern of criminal activity.
This includes crimes committed or attempted against the Bank as well as other criminal
transactions conducted or attempted at the Bank.
Ɣ Transaction refers to a purchase, sale, loan, pledge, gift, transfer, delivery, or other
disposition and, for financial institutions, includes a deposit, withdrawal, transfer
between accounts, exchange of currency, loan, extension of credit, purchase or sale of
any stock, bond, certificate of deposit, or other monetary instrument or investment
security, or any other payment, transfer, or delivery by, through or to a financial
institution, by any means. Attempted transactions, as well as completed ones, are
included.
Ɣ A suspicious transaction is a "transaction" which a Bank employee knows is
suspicious or has reason to suspect the transaction such as:
-
Funds derived from illegal activities or is intended or conducted in order to hide or
disguise funds or assets derived from illegal activities as part of a plan to violate or
evade transaction-reporting requirements.
-
Transactions designed to evade any Bank Secrecy Act requirement.
-
Transactions that have no business or apparent lawful purpose or that are not the
sort the customer would normally be expected to engage in and the Bank knows of
no reasonable explanation for the transaction after examining the available facts.
Ɣ Insider abuse involves a “criminal violation” committed or facilitated by a Bank
director, officer, employee, consultant, joint venture partner, attorney, appraiser,
accountant, agent, independent contractor, or other person who participates in the
conduct of the affairs of the Bank.
Rev (04/11/2007) – Compliance
C-12
Money Laundering Process
Money laundering is the criminal practice of filtering illegal gains or “dirty” money
through a series of transactions so that the funds appear to be “clean” and will look like
proceeds from legal activities. Cash does not need to be involved in every stage of the
laundering process, and almost any transaction conducted at a bank may constitute money
laundering. Although money laundering is more often than not a complex process, it
basically involves three independent steps that can occur simultaneously:
Ɣ Placement: This is the process of placing, through deposits or other means, unlawful or
“dirty” cash proceeds into traditional financial institutions.
Ɣ Layering: This is the process of separating the proceeds of criminal activity from their
origin through the use of layers of complex financial transactions, such as converting
cash into traveler’s checks, money orders, wire transfers, letters of credit, stocks, bonds,
or purchasing valuable assets, such as fine art, jewelry, or real estate.
Ɣ Integration: This is the process of using a legitimate transaction to disguise the
exchange of illegal proceeds, allowing the laundered funds to be disbursed back to the
criminal. Different types of financial transactions, such as sham loans or false
import/export invoices, may be used to accomplish the exchange of dirty funds for
clean money.
Office of Foreign Assets Control (OFAC)
Originating Lender will maintain procedures to comply with rules of the Office of Foreign
Assets Control (OFAC). OFAC rules impose economic sanctions against targeted
individuals, countries, geographic territories, and groups by rejecting transactions or
blocking assets. All U.S. persons and entities are not permitted to transact business with
any of the countries on the OFAC list or with any person or entity named in OFAC’s List
of Specially Designated Nationals (SDN list).
Originating Lender will screen each applicant against the OFAC list.
J. USA PATRIOT ACT
General Information
The USA Patriot Act is the most recent amendment to the Bank Secrecy Act. The
amendment establishes a variety of new requirements designed to combat terrorism to
which financial institutions must comply. Section 326 of the Act most notably affects most
financial institutions because it requires them to implement a Customer Identification
Program to ensure that banks clearly know and verify the identity of each of its customers.
Rev (04/11/2007) – Compliance
C-13
(USA Patriot Act continued)
In addition to the requirements of Section 326, the U.S. Treasury Department and its
Office of Foreign Assets Control ("OFAC") require financial institutions to establish
policies, procedures and controls reasonably designed to detect and report transactions
with individuals identified as known or suspected terrorists or terrorist organizations.
OFAC rules impose economic sanctions against targeted individuals, countries,
geographic territories and groups. Sanctioned countries are identified on the OFAC list of
sanctioned countries and targeted individuals are identified on the "Specially Designated
Nationals and Blocked Persons" list.
The Originating Lender’s Customer Identification Program must fully comply with
Section 326 of the USA Patriot Act and OFAC. The following outlines specific
regulatory requirements that should be included in the Originating Lender’s policy:
1. Provide each loan applicant with a “Customer Identification Notice”;
2. Comply with the four minimum pieces of customer information and documentation
needed to identify who the customer is;
3. Verify the identity of the customer through documentary or non-documentary
methods;
4. OFAC Alert screening must be performed all new loan applicants against the OFAC
list of "Specially Designated Nationals and Blocked Persons";
5. Determining if a customer is questionable or suspicious and loan denial procedures;
6. Monitor questionable instances which may require internal and external reporting of
suspected individuals;
7. Ensure employees are trained and informed of suspicious activities related to AntiMoney Laundering or involved in terrorist activities.
Customer Notification
At the time of initial loan application, the Originating Lender must provide a “Customer
Identification Notice” (“the Notice”) to each loan applicant applying for a mortgage loan.
The purpose of the “Notice” is to 1) inform each applicant that they are required to
provide information that will help to identify them as a customer and 2) requires the
applicant(s) to provide their date of birth and social security number.
Each loan applicant must sign and date the Customer Identification Notice and provide
their date of birth and social security number. The date of birth must include the month,
day and four-digit year (i.e. mm/dd/yyyy). A copy of the signed “Notice” as
acknowledged by each applicant must at all times be retained in the loan file.
Rev (04/11/2007) – Compliance
C-14
(Customer Notification continued)
For face to face applications the loan officer should review the driver’s license, green
card, passport, etc. and document that the identity has been verified. Mail and phone
applications will not require any additional documentation other than what is customary
in the normal course of business for verifying the name, address and social security
numbers through other documentation collected (i.e. credit report information, W-2
information, etc.).
Due to retention requirements, the Notice must be obtained from all applications and
must at all times be retained in the loan file.
The following language for the Notice is suggested:
IMPORTANT INFORMATION ABOUT PROCEDURES FOR A MORTGAGE LOAN
To help the government fight the funding of terrorism and money laundering activities, Federal
law requires all financial institutions to obtain, verify, and record information that identifies each
person who opens an account.
That this means for you: When you apply for a mortgage loan, we will ask for your full name
(including middle initial), address, date of birth, and other information that will allow us to
identify you. We may also ask to see your driver’s license or other identifying documents.
Minimum Identification Requirements for New Applicants
At the time of the initial loan application interview, the Originating Lender must at a
minimum, obtain the following four pieces of identifying information from each new
loan applicant:
1.
2.
3.
4.
Name (complete first, middle, and last name)
Date of birth (for individuals only to include month, day and year)
Mailing (street) address (individual residency or business location)
Taxpayer Identification Number (TIN or social security number or federal tax
identification number.
The residency of each applicant must be verified to determine if the applicant is either a
U.S. citizen or a permanent legal resident of the United States (i.e. the applicant is not a
“non-U.S. person”).
For U.S. citizens or individuals that reside in the U.S., a permissible address will be a
residential or business address, an Army Post Office (APO) or Fleet Post Office (FPO)
box number, or the residential or business street address of a next of kin or of another
contact individual. For entities other than an individual, the street address must be the
principal place of business, local office, or other physical location.
Rev (04/11/2007) – Compliance
C-15
(Minimum Identification Requirements for New Applicants continued)
The taxpayer identification number for U.S. persons will be the taxpayer identification
number (or social security number) of the applicant. For non-U.S. persons, the
identification number may be:
x A taxpayer identification number
x A passport number and country of issuance
x An alien identification card number
x A number and country of issuance of any other government-issued document
evidencing nationality or residence and bearing a photograph or similar safeguard
x In the absence of a government issued identification number for foreign
businesses or enterprises, an alternative government-issued documentation
certifying the existence of the business or enterprise
Customer Verification Procedures
For face to face applications the loan officer should review the driver’s license, green card,
passport, etc. and document that the identity has been verified. Mail and phone
applications will not require any additional documentation other than what is customary in
the normal course of business for verifying the name, address and social security numbers
through other documentation collected (i.e. credit report information, W-2 information,
etc.).
In any instance in which an applicant is not able to provide the required documentation
within a reasonable amount of time after the request has been made, the mortgage loan
process should not continue.
The customer verification process and required documentation that must be obtained from
each applicant or entity will vary based on the citizenship and residency of the applicant.
The following defines the document verification requirements of each:
1. If the applicant is a U.S. citizen, the applicant must provide a U.S. taxpayer
identification number (TIN) or social security number. Individuals that are U.S. citizens
must also provide an un-expired government issued identification document evidencing
nationality or residence that includes a photograph of the applicant. In most instances a
U.S. citizen would provide a copy of their driver’s license (photo id) however a
passport or government-issued identification card such as a military ID card would also
be acceptable.
2. If the applicant is a U.S. trust, a corporation or a partnership the TIN number is the
Federal tax identification number. For U.S. trusts, corporations or partnerships, a copy
of the trust instrument, or documents demonstrating the existence of the entity such as
certified articles of incorporation, a government issued business license, or partnership
agreement must be provided.
Rev (04/11/2007) – Compliance
C-16
(Customer Verification Procedures continued)
3. If the applicant is not a U.S. citizen, you must determine if the applicant is a
permanent legal resident of the United States on a temporary visa. For individuals
that are a permanent legal resident of the United States, the individual must provide an
un-expired government-issued "green card". Each applicant must also provide a
government issued photograph. This may also include a passport, military ID card or
INS Resident Alien ID card.
Lack of Documentation or Inability to Verify the Identity of a Customer
If an applicant is unable to provide the documentation outlined above or if the
documentation provided has expired, the Originating Lender may use non-documentary
methods to verify the identity of a customer. Non-documentary methods may be used under
the following circumstances:
1. Whenever the preferred method of documentary verification cannot be produced
for individuals appearing in person (an un-expired government-issued
identification).
2. Whenever the documents provided present conflicting information or the validity
of the documents presented are questionable.
3. Whenever the Originating Lender is not familiar with the documents the applicant
has presented.
Allowable non-documentary methods for verifying the applicant’s identity may include the
following:
1. Independently verifying the customer's identity through the comparison of
information provided by the customer with information obtained from a consumer
reporting agency, public database, or other source.
2. Checking references with other financial institutions.
3. Performing a site visit to a non-individual customer’s business address.
4. Checking with an employer if the customer consents.
5. Checking the telephone number and address provided in a telephone book or with
the telephone company.
6. Checking the address against a utility bill or credit card bill.
7. Obtaining a financial statement.
Denial Procedures
If the applicant is unwilling to provide acceptable documentation to verify his/her/its
identity, the Originating Lender should not proceed with the loan application. In addition,
all such transactions may require the filing of a Suspicious Activity Report.
Rev (04/11/2007) – Compliance
C-17
(Denial Procedures continued)
If the applicant is unwilling to provide acceptable documentation to verify identity, the
following steps should take place:
x It is the policy of U.S, Bank Home Mortgage to issue a Statement of Credit
Denial. The reason for denial would be “other” with one of the following denial
explanations:
-
“The applicant has been determined to be a true ‘match’ on the Office of
Foreign Assets Control Specially Designated Nationals list that has been
confirmed with the Office of U.S. Foreign Assets Control. As such, we are
sorry to advise you that we cannot grant you a loan at this time.” OR
-
We have been unable to verify the identification of the applicant. As such,
we are sorry to advise you that we cannot grant you a loan at this time.”
x All required internal and external SAR reporting requirements of the Act must be
performed.
Customer Identification Program and OFAC Alert Screening
U. S. Bank Home Mortgage relies upon representations and warranties of each Originating
Lender, along with their performance to comply with the requirements of the USA Patriot
Act and OFAC. U. S. Bank Home Mortgage will ensure that:
1. Such reliance is reasonable under the circumstances;
2. That the other financial institution is subject to a rule implementing an AntiMoney Laundering Program under the USA Patriot Act and is regulated by a
Federal functional regulator or a state regulator; and
3. That each financial institution or third party vendor enters into a contract
requiring it to certify annually to U. S. Bank Home Mortgage that it has
implemented its Anti-Money Laundering Program, and that it will perform (or its
agent will perform) the specified requirements of the U. S. Bank Home Mortgage
Customer Identification Program.
4. Where weaknesses through testing are identified or where failure to comply with
regulatory requirements exists, weaknesses and/or non-compliance are resolved.
Rev (04/11/2007) – Compliance
C-18
Record keeping
All identifying information and documentation or non-documentary methods used to verify
the identify of the applicant must be retained in the applicant’s loan file and maintained for
a period of five years after the loan is paid off. Verification information that must be
maintained includes: a description of any document that was relied upon for identification
noting the type of document, any identification number contained in the document, the
place of issuance and, if any, the date of issuance and expiration date; a description of the
methods and the results of any measures undertaken to verify the identity of the customer;
and a description of the resolution of any substantive discrepancy discovered when
verifying the identifying information obtained.
K. FAIR AND ACCURATE CREDIT TRANSACTIONS ACT (FACT ACT)
The FACT Act (Fair and Accurate Credit Transactions Act) amends the federal pre-emption
portion of the Fair Credit Report Act that would have terminated as of January 1, 2004. The
FACT Act, among other things, eliminates a state’s right to enact laws related to how credit
reporting agencies handle consumer credit information. With the elimination of state authority to
regulate consumer credit laws, Congress was able to enact a law that would establish national
uniformity standards for the reporting of consumer credit information. Amendments of the
FACT Act are intended to accomplish the following:
x
x
x
x
x
Enhance a consumers’ ability to combat identity theft by establishing national uniform
identity theft provisions;
Increase the accuracy of consumer credit reports which include requirements such as
giving a consumer their credit score information, providing one credit report free of
charge annually to a consumer, and giving advanced notification of negative credit
reporting;
Allows consumer to exercise greater control regarding the type and amount of marketing
solicitations they receive by way of a new opt-out provision;
Restricts the use and disclosure of sensitive medical information and;
Creates a new commission that will be responsible for improving the financial literacy
and education programs, grants and materials of the Federal Government.
Rev (04/11/2007) – Compliance
C-19
(FACT Act continued)
All consumer credit reporting agencies or anyone using a credit score in connection with a loan
secured by residential real property will be required to disclose to the consumer certain pieces of
credit information that were not previously provided to them. The credit information that is
disclosed to the lender that must now be provided to the consumer includes the following:
x
x
x
x
The credit score(s) that was/were used in connection with their mortgage loan;
The key factors that affected the consumers’ credit score (i.e. recent late payments, too
many inquiries, lack of recent information, etc.);
A “Notice to Home Loan Applicant” disclosure that provides an explanation of how a
credit score is determined and which must include the names, addresses and phone
numbers of each credit reporting agency that provides credit scores; and
Mandatory follow-up procedures by the Lender to verify the identity of the consumer in
any instance in which an identity theft alert message is referenced on the consumers’
credit report.
As soon as a credit report has been requested, the credit bureau agency must provide the lender
with the “Credit Score Disclosure” information required under the Act. The Lender must
provide the information to the customer, or they may allow the credit bureau agency to send the
information directly to the customer on their behalf.
Under the FACT Act, consumers have the ability to place an identity theft message on their
credit report if they are victims of identity theft.
The FACT Act mandates that procedures must be in place to verify the consumers’ identity
whenever a credit bureau report includes identity theft alert messages. Verification of the
borrower requires that we have “reasonable belief” that the consumer we are dealing with is in
fact who they say they are. While we should have reasonably identified our customer as required
under the Customer Identification Program, we are still responsible for contacting the customer if
there is an identity theft alert message on their credit report.
The verification process should include the following:
x
x
x
Calling the customer to inform them about the alert message and asking them to verify
their full name, address, phone number or any other pertinent information regarding their
loan request that helps you determine that we have reasonable belief that they are the
customer(s) that has applied for the loan.
In some instances, if there has been identity theft, the customer may have established
specific instructions and noted those in the credit bureau report advising us of how they
should be contacted. In those instances, we are required to contact the customer using
those instructions.
In any instance in which a fraud alert warning is on a credit bureau report, the loan file
should be documented indicating the date and follow-up to the customer that occurred.
Rev (04/11/2007) – Compliance
C-20
L. OTHER REQUIREMENTS
In additional to the foregoing, Originating Lender represents and warrants to U.S. Bank Home
Mortgage as follows:
1. The initial application shall be signed by all parties who are on the Note, as well as by
the interviewer.
2. The initial application shall be dated by all parties including the interviewer to establish
Truth-in-Lending compliance.
3. Product disclosures shall be signed and dated by all applicants. See Program
Description section of this manual for all disclosures. A new program disclosure shall
be delivered to the applicant if the applicant changes programs.
4. ARM disclosures must be signed at initial application.
M. ADDITIONAL REPRESENTATIONS OR WARRANTIES FOR ALT A/REDUCED
DOCUMENTATION LOANS
In addition to the representations and warranties, terms, conditions and requirements of
Originating Lender as detailed in the Mortgage Purchase Agreement and Originating Lender
Lending Manual, Originating Lender makes the following representations and warranties when
delivering loans processed under ALT A/Reduced Documentation process and/or products:
1. That the origination practices utilized by Originating Lender with respect to the loan(s)
have been legal, proper, prudent and customary.
2. In addition to the representations and warranties contained in the Mortgage Purchase
Agreement, the Originating Lender further represents and warrants that it has reviewed
all of the statements in the documentation submitted for each loan and has made such
inquires as it deems necessary to make and confirm the accuracy of the representations
set forth therein.
3. That the Originating Lender will promptly notify U.S. Bank Home Mortgage of any fact,
occurrence, act or omission regarding the loan, the mortgage property or the mortgagor
which may have a material adverse affect on the value of the loan and/or may cause
investors to consider the loan an unacceptable investment.
4. That the Originating Lender employs staff who are experienced and trained on the proper
origination of loans.
5. That Originating Lender has adopted appropriate operating procedures, including risk
assessment strategies, which are prudent and customary for Originating Lenders engaged
in the origination of loans.
6. Originating Lender represents and warrants that no loan delivered to U.S. Bank Home
Mortgage under Alt A, Stated Income/Stated Assets, No Ratio or No Income/No Assets
Documentation Process shall have been previously processed under a loan program
requiring full documentation.
Rev (04/11/2007) – Compliance
C-21
Predatory Lending
Mortgage Revenue Bond Program Division
PREDATORY LENDING
It is U.S. Bank Home Mortgage policy to comply with all federal, state, and local requirements
for anti-predatory lending. We do not originate nor will we purchase any high cost loans. We
actively monitor all predatory legislation including guidance and requirements issued by our
investors which includes, but is not limited to, Fannie Mae and Freddie Mac.
In addition, U.S. Bank Home Mortgage has adopted a policy to not originate or purchase any
conventional loan that exceeds Freddie Mac’s 5.00% points and fees limitation. If the loan is
sold to Fannie Mae, we conform to Fannie Mae’s 5.00% points and fee limitation. For all
government loans, we conform to state anti-predatory laws and/or HOEPA points and fees
limitations.
U.S. Bank Home Mortgage requires its’ Originating Lenders to know and adhere to all antipredatory lending laws as well as the points and fees limitations U.S. Bank Home Mortgage has
adopted.
Compliance with points and fees restrictions is monitored through Wholesale Department
reviews. Our reviews consist of verifying the accuracy of U.S. Bank Home Mortgage’s definition
of a finance charge and performing a points and fees test. These reviews are performed on all
loans we obtain or purchase from another lender as well as any loan we close in our name.
States that have Anti-Predatory Lending Restrictions
States and localities that have enacted anti-predatory lending requirements include
Arkansas, California, Colorado, Connecticut, District of Columbia, Florida, Georgia, Illinois,
Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New
Mexico, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, South
Carolina, Tennessee, Texas, Utah, Vermont, and Wisconsin.
Localities that have enacted anti-predatory lending requirements include Chicago, Illinois and
Providence, Rhode Island. This list is subject to statutory and regulatory change and is not
inclusive. Lenders should seek legal counsel to confirm state and local anti predatory lending
requirements.
Rev (04/11/2007) – Predatory Lending
P- 1
Disclosure Requirements
States and localities that require anti-predatory lending disclosures include Georgia and its’
Attorney Preference Disclosure, Illinois and its’ Caution on A Minus Product Disclosure, the
Points and Fees WS (required for all refinances), and the Net Tangible Benefit (NTB)
Disclosure, Massachusetts and its’ NTB Disclosure (for all refinances), Michigan and its’
Borrower Bill of Rights and Consumer Caution Disclosure, and the Homeowner Counseling
Notice, and New Mexico and its’ Points and Fees WS for all loans, and the NTB Disclosure and
Rhode Island and its’ Prohibited Acts and Practices Disclosure Regarding All Home Loans, its’
Prohibited Acts and Practices Regarding High-Cost Home Loans, and its’ Rhode Island Home
Loan Protection Act Disclosure Tangible Net Benefit. This list is subject to statutory and
regulatory change and is not inclusive. Lenders should seek legal counsel to confirm state and
local anti predatory lending disclosure requirements.
Certificate of Compliance Requirements
At the current time, there are no longer any Certificate of Compliance requirements for Cook
County, Illinois loans or Cleveland, Ohio loans.
This list is subject to statutory and regulatory change and is not inclusive. Originating Lenders
should seek legal counsel to confirm state and local anti predatory lending requirements.
Points and Fees Thresholds
Certain states and localities have anti-predatory lending restrictions for points and fees, including
Arkansas, California, Colorado, Connecticut, District of Columbia, Florida, Georgia, Illinois,
Chicago Illinois, Cook County Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts,
Michigan, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma,
Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, and Wisconsin.
This list is subject to statutory and regulatory change and is not inclusive. Originating Lenders
should seek legal counsel to confirm state and local anti predatory lending requirements.
Rev (04/11/2007) – Predatory Lending
P- 2
Underwriting
Mortgage Revenue Bond Program Division
UNDERWRITING GUIDELINES
CONVENTIONAL UNDERWRITING
GENERAL INFORMATION
All Conventional loan products provided in the MRB programs shall be underwritten utilizing
standard Fannie Mae or Freddie Mac underwriting guidelines as applicable with exceptions as
discussed herein and/or as described within specific product guidelines. Specific Fannie Mae or
Freddie Mac underwriting requirements may be restated in this section for purposes of additional
clarification or interpretation. Requirements not specifically addressed always default to current
Fannie Mae or Freddie Mac underwriting guidelines. Certain subjects may contain links to these
guidelines for quick reference. Throughout this section the term “Originating Lender” shall refer
to any lender, correspondent, broker or similarly described business entity that has entered into a
contractual agreement with the U.S. Bank Home Mortgage Division.
UNDERWRITING DOCUMENTATION
The application package must contain acceptable documentation to support the underwriting
decision. When standard documentation does not provide sufficient information to support the
decision, additional explanatory statements must be provided. Verification forms must pass
directly between lender and creditor without being handled by any third party. Documentation
must not contain any alterations, erasures, correction fluid or correction tape. Copies must be
stamped, “Certified, True and Exact Copies of the Original.”
GENERAL REQUIREMENTS FOR VERIFYING DOCUMENTS
x
Loan Prospector (LP) and Desktop Underwriter (DU) Submission and Resubmission
Rules
It is the Originating Lender’s responsibility to make sure loan information submitted to LP or
DU agrees with the terms under which the loan is closed and that the loan is eligible for
purchase in accordance with the registered product. Each product guideline contains a section
indicating the acceptability of either LP or DU.
Any lender being sponsored in the U.S. Bank Home Mortgage Desktop Originator System
(DO), must final assign the findings to U.S. Bank Home Mortgage upon submission to the
Operations Division for purchase.
x
Fannie Mae Expanded Approval Loans through Desktop Underwriter
The MyCommunityMortgage product is the only product that may receive an Expanded
Approval through the Fannie Mae DU system. The Expanded Approval levels are restricted to
EAI and EAII only.
Rev (04/11/2007) – Underwriting
U-1
ELIGIBLE BORROWERS
Loans with title or interest held in various forms/legal entities such as Life Estates, NonRevocable Trusts, Guardianships, LLC’s, Corporations or Partnerships are not eligible for
purchase.
x
Co Signers: Co-signors are permitted to the extent that the Fannie Mae or Freddie Mac
products permit and to the extent that the individual Housing Finance Authorities permit.
Co-signors income can be used for purposes of qualifying the borrower, however, the
income is not used when compliance approving the loan. Co-signors may not take title to
the property.
x
Citizenship: All Originating Lenders are required to follow the guidelines of the Housing
Finance Authority for specific citizenship requirements. If citizenship is not specifically
addressed by the HFA, the following applies:
All non-U.S. citizen borrowers must have current acceptable documentation from the
Bureau of Citizenship and Immigration Services (BCIS) (formerly the Immigration and
Naturalization Service (INS)) within the Department of Homeland Security, evidencing the
person’s legal residency status in the U.S.
x
Permanent Resident Alien (Immigrant): Individuals granted the privilege of residing
permanently in the U.S. Also includes refugees and others seeking political asylum.
Documentation is commonly referred to as a ‘Green Card’.
x
Nonpermanent Resident Alien (Nonimmigrant): Individuals seeking temporary entry to
the U.S. for a specific purpose, business or pleasure. This group may include
intracompany transferees, temporary workers/trainees, visitors for business or pleasure,
students, etc. Various types of visa classification documentation will apply. Refer to the
BCIS/INS Guidelines for specifics.
x
Diplomatic Status: Applicants possessing diplomatic status are ineligible
x
Valid SSN Required: All borrowers must have valid and verifiable Social Security
Numbers. Other forms of taxpayer identification are not allowed.
x
Living Trust: A living trust is ineligible.
Rev (04/11/2007) – Underwriting
U-2
(Eligible Borrowers continued)
x
U.S. Bank Home Mortgage Income Requirements: All Originating Lenders are
responsible to follow Fannie Mae or Freddie Mac guidelines for stable monthly income.
(See Freddie Mac Ch. 37.13 or Fannie Mae Section X Chapter 1)
x
Funds for Closing: All Originating Lenders are required to follow the guidelines of
acceptable sources of funds to close as stated in the Fannie Mae or Freddie Mac
Originating lender/Servicer guides. (See Freddie Mac Ch. 26 or Fannie Mae Section X:
Chapter 6)
x
Down Payment Assistance: Originating Lenders cannot provide their own Down
Payment Assistance programs; Fannie Mae and Freddie Mac do not accept these on
Conventional loan products in the MRB program.
x
Credit Underwriting: (See Freddie Mac Ch. 37 or Fannie Mae Section X Chapter 8)
DELINQUENT FEDERAL OR STATE DEBTS
If the borrower is presently delinquent on any Federal or State debt, the borrower is not eligible
until the delinquent account is brought current, paid, satisfied, or a satisfactory repayment plan is
made between the borrower and the agency owed. This action must be verified in writing. All
Federal and State Tax Liens must be paid in full for the mortgage to be eligible for sale to U.S.
Bank Home Mortgage.
SECONDARY FINANCING AND OTHER FINANCING AGREEMENTS
All Originating Lenders are required to approve eligible Second Mortgages that will be used
outside of the MRB program. All subordinate financing must meet Freddie Mac or Fannie Mae
guidelines. Originating Lenders are required to document each loan file with the following
information: product description, note, deed, funding source, and on Fannie Mae products the
Originating Lender must provide the Fannie Mae’s Community Second checklist. (See Freddie
Mac Ch. 25 or Fannie Mae Section VIII)
PRIVATE MORTGAGE INSURANCE
All Conventional loans requiring mortgage insurance must close at the insurance coverage
percentage levels outlined by the Freddie Mac or Fannie Mae product descriptions. Certain LP
and DU findings may offer a reduced level of coverage; however, these are not permitted. U.S.
Bank Home Mortgage does not purchase mortgage loans with mortgage insurance coverage levels
below those outlined in the Product Descriptions.
U.S. Bank Home Mortgage permits Originating Lenders to use Fannie Mae and Freddie Mac
recognized Mortgage Insurers.
Rev (04/11/2007) – Underwriting
U-3
MONTHLY PAYMENT ESCROWS
U.S. Bank Home Mortgage requires the collection of taxes, homeowner's insurance, and private
mortgage insurance (if applicable) and flood insurance (if applicable) monthly on all mortgages.
ANTI-FLIPPING POLICY
Conventional Purchase Transactions: U.S. Bank Home Mortgage requires all Originating
Lenders to follow both Freddie Mac and Fannie Mae applicable anti-flipping guidelines.
Evidence of required seasoning must be submitted in the Underwriting file. Documentation may
include, but is not limited to, a property sales history report, a copy of the deed of conveyance, a
copy of a property tax bill, a computer generated print-out from the assessor’s website or the title
commitment or binder indicating the legal ownership of the property.
Appraisals must indicate required sales history information as required.
Property Sales involving any of the following entities as property are exempt from these seasoning
requirements:
x
x
x
x
x
x
x
HUD
VA
Rural Development
Fannie Mae
Freddie Mac
Owners as a result of inheritance, to include divorce
Any Federally Insured Financial Institution (i.e. Bank selling home attained through foreclosure)
ELIGIBLE PROPERTIES
Eligible properties are determined by the specific MRB programs. Refer to the Housing Finance
Agency’s origination guidelines. Originating Lenders cannot utilize their specific variances with
Freddie Mac or Fannie Mae.
Originating Lenders are not permitted to submit Single Loan waivers unless they are requested
from the U.S. Bank Home Mortgage Underwriting Manager.
Condominium and PUD units must conform to current Freddie Mac and Fannie Mae requirements
(see the Condominiums & PUD’s section in this manual). U. S. Bank Home Mortgage does not
approve Condo’s or PUD’s.
Rev (04/11/2007) – Underwriting
U-4
(Eligible Properties continued)
Acreage: Originating Lenders are solely responsible to follow Housing Finance Authority
guidelines regarding maximum acreage. The Bond Program may have specifically addressed
acreage limitations. Please refer to origination guidelines link in Section 4 of this guide.
Manufactured Housing: Manufactured Housing is not permitted unless the MRB Program
includes this property type in their program offerings. (See program guidelines)
NATURAL DISASTER PROCEDURES
In the event of a natural disaster, such as a hurricane, tornado, flood, etc. the following procedures
must be followed:
Provide an exterior re-inspection of the subject property, with photograph, prior to funding of any
loan located in the cities or counties affected by the disaster. The re-inspection must state the
property is habitable and contains no evidence of damage based on the exterior inspection. The
re-inspection may be performed by any of the following:
x
The original appraiser
x
Staff appraiser employed by the Originating Lender
x
A company that specializes in property inspections
In lieu of the above, U.S. Bank Home Mortgage will accept a certification and/or endorsement
from the Homeowner’s Insurance Company stating that the property is unaffected and remains
insurable under their policy. The Homeowner Insurance Agent must also include a current
photograph of the subject property.
Rev (04/11/2007) – Underwriting
U-5
SHARED ROADS, WELLS AND SEPTIC SYSTEMS
Roads, wells and septic systems that are not publicly governed and maintained must have a
recorded maintenance agreement or easement that runs with the land (i.e., is expressly stated to
belong to the successors or assigns of the owner). This agreement assures the mortgagor or owner
and future owners of subject property the right to access and use of the road, well and/or septic
system as long as the mortgagor or owner and future owners fulfill reasonable conditions. The
agreement must also provide for mutual upkeep of the road, well or septic system.
x
Water Tests/Well Certifications
A satisfactory water test/well certification indicating compliance with acceptable local
standards will be required if:
o The appraiser recommends or requires a test, or
o The Purchase Agreement requires a test, or
o Underwriter discretion if documentation in the file indicates there may be a
potential problem.
x
Septic Certifications/System Reports
A satisfactory septic certification indicating compliance with acceptable local standards
will be required if:
o The appraiser recommends or requires a test, or
o The purchase Agreement requires a test, or
o Underwriter discretion if documentation in the file indicates there may be a
potential problem.
TERMITE INSPECTION
Termite Inspections are only required in geographic markets where termite infestation is a known
phenomenon, and if:
o Purchase Agreement requires, or
o Appraiser requires as a condition of the appraisal, or
o Underwriter discretion if documentation in the file indicates there may be a
potential problem.
Rev (04/11/2007) – Underwriting
U-6
WORK COMPLETION ESCROWS
Escrows for incomplete exterior work not completed due to inclement weather are allowed.
Originating Lenders are responsible to follow Freddie Mac or Fannie Mae guidelines for allowing
a repair escrow. The approving Underwriter must properly document the file with all necessary
paper work. The Originating Lender will be responsible to maintain and complete the escrow.
Escrows for well/septic, other health/safety issues will not be permitted.
Fannie Mae or Freddie Mac Tools
HELP LINE
Fannie Mae: 1-877-722-6757
Freddie Mac: 1-888-576-6932
FREQUENTLY ASKED QUESTIONS WEB SITE
http://www.allregs.com
https://www.efanniemae.com
http://www.freddiemac.com/
ADDITIONAL REFERENCES
MRI Publications
Rev (04/11/2007) – Underwriting
U-7
FHA UNDERWRITING
GENERAL INFORMATION
All Originating Lenders are required to underwrite FHA loans utilizing standard FHA
underwriting guidelines with exceptions as discussed herein and/or as described within specific
product guidelines. Specific FHA underwriting requirements may be restated in this section for
purposes of additional clarification or interpretation. Requirements not specifically addressed
always default to current FHA underwriting guidelines. Throughout this section the term
“Originating Lender” shall refer to any lender, correspondent, broker or similarly described
business entity that has entered into a contractual agreement with the U.S. Bank Home Mortgage
Division.
UNDERWRITING DOCUMENTATION
The application package must contain acceptable documentation to support the underwriting
decision. When standard documentation does not provide sufficient information to support the
decision, additional explanatory statements must be provided. Verification forms must pass
directly between lender and creditor without being handled by any third party. Documentation
must not contain any alterations, erasures, and correction fluid or correction tape. Copies must be
stamped, “Certified, True and Exact Copies of the Original.”
x
Loan Prospector And Desktop Underwriter
Submission and Resubmission Rules: It is the Originating Lender’s responsibility to
make sure loan information submitted to LP or DU agrees with the terms under which the
loan is closed and that the loan is eligible for purchase in accordance with the registered
product. Each product guideline contains a section indicating the acceptability of either LP
or DU.
Any Originating Lender being sponsored in the U.S. Bank Home Mortgage Division’s
Desktop Originator (DO) system, must final assign the findings to U.S. Bank Home
Mortgage prior to submission to the Operations Division for purchase.
Rev (04/11/2007) – Underwriting
U-8
ELIGIBLE BORROWERS
Loans with title or interest held in various forms/legal entities such as Life Estates, NonRevocable Trusts, Guardianships, LLC’s, Corporations or Partnerships are not eligible for
purchase.
x
Co Signers: Co-signors are permitted to the extent that the FHA products permit and to
the extent that the individual Housing Finance Authorities permit. Co-signors income can
be used for purposes of qualifying the borrower, however, the income is not used when
compliance approving the loan. Co-signors may not take title to the property.
x
Citizenship: All Originating Lenders are required to follow the guidelines of the Housing
Finance Authority for specific citizenship requirements. If citizenship is not specifically
addressed by the Housing Finance Agency, the following applies:
All non-U.S. citizen borrowers must have current acceptable documentation from the
Bureau of Citizenship and Immigration Services (BCIS) (formerly the Immigration and
Naturalization Service (INS)) within the Department of Homeland Security, evidencing the
person’s legal residency status in the U.S.
x
Permanent Resident Alien (Immigrant): Individuals granted the privilege of residing
permanently in the U.S. Also includes refugees and others seeking political asylum.
Documentation is commonly referred to as a ‘Green Card’.
x
Nonpermanent Resident Alien (Nonimmigrant): Individuals seeking temporary entry to
the U.S. for a specific purpose, business or pleasure. This group may include
intracompany transferees, temporary workers/trainees, visitors for business or pleasure,
students, etc. Various types of visa classification documentation will apply. Refer to the
BCIS/INS Guidelines for specifics.
x
Diplomatic Status: Applicants possessing diplomatic status are ineligible
x
Valid SSN Required: All borrowers must have valid and verifiable Social Security
Numbers. Other forms of taxpayer identification are not allowed.
x
Living Trust: A living trust is ineligible.
x
Stable monthly income: (See FHA 4155.1 Chapter 2, Section 2) All Originating Lenders
are responsible to follow FHA guidelines for stable monthly income.
Rev (04/11/2007) – Underwriting
U-9
FUNDS FOR CLOSING
Downpayment Assistance from Non-Profit:
All lenders are required to follow the guidelines of the Funded Downpayment Assistance from
non-profit organizations. These programs are permitted in accordance with FHA guidelines and
the following additional restrictions. Originating Lenders are responsible to guarantee that they
have verified that the Originating Lender Funded Down Payment Organization has not been listed
on the website below. To ensure the non-profit status is acceptable to HUD, the homebuyer must
enter into the Sales Contract/Purchase Agreement (including any amendments to purchase price)
on, or before, the date the IRS officially announces a termination of the organization’s tax-exempt
status.
See the following web site for a listing of ineligible organizations.
http://www.hud.gov/offices/hsg/sfh/np/irstatus.cfm Other web sites are not acceptable.
A printed copy of this web site page showing the agency has not had their tax-exempt status
terminated by the IRS prior to the date of the Sales Contract/Purchase Agreement must be
included in each loan file submitted for underwriting.
Originating Lenders approved by U.S. Bank Home Mortgage to submit loans underwritten by the
Originating Lender’s Direct Endorsement Underwriters may use any non-profit agency acceptable
per HUD guidelines, provided however that a copy of the web page discussed in this section
supports the tax-exempt status of such agency. It is recommended that Originating Lenders also
apply the following additional criteria when approving loans with downpayment assistance funds
provided by these agencies.
a) Originating Lender should have on file an IRS Letter of Determination verifying the
organization providing gift funds is a non-profit corporation under Section 501© (3)
exempt from taxation under Section 501(a) of the Internal Revenue Code. There must not
be an identity of interest between the donor (property Originating Lender, builder or
developer) and the non-profit organization.
b) The Federal Tax Identification Number of the non-profit must be entered in the FHA
CHUMS field designated for a charitable organization’s tax ID#. Failure to do so may
result in an uninsurable loan.
c) The gift should only be used toward the homebuyer’s downpayment and closing costs.
The loan file should contain a Gift Letter stating that no repayment of the gift is required.
d) Originating Lender should inform the appraiser of the gift transaction and the dollar
amount being used as downpayment assistance. The sales price should not be increased to
accommodate the downpayment assistance.
e) The closing agent must confirm the gift funds have been properly deposited in an escrow
account and that the gift funds came directly from the non-profit. Gift funds cannot be
disbursed from the Originating Lender’s proceeds at the borrower’s closing.
Cash Saved At Home:
All Originating Lenders are required to follow FHA guidelines when using these funds for closing.
For all other funds to close requirements see FHA 4155.1 Chapter 2, Section 3.
Rev (04/11/2007) – Underwriting
U-10
COLLECTION, JUDGMENTS AND PREVIOUS MORTGAGE FORECLOSURE
Originating Lenders are required to properly follow FHA guidelines when reviewing credit reports
that reflect these forms of derogatory credit.
DELINQUENT FEDERAL OR STATE DEBTS
If the borrower is presently delinquent on any Federal or State debt (ex. Student loan), the
borrower is not eligible until the delinquent account is brought current, paid or a satisfactory
repayment plan has been made between the borrower and the agency owed. This action must be
verified in writing. All Federal and State Tax Liens must be paid in full for the mortgage to be
eligible for sale to U.S. Bank Home Mortgage.
CREDIT UNDERWRITING
For all other credit underwriting see FHA Handbook 4155.1 Ch 2.2
MANUFACTURED HOUSING
Manufactured Homes loans are permitted under FHA product guidelines. Originating Lenders are
responsible to verify that the Manufactured Home has met all of FHA guidelines and the
guidelines listed below.
Manufactured Housing Minimum Requirements:
The manufactured unit must be constructed in conformance with the Federal Manufactured Home
Construction and Safety Standards, as evidenced by an affixed certification label, according to 24
CFR 3280.8; Only manufactured homes produced after June 15, 1976, will bear that seal. Loans
on mobile/manufactured homes produced prior to that date are unacceptable. In the case of
missing data plates, U.S. Bank Home Mortgage allows the use of IBTS (Institute for Building
Technology and Safety) to verify the certification labels. Contact IBTS at 703.481.2010 or web
site address: [email protected].
The manufactured unit must be a multi-width unit. No single-width homes are allowed. A
minimum of at least 600 square feet gross living area is required.
The manufactured unit must have a pitched roof and assume the characteristics of site-built
housing including permanent utilities.
All improvements must be completed prior to closing. Existing manufactured homes may not
have been moved from their original installation site.
The property including the manufactured unit must be classified and taxed as real estate by the
local taxing authority.
Rev (04/11/2007) – Underwriting
U-11
(Manufactured Housing Minimum Requirements continued)
The mortgage amount cannot include the financing of personal property such as furniture or any
type of insurance other than mortgage insurance. The value of appliances, air conditioning and
carpeting normally included in the value of site built homes may be included in the appraised
value. At least two comparable sales used in the appraisal must be similar permanently attached
manufactured housing units.
The security instrument must accurately describe both the land and the manufactured unit. At a
minimum, the unit description should include the Manufacturer’s Name, Model Year, Model
Name, Model Number, Serial Number and the Length and Width of the unit.
The Title Policy must identify the manufactured unit as part of the real property and contain an
ALTA Form 7 or equivalent endorsement.
The borrower must sign a written statement (such as an Affidavit of Affixation) to acknowledge
their intent that the manufactured home is a part of the real property that secures the mortgage.
An Insured Closing Protection letter must be provided unless prohibited by state law or regulation.
x
Appraisal Requirements: Regardless of any Loan Prospector or Desktop Underwriter
feedback certificate message to the contrary, the correspondent must obtain an appraisal on
Form 70B/1004C. At least two of the comparable sales in the appraisal report must be
manufactured homes.
x
Other Types of Factory-Built Housing: U.S. Bank Home Mortgage does not include
other types of factory-built housing not on a permanent chassis, such as modular or
panelized housing, in the definition of Manufactured Homes. U.S. Bank Home Mortgage
will also purchase a mortgage secured by one of these other types of factory- built housing,
as long as it meets all of FHA mortgage and property eligibility requirements and is
eligible under the specific U.S. Bank Home Mortgage Product Guideline.
Refer to Manufactured Housing Section for General Closing Requirements.
ANTI FLIPPING
See FHA Handbook 4000.2 Ch 1.7
Rev (04/11/2007) – Underwriting
U-12
SHARED ROADS, WELLS AND SEPTIC SYSTEMS
(See FHA Handbook 4150.2, Chg-1, 3-6 A, 7 and Chg-1, 3-6, A, 5)
x
Water Tests/Well Certifications
A satisfactory water test/well certification indicating compliance with acceptable local
standards will be required if:
o The appraiser recommends or requires a test, or
o The Purchase Agreement requires a test, or
o Underwriter discretion if documentation in the file indicates there may be a potential
problem.
x
Septic Certifications/System Reports
A satisfactory septic certification indicating compliance with acceptable local standards
will be required if:
o The appraiser recommends or requires a test, or
o The purchase Agreement requires a test, or
o Underwriter discretion if documentation in the file indicates there may be a
potential problem.
TERMITE INSPECTION
Wood Destroying Insects/Organisms (Termites): FHA is only requiring inspections if evidence of
active infestation or if in geographic markets where termite infestation is a known phenomenon,
and if:
o Purchase Agreement requires, or
o Appraiser requires as a condition of the appraisal, or
o Underwriter discretion if documentation in the file indicates there may be a
potential problem.
WORK COMPLETION ESCROWS
Escrows for repairs are permitted on external items only. All Originating Lenders are responsible
to follow FHA guidelines and the DE Underwriter must be in a position to properly document the
file with all necessary paper work. The Originating Lender will be responsible to maintain and
complete the escrow.
Escrows for well/septic, other health/safety issues will not be permitted.
Rev (04/11/2007) – Underwriting
U-13
NATURAL DISASTER PROCEDURES
In the event of a natural disaster, such as a hurricane, tornado, flood, etc. the following procedures
must be followed:
Provide an exterior re-inspection of the subject property, with photograph, prior to funding of any
loan located in the cities or counties affected by the disaster. The re-inspection must state the
property is habitable and contains no evidence of damage based on the exterior inspection. The
re-inspection may be performed by any of the following:
o The original appraiser
o Staff appraiser employed by the Originating Lender
o A company that specializes in property inspections
In lieu of the above, U.S. Bank Home Mortgage will accept a certification and/or endorsement
from the Homeowner’s Insurance Company stating that the property is unaffected and remains
insurable under their policy. The Homeowner Insurance Agent must also include a current
photograph of the subject property.
FHA TOOLS
HELP LINE
1-800-225-5342
FREQUENTLY ASKED QUESTIONS WEB SITE
http://www.allregs.com
http://answers.hud.gov/
EMAIL ADDRESS TO ASK QUESTIONS
[email protected]
TERMITE
www.npmapestworld.org/HUD.asp
Rev (04/11/2007) – Underwriting
U-14
VA UNDERWRITING
GENERAL INFORMATION
All Originating Lenders are required to underwrite VA loan products utilizing standard VA
underwriting guidelines with exceptions, if any, as discussed herein and/or as described within
specific product guidelines. Specific VA underwriting requirements may be restated in this
section for purposes of additional clarification or interpretation. Requirements not specifically
addressed always default to current VA underwriting guidelines. Throughout this section the term
“Originating Lender” shall refer to any lender, correspondent, broker or similarly described
business entity that has entered into a contractual agreement with the U.S. Bank Home Mortgage
Division.
UNDERWRITING DOCUMENTATION
The application package must contain acceptable documentation to support the underwriting
decision. When standard documentation does not provide sufficient information to support the
decision, additional explanatory statements must be provided. Verification forms must pass
directly between lender and creditor without being handled by any third party. Documentation
must not contain any alterations, erasures, correction fluid or correction tape. Copies must be
stamped, “Certified, True and Exact Copies of the Original.”
CO-SIGNERS
All Originating Lenders are required to follow the guidelines of The Department of Veterans
Affairs and to verify if their individual Housing Finance Authorities permit Co-signors.
DOWN PAYMENT / MAXIMUM MORTGAGE
The veteran must invest 25% of the sales price or appraised value, whichever is less, in entitlement
and cash down payment.
The base loan amount cannot exceed the VA appraised value of the subject property as indicated
on the Certificate of Reasonable Value issued by the VA or the Notice of Value issued by the
Lender Appraisal Processing Program (LAPP) Underwriter.
Rev (04/11/2007) – Underwriting
U-15
FUNDS FOR CLOSING
All Originating Lenders are required to follow the guidelines of The Department of Veterans
Affairs when using sources of funds to close.
The applicant or spouse must have sufficient cash to pay:
x
Any closing costs or points which are the applicant’s responsibility and are not financed in
the loan
x
The down payment, if required
x
The difference between the sales price and the loan amount, if the sales price exceeds the
reasonable value established by VA. If cash investment is necessary to meet the 25%
guaranty requirement, this must be verified as well.
Cash Saved at Home: Originating Lenders are responsible to follow the guidelines of The
Department of Veterans Affairs when considering using cash on hand. For all other funds to close
requirements see VA Handbook, Chapter 4.4.
CREDIT UNDERWRITING
(See VA Manual Chapter 4)
COLLECTION, JUDGMENTS AND PREVIOUS MORTGAGE FORECLOSURE
If loan is manually underwritten U.S. Bank Home Mortgage requires collections and judgments to
be paid in full and will not accept a loan with a previous mortgage foreclosure.
DELINQUENT FEDERAL OR STATE DEBTS
If the borrower is presently delinquent on any Federal or State debt (ex. Student loan), the
borrower is not eligible until the delinquent account is brought current, paid or a satisfactory
repayment plan has been made between the borrower and the agency. This action must be verified
in writing. All Federal and State Tax Liens must be paid in full for the mortgage to be eligible for
sale to U.S. Bank Home Mortgage.
Rev (04/11/2007) – Underwriting
U-16
MANUFACTURED HOUSING
Manufactured Homes are permitted under The Department of Veterans Affairs product guidelines.
All Originating Lenders are responsible to verify that the Manufactured Home has met all of the
VA requirements.
Refer to VA Manual chapter 12
U.S. Bank Home Mortgage will purchase a mortgage secured by a Manufactured Home, provided
it meets all the requirements as identified under the General Closing Requirements for
Manufactured Housing section of this manual and is permitted per the specific Program
Guidelines.
An Insured Closing Protection letter must be provided unless prohibited by state law or regulation.
• Appraisal Requirements: A mortgage secured by a manufactured home is not eligible to
be originated with the No-appraisal MAF. Regardless of any Loan Prospector or Desktop
Underwriter feedback certificate message to the contrary, the correspondent must obtain an
appraisal on Form 70B/1004C. At least two of the comparable sales in the appraisal report
must be manufactured homes.
• Other Types of Factory-Built Housing: U.S. Bank Home Mortgage does not include
other types of factory-built housing not on a permanent chassis, such as modular or
panelized housing, in the definition of Manufactured Homes. U.S. Bank Home Mortgage
will also purchase a mortgage secured by one of these other types of factory- built housing,
as long as it meets all of VA mortgage and property eligibility requirements and is eligible
under the specific U.S. Bank Home Mortgage Product Guideline.
SHARED ROADS, WELLS AND SEPTIC SYSTEMS
See VA Handbook, Chapter 12.
x
Water Tests/Well Water Certifications
A satisfactory water test/well certification indicating compliance with acceptable local
standards will be required if:
o The appraiser recommends or requires a test, or
o The Purchase Agreement requires a test, or
o Underwriter discretion if documentation in the file indicates there may be a
potential problem.
Rev (04/11/2007) – Underwriting
U-17
(Shared Roads, Wells and Septic Systems continued)
x
Septic Certification/System Reports
A satisfactory septic certification indicating compliance with acceptable local standards will be
required if:
o The appraiser recommends or requires a test, or
o The Purchase Agreement requires a test, or
o Underwriter discretion if documentation in the file indicates there may be a
potential problem, or
TERMITE INSPECTION
All Originating Lenders are required to follow the guidelines of The Department of Veterans
affairs as it relates to termite inspections.
WORK COMPLETION ESCROWS
Escrows for repairs are permitted on loan transactions. All Originating Lenders are responsible to
follow the guidelines of The Department of Veterans Affairs. The Underwriter must be in a
position to properly document the file with all necessary paper work. The Originating Lender will
be responsible to maintain and complete the escrow.
Escrows for well/septic, other health/safety issues will not be permitted, unless authorized by The
Department of Veterans Affairs.
NATURAL DISASTER PROCEDURES
In the event of a natural disaster, such as a hurricane, tornado, flood, etc. the following procedures
must be followed:
An exterior re-inspection of the subject property, with photograph, prior to funding of any
loan located in the cities or counties affected by the disaster. The re-inspection must state the
property is habitable and contains no evidence of damage based on the exterior inspection.
The re-inspection may be performed by any of the following:
x
The original appraiser
x
Staff appraiser employed by the Originating Lender
x
A company that specializes in property inspections
In lieu of the above, U.S. Bank Home Mortgage will accept a certification/endorsement from the
Homeowner’s Insurance Company stating that the property is unaffected and remains insurable
under their policy. The Homeowner Insurance Agent must also include a photograph of the
subject property.
Rev (04/11/2007) – Underwriting
U-18
PAYMENT OF FUNDING FEE AND SUBMISSION FOR LOAN GUARANTY
It is the sole responsibility of the Originating Lender to remit the Funding Fee in accordance with
VA guidelines. It is the sole responsibility of each Originating lender to obtain the Loan Guaranty
Certificate within 90 days of closing and to forward immediately upon receipt to U.S. Bank Home
Mortgage-MRBP.
VA TOOLS
FREQUENTLY ASKED QUESTIONS WEB SITE
http://www.allregs.com
http://www.homeloans.va.gov/
ADDITIONAL REFERENCES
MRI Publications
Rev (04/11/2007) – Underwriting
U-19
RURAL DEVELOPMENT LOANS
GENERAL INFORMATION
All Originating Lenders are required to underwrite Rural Housing loans utilizing standard Rural
Housing underwriting guidelines with exceptions as discussed herein and/or as described within
specific product guidelines. Specific Rural Housing underwriting requirements may be restated in
this section for purposes of additional clarification or interpretation. Requirements not specifically
addressed always default to current Rural Housing underwriting guidelines. Throughout this
section the term “Originating Lender” shall refer to any lender, correspondent, broker or similarly
described business entity that has entered into a contractual agreement with the U.S. Bank Home
Mortgage Division.
ELIGIBLE BORROWERS
Loans with title or interest held in various forms/legal entities such as Life Estates, NonRevocable Trusts, Guardianships, LLC’s, Corporations or Partnerships are not eligible for
purchase.
x
CoSignors: Per Rural Housing guidelines, Co-signors are not permitted.
x
Citizenship: All Originating Lenders are required to follow the guidelines of the Housing
Finance Authority for specific citizenship requirements. If the citizenship is not
specifically addressed by the HFA, the following applies:
All Non-U.S. Citizen Borrowers must have current acceptable documentation from the
Bureau of Citizenship and Immigration Services (BCIS) (formerly the Immigration and
Naturalization Service (INS)) within the Department of Homeland Security, evidencing the
person’s legal residency in the U.S.
x
Permanent Resident Alien (Immigrant): Individuals granted the privilege of residing
permanently in the U.S. Resident Aliens holding a green cared are acceptable. For
Eligibility of Non-U.S. Citizens please refer to RD AN No. 4200 dated 7/26/06.
x
Diplomatic Status: Applicants possessing diplomatic status are ineligible
x
Valid SSN Required: All borrowers must have valid and verifiable Social Security
Number. Other forms of taxpayer identifications are not allowed.
x
Living Trust: A living trust is ineligible.
Rev (04/11/2007) – Underwriting
U-20
(Eligible Borrowers continued)
x U.S. Bank Home Mortgage Income Requirements: All Originating Lenders are
responsible to follow Rural Housings guidelines for stable monthly income. (See RD AN
No. 4179 dated 4/28/06 and RD AN No. 4178 dated 4/28/06)
x
Funds for Closing: All Originating Lenders are responsible to follow the guidelines of
Rural Housing for acceptable funds for closing. See Chapter 4 Section 2 of the Rural
Housing Manual.
x
Down Payment Assistance: Down payment assistance is not permitted on Rural Housing
loans. Please refer to Chapter 4 Section 2 of the Rural Housing manual for acceptable
sources of funds.
x
Credit Underwriting: (See RD AN No. 4170 dated 4/13/06, RD AN No. 4171 dated
4/13/06 and RD AN No. 4174 dated 4/20/06).
MANUFACTURED HOUSING
Rural Development guidelines only permit Manufactured Homes under New Construction
guidelines. If the Housing Finance Authority permits New Construction in the MRB program,
Originating Lenders are responsible to follow all Rural Development guidelines.
U.S. Bank Home Mortgage will purchase a mortgage secured by a Manufactured Home, provided
it meets all the requirements as identified under the General Closing Requirements for
Manufactured Housing section of this manual and is permitted per the specific Program
Guidelines.
DELINQUENT FEDERAL OR STATE DEBTS
If the borrower is presently delinquent on any Federal or State debt (ex. Student loan), the
borrower is not eligible until the delinquent account is brought current, paid or a satisfactory
repayment plan has been made between the borrower and the agency. This action must be verified
in writing. All Federal and State Tax Liens must be paid in full for the mortgage to be eligible for
sale to U.S. Bank Home Mortgage.
MONTHLY PAYMENT ESCROWS
U.S. Bank Home Mortgage requires the collection of taxes, homeowner's insurance, and private
mortgage insurance (if applicable) and flood insurance (if applicable) monthly on all mortgages.
ANTI-FLIPPING POLICY
Rural Housing has not imposed Anti-flipping guidelines.
Rev (04/11/2007) – Underwriting
U-21
ELIGIBLE PROPERTIES
Eligible properties are determined by the specific MRB programs. Refer to the origination
guidelines. Originating Lenders cannot utilize their specific variances with Rural Development, if
any.
Condominiums and PUD units must conform to the current Rural Development requirements.
(See RD AN No. 4221 dated 10/17/06, RD AN No. 4196 dated 7/10/06). U.S. Bank Home
Mortgage does not approve Condo’s or PUD’s.
Originating Lenders are solely responsible to follow Housing Finance Authority guidelines
regarding maximum acreage or the guidelines directed by Rural Housing.
NATURAL DISASTER PROCEDURES
In the event of a natural disaster, such as a hurricane, tornado, flood, etc. the following procedures
must be followed:
Provide an exterior re-inspection of the subject property, with photograph, prior to funding of any
loan located in the cities or counties affected by the disaster. The re-inspection must state the
property is habitable and contains no evidence of damage based on the exterior inspection. The
re-inspection may be performed by any of the following:
x
The original appraiser
x
Staff appraiser employed by the Originating Lender
x
A company that specializes in property inspections
In lieu of the above, U.S. Bank Home Mortgage – MRBP will accept a certification and/or
endorsement from the Homeowner’s Insurance Company stating that the property is unaffected
and remains insurable under their policy. The Agent must also include a current photograph of the
subject property.
Rev (04/11/2007) – Underwriting
U-22
PROPERTY STANDARDS: SHARED ROADS, WELLS AND SEPTIC SYSTEMS
All properties must meet Rural Development minimum property standards including lead based
paint and health/safety issues.
x
Water Tests/Well Certifications
A satisfactory water test is required on all properties that have wells. (See RD AN No.
4145 dated 02/25/06)
x
Septic Certifications/System Reports
A satisfactory septic certification is required only if the appraiser notes problems on the
appraisal report (See RD AN No. 4145 dated 02/25/06)
ACREAGE
Rural Development does not specifically have an acreage requirement, but they do dictate that the
site value should not exceed 30%. Originating lender must also follow Housing Finance Authority
guidelines.
TERMITE INSPECTION
Termite Inspections are only required in geographic markets where termite infestation is a known
phenomenon.
WORK COMPLETION ESCROWS
Escrows are permitted for Rural Housing loans, but they may only be escrowed for weather related
issues. All Originating Lenders are to follow Rural Housing guidelines for allowing a repair
escrow. The approving Underwriter must properly document the file with all necessary paper
work. The Originating Lender will be responsible to maintain and complete the escrow.
USDA Tools
HELP LINE
Use the following link to get the telephone number for the nearest field office.
http://offices.sc.egov.usda.gov/locator/
FREQUENTLY ASKED QUESTIONS WEB SITE
http://www.allregs.com
http://www.rurdev.usda.gov/
ADDITIONAL REFERENCES
MRI Publications
Rev (04/11/2007) – Underwriting
U-23
General Closing
Requirements
Mortgage Revenue Bond Program Division
GENERAL CLOSING REQUIREMENTS
GENERAL INFORMATION
The following instructions are applicable to FHA, VA, RD, and Conventional bond mortgage loans to be
sold to U.S. Bank Home Mortgage. All loans are to be closed in the name of the Originating Lender and
must be readily marketable to prudent investors in the secondary mortgage market. In addition to these
instructions, Originating Lenders must comply with individual loan conditions as set forth by the
Department of Housing and Urban Development (HUD / FHA), the Department of Veterans Affairs (VA),
the U.S. Dept of Agriculture (RHS or RD), Federal National Mortgage Association (Fannie Mae / FNMA),
Federal Home Loan Mortgage Corporation (FHLMC / Freddie Mac), Government National Mortgage
Association (GNMA / Ginnie Mae), U.S. Bank Home Mortgage, and all conditions as set forth in the bond
origination documents.
Originating Lenders are responsible for full compliance with the Real Estate Settlement Procedures Act
(RESPA), Federal Truth-in-Lending Law, and with supplying U.S. Bank Home Mortgage with the correct
information to comply with the Home Mortgage Disclosure Act.
Originating Lenders will be responsible for the proper preparation and execution of all legal documents
including but not limited to the closing statements, HUD-1 forms and Truth-in-Lending forms, and Bond
Compliance documents.
A complete closed loan package must be received in fundable condition by the Program deadline date for
purchase. If the loan delivered is a seasoned loan, (90 days old), the closed loan package must include the
evidence of insurance on FHA/VA loans, or original LNG (Loan Note Guaranty – RHS loans), and a
current payment history.
Rev. (04/11/2007) – General Closing
GC-1
DELIVERY INSTRUCTIONS
Closed loan packages must be submitted in a legal sized file folder with all documentation “acco” fastened
according to the appropriate Loan Delivery Checklist. The entire closed loan package should be reviewed
for completeness and accuracy before shipping to U.S. Bank Home Mortgage.
Since all loan files contain sensitive customer information, lenders are encouraged to ensure files are sent to
U.S. Bank Home Mortgage via secured delivery, insured to a dollar amount that requires special handling
by their courier or in any manner that safeguards the privacy of customer data. Loan packages must be sent
via overnight delivery to the following address:
U.S. Bank Home Mortgage - MRBP
17500 Rockside Road
Bedford, Ohio 44146
Attn: MRBP Operations Department
The U.S. Bank Home Mortgage loan number is the permanent Servicer loan number. If provided to the
Originating Lender, it is to be used on all forms and correspondence given to the Mortgagor(s) at closing.
Typically, the loan number will be assigned when the loan information is registered either via Program
Administrator, by the Housing Agency, or by direct lock-in. However, in programs where the information
is unavailable, your lender loan number is acceptable. (Check program guidelines for registration
procedures).
Rev. (04/11/2007) – General Closing
GC-2
FUNDING DOCUMENTATION REQUIREMENTS
This section is to clarify the funding documentation requirements for most loans. The documentation
mentioned herein may not necessarily fulfill all requirements for all loans submitted to U.S. Bank Home
Mortgage for purchase. U.S. Bank Home Mortgage reserves the right to require additional documentation
needed to enhance a loan file on a case-by-case basis. Please ensure that each document submitted is
properly completed and correct.
1. Note
a) Note date must be typed and must agree with the date on the Deed of Trust/ Mortgage and HUD-1.
b) City and state where executed must be completed.
c) The property address must agree exactly with the Deed of Trust/ Mortgage, Appraisal, HUD-1 and,
Flood Certification and Hazard Insurance. (i.e. Rd. Road or Ave. Avenue. The same applies to any
directional.)
d) The loan amount must be correct, numerically and alphabetically, and must be rounded down to the
nearest dollar.
e) The Originating Lender’s name must be correct.
f) If the Originating Lender Name includes a “DBA” (Doing Business As) or any variation of the
Company Name, please include all supporting documentation.
g) Interest rate must be correct, numerically and alphabetically.
h) The first payment date must be correct as per the calculation of Per Diem Interest collected on the
HUD-1.
i) Maturity date must be correct.
j) Principal and Interest amount must be accurate.
k) The grace period may not exceed 15 days, late charge not to exceed 5% (Conventional loans), or 4%
(FHA/VA/RD loans) or the maximum allowable in your state.
l) The borrower’s name must be typed under their signatures. All borrowers listed on the loan
application must execute the Note.
Rev. (04/11/2007) – General Closing
GC-3
(Note requirements continued)
m) The Borrower(s) must sign exactly as their names appear in type (inconsistencies will require a
Name Affidavit)
n) The correct acceptable Note form must be utilized.
1. All Conventional fixed rate loans must use the most recent Fannie Mae/ Freddie Mac multistate Note.
2. FHA most recent HUD Note.
3. VA most recent VA form and be notarized if form requires it.
4. RD loans should use the most recent HUD Note.
o) FHA, VA, RD notes must include the case number in the upper right hand corner and must match
exactly with Certificate of Commitment or MIC/LGC/Note Guaranty.
p) Borrower/Co-Borrowers must initial errors and or corrections. Corrections must be made by
slashing through (///) or x’ing out the incorrect information and typing the correct information above
or below “slash” or “x” marks. Whiteouts are not acceptable. All pages of corrected Note must be
included.
q) Endorsement on Note – (Please follow the Example Provided)
Pay to the Order of:
U.S. Bank N.A.
Without Recourse
By:______________________(signature)
XYZ Mortgage Corporation (full legal name)
John Doe, Vice President (typed name & title)
If an original Note needs to be returned to you for any reason, it will be sent by overnight mail at
your expense. When corrected, it is to be returned overnight. If the Note comes from your bank
with a bailee letter, it will be returned to your warehouse bank.
Rev. (04/11/2007) – General Closing
GC-4
2. Name Affidavit
Required if there is a substantial discrepancy in the names and signatures of the borrowers that are of
record. (An example of such a case is if borrowers undersign the Note.)
a) Must be notarized (signed and dated by notary).
b) Indicate that the individual is known by more than one name or variation.
c) Identifies the property address
d) The affidavit is signed
e) The original is included in the loan file.
3. Power of Attorney (If applicable)
a) U.S. Bank Home Mortgage accepts only a Limited (Specific) Power of Attorney in those cases that
require one, with the exception of those currently in active military duty.
b) It must be clear that the mortgagor is appointing a Power of Attorney.
c) It must be clear who is being appointed with a Power of Attorney.
d) Must be signed and dated by the appointer (the mortgagor).
e) Copy must be notarized.
f) Cannot expire prior to the execution of the loan documents if there is an expiration date.
g) The property address and legal description must agree with the Deed of Trust/Mortgage.
h) Original must be recorded concurrently with the Deed of Trust/Mortgage.
i) The person being appointed with the Power of Attorney is “Attorney in Fact” and must sign the
closing documents as follows:
_______________________________________________
Jane Doe by John Doe, Her Attorney-in Fact
The signature could be: “Jane Doe by John Doe, Her Attorney-in Fact”, “John Doe, Attorneyin Fact for Jane Doe: or John Doe”. The manner of signing must be legally acceptable
according to state guidelines and must clearly show the signer to be the one authorized to sign
for the other specifically named individual.
Rev. (04/11/2007) – General Closing
GC-5
(Power of Attorney continued)
j) Must meet applicable state and agency requirements.
k) The Title Company must insure a valid Power of Attorney and that seller has a valid first lien.
l) The final Title Policy must not contain any exceptions based on the use of the Power of Attorney.
m) Excluding active military duty, we require the Mortgagor to sign the initial Loan Application.
4.
Deed of Trust/Mortgage
a) If MOM (MERS Original Mortgagee) loan, all Deed of Trusts/Mortgages should be transferred to
MERS Originator
b) ID#1000212. (See following section for additional information on MERS)
c) Copies must be certified as true and exact copies of the original. Appropriate, complete Riders
must all be attached. A Tax Exempt rider is required on ALL tax exempt bond loan programs. (See
Mortgage Riders below)
d) The Notarized section must be completed and executed by a notary. The stamp/seal and expiration
date is required.
e) The date of the notary execution must be the same date of the Deed of Trust/Mortgage.
f)
All information must be complete, correct and agree with the Note and Corporate Assignment. The
typed names of the borrowers must be included under the signature line and match the borrower’s
names as shown on the face of the Deed of Trust/Mortgage.
g) Legal description and property address must match precisely to all other supporting documentation.
h) All parties who have an interest on the property (i.e., spouses in community property states) must
have signed.
x The acceptable forms should be utilized:
x Conventional loans must use most recent Fannie Mae /Freddie Mac form.
x FHA loans use most recent HUD form.
x VA loans use most recent VA form.
x RD loans should use most recent HUD form
All Mortgagors must initial corrections, additions and deletions. Whiteouts are not permitted.
Rev. (04/11/2007) – General Closing
GC-6
5. Corporate Assignment
AKA Assignment of Mortgage, Transfer of Lien, Assignment of Security Deed. Not applicable if Deed of
Trust/Mortgage names MERS as nominee.
a) All information must be complete, correct and agree with the Deed of Trust/Mortgage and Note.
b) It must contain the legal description of the property, which is identical to that on the Deed of
Trust/Mortgage.
c) It must be signed by an officer of the assigning corporation with the officer’s name and title typed
below the signature. The name of the assigning corporation must appear above the signature line.
d) Copies must be a “certified true and exact copy”, carry a live ink signature of the person making the
certification, and must be fully notarized, with stamp, seal and expiration date of notary.
e) Must conform to the guidelines stated above.
MERS (Mortgage Electronic Registration System)
U.S. Bank Home Mortgage is a member of MERS. MERS is an electronic registration system that tracks
the ownership and servicing rights of a loan. If you are a member of MERS, U.S. Bank Home Mortgage
will accept your MOM (MERS as Original Mortgagee) documents. If MOM loan, all Deeds of
Trust/Mortgages should be transferred to MERS Originator ID 1000212. If you are not a MERS member,
you will need to close the loan using the customary mortgage forms and assignments.
If shipping a MOM loan, U.S. Bank Home Mortgage will need your Organization ID number (ORG ID),
name and phone number of a contact person. A MERS Contact Sheet is provided for your use (See Exhibits
section). U.S. Bank Home Mortgage must be informed of your MERS ID number, a lack of notification
could result in a purchase delay.
MIN (Mortgage Identification Number) and telephone number must be accurate.
If MOM documents have been used, please do not include copies of any assignments in the loan file. If you
are a member using a customary mortgage form, but registering the loan with MERS, a copy of the
assignment to MERS must be included in the shipped loan file. U.S. Bank Home Mortgage requires that the
Beneficial and Servicing Rights be transferred to us within ten (10) business days of purchase.
Rev. (04/11/2007) – General Closing
GC-7
6. 2nd Note
Unless indicated by bond program guidelines, the original Note should be sent to U.S. Bank Home
Mortgage, Master Servicer for the bond program.
a) Date must be complete and agree with date on the 2nd Deed of Trust/Mortgage
b) The property address must agree with 2nd Deed of Trust/Mortgage
c) Loan amount must be correct and agree with terms set forth by bond program parameters. (See
Program Guidelines)
d) Interest must be correct and agree with requirements set forth by bond program parameters. (See
Program Guidelines)
e) First payment date must be correct and agree with 1st Mortgage payment date terms.
f) The principal and interest amount must be correct.
g) The Mortgagee is in the name of the source of funds provider/ housing finance agency/authority.
h) The acceptable form should be utilized (reference Program Guidelines)
i) Note should not be assigned or endorsed to U.S. Bank Home Mortgage
j) Borrower/Co-Borrowers must initial errors and or corrections. Corrections must be made by
slashing through (///) or x’ing out the incorrect information and typing the correct information above
or below “slash” or “x” marks. Whiteouts are not acceptable. All pages of corrected Note must be
included.
If an original Note needs to be returned to you for any reason, it will be sent by overnight mail at your
expense. When corrected, it is to be returned overnight. If Note is delivered to us from your bank with
a bailee letter, it will be returned to your warehouse bank.
nd
7. 2
Deed of Trust/Mortgage
a) Copies must be certified as true and exact copies of the original.
b) The notarized section must be completed and signed by a notary. The stamp/seal and expiration date
is required.
c) The date of the notary must be the same date of the Deed of Trust/Mortgage.
d) All information contained must be complete, correct and agree with the 2nd Note. The typed names
of the borrower(s) must be included under the signature line and must match the borrower(s) names
shown on the face of the Deed of Trust/Mortgage.
Rev. (04/11/2007) – General Closing
GC-8
(2nd Deed of Trust/Mortgage continued)
e) All parties who have an interest on the property (i.e., spouses in community property states) must
have signed.
f) The acceptable form should be utilized (reference Program Guidelines)
g) The Tax Exempt rider should not be recorded with the 2nd Mortgage.
h) All borrower(s) must initial all corrections, additions and deletions. Whiteouts are not permitted.
Note: 2nd mortgages should not be registered with MERs.
8.
Mortgage Riders
This includes where applicable: Tax Exempt, VA, Condo, PUD, Assignment of Rents 1-4 Family,
Rehabilitation, etc.
x
The date must match the Note and Deed of Trust/Mortgage
x
The name of the Originating Lender must agree with Deed of Trust/Mortgage
x
The property address must match the Deed of Trust/Mortgage
x
The borrower(s) types name must be the same as on the Deed of Trust/Mortgage
x
The borrower(s) must have signed as their name is typed and must match the Deed of
Trust/Mortgage
x
The original must be recorded with the Deed of Trust/Mortgage
The Tax Exempt Rider is required on all tax exempt bond loans. Acceptable form should be utilized (as
provided by bond program).
9. First Payment Letter
Copy of letter provided to borrower that includes payment breakdown and first payment date.
Rev. (04/11/2007) – General Closing
GC-9
10. HUD-1 Settlement Statement
a) Proper box is marked for specific loan type.
b) Name of borrower agrees with the name on all legal documents.
c) The name of seller is identified and completed.
d) The name of the originating lender is identified and completed.
e) The property address must match exactly to the Note, Deed of Trust/Mortgage and appraisal and
loan application.
f)
The settlement date is reflected. This date may or may not be the same as on the Note and Deed of
Trust/Mortgage.
g) Signed copy of the final
h) Aggregate Escrow Disclosure must be signed by all parties
11. The Summary of Borrower’s Transaction:
The contract sales price listed on the HUD-1 must agree with the sales/purchase contract.
a) The principal amount of the loan must agree with the loan amount stated on the Note and Deed of
Trust/Mortgage.
b) If the loan contains a buy down agreement, the total buy down funds will be shown in either
borrower’s column or seller’s column. In addition to buy down funds reflected here, escrow
holdbacks may be shown under this heading.
c) The HUD-1 must clearly list all 2ND mortgages, Downpayment Assistance (DPA) assistances or
grants provided to the borrower.
d) FHA/VA/RD loans must reflect the Mortgage Insurance Premium (MIP), Funding Fee (FF), or
Guarantee Fee paid.
e) The Hazard and Flood Insurance premiums prepaid for 12 months is acceptable in lieu of a paid
receipt. HUD-1 must indicate payment directly to the Insurance Provider.
f)
All loans must have adequate reserves deposited with the lender. Adequate reserves for
taxes/insurance, etc. must be shown to have been collected to insure there are sufficient funds
available to pay the next installment when due.
Rev. (04/11/2007) – General Closing
GC-10
(Summary of Borrower’s Transactions continued)
g) Both the borrower and seller must sign the HUD-1 settlement statement (if the loan transaction is a
purchase). Only the borrower’s signature is required if the loan transaction is a refinance. The
settlement agent must sign and date this document in either case.
h) Escrow holdbacks must include the appropriate documentation in the file and should be clearly
identified. Prior approval by U.S. Bank Home Mortgage for escrow holdbacks is not required.
12. Down Payment Acknowledgement (DPA) Form (Reference Program Guidelines)
13. Temporary Buydown
Required only if product is allowable in current Bond Program. (Reference Program Guidelines)
Provide an original, signed Buydown Agreement in the closed loan package. All fields including borrowers name,
address and monthly payment breakdown should be correct. When U.S. Bank Home Mortgage purchases the loan,
the buy down contribution will be deducted from the wire amount in the same way as other collected escrows for
insurance and taxes. The buy down funds are held by U.S. Bank Home Mortgage and are used to supplement the
borrowers monthly payment.
14. Title Commitment
A.K.A. as Title Binder or Preliminary. (Please refer to Title Insurance Requirements Page)
a) Purchase transactions should show the borrower(s) as the “proposed insured”, which may or may
not be accompanied by a vesting.
b) The proposed dollar amount of the Deed of Trust/Mortgage.
c) The legal description agrees with the Deed of Trust/Mortgage and the appraisal.
d) The date must be the same or prior to the Deed of Trust/Mortgage.
e) Schedule B items, such as delinquent taxes, judgments and liens must be paid on HUD-1.
f)
A copy of the survey or plat map is needed unless a location endorsement has been ordered. The
commitment must contain wording such as “a comprehensive endorsement and location Note have
been approved for loan policy.” The address of the property should also be noted.
g) Attorney’s opinion letter (if applicable to your state) must be included. Do not include the
Abstract of Title.
h) Must include an Environmental Protection Lien Endorsement (8.1).
Rev. (04/11/2007) – General Closing
GC-11
(Title Commitment continued)
i)
The latest ALTA form of title insurance policy is required. In states where ALTA forms are not
used, similar coverage will be required.
j)
ALTA policies must be audited for proper endorsements (i.e., EPA endorsement 8.1, PUD
endorsement ALTA 5, Condo endorsement ALTA 4, Manufactured Housing Endorsement ALTA
7, etc.)
k) An ALTA 9 endorsement must be obtained for loans where surveys are not required.
15. Tax Certification
Originating Lender must provide internal form or local tax authority confirmation that indicates all
outstanding taxes have been paid.
16. Surveys or Plat Survey
a) A survey will be required if evidenced on the HUD-1 that there has been a charge for a survey, or if
it is required by your State. If a survey is not required, an Alta 9 endorsement to the title policy
must be obtained.
b) Identifies the property by the street address or the legal description, (preferably both).
c) Must be signed and sealed by surveyor.
d) Copy of the survey is acceptable.
17. Flood Certification
All loans must contain a Life of Loan Flood certification from an outside third party and be transferable to
U.S. Bank Home Mortgage.
18. Hazard Insurance
U.S. Bank Home Mortgage requires an insurance policy or binder (if in a binder state) with a one year paid
receipt.
a) Policy must reflect the borrower(s) name(s) and match other supporting documents.
b) Must contain the agent(s) signatures, their address and telephone number. It must also reflect the
company name and policy number.
c) Policy is in effect on the day of closing (coverage in force).
Rev. (04/11/2007) – General Closing
GC-12
(Hazard Insurance continued)
d) The full property address must be referenced and precisely match all other supporting
documentation.
e) Provide proof the policy is paid for the first year.
Acceptable Evidence of Payment of Hazard Insurance
x
Policy stating premium amount is paid in full.
x
Cancelled check (copy of front).
x
A paid receipt from the insurance agent or insurance company.
x
Payment deducted on the HUD-1.
f) Provide evidence that U.S. Bank N.A. has been named as First Loss Payee. The Loss Payee should
read:
U.S. BANK N.A., its successors and or assigns as their interest may appear.
c/o U.S. Bank Home Mortgage
P.O. Box 7298
Springfield, OH 45501-7298
g) Homeowner and wind deductibles cannot exceed the greater of 5% of the dwelling coverage for onefamily to four-family properties.
h) A binder (where applicable) is acceptable with a one year paid receipt.
i) U.S. Bank Home Mortgage will deduct the required hazard insurance escrow from the wire amount
to insure sufficient funds to pay the premium when due. The Originating Lender will be responsible
for collecting any shortage from the borrower(s).
j) For Conventional loans for a 2-4 unit dwelling, you must provide us with a policy that includes
“rental loss” insurance if you used the rental income to qualify the applicant.
k) For properties in an association such as a townhouse or condominium, a Master Policy with
Certificates issued to each borrower will be required as evidence of insurance.
l) Any payment of premiums due before the first payment to U.S. Bank Home Mortgage will be the
responsibility of the Originating Lender as will all other late charges, penalties and other costs.
Rev. (04/11/2007) – General Closing
GC-13
19. Flood Insurance
Loans on properties in a non-participating community, that are located in a flood zone, will NOT be eligible
for purchase
a) Flood Zones A and V require flood insurance.
b) Policy must reflect the borrower(s) name(s).
c) The coverage must be equal to the loan amount or the maximum available under the National Flood
Insurance Program’s regular program.
d) The Policy is in effect (coverage is in force) as of date of closing.
e) The full property address must be referenced and match all other supporting documentation.
f)
Evidence that the policy is paid for first year.
Acceptable Evidence of Payment of Flood Insurance
•
Policy stating premium is paid in full.
•
Cancelled check (copy of front).
•
Paid receipt from insurance agent or insurance company.
•
Payment is deducted on the HUD-1.
g) Evidence that U.S. Bank N.A. has been named as First Loss Payee. The Loss Payee should read:
U.S. BANK N.A., its successors and/or assigns as their interest may appear.
c/o U.S. Bank Home Mortgage
P.O. Box 7298
Springfield, OH 45501-7298
h) Deductibles cannot exceed the greater of $5,000 of the dwelling coverage for a single-family
dwelling, unless a higher amount is required by state law.
i)
The name of the borrower(s) and the property address must appear on the Flood Insurance Policy
and precisely match all other supporting documentation.
Rev. (04/11/2007) – General Closing
GC-14
(Flood Insurance continued)
j)
20.
Any premiums which are due before the first payment to U.S. Bank Home Mortgage will be the
responsibility of the Originating Lender as well any late charges or penalties assessed with the late
payment.
Private Mortgage Insurance (PMI)
U.S. Bank Home Mortgage requires Private Mortgage Insurance PMI on all Conventional Mortgage Loans
with a Loan-To-Value (LTV) in excess of 80.00%.
a)
Original commitment must be in the file with the lender’s information completed on the bottom
and signed by the lender.
b)
Coverage must equal the loan amount. Refer to Fannie Mae / Freddie Mac as well as Bond
Program Guidelines.
c)
Evidence that premium has been paid must be reflected on the HUD-1 excluding monthly MI.
d)
Amount of coverage must be correct per product guidelines.
e)
All information must be complete, and agree with loan file.
x
Fannie Mae or Freddie Mac recognized Private Mortgage Insurance Companies are
acceptable.
U.S. Bank Home Mortgage requires full MI coverage per Fannie Mae or Freddie Mac
requirements and will not accept reduced MI coverage.
21. Truth-In-Lending
All fees considered finance charges must be include in the calculation of the total finance charge and the
APR. Any finance charges paid by the borrower outside closing must be included in the calculations. Any
finance charges paid by the seller or another third party should not be included in the calculation. If the
seller is paying a pre-determined amount of the borrower’s closing costs, all fees that are not finance
charges should be paid first before applying the seller credit to any of the finance charges. *Please note that
the initial TIL must be dated within three (3) days of application. (Refer to Compliance Section for a
detailed discussion regarding TIL.) (Also refer to the chart in the Exhibits Section entitled U.S. Bank Home
Mortgage Finance and Non-Finance Charge Items.)
Rev. (04/11/2007) – General Closing
GC-15
22. Notice to Mortgagor Regarding Actual Transfer of Servicing
The notice to the mortgagor advising them of the actual transfer of servicing must contain the required
RESPA information. The Cranston Gonzales Act requires the borrower(s) to receive notification at least
fifteen (15) days prior to the effective date of the transfer. U.S. Bank Home Mortgage suggests using the
Notice of Assignment, Sale or Transfer of Servicing Right form when notifying the borrower(s) that the
loan has been sold to U.S. Bank Home Mortgage. Any equivalent type of “Good-bye” letter is acceptable
as long as it has all the required information. This disclosure must provide the borrowers with the name of
the new servicer, the address and toll-free phone number:
U.S. Bank Home Mortgage
17500 Rockside Road
Bedford, OH 44146
1-800 240-7890
23. Homebuyer Education/Borrower Authorization for Counseling
NOTE: Please refer to specific agency guidelines (Fannie Mae or Freddie Mac) for counseling
requirements. Bond program parameters will supersede all agency guidelines with respect to this
requirement.
a) Homebuyer counseling certificate must be included in the file.
b) Everyone who signs the Note is required to attend counseling
c) Training must take place in the following forums:
x
x
x
x
Face to Face Homebuyer Education
Classroom or workshop sessions
Telephone education/counseling program by an approved mortgage insurer sponsored by the
lender
Internet training is permitted thru Fannie Mae recognized MI companies
Borrower(s) must sign and lender must include in the Mortgage File the “Fannie Mae Borrower’s
Authorization for Counseling” (located in the Fannie Mae Selling Guide or at www.efanniemae.com or
Freddie Mac Selling Guide or at www.freddiemac.com). This form can also be used on Freddie Mac
products.
Rev. (04/11/2007) – General Closing
GC-16
24. Typed Loan Application
a) Fannie Mae 1003 must be utilized for all Conventional, Government and RD mortgage loans.
b) Must contain the verified information from the credit report, exhibits and appraisal.
discrepancy requires a written explanation.
Any
c) All borrowers must sign and date.
d) Must be signed by the Originating Lender.
e) Interest rate and loan amount must be completed.
f)
Must indicate how the Title is to be held.
g) Home Mortgage Disclosure Act (HMDA) information section must be complete. *New HMDA
requirements must be followed.
h) All Second Mortgage loans must be clearly identified.
25. Appraisal
Both forms 2055 and 2075 are only permitted if authorized by DU/LP with approval status. Originating
Lenders must have interior and exterior inspection reports and are responsible for following Housing
Agency Guidelines for Appraisal form usage.
a) The appraisal was signed by the appraiser prior to approval of the loan.
b) The appraiser is qualified and disinterested in the subject transaction.
c) The appraiser has made both exterior and interior inspections of the property.
d) The property address agrees precisely with the Note and Mortgage and other supporting documents.
e) The appraisal must be dated within 12 months of loan closing. A re-certification of value will be
required if the appraisal is over 6 months old.
f) Original photos of the subject and comparables are required. Printed digitals are acceptable.
Note: All pages of the appraisal must be included in the loan file.
g) U.S. Bank Home Mortgage reserves the right to request a review appraisal if not satisfied with the
one delivered. The Originating Lender will responsible to pay this cost.
Rev. (04/11/2007) – General Closing
GC-17
(Appraisal continued)
h) Wood Destroying Insects/Organisms (Termites): FHA is only requiring inspections if evidence of
active infestation, or if in geographic markets where termite infestation is a known phenomenon.
i) Manufactured Housing is only permitted if the bond program includes this property type in their
program offerings. (See program guidelines) Originating Lenders are limited to FHA/VA and RD
products. Note: Manufactured Housing is not permitted on Conventional loan products.
26. W-9 Form
Federal regulations require us to have in each loan transaction, verification of the social security numbers
for each borrower. The completed form signed by all mortgagors satisfies this requirement. The form is to
be completed with the name, mailing address and social security number of the mortgagor. Each W-9 form
must be signed and dated.
27. IRS Form 4506
U.S. Bank Home Mortgage requires IRS Form 4506 to be executed by the borrower(s) on any loan that is
underwritten using alternative documentation (virtually all LP or DU approvals).
A signed Form 4506 must accompany all packages submitted for validation of underwriting approval. Also,
a Form 4506 will be required on all loans for which tax returns have been obtained, including self-employed
borrowers.
28. Compliance/Errors and Omissions Agreement
U.S. Bank Home Mortgage requires a Compliance/Errors and Omissions Agreement to be executed by the
borrowers in which they will comply in the event documentation needs to be corrected to ensure marketable
title.
29. Termite Inspection
Wood Destroying Insects/Organisms (Termites): FHA is only requiring inspections if evidence of active
infestation, or if in geographic markets where termite infestation is a known phenomenon.
.
30. Miscellaneous Documentation
Please send all required agency and credit underwriting documentation for each mortgage loan file
submitted for purchase to U.S. Bank Home Mortgage.
Rev. (04/11/2007) – General Closing
GC-18
TAX INFORMATION
Property taxes must be paid through the current tax payment period at time of loan closing. If bills are
available, taxes for the subsequent period should also be paid, particularly if they become due within 60
days of loan closing. The date through which taxes are paid should always agree with exceptions for taxes
in the title policy. Under no circumstances should the title policy take exception to taxes other than those,
which are not yet due and payable.
AGGREGATE ESCROWS
The “Aggregate Method” of calculation must be used for establishing escrow accounts. It can be defined as
the accounting method a Originating Lender or bank uses in computing the sufficiency of the escrow
account funds by analyzing the account as a whole. Originating Lenders are responsible for collection of
appropriate amount of taxes and insurance escrows at closing. Should insufficient funds be collected at
closing, U.S. Bank Home Mortgage will require the Originating Lender to correct the shortage in addition to
providing the borrower with a re-disclosed initial escrow account statement. The shortage must be
corrected prior to purchase by U.S. Bank Home Mortgage. U.S. Bank Home Mortgage will not fund loans
with negative escrow.
The Aggregate Accounting Adjustment reflected on lines 1006-1008 of the HUD-1 must always be a
negative number (credit) or zero. If your calculations result in a positive number (greater than zero), recheck your calculations. If your calculations are determined to be correct, you are only permitted to reflect
a zero (0) for the Aggregate Accounting Adjustment on the HUD 1. The regulation does not permit a
positive charge on the HUD-1.
FIRST PAYMENT DATE
All loans must be closed with the monthly payments due on the first day of each month. The first payment
should be determined so the borrower, when making the first payment, will pay an entire month of interest.
First payment dates cannot exceed 61 days from disbursement.
Example:
Closing date is May 1st- First payment is June 1st. The borrower would pay May’s interest
with the June payment.
Closing date is May 2nd-First Payment is July 1st. The borrower would pay interest from
May 2nd through May 31st at closing; June’s interest would be paid with the first payment
(July 1).
U.S. Bank will allow, on a case-by-case basis, interest credits up to a maximum up ten (10) days.
* Per Diem is calculated on 365-day basis. *
Rev. (04/11/2007) – General Closing
GC-19
NOTES DELIVERED BY WAREHOUSE BANK
If your Notes are delivered directly to us from your Warehouse Bank, they must be delivered in identifiable
form. Please instruct your Warehouse Bank to attach the Note to a cover sheet, which reflects the U.S.
Bank Home Mortgage Loan Number, borrower’s name and the property address. This will enable us to
quickly match the Note with the corresponding closed loan package.
Please make your bank aware that the Note is to be delivered to the following address:
U.S. Bank Home Mortgage
17500 Rockside Road
Bedford, OH 44146
Attn: MRBP Collateral
EXCEPTION (SUSPENDED) LOANS
Upon review should exceptions be identified, we will communicate these to the Originating Lender via fax.
On every Monday, a report with all outstanding exceptions for your loans will be faxed. Interim reports will
be sent during the week for new exceptions posted. Additional follow-up will occur by phone and or e-mail
communication.
Loans that are not in fundable condition must be perfected within required timeframes set forth by bond
program. Exceptions not cleared in a timely manner may be subject to a late fee assessed or cancellation.
(Refer to the specific Program Guidelines).
Documentation sent to U.S. Bank Home Mortgage to clear a suspended loan, must be properly identified
and include U.S. Bank Home Mortgage Loan Number. Please address all exception documentation to the
attention of MRBP Bond Operations.
The following have been identified as the Top 10 Most Prevalent Documents with Exceptions that prevent
loan purchase.
1. Mortgage/Deed of Trust (1st & 2nd)
In order of prevalence: missing Riders, Property address differs from other documents, missing pages
and/or legal description, and blank or incorrect notary section
2. Note
In order of prevalence: Missing or incorrect endorsements, Property address differs from other
documents and miscellaneous incorrect payment terms.
3. Hazard & Flood Policies
In order of prevalence: names and addresses not precisely matching other documents and proof of
payment not included in file
Rev. (04/11/2007) – General Closing
GC-20
(Exception (Suspended) Loans continued)
4. Homebuyers Education Cert and/or Referral
If required by product type or bond program must be included in loan file.
5. Underwriting
Conventional Loans incorrectly put through DU/LP, missing 1008s. FHA loans missing completed
MCAW.
6. Assignment
In order of prevalence: Missing in file, not assigned correctly to U.S. Bank, NA, and incorrect reference
to borrower and/or property information from Mortgage
7. Appraisal
Missing parts/pages of Appraisal or address not matching other documents
8. HUD-1
In order of prevalence: incorrect or not precisely matching property address, bond assistance not
properly identified, signed copy of final, missing monthly escrows or not collected escrows
9. Title Commitment
In order of prevalence: co-signor or spouse named on title when not applicable, not sent with file,
missing or incorrect date of policy
10. Final TIL
They are either missing from file or name and/or address does not match
PURCHASE FUNDING
Upon receipt of a complete compliance approved, “exception free” closed loan package, U.S. Bank Home
Mortgage will wire funds according to the wire instructions provided by the Originating Lender. A
purchase summary detailing the transaction will be faxed on the day that funds are wired.
U.S. Bank Home Mortgage will calculate interest paid-to-date on a 365-day calendar year.
Any loan purchased between the 16th and the last day of the month, where the first payment is due the
following month, will be funded at an amortized balance. It will be the Originating Lender’s responsibility
to collect that payment from the mortgagor.
Any payment of taxes, homeowners or flood insurance and mortgage insurance which are owed before the
first payment due to U.S. Bank Home Mortgage, will be the responsibility of the Originating Lender. On
FHA loans, to ensure that MIP is paid timely and the borrower’s escrow account is not negatively impacted,
the Originating Lender is responsible to collect and pay all MIP premiums which are owed before the first
payment due to U. S. Bank Home Mortgage. The Originating Lender is also responsible for late charges,
penalties and other costs if these are not paid.
Rev. (04/11/2007) – General Closing
GC-21
(Purchase Funding continued)
When completing any information or documentation relating to the transfer of a loan to U.S. Bank please
use the account number listed on the purchase schedule. When using that number, please add the prefix of
99 to it. (i. e. purchase schedule account # 00123456- should be # 9900123456.) Examples of documents
relating to the transfer are Flood Zone Determinations, Hazard & Flood Insurance Declaration Pages.
A loan history is required on loans where payment(s) were due on the first of the previous month (i.e., first
payment due per Note is May 1; loan to be purchased on June 15). It is the Originating Lender’s
responsibility to forward an updated history if the one previously provided is outdated.
Mortgage payments received after U.S. Bank Home Mortgage purchases a loan must be forwarded to:
U.S. Bank Home Mortgage
P.O. Box 468002
Bedford, OH 44146 - 8002
Attn: Payment Processing Department
Tax bills received after U.S. Bank Home Mortgage purchases a loan must be forwarded to:
U.S. Bank Home Mortgage
4801 Frederica Street
Owensboro, KY 42301-0989
Attn: Tax Department
NATURAL DISASTERS
In the event of a natural disaster, such as a hurricane, tornado, flood, etc, the following procedures must be
followed:
a) An exterior re-inspection of the subject property, with photograph, prior to funding of loan located
in the city or county affected by the disaster
b) Re-inspection must state the property is habitable and has no evidence of damage on the exterior
inspection
c) Re-inspection may be performed by any of the following:
x Original appraiser
x Staff appraiser employed by the Originating Lender
x A company specializing in property inspections
In lieu of the above, U.S. Bank Home Mortgage will accept a certification/endorsement from the
Homeowner’s Insurance Company stating the property is unaffected and remains insurable under their
policy. The Homeowners Insurance Agent must also include a photograph of the subject property.
Rev. (04/11/2007) – General Closing
GC-22
MANUFACTURED HOUSING REQUIREMENTS
Definition of Manufactured Home
A manufactured home is a mobile home built entirely offsite on a permanent chassis that is pulled on the
highway to a permanent location. All mobile homes built after June 15, 1976 are required to have an
attached metal plate certifying it has been constructed in compliance with the Federal Manufactured Home
Construction and Safety standards.
1. The manufactured unit must be constructed in conformance with the Federal Manufactured Home
Construction and Safety Standards, as evidenced by an affixed certification label, according to 24
CFR 3280.8; only manufactured homes produced after June 15, 1976, will bear that seal. Loans on
mobile/manufactured homes produced prior to that date are unacceptable.
2. The manufactured unit must be a multi-width unit. No single-width homes are allowed.
3. The manufactured unit must have a pitched roof and assume the characteristics of site-built housing
including permanent utilities.
4. All improvements must be completed prior to closing. Specifically, the following must be
completed; site preparation for delivery of the manufactured home, attachment of the manufactured
home to a permanent foundation system, permanent connection to all necessary utilities (water,
electrical, gas service, etc). Exceptions to the forgoing may be only for minor items that do not
affect the ability to obtain a Certificate of Occupancy (i.e. landscaping, a driveway, a walkway, etc.).
Mortgage secured by existing manufactured homes that have incomplete items such as a partially
completed addition/renovation, or defects or needed repairs that affect the livability are not allowed
until the necessary work is completed.
5. Any towing hitch or running gear must be removed (including tongues, axles, brakes, wheels, and
lights).
6. The finished grade elevation beneath the manufactured unit or, if a basement is used, the lowest
finished exterior grade adjacent to the perimeter enclosure, must be at or above the 100 year return
frequency flood elevation.
7. The property including the manufactured unit must be classified and taxed as real estate by the local
taxing authority.
8. The mortgage amount cannot include the financing of furniture or mortgage life insurance. The
value of appliances, air conditioning, and carpeting normally included in the value of site built
homes may be included in the appraised value. At least two comparable sales used in the appraisal
must be similar permanently attached manufactured housing units.
Rev. (04/11/2007) – General Closing
GC-23
(Manufactured Housing continued)
9. The security instrument must accurately describe both the land and the manufactured unit in such a
way as to be considered a fixture filing under the UCC. At a minimum, the unit description should
include the Manufacturer’s Name, Model Year, Model Name, Model Number, Serial Number, and
the Length and Width of the unit.
10. The Title Policy must identify the manufactured unit as part of the real property and contain an
ALTA Form 7 or equivalent endorsement.
11. The borrower must sign a written statement (such as an Affidavit of Affixation) to acknowledge
their intent that the manufactured home is a part of the real property that secures the mortgage.
12. Any Certificate of Title must be surrendered to the state. Documentation must be included in the
loan file showing that the Certificate of Title has been surrendered. If the Certificate of Title has not
been surrendered, the loan is not eligible for sale to U.S. Bank Home Mortgage.
Lenders in Connecticut, Louisiana, Mississippi and Nebraska:
Call the appropriate Client Support Executive for special instructions on every loan involving
a Manufactured Home.
Connecticut Lenders
Louisiana Lenders
Mississippi Lenders
Nebraska Lenders
Lou Caresani
Sally Mazzola
Sally Mazzola
Elmer Helbig
(216) 475-8275
(216) 475-8379
(216) 475-8379
(216) 475-7685
FINAL DOCUMENTATION
All final documentation must be delivered to U.S. Bank Home Mortgage within 90 days of the date of
purchase. Any required post-funding follow-up documentation will be notated in a letter that is sent to the
Originating Lenders. Failure to provide documentation within this timeframe may result in penalties or
possible repurchase of the loan.
A copy of the Exception Letter/Report must be attached to all documentation that is sent to U.S. Bank
Home Mortgage to clear a post-funding deficiency. U.S. Bank Home Mortgage may elect to collect
outstanding documentation, if so any costs associated with the collection will be invoiced to the
correspondent with timely reimbursement expected.
Rev. (04/11/2007) – General Closing
GC-24
(Final Documentation continued)
Original loan documents to be received by U.S. Bank Home Mortgage within the 90 day period include:
a)
b)
c)
d)
Title Policy with applicable endorsements
Recorded Deed of Trust/Mortgage and applicable riders (i.e. Tax Exempt, Condo, PUD, etc.)
Recorded Corporate Assignment, or its equivalent
Mortgage Insurance Certificate (MIC) FHA loans/Loan Note guarantee (LNG) RD loans, Loan
Guaranty Certificate (LGC) VA loans
e) Recorded Power of Attorney, (if applicable)
f) Recorded Deed of Trust/Mortgage for Second Mortgage (if applicable)
g) Recorded Corporate Assignment for Second Mortgage (if applicable)
All follow-up documentation, along with the Final Document Delivery Checklist (See Exhibits section)
should be forwarded as shown below.
U.S. Bank Home Mortgage
17500 Rockside Road
Bedford, OH 44146
Attn: Document Control Department
TITLE INSURANCE REQUIREMENTS
U.S. Bank Home Mortgage will accept a title insurance policy issued by an American Land Title
Association Title Company (ALTA) specially authorized by law or licensed to do business within the state
where the property is located. Title Insurance Companies must be acceptable to Fannie Mae, Freddie Mac
and Ginnie Mae in order to be eligible title insurers for loans purchased by U.S. Bank Home Mortgage.
Short form policies are encouraged.
If the final title policy has not been issued at the time you deliver your closed loan file to U.S. Bank Home
Mortgage we will accept a title binder. Your final title insurance policy must contain the following:
1. Insured Party in Schedule A – The original mortgagee or assignee should be reflected with “Its
Successors and/or Assigns” added.
2. U.S. Bank Home Mortgage must hold a valid first lien position. Note: We require that 2nd
mortgage is listed in a subordinate lien position on same policy as the 1st mortgage or a separate
policy. U.S. Bank Home Mortgage should record as U.S. Bank N. A.
3. The effective date of the policy must be the same as or later than the recording date of the Deed of
Trust/Mortgage unless the policy is a master policy or a short form policy.
4. The complete legal description must be shown, if applicable, including lot, block, addition, city,
county and state and be exact to the mortgage.
Rev. (04/11/2007) – General Closing
GC-25
(Title Insurance Requirements continued)
5. The complete tax identification number and amount of taxes must be shown unless the policy is a
master policy or a short form. (Some states may not show the amount of taxes).
6. Title insurance coverage must be for at least the loan amount. On graduated payment mortgages,
coverage must be for the highest loan amount after all deferred interest is added to the principal.
7. Name(s) of the mortgagor(s) must be consistent with those on the Deed of Trust/Mortgage.
8. All titles must be held as Fee Simple.
9. The mortgagor(s) and mortgagee/beneficiary names, loan amount and date, recording information
and recording state entered in Schedule A should be checked against the Deed of Trust/Mortgage.
The following is a sample entry containing all required information:
Mortgage from Robert T. Jones and Cynthia R. Jones, husband and wife, to U.S. Bank
N.A., dated January 20, 1996, and recorded January 25, 1996 in Book No. 451, Page
3544, as Document No. 1242534 in Jefferson County, Kentucky, in the amount of
$50,000.00. Note: if the Deed of Trust/Mortgage has been re-recorded, the Deed of
Trust/Mortgage description must show the re-recording information.
10. If a borrower’s spouse has not signed the security agreement, the title insurance policy must
affirmatively state that the lien of the Mortgage described on Schedule of the policy is not affected
by the absence of the spouse’s signature.
11. A plat drawing/survey/ “Mortgage Inspection Report” must be included in the closed loan package.
The correct dimensions of the lot, the location of any improvements, the measurement from the
improvements to the various lot lines, the location and identity of all easements and encroachments
must be identified and illustrated on the drawing. All permanent structures must be identified (i.e.,
house, garage, storage, etc.) The location of easements (east side, west side, etc.) must be described
in the title policy. Note: Surveys are acceptable up to six months old.
If a Location Endorsement, ALTA 116 is not customary to the state and no plat/survey is available, then
survey exceptions cannot be noted on the title commitment/final policy.
Rev. (04/11/2007) – General Closing
GC-26
(Title Insurance Requirements continued)
Required Endorsements:
U.S. Bank Home Mortgage requires the following endorsements to the final title policy:
x
All loans require the Comprehensive Endorsement 100 or ALTA 9.
x
All loans require the Environmental Protection Lien Endorsement (ALTA 8.1).
x
All condominium mortgages require the Condominium Endorsement (ALTA 4).
x
All properties located in a planned unit development require the PUD Endorsement (ALTA 5).
x
All manufactured homes require an ALTA 7. Manufactured housing refers to housing produced in
or at a factory. The sections are transported to the building site for final assembly. Mobile Homes
meeting the specifications below are considered manufactured housing but modular, panelized or
prefabricated homes are not considered manufactured housing. Manufactured housing must meet
the following specific requirements: *NOTE all Manufactured homes must be eligible products as
defined by the program documents.
x
Property must be legally classified as real property.
x
Maximum lot size is 10 acres (In general land value should be no greater than 35% of the
overall property value.
x
Its property must have a general appearance and functional utility of a site –built home.
x
The unit must have been built after June 15, 1976.
x
A unit must be double wide or larger with a minimum width of 22 feet.
x
An appraisal or other acceptable alternative with original photos or high quality copies must
be in the file. Comparables must include no more than one-site built home. The
comparables and comments must support marketability and value. The value may not
include furniture; free standing appliances or other items of a personal nature.
x
The home must be permanently attached and anchored per manufacturer specifications
and/or state/local building codes. The home must also have acceptable full perimeter walls
that include brick, block and poured concrete or treated wood.
x
Wheels, axles and trailer hitches must be removed.
x
The home must have a pitched roof with overhang.
composition shingle (asphalt or fiberglass) or better.
Rev. (04/11/2007) – General Closing
Roof covering must be standard
GC-27
(Required Endorsements continued)
x
The unit must have permanent steps and stoops or proper footings.
x
On-site parking must be provided.
x
Not permitted on Conventional loans unless specifically identified by the Housing Finance
Agency.
General Title Waivers
Title to the mortgaged property must be free and clear of all exceptions that would affect the first lien
position of U.S. Bank Home Mortgage in any way. Schedule B, Part 1 of the title binder and final title
policy lists title exceptions for which the title company is not providing coverage. Before closing,
Originating Lenders must determine what action, if any, should be taken to protect the interest of U.S. Bank
Home Mortgage in the case of each such exception appearing on Schedule B, Part 1.
The Title insurance industry is in the business of insuring over the title to property, not over its value. If the
defect in question has potential effect on the chain of title, the title company should insure over it on the
final title policy, either by specific wording on Schedule B or by endorsement.
Examples of such defects are those referred to as: “Convenants”, ”Conditions”, ”Restrictions”,
”Declarations”, ”Agreements”, ”By-laws”, etc. which might cause the forfeiture or reversion of title if they
were violated.
If the defect in question has the potential for an adverse effect on the use and enjoyment of the
improvements and hence, on the value of the property as a whole, a specific waiver should be requested.
x
x
x
The appraiser who completed the appraisal must execute Conventional waiver.
VA wavier request must be sent to the appropriate local VA office: Attn: Valuations.
FHA waiver requests must be sent to the Direct Endorsement Underwriter that underwrote the loan.
If the wavier request involves a large adjustment in the value of the property, the local FHA office
may need to approve.
All waivers should be reviewed and approved prior to closing by the appropriate agency or appraiser listed
above.
Rev. (04/11/2007) – General Closing
GC-28
(General Title Waivers continued)
Examples of defects of this kind are easements, right of way, and encroachments, which are not covered by
the General Title Waivers.
x
Real Estate Taxes: FHA/VA/Conventional/RD – Real Estate Taxes must be followed by the
statement, “Taxes that are not yet due and payable”. Outstanding special assessments cited must be
followed by the statement, “Special assessments hereafter levied”. Note: There are no “pending
assessments now a lien.”
x
Restrictions, Covenants and Conditions: FHA/VA/RD/Conventional restrictions, covenants and
conditions cited must be followed by the statement, “which have not been violated to date. Any
future violations will not result in forfeiture or reversion of title”. Restrictions, covenants and
conditions cited that have been violated must be followed by the statements. “This policy insures
against all losses or damages by reason of this violation. This policy insures that neither said
violation nor any future violation will result in forfeiture or reversion or title.”
The following exceptions are not acceptable on final title policies:
x
x
x
x
x
x
x
Rights of Tenants in Possession.
Easements or claims of easements not shown of public record.
Right of first refusal.
Exceptions for dower or courtesy rights.
Fraudulent Conveyances.
Liens (except taxes not yet due and payable).
Exceptions which state anything as to matters of survey:
(Examples: discrepancies, conflicts, and shortages in area or boundary lines, encroachments or any
overlapping of improvements, which an accurate survey of the premises would disclose.) Exceptions
which state “possible” or “if any” must be specified or deleted.
x
Rights of others in and to the use of the secured property.
Rev. (04/11/2007) – General Closing
GC-29
TABLE FUNDING
Mortgage Revenue Bond Program Division
TABLE FUNDING PROCEDURES
OVERVIEW
x
The U.S. Bank Home Mortgage Loan Number is the permanent Servicer Loan
Number. It is to be used on all forms and correspondence given to the Mortgagor(s)
at closing. The loan number will be assigned when the loan information is registered
either via McWeb, by the Housing Agency, or by direct lock-in. Follow the
guidelines for your specific program.
x
Corresponding Lenders schedule the closings and prepare documents in their own
name. Loans do not close in the name of U.S. Bank, N.A. or U.S. Bank Home
Mortgage.
x
Corresponding Lender is solely responsible for the accuracy of the closing documents
at all times.
x
Please do not send a funding request until the loan has a Clear to Close from U.S.
Bank Home Mortgage Underwriting. Funds cannot be wired until the loan receives a
Clear to Close from U.S. Bank Home Mortgage underwriting. Please keep in mind
the Underwriting Department requires 48 hours to clear conditions.
REQUESTING FUNDS
1. Obtain the U.S. Bank Home Mortgage generated MIN number and Servicer Loan
Number for inclusion on an Assignment to MERS or for use on MOM docs. MIN
numbers can be obtained by faxing a request to 216-475-8699, or by calling or
emailing your Funding Team members. For further information see “MERS and
Table Funding with U.S. Bank Home Mortgage - MRBP Division.” section of this
manual.
2. By 2:00pm EST at least two days prior to the disbursement date, Corresponding
Lender must submit the Table Funding Request and Checklist via fax # 216-4758699. All applicable documents must accompany the request, or funding may be
delayed.
3. A U.S. Bank Home Mortgage Table Funder will review the funding request and
contact the Lender with any corrections or missing items. Please note, due to
variances in volume, U.S. Bank Home Mortgage cannot guarantee what time a
request will be reviewed.
Rev (04/09/2007) - Table Funding
T-1
1
(Requesting Funds continued)
4. The Corresponding Lender will receive a wire breakdown via fax once the request
has been processed and any outstanding items have been received by U.S. Bank
Home Mortgage.
5. All U.S. Bank Home Mortgage fees are net funded out of the wire along with interest
and escrows.
6. Wires are sent out the morning of disbursement. U.S. Bank Home Mortgage cannot
guarantee a wire delivery time. We do not send wires the day before disbursement.
7. Corresponding Lender is responsible for approving the final HUD-1 with the
settlement agent for funding. U.S. Bank Home Mortgage does not issue funding
numbers and we do not need to review the final HUD-1 at the time of disbursement
unless there are significant changes from the preliminary HUD-1. If escrows change
at closing or if the loan does not close as scheduled, please contact your Table Funder
immediately for instructions.
DELIVERY INSTRUCTIONS
1. After the loan disburses, the closed loan packages must be submitted in a legal sized
file folder with all documentation “acco” fastened according to the appropriate
Delivery Checklist. The entire closed loan package should be reviewed for
completeness and accuracy before shipping to U.S. Bank Home Mortgage.
NOTE: There are different checklists for FHA, VA, RHS/RD, and Conventional
loans by state (see exhibits section of this manual).
2. For loans underwritten by U.S. Bank Home Mortgage, it is not necessary to send a
copy of the credit package with the closed loan file.
3. Files are to be delivered within five (5) business days after funding, failure to comply
will result in a $50 fee for each day late and may delay future fundings.
Loan packages must be sent via overnight delivery to the following address:
U.S. Bank Home Mortgage
17500 Rockside Road
Bedford, Ohio 44146
Attn: MRBP Operations Department
Rev (04/09/2007) - Table Funding
T-2
2
POST-DELIVERY CONSIDERATIONS
After file delivery, a review will be completed to determine compliance to funding
documentation requirements (see the Loan Delivery & Purchase section of this Manual
for detailed instructions related to pertinent documents). If any exceptions are
discovered, they will be communicated via faxed report. These exceptions are to be
cleared as soon as possible and may be faxed to us (unless an original document is
specifically required to clear) to the Table Funding Request fax number. The faxed
exception report can be used as the cover letter, if using your own cover sheet, without
the U.S. Bank Home Mortgage exception report, please document the U.S. Bank Home
Mortgage loan number and applicable exception(s) included.
It is also the Correspondent Lenders responsibility to clear any compliance exceptions
reported by the Housing Finance Agency or Compliance Agent for the applicable
program.
If compliance approval is not obtained in a timely manner, a repurchase demand will be
made for the applicable loan and/or the lender may be terminated.
Rev (04/09/2007) - Table Funding
T-3
3
MERS® and TABLE FUNDING with
US BANK HOME MORTGAGE MRBP DIVISION
What is MERS®?
It stands for MORTGAGE ELECTRONIC REGISTRATION SYSTEM.
MERS is an electronic registration process that simplifies the way mortgage
ownership and servicing rights are originated, sold and tracked. MERS acts as
nominee in the county land records for the Lender and Servicer. Mortgages are
registered and tracked using a Mortgage Identification Number (MIN) unique to
each loan.
U.S. Bank requires all loans to be assigned to MERS.
Further information about MERS can be found online: www.mersinc.org OR by
contacting Pat Bishop at U.S. Bank Home Mortgage. 216-475-8403
[email protected]
What if we are not a MERS Member?
Most of our Table Funded Lenders are not members of MERS. You do not have to
be a MERS member to assign loans to MERS or to table fund with U.S. Bank.
(Please note the following instructions only apply to NON-MERS members.)
How do we obtain a U.S. Bank Home Mortgage generated MIN Number?
Fax a loan registration form to the Help Desk at 866-350-5156 and it will be
returned with the U.S. Bank Home Mortgage Loan Number and MIN
or
Email or Call your Table Funding team members:
Ellen Hart 216-475-8324 [email protected]
Robin Nicolosi 216-475-8325 [email protected]
Once your loan is registered with the Housing Finance Agency, U.S. Bank
Home Mortgage will have the loan information in our system. Requests for
MIN numbers can be made at any time after you have registered with the
HFA. To avoid a last minute rush when preparing closing documents, many
lenders submit fax requests for a U.S. Bank Home Mortgage Loan Number
and MIN number prior to submitting the credit file to our Underwriting
Department.
Rev (04/09/2007) - Table Funding
T-4
4
(MERS® Continued)
What are MOM documents?
MOM means: MERS AS ORIGINAL MORTGAGEE
Lenders close loans using standard security instruments containing language
approved by Fannie Mae and Freddie Mac showing MERS as the mortgagee of
record.
The Mortgage Identification Number (MIN) number appears directly on the
security instruments.
You will need to obtain a U.S. Bank Home Mortgage generated MIN number to be
included on the closing documents.
Discuss your ability to create MOM docs with your doc prep company.
Rev (04/09/2007) - Table Funding
T-5
5
(MERS® Continued)
How are loans assigned to MERS?
Table Funded Lenders have two options:
1. Use an Assignment of Mortgage at closing. See example on next page.
Using a paper assignment, Corresponding Lender assign the loan to MERS as
nominee for U.S. Bank, N.A. The assignment gets recorded with the mortgage at
the time of closing. A U.S. Bank Home Mortgage generated MIN number must
appear on the assignment.
Please Note: Do not assign any loans directly to U.S. Bank, N.A.
OR
2. Use MOM docs with a U.S. Bank Home Mortgage assigned MIN number
printed directly on the security instruments.
This option eliminates the need for an assignment entirely. You do not need to be
a MERS member to use MOM docs with a U.S. Bank MIN number.
As a Non-MERS Member, do we need to register our loans with MERS?
No, Non-MERS members need only assign the loan to MERS using a U.S.
Bank Home Mortgage MIN number on a paper assignment or MOM docs.
U.S. Bank will register the loans with MERS.
Rev (04/09/2007) - Table Funding
T-6
6
Rev (04/09/2007) - Table Funding
T-7
7
IMPORTANT TIPS TO CORRESPONDENTS FOR AVOIDING
EXCEPTIONS AND DEFICIENCIES
x
All Table Funded first mortgages must be assigned to MERS with an Assignment of
Mortgage or MOM documents.
See the “MERS and Table Funding with U.S. Bank Home Mortgage - MRBP
Division” section of this guide for further instructions.
x
Second mortgages should not be assigned to MERS.
x
First Mortgage Loans should never be assigned directly to U.S. Bank Home Mortgage
or U.S. Bank, N.A.
x
The Original Assignment should be sent with the mortgage for recording. Please
send a copy of the Assignment with closed loan packages.
x
The HUD-1 Settlement statement must not show U.S. Bank as the Lender.
x
An Assignment cannot be dated earlier than the security instrument; it must be the
same date or a later.
x
All bond loans require a Tax Exempt Rider to the mortgage. Housing Finance
Authorities also have program specific riders to the mortgage. Please be sure to
check your Housing Finance Agency’s guidelines prior to closing.
x
The property address on a Note must include a street designator, i.e. Avenue, Road,
etc. A great resource for address verification is the US Postal Service website:
http://www.usps.com/. Please verify street names and zip codes before drawing
closing documents.
Rev (04/09/2007) - Table Funding
T-8
8
(Important Tips continued)
x
Notes should be endorsed
WITHOUT RECOURSE to U.S. BANK, N.A.
– Not U.S. Bank Home Mortgage. All endorsements should be made on the original
Note only. An allonge is acceptable only if there is no room on the Note for an
endorsement. The allonge must reference the borrower’s name, property address and
loan amount. Endorsements on Riders or Addendums are not acceptable. Be sure to
type the name of your institution and the name and title of the officer endorsing the
Note.
x
The property address on the Flood Cert, Hazard Insurance, and Appraisal must match
the Note exactly.
x
The Corresponding Lender is responsible for the accuracy of the final Truth-inLending disclosures.
x
U.S. Bank Home Mortgage reserves the right to require additional documentation
needed to enhance a loan file on a case-by-case basis.
Questions? Ask US
Table Funding Contacts
Ellen Hart 216-475-8324 [email protected]
Robin Nicolosi 216-475-8325 [email protected]
Funding Supervisor
Donna Allison 216-475-8417 [email protected]
Rev (04/09/2007) - Table Funding
T-9
9
FREQUENTLY ASKED QUESTIONS
HOW FAR IN ADVANCE DO I NEED TO REQUEST FUNDS FOR CLOSING?
Requests must be received by 2:00pm, two days prior to disbursement. The loan
must receive a clear to close from our Underwriting Department before you can
send a Request for Funds.
Example: if the loan is to disburse on Friday, request must be in by the
preceding Wednesday at 2:00pm Eastern Standard Time.
CAN I STILL REQUEST FUNDS AFTER THE 2:00pm DEAD LINE?
Yes. However, an additional $100.00 Rush Fee will apply. U.S. Bank Home
Mortgage will make every effort to accommodate late requests; however, we
cannot guarantee the fulfillment of late wire requests.
DOES U.S. BANK PROVIDE CLOSING DOCUMENTS?
The Corresponding Lender must supply closing documents and is responsible for
the accuracy of those documents. Corresponding Lenders are also responsible for
complying with any requests from U.S. Bank Home Mortgage for corrections.
(Note: U.S. Bank Home Mortgage is in the process of beta testing a service that
will do this for Corresponding Lenders in the future, call to see if this is available
if interested)
DO WE CLOSE THE LOAN DOCUMENTS IN THE US BANK NAME?
Your company is still the closing Lender. The loan must close in your company's
name.
HOW MANY DAYS DO I HAVE AFTER CLOSING TO DELIVER THE
CLOSING PACKAGE?
Five (5) Business days, to deliver Collateral and Closed Loan Package. A late fee
of $50.00 per day is assessed for each day beyond the deadline.
Rev (04/09/2007) - Table Funding
T-10
10
(Frequently asked continued)
WHAT DOCUMENTS NEED TO BE SENT TO U.S. BANK AFTER THE
CLOSING?
Refer to the Delivery Checklist for MRB specifics regarding closing documents.
If the credit file was underwritten by U.S. Bank Home Mortgage, you do not need
to resend the credit package along with the closing documents.
DOES U.S. BANK HAVE THE RIGHT TO POSTPONE MY REQUEST?
x
x
x
x
x
If you have any loan(s) that have not been compliance approved by the Housing
Authority within 30 days of funding.
If there are any outstanding conditions on previous loans.
If the loan is not approved by the Housing Authority, or the Underwriter.
If any document required for funding are missing or incomplete.
If the loan has not received a Clear to Close from U.S. Bank Home Mortgage
Underwriting.
CAN I STILL REQUEST MONEY FOR A CLOSING ON A HOLIDAY?
If the Federal Reserve Bank is closed, U.S. Bank cannot provide funds.
CAN I RECEIVE THE WIRE A DAY BEFORE CLOSING?
We do not provide early wires. Money will only be wired the day of
disbursement.
WHAT IF THE LOAN DOES NOT CLOSE THE DAY SCHEDULED?
Contact your Table Funder at U.S. Bank immediately for return wire instructions.
Rev (04/09/2007) - Table Funding
T-11
11
Exhibits
This Exhibit Section contains various lending program specific documents,
schedules, and informational bulletins that each Originating Lender should review
and, in some cases, complete and return to U.S. Bank Home Mortgage.
Mortgage Revenue Bond Program Division
US BANK HOME MORTGAGE - MRBP DIVISION
TABLE FUNDING REQUEST & CHECKLIST
FAX 216-475-8699
216-475-8324 ELLEN HART / [email protected]
216-475-8325 ROBIN NICOLOSI / [email protected]
REQUESTS MUST BE FAXED BY 2:00PM EST 2 DAYS PRIOR TO WIRE DATE.
REQUESTS WITH LESS THAN 24 HOURS CANNOT BE GUARANTEED FOR THE DATE REQUESTED.
TODAYS DATE
CLOSING DATE
DISBURSEMENT/WIRE DATE
LENDER INFORMATION
CONTACT
PHONE
FAX
E-MAIL ______________________________________________________________________________________________
PLEASE COMPLETE
US BANK USE ONLY
SETTLEMENT AGENT
LOAN AMOUNT
CONTACT NAME & PHONE
PREMIUM
ADDRESS
INTEREST
ESCROWS
US BANK LOAN#
TAX SERVICE
BORROWER
TRANSFER FEE
LOAN AMOUNT
MIP/ VA FUNDING
INTEREST RATE
ASSISTANCE/2ND MTG
TERM
TABLE FUNDING
TYPE
COMPLIANCE FEE
PRICE/SRP
MERS
US BANK TO WIRE MIP OR VA FEE: (Circle) YES NO
THE FOLLOWING ITEMS
MUST BE FAXED WITH THIS REQUEST
(ANY MISSING DOCUMENTS MAY DELAY FUNDING)
FHA/VA CASE BINDER*
FHA/VA WIRE FEE
SECOND MTG FEE/COMPCR
BUYDOWN FUNDS
MCM FEE
INTEREST IS CALCULATED ON 365 BASIS
TOTAL
HUD-1
COPY OF NOTE (with Signed Endorsement to US BANK, N.A.)
Please Certify Address Before Submitting, All Docs Must Match.
EXHIBIT G (Kansas Lenders Only)
Page 1 of MERS Mortgage/Deed of Trust (with MOM documents) or MERS Assignment
Do Not Create an Assignment to MERS if you use MOM documents
COPY OF SECOND NOTE (If Applicable)
INITIAL ESCROW DISCLOSURE
TRUTH-IN-LENDING (Itemization of Amount Finance Sheet, if included)
APPRAISAL (First Two Pages)
FLOOD CERT/FLOOD INSURANCE (If in Flood Zone)
HAZARD INSURANCE
WIRE INSTRUCTIONS
CLOSING PROTECTION LETTER (Specific for each Property)
CLEAR TO CLOSE, APPROVAL FROM USBHM UNDERWRITING
HOUSING AUTHORITY COMMITMENT LETTER OR E-HOUSING LOAN DETAIL SHEETS
(Showing Commitment Expiration Date)
MI CERT. (If Conventional)
BUYDOWN AGREEMENT (If Applicable)
LOUISIANA LENDERS
EXHIBIT C-1
EXHIBIT E
EXHIBIT T
Rev. 3/2007
US Bank Home Mortgage - MRBP Division
Lender Contact Information
Fax this completed form to: 866-404-8094 - Attention: Ralph Pasterak
Email this completed form to: [email protected]
Bond Program
Lender Name
Mailing Address
Main Phone Number
Main Fax Number
MERS ID # (if applicable)
Name
Phone
Main Contact
Main Contact E-mail
Underwriting Manager
Underwriting E-mail
Shipping Supervisor
Shipping E-mail
Shipping Staff
Shipping Fax #
Processing Manager
Processing E-mail
Exception Contact
Final Documents
Final Docs Fax #
Final Docs E-mail
Scorecard Recipient
Scorecard Fax #
Scorecard E-mail
Wire Instructions
Bank Name
ABA Number
Account Name
Purchase Advice Attn
Fax # for Purchase Advice
E-Mail Address
Account Number
Updated – 4/5/2007
I:/Bond Production Library/new lender documents/lender approval documentation/Lender Contact Form.doc
U.S. Bank Home Mortgage
Finance and Non-Finance Charge Items
Fee
Abstract or Title Search Fee
Administrative Fee
All Items Paid by Seller or Lender
Application Fee
Appraisal Fees:
- Drive By
- Field Asset Valuation
- Recertification of Value
- Standard
Assignment Fee
Assumption Fee
Attorney's Fees
Bond Fees:
(Participation, Reservation, Review, Transfer, etc.)
(Bond Program is KHC, OHFA, etc.)
Broker Admin. Fee
Broker Fee/Mortgage Broker Fee
Buydown Fee
Closing/Settlement Fee or Closing/Escrow Fee
Commitment Fee
Computer Fee or Computer Orig Fee (Texas only)
Condo Doc Review Fee or PUD Doc Review Fee
(When fee is required and retained by Lender)
Construction Admin Fee
Construction Loan Disbursement Fees
(Draw Fees charged by Title Agent or Construction Agent)
Copy Fee
Correspondent Delivery Fee
Courier/Express Mail or other Overnight Fees (includes fees
charged by title agent)
Credit Life and Disability Insurance
Credit Processing Fee (CARD)
Credit Report Fee
Date Down Endorsement Fee
Delivery/Handling Fee
Disbursement Admin Fee/Disbursing Agent Fee
Discount Fee/Points
Doc Tax Stamp Fee
Document Delivery or Document Retrieval Fee
Document Preparation Fee
Document Preparation - Redraw Fee
Document Review Fee
Document Signing Fee
Electronic Document Delivery or Electronic Retrieval Fee
E-mail Document Fee
Escrow Waiver Fee
Extension Fee (On KHC loans per KHC regulations)
Finance
Charge
Not a
Finance
Charge
Definition
X
X
X
X
X
X
X
X
X
X
X
5
X
X
X
X
X
X
X
X
X
X
X
X
X
5
X
2
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
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3
5
5
U.S. Bank Home Mortgage
Finance and Non-Finance Charge Items
Fee
Fax Fee
Final Appraiser Certification of Completion (Performed before
closing)
Final Delivery
Final Inspection Fee (After loan closing)
Flood Certification Fee
Flood Fee - Life of Loan
Funding Fee
Georgia Per Loan Fee
Hazard Insurance
Home Buyer Education
Inspection Fees:
- Chimney
- Compliance (Unless final)
- Gas
- Home
- Mechanical
- Plumbing & Heating
- Radon
- Re-Inspection
- Roof
- Septic
- Termite (Pest)
- Well/Water/Septic
Intangible Tax
Interest Paid Separate Prior to First Regular Payment
(MD or DC)
Interest (Interim/Per diem or prepaid interest on new loan)
Judgment Search
Late Payment Charges
Late Request Fee
Lender’s Escrow Fees
(Fee charged for processing work completion escrow)
Lender’s Inspection Fee (Performed by Lender)
Loan Tie In Fee or Loan Fee
(CA-Title agent charge to Fed Ex package)
Lock-In Fee (Initial or Extended or Rate Lock Fee)
MCC (Commitment or Application) Fee
MERS Registration Fee
Mortgage Insurance Premiums
(Includes amounts collected at closing and during the term –
both MIP and PMI)
Mortgage Recording Tax
(Charged by the state of New York)
Mortgage Tax Fee
Name Search
Notary Fee
Finance
Charge
Not a
Finance
Charge
Definition
X
X
X
X
X
X
X
5
1
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
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4
U.S. Bank Home Mortgage
Finance and Non-Finance Charge Items
Fee
Origination Fee
Payoff Processing Fee
Plat Sketch/Plat Drawing
Post Closing Admin Fee
Premium Tax
(May be listed as KY Municipal Premium Tax. This is a tax
charged on MIP in the states of Kentucky or Washington.
Rate charged will appear on the MI cert. On the HUD, the
amount shown for Mortgage Insurance may include this
premium tax.)
Processing Fee
Re-certification Fee or Re-certification of Value
Reconveyance Fee
Record Processing or Record Tracking Fee (Wisconsin)
Recording Fees
- Assignment (Required by Lender)
- City Transfer Tax
- Conservation Fee (to record)
- Deed/Mortgage/Release
- Mortgage Registration
- Mortgage-Abstract/Torrens Release
- Recording Service Fee (Charged by and paid to title co)
- Subordination Agreement Recording Fee
Redraw Fee
Rural Development Guarantee Fee (RHS Guarantee Fee)
Sales Tax or Surcharge on Title or Escrow
(Charged by a Title Company)
Servicing Release Premium (Correspondent loans)
Settlement (or Closing) Fee
Signing Service Fee
Staged Inspection Fees on Construction-Perm Loans
Sub-escrow Fee
Subordination Agreement Fee (Fee charged for preparing a
subordination agreement which is required by the Lender)
Supplemental Origination Fee
Survey/Escrow Survey
Tax Service Fee or Tax Contract Fee
Telephone Fee
Tie-in Fee (Misc. handling fee charged by Title Agent in CA)
Title Endorsements
- ARM Rider
- Condo Rider
- PUD Rider
Title Examination
Title Insurance
Title Search
Finance
Charge
Not a
Finance
Charge
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
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Definition
U.S. Bank Home Mortgage
Finance and Non-Finance Charge Items
Finance
Charge
Fee
Title Work Fees
- Affidavit Filing
- Abstracting
- Special Assessment Search
- Well Disclosure Filing
Transfer Fee
Underwriting Fee
VA Funding Fee
VOE and VOD Verification Charges
Wire Fee - Late Wire Request Fee
Wire Fee - Rush Wire Fee
Yield Spread Premiums
203K Fees:
- Architectural and Engineering Fee
- Bond Fee
- Independent Consultant Fee
- Permits and Other Fees
- Plan Review Fee
- Rehab Advisor Fee
- Rehab Escrow Amount
Not a
Finance
Charge
Definition
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Definitions
1. If the fee includes the initial certification plus life of loan service, and the breakdown of costs between the two
are not or cannot be determined to show as separate costs on the GFE & HUD-1, then the entire fee must be
disclosed as a prepaid finance charge.
2. Must not be required by the creditor and proper disclosures are on the TIL; a) disclosed as not required;
b) disclose premium for initial term; c) customer signs an affirmative written request.
3. Must be properly disclosed on the face of the TIL, or other forms as permitted by Regulation Z, such as the
HUD-I, Good Faith Estimate, or Itemization of Amount Financed.
4. Must have proper disclosures on TIL stating that hazard insurance may be obtained from anyone
the borrower chooses. If obtained through creditor, cost of hazard insurance must be disclosed.
5. This fee is treated as a finance charge on all U.S. Bank Home Mortgage retail (and CARD) transactions only.
Does not apply to wholesale transactions.
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MRBP Division
MERS Contact Information
ORG ID #1000212
COMPANY NAME
ORG ID#
CONTACT NAME
PHONE NUMBER
FAX NUMBER
EMAIL ADDRESS
SUPERVISOR
If not the same as above - PHONE NUMBER
______________________________
FROM THE DESK OF PAT BISHOP
Phone: (216) 475-8403
Fax: (866) 350-7310
[email protected]
i:\Bond Production Library\New Lender Documents\Lender Approval Documentation\MERS Contact Information.doc
US Bank Home Mortgage – MRBP Division
Final Document Delivery
17500 Rockside Road, Bedford, Ohio 44146
Attention: DOCUMENT CONTROL DEPARTMENT
Department Manager: Darlene Kreigh (216) 475-7739
Department Team Lead: Carolyn Blackshear (216) 475-7743
Government Insuring Contact: Linda Levandoski
(216) 475-8015
Department Fax Number: (216) 475-8606
Department E-Mail: [email protected]
To complete your mortgage loan file, please send the following documents to the Document Control
Department within 90 days of purchase. Penalty fees will be assessed after 120 days of purchase.
Borrower’s Name:_____________________________________ USBHM#_________________
Property Address:_____________________________________ Loan Type:________________
………………………………………………………………………………………………
__________
Original signed and dated Loan Note Guaranty (Rural Housing Loans)
__________
Loan Guaranty Certificate (VA Loans) (EDI format or LGC-press acceptable)
__________
Original Recorded Mortgage, including the legal description and all applicable
riders, i.e., Condo/Pud/1-4 Family, etc. Please make sure that the Tax Exempt
Rider is recorded with the 1st Mortgage.
__________
Original recorded Intervening Assignment and any 1st Prior Assignments
__________
Original Title Policy
__________
Other:____________________________________________________________
Requests for pay histories for insuring purposes may be faxed to
(866) 867-4460 or (216) 475- 8606
Originating Lender’s Name _______________________________________________________
Address: ______________________________________________________________________
Contact Person: ___________________________________Phone Number:_________________
PLEASE NOTE: IT IS NO LONGER NECESSARY TO PROVIDE THE MIC
I:\Bond Production Library\New Lender Documents\Lender Approval Documentation\Final Document Delivery.doc
BORROWER PAYMENT ADDRESS AND WEBSITE
U.S. Bank Home Mortgage
P.O. Box 468002
Bedford, OH 44146-8002
800-240-7890
www.usbankhomemortgage.com
NOTE ENDORSEMENTS
U.S. BANK N.A.
HAZARD INSURANCE AND LOSS PAYEE CLAUSE:
U.S. BANK N.A.
its successors and or assigns as their interest may appear.
c/o U.S. Bank Home Mortgage
P.O. Box 7298
Springfield, OH 45501-7298