UNDERWRITING

TEXAS 50 (a)(6)

100

Cash out refinances are allowed in the state of Texas for second homes/investment properties under what circumstance?

Texas cash out on second homes or investment properties are not allowed unless the borrower has a documented homestead primary residence located in the state of Texas

200

Are all property types allowed under Texas 50(a)(6) guidelines?

TX 50(a)(6) are not permitted on 2-4 unit primary residences

300

What is the max acreage for an urban homestead and LTV/CLTV for Texas 50(a)(6) loans?

Max acreage may not exceed 10 acres for an Urban Homestead  Max LTV and CLTV not to exceed 80% 

400

What document must be signed by all owners, who must review all loans before closing and what is the seasoning requirement for a Tx 50 (a)(6) loan?

All owners must sign and date the Notice Concerning Extension of Credit disclosure (12 Day Letter) at least 12 days prior to consummation. All Texas loans must be reviewed by an approved Texas attorney prior to closing. Prior C/O – 12 month seasoning required from previous Note Date o Prior A(6) to A(6) o Prior A(6) to R/T

500

What test, who completes and what is reviewed on the test for rural properties greater than 10 acres under the Texas 50(a)(6) program?

Rural properties greater than 10 acres must be sent to credit risk for review to verify the property meets the Homestead test o Homestead Test:

  Located within the physical or jurisdictional limits of a municipality or planned subdivision or development 

 Serviced by police and/or fire protection 

 At least 3 of the following services are provided :

 Electric 

 Natural Gas 

 Sewer 

 Storm Sewer 

 Water .

GENERAL KNOWLEDGE

100

What is the name of the program that allows the rate term refinance of a TX 50(a)(6) loan?

(f)(2) Rate and Term Refinance of a Texas (a)(6) Home Equity Loan 

200

Citizenship of the United States is not required for eligibility. Borrowers must be one of the following :

 U.S. Citizen 

 Permanent Resident 

 Non-Permanent Resident

300

Name 3 transactions that do not allow the use of a Power Of Attorney (POA) ?

Except as required by applicable law, a power of attorney may not be utilized to sign a security instrument or note if: 

 No other borrower executes such loan document in person in the presence of a notary public Exception: a POA may be utilized to sign loan document(s), as long as the attorney-infact or agent under the power of attorney is either the borrower’s attorney-at-law or the borrower’s relative 

 The transaction is a cash-out refinance unless required by specific state law 

 The transaction is a Texas 50(a)(6) loan; or 

 The transaction is closing in an acceptable Inter-Vivo Revocable Trust

  The transaction is a jumbo loan

400

To close in the name of a trust, Amerisave requires the following documentation:

AmeriSave will require a complete copy of the trust agreement including:  All legible pages of the Trust Agreement and any Amendments to the trust  Fully executed and dated by all parties (Trustees and Settlors)  Notarized or Certified by the Attorney who prepared the trust on the same date as Trustees/Settlors If a trust is amended and completely restated, AmeriSave can accept the full restatement without obtaining the original. A Certification of Trust or Abstract of Trust is a summary of a trust and is commonly accepted by law in several states. A list of the states where a Certificate of Trust is acceptable is located on the CRM Homepage under the Trust Resources.

500

Mention 3 transaction types that may NOT close in a trust:

 Jumbo loans (unless investor specific guidelines allow)

  Deed restricted properties 

 POA’s are not allowed on loans closing in trust 

 Texas 50(a)(6) loans may NOT close in trust 

 USDA loans

DEROGATORY CREDIT

100

What is the waiting period for a chapter 7 bankruptcy:

4 yrs. from discharge - 2 yrs. w/ Extenuating Circumstances

200

What is the waiting period for a chapter 13 bankruptcy?

2 yrs. from "discharge" - no reduction w/ Extenuating Circumstances  4 yrs. from "dismissal" - 2 yrs. w/ Extenuating circumstances

300

Foreclosure waiting period?

7 yrs. from completion date 3 yrs. - w/ Extenuating Circumstances* (If < 7 yrs., then 90% LTV max & no investment/2nd home Purchases, or cash out is allowed)

400

Waiting period for multiple BK's within the last 7 years?

5 yrs. from most recent discharge or dismissal 3 yrs. w/ Extenuating Circumstances*

500

Waiting period for deed in lieu and short sale? What is Amerisave's exception to the standard waiting periods under extenuating circumstances?

4 yrs. from completion date 2 yrs. w/ Extenuating Circumstances* 

*AmeriSave only permits an exception to the standard waiting periods when a death of a wage earning spouse or a death of a dependent has occurred* Exceptions require a 2nd level review by credit risk. Cash-out transactions are not eligible for extenuating circumstances

BORROWER

100

Citizenship is not required for eligibility, but customers must be one of the following:

 U.S. Citizen

 Permanent Resident 

 Non-Permanent Resident

200

What is required to confirm a borrower has a lawful, permanent residency?

 I-551: Front and back of Permanent Resident Card (Alien Registration Receipt Card/"Green Card") that does not have an expiration date or the expiration date on the back is valid for 10 years: or

  I-155: Conditional Permanent Resident Card (Conditional Alien Registration Receipt Card) that has an expiration date on the back valid for 2 years, provided it is accompanied by a copy of an USCIS form I-751 (Petition to Remove the Conditions on Residence)

300

True or False: is a social security card an acceptable form to verify the borrower work status?

A social Security Card is not acceptable as evidence of work status

400

This type of visa is given to temporary workers / foreign citizens working temporarily in the United States?

H-1 (H-1, H-1A, H-1B and H-1C) Temporary Worker - given to foreign citizens temporarily working in the United States

500

Mention one of the non-permanent resident visa types NOT permitted:

 B-1, B-2 – Visitors for business or pleasure. No work authorization 

 BBBCC – Border crossing card equivalent to B-1/B-2. No work authorization 

 F-1 – Student work authorized under limited circumstances 

 J-1 - Work authorized under certain circumstances. Individuals approved to participate in work-and study-based exchange visitor programs, such as a visiting scholar, teacher, or researcher 

 P Series (P-1A, P1B, P-2 and P-3) - Internationally recognized entertainment group. Artists or entertainers under reciprocal exchange program. Culturally unique artists or entertainers

PRINCIPAL CURTAILMENT

100

What is a principal curtailment?

A principal curtailment is a payment made to reduce the principal balance of a mortgage. For the purpose of this policy, an example of principal curtailment is when AmeriSave applies excess premium to pay down the balance of the new mortgage. Excess premium occurs when the borrower selects a higher interest rate with the intent to have the premium go towards closing costs, but the closing costs are less than the premium available. In this case the principal curtailment is applied after closing and may be captured on the CD Settlement Statement or Closing Disclosure. A principal curtailment may also be considered as a borrower paid reduction towards principal at closing. The amount of Principal Curtailment will vary on each individual loan.

200

Can a principal curtailment be done provided if “cash to borrower” exceeds the maximum allowed amount?

No, the loan amount must be recalculated to reduce the amount of cash to borrower. A principal curtailment is ONLY permitted if the Lender Credit exceeds max allowed closing costs for the loan

300

How does the principal curtailment affect the borrower?

A principal curtailment will lower the borrower’s unpaid principal balance.

400

Why would a principal curtailment be required?

When a loan application is locked with a lender credit to the borrower to cover closing costs and the lender credit is disclosed on the Loan Estimate, if the credit is not fully used towards closing costs or other costs at closing, the amount of the credit may not be reduced or zeroed out.

500

Mention one of the 4 options RESPA provides for reconciling the curtailment/lender credit?

 Option 1 – The credit remains the same as stated on the LE and the excess is applied to the additional closing costs not anticipated, but were disclosed due to a valid change of circumstance When Option 1 is used, it cannot be applied to tolerance cures. 

 Option 2 – Administer a principal reduction to be applied after closing so not to affect the Note amount .

 Option 3 – Reduce the interest rate to lower the credit .

 Option 4 – Have the credit remain the same resulting in cash back to the borrower on the CD. This option is not permitted on Purchase transactions and the cash back amount is limited for the other transactions .