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Welcome to Lender Training for the HERO Program

Welcome to Lender Training for the HERO Program. Homeownership Staff . Erik Nore, Director of Homeownership Anita Racicot, Homeownership Specialist Cynthia Marquez, Lending Specialist Lisa Romero, Lending Specialist Barbara Tashkandy, Lending Coordinator Teri Baca, Representative

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Welcome to Lender Training for the HERO Program

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  1. Welcome • to • Lender Training for the • HERO Program December 2012

  2. Homeownership Staff • Erik Nore, Director of Homeownership • Anita Racicot, Homeownership Specialist • Cynthia Marquez, Lending Specialist • Lisa Romero, Lending Specialist • Barbara Tashkandy, Lending Coordinator • Teri Baca, Representative • Eunice Duran, Representative December 2012

  3. MFA Mandate • In 1975 the New Mexico state legislature created the New Mexico Mortgage Finance Authority (MFA), a public body politic and corporate, separate and apart from the state, constituting a governmental instrumentality, with the power to raise funds from private investors in order to make such private funds available to finance the acquisition, construction, rehabilitation and improvement of residential housing for persons and families of low or moderate income within the state. December 2012

  4. Mission Statement • MFA provides innovative policies, products, education, and services in collaboration with strategic partners to ensure that all New Mexicans have access to affordable housing. We engage in self-sustaining practices to strengthen the social and economic development of New Mexico’s communities and families by financing, developing, and preserving homes. December 2012

  5. Vision Statement • All New Mexicans will have quality affordable housing opportunities December 2012

  6. HERO PROGRAM • Eligible Borrower(s): • The HERO program is available only to households in which at least one person is a Teacher, Safety Worker, Health Care Worker or an Active Member of the Armed Forces. Definitions are as follows: December 2012

  7. HERO PROGRAM • Teacher: • One of the borrowers must be an employee of an accredited or state chartered private or public school; a certified teacher or administrator in an education agency; or an employee of a post-secondary level educational institution. December 2012

  8. HERO PROGRAM • Safety Worker: • One of the borrowers must be an employee of a law enforcement agency or fire department administered by an agency or subdivision of a state or local government; or a sworn law enforcement officer responsible for crime prevention and detection, law enforcement, or criminal incarceration; or a sworn member of a fire department involved in the fire suppression or prevention, emergency medical response, hazardous materials response, or management or response to terrorism. December 2012

  9. HERO PROGRAM • Health Care Worker: • One of the borrowers must be a certified, accredited, or licensed health care worker who is a medical resident or fellow; a nurse, nursing assistant, pharmacist, pharmacy technician, physician’s assistant, or medical technician, technologist or therapist. December 2012

  10. HERO PROGRAM • Active Member of Armed Forces: • One of the borrowers must be a current member of the United States Armed Forced (Active or Reserve). December 2012

  11. HERO PROGRAM • Eligible Borrower(s): • The borrower does not have to be a first-time homebuyer (FTHB) under the HERO Program • The borrower may not own any other Real Property December 2012

  12. HERO PROGRAM • Eligible Program Type: • FHA ONLY December 2012

  13. HERO PROGRAM • Eligible Property Type: • Must be owner-occupied single family residence December 2012

  14. HERO PROGRAM • Tax Code Criteria: • No Tax Code Criteria required for the HERO Program • No “Recapture” requirement • Tax Exempt Financing/VA Rider not required • Seller and Purchase Affidavits are not required December 2012

  15. MFA GuidelinesHERO Program • Minimum Credit Score of 620 • If credit report provides 3 credit scores (tri-merge), then the middle credit score must be at least 620 for each borrower • If credit report only provides 2 credit scores, the lowest credit score must be at least 620 for each borrower December 2012

  16. MFA GuidelinesHERO Program • Minimum Credit Score of 620 • If the credit report only provides 1 credit score that score must be at least a 620 for each borrower • If either borrower has no credit score, due to insufficient or stale credit, MFA will accept a manually underwritten loan. In addition, the loan must be underwritten to applicable secondary market guidelines December 2012

  17. MFA GuidelinesHERO Program • Minimum Credit Score of 620 • When reserving a borrower without a credit score, the system will not allow you to move to the next screen without entering a score. A 620 score must be entered to get to the next page. After the reservation is complete you must call MFA so that the score can be changed and notes added to the reservation screen. December 2012

  18. MFA GuidelinesHERO Program • Minimum borrower cash contribution • MFA requires a minimum borrower cash contribution of $ 1,000.00 for the HERO Program. • Funds must be from the borrower and cannot be derived from any type of gift, grant, pro-rated taxes or down payment. December 2012

  19. MFA GuidelinesHERO Program • Minimum borrower cash contribution • MFA requires the lender to provide proof of borrower’s funds • If the borrower contributes more than $1,000 to the transaction (i.e. Earnest Money, POC Appraisal Fee) the borrower can get those funds back at closing December 2012

  20. MFA GuidelinesHERO Program • Reasons for Sole and Separate (Lender Memo 12-11 dated July 11, 2012) • One Spouse of a married couple is not able to enter into a contract (i.e. not of legal age), the spouse that is able to enter into a contract will be allowed to purchase the home as their Sole and Separate property. • Proof that spouse is not of legal age must be provided ** All household income needs to be counted toward income eligibility ** December 2012

  21. MFA GuidelinesHERO Program • Reasons for Sole and Separate (Lender Memo 12-11 dated July 11, 2012) • One spouse of a married couple has insufficient credit history (no credit score), which does not allow for the married couple to qualify for the mortgage jointly, the spouse with the credit score will be allowed to purchase the home as their Sole and Separate property. • Proof of no credit history must be provided ** All household income needs to be counted toward income eligibility ** December 2012

  22. MFA GuidelinesHERO Program • Reasons for Sole and Separate (Lender Memo 12-11 dated July 11, 2012) • One spouse of a married couple does have a Social Security number and the other spouse does not have a Social Security number or has an Individual Tax Identification Number (ITIN), the spouse with the Social Security number will be allowed to purchase the home as their Sole and Separate property. • Proof of Social Security number or ITIN must be provided ** All household income needs to be counted toward income eligibility ** December 2012

  23. MFA GuidelinesHERO Program • Reasons for Sole and Separate (Lender Memo 12-11 dated July 11, 2012) • One spouse of a married couple has a poor credit history (a credit score of less than 620), which does not allow for the married couple to qualify for the mortgage jointly, the spouse with the credit score above 620 will be allowed to purchase the home as their Sole and Separate property, with the following restrictions; **All household income needs to be counted toward income eligibility ** December 2012

  24. MFA GuidelinesHERO Program • Reasons for Sole and Separate (Lender Memo 12-11 dated July 11, 2012) • A maximum debt-to-income (“DTI”) of 45% for the purchasing spouse, regardless of the automated underwriting system (“AUS”) approval criteria. • Both spouses need to provide proof that they both qualify for any and all First Time Homebuyer Requirements that might apply, including total household Income and prior homeownership.(First Time Homebuyer Requirements do not apply to the HERO Program) • Proof of poor credit history must be provided **All household income needs to be counted toward income eligibility ** December 2012

  25. MFA GuidelinesHERO Program • Homebuyer Counseling • Required for first-time Homebuyers (FTHB) only December 2012

  26. MFA GuidelinesHERO Program • Homebuyer Counseling • The pre-purchase homebuyer counseling will be either: • Through eHome America Online Pre-Purchase Housing Counseling or face to face/group Pre-Purchase Counseling provided through a HUD approved Housing Counseling agency. December 2012

  27. MFA GuidelinesHERO Program • Homebuyer Counseling • Pre-purchase homebuyer counseling • Through the eHome America on-line Housing counseling program accessed through MFA’s website • Borrowers may take the course together (married or unmarried) for the fee of $45 paid at the time of registration. When registering type both first names [example: Joe and Judy] in the first name field and type both last names in the last name field, both names will print on the certificate of completion. December 2012

  28. MFA GuidelinesHERO Program • Homebuyer Counseling • Pre-purchase homebuyer counseling • Link to the eHome America site is on the MFA Home Page • If borrower accesses the eHome America from the eHome America web address be sure borrower has chosen New Mexico as their counseling agency. December 2012

  29. Questions? December 2012

  30. HERO Program • Fees • Fees: 0.00% Origination + 0.00% Discount to the borrower(s) • Lender will be paid 1.00% origination when loan is purchased by Master Servicer December 2012

  31. HERO Program • Down Payment Assistance • DPA Assistance: Borrower receives 3.50%grant at time of closing • 3.50% is based on the final loan amount December 2012

  32. HERO Program • Current Rate • Current Rate: FHA -To be determined when program is released December 2012

  33. HERO Program • Term • Term: 30 year Fixed-Rate Mortgage December 2012

  34. Income LimitsHERO Program December 2012

  35. Acquisition Cost LimitsHERO Program December 2012

  36. Servicing of Loans • Master Servicer (US Bank) will service the HERO Loan. December 2012

  37. Questions? December 2012

  38. Reservation ProcessHERO Program • Lender accesses reservation system on MFA secure website with password • There is no limit to the number of passwords issued to the lender – each person who reserves loans should have their own password. • Lender should notify MFA of staff changes (additions or deletions); if a new password is needed a manager must e-mail a member of the Homeownership Department requesting password. December 2012

  39. Reservation ProcessHERO Program • Lender enters information for mortgage • Lender will print Agreement • Mortgage Purchase Agreement [MPA] • Please do not hesitate to contact MFA if there are technical difficulties with entering the reservation as this will eliminate any problems in the future with the reservation. December 2012

  40. Reservation ProcessHERO Program • Pricing Parameters are different from Mortgage-$aver MBS Program • Interest Rate Lock Window • Rates are available for reservation from 9:00 am – 5:00 pm Monday – Friday MTS • On-line reservation system will not accept rate-locks before or after the lock window December 2012

  41. Reservation ProcessHERO Program • Pricing Parameters • Intraday Interest Rate Re-Pricing • Rates may change intraday if determined by movement in the market • Watch the MFA websiteunder current interest rate December 2012

  42. Reservation ProcessHERO Program • Pricing Parameters • Rate lock period • 45 day lock period from loan reservation to loan closing • 60 days from loan reservation to loan purchase by Master Servicer • If a rate lock period (including extensions) expires and the loan has not closed, no new rate lock may be made for the same borrower for the same property address until 60 days after expiration of the prior rate lock period (including extensions) December 2012

  43. Reservation ProcessHERO Program • Pricing Parameters • Extension Fees • 30 day lock extension (0.50 point fee) • Lender must contact MFA if loan has not been purchased within 60 days from the date of reservation. • The fee will be deducted by the Master Servicer when the loan is purchased. December 2012

  44. Reservation ProcessHERO Program • Pricing Parameters • Extension Fees • Only one 30 day extension is allowed. • No additional lock extensions will be granted December 2012

  45. Reservation ProcessHERO Program • Pricing Parameters • Non-Delivery Penalty • If loan is not purchased within 90 days of reservation, loan can still be delivered, butwill be purchased on a worst case, Mark-to-Market basis. December 2012

  46. Reservation ProcessHERO Program • Pricing Parameters • Cancellation Policy • No Penalty for cancellation • Borrower will not be allowed to re-lock until 60 days after expiration of previous lock December 2012

  47. Compliance and Loan Closing • Mortgage Loan must be Underwriter Certified through the E-Housing website prior to the expiration date (45 days) • Mortgage Loan must be closed prior to the expiration date (45 days) December 2012

  48. Compliance Guidelines • Income Calculation • ALL Household income is considered • Example: John Doe is purchasing home and is not married. John Doe qualifies for home on his own, however his girlfriend lives with him and will not be on title. The girlfriend’s income must be counted toward household income according to Tax Code. December 2012

  49. Compliance Guidelines • Income Calculation • Common mistake with the current pay stub • The date that MUST be within 30 days of submitting the package is the pay period paid through date NOT the check date or the pay date. December 2012

  50. Compliance GuidelinesVerification of Employment Income December 2012

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