Mortgage-Ease II Training Guide

1. Mortgage-Ease II Training Guide

2. Mortgage Ease II • The Mortgage-Ease II program is a true partnership between CU Members Mortgage and the Credit Union. • Both parties functions are crucial to a mutually beneficial mortgage program.

3. Marketing • Statement Stuffers • Envelope Over Prints • Newsletter articles • Posters/Banners • Homebuyers Seminars • Employee Awareness • Voice Mail Message • Email signature • Credit Union Website Link

4. Counseling and Decision to Apply • Shared CU Members Mortgage and CU function • Provide Options • Find Solutions • Increase Member Confidence Level • Capture Loan

5. Application • Originating the Application • Get Documentation and Signatures • Give time frames and expectations

6. Processing and Approval • Credit Union completes forms and functions • Loan is set up at CU Members Mortgage • Processing is completed • Loan is submitted to Underwriting

7. Closing and Funding • File is prepared for closing • Closing documents prepared • Processor/Closer co-ordinate with the title company • Loan is funded • Servicing takes over

8. A Lead is Received • If we are asked by you to contact one of your members or they have asked for information through the web site, one of our loan officers will contact your member to start or complete the counseling process. • If the member is ready to start the application process, and depending on the members preference we will: • -provide them with a link to the credit union co-brand site to input the application OR • -take the data from them over the phone and input the application into the credit union’s co-brand site OR • -direct them to your office for your assistance in inputting the application in the co-brand site

9. The Member Contacts the Credit Union First • The credit union loan officer can take the application on line for the member • The credit union can fill out the contact us section on the website OR • Use the credit union lead sheet (see M2 forms for your region)

10. The Goal No matter which method your member used to inquire about the mortgage process, the goal is to get the member to use the credit union for their mortgage loan, and to let the credit union begin the Mortgage-Ease II process.

11. Procedures for Web applications • CUMCS retrieves the application, contacts the member to review and sends the application, a Mortgage-Ease II Participation form, and an approval letter if applicable. • Credit Union contacts the member, and signs the application as interviewer/reviewer. • The credit union must perform at least 5 functions in order to meet the terms of their agreement and/or to comply with RESPA requirements.

12. RESPA Required Functions-CU as Lender • Analyze the prospective borrower’s income and debt and pre-qualify the prospective borrower to determine the maximum mortgage that the borrower can afford • Collect financial information (tax returns, bank statements) and other related documents that are part of the application process • Initiate VOE’s and VOD’s or the alternative documentation such as W2 forms, paycheck stubs and completing a verbal verification of employment. • Assist the borrower in understanding and clearing credit problems. • Participate in the closing (credit union using portfolio or delayed funding option)

13. RESPA Required Functions-Credit Union as TPO (CUMCS Funds Loan) • Analyze the prospective borrower’s income and debt and pre-qualify the prospective borrower to determine the maximum mortgage that the borrower can afford • Collect financial information (tax returns, bank statements) and other related documents that are part of the application process • Initiate VOE’s and VOD’s or the alternative documentation such as W2 forms, paycheck stubs and completing a verbal verification of employment. • Assist the borrower in understanding and clearing credit problems. • Agree to maintain regular contact with the borrower, realtor and or CUMCS between application and closing and assist with gathering any other required documentation

14. Analyzing Information and Pre-Qualifying the member Every application input through your co-branded website utilizes a secondary market automated underwriting system thereby completing this task.

15. Collecting Financial Information • Collect from the member documentation such as tax returns or deposit statements.

16. Initiating VOE’s and VOD’s or Alternative Docs The credit union should perform an initial verbal verification of employment, and also obtains other required documentation such as 2 years W-2’s, the most recent 30 days of paystubs, and the most recent 2 months of deposit statements showing sufficient assets to document required amount for closing funds.

17. Assist the borrower in understanding credit issues • Credit counseling is an important part of the mortgage process. If you provide credit counseling to your member then you have satisfied this requirement. (Please provide a copy of the document and indicate date and method of delivery on the Participation Form)

18. Participating in the Closing -CU as Lender (Loan funded by CU) • Credit Union participates in the closing by funding the loan under delayed funding OR a portfolio funding option and should indicate their intent on the Mortgage Ease 2 Participation Form (Lender Version)

19. Provide Assistance-CU as TPO (Loan funded by CUMCS) • This function is required when the credit union is considered a TPO (Credit Union participates in M2 loan origination functions but the loan closes in CU Members Mortgage name) • Unless this credit union is approved by HUD as a “Full Eagle” lender, then the loan must close in CU Members Mortgage name on FHA transactions

20. Required Forms • Complete Mortgage-Ease II Participation Form (Either CU as lender or CU as TPO depending on the funding option) • Complete Mortgage-Ease II Funding Option Commitment • Portfolio Commitment Letter (Only if the credit union chooses to keep the loan)

21. Quoting Rates* • Rates are typically available at 9:30 AM central time • Rates can be accessed on the credit union’s co-branded website or at cumembers.com after log in *There are many factors that influence pricing including property type, LTV, credit score, loan purpose etc. CUMCS is responsible for secondary market pricing and locking rates with your member.

22. Locking the Rate A CUMCS loan officer will discuss rates and locking options with your member after they have received a completed application on refinance transactions, and after receipt of application and an executed purchase contract on a purchase transaction.

23. Collecting funds • CUMCS will collect an $80 application fee as a part of the overall origination charge. However, the fee is collected in 2 stages. A $17 credit report fee is collected online at the end of the internet application completed on the credit unions co-branded web site. After the member has received the required GFE form after completing the application and is ready to move forward with the transaction, the additional portion of the application fee ($63.00) is collected. • Prior to ordering the appraisal (and also after disclosures have been received by the member) an appropriate appraisal fee as determined by the type of appraisal and the region is also collected. The rest of the fees are collected at the time of settlement. IMPORTANT: At the ME-II level, CUMCS is responsible for disclosures and the GFE. The credit union should not issue a Good Faith Estimate to the member/ borrower. They may utilize the personal rate quote feature on their co-branded site to be able to provide an estimate of fees.

24. Compensation from Mortgage-Ease II functions • For assisting in originating the application and completing the 5 processing functions discussed in prior slides, the credit union will receive a portion of the origination fee per their Direct Lending Agreement.

25. Compensation from funding options • Direct funding-(CU Members Mortgage funds the loan and sells into the secondary market) No funding compensation if this option is utilized. • Portfolio funding-CU uses their money to fund the loan, for their portfolio (CU earns the interest on the loan less CU Members Mortgage servicing fee) • Delayed funding-(CU funds the loan for sale back to CU Members Mortgage) Credit Union earns a warehouse fee per their Direct Lending Agreement

26. Contact Information • Contact information for your assigned regional office is available at cumembers.com (Administrative site) • After log in, click on -Training -Click on M2 Forms