1. MassHousing Lender Extranet Lender’s Guide to System Changes January 2007 emasshousing.com Page 1

2. Table of Contents Item Page Introduction 4 New Product: MassHousing-MyCommunity 5 - 11 o LTV and Loan Amount Limits & Pre-qualifications and Pre-Approvals 6 o New automated underwriting rules 7 o New compliance income analysis / when adding MI or Loan Detail 8 o New compliance income analysis / When funding is requested 9 o Compliance fails: compliance income is less than the borrower income. 10 o Compliance fails: compliance income exceeds the income limits 11 New Pre-Approval Options 12 - 13 o New Products, options and required fields 13 Add Loan Detail 14 - 19 o Additional required data collection: Add Loan Detail 15 o Borrower Tab: Employment Information, FICO Scores, Credit Repository 16 o Completed Borrower Tab 17 o Loan Detail Tab: Pre-approval info, Appraised value, Liabilities, Present Housing, Asset data, Property housing expense 18 o Completed Loan Detail Tab 19 Page 2

3. Table of Contents Item Page New Data Fields 20 - 35 o Loan Tab : Third Party Origination and Secondary Financing Information 21 - 22 o Completed Loan Tab (MassAdvantage) 23 o Property Tab: New construction and Deed restriction 24 - 25 o Completed Property Tab (MassAdvantage) 26 o Borrower Tab: Date of Birth 27 o Borrower Tab -MI only product: Date of Birth and Credit Repository 28 o Completed Borrower Tab (MassAdvantage) 29 o MI Underwriting Tab: Multi-family rental income data, Monthly Flood Insurance 30 - 31 o MI Underwriting Tab – MI only products: Is the property in a Flood Zone, Monthly Flood Insurance 32 o Completed MI Underwriting Tab (MassAdvantage) 33 o Fund Tab: Year Built, Is the property in a Flood Zone 34 o Completed Fund Tab (MassAdvantage) 35 Page 3

4. Introduction In February 2007 we will be releasing several changes to the emasshousing.com site. When you log into emasshousing.com after this release your user experience will change in many ways. As you enter new loans, modify loans or request funding there will be additional data you will need to provide. This document is being provided to alert you of these upcoming changes. The changes include: We are retiring the three current MyCommunity products and replacing it with one MyCommunity mortgage product. This new product, called MassHousing-MyCommunity will incorporate all of the features of the MyCommunity 100 Plus, MyCommunity 3 & 4 and MyCommunity < 97. MassHousing-MyCommunity will only be available for new MyCommunity reservations. Any current approved MyCommunity reservations in your pipeline cannot be ‘switched’ into this product. We are adding automated underwriting rules and compliance income analysis rules to the new MyCommunity product and the Standard Fixed product. We will be changing the products and loan terms currently offered for pre-approvals. The MassAdvantage First Step (and First Step Low) products and the ability to select a 40 year term (offered on MassAdvantage and MassAdvantage Low) will be available for pre-approval. The MyCommunity product will no longer be available for pre-approval; DU/DO automated underwriting will serve as the pre-approval resource for all My Community loans. We are requiring the collection of additional loan data for all first mortgages that do not require Mortgage Insurance. After a reservation is approved, your next action step will be to “Add Loan Detail”. This action will require you to enter additional borrower/housing/asset and liability data before you can request funding. Lastly, we have added several additional data fields to the current system. Each of these changes are explained in the pages that follow. Page 4

5. New Product MassHousing-MyCommunity Page 5

6. New Product: MassHousing-MyCommunity The following provides LTV and Loan Amount Limits for this product: Property TypeSingle, Condo, PUD2 Family3 Family4 Family Maximum Loan to Value100%97%95% Minimum Loan to ValueN/A Maximum Loan Amount$417,000$533,850$645,300$801,950 Minimum Loan Amount$25,000 Pre-qualifications and Pre-Approvals: All new FannieMae pre-qualification leads will be issued as MassHousing-MyCommunity (pre-qualifications will no longer be issued for MyCommunity 100 Plus). All of your current MyCommunity 100 Plus pre- qualifications will be ‘switched’ to the MassHousing-MyCommunity product. MassHousing will no longer allow Pre-Approvals for any FannieMae initiative product, DU/DO automated underwriting will serve as the pre-approval resource for all My Community loans. Prior to this release, all MyCommunity 100 Plus loans in your pre-approval pipeline will need to be withdrawn. Page 6

7. New Product: MassHousing-MyCommunity New automated underwriting rules: When a MassHousing-My Community or Standard Fixed reservation is submitted for Mortgage Insurance (MI), new automated Underwriting rules will be run. There are two loan profiles that will result in a request for MI being referred: gross debt ratios >= 60% the underwriting borrower has a FICO score < = 620 (this includes no credit score). If your request for MI is referred, a message will provide the reason for referral. You may submit to the Mortgage Insurance Fund (MIF) a full credit file for review. Once MIF has reviewed the additional documentation, they can update the MI status to: Approved  you can now request funding. Approved with Conditions  you will be required to submit additional documentation for MIF to review. Until MIF approves these conditions and approves MI, you will not be allowed to request funding. Manually Denied  your request for MI is denied, you will not be allowed to request funding. Page 7

8. New Product: MassHousing-MyCommunity New compliance income analysis: MassHousing- MyCommunity AND Standard Fixed products. When either MI is added or Loan Detail is added a compliance rule will run to ensure that the borrower income entered on the Borrower tab does not exceed the compliance income that was entered on the Loan tab. You will be given a compliance failure message (see # 1) and not be able to proceed with your data entry until this is corrected. To correct this, you can either modify the Monthly Employment or Monthly Other Income on the Borrower(s) tab or modify the Borrower Annual Income (Compliance) on the Loan tab. 1 1 2 2 2 Page 8

9. New Product: MassHousing-MyCommunity When funding is requested you will be asked to certify that the borrower compliance income is accurate. 1 1 2 New compliance income analysis: MassHousing-MyCommunity AND Standard Fixed products. If you change the compliance income on this page, upon ‘Submit’ a compliance income analysis rule will run to ensure that the revised annual compliance income: does not exceed the income limits (for the product and the property location). is not less than the borrower income. If your changes are such that compliance is passed you will be brought to the Fund tab where you can finish your funding request process. If compliance fails, depending upon why you fail compliance, what you will encounter is outlined on the next two pages. 2 Page 9

10. New Product: MassHousing-MyCommunity Compliance fails: compliance income is less than the borrower income. Your options are to: Cancel: get out of this flow to research the income issue. Select the option “Click here to change the income on the Borrower tab”. You are brought to the Borrower tab where you must follow these three steps: Change the income to equal the compliance income that you just changed. Click Next to get to the MI Underwriting tab (or Loan Detail tab) Click Next again and you are brought to the Fund tab where you can where you can finish your funding request process. 1 1 2 3 2 3 3 Page 10

11. New Product: MassHousing-MyCommunity Compliance fails: compliance income exceeds the income limits You are out of the funding flow. You are brought to a page where you have options: Discard Changes, Submit Change Request, Withdraw Application or Change products (if you qualify for other products, these will be listed). If you do not want to proceed at this time, click ‘Discard Changes’. You are brought back to the Loan tab. Click ‘Cancel’ at the bottom of the Loan Tab page. If you want to send an email to MassHousing, click ‘Submit Change Request’. A new page will open that will allow you to send an email. If you want to withdraw the application click ‘Withdraw Application’. Note: this is not a way to modify the loan-withdraw means this application will be permanently removed from your pipeline. If you want to select a new product, click the ‘product name’ link. You are brought back into the loan tabs, where you must view all loan tab pages. From the MI Underwriting page or the Loan Detail page you can click ‘Submit Modifications’. 1 1 2 2 Page 11

12. Pre-Approvals Page 12

13. New Pre-Approval Options 1 For pre-approvals you will now be able to select the MassAdvantage First Step or MassAdvantage First Step Low products. Previously, these products were not available for pre-approval. For pre-approvals you will now be required to select a term. If the MassHousing product you selected has multiple loan terms available you will see all available terms in this new dropdown box. In this example a MassAdvantage Low was selected. This product offers terms of 480 and 360 which are available for you to select. 2 1 23 3 For pre-approvals you will now be required to select an amortization type. If the MassHousing product you selected has multiple amortization types available you will see all available types in this new dropdown box. In this example a MassAdvantage Low was selected. This product only offers a fixed amortization type which is available for you to select. Page 13

14. Add Loan Detail Page 14

15. Additional required data collection: Add Loan Detail MassAdvantage and FNMA Products For any approved reservation with an LTV < = 80.00% you will now be required to complete an additional data collection step before you will be allowed to request funding. After your reservation is approved, your next action will be to Add Loan Detail. Previously your next action would have been Fund. This process requires you to enter additional borrower and housing/asset/liability data on two loan tabs. This process is similar to adding Mortgage Insurance. If your approved reservation requires Mortgage Insurance your next action will still be “ADD MI”. Page 15

16. Borrower Tab / / Add Loan Detail For each borrower you will now be required to enter employment information; employer name, employment position, monthly income, is the borrower self employed. Based on the monthly income entered, the ‘Combined Gross Annual Income’ and the ‘Total Monthly Income’ fields will calculate on this page. You will now be required to enter a FICO score for each borrower. Previously this was a field on the Fund tab. You will now be required to provide the credit repository that is associated with the FICO score entered. This new dropdown box will contain the following selections: Equifax Experian Trans Union Credco Anthem A valid Credit Score is not available 1 2 3 3 2 1 Page 16

17. Completed Borrower Tab Add Loan Detail (MassAdvantage) Page 17

18. Loan Detail Tab // Add Loan Detail 1 You will now be required to enter housing expense data. You will now be required to enter asset data. You will now be required to enter the appraised value. You will now be required to enter the borrower(s) present housing expense. You will now be required to enter total monthly liabilities. 1 2 3 4 5 2 3 4 5 Page 18

19. Completed Loan Detail Tab // Add Loan Detail (MassAdvantage) Page 19

20. New Data Fields Page 20

21. 1 2 New Data Fields // Loan Tab New reservation-MassAdvantage and FNMA products For the MassAdvantage and FNMA products, you will now be required to provide information on Third Party originations. This new dropdown box will contain the selection –Not a Third Party originator as well as a list of all approved TPO’s for your Institution. If you do not see a Third Party originator in the dropdown, please contact us via email at: e-business@masshousing.com If there is any Secondary Financing on the loan you will now be required to provide this information. Previously this information was only needed when the LTV was 80% or below. If you indicate yes to Secondary Financing, you will be required to enter all secondary data. The secondary interest rate cannot exceed 2.000% over the reservations interest rate. 1 2 Page 21

22. New Data Fields // Loan Tab New MI requests-MI only products 1 For the MI only products, you will now be required to provide information on Third Party originations. This new dropdown box will contain the selection –Not a Third Party originator as well as a list of all approved TPO’s for your Institution. If you do not see a Third Party originator in the dropdown, please contact us via email at: e-business@masshousing.com 1 Page 22 If there is any Secondary Financing on the loan you will now be required to provide this information. Previously these fields were not on the Loan tab for the MIF only products. 2 2

23. Completed Loan Tab (MassAdvantage) Page 23

24. New Data Fields // Property Tab New reservation –MassAdvantage and FNMA products 1 2 For all first mortgage products, you will now be required to select if the property is new construction. Previously this field defaulted to “No” being selected. 1 For MassAdvantage and FNMA products you will now be required to provide information on deed restrictions. This new dropdown box will contain the following selections: No Deed Restriction Deed Rider Survives Foreclosure Deed Rider Terminates Foreclosure FNMA Deed Rider Survives Foreclosure 2 Page 24

25. New Data Fields // Property Tab New MI requests – MI only products 1 For all first mortgage products, you will now be required to select if the property is new construction. Previously this field defaulted to “No” being selected. 1 Page 25

26. Completed Property Tab (MassAdvantage) Page 26

27. New Data Fields // Borrower Tab New reservation-MassAdvantage and FNMA products 1 For all MassAdvantage and FNMA products you will now be required to provide a date of birth for each borrower. This new field will require you to enter the date of birth is this format: mm/dd/yyyy. Previously you were required to enter each borrower’s age on this page. Now, each borrower’s age will calculate using the date of birth and the estimated closing date entered on the loan tab. At time of funding, the age will recalculate based on each borrower’s date of birth and the closing date entered on the Fund tab. If the loan is a MI only product, at the time MI is activated each borrower’s age will also recalculate using the closing date. MassHousing does not allow any borrower to be under the age of 18 as of the closing date. The funding request or MI activation request will fail compliance should this occur. 1 Page 27

28. New Data Fields // Borrower Tab New MI requests -MI only product For all MI Only products you will now be required to provide the credit repository. This new dropdown box will contain the following selections: Equifax Experian Trans Union Credco Anthem A valid Credit Score is not available If your reservation is for a MassAdvantage or FNMA product, you will not ‘see’ the portion of this page that contains this data until you “ADD MI” or “ADD LOAN DETAIL”. The new Add Loan Detail process was explained in pages 12 – 17. 2 2 1 1 For the MI only products you will also be required to provide a date of birth for each borrower. Please see page 25 for the full description of this field. Page 28

29. Completed Borrower Tab (MassAdvantage) Page 29

30. New Data Fields // MI Underwriting Tab Add MI to a MassAdvantage or FNMA products Pg. 1 of 2 For all 1 st mortgage multi-family properties, you will now be required to enter additional data for each unit in the property. Previously all that was required was to enter rental income data in the field called Monthly Rental Income Subject Property. This new data collection grid will require that you enter the following data: Owner Occupied Unit: Number of Bedrooms. Acceptable values for # of bedrooms are whole numbers between 1 and 6. The number 0 cannot be entered. Each Rental Unit: Number of Bedrooms, Gross Monthly Rental Income and a button to indicate if the rental income is Current or Estimated. Acceptable values for Gross Monthly Rental Income are whole numbers between $0 and $5000. The Total Gross Monthly Rental Income will be calculated (the sum of all gross monthly rent entered in the rental data grid). The Monthly Rental Income Subject Property will be calculated. The calculation will sum 75% of current gross rental income plus 50% of estimated gross rental income. The total Monthly Rental Income Subject Property is used to calculate the Net Housing to Income and Net Housing & Debt to Income ratios. 1 1 Page 30

31. For all 1 st mortgage products, you will now be allowed to enter the monthly flood insurance premium (for properties in a flood zone that require flood insurance). This new data entry field will be enabled but not required for MassAdvantage and FNMA loans. For MI only products see next page. 2 2 New Data Fields // MI Underwriting Tab Add MI to a MassAdvantage or FNMA products Pg. 2 of 2 a For MassAdvantage or FNMA reservations that have secondary financing (data that was entered on the loan tab), the Secondary Mortgage amount entered on the loan tab will be displayed on this tab (view only) as ‘Other Financing’. a Also, for reservations that have secondary financing, the Secondary Financing P&I payment entered on the loan tab will display (view only) as ‘Other P & I’. b b Page 31

32. New Data Fields // MI Underwriting Tab New MI requests – MI only products For MI only products, you will now be required to indicate if the property is in a flood zone. If you select ‘Yes’ you will be required to enter the Monthly Flood Insurance payment (see #2). For MassAdvantage and FNMA loans, this field will be located on the Fund tab. 2 3 3 For MI only products if you select “Yes” to the flood zone question (see # 3) you will be required to enter the Monthly Flood Insurance amount. If you select “No” to the flood questions, the Monthly Flood Insurance field will be disabled. 2 Page 32

33. Completed MI Underwriting Tab (MassAdvantage) Page 33

34. New Data Fields // Fund Tab MassAdvantage and FNMA products 1 2 For all MassAdvantage and FNMA products you will now be required to provide the year built. This new data entry field will allow you to enter values from the year 1620 up to and including the current year. If the property is new construction (as indicated on the Property tab), the only allowable values for year built will be the current year or the previous year. Previously you were required to enter the property age on this page. For all MassAdvantage and FNMA products, you will now be required to indicate if the property is in a flood zone. This new field will require you select either no or yes. 1 2 Page 34

35. Completed Fund Tab (MassAdvantage) Page 35