1. Delegated underwriting training
Heather Carrico

2. Purchase Process Summary
Deephaven’s seamless integration with your process maximizes loan purchase eligibility.
Lender Process Flow
Quality Control
Funding
Loan Sale
Application
Underwriting
Deephaven Process Flow
Scenario Reviews available for guideline inquiries and exception review
File Reviews available for purchase eligibility
Final Purchase Eligibility Review
Collateral File Review
Servicing transfer
48-72 Hours
24 Hours
3 – 7 Days

3. Deephaven Difference Personal & Business Bank Statements
Loan Amounts Up to $2.5M
DTI Up To 55%
Use Cash Out Proceeds as Reserves
1-year tax return and W-2 doc options
Investors with greater than 10 properties
Non-Warrantable Condos
Prior Foreclosure or Bankruptcy
No-Income doc Investor loans
Up to 95% LTV
Limited by past consumer credit problems
More investor loan options
Qualify with alternative income documentation
Borrowers who were negatively impacted by housing crisis
Outside of agency investor guidelines

4. DEEPHAVEN PRODUCTS Expanded-Prime
Start here for all owner-occupied and 2nd home borrowers at least 5 years from a housing event. This is a near-miss product with our most competitive pricing.
Near-Prime
Start here for all owner-occupied and 2nd home borrowers at least 3 years from a housing event.
Non-Prime
Start here for all owner-occupied and 2nd home borrowers within 2 years or less from a housing event.
Investment Property
Start here for all investment properties and foreign nationals.

5. Expanded-Prime

6. Near-Prime

7. Non-Prime

8. Investment

9. Credit Summary Qualifying FICO Score Tradeline Requirements
Primary wage-earner's middle score used for the Representative Loan Score
Co-borrower must have at least 1 score of 500 or higher
Tradeline Requirements
Tradelines used to qualify may not exceed 0x60 in the most recent 12 months
Standard Trade lines: 3 trade lines reporting for 12+ mos or 2 trade lines reporting for 24+ mos, all with activity in the last 12 mos
Limited Trade lines allowed on the Non-Prime product only (not Near Prime or Investment)
6 months reserves required, 10% minimum borrower contribution (see guidelines for all requirements)
Unacceptable Trade lines: Loans in a deferment period, collection or charged-off accounts, accounts discharged through bankruptcy, and authorized user accounts

10. Credit Summary - continued
Collections and Charge-offs that may remain open
All medical collections
< 24 months old with a maximum cumulative balance of $2,000
≥ 24 months old with a maximum of $2,500 per occurrence
Collections and charge-offs that have passed beyond the statute of limitation for that state (supporting documentation required)
Collection and charge-off accounts outside of the parameters listed above may remain open on the Non Prime Program or Investment A & A- if either of the following is met
Borrower has sufficient reserves to cover all unpaid collections and charge-offs in addition to the published reserve requirement; or
Payment of 5% of collection balance is included in final DTI. DTI cannot exceed 50%.

11. Residual Income and payment shock
$2,500 is required for Expanded-Prime product
150% max payment shock on primary residence transactions
$2,500 is required for Near-Prime product
Up to 250% allowed with compensating factor
$1,500 is required for Non-Prime product
Additional $150 per dependent is also required

12. Ratio Grid

13. Bank Statement Documentation
Self-employed borrowers are eligible for either Personal Bank Statement Documentation or Business Bank Statement Documentation. The following restrictions apply to both documentation types:
Borrowers must be self-employed for at least 2 years and business must be in existence for at least 2 years.
Standard Tradelines and a 12-month housing history are required.
Non-Permanent Resident Aliens and Foreign Nationals are ineligible.
All parties listed on each bank account must be included as borrowers on the loan.
Statements must be consecutive and reflect the most recent months available and Statements must support stable and generally predictable deposits. Unusual deposits must be documented.
Evidence of a decline in earnings may result in disqualification.
Up to 3 NSF checks and overdraft protection transfers in the most recent 12-month period are allowed with explanation from the borrower.
W-2 Wages: Additional income deposited into the bank statements but derived from a source other than the self-employed business may not be included in the bank statement average. W-2 earnings must be documented as per the requirements in Wage-Earners along with a processed 4506-T verifying the W- 2 earnings only.
Rental Income: Income derived solely from the ownership of rental properties as declared on Schedule E must be calculated per the requirements in Rental Income. Borrowers who receive rental income as a secondary income source may utilize Bank Statement Documentation on a case-by-case basis. Please consult the Deephaven Scenario Desk prior to submission.

14. Personal Bank Statement Program
General Requirements
24 months or 12 months complete bank statements (Transaction history printouts are not acceptable)
Initial signed 1003 with monthly income disclosed
Personal Bank Statements
100% of deposits, averaged over 24 months or 12 months
Transfers between personal accounts should be excluded
Transfers from a business account into a personal account are acceptable
Unusual deposits must be documented
Borrowers will qualify off the lower of the following -
Income figure listed on Signed 1003
Personal Bank Statement Average (total deposits [minus any disallowed deposits] 24 months or 12 months)

15. Business Bank Statement Program
24 months complete Business bank statements (Transaction history printouts are not acceptable)
Borrower Prepared P&L covering same time period as the bank statements
Bank Statement deposits need to be within 10% of the gross revenue on the P&L. Will use lower of the net income or the initial signed 1003 income to qualify (see guidelines for additional options).
B. Initial signed 1003 with monthly income disclosed
General Requirements
Business bank accounts, personal bank accounts addressed to a DBA, or personal accounts with evidence of business expenses can be used for qualification
Wire transfers and transfers from other accounts must be documented or excluded
Statements should show a trend of ending balances that are stable or increasing over time
Business expenses must be reasonable for the type of business (examples of business with higher expense ratios may include construction companies, builders, restaurants and retail firms)
Must own 100% of business
Business Bank Statements

16. Asset Depletion
Allowed under Near-Prime ONLY - Rate/Term Refi or Purchases
Net of down payment, loan costs and reserves: borrowers must have a minimum of the lesser of
1.5 times the loan balance OR
$1mm in qualified assets
Qualified assets include:
100% of checking/savings/money market accounts
70% of remaining value of stocks/bonds
60% of retirement assets
Monthly Income = Net Qualified Assets / 120 Months

17. Asset Depletion CALCULATION

18. Foreign Nationals Documentation
Copies of the borrower’s passport and unexpired visa must be obtained
The following visa types are allowed as foreign nationals:
B-1and B-2, H-2 and H-3, I, J-1 and J-2, O-2, P-1 and P-2
Credit
For borrowers with a valid SSN –
A U.S. credit report should be obtained providing merged credit information from the 3 major national credit repositories
Must meet standard tradeline requirements
Qualifying Foreign Credit –
3 open accounts with a 2-year history
2-year housing history can be used as a tradeline
U.S. credit accounts can be combined with letters of reference to establish the 3 open accounts

19. Foreign Nationals Income Salaried foreign national borrowers:
Letter from employer providing current monthly salary and YTD earnings or 2 months’ pay stubs with YTD earnings
Verification of earnings for the last 2 years
Employer to be independently verified
Self-Employed foreign national borrowers for at least 2 years are allowed:
Letter from a CPA providing income for the last 2 years and YTD earnings
Self-employed business and CPA are to be independently verified (via LexisNexis, D&B International Business Search, Google, or other means of verification)
**All documents must be translated by a certified translator
Assets
12 months PITIA reserves required for the subject property
All funds for the transaction must be seasoned for 60 days
Assets used for down payment and closing costs must also be seasoned in a U.S. depository institution for 30 days prior to closing
Assets held in foreign accounts are eligible for reserves. A 30 day statement is required. Funds to be converted to U.S. dollars using the current exchange rate
Property
Eligible for 2nd Home and Investment Property – must verify any mortgage history for current residence.

20. Miscellaneous transaction information
Co-Borrowers / Co-signers
Non-occupant co-borrowers and co-signers are not allowed
Vesting in Limited Liability Company (LLC)
Allowed on Investment Property Program only. Refer to guidelines for more details
Purpose of the LLC is for ownership and management of real estate
All owners of the LLC (no more than two) are borrowers on the transaction
Personal Guaranty form is required.
Secondary Financing
Institutional 2nd’s only, maximum CLTV is 90%
The max CLTV available under the Expanded Prime Program is the same as the maximum LTV for the transaction

21. Down payment and Assets
PITIA Reserves
All transactions require a minimum of 3 months reserves
month reserves are required (see matrix for additional reserve requirements
Retirement Accounts
Vested funds from retirement accounts (IRA/Keogh and 401(k) accounts) are acceptable sources of funds for down payment, closing costs, and reserves (terms of withdraw are required)
100% of the vested amount may be used
Retirement accounts that do not allow any type of withdrawal may not be considered
Funds do not have to be withdrawn to use for reserves

22. Down payment and Assets - continued
Minimum Borrower Contribution
Gift funds are allowed after the borrower has made the minimum required borrower contribution towards the down payment
Gift Funds
Borrowers must contribute up to a minimum of 5% of their own funds toward the down payment on purchase transactions
10% contribution required for the following: no housing history, loans amount > $453,100, 2nd Homes, and limited trade lines
Gift of Equity/Family Transaction
Primary residence only
Gifts of equity must come from an immediate family member
Transaction is subject to the maximum LTVs available for cash-out transactions
6 months reserves required. No minimum borrower contribution is required
Non-arm’s length criteria is met (see Non-Arm’s Length Transactions Section 3.10)
Signed gift letter is provided

23. Collateral Eligible Properties – See Matrix for LTV Limitations
Single-Family Residence (attached or detached)
Planned Unit Development - PUD (attached or detached)
Townhomes
Multi-family properties (2-4 units)
Condominiums
Log Homes
Modular Homes
Non Warrantable Condominiums
Eligible Properties – See Matrix for LTV Limitations
Co-operative Units
Condotels or Condo Hotel
Mixed-Use Properties
Manufactured Homes
Earth Homes, Berm Homes, and Dome Homes
Farms or Hobby Farms
Ineligible Properties

24. Collateral - continued
Minimum Loan Amount and Sq Ft
$100,000
600 Sq Ft
Determining Value
All transactions: current appraised value used when owned > 1 year (Cashout limits on Investment Properties may apply if owned months) *See guidelines for Investor Advantage Product*
All transactions with < 1 year ownership seasoning: use lesser of current appraised value or purchase price *See guidelines for Investor Advantage Product*
Rural Property
Primary Residence only
No agricultural use allowed
Max acreage is 10 acres (exceptions exceeding 10 acres on a case-by-case basis)
Maximum LTV is 80%

25. Non - Warrantable Condos
Commercial Space
Fannie – No more then 25% of a condo project can be commercial space.
Deephaven – Up to 30% of the condo project can be commercial space.
HOA Dues
Fannie – No more than 15% of total units in project may be 60 days or more past due.
Deephaven – No more than 20% of units may be 60 days or more past due.
Litigation
Fannie – If the lender determines that pending litigation involves minor matters with no impact on the safety, structural soundness, habitability, or functional use of the project, the project is eligible provided the litigation is limited to one of the following categories:
non-monetary litigation involving neighbor disputes or rights of quiet enjoyment
litigation for which the claimed amount is known, the insurance carrier has agreed to provide the defense, and the amount is covered by the HOA's or co-op corporation's insurance; or
the HOA or co-op is named as the plaintiff in a foreclosure action, or as a plaintiff in an action for past due HOA assessments
Deephaven – Acceptable as long as the pending lawsuit(s) are not structural in nature, do not affect the marketability of the units and:
Potential damages do not exceed 25% of the HOA reserves, OR
The association’s insurance policy is sufficient to cover the litigation

26. Non - Warrantable Condos
Single Entity Ownership
Fannie – Projects in which a single entity owns more than 10% of the project are ineligible (2 – 4 unit project = 1 unit max; 5 – 20 unit project = 2 units max)
Deephaven – Allows up to 20%
Investor Concentration
Fannie – At least 50% of the total units in the project must be conveyed to principal residence or second home purchasers (investor occupancy only – does not apply to primary or 2nd home occupancy)
Deephaven - Up to 60%. Guidelines specify that higher percentages may be considered under the Investment Property Program, but does not explicitly say ‘does not apply to primary or 2nd home occupancy’

27. Investor advantage
Credit scores as low as 640 with a maximum $2,000,000 loan amount
Investor Advantage designed for experienced investors with no income and no employment verification.
Invertor Advantage Interest Only ARM’s only – 3/1 with 5 year I/O and 25 year Amortization, 7/1 I/O with 20 year Amortization
LTV’s for PURCHASE and Rate/Term up to 75%
LTV’s for CASH OUT up to 70%

28. Investor Advantage Road Map
Additional forms Required
Business Purpose Affidavit
2 copies required – 1 signed at application and another signed AND notarized at closing
Fannie Mae form 3170, 1-4 Family Rider

29. Investor Advantage Road Map
We will accept a 1003 and ask that the following sections not be completed:
Section IV – Employment Information
Section V – Monthly Income and Combined Housing Expense Information

30. FAQ - Investor Advantage Qualifications
Credit Score
Credit Reports should be supplied for all borrowers and/or guarantors
If two borrowers, the lower of the two middle credit scores will be used for Representative Loan Score
Tradelines
3 tradelines reporting for 12+ months, OR
2 tradelines reporting for 24+ months
All with activity in the last 12 months
Late Payments
Rolling late payments are not permitted
Employment / Income
There is no employment verification or income analysis required
There is no Debt-to-Income (DTI) or Debt Service Coverage Ratio (DSCR) requirement

31. FAQ - Investor Advantage Qualifications
Documentation
Full asset documentation is required for purchase transactions to evidence sufficient funds to close
Assets must be sourced or seasoned for 60 days
Gift Funds
Not permitted
Reserves
There is no reserve requirement
Appraisal
Two (2) appraisals are required for loans > $1,500,000
A Clear Capital Collateral Desk Analysis (CDA) is required for all transactions
Note
The borrower MUST own their primary residence.

32. Scenario Desk
The Deephaven Mortgage Scenario Desk is designed to help you quickly determine which borrowers are likely to qualify for our programs. Whether it is a general guideline question, a complex income calculation, or an exception request. Deephaven’s experienced mortgage professionals are here to help at any step along the way!

33. Diligence Review – Best Practices
The following must be included in the credit file:
Underwriting Approval
Credit Report
Paystubs and W2’s (Full Doc only)
Sales Contract
Exception request form (if applicable *Please add the Scenario Desk string)
Underwriter 1003
Fraud Report
P&L, Bank Statements, and Initial signed 1003 (on Business Bank Statement program)
Initial 1003 and Bank Statements (for Personal Bank Statement program)
Income Calculation worksheet
Diligence Review
A full credit, income, asset and collateral review should be completed by your underwriter.
Allow hours for the pre-close review
Upload the file in the Deephaven stacking order for faster turn times
**Escrows are required on ALL loans**

34. We look forward to working with you!
QUESTIONS?