1. Bi-Weekly Product Seminar – Non-QM (February 28, 2019)

2. Reminders for Call Today
Refrain from asking loan level specific scenarios
Submit to
Call will be recorded and ed out by Craig
These are Delegated Correspondent options
Price out in Optimal Blue

3. Chase Delegation Capped at $2 million loan amount
Over $2 million requires to be submitted as Non-Delegated
$3 million is the max loan amount
Allow Fixed, ARM and Interest Only Options
Exceptions require CCM approval and submission to Chase directly
Limited to how many we can send within Delegation

4. Chase Delegation Capped at $2 million loan amount
Over $2 million requires to be submitted as Non-Delegated
$3 million is the max loan amount
Allow Fixed, ARM and Interest Only Options
Exceptions require CCM approval and submission to Chase directly
Limited to how many we can send within Delegation

5. Wells Fargo Delegation
Up to $1.5 million loan amount (allow up to $3 million)
One unit primary residence or second home
No Co-Ops, Investment properties or 2-4 units
No Cash Out refinances on second homes
No Third-Party Originations (TPO)
Business use of funds not allowed
Delayed financing not allowed

6. Wells Fargo Delegation Cont’d
Maximum DTI
43% for fixed rate purchase and rate/term refinance of primary residence
43% for occupant borrower’s ratio with non-occupant co- borrower
40% for all other transaction
MAX 36% front end
NOTE: All loans requiring exception must be submitted as non-delegated loan

7. Wells Fargo Delegation OB

8. Today’s Call Discuss following Jumbo Investors Redwood BB&T
Underwriting Process (No Rushes)
Where to locate guides AllRegs

9. Redwood Select QM Select Non-QM Select 90 QM Choice QM Choice Non-QM
Delegated to $2.5M

10. Redwood Tips Asset Depletion – Select Non QM & Choice Non-QM
Exclude Departing Residence currently listed or with intent to list – Select Non-QM & Choice Non-QM
Select QM & Select Non-QM – 7 Year Seasoning
Choice QM & Choice Non-QM – 4 Year Seasoning
Select QM – Minimum loan amount $484,351
Up to 90% LTV/CLTV with no MI
Max DTI 49.99% on Non-QM products
Exceptions on case-by-case basis

11. Redwood Matrix

12. Redwood Matrix

13. Redwood Select QM
Minimum loan amount is $484,351 for 1 unit properties
Minimum loan amount is $1 above the conforming loan limits for 2-4 units
Loan amounts between conforming loan limits and Agency High Balance limits are eligible, except on loans with LTV greater than 80%

14. Redwood Select QM Matrix – Primary Residence

15. Redwood Select QM Matrix – Second Home

16. Redwood Select QM Matrix – Investment

17. Redwood Select QM – LTV above 80%
MI not required
Secondary Financing not allowed
Maximum DTI is 36%
Non-permanent resident alien Is not allowed
Gift funds are not allowed
Agency High Balance loan amounts are in eligible
Escrow/impound accounts required for LTV’s greater than 80% unless prohibited by law

18. Redwood Select QM Guides

19. Redwood Select QM – First Time Home Buyer
FTHB defined as borrower who has not owned a home in last 3 years
If more than one borrower, if one borrower owned in last three years, FTHB requirements do not apply
Max loan amount $1 million
Reserve Requirements are higher

20. Redwood Select QM – First Time Home Buyer
Transactions in CA, NJ, NY or CT max loan amount is $1.5 million if following is met and only apply for loan amounts over $1 million in allowed states:
720 minimum FICO
No gift funds allowed
Primary residence only
Reserves requirements met for FTHB in asset section
Max LTV/CLTV/HCLTV of 80%

21. Redwood Select QM - Eligible Products

22. Redwood Select QM – Max DTI
Fixed and ARM Products
Max DTI is 43% for LTVs less than equal to 80%
Max DTI is 36% for LTVS greater than 80%

23. Redwood Select QM – Tradeline Requirements

24. Redwood Select QM – Derog Seasoning
BK Chapter 7, 11, 13 – 7 years discharge/dismissal date
Foreclosure – 7 years since completion date
Notice of Default – 7 years
Short Sale/DIL – 7 years since completion/sale date
Mortgage Accounts settled for less – 7 years settlement date
Loan Modification
No debt forgiveness and not due to hardship – no seasoning
Due to hardship or debt forgiveness – 7 years since modification
Multiple derogatory credit events not allowed

25. Redwood Select QM – Gift Funds
Gift funds may be used once borrower has contributed 5% of own funds
Gift funds not allowed for reserves
Gift funds not allowed on LTVs > 80%
Gift funds not allowed on investment properties

26. Redwood Select QM – Gift Funds Eligible Donor
Donor must be a family member, future spouse or domestic partner
Executed gift letter with gift amount, source, donor’s name, address, phone number and relationship
Seller must verify sufficient funds to cover the gift are either in the donor’s account or have been transferred to borrower’s account
Acceptable documentation includes:
Copy of donor’s check and borrower’s deposit slip
Copy of donor’s withdrawal slip and borrowers deposit slip
Copy of donor’s check to the closing agent
A settlement statement/CD showing receipt of donor’s gift check

27. Redwood Select QM – Reserve Requirement

28. Redwood Select QM – Departing Residence

29. Redwood Select QM – Restricted Stock

30. Redwood Select QM – Multiple Financed Property

31. Questions

32. Redwood Select Non-QM Non-QM loan with any of following attributes
Interest Only Product
Debt-to-income ratio > 43%
Qualifying income stream using asset depletion
Projected income without a guaranteed non-revocable contract
Gaps of employment outside of QM requirements (exception basis only)
Investment purchase transaction with no lease provided
Departure residence excluded from DTI when property is not listed for sale or leased to rent

33. Redwood Select Non-QM
Minimum loan amount is $484,351 for 1 unit properties
Minimum loan amount is $1 above the conforming loan limits for 2-4 units
Residual income calculation must be provided and must meet the residual income requirements indicated in the Income/Employment section of guides

34. Redwood Select Non-QM Matrix – Primary Residence

35. Redwood Select Non-QM Matrix – Second Home

36. Redwood Select Non-QM Matrix – Investment

37. Redwood Select Non-QM Guides

38. Redwood Select Non-QM – First Time Home Buyer
FTHB defined as borrower who has not owned a home in last 3 years
If more than one borrower, if one borrower owned in last three years, FTHB requirements do not apply
Max loan amount $1 million
Reserve Requirements are higher

39. Redwood Select Non-QM – First Time Home Buyer
Transactions in CA, NJ, NY or CT max loan amount is $1.5 million if following is met and only apply for loan amounts over $1 million in allowed states:
720 minimum FICO
No gift funds allowed
Primary residence only
Reserves requirements met for FTHB in asset section

40. Redwood Select Non-QM - Eligible Products

41. Redwood Select Non-QM – Max DTI
Fixed Rate: 49.99%

42. Redwood Select Non-QM – Tradeline Requirements

43. Redwood Select Non-QM – Derog Seasoning
BK Chapter 7, 11, 13 – 7 years discharge/dismissal date
Foreclosure – 7 years since completion date
Notice of Default – 7 years
Short Sale/DIL – 7 years since completion/sale date
Mortgage Accounts settled for less – 7 years settlement date
Loan Modification
No debt forgiveness and not due to hardship – no seasoning
Due to hardship or debt forgiveness – 7 years since modification
Multiple derogatory credit events not allowed

44. Redwood Select Non-QM – Gift Funds
Gift funds may be used once borrower has contributed 5% of own funds
Gift funds not allowed for reserves
Gift funds not allowed on LTVs > 80%
Gift funds not allowed on investment properties

45. Redwood Select Non-QM – Gift Funds Eligible Donor
Donor must be a family member, future spouse or domestic partner
Executed gift letter with gift amount, source, donor’s name, address, phone number and relationship
Seller must verify sufficient funds to cover the gift are either in the donor’s account or have been transferred to borrower’s account
Acceptable documentation includes:
Copy of donor’s check and borrower’s deposit slip
Copy of donor’s withdrawal slip and borrowers deposit slip
Copy of donor’s check to the closing agent
A settlement statement/CD showing receipt of donor’s gift check

46. Redwood Select Non-QM – Reserve Requirement

47. Redwood Select Non-QM – Departing Residence

48. Redwood Select Non-QM – Departing Residence

49. Redwood Select Non-QM – Restricted Stock

50. Redwood Select Non-QM – Asset Depletion

51. Redwood Select Non-QM – Projected Income

52. Redwood Select Non-QM – Multiple Financed Property

53. Questions

54. Redwood Select 90 QM Guides

55. Redwood Select 90 QM

56. Redwood Select 90 QM Tradelines
Minimum three (3) tradelines are required. The following requirements apply:
One (1) tradeline must be open for twenty-four (24) months and active within the most recent six (6) months.
Two (2) remaining tradelines must be rated for twelve (12) months and may be opened or closed. OR
Minimum two (2) tradelines are acceptable if the borrower has a satisfactory mortgage rating for at least twelve (12) months (opened or closed) within the last twenty-four (24) months and one (1) additional open tradeline.
Each borrower contributing income for qualifying must meet the minimum tradeline requirements; however, borrowers not contributing income for qualifying purposes are not subject to minimum tradeline requirements.
Authorized user accounts are not allowed as an acceptable tradeline.
Non-traditional credit is not allowed as an acceptable tradeline.

57. Redwood Select 90 QM Derog Credit Seasoning
Derogatory Credit:
Bankruptcy, Chapter 7, 11, 13 - Not Allowed.
Foreclosure/Notice of Default - Not Allowed.
Short Sale/Deed-in-Lieu - Not Allowed.
Mortgage accounts that were settled for less, negotiated or short payoffs - Not Allowed.
Loan Modification - Not allowed unless the modification is unrelated to hardship and there is no debt forgiveness as evidenced by supporting documentation.
Medical collections - allowed to remain outstanding if the balance is less than $10,000 in aggregate.

58. Redwood Select 90 QM Assets/Reserves

59. Redwood Select 90 QM Departing Residence

60. Redwood Select 90 QM – Restricted Stock

61. Questions

62. Redwood Choice QM
Minimum loan amount is $1 over current conforming/high balance limits
Higher Priced Mortgage Loans (HPML) are allowed:

63. Redwood Choice QM Matrix – Primary Residence

64. Redwood Choice QM Matrix – Second Home

65. Redwood Choice QM Matrix – Investment

66. Redwood Choice QM Guides

67. Redwood Choice QM – LTV above 80%
MI not required
Secondary Financing is allowed
Maximum DTI is 38%
Non-permanent resident alien is not allowed
Gift funds are not allowed
Escrow/impound accounts required for LTV’s greater than 80% unless prohibited by law

68. Redwood Choice QM – First Time Home Buyer
FTHB defined as borrower who has not owned a home in last 3 years
If more than one borrower, if one borrower owned in last three years, FTHB requirements do not apply
Max loan amount $1 million
Reserve Requirements are higher

69. Redwood Choice QM – First Time Home Buyer
Transactions in CA, NJ, NY or CT max loan amount is $1.5 million if following is met and only apply for loan amounts over $1 million in allowed states:
680 minimum FICO
No gift funds allowed
Primary residence only
Reserves requirements met for FTHB in asset section
Max LTV/CLTV/HCLTV of 80%

70. Redwood Choice QM – Non-Occ Co-Borrower
Non-Occupant Co-Borrowers are allowed with following:
Primary Residence – One (1) Unit Property
Purchase and rate/term refinance transactions only
Max loan amount $1 million; $1.5 million in CA, CT, NY and NJ
Max LTV/CLTV 80%
No minimum down payment required from occupant borrower
Down payment and reserves may be from the occupant borrower or non-occupant co-borrower

71. Redwood Choice QM – Non-Occ Co-Borrower
Non-Occupant Co-Borrowers are allowed with following:
Additional 6 months reserves required
Non-Occupant Co-borrower must be family member
Mother/Father, Brother/Sister, Daughter/Son or Grandparents
Blended ratios allowed with maximum 43% DTI
Transaction must be an arm’s length transaction

72. Redwood Choice QM - Eligible Products

73. Redwood Choice QM – Max DTI
Fixed and ARM Products: 43%
Non-Occupant Co-Borrower with Blended Ratio: 43%
LTV/CLTVs over 80%: 38%

74. Redwood Choice QM – Tradeline Requirements

75. Redwood Choice QM – Derog Seasoning
BK Chapter 7, 11, 13 – 4 years discharge/dismissal date
Foreclosure – 4 years since completion date
Notice of Default – 2 years
Short Sale/DIL – 4 years since completion/sale date
Mortgage Accounts settled for less – 4 years settlement date
Loan Modification – 2 years since modification date with no mortgage lates on any mortgage last 24 months
Multiple derogatory credit events not allowed

76. Redwood Choice QM – Derog Seasoning
Borrowers with credit events listed above between 4 and 7 years must meet following requirements:
Tradeline requirements must be met
Satisfactory housing history for 24 months required
No mortgage lates since credit event
No public records since credit event
Primary residence – purchase or rate/term refinance with maximum 80% LTV/CLTV/HLCTV or program maximum if lower

77. Redwood Choice QM – Gift Funds
Gift funds may be used once borrower has contributed 5% of own funds
Gift funds not allowed for reserves
Gift funds not allowed on LTVs > 80%
Gift funds not allowed on investment properties

78. Redwood Choice QM – Gift Funds Eligible Donor
Donor must be a family member, future spouse or domestic partner
Executed gift letter with gift amount, source, donor’s name, address, phone number and relationship
Seller must verify sufficient funds to cover the gift are either in the donor’s account or have been transferred to borrower’s account
Acceptable documentation includes:
Copy of donor’s check and borrower’s deposit slip
Copy of donor’s withdrawal slip and borrowers deposit slip
Copy of donor’s check to the closing agent
A settlement statement/CD showing receipt of donor’s gift check

79. Redwood Choice QM – Reserve Requirement

80. Redwood Choice QM – Departing Residence

81. Redwood Choice QM – Restricted Stock

82. Redwood Choice QM – Multiple Financed Property

83. Questions

84. Redwood Choice Non-QM
Minimum loan amount is $1 over current conforming/high balance limits
Higher Priced Mortgage Loans (HPML) are allowed:

85. Redwood Choice Non-QM Non-QM loan with any of following attributes
Interest Only Product
Debt-to-income ratio > 43%
Qualifying income stream using asset depletion
Projected income without a guaranteed non-revocable contract
Gaps of employment outside of QM requirements (exception basis only)
Investment purchase transaction with no lease provided
Departure residence excluded from DTI when property is not listed for sale or leased to rent

86. Redwood Choice Non-QM Matrix – Primary Residence

87. Redwood Choice Non-QM Matrix – Second Home

88. Redwood Choice Non-QM Matrix – Investment

89. Redwood Choice Non-QM Guides

90. Redwood Choice Non-QM - Eligible Products

91. Redwood Choice Non-QM – First Time Home Buyer
FTHB defined as borrower who has not owned a home in last 3 years
If more than one borrower, if one borrower owned in last three years, FTHB requirements do not apply
Max loan amount $1 million
Reserve Requirements are higher

92. Redwood Choice Non-QM- First Time Home Buyer
Transactions in CA, NJ, NY or CT max loan amount is $1.5 million if following is met and only apply for loan amounts over $1 million in allowed states:
680 minimum FICO
No gift funds allowed
Primary residence only
Reserves requirements met for FTHB in asset section
Max LTV/CLTV/HCLTV of 80%

93. Redwood Choice Non-QM – Non-Occ Co-Borrower
Non-Occupant Co-Borrowers are allowed with following:
Primary Residence – One (1) Unit Property
Purchase and rate/term refinance transactions only
Max loan amount $1 million; $1.5 million in CA, CT, NY and NJ
Max LTV/CLTV 80%
No minimum down payment required from occupant borrower
Down payment and reserves may be from the occupant borrower or non-occupant co-borrower

94. Redwood Choice Non-QM – Non-Occ Co-Borrower
Non-Occupant Co-Borrowers are allowed with following:
Additional 6 months reserves required
Non-Occupant Co-borrower must be family member
Mother/Father, Brother/Sister, Daughter/Son or Grandparents
Blended ratios allowed with maximum 43% DTI
Transaction must be an arm’s length transaction

95. Redwood Choice Non-QM – Max DTI
Fixed Rate: 49.99%
ARM: 47%
LTV/CLTV over 80%: 38%
Non-Occupant Co-Borrower: 43%

96. Redwood Choice Non-QM – Tradeline Requirements

97. Redwood Choice Non-QM – Derog Seasoning
BK Chapter 7, 11, 13 – 4 years discharge/dismissal date
Foreclosure – 4 years since completion date
Notice of Default – 2 years
Short Sale/DIL – 4 years since completion/sale date
Mortgage Accounts settled for less – 4 years settlement date
Loan Modification – 2 years since modification date with no mortgage lates on any mortgage last 24 months
Multiple derogatory credit events not allowed

98. Redwood Choice QM – Derog Seasoning
Borrowers with credit events listed above between 4 and 7 years must meet following requirements:
Tradeline requirements must be met
Satisfactory housing history for 24 months required
No mortgage lates since credit event
No public records since credit event
Primary residence – purchase or rate/term refinance with maximum 80% LTV/CLTV/HLCTV or program maximum if lower

99. Redwood Choice Non-QM – Gift Funds
Gift funds may be used once borrower has contributed 5% of own funds
Gift funds not allowed for reserves
Gift funds not allowed on LTVs > 80%
Gift funds not allowed on investment properties

100. Redwood Choice Non-QM – Gift Funds Eligible Donor
Donor must be a family member, future spouse or domestic partner
Executed gift letter with gift amount, source, donor’s name, address, phone number and relationship
Seller must verify sufficient funds to cover the gift are either in the donor’s account or have been transferred to borrower’s account
Acceptable documentation includes:
Copy of donor’s check and borrower’s deposit slip
Copy of donor’s withdrawal slip and borrowers deposit slip
Copy of donor’s check to the closing agent
A settlement statement/CD showing receipt of donor’s gift check

101. Redwood Choice Non-QM – Reserve Requirement

102. Redwood Choice Non-QM – Departing Residence

103. Redwood Choice Non-QM – Departing Residence

104. Redwood Choice Non-QM – Restricted Stock

105. Redwood Choice Non-QM – Asset Depletion

106. Redwood Choice Non-QM – Projected Income

107. Redwood Select Non-QM – Multiple Financed Property

108. Questions

109. BB&T Delegation Max $1M loan amount
Over $1M loan amount is non-delegated and BB&T has to review and approve loan
Primary and 2nd Homes
Minimum FICO 720
Max LTV 90 (does have MI)
Max DTI is 43%

110. BB&T Guidelines AllRegs
What are the restrictions?

111. BB&T Guidelines LTV/Reserves
What are the restrictions?

112. BB&T Tradeline Requirements
Credit report must show a minimum of 2 years established credit history
Each borrower must have 3 tradelines with 12 months satisfactory history
Tradelines may be open, closed and/or paid in full by applicant
Prior mortgage or rental history which evidences no late payments in past 24 months is required

113. BB&T Derogatory Seasoning
What are the restrictions?

114. BB&T Derogatory Seasoning
What are the restrictions?

115. BB&T Re-establishing Credit
After significant derogatory event, borrower’s credit will be considered reestablished if all of the following are met:
The waiting period and the related additional requirements are met: and
All credit reviewed must be reestablished credit. Nontraditional credit files are not acceptable

116. BB&T Self-Employed Borrower K1
Rely on Ordinary Income and/or Net Rental Income or Guaranteed Income to qualify
Do not use Distribution income to qualify
Do not perform a liquidity test
Only performed if trying to use business funds for assets to ensure withdrawal of funds without negative impact

117. BB&T Things to Look Out For
Requires full 24 month housing history (other investors are 12 months)
Requires tax returns to be wet signed
LTV over 80% requires MI

118. Questions

119. QC First Look Process Required on Jumbo & Non-QM Loans
Review Income & Assets in file
Either passes and submitted to UW or
Missing items and required for submission to UW
They cannot change the loan as view only mode

120. QC First Look - Reminders
Document all assets required for funds to close and reserves
Provide all required income for loan
Process is provide clean files to Underwriting and reduce Suspense by UW

121. Where to Locate Jumbo Matrix

122. Where to Locate Jumbo Matrix Cont’d

123. Where to Locate Jumbo Matrix Cont’d

124. Questions

125. Future Questions/Scenarios
Next Call is March 14, 2019
Scenario Questions for Non-Agency/Non-QM you can
What are the restrictions?