FGMC Seller Guide - First Guaranty Mortgage Corporation

Transcription

Correspondent Lending
Seller Guide
Effective Date: 12/10/2015
Last Updated: 7/28/2016
First Guaranty Mortgage Corporation ®
Document is Not Legal or Compliance Advice
This document should not be construed as legal or compliance advice. FGMC encourages Correspondents to consult
with their legal and/or compliance counsel for any legal or compliance matters.
Document Version Matrix
Version
1.0
1.1
1.2
1.3
Version 1.2
Changes
Initial Version Finalized
Update
Update
Update
Date
12/21/2015
01/19/2016
04/15/2016
07/28/2016
Correspondent Lending Seller Guide
CONFIDENTIAL DOCUMENT
First Guaranty Mortgage Corporation must give prior written permission for this work, or any part thereof, to be used, reproduced, or transmitted in any form or by any
means, by or to any party outside of First Guaranty Mortgage Corporation, its regulators and investors.
2
1
INTRODUCTION ...............................................................................................................8
1.1
Purpose............................................................................................................................. 8
1.2
Applicability ...................................................................................................................... 8
1.3
Correspondent Lending .................................................................................................... 8
1.4
Correspondent Loan Process ........................................................................................... 8
2 GETTING STARTED ...........................................................................................................9
2.1
Overview .......................................................................................................................... 9
2.2
Approval ........................................................................................................................... 9
2.3
Setup .............................................................................................................................. 10
2.3.1
Resources ................................................................................................................ 10
2.3.1.1 FGMC Correspondent Website ........................................................................... 11
2.3.1.2 Portal Training ..................................................................................................... 11
2.3.1.3 Loan Submission .................................................................................................. 11
2.3.1.4 Submitting Files for Underwriting ....................................................................... 11
2.3.1.5 General Information ............................................................................................ 12
2.3.1.6 Pricing .................................................................................................................. 12
2.3.1.7 Original Collateral/Notes..................................................................................... 12
2.3.1.8 Final Documents .................................................................................................. 12
2.3.1.9 Compliance .......................................................................................................... 12
2.3.1.10 Important Addresses ........................................................................................... 13
3 CORRESPONDENT ELIGIBILITY........................................................................................ 13
3.1
Overview ........................................................................................................................ 13
3.2
Eligibility ......................................................................................................................... 13
3.2.1
Requirements .......................................................................................................... 13
3.3
Approval Levels .............................................................................................................. 15
3.3.1
Loan Purchase Eligibility ......................................................................................... 15
3.3.2
FHA Loan Purchase Eligibility .................................................................................. 15
3.4
Maintaining Eligibility ..................................................................................................... 15
3.4.1
Notification of Significant Changes ......................................................................... 16
3.4.2
Changes to Corporate Authority and Banking Relationships ................................. 16
3.4.3
Compliance Reporting Requirements ..................................................................... 16
3.4.4
Periodic Reviews ..................................................................................................... 17
3.4.5
Early Payoff Remedies ............................................................................................ 17
3.4.6
Audits ...................................................................................................................... 17
3.4.7
Correspondent Annual Recertification ................................................................... 18
3.4.8
Financial Statement Delivery Requirements .......................................................... 18
3.5
Loan Defects ................................................................................................................... 18
3.5.1
Early Payment Default ............................................................................................ 18
3.5.2
Loan Defects Detected ............................................................................................ 19
4 CREDIT PARAMETERS .................................................................................................... 19
4.1
Overview ........................................................................................................................ 19
4.2
Product Options ............................................................................................................. 19
5 APPRAISAL REQUIREMENTS .......................................................................................... 19
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5.1
Overview ........................................................................................................................ 19
5.2
Correspondent Certification........................................................................................... 20
5.3
Appraisal Requirements ................................................................................................. 20
5.4
Enhanced Appraisal Requirements ................................................................................ 21
6 COMMITMENT POLICY/LOAN LOCKS ............................................................................. 21
6.1
Overview ........................................................................................................................ 21
6.2
Best Efforts/Mandatory Locks ........................................................................................ 22
6.2.1
Best Efforts Definition ............................................................................................. 22
6.2.2
Mandatory Lock Definition ..................................................................................... 22
6.2.3
Service Release Premium ........................................................................................ 22
6.2.4
Loan Registration .................................................................................................... 22
6.2.4.1 Lock Confirmations.............................................................................................. 23
6.2.4.2 Off-Sheet Pricing Request ................................................................................... 23
6.2.4.3 Duplicate Locks .................................................................................................... 23
6.2.4.4 Fallout .................................................................................................................. 23
6.2.4.5 Lock Periods ........................................................................................................ 24
6.2.4.6 Non-Delegated 1x Close Construction to Permanent Cap and Float Down Option
24
6.2.4.7 Non-Delegated 1x Close Construction to Permanent Upfront Extended Lock ... 25
6.2.4.8 Lock Expiration Date............................................................................................ 25
6.2.4.9 Lock Extensions ................................................................................................... 25
6.2.4.10 Relocks................................................................................................................. 26
6.2.4.11 Renegotiations .................................................................................................... 26
6.2.4.12 Pair-Offs via Mandatory Rate Sheet Locks .......................................................... 26
6.2.4.13 Canceling Mandatory Locks via Rate Sheet ........................................................ 27
6.2.4.14 Swaps on Mandatory Locks via Rate Sheet ......................................................... 27
6.2.4.15 FGMC Mandatory Trade Desk ............................................................................. 27
6.2.4.16 Trade Confirmations............................................................................................ 28
6.2.4.17 Delivery Timeframes ........................................................................................... 28
6.2.4.18 Delivery Tolerance............................................................................................... 28
6.2.5
Pair-Off Policy ......................................................................................................... 28
7 DELIVERY PROCEDURES ................................................................................................. 30
7.1
Overview ........................................................................................................................ 31
7.1.1
Document Upload ................................................................................................... 31
7.1.2
Purchasable Form ................................................................................................... 32
7.1.3
Collateral Package ................................................................................................... 32
7.2
Closed Loan Documentation .......................................................................................... 33
7.2.1
Ability to Repay and Qualified Mortgage Rule ....................................................... 33
7.2.2
Required Forms and Reference Data ...................................................................... 34
7.2.3
Bailee Specifications ............................................................................................... 34
7.2.4
General Closing Specifications ................................................................................ 34
7.2.5
Note Endorsement .................................................................................................. 35
7.2.6
Due-On Sale Clause ................................................................................................. 35
7.2.7
Initial Application Date ........................................................................................... 35
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7.2.8
Late Charge ............................................................................................................. 35
7.2.9
Mortgagee Clause ................................................................................................... 35
7.2.10 HUD-1 Settlement Statement/Closing Disclosure .................................................. 36
7.2.11 Underwriting Conditions ......................................................................................... 36
7.2.12 Tax Requirements ................................................................................................... 36
7.2.13 Satisfaction of Risk Screening Conditions ............................................................... 38
7.2.14 Eligible Loan Modifications ..................................................................................... 38
7.3
Assignment of Mortgage ................................................................................................ 38
7.4
Mortgage Loan Purchase ............................................................................................... 39
7.4.1
Calculation of Purchase Proceeds ........................................................................... 39
7.4.2
Decline to Purchase ................................................................................................ 40
7.4.3
Principal Balance Purchased ................................................................................... 40
7.4.4
Accrued Interest...................................................................................................... 40
7.4.5
Escrow Waiver Fees ................................................................................................ 40
7.4.6
Power of Attorney (POA) ........................................................................................ 40
7.4.7
Trust Review Guidelines ......................................................................................... 42
7.4.8
Signature Specifications .......................................................................................... 43
7.5
Title Insurance Specifications ......................................................................................... 44
7.6
Private Mortgage Insurance ........................................................................................... 44
7.6.1
Government Insuring Documents........................................................................... 45
7.7
Hazard Insurance ............................................................................................................ 46
7.7.1
Hazard Insurance General Specifications ............................................................... 46
7.7.2
Types of Hazard Insurance Coverage ...................................................................... 46
7.7.3
Amount of Hazard Insurance Coverage .................................................................. 47
7.7.4
Hazard Insurance Deductible .................................................................................. 47
7.7.5
Additional Hazard Insurance Coverage................................................................... 47
7.7.6
Special Endorsements ............................................................................................. 49
7.8
Flood Insurance .............................................................................................................. 49
7.8.1
Non-Participating Communities.............................................................................. 49
7.8.2
Flood Determination Certification .......................................................................... 49
7.8.3
Required Documentation ....................................................................................... 49
7.8.4
Elevation Certificate ................................................................................................ 50
7.8.5
Amount of Coverage ............................................................................................... 50
7.8.6
Deductible Amount ................................................................................................. 50
7.9
Disaster Policy ................................................................................................................ 51
7.9.1
Determining Affected Areas ................................................................................... 51
7.9.2
Valuation Requirements for Property in Affected Areas ........................................ 51
7.9.3
Valuation and Inspection Requirements ................................................................ 51
7.9.4
Current Disaster Updates........................................................................................ 52
7.10 Real Estate Taxes ............................................................................................................ 53
7.11 Escrow/Impound Accounts ............................................................................................ 53
7.11.1 Escrow Waiver ........................................................................................................ 54
7.12 Loan Sale Notification .................................................................................................... 54
7.12.1 Due Dates ................................................................................................................ 54
7.12.2 Borrower Notification ............................................................................................. 54
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7.12.3 Servicing Information .............................................................................................. 55
7.12.4 Vendor Notifications ............................................................................................... 55
7.12.5 Payment Processing Requirements ........................................................................ 56
7.12.6 Non-Sufficient Funds............................................................................................... 56
7.12.7 Corporate Advances/Invoice Requirements ........................................................... 56
7.12.8 Wire Instructions..................................................................................................... 56
7.12.9 MERS/Transfer of Mortgage Instructions ............................................................... 57
7.12.10 Hazard Insurance .................................................................................................... 57
7.12.11 Tax Instructions ....................................................................................................... 58
7.12.12 PMI & MIP Instructions ........................................................................................... 58
7.12.13 Escrows ................................................................................................................... 58
7.13 Final Documents ............................................................................................................. 59
7.13.1 Delivery ................................................................................................................... 59
7.13.1 Shipping Procedures ............................................................................................... 60
7.13.2 Recovery.................................................................................................................. 60
7.13.3 Billing ....................................................................................................................... 60
7.14 Reporting ........................................................................................................................ 60
7.15 Responsible Lending....................................................................................................... 60
7.16 Funding Fees................................................................................................................... 60
7.17 Non-Delegated Loan Delivery ........................................................................................ 61
7.17.1 Non-Delegated Setup .............................................................................................. 61
7.17.2 Loan Package........................................................................................................... 61
7.17.3 Loan Programs ........................................................................................................ 62
7.17.4 Package Review....................................................................................................... 63
7.17.5 Credit Denials .......................................................................................................... 64
7.17.6 Clear to Close .......................................................................................................... 64
7.18 Renovation and Construction Loan Programs ............................................................... 65
7.19 Property Value for Loans Sold More than Four Months from Note Date ..................... 65
8 Appendix ...................................................................................................................... 66
8.1
Exhibit A – Lock Request Form ....................................................................................... 66
8.2
Exhibit B – Goodbye Letter ............................................................................................ 67
8.3
Exhibit C – Final Documents Transmittal ....................................................................... 70
8.4
Exhibit D – Non-Delegated Correspondent Checklists/Stacking Orders ........................ 71
8.4.1
FGMC FHA Stacking Order ...................................................................................... 71
8.4.2
FGMC FHA Streamline Stacking Order .................................................................... 73
8.4.3
FGMC VA Stacking Order ........................................................................................ 74
8.4.4
FGMC VA IRRRL Stacking Order .............................................................................. 76
8.4.5
FGMC USDA Stacking Order .................................................................................... 77
8.4.6
FGMC Fannie Mae Stacking Order .......................................................................... 78
8.5
Definitions ...................................................................................................................... 80
8.6
Contents of each Mortgage File ..................................................................................... 83
9 FORMS .......................................................................................................................... 85
10 WEB PORTAL INSTRUCTIONS ......................................................................................... 86
10.1 Registering a New Loan .................................................................................................. 86
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10.2 Uploading Scanned, Imaged File .................................................................................... 86
10.3 How to Check for and Upload Conditions ...................................................................... 87
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1
1.1
INTRODUCTION
Purpose
The Correspondent Lending Division of First Guaranty Mortgage Corporation (FGMC) purchases loans
from approved sellers. This Correspondent Lending Seller Guide details the terms and conditions that
govern Correspondent participation in the FGMC Correspondent Lending Program. Occasionally, FGMC
communicates updates and revisions to this Guide through email communications and online bulletins
located on the FGMC Correspondent website. Each bulletin will indicate its effective date. The basic terms
and conditions of the Mortgage Loan Purchase and Sale Agreement (MLPSA) have been incorporated into
this Guide, however in the event of a conflict with this document the Mortgage Loan Purchase and Sale
Agreement (MLPSA) will govern.
1.2
Applicability
This Guide shall apply to FGMC in its entirety including all divisions, departments, subsidiaries, and
affiliates.
1.3
Correspondent Lending
A Correspondent, as defined by FGMC, is an FGMC-approved mortgage lender that originates, funds, and
closes mortgages in their name. The Correspondent then submits the loan to FGMC for review (and/or
underwriting), purchase, and funding.
1.4
Correspondent Loan Process
All Correspondents should use this Guide to ensure that loans are prepared in accordance with FGMC
requirements, thus increasing the chance of acceptance, purchase, and funding. After Correspondents
create the loan, the loan package will proceed through the pipeline as follows:
 Started – Loan has either been registered or submitted through the FGMC Correspondent website
and is in an active folder at FGMC.
 Processing – Once document upload is complete, loan processing begins. Correspondent sends
required (Collateral Package) documentation for review.
 Submitted – Awaiting a list of requirements from FGMC Underwriter or File Reviewer.
 Decisioned – Loan has been conditioned and FGMC is waiting for suspense or condition uploads
to clear.
 Resubmitted – Cleared loan is ready for submission.
 Approved – Loan is ready for purchase. FGMC must receive either reverse Bailee letters or original
documents prior to purchase.
 Closing – The loan is progressing through the purchase queue, has been confirmed locked, and
the required documents received.
 Funding – FGMC delivers package to Document Custodian; Purchase Advice has been created and
sent to Correspondent and Funding Department.
 Final Docs – Correspondent ships Final Documents as required.
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2
2.1
GETTING STARTED
Overview
First Guaranty Mortgage Corporation (FGMC) is in the business of providing the best possible service to
its clients and customers. To begin a relationship as an FGMC Correspondent, Sellers can visit the
Comergence Compliance LLC website. There, a Seller can log in or create a new account to get started.
2.2
Approval
The following is an overview of documents necessary for Correspondent approval. These will be requested
and maintained by Comergence as part of the approval process.
 Two (2) most recent years audited financial statements
 Interim financial statements (most recent available)
 Resumes of Key Management (all applicable):
o
Chief Executive Officer
o
Chief Financial Officer
o
Head of Secondary Marketing
o
Head of Operations
o
Head of Production
o
Head of Compliance
o
Underwriting Manager(s)
o
Closing Manager
o
Funding Manager
o
Post-Closing Manager
 Resumes of Underwriters (CHUMS Numbers required, if applicable)
 Appraiser Independence Requirements (AIR) Certification of Compliance
 Anti-Money Laundering (AML) Bulletin
 AML Certification
 Company Formation/Corporate By-laws
 Corporate Resolutions
 FACT Act Compliance (Red Flag Policy)
 FGMC Mortgage Loan Purchase and Sale Agreement
 Investor Scorecards for most recent quarter for all investors providing scorecards
 IRS Form W-9
 Letter of Reference from Primary Warehouse Bank
 Quality Control Policy and Procedure Documents
 Surety/Fidelity Bond insurance ($300,000 minimum)
 Copies of all of the following that are available:
o
Appraisal Management Policy
o
Compliance Management Program
o
Credit Policy
o
Complaint Management Program
o
Fraud Management Policy
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Comergence will conduct a background and licensing check consisting of the following steps:
 Background check of ownership
 Office of Foreign Assets Control (OFAC) check
 HUD Limited Denial List check
 Licensing review
 Federal criminal/civil records check
 Secretary of State check
 Regulatory sanctions check
 Review for bankruptcy, foreclosures, or liens/judgments
 State/local criminal records check
Next, FGMC will perform the following due diligence:
 Financial review
 Quality Control review
 Comprehensive Risk Assessment (Business, Operations, Compliance)
 Consumer and Social Media review
 HUD Neighborhood Watch review - Minimum requirements for all approvals (except NonDelegated Approval) is current and trailing 3-month average Compare Ratio < 150
In addition, the following requirements will be necessary for FGMC risk review:
 All Approval Requests (Non-Delegated, Delegated, Mandatory, Third Party Origination (TPO)):
o
FGMC Business Questionnaire
o
FGMC Unfair, Deceptive, or Abusive Acts and Practices (UDAAP) Questionnaire
o
FGMC Information Security Questionnaire
 Mandatory Approval Requests Only:
o
Hedging Policy
o
Pricing Policy
o
Copy of hedging vendor agreement
o
Full set of most recent month’s hedging reports
 Third Party Origination Approval Requests Only:
o
Copy of TPO Approval and Monitoring Program
o
FGMC TPO Questionnaire
2.3
Setup
Once FGMC has sent approval, the Correspondent needs to fill out the Company Setup Application and
email the completed form to [email protected]. This is the first step in getting properly setup
on the FGMC Web Portal. The FGMC Help Desk will set up individual users once the completed form has
been received.
The Correspondent will be assigned an Account Executive (AE) as the main point of contact. The
Correspondent will also be classified as Delegated or Non-Delegated based on FGMC-established
requirements. The Delegated Correspondent performs the loan underwriting while the 7.17 NonDelegated Loan Delivery requires loans to be underwritten by FGMC and follows a slightly different
process.
2.3.1 Resources
These important resources will provide Correspondents with learning opportunities in order to quickly
establish a working relationship with FGMC.
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2.3.1.1 FGMC Correspondent Website
www.fgmccorrespondent.com
Resources




Learning Center
Bulletins
Forms
Correspondent Checklist
NMLS Consumer Access




Product Option Guides
Loan Submission
Delivery Information
TRID Resource Center
2.3.1.2 Portal Training
Live FGMC Web Portal training is provided every Thursday at 2:00 PM ET. The session usually lasts 45
minutes and will help Correspondents better understand how to register, submit, and lock loans and
upload conditions. The webinar is an online meeting available to all clients. Correspondents can contact
their Account Executive (AE) for details and a training schedule. If a Correspondent encounters an issue
or error when submitting a file, uploading conditions, or locking, the FGMC Help Desk is available for
assistance by emailing [email protected].
2.3.1.3 Loan Submission
Submission and Condition instructions and Loan Submission Form:
 Instructions for submitting loans and uploading conditions to FGMC can be found here:
o
WEB PORTAL INSTRUCTIONS.
o
If at any time there is an issue or error submitting a file, uploading conditions, or
locking a loan, the FGMC Help Desk is available for assistance by emailing
[email protected].
 Be sure to include the FGMC Correspondent Loan Submission Form on all loan submissions.
2.3.1.4 Submitting Files for Underwriting
Correspondents are advised to provide a full, complete file at the time of submission; however, if some
items are not available at the time of submission, packages will be accepted with the minimum docs
required below. Please refer to the minimum requirements for each submitted file. These items may
not be applicable to all files, but this provides Correspondents with a basic list of documents needed to
proceed.
 FGMC Submission Form
 Automated Underwriting System (AUS) Findings – FNMA Desktop Underwriter (DU) only,
FHA/VA DU or Loan Prospector (LP)
 1003 Loan Application (unsigned OK)
 Assets / Income
 Sales Contract, if applicable
NOTE: If a submission form is not provided clearly identifying the correct channel, the FGMC Input
Department will hold the file until received (status/milestone will show as PROCESSING). FGMC will accept
a TBD file for review for purchase transactions only. Be aware that the less documentation provided upfront
for initial Underwriter review, the more conditions will be added to the loan approval.
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2.3.1.5 General Information
The FHA Case Assignments document provides information related to FHA Connection. FGMC ID
Numbers:
 FHA ID number is 7516800469
 VA ID Number is 6852450000
 MERS ID is 1000314
 NMLS Number is 2917
Once a loan is fully submitted into the FGMC pipeline, the loan will be routed to the Input Department.
The system milestone will show as STARTED. Once the file is reviewed, the system is updated as necessary
and the Correspondent is notified of any missing items. If the loan is put on hold for any reason, the
milestone will show as PROCESSING. Once the loan has moved through input, it will then be put into the
reviewer’s queue. At this time the milestone will show as SUBMITTAL.
Pre Purchase Review and Conditions
Once in the SUBMITTAL stage, the loan is in queue for underwriting/review on a first-in/first-out basis.
Turn times (posted at www.fgmccorrespondent.com) begin the day AFTER the loan was fully submitted
to FGMC to account for one (1) full business day.
Closed Loans
Once the loan is decisioned, the review/approval will be uploaded to the FGMC Web Portal for retrieval
any time. The milestone will show as DECISIONED.
NOTE: Once the conditions have been uploaded, the Correspondent must click the SUBMIT FOR REVIEW
button located above the Conditions section on the upload screen. This is the only way the Underwriter is
notified that conditions have been submitted for review.
2.3.1.6 Pricing
Correspondents should contact their Account Executive for all pricing questions and issues.
Locking/Pricing is completed through the FGMC Web Portal. Correspondents can contact
[email protected] for the associated lock/pricing username or other assistance. See
COMMITMENT POLICY/LOAN LOCKS for more details.
2.3.1.7 Original Collateral/Notes
FGMC requires the original final Collateral Documents on all Conforming Mortgage Loans and on
Government Mortgage Loans when applicable. The Collateral Package must be shipped to the FGMC
custodian no later than the same day that the Loan Package is delivered (via the FGMC Web Portal) to
FGMC. For more information, see Collateral Package.
2.3.1.8 Final Documents
For complete details about the procedure for shipping documents, see DELIVERY PROCEDURES and Final
Documents.
2.3.1.9 Compliance
FGMC strictly adheres to federal, state, and agency laws and regulations. It is the Lender’s responsibility
for Delegated and Non-Delegated loans to adhere to all applicable federal, state, and agency laws and
regulations prior to closing the loans.
Note: Correspondents are responsible for ensuring all loans sold to FGMC are originated and
closed in accordance with all federal, state, city, county, and agency high-cost/predatory
lending regulations. FGMC will not purchase any loan (Agency, Non-Agency, FHA, VA, or USDA) that
meets the definition of a “subprime loan” under New York State Law.
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2.3.1.10 Important Addresses
The submission process for documents (Imaged, Collateral, and Final/Trailing) is covered in detail in the
DELIVERY PROCEDURES section. For quick reference, applicable addresses are as follows:
Collateral Documents:
Deutsche Bank National
Trust Company
Attn: Team FGMC/Correspondent
1761 East St. Andrews Place
Santa Ana, CA 92705
Compliance Actions:
First Guaranty Mortgage
Corporation
Attn: Client Administration
1900 Gallows Road, Suite 800
Tysons Corner, VA 22182
Final Documents:
Corporation
Attn: Final Docs
5280 Corporate Drive, Ste. B200
Frederick, MD 21703
Borrower’s First Payment:
Roundpoint Mortgage Servicing
Corporation
Attn: Payment Processing
PO Box 674150
Dallas, TX 75267-4150
Vendor Notification:
Corporation
Attn: Servicing Dept.
5280 Corporate Drive B200
Frederick, MD 21703
Borrower’s General Correspondence:
Attn: Customer Service
PO Box 19789
Charlotte, NC 28219-9409
3
CORRESPONDENT ELIGIBILITY
3.1
Overview
With respect to loans sold to FGMC and in addition to the Mortgage Loan Purchase and Sale Agreement
and other legal agreements between FGMC and the Correspondent, each Correspondent is bound by
the provisions of this Guide.
3.2
Eligibility
The requirements stated below, unless waived by FGMC at its sole and absolute discretion, must be met
by Lenders in order to be eligible for participation in the FGMC Correspondent Program. FGMC reserves
the right, in its sole discretion, to determine whether a prospective Correspondent meets these eligibility
requirements. Once approved, Correspondents are required to maintain the eligibility requirements. If a
Correspondent fails to maintain one or more of the eligibility requirements, FGMC may suspend
purchasing mortgage loans from the Correspondent and/or terminate its business relationship with the
Correspondent.
3.2.1 Requirements
Correspondents must follow the requirements listed below.
Experience
The Correspondent must have been an active originator of first lien, investment-quality residential
mortgage loans using Fannie Mae’s Desktop Underwriter (DU) Automated Underwriting System (AUS)
engine during the previous two years.
Facilities
The Correspondent must have adequate facilities with which to originate first lien residential mortgage
loans.
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Selling Standards
 The Correspondent must follow generally accepted mortgage lending practices with respect to its
mortgage loan origination activities.
 The Correspondent’s company must be an organization which is committed to, and engages in,
responsible lending practices.
Capital Requirements
The Correspondent and the Correspondent’s parent corporation, if any, must meet the capital
requirements of each state and federal regulatory agency with jurisdiction over any of the
Correspondent’s or parent corporation’s activities, as applicable. Minimum requirements are:




Delegated Loans: $500,000 net worth (NW) and 20% NW in cash.
Non-Delegated Loans: $150,000 NW and $50,000 in cash.
Mandatory Locks: $1,000,000 NW and 20% of NW in cash.
Delivery of Third-Party Originated (TPO) Loans: $1,000,000 NW and 20% of NW in cash.
Legal Standing
 The Correspondent must be duly organized, validly existing, and in good standing under the laws
of the jurisdiction of its organization and qualified to transact business and properly licensed in
each jurisdiction where it originates or services mortgage loans.
 The Correspondent must be in good standing with all applicable regulatory authorities and not
subject to any extraordinary supervision of its operations.
 The Correspondent must have the power and authority to enter into the FGMC Correspondent
Mortgage Loan Purchase and Sale Agreement.
 The Correspondent’s compliance with the terms and conditions of the agreement, including the
terms and conditions of this Guide, must not violate any of the provisions of its articles of
incorporation, charter or bylaws or any other instrument relating to the conduct of the
Correspondent’s business, the ownership of its property or any other agreement to which it is a
party or by which it is bound.
Licensing
The Correspondent must possess and maintain all required licenses necessary to conduct its activities in
each jurisdiction in which any mortgaged property is located or otherwise be exempt from such
requirements.
Insurance
Correspondents that are not federally insured must maintain a blanket fidelity bond and errors and
omissions insurance coverage in the amount of $300,000 each. The deductible may not exceed the greater
of $100,000 or 5% of the face amount of the bond.
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3.3 Approval Levels
3.3.1 Loan Purchase Eligibility



Delegated Correspondents must underwrite and close all loans delivered to FGMC for purchase.
Loans must meet FGMC and Investor guidelines.
AUS decision required in accordance with the following:
o
Conventional: Desktop Underwriter (DU) approval.
o
FHA: DU or LP TOTAL Scorecard approval. Streamline transactions do not require a TOTAL
Scorecard approval.
o
VA: DU approval, LP approval, or manual underwrite per Product Profile. Interest Rate
Reduction Refinance Loans (IRRRL) transactions do not require an AUS approval.
o
Rural: USDA Guaranteed Underwriting System (GUS) approval or manual underwrite per
Product Profile.
Loans underwritten by a nationally recognized Mortgage Insurance (MI) contract underwriting company
that meet the above criteria are eligible for purchase.
Correspondents must be aware of the following when utilizing MI contract underwriting:
 The Correspondent must establish and utilize its own contract underwriting agreement with the
MI Company. FGMC will not be a party to these agreements.
 The Correspondent is responsible for all representations and warranties to FGMC for underwriting
decisions.
 The Correspondent must perform normal due diligence in processing and underwriting the loan
prior to submitting the loan to the contract underwriter.
 Even though the MI Company will be underwriting as an agent of the Correspondent,
Correspondents are still responsible for all origination activities.
 Correspondents are responsible for complying with federal and state reporting requirements,
including but not limited to, reporting under the Home Mortgage Disclosure Act (HMDA) and
Nationwide Licensing System Mortgage (NLSM) call reports and financial statements.
 A contract underwriting decision issued by the MI Company on behalf of the Correspondent will
not impact or change the Correspondent’s responsibility and obligation to sell FGMC loans that
are in full compliance with the Guide and the Mortgage Loan Purchase and Sale Agreement.
3.3.2 FHA Loan Purchase Eligibility
In addition to the Purchase Eligibility requirements for FHA Loans, Correspondents must:
 Meet all other eligibility requirements, as applicable.
 Meet HUD’s loan insurance requirements.
 Realize any government loan not insured within 60 days of loan closing may be subject to
repurchase or collection of an uninsured loan fee.
 Be HUD approved and have a DE Underwriter on staff.
 Provide a copy of their HUD approval letter.
 Be in good standing with HUD and other applicable agencies.
3.4
Maintaining Eligibility
Any Correspondent approved for participation in the FGMC Correspondent Program must continue to
meet the eligibility requirements herein to maintain its eligibility and approval to participate.
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3.4.1 Notification of Significant Changes
The Correspondent must send FGMC written notice of any contemplated major changes in its
organization, including its notice copies of any filings with, or approvals from, its regulators. FGMC
requires notice of, among other things, the following significant changes relating to the Correspondent:
 Any mergers, consolidations, or reorganizations.
 Any direct or indirect material change in ownership. An “indirect change in ownership” includes
any change in the ownership of the Correspondent’s parent, any owner of the parent, or any
beneficial owner of the Correspondent that does not own a direct interest in the Correspondent.
 Any change in corporate name.
 Any change from a federal charter to a state charter (or vice versa) if the Correspondent is a
savings and loan association or a bank.
 Material changes in financial condition.
3.4.2 Changes to Corporate Authority and Banking Relationships
In the event that there is any change in corporate authority, the lender must immediately deliver to FGMC
a replacement Corporate Resolution, which accurately reflects the corporate authorizations granted by
the lender, or a Funding Instructions Notification which accurately describes the banking relationships in
effect, as applicable.
FGMC will not recognize any changes in the Correspondent’s corporate authorizations or funding
instructions until the replacement Corporate Resolution, or Funding Instructions Notification, as
applicable, is received by FGMC.
3.4.3 Compliance Reporting Requirements
If the Correspondent is subject to the jurisdiction of any governmental agency or quasi-governmental
agency, including but not limited to, state regulatory entities, the Consumer Financial Protection Bureau
(CFPB), Fannie Mae, Freddie Mac, Department of Housing and Urban Development (HUD) or Federal
Deposit Insurance Corporation (FDIC), FGMC may request copies of any audit reports issued by such
agencies.
If any disciplinary action is taken by any such agency, including suspension or termination of the
Correspondent’s selling or servicing rights, the Correspondent must notify FGMC within three (3) business
days of such action. Any reports or notices to be delivered to FGMC pursuant to this section of the Guide
must be delivered to the following address:
First Guaranty Mortgage Corporation
Attn: Client Administration
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3.4.4 Periodic Reviews
FGMC will routinely review each Correspondent’s book of business to monitor performance. The reviews
may include, but are not limited to, the following:
 Product mix
 Best-effort commitment pull through rate
 Mark-to-market (MTM) exposure
 Delinquency data
 HUD compare ratios
 Repurchase activity
 Defective delivery rate
 Number of Early Payment Default (EPD) loans
 Number of Early Payoffs (EPO) and overall portfolio turnover
3.4.5 Early Payoff Remedies
Consistent with the prepayment review process of the Agencies, FGMC routinely reviews each
Correspondent’s portfolio of loans to monitor levels of prepayments. If such analysis identifies unusual
prepayment behavior (as defined by one or more of the Agencies) by an FGMC Correspondent, the
originating broker or loan officer, FGMC may seek additional protections, including an extended EPO
period on future loan purchases or disallowing loans to be submitted from identified brokers or loan
officers prior to purchasing any additional mortgage loans from a Correspondent. Further, if FGMC
receives invoices from an investor due to unusual prepayment speeds, the cost (which may include an
EPO recapture of all amounts paid in excess of the loan amount) will be passed on to and borne by the
Correspondent.
See the FGMC Mortgage Loan Purchase and Sale Agreement regarding solicitation, GovernmentSponsored Enterprise (GSE) eligible loans, and the GSE’s policy regarding prepayment behavior.
3.4.6 Audits
FGMC may audit the Correspondent’s mortgage loan origination operations and examine the books and
records relating to any mortgage loan sold by the Correspondent to FGMC. The Correspondent will
facilitate such audits and provide FGMC and its agents with access to the Correspondent’s offices, books
and records at reasonable times during the Correspondent’s normal business hours.
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3.4.7 Correspondent Annual Recertification
Within 30 days of their yearly initial approval date, all Correspondents will be advised to complete the
Correspondent Annual Recertification form as part of the Correspondent Annual Recertification Process.
In addition, Correspondents are required to provide the following:
 Most recent years audited financial statements
 Interim financial statements (most recent available)
 Resumes of key management (revised or additional) that differ from those previously provided to
FGMC
 Resumes of current Underwriters (CHUMS Numbers required, if applicable)
 Anti-Money Laundering (AML) Bulletin
 AML Certification
 Corporate Resolutions
 Corporate Formation/Corporate Bylaws
 FGMC Mortgage Loan Purchase and Sale Agreement (previous version can remain unchanged)
 Letter of Reference from Primary Warehouse Bank
 QC reports with management responses for most recent quarter
 Surety/Fidelity Bond insurance ($300,000 minimum)
 Fair and Accurate Credit Transactions (FACT) Act Compliance (Red Flag Policy)
 Copies of any policies, procedures or programs (revised or additional) that differ from those
previously provided to FGMC
Comergence will work with FGMC to perform the required background checks and verifications, including
past performance with FGMC, and then provide Correspondent with the results.
3.4.8 Financial Statement Delivery Requirements
All Correspondents are required to provide audited financials within 120 days of fiscal year end.
3.5 Loan Defects
3.5.1 Early Payment Default
If, at any time, within the first six (6) months following purchase of the Loan, any scheduled Monthly
Payment on such Mortgage Loan is or becomes ninety (90) days delinquent with respect to a monthly
payment, Seller shall be obligated to repurchase the affected Mortgage Loan upon the occurrence of one
or more of the following circumstances (each, a “Repurchase Obligation”) affecting a Mortgage Loan:
Where an Early Payment Default has occurred with respect to the Mortgage Loan;
The Purchaser (FGMC) reserves the right to, in lieu of repurchase, recapture the Service Release Premium
(SRP), an administrative fee of $3,000 and any estimated associated loss in respect to the Mortgage Loan.
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3.5.2 Loan Defects Detected
For all loans acquired by Purchaser that are determined to have eligibility violations, the Purchaser will
inform the Seller, in writing, and provide a response time in accordance to the Mortgage Loan Purchase
and Sale Agreement.
If a Seller provides a response within the allotted time in accordance to the Mortgage Loan Purchase and
Sale Agreement and both the Purchaser and/or Purchaser’s investor agree with the provided rebuttal, the
repurchase demand will be rescinded.
If a Seller cannot cure the eligibility violation but is able to refinance the existing mortgage loan, the
Purchaser reserves the right to recapture the Service Release Premium (SRP) paid in respect to such
mortgage loan, if the eligibility violation is detected within three (3) years of the Funding Date. Additional
holding fees may be applicable if the refinance extends beyond the Agency repurchase due date.
If the eligibility violation cannot be cured, an effective repurchase due date will be set. The repurchase
due date will be the greater of the investor repurchase date or 30 days from initial repurchase notification.
If funds are not remitted by the repurchase due date, the Purchaser reserves the right to charge the Seller
a daily or monthly holding fee until the full Repurchase Price is remitted.
4
CREDIT PARAMETERS
4.1
Overview
As outlined in the Mortgage Loan Purchase and Sale Agreement, loans sold to FGMC by the Correspondent
are bound by the provisions in this Guide.
4.2
Product Options


5
5.1
Refer to Product Option Guides for details on each FGMC product.
For Non-Delegated loans, see Non-Delegated Loan Delivery.
APPRAISAL REQUIREMENTS
Overview
FGMC allows Correspondent Sellers to order appraisal reports following their own internal appraisal
management policies. Each appraisal report submitted to FGMC requires the individual appraiser to fully
comply with all Uniform Standards of Professional Appraisal Practice (USPAP), Financial Institutions
Reform Recovery and Enforcement Act (FIRREA) appraisal regulatory standards, and the Federal Housing
Finance Agency (FHFA) which issued the Appraiser Independence Requirements (AIR). Additionally, all
reports must meet all minimum appraisal requirements as set forth by the secondary market, including
Government-Sponsored Enterprises (GSEs), Federal Housing Administration (FHA) and Department of
Veterans Affairs (VA).
Correspondent Sellers must comply with FGMC standards for meeting AIR. They must have documented
internal appraisal procedures, including, but not limited to, if they utilize Appraisal Management
Companies (AMCs) and/or a panel of approved appraisers as outlined under FGMC Policy – Requirements
for Correspondent Use of Appraisal Management Companies (AMCs) and/or Proprietary Panel of
Approved Appraiser. FGMC will review Correspondent Seller policies and procedures for meeting AIR, to
determine if the Correspondent’s documented internal appraisal procedures utilize AMCs and/or a panel
of approved appraisers, and if they meet all standards outlined in the FGMC Policy.
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5.2
Correspondent Certification
With every appraisal report submitted to FGMC, the Correspondent certifies:
 The appraisal has been conducted by a licensed or certified appraiser. Correspondent certifies
that it has adequate controls to ensure the appraiser is in good standing and
licenses/certifications are current.
 The Correspondent has thoroughly reviewed the report and has concluded that the property is
adequate collateral to support the loan.
 The report complies with FGMC, Uniform Standards of Professional Appraisal Practice (USPAP)
and agency standards.
 Any information known to the Correspondent that could adversely affect value or marketability
was disclosed to the appraiser.
 The appraiser has adequately supported any assumptions, data, analysis, rationale, and
conclusions made or used to determine value and marketability.
 The information on the report is accurate, consistent, clearly written, and sufficiently
documented.
 Appraiser comments addressing declining property value (if any) are acted upon appropriately.
 By delivering loans to FGMC, the Correspondent represents and warrants that their appraisal
process and appraisal reports are in compliance with all agency and HUD requirements, as well as
all applicable state or federal statutes in all aspects of ordering, evaluating, disclosures and
processing appraisals. Appraisals provided by a third party, such as a mortgage or real estate
broker, are not acceptable.
5.3
Appraisal Requirements





Determined by AUS Findings. Property Inspection Waivers, through Desktop Underwriter (DU),
are acceptable with a $75.00 delivery fee.
A Market Conditions Addendum (Fannie Mae Form 1004MC/Freddie Mac Form 71) is required for
all loans delivered with appraisals of one to four unit properties. It must be included with appraisal
Forms 1004/70, 1025/72, 1073/465, 1075/466, 2055/2075.
A full appraisal is required, regardless of AUS findings, if any of the following conditions exist:
o
Purchase transactions of REO properties and all purchases of properties whose most recent
transaction was a foreclosure sale.
o
Apparent adverse physical deficiencies or conditions.
o
Apparent adverse environmental conditions.
o
The subject property does not conform to the neighborhood.
First generation PDF of the Appraisal Report.
Summary Submissions Report (SSR) if submitted to Fannie Mae Uniform Collateral Data Portal
(UCDP) or FHA/Department of Housing and Urban Development (HUD) Electronic Appraisal
Delivery (EAD) Portal (effective June 27, 2016). (Note: The SSR document must have a status of
“Successful” to be acceptable.)
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5.4
Enhanced Appraisal Requirements
With every appraisal report submitted to FGMC, the Correspondent certifies:
 The appraisal has been conducted by a licensed or certified appraiser. Correspondent certifies
that it has adequate controls to ensure the appraiser is in good standing and
licenses/certifications are current.
 The Correspondent has thoroughly reviewed the report and has concluded that the property is
adequate collateral to support the loan.
 The report complies with FGMC, USPAP, and agency standards.
 Any information known to the Correspondent that could adversely affect value or marketability
was disclosed to the appraiser.
 The appraiser has adequately supported any assumptions, data, analysis, rationale, and
conclusions made or used to determine value and marketability.
 The information on the report is accurate, consistent, clearly written, and sufficiently
documented.
 Appraiser comments addressing declining property value (if any) are acted upon appropriately.
 By delivering loans to FGMC, the Correspondent represents and warrants that their appraisal
process and appraisal reports are in compliance with the all agency and HUD requirements as well
as all applicable state or federal statutes in all aspects of ordering, evaluating, disclosures and
processing appraisals. Appraisals provided by a third party, such as a mortgage or real estate
broker, are not acceptable.
6
COMMITMENT POLICY/LOAN LOCKS
All loans are required to be locked with the lock desk at FGMC prior to authorization to clear a loan for
purchase. Loan files that are not locked and/or have a lock expired at the time of review will receive a
condition indicating the loan must be locked. This condition must be satisfied before FGMC will clear the
loan for purchase.
6.1
Overview
All Correspondents have the ability to submit locks, extensions, and change requests. For detailed
instructions, Correspondents can reference the Locking and Change Request Manual or contact their
Account Executive. Assistance with the online portal or the locking process can also be obtained by
emailing [email protected].
The FGMC Lock Desk is open until 9:00 PM ET for all products. New locks and extension requests received
through the correspondent website will be processed the same day with exception of FHA 203k, FNMA
HomeStyle, VA and all High Balance products. All online profile changes, emails, relocks and manual lock
requests submitted between 7:00 PM – 9:00 PM ET will be processed the next business day. Manual lock
requests and relocks received after 9:00 PM ET will be processed the following business day once pricing
is made available. Pricing is made available every morning once Rate Sheets have been updated and sent.
Pricing is updated between 9:45 AM and 10:30 AM ET every business day. Pricing may also be updated
throughout the day as needed and new Rate Sheets will be sent out. FGMC does not offer overnight price
protection.
Note: Correspondents may access historical pricing via the FGMC online locking system if available,
but it is the responsibility of the Correspondent to keep historical records of FGMC rate sheets and
lock confirmations.
Off-sheet pricing requests, transactions requiring a manual lock request, or locks done via FGMC extended
lock option need to be submitted using Exhibit A – Lock Request Form and emailing to [email protected].
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Transactions Requiring a Manual Lock Request:
Transaction
Scenario
Fannie Mae HomeStyle
High Balance
Fannie Mae
High Balance
MyCommunityMortgage (MCM)
Conventional
Run on DU 9.0 with LTV > 95%
Conventional
Run on DU 9.0 with EA eligibility
6.2
Best Efforts
X
X
X
X
Mandatory
X
X
X
X
Best Efforts/Mandatory Locks
FGMC offers Correspondents two options for selling mortgage loans—Best Efforts and Mandatory, each
with its own benefits. An explanation of the two types of locks can be found below. Note that loans cannot
be switched from Best Efforts to Mandatory option (or from Mandatory to Best Efforts) after a loan has
been locked.
6.2.1 Best Efforts Definition
A Best Efforts Lock is an agreement between FGMC and the Correspondent for the purchase and sale of a
specified, eligible mortgage loan by a specific date and for a specific price. Correspondents commit to
providing their best effort to sell this loan to FGMC. A Best Efforts Lock is borrower and property specific.
Choosing this option means that the Correspondent will not incur borrower-driven fallout risk prior to the
loan closing. Things to remember:
 For loans that do not close, Correspondents may cancel the lock without incurring a pair-off fee.
 For Re-Locks, Correspondents are obligated to perform within the Re-Lock terms of this policy.
Notes:
 A loan may not be switched from Best Efforts to Mandatory after a loan has been locked.
 A pair-off fee is a fee assessed when the aggregate principal balance of a mortgage funded or
purchased under a delivery commitment falls below the tolerance specified. (See Pair-Off Policy.)
6.2.2 Mandatory Lock Definition
A Mandatory Lock is an agreement between FGMC and the Correspondent for the purchase and sale of a
specified, eligible mortgage loan by a specific date and for a specific price. The Correspondent commits to
sell the loan(s) to FGMC and failure to do so may result in a pair-off fee.
Note: A loan may not be switched from Mandatory to Best Efforts after the loan has been locked.
6.2.3 Service Release Premium
FGMC pays the Correspondent a Service Release Premium (SRP) on each loan based on specific loan
criteria. The SRP is included in the GNMA (FHA, VA, USDA loans) and Fannie Mae TPO base pricing.
6.2.4 Loan Registration
All loans must be registered prior to requesting a lock. All bulk registrations must be completed within 48
hours of commitment. For instructions on how to register a loan, refer to the Web Portal Instructions
located on the FGMC Correspondent website under Forms or go to the Registering a New Loan section of
this Guide.
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6.2.4.1 Lock Confirmations
Lock confirmations are sent automatically via email to the Correspondent upon FGMC confirming a lock
was requested via FGMC’s online locking system. All lock confirmations will be sent to the email assigned
to the User during the online Web Portal setup. If a lock confirmation is not received upon locking a loan
online, the Correspondent should email [email protected] to ensure that FGMC has the most recent
contact email on file.
In addition, all lock confirmations for loans that are locked online may be retrieved after a loan is locked
by the Correspondent, at any time. For instructions on how to retrieve lock confirmations online, refer to
the Locking and Change Request Manual located on the FGMC Correspondent website under
“Resources/Forms” or contact the assigned Account Executive.
Lock confirmations for all manual requests will be sent via email by the FGMC Lock Desk within 24 hours
of request.
6.2.4.2 Off-Sheet Pricing Request
Requests for off-sheet pricing must be submitted to: [email protected] no later than 4:00 PM ET and
confirmed with FGMC no later than 5:00 PM ET. In addition, off-sheet pricing is only available as a
mandatory delivery.
6.2.4.3 Duplicate Locks
Correspondents must monitor their pipeline to prevent duplicate loans and double locks (same borrower,
same property address, etc.). A lock commitment is associated with one specific physical address. If a
property address changes, a new lock is required and will not be considered a duplicate lock.
In the event that the Correspondent locks a loan with the same property address more than once, the
following procedures will apply:
If two loans are registered and locked with same
borrower/ property address and…
Both loans have locks that are active,
Then the...
The original loan is canceled and a new loan, with the
same property address, is locked ≤ 30 days from the
cancellation date,
Worst case pricing and applicable relock fee will apply,
in addition to all previous relock and extension fees.
The second loan will be canceled and will count
against the Correspondent’s fallout percentage.
Original loan will remain active and FGMC will apply
worst case pricing between the two locks. The second
loan will be canceled and will count against the
Correspondent’s fallout percentage.
Note: In the event that the Correspondent locks a loan Mandatory with the same property address more
than once and both locks are active, the second loan will be canceled and subject to a pair-off fee and
count towards the Correspondent’s fallout percentage.
6.2.4.4 Fallout
FGMC will monitor the Correspondent’s fallout percentages. FGMC will contact any Correspondent with
excessive fallout percentages (typically over 20%) to determine the origin.
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6.2.4.5 Lock Periods
The standard lock periods include 15, 30, 45, and 60 days. Extended locks are available; see Error!
eference source not found. for more information. Remember that before a lock can be tracked and
confirmed from FGMC’s system, the loan must be registered in the portal.
Additionally:
 Loans must be in Approval status prior to lock expiration (i.e. cleared for purchase)
o
The closed loan package must be received, AND
o
Loan has been reviewed and cleared by FGMC Due Diligence for all prior-to-purchase
(suspense) conditions.
 For loans that are delivered to FGMC by the lock expiration date, an automatic and free 10-day
extension will be applied.
 The 10-day free extension will provide additional time to clear prior-to-purchase suspense
conditions.
 If the loan has not been cleared for purchase after the free 10 days, automatic extensions will be
charged per the rate sheet in increments of 15 days.
 After 45 days of automatic extensions at a charge, the lock will expire and is subject to re-lock or
pair-off fees per this policy.
Note: Lock Periods section of this policy DO NOT apply to Mandatory Trade Desk loans. Loans must be
delivered to FGMC in fundable condition (credit and closed loan package) before 4:00 PM ET on day of lock
expiration. If FGMC detects a deficiency during the funding review process, suspense conditions will be
issued via the online portal for the Correspondent to access or through direct email contact with the
Correspondent. It is the Correspondent’s responsibility to review and clear these suspense items quickly in
order to avoid extension charges.
6.2.4.6 Non-Delegated 1x Close Construction to Permanent Cap and Float Down Option
Correspondents will choose rate and price on the current HomeSweetHome, H.O.M.E. (Home Opportunity
Made Easy) or Welcome Home rate sheet.
The loan will be approved at the Correspondent’s selected note rate. This will be the ceiling/cap rate.
The loan will be underwritten, approved, and closed using the ceiling/cap rate.
If the loan does not close and is not delivered to FGMC in a fundable condition within 60 days from the
initial lock period, the rate lock MUST be extended. For all VA and any FHA loans in which the builder is
responsible for construction loan fee/interest and charges, the builder will be responsible for paying the
rate lock extension fees.
Upon completion of construction within the construction period, the borrower will receive EITHER the
then current market price for a loan with the same pricing or the ceiling/cap rate, whichever is the lower
of the two at the time of completion. For example, if a loan closed and the rate was capped at 5.75%, at
the time of completion the current rate is 5.0% then the loan would convert at the 5.0% rate. If however
the current rate is 5.875%, then the loan would convert at the 5.75% capped rate. The FGMC loan
administrator will be responsible for the loan conversion and it will happen automatically without the
requirement of a request or fees/charges to the broker.
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6.2.4.7 Non-Delegated 1x Close Construction to Permanent Upfront Extended Lock
The loan will be approved at the maximum rate for DU A/E approval. The Correspondent can lock at any
rate up to the maximum rate used for DU A/E approval. There are lock periods from 60-270 days listed on
the HomeSweetHome, H.O.M.E and Welcome Home rate sheet that may be selected.
The rate lock period MUST exceed the estimated date of completion by 30 days. The rate lock period can
be extended up to 270 days. Extensions will be charged per the HomeSweetHome, H.O.M.E and Welcome
Home rate sheet.
If the Home and Final Loan Documentation are not completed (C/O, Modification of Note, Title Updates,
etc. – ‘Completion’) prior to the expiration of the rate lock period, the rate lock MUST be extended.
Extensions will be charged per the HomeSweetHome, H.O.M.E and Welcome Home rate sheet. For all VA
and any FHA loans in which the builder is responsible for construction loan fee/interest and charges, the
Builder will be responsible for paying the rate lock extension fees. Lock extensions must be obtained until
the house is completed.
6.2.4.8 Lock Expiration Date
When the initial lock expiration date falls on a weekend or holiday, the lock expiration date is
automatically moved to the next business day.
Loans must be delivered in fundable condition (credit and closed loan package) on or before 11:59 PM ET
one calendar day prior to the lock expiration date. Loans delivered after the lock expiration date will be
subject to FGMC re-lock policies.
6.2.4.9 Lock Extensions
(Only applies to lock extensions done prior to delivery of loan to FGMC. Otherwise, charged Auto
Extensions apply as listed in “Lock Periods” section of this policy.)
Correspondent Sellers may request an extension on or before the lock expiration date. If a lock is expired
an extension may not be requested and the loan must be relocked. When requesting an extension before
the lock expiration date, the request may only be submitted and will only be granted by FGMC when the
loan is within 15 days of lock expiration.
For example, if a loan is locked on the 1st of the month for 30 days then an extension can be submitted
any day after the 16th of that same month.
The number of days selected for extension will be added to the expiration date. Lock extension days are
available in 7, 15, or 30 day increments at the extension price listed on the FGMC Correspondent Rate
Sheet or 30 days on Non-Delegated 1x Close Rate Sheet. See below for the maximum number of
extensions and the total maximum of extension days.
Conforming
Non-Del 1x Close
Max extension requests
Max extension days
3
45
2
60
Extension Days
Extension Cost
7 Days
(.125)
15 Days
(.250)
30 Days
(.500)
All extension requests done prior to delivery of loan to FGMC must be submitted online. FGMC will only
accept email extension request for loans that were originally locked manually.
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6.2.4.10 Relocks
Relocks may only be submitted on expired locks. If a loan has been expired for at least 30 days, then it is
considered a new lock and pricing will be based on current market. Loans that have been expired for less
than 30 can be relocked for 15 or 30 days (Correspondent Rate Sheet) and 60, 90, 120, 150, 180, or 210
days (Non-Delegated 1x Close Rate Sheet). Relocks for loans expired for less than 30 are subject to worse
case pricing plus the applicable relock fee, and all previous extension/relock fees. Relock fees can be
found on the table below. Loans may only be relocked one time.
Relock Days
Relock Fee
15 Days
(.250)
30 Days
(.500)
Note: Relock fee applied to FGMC Delegated and Non-Delegated Rate Sheets only.
If at the time of Relock the rate has increased, the worst of pricing between existing price and current
price on the new rate lock will apply.
If at the time of Relock the product is changed, the worst of pricing between the existing price on the
original product and the current price on the new product will apply. The price may not improve
regardless of product change.
6.2.4.11 Renegotiations
Correspondents may submit a Renegotiation Request from the time the first Rate Sheet is generated until
4:00 PM ET to [email protected]. Correspondents are responsible for calculating the renegotiated gross
price using the Renegotiated Price Calculation below. The renegotiation price is based on the FGMC
Correspondent Rate Sheet that is in effect when the request is received. Requests received after 4:00 PM
ET will not be processed and a new request must be submitted the next business day within the
renegotiation hours listed in this policy.
Renegotiated rate must result in a minimum of 0.125 improvement in rate to the borrower. Only one
renegotiation is permitted per loan and product changes are only permitted if requested at the same time
of the renegotiation. The final pricing for the renegotiated product and/or rate cannot exceed the final
pricing from the original product and rate. Re-locked loans are not eligible for renegotiation.
Conforming Renegotiation Price Calculation:
+
+/+
=
Current 60-day Base Price
Renegotiation fee (-0.25)
Current day price adjustments
Prior extension or relock fees
Current day SRP (if applicable)
Renegotiated Gross Price
6.2.4.12 Pair-Offs via Mandatory Rate Sheet Locks
Mandatory locks are subject to a pair-off when current market price is greater than the market price when
the lock was originally committed or when the mandatory lock has been extended. Pair-offs apply to
Canceled locks, Non-delivery prior to lock expiration, and Duplicate locks.
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Example of pair-off fee calculation:
Locked loan amount:
Original Price:
Current Price:
$100,000.00
100.00
100.25
Positive Market Movement:
Roll Charges (1 Month)
Total Pair-off
.25
.25
0.50
$100,000 x (0.25% + 0.25%) = $500 (pair-off fee due to FGMC)
Amount x (Market Movement + Extension Cost) = Pair-off fee due
Note: FGMC will not remit for negative market movement pair-offs.
Pair-off fees are due within 15 calendar days and must be sent to:
Mail:
Attn: Accounts Receivable
Reference: Pair-off Fee
(FGMC Loan Number), (Borrower Name)
Wire:
Texas Capital Bank National Association
2350 Lakeside Blvd, Suite 800
Richmond, TX 75082
Account Number: 2111035230
ABA Number: 111017979
Account Name: First Guaranty Mortgage Corporation
6.2.4.13 Canceling Mandatory Locks via Rate Sheet
Correspondents may cancel the lock, but may be subject to a pair-off fee if current market pricing is
higher than market price from the original lock date.
6.2.4.14 Swaps on Mandatory Locks via Rate Sheet
Swaps will be considered on Mandatory commitment locks via the FGMC Correspondent Rate Sheet on
a case by case basis. All requests should be sent to [email protected] by 4:00 PM ET for consideration.
Swaps should be the same product and will be subject to a 2% loan amount tolerance.
6.2.4.15 FGMC Mandatory Trade Desk
FGMC has a mandatory trade desk that offers bid indications on mini-bulk, bulks, forwards, and supports
Assignment of Trade (AOT) transactions. To receive a bid indication, a data tape should be sent to
[email protected]. A sample data tape can be found on the FGMC Correspondent website under Forms.
For any inquiries, contact the designated Account Executive.
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Mandatory Trade Desk
Transaction Types
Mini-bulk or Bulk
Assignment of Trade
(AOT)
Forward Trades
Definition
Correspondent submits a pool of loans on data tape to: [email protected]. If the trade is
awarded, the pool of loans is then delivered to FGMC under the specified trade commitment
terms. Pools must be a minimum of $2 million in unpurchased principal balance per trade.
Exceptions can be considered upon request.
Correspondent is responsible for negotiating a trade price directly with FGMC trade desk,
and the applicable security must be taken out via an FGMC-approved Broker/Dealer. Upon
completion, the trade is assigned to FGMC, and the pool of loans is delivered under the
specified commitment terms. The minimum AOT commitment amount is $2 million in
unpurchased principal balance. Exceptions can be considered upon request. AOT letters
must be sent to [email protected].
Correspondent negotiates a forward trade price that is non-loan specific directly with FGMC,
and a pool of loans are delivered to fill the forward commitment under the specified forward
commitment terms. A Commitment Report will need to be sent to [email protected]
reflecting new loans as they are added. The minimum forward commitment amount is $2
million in unpurchased principal balance. Exceptions can be considered upon request.
6.2.4.16 Trade Confirmations
Trade confirmations will be provided via email after a bid indication is awarded and final acceptance of
the final price is made by FGMC. All bid indications are subject to market movement prior to confirmation
and may require a re-price without notice.
6.2.4.17 Delivery Timeframes
Terms and conditions of trades will be available at the time a bid indication is provided. Loans are required
to be registered on the FGMC Web Portal within 72 hours, or the commitment may be cancelled and pairoffs assessed if applicable. Bulk registration options are available by request.
6.2.4.18 Delivery Tolerance
All Mandatory Trade Desk transactions must be filled to within 2% (above or below) of the commitment
amount. Full re-pricing may occur if any material loan characteristic changes appear during delivery.
6.2.5 Pair-Off Policy
All non-delivery of any type of Mandatory Trade Desk transactions is subject to a pair-off when current
market price is greater than the market price when the transaction was originally committed or when the
mandatory trade has been rolled.
Example of pair-off fee calculation:
Locked loan amount:
Original Price:
Current Price:
Positive Market Movement:
Roll Charges (1 Month)
Total Pair-off
$100,000.00
100.00
100.25
.25
.30
0.55
$100,000 x (0.25% + 0.30%) = $550 (pair-off fee due to FGMC).
Amount x (Market Movement + Extension cost) = Pair-off fee due
FGMC will not remit for negative market movement pair-offs.
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Pair-off fees are due within 15 calendar days and must be sent to:
Mail:
Attn: Accounts Receivable
Wire:
Texas Capital Bank National Association
2350 Lakeside Blvd, Suite 800
Richmond, TX 75082
Account Number: 2111035230
ABA Number: 111017979
Account Name: First Guaranty Mortgage Corporation
Rolling Mandatory Trade Desk Transactions
The undelivered balance of any Mandatory Trade Desk transaction may be rolled to the next settlement
month at a cost of 30 basis points for 30 days. There is a maximum of 3 rolls for any Mandatory Trade
Desk transaction.
Note: It is important to monitor commitment pipelines closely, and notify the FGMC Mandatory Trade Desk
of any transactions that cannot be filled to mitigate pair-off exposure during periods of market volatility.
Swaps
Correspondents may substitute a loan in a mini-bulk or bulk transaction. The substitution does not need
to match the original commitment or loan parameters, but is subject to worst of spread from the original
commitment date, or in the case of an AOT, the date of the original trade, or current date. A new trade
commitment will be established, canceling the swapped undelivered amount from the original
commitment.
Canceling a Mandatory Trade Desk Transaction
To cancel a Mandatory Trade Desk transaction, email a request to [email protected]. Pair-offs may be
assessed (if applicable) according to Mandatory pair-off rules and calculations listed in this policy. A single
cancellation request can be made while in due diligence by notifying the assigned Transaction Manager
and Account Executive.
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7
DELIVERY PROCEDURES
At this point, the Correspondent has been approved, attended training for the FGMC Web Portal, and
determined the best loan delivery option (such as importing a DU 3.2 file and uploading PDFs of the Credit,
Collateral and Closing documents). See the GETTING STARTED section.
For document delivery, the Correspondent follows this procedure:
Step/Status
1
Started
Action
Log on to the FGMC Web Portal (WEB PORTAL INSTRUCTIONS) to allow direct access for Document
Upload based on the loan type, refer to Appendix E for FGMC's stacking order for each product.
Correspondent fee will apply as follows (to be netted from proceeds):
Delegated Correspondent
Non-Delegated Correspondent
All Loans $595 - FGMC fully underwrites the
Closed Loan $295 – After performing the
loan.
underwriting, deliver the closed loan package
2
Processing
3
Submitted
4
Decisioned
5
Resubmitted
for review
Note: On loans where FGMC administers the escrow account, supplemental origination charges will
be incurred.
Once document upload is complete, loan processing begins.
Correspondent sends the Collateral Package to FGMC internal file reviewer:
Deutsche Bank National Trust Company
Santa Ana, CA 92705
Note: Correspondent should email the tracking information to [email protected]
Await a list of pre-purchase conditions from FGMC.
Loan has been conditioned; waiting for conditions from Correspondent.
Conditions received from Correspondent pending FGMC review.
6
Approved
Loan is ready for purchase. FGMC must receive either reverse Bailee letters or original Collateral prior
to purchase.
7
Closing
The loan is progressing through the purchase queue, has been confirmed locked and the required
documents have been received.
8
Funding
FGMC delivers package to Document Custodian; Purchase Advice has been created and sent to
Correspondent and Funding Department.
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9
Final Docs
Ship Final Documents using Exhibit C – Final Documents Transmittal which provides more details
about how to prepare and send the loan package.
Step
Action
Correspondent collects all Final Documents for the loan.
1
2
3
4
5
Correspondent sends all completed documents to FGMC using the Transmittal Form
and loan account number.
FGMC receives the documents and updates the file as received.
FGMC notifies the Correspondent of any exceptions found during the Quality Control
(QC) review.
Once all exceptions are cleared, QC sends the documents to the Document Custodian.
Document Custodian removes any delinquent report or update with the new
exception.
To: First Guaranty Mortgage Corporation
Attn: Final Docs
Frederick, MD 21703
For questions with Final Docs, send email to: [email protected].
6
7.1
Overview
The Closed Loan Package of any mortgage loan that is being considered for purchase by FGMC must be
delivered prior to the expiration date of the related Lock Confirmation. “Delivered” means the Closed
Loan Package and any supporting documentation, except for Collateral documents (which are required to
be delivered as original documents), have been submitted through the FGMC Web Portal. Next, Collateral
documents are submitted. And finally, once the loan is cleared, approved and funded, Final Documents
are shipped.
7.1.1 Document Upload
The following critical documents should be included in the imaged loan package upload:
 Completed FGMC Correspondent Loan Submission Form.
 All documents, except for original Collateral documents (which are required to be submitted as
original documents), must be delivered using the FGMC Web Portal by image.
 Copy of the original Mortgage Note with intervening endorsements, endorsed “Pay to the order
of FGMC, without recourse.”
 Copy of the original Mortgage/Deed of Trust, and any riders as indicated on the Mortgage/Deed
of Trust. Deed of Trust copy must be stamped as a certified true copy of the original and include
a signature along with the name of the company making the certification.
 Copy of the original Title Insurance Policy or if the original policy has not been issued, the
irrevocable commitment to issue the same.
 Copy of the Power of Attorney, if used to execute Note or Mortgage/Deed of Trust. Power of
Attorney copy must be stamped as a certified true copy of the original and include a signature
along with the name of the company making the certification.
 Copy of the Private Mortgage Insurance Certificate, if required by program guidelines.
 Evidence of adherence to all applicable local, state and federal regulations as well as compliance
with all FNMA (Fannie Mae), FHLMC (Freddie Mac), FHA, VA and USDA specific disclosures and
forms.
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7.1.2 Purchasable Form
The COMMITMENT POLICY/LOAN LOCKS section of this Guide details the possible penalties associated
with delivering files that are not in purchasable form.
FGMC considers a delivered file to be in purchasable form if it meets all product and program parameters,
federal, state and local laws and regulations, industry standards, including FGMC-specific documentation
requirements. All loans will be reviewed in a timely manner after receipt and the Correspondent will be
notified of any issues which impact the purchase of the loan.
Note: FGMC will not purchase any loan that is not current. Payments must be up to date.
7.1.3 Collateral Package
FGMC requires the original final Collateral Documents on all Conforming Mortgage Loans and on
Government Mortgage Loans when applicable, with the exception of Mortgages (Deeds) that are pending
recordation in the appropriate jurisdiction, for which a Certified True Copy will be provided. The Collateral
Package must be shipped no later than the same day that the loan package is delivered (via the FGMC
Web Portal) to FGMC.
The Collateral File for each loan submitted for purchase by FGMC should include the following:
 Original Note with intervening endorsements, endorsed “Pay to the order of First Guaranty
Mortgage Corporation, without recourse” and signed by an authorized officer of the
Correspondent
 Allonge, if necessary, must be permanently affixed as required by the applicable Uniform
Commercial Code
 Wiring instructions or Bailee Letter, as applicable
 Power of Attorney, if applicable
 Copy of certified true copy of Mortgage/Deed of Trust
 Riders to Mortgage/Deed of Trust, as applicable
 Legal description
 Title commitment
 Name Affidavit for all borrowers, if applicable
The Collateral Package is reviewed prior to the mortgage loan being approved for purchase. Any
deficiencies are noted as “Loan Conditions” which may require that the Correspondent send additional
documentation.
For purchased mortgage loans, FGMC requires Correspondents to use express shipping service to track
shipments and ensure timely delivery of the Collateral Package. Correspondents should ensure that all
Collateral is addressed exactly as follows:
Deutsche Bank National Trust Company
Santa Ana, CA 92705
Note: Correspondent should email the tracking information to [email protected] once documents have
been shipped.
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FGMC will perform a compliance review including, but not limited to, the following:
 Confirm legal documents are complete and conform to requirements
 Review final HUD-1, Good Faith Estimate (GFE) and Truth-in-Lending (TIL) forms for
completeness and accuracy
 Review (applications taken on and after 10/03/15) final Closing Disclosure (CD) and Loan
Estimate (LE) for completeness and accuracy
 Confirm Annual Percentage Rate (APR) accuracy and execute all applicable compliance tests
 Validate compliance with Qualified Mortgage (QM) and Ability to Repay (ATR) requirements
 Validate loan collateral (Note)
 Reverse Bailee
 Copy of the Note
 Allonge/Allonge validation
 Endorsement to FGMC is accurate
If a Note defect is identified prior to purchase, FGMC will contact the Correspondent and may allow
changes to be made provided the correction is accompanied by the borrower(s) initials.
7.2
Closed Loan Documentation
The Correspondent’s Closed Loan delivery package documentation should adhere to the following
policies. These requirements will help ensure that all applicable documentation is accurate and complete
in order to avoid delays in the review and purchase of a loan.
7.2.1 Ability to Repay and Qualified Mortgage Rule
FGMC complies with the Consumer Financial Protection Bureau’s (CFPB) Ability-to-Repay (ATR) and
Qualified Mortgage (QM) Rule (“Rule”). FGMC requires Correspondents to also comply with the Rule’s
ATR and QM provisions. In accordance with the Rule, it is the policy of FGMC to ensure that the Lender
makes a reasonable good faith ATR determination using verified and documented information.
Eligible for Delivery to FGMC
FGMC will only purchase loans that meet the requirements for Qualified Mortgages under the Truth in
Lending Act (TILA), including, but not limited to, ATR, maximum allowed points and fees, and prohibited
loan features. FGMC will accept QMs that meet the TILA requirements for either Safe Harbor or
Rebuttable Presumption QMs. Correspondents should consult with their compliance and/or legal counsel
for more information on compliance with the ATR-QM rule.
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ATR-QM Compliance Requirements
 Loans must be originated, underwritten and closed in accordance with the ATR-QM regulations.
 Lender must evidence compliance with the ATR-QM rules by:
o Ensuring underwriting documentation clearly defines how income, liabilities and resulting DTI
were calculated. This can be documented on the FGMC Income Data Worksheet or by using
a Lender’s own form with materially the same information.
o Identifying any affiliate business relationships on the Affiliate Disclosure Form.
o Completing the FGMC Correspondent Loan Submission Form:
 Identify loan application date information
 Identify loan lock information (lock with the borrower, not with FGMC)
 Accurately identify the proper ATR-QM designation
 Identify how points and fees were determined and provide documentation
 Indicate QM points and fees test utilized
 Identify any bona fide discount points excluded and provide information to support them
o Ensuring loans are underwritten and documented (as appropriate to loan program) according
to the following guidelines:
 Fannie Mae - DU as Approved/Eligible only for Correspondent
 FHA – TOTAL Mortgage Scorecard – DU and LP accepted
 VA - DU and LP accepted
 RHS/USDA – GUS
7.2.2 Required Forms and Reference Data
Forms (all forms are required with each loan submission):

FGMC Correspondent Loan Submission Form (only this form may be provided)

Certification of Seller Paid Points (this form or a similar form may be provided)
Affiliate Disclosure Form (this form or a similar form may be provided) if applicable


FGMC Income Data Worksheet and Instructions (this form or a similar form may be provided)
Links:

FGMC Correspondent Website: www.fgmccorrespondent.com

Average Prime Offer Rates (APOR) Index: https://www.ffiec.gov/ratespread/aportables.htm
7.2.3 Bailee Specifications
For each Mortgage Loan that is delivered to FGMC and for which a third party holds an interest, a Bailee
Letter must be included in each file and be identified sufficiently. The Bailee Letter should include:

Correspondent name,

Loan number,

Principal balance, and

Wiring or payment instructions.
When the Note is delivered, the Bailee Letter must be included with the Note. A Bailee or Trust
arrangement is not established and a security interest in the mortgage loan is not valid if a Bailee Letter
is sent to FGMC separate from the applicable Note.
7.2.4 General Closing Specifications
Correspondent loan documents must conform to the specifications of the applicable mortgage loan
program and all applicable federal, state and local laws and regulations.
Mortgage loans must incorporate the most current Fannie Mae/Freddie Mac Note and Security
Instruments, including all applicable riders and addenda.
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The Correspondent warrants that all delivered loans comply with the restrictions on transactions with
Specially Designated Nationals and Blocked Persons and the Sanctioned Nations administered by the
Office of Foreign Assets Control of the US Department of the Treasury.
7.2.5 Note Endorsement
For each mortgage delivered to FGMC, the original of the Note must be delivered with the Final
Documents according to the requirements of this Guide and the Note must bear the following
endorsement by the Correspondent:
PAY TO THE ORDER OF FGMC WITHOUT RECOURSE
___________________________________________________________
(Correspondent Company Name exactly as shown on the face of the Note)
___________________________________________________________
Signature of Duly Authorized Officer (Typed name and Title of Authorized Signer)
7.2.6 Due-On Sale Clause
The uniform instruments include provisions governing whether the loan will be accelerated if the
borrower sells or transfers the mortgaged premises or any interest in the mortgaged premises or whether
instead the loan may be assumed by a third party who acquires the mortgaged premises, or any interest
in the mortgaged premises by sale or transfer. These provisions are sometimes referred to as “due-on
sale” clauses.
 Uniform instruments for different mortgage products may have different due-on-sale clauses.
 The type of due-on sale clause set forth in the uniform instruments used to originate a particular
mortgage determines whether or not the mortgage is assumable by the party to whom the
mortgaged premises are transferred.
7.2.7 Initial Application Date
At the time of registration/commitment of a Best Effort loan, the Correspondent must identify the initial
application date.
7.2.8 Late Charge
The Note for a conventional first mortgage must provide for the borrower to pay a 5% late charge on any
installment that is not received by the 15th day after it is due. If state law does not allow a charge at that
rate, the maximum amount that is allowed should be used. The late charge should be computed on the
principal and interest (P&I) installment only, not on the full monthly payment – Principal, Interest, Taxes,
Insurance (PITI).
7.2.9 Mortgagee Clause
Note: It is the Correspondent’s sole responsibility to ensure that all vendors are notified to change the
mortgagee clause to:
Attn: Servicing Dept.
5280 Corporate Drive B200
Frederick, MD 21703
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7.2.10 HUD-1 Settlement Statement/Closing Disclosure
A completed and signed original/certified copy of the Final HUD-1 Settlement Statement or Closing
Disclosure (applications taken on and after 10/03/15) is required by FGMC, and must be included in the
closing file for purchase.
7.2.11 Underwriting Conditions
All underwriting conditions, such as prior-to-close and at-closing, must be satisfied prior to purchase.
7.2.12 Tax Requirements
IRS Form 4506-T Requirements
Correspondents are required to submit a borrower-signed Request for Transcript of Tax Return Form
4506-T signed by each borrower and dated at closing.
Tax Transcripts
Tax transcripts are required for each borrower whose income is utilized as a source of repayment,
however tax transcripts are not required for non-credit qualifying (e.g. FHA Streamline, VA IRRRL).
Transcripts must be provided for the number of years of income used to qualify the borrower. If only W2 income is used to qualify, the lender may obtain W-2 transcripts as long as tax returns are not included
in the loan file.
If tax transcripts are not available, a copy of the IRS notice showing “No record of return filed” is required
along with documented acknowledgement receipt (such as IRS officially stamped tax returns or evidence
that the return was electronically received) from the IRS and previous one year of tax transcripts.
Tax Return Verification (TRV) Rejections
When the IRS rejects the request for the borrower’s Tax Return Verification (TRV) transcripts due to
identity theft (IRS rejection code 10), FGMC will accept alternative documentation. The information noted
below should NOT be used when a “no record found” or “data does not match” response is received from
the IRS.
The following documentation will be accepted:
When the Reason for IRS Rejection Then Provide…
is….
Identity Theft
 A copy of the notification from the IRS alerting the tax payer to
the possible identification theft(IRS rejection code 10)
 Validation of the reported income on the tax returns by providing
the following documentation:
o Borrower obtained Record of Account Transcript, in pdf
format, for all applicable years missing from www.irs.gov,
or all of the following:
 W-2 or 1099 transcripts which match the W-2 or
1099 income reflected on transcripts,
 Validation of prior tax year(s) income (income for
the current year must be comparable to prior
year(s)
Do not use the guidelines reflected above when a “no record found” or “data does not match” response
is received from the IRS.
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Federal Income Tax Return Due Dates
Some sources of income require personal federal income tax returns and/or business returns. The
requirements below are based on application date and disbursement date of which annual personal
federal income tax returns and/or business returns are necessary.
Application Date
Disbursement Date
a
October 15 , [current October 15a [current
year minus 1] to April year minus 1] to April
14b, current year
14b, current year
April 15a, current year
to June 30, current
year
Documentation Required
The most recent year’s tax return is required. The use of a Tax
Extension (IRS Form 4868) is not permitted.
The previous year’s tax return (the return due in April of the
current year) is recommended, but not required.
The underwriter must inquire whether the borrower(s) has
completed and filed their return with the IRS for the previous
year. If the answer is yes, the underwriter must request copies
of that return. If the answer is no, the underwriter must
request copies of tax returns for prior two years.
The underwriter also must condition for the signed IRS Form
4506–T for transcripts of tax returns (FGMC is not required to
file IRS Form 4506–T for tax returns not provided by the
borrower.)
July 1, current year to The FGMC must obtain
October 14b, current
year
• the most recent year’s tax return, OR all of the following:
a
a
April 15 , current year April 15 , current year
to
to December 31, • A copy of IRS Form 4868 (Application for Automatic Extension
b
of Time to File U.S. Individual Income Tax Return) filed with the
October 14 , current current year
IRS,
year
– The underwriter must review the total tax liability reported on
IRS Form 4868 and compare it with the borrower’s tax liability
from the previous two years as a measure of income source
stability and continuance. An estimated tax liability that is
inconsistent with previous years may make it necessary for the
underwriter to require the current returns in order to proceed.
• IRS Form 4506–T transcripts confirming “No Transcripts
Available” for the applicable tax year, and
• Returns for the prior two years
(a)
(b)
January 1, [current The most recent year’s tax return is required. The use of a Tax
year
Extension (IRS Form 4868) is not permitted.
b
plus 1] to April 14 ,
[current year plus 1]
Or the April/October filing dates for the year in question as published by the IRS.
Or the day prior to the April/October filing dates for the year in question as published by the IRS.
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Note: For business tax returns, if the borrower’s business uses a fiscal year (a year ending on the last day
of any month except December), the lender may adjust the dates in the above chart to determine what
year(s) of business tax returns are required in relation to the application date/disbursement date of the
new mortgage loan.
7.2.13 Satisfaction of Risk Screening Conditions
FGMC may, at its sole discretion, utilize third-party risk screening services for any group or category of
loans.
7.2.14 Eligible Loan Modifications
Any eligible loan modification must be signed by all borrowers on the Note and/or Mortgage, as
appropriate based on the scope of the modification, and the signed modification must be provided to
FGMC prior to purchase. Loan modifications presented to FGMC after purchase may not be accepted and
repurchase may be required—these are considered on a case-by-case basis.
7.3
Assignment of Mortgage
All Correspondents must be Mortgage Electronic Registration Systems (MERS) members, able to register
and transfer loans through MERS. All loans must be registered with MERS at time of delivery to FGMC and
a MERS transfer of beneficial rights and transfer of servicing rights must be initiated by the Correspondent.
Note: FGMC can assist the Correspondent in registering loans if they are awaiting membership
confirmation from MERS. Correspondent will provide paper assignment to FGMC, FGMC will record the
loan with MERS, and Correspondent will submit Collateral and Final Docs as required.
If a mortgage is registered with MERS and MERS is not the original mortgagee of record, the lender must
ensure that:
 An assignment to MERS has been prepared, duly executed and recorded prior to delivery for
purchase.
 The chain of assignments is complete and recorded from the original mortgagee to MERS.
 The Mortgage Identification Number (MIN) is located on the bottom center of the assignment.
 The MERS phone number (888-679-6377) must be printed at the bottom of the page.
If a mortgage is registered with MERS naming MERS as original mortgagee of record, no assignments
are necessary if:
 The mortgage is originated naming MERS as the original mortgagee of record, solely as nominee
for the lender named in the Security Instrument and the Note, and the lender's successors and
assigns.
 The lender has ensured that the Security Instrument is properly executed, acknowledged,
delivered and recorded in all places necessary to perfect a first lien security interest in the
mortgaged premises in favor of MERS, solely as nominee for the lender named in the Security
Instrument and the Note, and lender's successors and assigns.
 The MIN must be placed on the Security Instrument to the right of or below the form title, but
NOT within the recording margin of the document.
 Additional verbiage approved by the agency must be added to the Mortgage/Security Instrument.
MERS Corporate Office can provide the correct state-specific verbiage.
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7.4
Mortgage Loan Purchase
Once the Correspondent has successfully delivered the loan file, FGMC performs a thorough review, which
includes an examination of documentation and a verification of adherence to all applicable underwriting
guidelines and federal, state and agency regulatory compliance.
Requirements
 A loan file is not ready for purchase consideration until the Collateral has been received and
reviewed by FGMC.
 The funding method will be selected based on the file type and individual Correspondent
agreement.
 A Purchase Advice will be created for each loan (or group of loans) and provided to the
Correspondent for review.
 Once the loan is reviewed, it will be classified as “approved” or “declined.” For approved loans,
the funds are wired to the account/institution as provided to FGMC. For declined loans, the
Correspondent is notified and given an opportunity to rectify and resubmit.
Loan Options
 Pre-Closed
o Loans are submitted for review by the approved Correspondent prior to the loan closing.
o Conditions issued by FGMC are gathered and cleared by the Correspondent’s underwriters
(delegated authority).
o Conditions and the closed loan package will be reviewed by FGMC to verify all requirements
have been met prior to loan purchase.
 Closed
o Loans are submitted for review after the loan has closed in the Correspondent’s name.
o File review is completed and any material items are addressed with the Correspondent.
o Once material items have been addressed, loan can be purchased.
Note: In most cases, FGMC will wire funds for purchase of a mortgage loan within 24-48 hours after the
date of FGMC’s approval to purchase the loan, provided loan re-pricing is not required.
7.4.1 Calculation of Purchase Proceeds
To accurately determine the amount of purchase funds, FGMC starts with the base price as indicated in
the confirmation letter and then adds or subtracts from the loan total as follows:
 Addition of any applicable pricing specials.
 Increase or decrease for accrued interest based on the funding date.
 Decrease for any applicable price adjustments.
 Decrease for escrow and buy-down account funds collected.
 Decrease for any outstanding unpaid fees due to FGMC.
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7.4.2 Decline to Purchase
In some cases, FGMC may have declined a mortgage loan for purchase. In those instances, the
Correspondent will be notified of the identified issues and provided with a timeframe to correct any errors
and resubmit the loan for purchase consideration.
Common errors include, but are not limited to, the following:
 Original promissory note is not properly endorsed.
 Original Note is missing.
 Underwriting approval is missing or incomplete.
 No Mortgage Insurance Certificate.
 Inaccurate escrow calculations on the HUD-1.
Note: Any instances of suspected fraud in the origination of the mortgage loan or a breach of any other
representation, warranty or covenant made with respect to the mortgage loan as stated in the Guide or in
the Correspondent’s Loan Purchase Agreement will be cause for immediate rejection.
7.4.3 Principal Balance Purchased
FGMC determines the principal balance at the time of purchase as follows:
 The first loan payment due for loans that have been purchased on or after the first day of the
month will not be amortized.
 The first loan payment due for loans purchased on/after the twelfth day of the month will be
amortized.
 FGMC will also withhold all PMI/MIP funds associated with amortized payments. Prior to loan
purchase, Correspondents are responsible for ensuring timely remittance of PMI/MIP payments
on these loans as well as any late fees incurred.
 To request a refund on a previously remitted PMI/MIP payment, the Correspondent must provide
a copy of evidence of payment.
7.4.4 Accrued Interest
Accrued interest will be paid to the Correspondent or deducted from the purchase proceeds based on the
first scheduled principal and interest payment due to FGMC:
 For principal and interest payments due to FGMC scheduled for the first day of the month
following the month in which a mortgage loan was purchased, FGMC will pay the Correspondent
accrued interest at the interest rate stated in the applicable note from the first day of the month
of purchase through the day prior to the date of purchase.
 For principal and interest payment due to FGMC on the first day of the second month after the
month of purchase, the purchase proceeds paid by FGMC will be reduced by an amount equal to
interest accrued at the interest rate stated in the applicable note from the date of purchase
through the last day of the month of purchase.
All loan products will accrue interest using a 365 day interest factor at time of purchase, although they
can be closed using 360 days or 365 days interest factor.
7.4.5 Escrow Waiver Fees
The Escrow Waiver Fee is a deduction from the base price of the loan. The Correspondent can refer to the
Loan Pricing Adjustments (LPA) to determine any applicable escrow waiver fee. LPAs are listed on the
FGMC Correspondent Rate Sheet.
7.4.6 Power of Attorney (POA)
All POAs must be reviewed and approved by FGMC prior to purchase/closing to ensure that legal, agency
and investor requirements are met.
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POA Guidelines - General
 The POA must comply with state and federal laws.
 The POA must be durable (the POA survives the subsequent incapacity or disability of the
principal).
 The POA should be specific to the transaction (e.g., should contain a description of the property).
 The POA must specifically authorize the actions necessary to close the loan, whether it is a
purchase or refinance, and the terms of the loan cannot exceed the authority in the POA
 The title company must always approve the POA as they are the party insuring the loan. The title
company should review the POA to ensure it complies with state and local requirements regarding
validity, signature and acknowledgment.
 The Final Title Policy must not contain any exceptions relating to the POA.
 The POA must be recorded with the Mortgage/Deed of Trust.
 A POA should only be used in extraordinary circumstances.
 A letter of explanation providing the reason for the necessity of the POA must be included in the
loan file.
 The POA must be properly executed in accordance with the laws of the state in which the
borrower executes it.
o Examples of state law requirements, while not exhaustive, include:
 Number of witnesses
 Particular witness attestation language
 Particular state notarial act requirements
 Disinterested witness requirements, including whether notary can serve as
witness
 Specific language required to be included in the POA
 State laws requiring itemized authorization by principal
 That there is no order of conservatorship that conflicts with the authority of the
POA
 Correspondents must provide a certified copy of the POA in the closed loan package. Failure to
provide a certified copy will result in funding delays and the loan may be subject to re-pricing.
 Correspondent lender must complete the initial review to confirm the POA is still effective and
not expired at the time the closing documents are executed.
 Additional agency and investor guidelines must be met.
 Unless it is a proper military POA under Title 10 of the United States Code, POA signed outside of
the United States must be acknowledged before the United States embassy or consulate.
 Please note that, in addition to the specifications set out in this Section, there may be additional
requirements and conditions specified by applicable Agencies and Investors that will need to be
fulfilled prior to the acceptance of a mortgage loan by FGMC with respect to proper execution of
closing documents and/or the use of POA’s and Trust authorizations as set out herein.
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7.4.7 Trust Review Guidelines
FGMC may purchase loans where the property is held in a revocable trust provided that the trust meets
investor and FGMC guidelines. All trusts (where property is closing in a trust or the property is deeded out
of the trust prior to closing) must be reviewed and approved by FGMC. At a minimum, FGMC will require
a copy of the trust documents and the title commitment documents. In most cases, a current trust
certification or affidavit which confirms the powers of the trustees and the continuing existence of the
trust will also be required. Additional conditions may apply.
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The review will include the following criteria:
A complete copy of the trust including all referenced schedules and amendments except in those
states where an executed Certificate of Trust is acceptable instead of the entire trust agreement.
The trust should be signed, notarized, and dated by all applicable parties.
Trust affidavit or certificate of trust signed by the trustees shortly before or at closing.
The individual(s) establishing the trust (“Grantor” or “Settlor”) is alive at the time of loan
application, and loan closing/funding.
The trust has been established in writing by a natural person and is to be effective during their
lifetime. (The trust is not created in a will or codicil.)
The Grantor(s) has the right to revoke or alter the trust.
The primary beneficiary of the trust is the Grantor(s) (the interest and principal of the trust estate
is applied for their benefit) and the mortgage has been underwritten as if the Grantor (or at least
one of the Grantors) is the borrower (or the co-borrower, if there are additional individuals whose
income or assets will be used to qualify for the mortgage.)
The loan applicant(s) are both the Grantor(s) and the trustee (or one of the co-trustees).
The trustees must include at least one of the Grantors, if there are two or more, or an institutional
trustee that customarily performs trust functions (i.e., a bank).
The trustee(s) has the power to mortgage and borrow money.
The trust does not contain an unusual risk or impairment of the lender’s rights (i.e., distributions
required to be made in specified amounts from other than net income).
The title must be vested: in the name of one trust; jointly in the trustee (s) of the inter vivos
revocable trust and in the name(s) of an individual borrower(s); or in the trustee(s) name if more
than one inter vivos revocable trust.
The title policy assures full protection to the lender, its successors, and/or assigns, and must state
that title to the property is vested in the trustee(s) of the trust. (It must not list any exceptions
arising from the trust ownership of the property.)
The agency or investor signature requirements must be met. See also, signature requirements set out in
Section 7.4.8.
Trust documents must be provided FGMC at least four (4) business days prior to anticipated purchase by
FGMC.
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7.4.8 Signature Specifications
Signatures on all closing documents must meet the following specifications:
 Each borrower’s name and signature must be consistent on all closing documents; matching to
the names appearing on the title insurance policy.
 Signatures must appear exactly as they are typed on the document. Each borrower’s signature
must appear directly above his or her typed name in the signature portion of each signed
document.
 FGMC does not accept electronic signatures on closing documents.
 If corrections to the documents are required, then ONLY strike-overs are permitted and any
change must be initialed by each borrower.
Note: All loans will be reviewed for these signatures as stated above please see examples below.
The preprinted signature should indicate that the borrower is signing through a Power of Attorney
(POA) and preprinted signature should match the signature of the borrower
By way of example, the following is acceptable:
Mary Jones, by John Smith attorney in fact
Mary Jones by John Smith attorney in fact
Mary Jones as attorney in fact for John Smith
Mary Jones by John Smith attorney in fact
By way of example, the following is not acceptable:
Mary Jones, by John Smith attorney in fact
Mary Jones
Mary Jones
Mary Jones by John Doe, attorney in fact
Mary Jones
Mary Jones, attorney in fact
The preprinted signature should indicate that the borrower is signing in their capacity as a Trustee and
the preprinted signature should match the actual signature of the borrower.
By way of example, the following is acceptable:
NOTE:
Mary Jones, individually and as trustee of the Jones Family Trust
Mary Jones, individually and as trustee of the Jones Family Trust
MORTGAGE/DEED OF TRUST:
Mary Jones, trustee of the Jones Family Trust
Mary Jones, trustee of the Jones Family Trust
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7.5
Title Insurance Specifications
The mortgage loan must be covered by an ALTA (American Land Title Association) lender’s title insurance
policy or a title insurance policy which provides the same coverage as the equivalent ALTA form. The
insurance policy must adhere to the following requirements:
 The policy must be issued by a title insurer, acceptable to the applicable Agency that is qualified
to do business in the jurisdiction where the mortgaged property is located.
 The policy must ensure that the Correspondent, its successors and/or assigns, is in a first priority
lien position.
 The policy must insure the Correspondent, its successors and/or assigns, is insured for the full
mortgage loan amount.
The previous requirements are subject only to the following exceptions:
 The lien of current real property taxes and assessments not yet due and payable.
 Covenants, conditions and restrictions, rights of way, easements and other matters of public
record as of the date of recording acceptable to mortgage lending institutions generally and
specifically referred to in the lender’s title insurance policy delivered to the originator of the
mortgage loan and (i) referred to or otherwise considered in the appraisal made for the originator
of the mortgage loan or (ii) which do not adversely affect the appraised value of the mortgaged
property set forth in such appraisal.
Where required by state law or regulation, the Mortgagor has been given the opportunity to choose the
carrier of the required title insurance. Additionally, such lender’s title insurance policy affirmatively
insures ingress and egress, and against encroachments by or upon the mortgaged property or any interest
therein.
The Correspondent is the sole insured of such lender’s title insurance policy, and such lender’s title
insurance policy is in full force and effect and will be in force and effect upon the consummation of the
transactions contemplated by this Agreement. No claims have been made under such lender’s title
insurance policy, and no prior holder of the Mortgage, including the Correspondent, has done, by act or
omission, anything which would impair the coverage of such lender’s title insurance policy including
without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any
kind has been or will be received, retained or realized by any attorney, firm or other person or entity, and
no such unlawful items have been received, retained or realized by the Correspondent.
Each loan file prior to purchase shall contain:
 Closing Protection Letter (CPL) dated no later than thirty (30) days from the date of the Note.
 Title binder dated no later than sixty (60) days from the date of the Note.
7.6
Private Mortgage Insurance
The Correspondent is required to purchase a commitment/policy from an Agency-approved private
mortgage insurer prior to the mortgage loan closing for all loans requiring Private Mortgage Insurance
(PMI). The Correspondent must forward a Change of Servicer notification to the PMI Company once FGMC
has purchased the loan, if the Correspondent’s name appears in the mortgagee clause.
Proper Disclosure of PMI Premium
The Correspondent ensures that as of the date a mortgage loan is purchased, PMI has been secured and
any upfront premiums for PMI have been paid. If PMI cost has not been properly disclosed to the
borrowers, the Correspondent is responsible for correcting the error at no charge to the borrower. FGMC
will order the correct mortgage insurance coverage amount and invoice the Correspondent for the actual
cost if necessary.
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Captive Re-Insurance
All PMI policies must be eligible for reinsurance by FGMC or its affiliates.
Acceptable PMI Types
 Borrower Paid Monthly
 Borrower Paid Single Premium
 Financed: Gross LTV cannot exceed FGMC program maximum
 Split Premium
 Lender Paid Single Premium
Unacceptable PMI Types
 Lender Paid Monthly
 Lender Paid Annual
 Borrower Paid Annual
 Reduced coverage
 Any MI type not listed as acceptable
7.6.1 Government Insuring Documents
FGMC will require evidence of the FHA MIC, VA LGC or USDA LNG prior to funding when the government
loans are received for purchase by FGMC and/or have been pended at FGMC, and it has been over 60 days
from the date of closing. When providing Government Mortgage Insuring documents on loans after FGMC
purchase, Correspondents should follow this procedure:
Step
Action
1
FGMC purchases government-insured loan.
2
Correspondent emails the acceptable documents (PDF format) to FGMC at [email protected].
3
Acceptable Government Mortgage Insuring Documents are:
 FHA – Mortgage Insurance Certificate (MIC)
 USDA – Loan Note Guaranty (LNG)
 VA – Loan Guaranty Certificate (LGC)
Once the FGMC Insuring Department has processed the documents, the Correspondent will receive an
acknowledgement of receipt.
Notes:
 If insurance document is not received the loan will become eligible for repurchase and a formal
letter may be sent.
 In the event of any insurance defect, Correspondent is required to contact FGMC at
[email protected] within 7 business days of notification.
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Any joint loan for which the veteran will hold title to the property with any person other than the
veteran’s spouse must be submitted for prior approval to the VA before the loan closing.
Additionally, the VA will only guaranty the portion of the loan that is allocable to the veteran’s
interest in the property. No portion of the guaranty will be applied to the portion of the loan
allocated to the non-veteran, non-spouse. In this particular case, FGMC will only purchase loans
with a minimum 25% guaranty, therefore a down payment may be required, if the transaction is
a purchase, or the property must contain sufficient equity, if a refinance, to meet the 25%
guaranty.
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USDA – Loan Note Guaranty (LNG) information:
Roundpoint (Servicing Lender)
Tax ID # 26-1193089
Agency assigned branch # 001
5032 Parkway Plaza Blvd
Charlotte, NC 28217
FGMC (Holding Lender)
Tax ID# 54-1429575
Agency assigned branch # 001
7.7 Hazard Insurance
7.7.1 Hazard Insurance General Specifications
TITLE INSURANCE POLICY - NAME OF INSURED
First Guaranty Mortgage Corporation, ISAOA/ATIMA
HAZARD INSURANCE POLICY - MORTGAGEE CLAUSE
FHA LOANS (Sponsor ID No. 7516800469)
VA LOANS (Sponsor ID No. 6852450000)
First Guaranty Mortgage Corporation, ISAOA/ATIMA and/or Secretary of Veterans Affairs, ISAOA/ATIMA
CONVENTIONAL LOANS
USDA LOANS
ADDITIONAL INFORMATION
Abbreviations: If an abbreviation is necessary, use the following only (please note, there should be NO
abbreviations used for Agency names):
First Guaranty Mtg. Corp., ISAOA/ATIMA &/or [Insert COMPLETE Agency Name], ISAOA/ATIMA
For ND Loans name should be: First Guaranty Mortgage Corporation dba FGMC, ISAOA/ATIMA
For NY Loans name should be: FGMC In Lieu of True Corporate Name First Guaranty Mortgage Corporation,
ISAOA/ATIMA
7.7.2 Types of Hazard Insurance Coverage
One-to-Four Family Residences
One-to-four family residences must protect against loss or damage from fire and other hazards covered by the
standard extended coverage endorsement. The coverage should be of the type that provides for claims to be
settled on a replacement cost basis. FGMC will not accept hazard insurance policies that limit or exclude from
coverage (in whole or in part) windstorm, hurricane, hail damages, or any other perils that normally are included
under an extended coverage endorsement. A lender should advise borrowers that they may not obtain hazard
insurance policies that include such limitations or exclusions—unless they are able to obtain a separate policy or
endorsement from another commercial insurer that provides adequate coverage for the limited or excluded peril
or from an insurance pool that the state has established to cover the limitations or exclusions. The coverage should
be of the type that provides for claims to be settled on a current replacement cost basis.
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PUD
Individual insurance policies are required on Planned Unit Development (PUD) units unless the PUD unit is covered
under the project’s blanket policy and the PUD project’s constituent documents allow the individual PUD units to
be included in the projects blanket policy. In addition, the homeowner association must maintain a policy which
covers the common areas, fixtures, equipment, personal property and supplies of the project.
Condominium
On a condominium unit, an individual hazard insurance policy is not required. Before delivering a mortgage loan
to FGMC, the Correspondent must verify that coverage is in force for the entire project.
7.7.3 Amount of Hazard Insurance Coverage
For first lien home mortgages on 1-4 unit properties, the hazard insurance coverage must be equal to lesser of:
 100% of the insurable value of the improvements—as established by the property insurer or
 Guaranteed Replacement Cost Endorsement, which provides that the insurer agrees to replace the
insurable property, regardless of the cost or the Replacement Cost Endorsement or
 The unpaid principal balance of the mortgage, as long as it equals the minimum amount (80%) of the
insurable value (total appraised value minus the estimated site value) required to compensate for damage
or loss calculated on a replacement cost basis.
If the hazard insurance is not equal to at least one of the above minimum coverage amounts, then additional
hazard coverage that meets the minimum coverage amounts must be obtained before the loan can be purchased.
If the estimated site value, opinion site value, or an appraisal addendum signed by the appraiser is not available
on the appraisal, the documents below are acceptable in the following order:
1. Insurance value from the insurance agency.
2. Third party vendor may have been used by the vendor.
3. If the site value is not noted, the tax assessor value from the title policy/commitment or tax assessment
form may be used for the calculation.
Hazard insurance policies that include optional coverage not required by FGMC are acceptable provided that
FGMC is not obligated to renew any part of the coverage not required hereunder.
7.7.4 Hazard Insurance Deductible
The deductible for hazard policies must conform to agency guidelines unless otherwise specified below.
7.7.5 Additional Hazard Insurance Coverage
PUD
Requirements for 1-4 unit properties apply to similar residential properties within a PUD or a ground lease
community. If the individual units are covered by insurance purchased by their respective owners or leasehold
lessees, the PUD homeowner association or the fee simple landowner/lessor of the ground lease community must
maintain "all risk" coverage for common areas and property for 100% of their insurable value and provide for loss
or damage settlement on a replacement cost basis. The association or fee simple landowner/lessor must also
obtain any additional coverage commonly required by private mortgage investors for developments similar in
construction, location and use, including the following where applicable and available:
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Agreed amount
Demolition cost
Increased cost of construction
Boiler and machinery
The insurer's minimum liability per accident under boiler and machinery coverage must equal the insurable value
of the building housing such boiler or machinery or $2 million, whichever is less.
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First Guaranty Mortgage Corporation must give prior written permission for this work, or any part thereof, to be used, reproduced, or transmitted in any form or by any means, by or to any
party outside of First Guaranty Mortgage Corporation, its regulators and investors.
FGMC will also accept blanket insurance covering all units in the PUD or ground lease community as well as
insurable common areas and property, if called for in the PUD's governing documents or in the lease. Such
coverage must meet the requirements applicable to each PUD or ground lease community unit and those
applicable to insurable common areas and property. Deductibles are allowed under this blanket coverage under
the terms and conditions stipulated above.
The PUD's or ground lease community fee simple owners' insurance policy must name the insured in substantially
the same language as follows: Association of the Owners of the Planned Unit Development for the use and benefit
of the individual owners (designated by name, if required by law or the governing documents).
Condominiums
Condominiums must be covered by an insurance policy which protects against fire, and all other hazards that are
normally covered by the standard extended coverage endorsement, and all other perils customarily insured
against by similar types of projects, including those covered by the standard “all risk” endorsement. If the policy
does not include an “all risk” endorsement, FGMC will accept a policy that includes the “broad form” covered
causes of loss. The homeowner association must maintain the hazard insurance policies described in this Guide.
Premiums with respect to such policies should be considered a common expense of the project.
Policies covering the common elements for a condominium project must cover all of the common elements except
for those that are normally excluded from coverage, such as land, foundation, excavations, etc. Fixtures and
building service equipment that are considered part of the common elements, as well as common personal
property and supplies, should be covered. FGMC will accept such policies in satisfaction of the insurance
specifications for the units, if the project’s legal documents allow for blanket insurance policies to cover both the
individual units and common elements.
The “master” or “blanket” policy covering the common elements of a condominium project must cover all of the
general and limited common elements that are normally included in coverage such as fixtures, building service
equipment and common personal property and supplies belonging to the homeowner association.
The policy must also insure fixtures, equipment, and other personal property inside individual units if they will be
financed, whether or not the property is part of the common elements. The condominium owners association
must maintain blanket “all risk” coverage for the following:
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General and limited common elements within the condominium project
Fixtures, machinery, equipment and supplies maintained for the service for the condominium project
Fixtures, improvements, alterations and equipment within the individual condominium units
Coverage must be for 100% of the insurable value of the common elements or property described above and
provide for loss or damage settlement on a replacement cost basis. The additional coverage required for PUD
homeowner associations is also required for condominium owner associations where applicable and available.
The deductible for fire, water (not caused by flooding) or wind damage to the insured improvements (generally
designated as "building" in the insurance policy) may not exceed 5% of the limit maintained for building coverage.
The insurance policy of the condominium owners association must name the insured in substantially the same
language as follows: Association of Owners of the _______ Condominium for the use and benefit of the individual
owners (designated by name, if required by law or the governing documents).
If the mortgaged premises are in a Detached Condominium Project and the condominium governing documents
so permit, FGMC will accept insurance for the mortgaged premises that meets the requirements of 1-4-unit
properties. The condominium unit owners association must maintain all other applicable insurance coverages
required.
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7.7.6 Special Endorsements
The following endorsements are required for PUD and condominium projects:
 Inflation Guard Endorsement, if available;
 Construction Code Endorsement, if there is a construction code provision that would require changes to
undamaged portions of the subject project’s building(s) even when only a part of a building is destroyed
by an insured hazard;
 Steam Boiler and Machinery Coverage Endorsement, if the project has central heating or cooling. The
minimum coverage per accident must be at least equal to the lesser of $2 million or the insurable value
of the building(s) containing the boiler or machinery. Separate stand-alone boiler and machinery coverage
may be purchased in lieu of obtaining this endorsement.
In addition, policies covering a condominium project should provide that:
 Insurance trust agreements will be recognized;
 The right of subrogation against unit owners will be waived;
 The insurance will not be prejudiced by any acts or omissions of individual unit owners that are not under
the control of the homeowner association; and
 The policy will be primary, even if a unit owner has other insurance that covers the same loss.
These provisions are usually covered by a Special Condominium Endorsement.
7.8
Flood Insurance
Prior to loan purchase, a Flood Zone Determination Certification (FZD or Flood Cert) is required for each loan file.
Flood Insurance is required for any property located in a Special Flood Hazard Area (SFHA) which has federally
mandated flood insurance purchase specifications. Properties located in SFHA designated by the symbols “A” and
“V” on a Flood Insurance Rate Map (FIRM) require flood insurance.
7.8.1 Non-Participating Communities
FGMC does not purchase mortgages secured by properties which are determined to be in an SFHA and which are
located in areas where the community does not participate in the National Flood Insurance Program.
7.8.2 Flood Determination Certification
If the property is located in an SFHA requiring flood insurance, the Correspondent represents and warrants that,
as of the date a mortgage loan has been purchased, flood insurance has been purchased and the premiums for
flood insurance have been paid.
7.8.3 Required Documentation
Flood insurance generally should be in the form of the standard policy issued under the National Flood Insurance
Program. The declaration page of a policy is acceptable evidence of flood insurance coverage.
If flood insurance is required, the mortgage loan must close with one of the following:
 A complete flood insurance policy containing a standard mortgagee clause which must read as described
in the Guide.
 A complete application to the National Flood Insurance Program (NFIP) with evidence that the first year
premium on the policy has been paid and an elevation certificate if the property was constructed after
the date on the FIRM.
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7.8.4 Elevation Certificate
A new elevation certificate may be obtained from a private engineer, architect, land surveyor, or a local
community permit official who obtains the information by transcribing data from the building permit records
provided that the data has been certified.
FGMC will accept the following alternative documentation:
 A copy of the property seller’s elevation certificate;
 A copy of the property seller’s flood insurance declaration page (provided the elevation information is on
the declaration page); or
 A completed application to the NFIP with evidence that the first year premium on the policy has been
paid, and a completed Flood Insurance Certification Form if the property was constructed before the FIRM
date.
With respect to new construction, elevation information may be obtained from the city engineer or the
developer’s site planning engineer. To determine whether a property was constructed before or after the FIRM
date, consult the Community Status Book published by the NFIP.
7.8.5 Amount of Coverage
The amount of flood insurance required, regardless of property type, is the lesser of:
 The unpaid principal balance of the mortgage, or
 The maximum amount of coverage available under the NFIP for the type of improvements, or
 The replacement cost of the improvements.
Condominium and PUD Projects
The amount of condominium flood insurance coverage in a Master Policy is sufficient if:
 80% of the replacement cost; or
 The maximum insurance available from NFIP per unit (which is currently $250,000).
For PUD units, a Master Policy must cover any common element buildings and any other common property located
in an SFHA. The unit allocation from the Master Policy must meet the one- to four-unit coverage requirements.
The same flood insurance for individual PUD units that is required for other one- to four-unit properties. A standalone dwelling policy may be maintained to meet these requirements.
If the coverage amount does not meet one of the above criteria, the borrower must obtain an individual dwelling
policy to cover the deficiency.
7.8.6 Deductible Amount
Deductible amounts must meet the minimum applicable investor requirements. In addition to any flood insurance
required with respect to a specific condominium or PUD unit, if any parts of a project’s common elements are in
a Special Flood Hazard Area, the homeowner association must maintain a “master” or “blanket” policy of flood
insurance and collect premiums from its members as it would any other common expense.
The specifications for condominiums and PUDs are:
 For PUD projects, the master policy should cover any common elements in the buildings and other
common property.
 For Condominium projects, the policy should cover common elements in the buildings and any other
common property. When the project consists of high-rise or other vertical buildings, the owner’s
association must have a separate flood insurance policy for each building that contains dwelling units.
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7.9
Disaster Policy
Disasters—including (but not limited to) earthquakes, fires, floods, hail, hurricanes, landslides, lightning,
tornadoes—may impact a subject property adversely. While FEMA is the primary source for this information, it
does not always issue declarations immediately following a disaster. Regardless of the issuance of a FEMA Disaster
Notification, anyone with knowledge of potentially adverse conditions within the subject property should take
action to ensure the property meets FGMC’s requirements for purchase. Potentially affected property should be
evaluated for habitability, marketability and any adverse effect on valuation. FGMC will purchase loans on
properties located in FEMA Disaster Declaration Areas provided they meet the requirements as outlined in this
policy.
Note: Specific policies may apply based on the exact type of disaster and may require its own certification form.
7.9.1 Determining Affected Areas
It is the Correspondent’s sole responsibility to be aware of disasters within their lending area. Additionally, the
Correspondent should use available contacts and resources to determine if a property has been impacted by a
disaster and may require repairs. Any damage to the subject property will need to be repaired and property
inspection completed to verify completion of repairs prior to purchase of the loan. FGMC reserves the right to
request additional documentation as proof/certification of the properties habitability, marketability or value.
7.9.2 Valuation Requirements for Property in Affected Areas
In general, this Disaster Policy should be followed during an ongoing disaster and up to 90 days from the disaster
and/or FEMA Declaration.
7.9.3 Valuation and Inspection Requirements
On all files, a certification from the Correspondent must be provided. This certification is required for properties
in both individual and public assistance FEMA disaster areas. The certification requires a signature from an officer
of the Correspondent Company.
For loans in areas where the federal government issued a FEMA Disaster Declaration requiring individual
assistance:
 For FHA, VA, and USDA loans, in addition to any specific requirements set by the government agencies
regarding property inspection, FGMC requires, at a minimum, a 1004D on all loan types where an initial
appraisal was completed. The 1004D should be completed by the original appraiser when possible, or any
approved FHA or VA inspector. For FHA Streamlines or VA Interest Rate Reduction Refinance Loans (IRRRL)
without an appraisal, FNMA 2075 is required when the loan will close within 90 days of the FEMA
declaration. All inspection types should, at a minimum, have:
o Exterior photo of the subject property, evidencing no damage.
o The date of the inspection, indicating it occurred after the end date of the disaster (as indicated on
the FEMA site).
o Appraiser or inspector certification that the subject property is free from damage and in the same
condition or better condition since original inspection. If not, the original inspector/appraiser must
indicate completion of an interior and exterior inspection of the subject to determine no damage to
the subject property.
o If applicable, comments from the appraiser/inspector should reference any adverse conditions in the
area that could negatively impact habitability, marketability, and/or value.
o Additional certification is required on all VA loans as per the VA Guidance on Natural Disasters policy;
this certification must be provided by the Correspondent lender.
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
For FNMA Conventional loans, FGMC requires at a minimum a 1004D on all loan types where an initial
appraisal was completed. The 1004D should be completed by the original appraiser when possible. For
loans without an appraisal, FNMA 2075 is required when the loan will close within 90 days of the FEMA
Disaster Declaration. All inspection types should, at a minimum, have:
o Exterior photos of the subject property evidencing no damage.
o The date of the inspection, after the end date of the disaster.
o Appraiser/inspector certification that the subject property is free from damage and in the same
condition or better since the original inspection. If not, the original inspector/appraiser must
comment that an interior and exterior inspection of the subject has been completed to determine no
damage to the subject property.
o If applicable, include comments from the appraiser/inspector regarding any adverse conditions in the
area which could negatively impact habitability, marketability, and/or value.
o In lieu of an appraiser/inspector on conventional loan types, FGMC will accept a Correspondent
Inspection of the property. This review type is only applicable when:
 The loan type is conventional, and
 The property has sustained no damage.
When a Correspondent Inspection of the property is used:
- At least one clear photo of the subject must be provided,
- An officer of the Correspondent company must sign the inspection, and
- The certification must be completed and submitted on the Correspondent Company’s
corporate letterhead.
o For FNMA Desktop Underwriter® (DU) Refi Plus™, if the lender has reason to believe that fieldwork is
warranted based on additional information obtain about the property or subsequent events such as
a hurricane or other natural disaster (i.e. property located within a FEMA Disaster Area that is eligible
for individual within two years of the disaster declaration date) or based on additional information
provided by DU regarding the subject property and/or loan case file, the minimum property fieldwork
requirement specified by DU must be obtained and the lender is not allowed to exercise a DU Refi
Plus™ property fieldwork waiver.
All inspection reports are subject to review by a member of the FGMC review team or senior management. FGMC
reserves the right to require additional documentation prior to the purchase of any property in a Federally
Declared Disaster Area.
If a property has sustained damage, FGMC will not purchase the subject loan until all damage has been repaired
and the subject has been inspected to reflect a condition acceptable to FGMC and meets all applicable agency
requirements. This final inspection type must be an interior and exterior inspection.
7.9.4 Current Disaster Updates
Correspondents are responsible for checking the FEMA website often for applicable updates.
FEMA website: https://www.fema.gov/disasters.
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7.10 Real Estate Taxes
To facilitate the review of each loan package, it is important for the Correspondent to ensure that all real estate
taxes are paid prior to submission of the loan package to FGMC. Correspondents are also responsible for any tax
penalties incurred by FGMC as a result of the delinquent payment of real estate taxes on the subject property.
The following tax payment guidelines also apply:






Correspondent is required to ensure that all real estate tax payments are current prior to loan purchase
by FGMC. This includes any unpaid taxes that will become due within 60 days from the loan purchase
date.
FGMC will withhold the escrow deposit after purchase of the loan to ensure payment in full of any
outstanding taxes or assessments by the due date.
Correspondent must provide FGMC with evidence of all tax bills paid.
Any funds collected by, or on behalf of, the Correspondent after purchase of the loan must be submitted
to FGMC within three (3) business days of receipt.
In the event of an overpayment of taxes by the Correspondent, FGMC will process a refund after receiving
acceptable proof of payment.
Correspondent must submit all current or new tax information with the closed loan package.
7.11 Escrow/Impound Accounts
The Correspondent must establish an escrow/impound account for each mortgage loan sold to FGMC, except as
outlined in PUD and Condos below.
Note: The escrow/impound account must include a two month escrow deposit for all items with the exception of
mortgage insurance, in which no cushion is to be established.
The Correspondent is responsible for complying with all applicable federal, state, and local laws and regulations
relating to the creation of escrow/impound accounts and prior to the transfer of the escrow account to FGMC.
The following defines the premiums that may be paid from a FGMC Escrow/Impound account:
Held and paid from the Escrow Account (as applicable):
 Real estate taxes
 Hazard insurance premiums
 Flood insurance premiums
 Mortgage insurance premiums
Not held or paid from the Escrow Account:
 Ground rents
 Water or sewer taxes
 Homeowner association dues
 Fire hydrant taxes
 Refuse taxes
 Tax service fees
 Special assessments
PUD and Condos
Escrow/impound deposits are not required to cover hazard insurance premiums for individual condominium or
PUD units if the project containing the unit is adequately covered by a blanket hazard insurance policy purchased
by the homeowner association.
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7.11.1 Escrow Waiver
The Correspondent may waive the escrow/impound account specification with respect to conventional mortgage
loans if the loan to value (LTV) is 80% or less (90% in California), but the standard escrow provision must remain
in the mortgage loan documents. Partial waivers are not allowed. If a waiver is used, there will be a pricing impact
as noted on the rate sheet. The Correspondent’s waiver of the right to collect escrow/impound funds must not
weaken the right of FGMC to subsequently enforce the escrow provision contained in the mortgage loan
documents in the event that the borrower fails to act responsibly.
7.12 Loan Sale Notification
After FGMC purchases and funds a loan, the Correspondent is required to notify the borrower and any applicable
vendors of the sale of the mortgage loan to FGMC.
Note: FGMC requires all applicable federal, state, and agency laws to be followed in the transfer of loan servicing.
7.12.1 Due Dates
For all purchases on or after the 16th of any month, the first date due to FGMC will be adjusted forward one month
accordingly. For example, a loan purchased on April 15th will have a first payment due to FGMC on May 1st. A loan
purchased on April 16th will have a first payment due to FGMC on June 1st.
7.12.2 Borrower Notification
Correspondents are required to comply with all applicable federal, state, and agency laws and regulations
regarding the transfer of servicing. Once the Correspondent receives notification that the loan has been purchased
and funded, the Correspondent must notify the borrower, in writing, within 15 days of the purchase.
At a minimum, the notification (“Goodbye Letter”) must include the following (see Exhibit B – Goodbye Letter):
 Effective date of transfer.
 The name, address, a toll-free telephone number, and hours of operation for an employee or department
at the Correspondent’s office who can answer servicing transfer inquires.
 The name, address, a toll-free telephone number, and hours of operation for an employee or department
at FGMC’s office who can answer servicing transfer inquires.
 Date Correspondent will stop accepting payments.
 Date FGMC will begin accepting payments.
 Any applicable information regarding optional insurance (such as mortgage life or disability) and actions
borrower must take to maintain coverage.
 A statement that servicing does not affect any agreed-upon terms or conditions of the mortgage
documents other than those directly related to loan servicing.
 A statement that, under Federal law, during the 60-day period following the effective date of the transfer
of the loan servicing, a loan payment received by the old servicer on or before its due date may not be
treated by the new servicer as late, and a late fee may not be imposed on you.
 Letter must also indicate that Roundpoint will be the new servicer for the loan
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7.12.3 Servicing Information
Once FGMC assumes the loan, the borrower(s) will receive information about future billing statements, payment
details, etc.
Borrowers will remit first payment to:
Roundpoint Mortgage Servicing Corporation
Attn: Payment Processing
PO Box 674150
Dallas, TX 75267-4150
Notes:
 If previous lender has received payment from the borrower, Correspondent should forwarded that
payment to FGMC to ensure credit.
 Any payments made by the borrower to Roundpoint that were due to Correspondent, must be requested
by the Correspondent within 60 days from time of loan purchase.
 Any servicing or payment discrepancies that require attention must be submitted by Correspondent within
60 days from time of loan purchase.
 Correspondent should contact FGMC Servicing at [email protected].
Borrower general correspondence should be directed to:
Attn: Customer Service
PO Box 19789
Note: Customer correspondence should not be included with payments.
Roundpoint Customer Service contact information:
Toll free: 877-426-8805, Monday – Friday 8:00 AM to 10:00 PM (Eastern Time)
Saturday 8:00 AM to 12:00 PM (Eastern Time)
Website: www.rpmservicing.com
7.12.4 Vendor Notifications
Correspondents must notify all vendors associated with a loan within 15 days of the transfer date. All notifications
must advise the vendor that the sold loan is now being serviced by FGMC and all future notices, tax bills, insurance
statements, and any other information must be delivered to the appropriate address.
Taxes
C/o Roundpoint Mortgage Servicing Corporation
Attn: Escrow Department
PO Box 19409
Insurers (Hazard, Flood, PMI)
C/o Roundpoint Mortgage Servicing Corporation
Its Successors and/or Assign (ISAOA)
As their Interest May Appear (ATIMA)
PO Box 39575
Solon, OH 44139-0575
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7.12.5 Payment Processing Requirements
Borrower funds must always be forwarded separately from Settlement funds (escrows, unapplied funds, tax
contract fees, etc.). Borrower funds are funds received by the seller after the transfer date that are to be posted
to a loan, such as normal payments, bankruptcy trustee payments, payoffs, short payoffs, third-party payoffs and
REO liquidations proceeds.
All payments/borrower funds received prior to the transfer date are to be properly posted by
Correspondent/Servicer unless otherwise directed. Payments/borrower funds received after the transfer date
should not be posted.
All payments/borrower funds, including checks received after the transfer date, must be clearly identified with
borrower name, FGMC loan number, and date the payment is received. This must be properly endorsed to First
Guaranty Mortgage Corporation without recourse. The purpose of each check should be clearly identified
(payment, payoff, etc.). The same information must be provided for any wires.
All payments/borrower funds must be forwarded via overnight delivery to FGMC on a daily basis for a period of
thirty (30) days following the date of transfer and weekly thereafter. All such payments that are received by the
Correspondent after the first 60 days following the date of transfer shall be returned to the mortgagor. All other
funds pertaining to the Mortgage Loans received by Correspondent, including recoveries of advances shall be
forwarded by Correspondent, at Correspondent’s expense, to FGMC or its designee within two business days
following seller’s receipt.
7.12.6 Non-Sufficient Funds
Non-Sufficient Fund (NSF) reimbursement requests must be submitted with the following information to the same
physical address (Serving Dept.) as that used for borrower payments.
 Provide the original NSF check, or legible front and back copy of the NSF check.
 Provide payment history showing detail of the posted amount (breakdown of amounts applied to
principal, interest, fees, etc.).
 Provide mailing instructions for the reimbursement remittance to the Correspondent.
 Provide contact information for the requestor.
7.12.7 Corporate Advances/Invoice Requirements
All advances paid during interim servicing (between purchase date and transfer date) by Correspondent should
be posted to the loan and be included in the final trial balance provided to FGMC. Invoices related to advances
during interim servicing must be submitted to FGMC. FGMC will not reimburse Correspondent for any advances
incurred prior to purchase date.
7.12.8 Wire Instructions
Borrower payments must always be forwarded separately from Settlement funds. Settlement funds include
escrows, unapplied funds, tax contract fees, etc.). See the instructions above for borrower payments.
**FGMC does not permit netting of escrow or suspense funds**
FGMC Operating Acct.
BB&T: 8280 Greensboro Drive
ABA# 051404260
Account# 5136294964
ATTN: Servicing Dept.
GROSS ESCROW AND SUSPENSE FUNDS MUST BE TRANSFERRED
ANY ESCROW ADVANCE WILL BE FUNDED WITHIN FIVE (5) BUSINESS DAYS OF TRANSFER DATE SUBJECT TO
APPROPRIATE SUBSTANTIATION
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All funds wired to FGMC must include the following:
Please send a notification email to [email protected] referencing the total amount of the wire and the date
sent. An electronic report providing loan level details for the wire amount must be provided. This report should
be sent as an attachment to the wire notification email and include:
 Loan numbers
 Borrower name
 Loan level itemization of balances being transferred (escrow, restricted escrow, suspense, etc.)
7.12.9 MERS/Transfer of Mortgage Instructions
MERS Org ID: First Guaranty Mortgage Corporation: 1000314
 Correspondent/Servicer is responsible for creating a transfer of beneficial rights and/or transfer of
servicing rights within MERS no later than three (3) business days after purchase date.
 Correspondent must provide proof of transfer to: [email protected].
 The following items shall be verified upon completion:
o
A Registered MERS MIN number
o
MERS as Original Mortgagee (MOM) flags, if applicable
o
MOM value, if applicable
o
Borrower name & address
o
Note date
o
Note amount
o
Owner occupancy
 If the Correspondent is not a MERS member, they must provide a recorded paper assignment to First
Guaranty Mortgage Corporation, upload a copy, and include original with Final Docs.

If the MIN number has not been transferred within three (3) business days, an administrative fee shall be
incurred by Correspondent/Servicer.
7.12.10



Hazard Insurance
Correspondent/Servicer is responsible for cancelling all force-placed policies on loans effective the date
of transfer.
Correspondent/Servicer is responsible for paying all items due up to 30 days after the date of transfer.
Correspondent/Servicer is responsible for providing the following:
o
A report of payee codes and payee names for all loans.
o
A report of loans that have temporary binder coverage as of the transfer date.
o
A report of loans which had been covered under a force-placed policy, including carrier name
address, and phone number.
o
A report of pending loss drafts, including amounts and servicing files.
o
A file from a flood certification vendor containing the flood zone, community, community status,
map date, certificate number, service type and certificate date for all loans.
All reports must include loan number, borrower name, policy number, and applicable dates. This information must
be received by the transfer date.
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7.12.11
Tax Instructions
Tax Service: CoreLogic. Customer ID: Life of Loan 10820; Periodic 11120
Correspondent/Servicer is responsible for providing all notifications to CoreLogic for life-of-loan, and transfer the
life-of-loan tax contract.


Correspondent/Servicer is responsible for payment of all items due up to 30 days after the date of
transfer.
Correspondent/Servicer is responsible for providing the following:
o
A detailed report by state including loan number, borrower name, payee code, and tax parcel
number for all delinquent taxes on non-escrowed loans.
o
A reverse adds file, or tax tape, shall be provided no later than 5 days after the transfer date.
o
An open items report for escrowed loans for all pending activity through the transfer date + 30 days.
o
A detailed report of any outstanding tax issues including appropriate correspondence and
explanation of the situation as of the transfer date.
o
A report of all open items and send any tax bills and original tax receipts that relate to such loans.
o
A report of all loans with multiple tax parcels.
o
A file from your tax service (Excel format) containing all loan-level tax data.
o
A report of payee codes and payee names for all loans.
o
The tax bills and receipts must be sent daily to FGMC via overnight mail.
7.12.12


PMI & MIP Instructions
Correspondent/Servicer is responsible for payment of all items up to 30 days after the date of transfer.
Correspondent/Servicer is responsible for transferring loans to FGMC:
o
HUD Holder: 75168
o
HUD Servicer: 29921
o
USDA Holder: 54-1429575
o
USDA Servicer: 26-1193089
7.12.13
Escrows
It is the responsibility of the Correspondent/Servicer to pay all escrow-related expenses due prior to and 30 days
after the date of transfer and provide to FGMC documentation of payment.
Escrow Reconciliation Requests
If the Correspondent is due escrow funds from FGMC, then a written request including supporting documentation
must be submitted to the FGMC Servicing Department within 60 days following Mortgage Loan Purchase date.
Correspondent must provide the following documentation:
 Request Escrow Funds or Monthly Payment
 HUD-1 Settlement Statement
 Mortgage Loan History
 Copy of Check (If tax or insurance was paid, or if check was sent to Borrower)
If the required documentation listed above is not received, then the request will be denied pending further
documentation. The Correspondent will have 15 days to respond to the denial letter. If the information is not
received within 15 days, then FGMC will remove all analysis and disbursement stops on the escrow account.
If FGMC approves the request, then the funds will be forwarded to the Correspondent. If the request is denied,
then FGMC will send a letter to the Correspondent outlining the reason for the denial.
If FGMC is due escrow funds from the Correspondent, then a request accompanied by a detailed explanation will
be submitted to the Correspondent requesting the additional escrow funds. If additional information is required,
then the Correspondent should contact the FGMC Servicing Department. All requests receiving no response will
be added to the Correspondent’s monthly invoice.
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After the 60 day timeframe, neither FGMC nor the borrower is responsible for returning escrow funds to the
Correspondent. FGMC will not be responsible for reimbursement of escrow funds to the Correspondent for loans
paid in full or sold.
FGMC may request reimbursement from the Correspondent through 12 months after the purchase of the
mortgage loan. Correspondent is responsible for escrow errors for a complete 12 month cycle after the date of
purchase.
7.13 Final Documents
All Final or Trailing original documents for loans purchased by FGMC must be delivered as they become available
but not to exceed 180 days from the loan close or purchase date. As they are received, FGMC will perform a quality
control review to ensure the documents match the recorded mortgage. Final Documents are critical documents
that, for a number of reasons, cannot be shipped to FGMC with the normal Collateral.
These documents include, but are not limited to, the following:
Document Type
Final Documents Transmittal Form
Mortgage and all Riders
FHA Mortgage Insurance Certificate
USDA Loan Note Guarantee
Private Mortgage Insurance Policy
Paper Copy VA Loan Guarantee Cert. (LGC)
Originals of all Intervening Assignments (allowed by
endorsement only)
Original Assignment all intervening assignments for nonMOM
Original Final Title Insurance Policy
Original Power of Attorney, if applicable
Original Assumptions, Extensions, Written Assurance or
Modifications or Substitutions
When Required
w/ Final Docs
Certified copy prior to purchase / Final Doc – Original
recorded to FGMC
Refer to 7.6.1
Refer to 7.6.1
Final Doc to FGMC
Refer to 7.6.1
Cert. copy prior to purchase / Original recorded / Final Doc
to FGMC
Cert. copy prior to purchase / Orig. recorded final doc to
FGMC
Title prior to purchase / Final policy with Final Docs to FGMC
Cert. copy prior to purchase / Recorded original Final Doc to
FGMC
Cert. copy prior to purchase / Recorded original Final Doc to
FGMC
7.13.1 Delivery
Correspondents should ship the required documents using Exhibit C – Final Documents Transmittal which provides
more details about how to prepare and send the loan package. Forward all Final Documentation to:
Attn: Final Docs
Frederick, MD 21703
Direct any questions regarding Final Documents to: [email protected].
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7.13.1 Shipping Procedures
Correspondents are responsible for forwarding all Final Documents in accordance with the following procedure.
Step
Action
1
FGMC notifies Correspondent that loan has funded.
2
Correspondent collects all Final Documents for the loan.
3
Correspondent sends all completed documents to FGMC using the Transmittal Form and loan account number.
4
FGMC receives the documents and updates the file as received.
5
FGMC notifies the Correspondent of any exceptions found during the Quality Control (QC) review.
6
Once all exceptions are cleared, QC sends the documents to the Document Custodian.
7
Document Custodian removes any delinquent report or update with the new exception.
Note: Allow FGMC time to perform the QC review before inquiring about the file review status.
7.13.2 Recovery
Correspondents will be given 180 days from the day that FGMC purchases the loan to send all Final Documents.
After 180 days, the following will apply:
 A letter will be sent to the Correspondent stating that if the docs are not received within 30 days, FGMC
will require a third-party vendor to take over efforts to obtain them for final certification.
 If after 30 days the documents are not received, the loan may be subject to re-purchase.
 If after 30 days from when the re-purchase letter was sent the Correspondent has not agreed to repurchase the loan, that account may be subject to suspension, locked loans may be subject to
cancellation, and any scheduled funding may be cancelled.
 Any loans that reach 11 months, regardless of third-party involvement, will require re-purchase.
 If at any time a Correspondent has a loan that reaches 12 months, that account will be suspended.
7.13.3 Billing
All third-party charges will be billed to Correspondents on a quarterly basis in arrears for outstanding documents.
In addition, a fee may be billed to the Correspondent for each Final Document that is not received within 180 days
of the FGMC loan purchase date.
7.14 Reporting
As required by the Internal Revenue Service, FGMC reports mortgage interest only for interest paid by the
borrower to FGMC on or after the transfer of servicing from the lender to FGMC. All 1098 reporting for interest
paid at closing or prior to the transfer of servicing to FGMC is the responsibility of the lender.
7.15 Responsible Lending
Correspondents must engage in fair and responsible lending in accordance with all applicable state and federal
laws, including but not limited to the federal Equal Credit Opportunity Act (ECOA), the Federal Reserve Board's
Regulation B (which implements ECOA) and the Fair Housing Act. Correspondents must work to ensure fair lending
and equal access to credit and prevent unlawful discriminatory practices in relation to its lending activities.
7.16 Funding Fees
The fees charged for each submitted loan package are based on the type of review required from FGMC. Once
FGMC completes a satisfactory review and/or underwrite, the fees are deducted from the Correspondent’s
proceeds at the time of funding.
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Delegated Correspondents
Closed
 Delegated Correspondent closes the loan and submits the loan package for review.
 FGMC completes the file review and notifies Correspondent of any issues or follow-up requests.
 After FGMC is satisfied that all conditions have been met, the loan is funded.
Funding Fees
Delegated Correspondent
Closed Loan $295 – After performing the underwriting,
deliver the closed loan package for review.
Non-Delegated Correspondent
All Loans $595 - FGMC fully underwrites the loan.
Note: On loans where FGMC administers the escrow account, supplemental origination charges will be incurred.
7.17 Non-Delegated Loan Delivery
Correspondents approved for non-delegated loan delivery follow a slightly different procedure to allow FGMC to
properly review and underwrite submitted loans. As always, the Account Executive (AE) contact that was provided
upon FGMC approval is the primary contact for questions regarding the Non-Delegated Correspondent (NDC)
procedure.
7.17.1 Non-Delegated Setup
A Correspondent setup as a Non-Delegate follows the same procedure as outlined in this Guide to include:
 Email notification from the FGMC IT Department indicating approval and AE contact.
 Training provided.
 Log-in credentials to allow for file uploads as required.
7.17.2 Loan Package
Correspondents are advised to provide a full, complete package at the time of submission (Exhibit D – NonDelegated Correspondent Checklists/Stacking Order); however, if some items are not available at the time of
submission, packages will be accepted with the minimum docs required below.
Please refer to the minimum requirements for each submitted file. These items may not be applicable to all
files, but this provides Correspondents with a list of documents needed to proceed.
 FGMC Correspondent Loan Submission Form
 Appraisal (not required for submission of a USDA NDC file)
 Sales Contract (if applicable)
 1003 (Unsigned OK)
 Assets / Income
 Credit Report
 Non-Purchaser Special Credit Authorization (If Applicable)
 AUS Findings – FNMA DU only, FHA/VA LP or DU Borrower Credit Authorization (on USDA files, GUS
findings are run in-house)
NOTE: If a submission form is not provided clearly identifying the correct channel, the FGMC Input Department will
hold the file until received (status/milestone will show as PROCESSING). FGMC will accept a TBD file for review as
long as it’s NOT a renovation loan.
Be aware that the less documentation provided upfront for initial underwriter review, the more conditions will be
added to the loan approval.
After receiving a Clear-to-Close from the FGMC Underwriter, the Correspondent can go to Settlement with the
borrower(s). Once Settlement has taken place, the Correspondent has three (3) business days to deliver the
Closing Package to FGMC.
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7.17.3 Loan Programs
The FGMC Non-Delegated Loan Programs follow the policies outlined in this section based on the type of loan that
is submitted for review.
FHA Policy
Correspondents approved by FGMC for Non-Delegated loan delivery that are also approved FHA mortgagees
originating and closing loans in their own name, must use FGMC’s Non-Delegated underwriting services for loan
review, decision, and clearance. These loans may be sold to FGMC as closed FHA loans with FHA case assignments
that adhere to the following requirements:
 The case assignment must reflect FGMC as the Sponsor.
 The case assignment reflects the Correspondent as the Originator.
 The case assignment is a Sponsored Originator Case using the Correspondent’s EIN (removes
neighborhood watch delinquency risk, does not reflect in originating lender’s FHA compare ratio) or the
Correspondent’s FHA ID (origination will still be reflected in the neighborhood watch).
NOTES:
 On Non-Delegated transactions, Correspondents are responsible for paying the Up Front Mortgage
Insurance Premium (UFMIP) on FHA loans and VA Funding Fee (VAFF) on VA loans prior to FGMC
purchasing the loan. FGMC will condition prior to funding all Non-Delegated FHA or VA loans that do not
contain proof of payment in the loan file and will not purchase until proof is provided. Correspondents will
be responsible for all lock extension costs resulting from failure to provide proof of payment of the UFMIP
or VAFF prior to funding. FGMC will continue to net fund from the Correspondent’s Purchase Advice the
upfront MIP on USDA Non-Delegated loans only.
 FHA test cases cannot be underwritten as Non-Delegated and should be underwritten by the test case
lender and sent to the appropriate FHA Homeownership Center (HOC) for commitment. FGMC may
purchase FHA test cases that have a commitment. The lender is required to obtain the FHA MIC after
closing, and provide it to FGMC within 45 days of closing. Test cases are eligible for “pre-close” review. A
pre-close review is not the same as a Non-Delegated underwrite and does not alleviate underwriting or
performance risk.
 FGMC cannot perform Non-Delegated underwriting on loans originated by a third-party originator (TPO)
(Correspondent’s TPO production). FGMC will only underwrite a Correspondent’s retail production through
the Non-Delegated channel. (FGMC may purchase delegated TPO loans and any delegated TPO loans are
eligible for pre-close review.)
Setup
There are two options to properly set up the case assignment as a Sponsored Origination. All Non-Delegated FHA
loans must reflect FGMC as the Sponsor/Agent.
Option A: Allow FGMC to order the case assignment.
Step
Action
1
Sign into the FGMC Web Portal at www.FGMCcorrespondent.com using assigned credentials (or contact
assigned AE).
2
Fill out the secure Case Assignment request form. Be sure to include your company EIN.
3
Await case assignment reflecting FGMC as the Sponsor/Agent and your company as the Sponsored Originator.
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Option B: Transfer an existing case assignment to FGMC.
Step
Action
1
The case assignment must already have been ordered in the name of the Correspondent.
2
The Correspondent must be reflected on the Sponsored Originator List.
If not, email [email protected] to be added.
3
Go to the Case Transfer screen in FHA Connection.
4
Select Sponsored Originator EIN in the dropdown.
5
Enter your company (Correspondent Lender) EIN.
6
Enter New Sponsor/Agent ID (FGMC Sponsor ID: 7516800469).
7
Complete Date of Assignment Letter (input the Day of Request/Change).
8
Click Submit.
7.17.4 Package Review
As the loan moves through the review process, the website will be updated with the current status. The NonDelegated Correspondent should check the website for loan status updates.
The AE will monitor each loan and assist the Correspondent with any issues that require follow-up. The
Correspondent may need to upload requested documents to the FGMC portal to fulfill any requests for
outstanding information. The AE will contact the Correspondent to communicate the loan decision. For USDA
loans, the Underwriter communicates suspense and denials, and the Processor sends approval notifications.
Questions regarding the conditional approval, denial, or suspense should be directed to the Underwriter.
Note: Conditions must always be uploaded through the FGMC online portal and placed in the folder labeled
CORRESPONDENT CONDITIONS SUBMISSION.
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7.17.5 Credit Denials
FGMC is required to provide the originating correspondent with a Statement of Credit Denial, Termination, or
Change on all loans denied. FGMC will upload the Statement of Credit Denial, Termination, or Change to the FGMC
portal. It is the Correspondent’s responsibility to provide the adverse action notification to the applicant in
accordance with the following guidelines:
 If the loan was denied for non-credit history related reasons and the applicant expressly accepts the credit
offered by another lender, a Statement of Credit Denial, Termination, or Change disclosure is not required
to be sent to the applicant by the correspondent.
 If a loan denial is based either solely or partly on information derived from a consumer credit report, the
completed Statement of Credit Denial, Termination, or Change disclosure must include the name, address
and telephone number of the Credit Reporting Agency that provided the information used in the decision.
The Correspondent lender is required to deliver the disclosure regardless of whether or not the loan is
placed with another lender.
 The provisions set forth in the Fair Credit Reporting Act (FCRA) and the Equal Credit Opportunity Act
(ECOA), also known as Reg. B, require creditors to provide applicants with notification of adverse action
in a timely manner.
 The Statement of Credit Denial, Termination, or Change disclosure must be provided to the applicant
within thirty (30) days of the date the completed application was received for underwriting.
 The term “completed application” is defined as a loan application inclusive of all of the necessary
documentation needed to make a credit decision. The thirty (30)-day requirement does not begin until
the final document that was used in the decision to deny the file was received.
7.17.6 Clear to Close
Here are a few things to remember once the loan has been approved:
 A final property appraisal may be issued.
 File stays in a “decisioned” status until the closed loan package is uploaded (which should be within three
days of the loan closing).
 Any required government loan fees must be paid.
 PMI is obtained by the Correspondent.
 USDA guarantee fees are paid by FGMC. These amounts are netted from the funds upon purchase of the
closed loan.
Automated Underwriting System (AUS)
The Non-Delegated Correspondent must run the AUS using Desktop Originator (DO)/Desktop Underwriter (DU) to
obtain an automated approval with findings that may need to be satisfied. If not currently registered with Fannie
Mae, the Correspondent must choose the Investor option on the dropdown menu and select FGMC.
 Correspondents can transfer files to FGMC using their EIN. (Case query will notify FGMC of the transfer.)
 Must be completed prior to Clear-to-Close.
VA Sponsorship
To deliver a VA Non-Delegated loan, Correspondents must designate FGMC as the sponsor to originate. To initiate
the VA sponsorship process, the Correspondent must send a check to FGMC which is then sent to VA to begin the
sponsorship process. This process takes approximately 30 days. In the interim, FGMC may begin the underwriting
process and will obtain the AUS.
Note: FGMC may accept Loan Prospector (LP) results for VA and FHA loans. In those cases, there is no need for file
transfer or drop-down selection.
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VA Underwriting
 Must order case assistant and appraisals.
 Correspondent must obtain Lender Appraisal Processing Program (LAPP) approval, which will allow for
expedited loan processing.
 Correspondents should be set up as IND.
 When Correspondent IND is transferred to FGMC, a Lender Notice of Value (LNOV) will be issued.
 FGMC reviews the VA Portal for completed appraisals of Non-Delegated VA loans.
 The VA Staff Appraisal Reviewer (SAR) will complete their review within the VA allotted time.
7.18 Renovation and Construction Loan Programs
RESERVED
7.19 Property Value for Loans Sold More than Four Months from Note Date
FGMC will allow the Fannie Mae Form 1004D/Freddie Mac Form 442, dated within thirty days of the delivery of
the loan, to evidence that the current value of the property is not less than the original value as long as:
1) Summary Appraisal Update Report section is completed by the appraiser
2) Appraiser has checked off that the Market Value of the Subject Property has not declined
For Seasoned Mortgages, which are mortgages that are more than one year old from the first payment date,
additional conditions may apply for the loan to be eligible to be sold to Fannie Mae.
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8
8.1
Appendix
Exhibit A – Lock Request Form
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8.2
Exhibit B – Goodbye Letter
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8.3
Exhibit C – Final Documents Transmittal
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8.4 Exhibit D – Non-Delegated Correspondent Checklists/Stacking Orders
8.4.1 FGMC FHA Stacking Order
CREDIT PACKAGE
 HUD 92900b Important Notice to Home
 FHA Connection Case Assignment
Buyers
 FHA Refinance Authorization (FHA to FHA)
 FHA Informed Consumer Choice Disclosure
 FHA CAIVRS Print Out
 Notice to Homeowner-Assumption
 TOTAL AUS Approval
(Assumption only)
 92900-LT Transmittal Summary
 Termite Cert with clearance (if applicable)
 Final & Initial 1003
NEW CONSTRUCTION
 92900-A Addendum to URLA (final)
 Engineer Certificate (if Mfg.)
 92900-A Addendum to URLA (initial)
 BOOL worksheet (if applies)
 Credit Report & Supplements
 HUD 92541 – Builder Certification
 VOR
 HUD 92544 – Builders Warranty of
 BK/Collection/Charge Off/Judgement docs
Construction
 Verbal Verification of Employment (VVOE)
 Local Health Authority Well Water Analysis
 Income Documentation (Per AUS or manual
(if applicable)
UW)
 Septic Report (if applies)
 Income Calculation Worksheet
 NPMA 99a Subterranean Termite Protection
 Self-Employment Income Analysis
Builder Guarantee
 Tax Return Transcripts (per AUS)
 NPMA 99b New Construction Subterranean
 4506T (Final)
Termite Service Record
 Verification of Deposit (VOD)
 Building Permit and Certificate of
 Asset Documentation (Per AUS or manual
Occupancy OR 3 compliance Inspections by
UW)
FHA inspector OR 10-year Warranty and
 Gift Letter with proof of transfer
Final Inspection by an FHA Inspector
 FHA Appraisal
 Appraisal Acknowledgement Disclosure
203K
 Final Inspection (If applies)
 Maximum Mortgage Worksheet
 Homeownership Counseling Disclosure plus
 203(k) Borrower Acknowledgement
list
 Borrower Certification – Identity of Interest
 Sales Contract and all addendum(s)
 Homeowner/Contractor Agreement
 Amendatory Clause
 Rehabilitation Loan Agreement
 Real Estate Certification
 Rehabilitation Loan Rider
 Conditional Commitment 92800.5b
 LDP/SAM (Fraud Guard/DRIVE will suffice in
CLOSING PACKAGE
lieu of screen prints)
 Lender Compliance report
 HUD 92561 Borrower contract with respect
 Rate Lock Confirmation
to Hotel and Transient Use (2-4 units only)
 Initial Disclosures
 Energy Efficient Form (EEM only)
o Loan Estimate (with Service Provider
 Identity of Interest Disclosure (IOI only)
List)
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o GFE (pre-TRID)
o Change of Circumstance(s)
o Service Provider List (Pre-TRID)
Final Executed Closing Disclosure/HUD-1
Sellers Closing Disclosure (if applicable)
Escrow Holdback Agreement
Borrower ID(s)
Patriot Act Disclosure
Proof of payment UFMIP (NDU only)
Initial Escrow Account Disclosure
Homeowners Insurance
Master Hazard Insurance (if applies)
HO-6 Policy (for projects when master
insurance policy does not contain walls-in
coverage)
Flood Certificate
Flood Insurance (if applies)
Signed SFHA Notice (if applies)
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Note
Mortgage/Deed of Trust
ARM Disclosure (if applies)
Rider to Mortgage
Modification
Affidavit of Affixation (Mfg)
Limited POA (Mfg)
POA (if applies)
Trust (if applies)
Itemization of Amount Financed (Pre-TRID)
Notice of Right to Cancel (if applies)
Escrow/Closing Instruction (Dry States)
Preliminary Title Commitment
CPL or Closing Attorney E&O
Property Tax Information form (if not in title
commitment)
 Subordination Agreement (if applies)
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8.4.2 FGMC FHA Streamline Stacking Order
CREDIT PACKAGE
 FHA Connection Case Assignment
 FHA Refinance Authorization
 FHA CAIVRS Print Out
 92900-LT Transmittal Summary
 92900-A Addendum to URLA (final)
 92900-A Addendum to URLA (initial)
 4506T (Final)
 Assets (if funds to close needed)
 Appraisal (if applies)
 Appraisal Acknowledgement Disclosure (if
applies)
 Conditional Commitment 92800.5b (if
applies)
list
 HUD 92561 Borrower contract with respect
to Hotel and Transient Use (2-4 units only)
 FHA Informed Consumer Choice Disclosure
CLOSING PACKAGE
List)
o GFE (pre-TRID)
 Final Executed Closing Disclosure/HUD-1
 Borrower ID(s)
 Patriot Act Disclosure
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Proof of payment UFMIP (NDU only)
Master Hazard Insurance (if applicable)
HO-6 Policy (for projects only when master
coverage)
Flood Certificate
Flood Insurance (if applicable)
Signed SFHA Notice (if applicable Mortgage
Payoff(s)
Note
Rider to Mortgage
Limited POA (Mfg)
POA (if applies)
Trust (if applies)
commitment)
Subordination Agreement (if applies)
Copy of 2nd lien note (if applies)
UPB with mortgage payment history (if
mortgage begun amortization at time of
purchase)
Compliance Agreement/Errors & Omission
AKA/Name Affidavit Disclosure
W-9
First payment Letter
Assignment (if Non MERS member)
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8.4.3 FGMC VA Stacking Order
CREDIT PACKAGE
 AUS (DU/LP)
 VA Loan Analysis (26-6393)
 Addendum to URLA Initial & Final (261802a)
 CAIVRS
 VOR
 VA 26-1880 Request for COE
 VA Certificate of Eligibility
 Income Documentation (Per AUS/Manual
UW)
 4506T (Final)
 Tax Return Transcripts (if per AUS)
 Asset Documentation (Per AUS/Manual
UW)
 Gift letter with proof of transfer (if applies)
 VA Appraisal
 VA Notice of Value
 Termite Report with Clearance
 VA Amendatory Clause
 VA Case Assignment (any WEBLG doc)
 VA Counseling Checklist (Active Duty Only)
 VA Child Care Statement (if applies)
 VA Certificate of Duty (Still in Active Service)
 Initial Disclosures including but not limited
NEW CONSTRUCTION
 Warranty of Completion
 Certificate of Occupancy
 VA/HUD 10-year protection plan
 Builder 1-year warranty
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 NPMA 99a Subterranean Termite Protection
Builder Guarantee
 NPMA 99b New Construction Subterranean
Termite Service Record
CLOSING PACKAGE
List)
o GFE (pre-TRID)
 Sellers Closing Disclosure (if applicable)
 Escrow Holdback Agreement
 Borrower ID(s)
 Proof of payment Funding Fee (NDU only)
 Initial Escrow Account Disclosure
 Homeowners Insurance
 Master Hazard Insurance (if applies)
 HO-6 Policy (for projects when master
coverage)
 Flood Certificate
 Flood Insurance (if applies)
 Signed SFHA Notice (if applies)
 Payoff(s) (refinance)
 Note
 Mortgage/Deed of Trust
 ARM Disclosure (if applies)
 Rider to Mortgage
 Modification
 Affidavit of Affixation (Mfg)
 Limited POA (Mfg)
 POA (if applies)
 Trust (if applies)
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 Copy of 2nd lien note (if applies)
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 UPB with mortgage payment history (if
purchase)
 Compliance Agreement/Errors & Omission
 AKA/Name Affidavit Disclosure
 W-9
 First payment Letter
 Assignment (if Non MERS member)
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8.4.4 FGMC VA IRRRL Stacking Order
CREDIT PACKAGE
 IRRRL Rate Reduction worksheet (form 268923)
 Addendum to URLA Initial & Final (261802a)
 CAIVRS
 Prior Loan Validation (verify Case
assignment & funding fee status;
exempt/non-exempt)
 VA Loan Comparison Form (Old loan vs New
loan)
 4506T (Final)
 Asset Documentation (if applies)
CLOSING PACKAGE
List)
o GFE (pre-TRID)
 Borrower ID(s)
 Proof of payment Funding Fee (NDU only)
 Initial Escrow Account Disclosure
 Homeowners Insurance
 Master Hazard Insurance (if applies)
Version 1.2
 HO-6 Policy (for projects when master
coverage)
 Flood Certificate
 Flood Insurance (if applies)
 Signed SFHA Notice (if applies)
 Payoff(s) (refinance)
 Note
 Mortgage/Deed of Trust
 ARM Disclosure (if applies)
 Rider to Mortgage
 Modification
 Affidavit of Affixation (MFG)
 Limited POA (MFG)
 POA (if applies)
 Trust (if applies)
 Itemization of Amount Financed (Pre-TRID)
 Notice of Right to Cancel (if applies)
 Escrow/Closing Instruction (Dry States)
 Preliminary Title Commitment
 CPL or Closing Attorney E&O
 Property Tax Information form (if not in title
commitment)
 Copy of 2nd lien note (if applies)
 UPB with mortgage payment history (if
purchase)
 Compliance Agreement/Errors & Omission
 W-9
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8.4.5 FGMC USDA Stacking Order
CREDIT PACKAGE
 Conditional Commitment 3555-18
 GUS
 Final 1008
 VOR
 Income Documentation (Per GUS or manual
UW)
 USDA Income Calculation Worksheet
 Tax Return Transcripts (per GUS)
 4506T (Final)
 Asset Documentation (Per GUS or manual
UW, if applies)
 Appraisal
list
CLOSING PACKAGE
List)
o GFE (pre-TRID)
 Sellers Closing Disclosure (if applicable)
 Escrow Holdback Agreement
 Borrower ID(s)
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Flood Certificate
Note
Rider to Mortgage
Modification
POA (if applies)
Trust (if applies)
commitment)
purchase)
AKA/Name Affidavit Disclosure
W-9
First payment Letter
Assignment (if Non MERS member)
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8.4.6 FGMC Fannie Mae Stacking Order
CREDIT PACKAGE
 DU
 Final and Initial 1003
 1008
 VOR
 Borrower(s) authorization to release
information (including non-borrowing
spouse if applicable)
 Income Documentation (Per DU)
 Self-Employment Income Analysis
 Rental Income Worksheet (FNMA 1038)
 Tax Return Transcripts (per AUS)
 4506T (Final)
 Asset Documentation (Per DU)
 Appraisal
 Condo docs
 FNMA SSR/UCDP
 PMI Certificate
 Final Inspection (If applicable)
 Homeownership Counseling Disclosure
HOMESTYLE
 Maximum mortgage worksheet
 Homeowner/Contractor Agreement
 Bid/Proposal or SOR
 Consultant work write up or SOR
CLOSING PACKAGE
List)
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Final Executed Closing Disclosure/HUD-1
Sellers Closing Disclosure (if applicable)
Escrow Holdback Agreement
Borrower ID(s)
Patriot Act Disclosure
coverage)
Flood Certificate
Note
Rider to Mortgage
Modification
Limited POA (Mfg)
POA (if applies)
Trust (if applies)
commitment)
purchase)
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8.5
Definitions
The following terms are defined as set forth below:
Accepted Servicing Practices
With respect to any Mortgage Loan, those mortgage servicing practices of prudent
mortgage lending institutions which service mortgage loans of the same type as such
Mortgage Loan in the jurisdiction where the related Mortgaged Property is located.
ALTA
The American Land Title Association or any successor thereto.
Appraised Value
The value set forth in an appraisal made by a Qualified Appraiser in connection with the
origination of the related Mortgage Loan as the value of the Mortgaged Property.
Approved Flood Policy Insurer
A nationally recognized flood insurer approved by Fannie Mae, Ginnie Mae and HUD, or
other insurer as may be approved by Purchaser from time to time.
Approved Tax Service Contract Provider
A nationally recognized tax service contract vendor approved by Fannie Mae, Ginnie Mae
and HUD, or other similar vendor as may be approved by Purchaser from time to time.
Assignment of Mortgage
An assignment of the Mortgage, notice of transfer or equivalent instrument in recordable
form, sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect the sale of the Mortgage to the Purchaser.
Business Day
Any day other than (i) a Saturday or Sunday, or (ii) a day on which banking and savings
and loan institutions in the Commonwealth of Virginia are authorized or obligated by law
or executive order to be closed.
Closing Date
The relevant date on which the Purchaser from time to time shall purchase and the Seller
from time to time shall sell the Mortgage Loans listed on the related Mortgage Loan
Schedule.
Condemnation Proceeds
All awards or settlements in respect of a Mortgaged Property, whether permanent or
temporary, partial or entire, by exercise of the power of eminent domain or
condemnation, to the extent not required to be released to a Mortgagor in accordance
with the terms of the related Mortgage Loan Documents or applicable law.
Cut-off Date
The first day of the month in which the Closing Date occurs or as otherwise set forth in
the Trade Confirmation.
Deleted Mortgage Loan
A Mortgage Loan which is repurchased or substituted with a Qualified Substitute
Mortgage Loan by the Seller in accordance with the terms of this Agreement.
Escrow Payments
With respect to any Mortgage Loan, the amounts constituting ground rents, taxes,
assessments, water rates, sewer rents, municipal charges, mortgage insurance
premiums, fire and hazard insurance premiums, condominium charges, and any other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant to
the Mortgage or any other document.
Fannie Mae
The Federal National Mortgage Association or any successor thereto.
FHA
The Federal Housing Administration, or any successor thereto.
FICO Score
Statistical credit scores obtained by mortgage lenders in connection with the loan
application to help assess a borrower’s credit worthiness. The FICO Score shall be the
lower of two, or the middle of three, credit scores.
GLB
Gramm-Leach- Bliley Act, 15 USC. § 6801 et seq. Also known as the Financial Services
Modernization Act of 1999.
Ginnie Mae
The Government National Mortgage Association or any successor thereto.
HUD
US Department of Housing and Urban Development.
Insurance Proceeds
With respect to each Mortgage Loan, proceeds of insurance policies insuring the
Mortgage Loan or the related Mortgaged Property.
Liquidation Proceeds
Cash received in connection with the liquidation of a defaulted Mortgage Loan, whether
through the sale or assignment of such Mortgage Loan, trustee’s sale, foreclosure sale
or otherwise, or the sale of the related Mortgaged Property if the Mortgaged Property
is acquired or foreclosed upon in satisfaction of the Mortgage Loan.
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LPMI Fee
LPMI Loan
Material Adverse Change
MERS
MERS Mortgage Loan
MERS System
MI Fee
Monthly Payment
Mortgage
Mortgage File
Mortgage Interest Rate
Mortgage Loan
Mortgage Loan Documents
Mortgage Loan Package
Mortgage Loan Schedule
Mortgage Note
Mortgaged Property
Mortgagor
Net Mortgage Interest Rate
Officer’s Certificate
Person
Premium
Primary Insurance Policy
Purchase Price
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The portion of the Mortgage Interest Rate relating to any LPMI Loan, which is set forth
on the Mortgage Loan Schedule, to be retained by the Seller to pay the premium due on
the Primary Insurance Policy with respect to such LPMI Loan.
Any Mortgage Loan with respect to which the Seller is responsible for paying the
premium due on the related Primary Insurance Policy with the proceeds generated by
the LPMI Fee relating to such Mortgage Loan, as set forth on the Mortgage Loan
Schedule.
(a) A material adverse change in, or a material adverse effect upon, the operations,
business, properties, condition (financial or otherwise) or prospects of the Seller; (b) a
material impairment of the ability of Seller to perform under this Agreement or any
related agreements; or (c) a material adverse effect upon the legality, validity, binding
effect or enforceability of this Agreement or any related agreements against Seller.
Mortgage Electronic Registration Systems, Inc. or any successor thereto.
Any Mortgage Loan registered with MERS on the MERS System.
The system of recording transfers of mortgages electronically maintained by MERS.
Any mortgage insurance fee and/or other private insurance fee and/or any monthly fee
payable to HUD with respect to mortgage insurance.
The meaning set forth in Section 8(c) hereof.
The mortgage, deed of trust or other instrument securing a Mortgage Note, which
creates a first or second lien, as applicable, on an unsubordinated estate in fee simple in
real property securing the Mortgage Note.
The items pertaining to a particular Mortgage Loan referred to in Exhibit B annexed
hereto, and any additional documents required to be added to the Mortgage File
pursuant to this Agreement.
The annual rate of interest borne on a Mortgage Note.
An individual Mortgage Loan which is the subject of this Agreement, each Mortgage Loan
originally sold and subject to this Agreement being identified on the related Mortgage
Loan Schedule, which Mortgage Loan includes without limitation the Mortgage File, the
Monthly Payments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition Proceeds, all Servicing Rights and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan.
The documents contained in the Mortgage File pertaining to each Mortgage Loan.
One or more Mortgage Loans sold to the Purchaser by the Seller on a Closing Date.
With respect to each Mortgage Loan Package, a schedule of Mortgage Loans delivered by
Seller to Purchaser at least two (2) Business Days prior to the applicable Closing Date,
such schedule setting forth the specific information requested by Purchaser with respect
to each Mortgage Loan, the Mortgaged Property and the Mortgagor.
The note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage.
The real property securing repayment of the debt evidenced by a Mortgage Note.
The obligor on a Mortgage Note.
With respect to any Mortgage Loan, as of any date of determination, a per annum rate of
interest equal to the then applicable Mortgage Interest Rate for such Mortgage Loan
minus the MI Fee, if applicable.
A certificate signed by the Chairman of the Board or the Vice Chairman of the Board or
the President or a Vice President and by the Treasurer or the Secretary or one of the
Assistant Treasurers or Assistant Secretaries of the Seller, and delivered to the Purchaser
as required by this Agreement.
Any individual, corporation, limited liability company, limited liability partnership,
partnership, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
The meaning set forth in Section 8(e).
A policy of primary mortgage guaranty insurance issued by a Qualified Insurer.
The price paid by the Purchaser to the Seller in exchange for the Mortgage Loans pursuant
to Section 3 of this Agreement.
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Purchase Price Percentage
Qualified Appraiser
Qualified Insurer
REO Disposition Proceeds
Repurchase Price
Securitization Date
Underwriting Guides
Servicing File
Servicing Rights
Stated Principal Balance
Trade Confirmation
Transfer Date
USDA
VA
Version 1.2
The percentage of par as stated in the Trade Confirmation (subject to adjustment as
provided therein).
An appraiser, duly appointed by the Seller, who had no interest, direct or indirect, in the
Mortgaged Property or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of the Mortgage Loan, and
such appraiser and the appraisal made by such appraiser both satisfy the applicable
Underwriting Guides.
A primary mortgage insurer acceptable to Fannie Mae.
All amounts received with respect to an REO disposition.
The meaning set forth in Section 8(f) hereof.
The date on which Purchaser has completed its securitization of a pool of Mortgage Loans
that includes the applicable Mortgage Loan.
The eligibility requirements established by any applicable agencies, including but not
limited to, FHA, Fannie Mae, Freddie Mac, Ginnie Mae, VA and/or USDA, as identified by
the Purchaser and that must be satisfied by a Mortgage Loan originator to sell Mortgage
Loans to the Purchaser. Includes the underwriting guidelines and specifications that a
Mortgage Loan must meet, and the requirements that it must satisfy, to qualify for the
Purchaser’s program of Mortgage Loan purchases, as such requirements and
specifications may be revised, supplemented or replaced from time to time.
With respect to each Mortgage Loan the file retained by the Seller until the applicable
Transfer Date consisting of originals of all documents in the Mortgage File, which are not
delivered to the Purchaser or the Purchaser’s designee on or before the Closing Date,
and copies of the Mortgage Loan Documents listed on Exhibit B hereto.
Any and all of the following: (a) any and all rights to service the Mortgage Loans; (b) any
payments to or monies received by the Seller for servicing the Mortgage Loans; (c) any
late fees, penalties or similar payments with respect to the Mortgage Loans; (d) all
agreements or documents creating, defining or evidencing any such servicing rights to
the extent they relate to such servicing rights and all rights of the Seller there under; (e)
Escrow Payments or other similar payments with respect to the Mortgage Loans and any
amounts actually collected by the Seller with respect thereto; (f) all accounts and other
rights to payment related to any of the property described in this paragraph; and (g) any
and all documents, files, records, servicing files, servicing documents, servicing records,
data tapes, computer records, or other information pertaining to the Mortgage Loans or
pertaining to the past, present or prospective servicing of the Mortgage Loans.
As to each Mortgage Loan, (i) the principal balance of the Mortgage Loan at the related
Closing Date after giving effect to payments of principal received on or before such date,
minus (ii) all amounts previously distributed to the Purchaser or Purchaser’s designee
with respect to the related Mortgage Loan representing payments or recoveries of
principal or advances in lieu thereof.
With respect to the Mortgage Loans purchased and sold on the Closing Date, the letter
agreement between the Purchaser and the Seller, in the form annexed hereto as Exhibit
C (including any exhibits, schedules and attachments thereto), setting forth the terms
and conditions of such transaction and describing the Mortgage Loans to be purchased
by the Purchaser on the Closing Date.
The date on which the Purchaser, or its designee, shall receive the transfer of servicing
responsibilities and begin to perform the servicing of the related Mortgage Loans, and
the Seller shall cease all servicing responsibilities. Such date shall be the date specified
by Purchaser in its sole and absolute discretion.
The US Department of Agriculture.
The US Department of Veterans’ Affairs.
82
8.6
Contents of each Mortgage File
With respect to each Mortgage Loan, the Mortgage File shall include each of the following items, which shall be
available for inspection by the Purchaser and any prospective Purchaser, and which shall be delivered to the Purchaser
pursuant to Section 2 of the Purchase Agreement to which this Exhibit is attached (the “Agreement”):
1.
The original1 Mortgage Note, indorsed “Pay to the order of
, without recourse” and signed in the
name of the Seller by an authorized officer of Seller. If an allonge is provided by the Seller the allonge must be permanently
affixed as required by the applicable Uniform Commercial Code. The Mortgage Note shall include all intervening
indorsements showing a complete chain of title from the originator to the Seller.
2.
The original of any guarantee executed in connection with the Mortgage Note.
3.
The original Mortgage, with evidence of recording thereon, together with an Assignment of Mortgage for any nonMERS loan and originals of any intervening Assignments of Mortgage with evidence of recording thereon. If in connection
with any Mortgage Loan, the Seller cannot deliver or cause to be delivered the original Mortgage or any intervening
Assignment of Mortgage with evidence of recording thereon on or prior to the related Closing Date because of a delay
caused by the public recording office where such Mortgage or any intervening Assignment of Mortgage has been delivered
for recordation or because such Mortgage or any intervening Assignment of Mortgage has been lost or because such public
recording office retains the original recorded Mortgage or any intervening Assignment of Mortgage, the Seller shall deliver
or cause to be delivered to the Purchaser, a photocopy of such Mortgage or any intervening Assignment of Mortgage,
together with (i) in the case of a delay caused by the public recording office, an Officer’s Certificate of the Seller stating that
such Mortgage and any intervening Assignment of Mortgage has been dispatched to the appropriate public recording office
for recordation and that the original recorded Mortgage and any intervening Assignment of Mortgage or a copy of such
Mortgage and any intervening Assignment of Mortgage certified by such public recording office to be a true and complete
copy of the original recorded Mortgage and any intervening Assignment of Mortgage will be promptly delivered to the
Purchaser upon receipt thereof by the Seller; or (ii) in the case of a Mortgage or any intervening Assignment of Mortgage
where a public recording office retains the original recorded Mortgage or any intervening Assignment of Mortgage or in the
case where a Mortgage or any intervening Assignment of Mortgage is lost after recordation in a public recording office, a
copy of such Mortgage or any intervening Assignment of Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage or any intervening Assignment of Mortgage. In any event, the Seller shall
deliver to the Purchaser the original recorded Mortgage or any intervening Assignment of Mortgage (in the case of clause
(i) above) or a certified copy (in the case of clause (ii) above) within 120 days after the related Closing Date.
4.
The originals of all assumption, modification, consolidation or extension agreements, with evidence of recording
thereon.
5.
The original mortgagee policy of title insurance, or, if the original policy has not yet been released by the insurer,
the related binders. In any event, the Seller shall deliver to the Purchaser the original policy of title insurance within 120
days after the related Closing Date. The policy must be properly endorsed, any necessary notices of transfer must be
forwarded and any other action required to be taken must be taken in order to fully protect, under the terms of the policy
and applicable law, Purchaser’s interest as first mortgagee.
6.
Original MIC, LGC, LNG (as defined herein), and/or or evidence of PMI (as defined herein) as applicable and as
required.
7.
Any security agreement, chattel mortgage or equivalent executed in connection with the Mortgage.
8.
The original hazard insurance policy and, if required by law, flood insurance policy, in accordance with Section 7(f)
of the Agreement. F:\99021\001\Loan Purchase and Sale Agt 8 22 09.doc
9.
Residential loan application.
10.
Mortgage Loan closing statement.
11.
Verification of employment and income except for Mortgage Loans originated under a Limited Documentation
Program.
1
In each instance where an original document is requested, if applicable, a certified copy of the document may be
acceptable.
12.
Verification of acceptable evidence of source and amount of down payment.
13.
Credit report on the Mortgagor.
14.
Residential appraisal report, including interior, exterior and street view pictures of the subject property along with
pictures of all comparables.
15.
Survey of the Mortgaged Property, if any.
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16.
Copy of each instrument necessary to complete identification of any exception set forth in the exception schedule
in the title policy, i.e., map or plat, restrictions, easements, sewer agreements, home association declarations, etc.
17.
All required disclosure statements.
18.
If available, termite report, structural engineer’s report, water potability and septic certification.
19.
Sales contract.
20.
Tax receipts, insurance premium receipts, ledger sheets, payment history from date of origination, insurance claim
files, correspondence, current and historical computerized data files, and all other processing, underwriting and closing
papers and records which are customarily contained in a mortgage loan file and which are required to document the
Mortgage Loan or to service the Mortgage Loan.
21.
Amortization schedule.
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9
FORMS
The FORMS page of the FGMC Correspondent Website provides links to common documents that are used during the loan
process such as:
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Locking and Change Request Manual
Manual Lock Change Request Form
1X Close Scenario Request
1X Close Lock Request Form
Delegated Renovation Fees
FGMC Correspondent Loan Submission Form
Certification of Seller Paid Points
FGMC Affiliate Disclosure Form
FGMC Income Data Worksheet and Instructions
Web Portal Instructions
FGMC Correspondent Exception Request
Correspondent Disaster Certification
FGMC Disaster Policy
Correspondent Lock Policy
HPML Certification
Non-Exclusive Correspondent Sales Agreement
Correspondent Lock Request Form
Company Setup Application
FGMC – Data Tape Template
FGMC Transfer Instructions
VA Sponsorship Request
FGMC Compliance Information Form
HomeStyle Reno Docs (Non-Del Only)
203k Docs (Non-Del Only)
FHA Case Assignments
Non-Delegated Conventional Submission Checklist
Non-Delegated VA Submission Checklist
Non-Delegated FHA Submission Checklist
Scenario Request Form
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10 WEB PORTAL INSTRUCTIONS
10.1 Registering a New Loan
Step
Action
1 1. In order to register a new loan, have the data file downloaded from the Loan Origination System (LOS). File
format needs to be FNMA 3.2.
1.
Open a web browser and go to www.fgmccorrespondent.com.
2
3 1. Log in to the FGMC Web Portal using assigned log-in credentials provided during FGMC setup.
4 1. Enter log-in credentials in the log-in section of the main page.
5 1. From the Welcome page, click on the button for New Loan.
6 1. Once the file is downloaded, select the radio button for DU 3.2 File (*.fnm) and then click on the Next
button.
1.
Select the Browse button on the DU Import Loan page. Browse for the designated file, select, and then click
7
Import.
8 1. On the 1003 page, click Save. When the Current loan has been saved message is displayed, the loan has been
successfully registered.
Note: The loan is now visible in the Pipeline view accessed either by using the link labeled Pipeline or by returning to the
Welcome Page and clicking on the View Pipeline button.
10.2 Uploading Scanned, Imaged File
Once the loan is registered, the file needs to be uploaded to the FGMC Web Portal.
Step
1
Action
To upload the imaged file, locate the loan in the Pipeline View, and click the View/Edit button for that loan.
2
On the Loan Details page, click on the tab labeled Conditions & Documents.
3
To add the scanned, imaged file to the Correspondent File Upload folder, click on Add File on the same row for
Correspondent File Upload.
To upload a file, click on Add File. A pop-up will appear. Click the Browse button and located the file that needs
to be uploaded to the Web Portal. Then click the Upload File button. The uploaded file will appear on the
Correspondent File Upload row in the Documents and Conditions section.
Note: Files can vary in size for many reasons. For instance, higher resolution files and/or lots of graphics can
increase a file’s size. FGMC’s Web Portal will allow an upload of up to 40 megabytes (MB) per upload. So if the
upload exceeds 40 MB, the file will need to be split into sections smaller than 40 MB each prior to attempting an
upload.
4
5
6
Note: Upload any additional files by repeating Step 4 until all files have been uploaded.
Once the complete file has been uploaded, scroll to the top of the screen and click on the Submit Loan button
on the left-hand side of the screen under Loan Details/Loan Actions.
Once all mandatory fields are populated, scroll down to the bottom of the screen and click the Submit Loan
button again.
Note: Once the loan is successfully submitted, the Loan Details page will be displayed with the highlighted message “The loan
has been submitted.”
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10.3 How to Check for and Upload Conditions
Contact the designated Account Executive for current FGMC turn times. Once the file has been reviewed by the
FGMC Due Diligence Team, the status will change to Decisioned.
Step
1
2
3
4
Action
To access the Loan Details page, click on the View/Edit link from the Pipeline View.
On the Loan Details page, click on Conditions & Documents.
 Locate the row labeled DD Review.
 Click on the File Name column to display a PDF document that lists all outstanding conditions. (To
download the document, click on the file link.)
Below is the FGMC Due Diligence Review Report which lists conditions in two parts:
Prior to Purchase Conditions Required and Post Purchase Conditions Required.
All Prior to Purchase Conditions must be cleared before closing.
To upload conditions to the FGMC Web Portal, click on the Conditions & Documents tab on the Loan Details
page.
Note: If possible, upload all conditions to FGMC at the same time. However, if satisfying some of the conditions
will take much longer than others, documents can be uploaded separately as they are prepared.
Under the Documents section, upload conditions to the Correspondent Conditions Submission folder, by
clicking on the Add File link on the row for Correspondent Conditions Submission.
The designated underwriter will be automatically notified of the new documents.
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FGMC Seller Guide - First Guaranty Mortgage Corporation

Transcription

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