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Making Home Affordable Refinance Guidelines

DU REFI PLUS TM 04/06/09)/A.: GENERAL INFORMATION (04/06/09)

A.: GENERAL INFORMATION (04/06/09)

Purpose

DU Refi Plus TM is a refinance of an existing Fannie Mae loan that is re-sold to Fannie Mae.

DU Refi Plus leverages DU to provide new functionality that systematically identifies existing Fannie Mae loans and extends underwriting flexibilities and documentation efficiencies to eligible loans.

Program Benefits

The program benefits borrowers who have demonstrated an acceptable payment history on their mortgage and need an expanded LTV or potential relief from Mortgage Insurance requirements.

The refinance should result in a:
• Reduced Mortgage payment, or
• More Stable loan product

If the existing loan is a fixed rate product the new loan cannot be an adjustable rate mortgage product.

The following conforming products are allowed with DU Refi Plus:
• 40, 30, 20, 15 Year Fixed Rate products ( Section 109 and Section 111)
• 5/1, 7/1,10/1 ARM ( Section 104, Section 105 and Section 106)

DU REFI PLUS TM (04/06/09)/B.: PROGRAM ELIGIBILITY REQUIREMENTS (04/06/09)

B.: PROGRAM ELIGIBILITY REQUIREMENTS (04/06/09)

Investor Requirements
• Original investor must be Fannie Mae
• No restriction on the servicer of the borrower’s existing loan

Transaction Type

Rate/Term Refinance only.

Amortization

Fully Amortizing only; the Interest-Only payment feature is not allowed.

Temporary Buydown:

Not allowed.

Assumptions

Not allowed.

Prepayment Penalty

None

Ineligible Existing Mortgages/Programs/Loans

DU will identify the loans that are ineligible.
• FHA
• VA
• Reverse

• Second Mortgages
• Loans subject to lender paid mortgage insurance
• High Balance Conforming Loans (any loan above the conforming loan limits)

Maximum Loan Amount

Conforming Loan Limit

The new loan amount is limited to:
• The actual payoff amount of the first mortgage balance, including accrued interest
• Actual closing costs, financing costs, pre-paids and escrows

The borrower may not receive any cash at closing.

Subordinate Financing
• New or replacement subordinate financing not allowed.
• Existing subordinate financing must be re-subordinated or paid off with borrower’s own funds.
• Affordable seconds are eligible to be re-subordinated.

Seasoning Requirements
• There is no seasoning requirement.
• The requirements for loans seasoned less than 12 months or seasoned less than 6 months do not apply.

Traditional Broker

Allowed

Enhanced Broker

Not allowed.

DU REFI PLUS TM (04/06/09)/C.: BORROWER – GENERAL ELIGIBILITY (04/06/09)

C.: BORROWER – GENERAL ELIGIBILITY (04/06/09)

Eligible Borrowers

The following are eligible borrowers:
• U.S. citizens
• Permanent resident aliens (Green Card holders)
• Non-permanent resident aliens

Borrower Changes
• Borrowers cannot be removed from the original loan.
• New borrowers may be added to the loan as long as the existing borrowers remain on the loan.

Co-Borrowers

Non-occupant co-borrowers are allowed on primary residences if the existing loan has non-occupant co-borrowers.

Title in Trust

Allowed, if title on the exiting loan is in a trust.
• Living (inter vivos) trusts are allowed
• Illinois Land Trusts are allowed only with a Home Equity loan

Multiple Financed Properties

The policy for maximum number of financed properties owned by the borrower does not apply.

DU REFI PLUS TM (04/06/09)/D.: UNDERWRITING REQUIREMENTS (04/06/09)

D.: UNDERWRITING REQUIREMENTS (04/06/09)

DU Response Recommendations

Loan must receive an Approve/Eligible response from DU.

DU will issue the following message when a loan is eligible for DU Refi Plus:
This loan casefile was underwritten according to the DU Refi Plus expanded eligibility guidelines offered on certain limited cash-out refinance loan casefiles where the borrower’s existing loan is identified by DU as a Fannie Mae loan. This loan casefile must be delivered with Special Feature Code 147.

If a loan receives the following message, it is ineligible for DU Refi Plus:
The borrower(s) existing loan has been identified as a Fannie Mae loan. The loan casefile was not underwritten according to the DU Refi Plus expanded eligibility guidelines because the loan does not meet the eligibility criteria required for DU Refi Plus.

Reserves

Reserves are not required.

Minimum Loan Score

DU will determine the minimum acceptable Loan Score.

Derogatory Credit

In addition to the requirements in the DU underwriting feedback certification, the borrower must meet the requirements below.
Bankruptcy/Foreclosure

Eligibility is determined by DU.
Collections/Judgments

Collections or judgments over $1,000 must be paid off prior to or at closing.
Mortgage Delinquency

Mortgage history on the loan being refinanced must reflect 0 X 60 in the last 12 months.
Wells Fargo Adverse Credit Policy

If the loan is not serviced by Wells Fargo Home Mortgage, confirm that the borrower does not have a bankruptcy, foreclosure, collection, charge off or repossession with Wells Fargo or Wachovia.

Qualifying Ratios

DU will determine maximum allowable ratios.

Maximum Payment Increase

DU will determine maximum allowable payment increase.

DU REFI PLUS TM (04/06/09)/E.: DOCUMENTATION (04/06/09)

E.: DOCUMENTATION (04/06/09)

Employment and Income
• Salaried borrowers: Most recent paystub.
• Commissioned or self-employed borrowers: Most recent one year of complete federal tax returns.
• Income from sources other than a salary: Most recent one year of complete federal tax returns.

Assets

Assets must be verified when the following exists:
• Payoff or pay down of subordinate financing

• Pay down first mortgage balance
• Payoff other debts

4506 -T

A fully executed 4506-T must be signed at application and closing.

DU Certificate

All documentation requirements on the final DU feedback certificate must be met.

DU REFI PLUS TM (04/06/09)/F.: PROPERTY TYPE – GENERAL INFORMATION (04/06/09)

F.: PROPERTY TYPE – GENERAL INFORMATION (04/06/09)

Geographic Location
• Allowed in 50 states and Washington D.C.
• See Section 435 for all Texas property transactions; loans subject to Texas Equity 50 (a) (6) requirements are not allowed.

Market Classification

Market classification policy does not apply.

Property Type/Occupancy

The following property and occupancy types are acceptable:

Property Type

Primary
.
Second/ Vacation

Investment3

1. Requirements for including number of bedrooms and verified rental income on the loan application must be met.

2. 3-4 units not allowed with 40-year loan term.

3. Rent Loss Insurance is not required on investment properties.

Leasehold

Allowed

Condominium and Cooperative Project Approval Requirements

Wells Fargo will determine project eligibility.

Cooperative financial statements are not required.

Appraisal Requirements

DU will determine required appraisal product or PIW Eligibility.

When no appraisal is obtained, a signed affidavit is required from the borrower indicating how long they have owned the property and that the property is currently not listed for sale.

DU REFI PLUS TM (04/06/09)/G.: MORTGAGE INSURANCE (04/06/09)

G.: MORTGAGE INSURANCE (04/06/09)
• If the existing loan does not have MI coverage, then no MI is required for the new loan.
• If the existing loan has LPMI, it will be excluded from the eligible population by DU.
• If the existing loan has BPMI, it is currently not eligible to be refinanced under this program.

DU REFI PLUS TM (04/06/09)/H.: LTV MATRIX (04/06/09)

H.: LTV MATRIX (04/06/09)

Maximum Loan to Value

DU will determine the maximum LTV/TLTV/CLTV.

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