AltQMTM Alternative Documentation Program Underwriting ... · AltQMTM Alternative Documentation...

AltQM

TM Alternative Documentation Program – Underwriting Guidelines

11/5/15 Underwriting Guidelines of 23

©2014 Impac Mortgage Corp. NMLS #128231. www.nmlsconsumeraccess.org. Rates, fees and programs are subjected to change without notice. Other restrictions may apply. Information is intended solely for mortgage bankers, mortgage brokers, financial institutions and correspondent lenders. Not intended for distribution to consumers, as defined

by Section 1026.2 of Regulation Z, which implements the Truth-In-Lending Act. Licensed by the Department of Corporations under the California Residential Mortgage Lending Act (License #4131083). In the state of New York, Impac Mortgage Corp. dba Excel Mortgage.

Underwriting Philosophy Impac takes a common sense approach to underwriting a borrower’s creditworthiness to determine the willingness and ability to repay the loan. Each applicant has a different situation and each loan is weighed on its own merits. Our goal is to help good borrowers with their financing needs while mitigating risk for the company. The AltQM

TM programs are high risk loans. Impac will

only approve loans for which the company has a reasonable belief that the borrower has the ability to repay the subject loan. This reasonable belief is based upon information provided by or independently verified by an independent third party. Any irregularity in borrower profile, documentation provided, or property used to support the debt may be cause for denial of the loan. Program Highlights The AltQM

TM Alt Doc product is designed with two separate qualification options for borrowers with unique situations:

Option One – Asset Qualification Option Two – Self-Employed using Bank Statements with or without Asset Amortization Option One – Asset Qualification

Borrowers are qualified based on verified liquid assets

Foreign National borrowers are allowed

Loan amounts up to $3 million

Credit scores as low as 680 Option Two – Self-Employed using Bank Statements with or without Asset Amortization

One borrower must be self-employed and may have a W-2 co-borrower

Self-employed borrowers are qualified using bank statements for the most recent 12 month period

Assets must be traditionally documented

Loan amounts up to $3 million

DTI up to 50% (see Qualifying Rate and Ratios)

Credit scores as low as 680

Borrower may use an asset amortization formula to derive additional qualifying income NOTE: Loans that are eligible for sale to a government-sponsored enterprise (GSE) – the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac) – are ineligible for any AltQM

TM

Series programs. Guideline Overview Loans meeting the parameters outlined in these guidelines are consistent with the Dodd Frank Wall Street Reform and Consumer Protection Act’s requirement that a borrower have the Ability to Repay the mortgage loan. Documentation standards are designed so that loans are made to borrowers who have demonstrated the ability and have the wherewithal to repay the debt. This program requires review and verification of documentation to ensure that the loan meets Ability-to-Repay standards. Program Qualifications This program is designed for borrowers who have significant verifiable assets or are self-employed and would benefit from alternative loan qualification methods. This program provides two alternate approaches to document the borrower’s ability to repay. Asset statements alone (no debt to income ratio is required) may be used by high net worth individuals for qualification. Bank statements (personal and/or business) may be used as an alternative to tax returns to document a self-employed borrower’s income. In addition, a self-employed borrower may supplement bank statement income with additional income derived from an asset amortization formula. Eligibility Matrix Loan Amount & LTV Limitations

Primary Residence - Purchase and Rate & Term Refinance

Units Credit Score LTV2

CLTV2

Minimum Loan Amount

Maximum Loan Amount

1-4 Units 6803

80%

(85%3 No MI)

80% (85%3)

$100,000

$750,000

70% (75%) 70% (75%) $2,000,000

50% (55%) 50% (55%) $3,000,000

Primary Residence - Cash-Out Refinance

Units Credit Score LTV

2 CLTV

2

Minimum Loan

Amount

Maximum Loan Amount

Maximum Cash-Out

1-4 Units 680

75% (80%) 75% (80%)

$100,000

$750,000 $500,000

65% (70%) 65% (70%) $1,500,000 $500,000

55% (60%) 55% (60%) $2,000,000 $1,500,000

http://www.nmlsconsumeraccess.org/EntityDetails.aspx/COMPANY/128231

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Second Home - Purchase and Rate & Term Refinance

Units Credit Score LTV1,2

CLTV1,2

Minimum Loan

Amount Maximum Loan Amount

1 Unit 680

75% (80%) 75% (80%)

$100,000

$750,000

65% (70%) 65% (70%) $1,500,000

60% (65%) 60% (65%) $2,000,000

Second Home - Cash-Out Refinance

Units Credit Score

LTV1,2

CLTV1,2

Minimum Loan

Amount

Maximum Loan Amount

Maximum Cash-Out

1 Unit 680

70% (75%) 70% (75%)

$100,000

$750,000 $500,000

60% (65%) 60% (65%) $1,500,000 $1,000,000 55% (60%) 55% (60%) $2,000,000 $1,500,000

Investment Property - Purchase and Rate & Term Refinance

Units Credit Score LTV1,2

CLTV1,2

Minimum Loan

Amount Maximum Loan Amount

1-4 Units 680

70% (75%) 70% (75%)

$100,000 $750,000

60% (65%) 60% (65%) $1,500,000

50% (55%) 50% (55%) $2,000,000

Investment Property - Cash-Out Refinance

Units Credit Score

LTV1,2

CLTV1,2

Minimum Loan

Amount

Maximum Loan Amount

Maximum Cash-Out

1-4 Units 680 55% (60%) 55% (60%)

$100,000 $750,000 $500,000

50% (55%) 50% (55%) $2,000,000 $1,500,000 Footnote: 1 LTV/CLTV limited to 65% for Foreign Nationals – only allowed on 2

nd homes and NOO.

2 LTV/CLTV maximums inside parentheses are for 15 year fixed rate loans only 3 For Option #2 Only: Maximum LTV/CLTV may increase from 85% to 90% when credit score ≥ 740 (Primary Purchase and Rate & Term) Product Description

5/1, 7/1, and 10/1 LIBOR ARMs, fully amortizing

Interest Only available for fixed rate period on ARMs

15 and 30 year fixed rate, fully amortizing

Product Codes Fully Amortizing Interest Only

Hybrid ARM

Product Code Hybrid

ARM Product Code

5/1 ARM

NA51AD – AltQMTM

Alt Doc 5/1 LIBOR ARM 5/1

ARM NA51ADIO - AltQM

TM Alt Doc 5/1 LIBOR ARM Interest Only

7/1 ARM

NA71AD – AltQMTM


ARM NA71ADIO – AltQM


10/1 ARM

NA101AD – AltQMTM


ARM NA101ADIO – AltQM


Fixed

15 Year NF15AD – AltQM™ Alt Doc 15 Year Fixed

30 Year NF30AD – AltQM™ Alt Doc 30 Year Fixed

Locking

Forward locking is not allowed

Loan approval is required prior to lock o Cannot lock until the loan is approved and the appraisal has been received and reviewed by an Impac

underwriter.


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Cross-Out

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Cross-Out

susie.millet

Cross-Out

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Eligibility Requirements

Adjustable Rate Details

Interest Rate Adjustment Caps

5/1, 7/1 & 10/1 ARM Initial: 2% up/down; Subsequent: 2% up/down; Lifetime: 5% up

Margin See rate sheet

Index 1-Year LIBOR (London InterBank Offer Rate)

Index Establish Date 45 days prior to the change date (aka “look back period”)

Interest Rate Floor Note Start Rate

Conversion Option None

Assumption ARM products are assumable to a qualified borrower after the fixed term

Negative Amortization

None

Interest Only Option Interest Only Option available for fixed period of ARMs

Notes / Riders FNMA 3528 / 3187 (fully amortizing) FNMA 3530 / 3187 (interest only)

Appraisal Requirements

Loan Amount Appraisal Requirement

≤ $1,000,000 One Full Appraisal

> $1,000,000 Two Full Appraisals

All properties For Sale By Owner (FSBO) Two Full Appraisals

A Pro Teck Valuation Services Appraisal Risk Review (ARR) supporting the value within 10% (higher or lower than appraised value) will be required when the Appraisal Requirement is One Full Appraisal. If variance exceeds 10% then a field review ordered from one of the following providers will be required:

Pro Teck Valuation Services

Clear Capital

Nationwide If a Pro Teck Valuation Services Appraisal Risk Review (ARR) is not available, a Field Review or Second Appraisal is acceptable in lieu. Documentation confirming Pro Teck inability to provide ARR must be in file. When two (2) appraisals are required as part of the program guidelines, an ARR is not required. Condos and PUDs must meet FNMA requirements. See the Property Types section for additional information. Note: The ECOA Valuations Rule requires copies of appraisals and other written valuations be delivered to borrower promptly upon completion, or three (3) business days before consummation, whichever is earlier.

Assets Funds for down payment, closing and reserves must be verified, sourced and seasoned for 2 months.

Cash out from the subject transaction may not be used toward the reserve requirement. Loan amounts > $2,000,000 require 12 months reserves. Loan amounts ≤ $2,000,000 follow the table below.

Debt to Income (DTI) Ratio Required Reserves

Option #1 – No DTI Calculated 6 months1,2

≤ 43 6 months1

> 43 12 months

Notes: 1. See Foreign Nationals section. Foreign Nationals require minimum 12 months total reserves at loan closing. 2. Required reserves for Option #1 are calculated using only P&I (principal + interest) payment. Other mortgage related debt is included with “60 months monthly debt” calculation as part of loan qualification. See Income/Asset Verification Option #1 – Asset Qualification.

Additional reserves for each NOO property (regardless of financing); max 36 months*.

If borrower owns > 4 properties then 1 month for each property

If borrower owns ≤ 4 properties then 2 months for each property

*When calculating additional reserves for NOO properties, they shall be calculated using the worst-case (e.g., properties with the highest monthly expenses are counted first)


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See Credit for additional reserves due to certain recent mortgage related credit events. Additional Requirements for Option #1 – Asset Qualification

Reserve requirement above is in addition to the residual assets needed to cover debts for sixty (60) month period. These debts include mortgage related debt such as taxes, insurance, HOA dues and special assessments.

See Documentation for specific requirements.

Any investment properties owned by the borrower must show a debt coverage ratio of at least 1.20 (may be cumulative if multiple properties are owned). See Limitations on Other Real Estate Owned for debt coverage ratio calculation information. Lease agreements must be provided for all investment properties. Debt coverage ratio of less than 1.20 will require additional reserves.

Business funds are not to be included in the total available asset calculation or qualifying calculation. Additional Requirements for Option #2 - Self-Employed using Bank Statements with/without Asset Amortization

Business funds - Funds in the borrower’s business account(s) ≤ 50% of account balance may be counted toward reserves so long as borrower is 100% owner of business (e.g., Sole Proprietor, S Corp, Corporation, LLC) or has written permission in file from other business co-owner(s) regarding use of these business funds (up to 50% of account balance) for reserves.

PITIA for reserves is the monthly housing expense for a property and includes the following:

Principal and interest (P&I);

Hazard, flood, and mortgage insurance premiums (as applicable);

Real estate taxes;

Ground rent;

Special assessments;

Any owners’ association dues (including utility charges that are attributable to the common areas, but excluding any utility charges that apply to the individual unit);

Any monthly co-op corporation fee (less the pro rate share of the master utility charges for servicing individual units that is attributable to the borrower’s unit);

Any subordinate financing payments on mortgages secured by the subject property. Foreign Nationals – See Foreign Nationals section for additional asset documentation and seasoning requirements Gift funds Gift funds and gifts of equity are not allowed.

Assumptions ARM products are assumable to a qualified borrower after the fixed term.

Borrower Eligibility

Eligible

U.S. Citizens

Permanent Resident Aliens; provide evidence of lawful residency and must meet all the same credit standards as U.S. citizens.

o A copy of the borrower’s identification is required to verify the acceptable documentation that evidences the borrower is eligible to lawfully reside in the U.S.

o Valid Green card, showing continuous time remaining for at least 12 months. o Borrower must be employed in U.S. for the last 24 months or have acceptable education

documentation (e.g., college transcripts) combined with employment to total at least 24 months

Inter Vivos Revocable Trust – must meet FNMA guidelines

Non-Permanent Resident Alien (Option #1 - Asset Qualification program only)

Foreign Nationals – 2nd

Homes and NOO – see Foreign National section. (Option #1 - Asset Qualification program only)

Ineligible for Option #2 - Self-Employed using Bank Statements with/without Asset Amortization:

Foreign Nationals

Non-Permanent Resident Aliens

Cash-Out Requirements

If borrower has held title to the property less than 12 months, the LTV is based on the lesser of purchase price or appraised value. Note: The following items may be paid off with proceeds from a Rate/Term refinance:

Non-purchase money seconds with 12 month seasoning

HELOCs (Home Equity Line of Credit) with total withdrawals not exceeding $2,000 in the last twelve (12) months


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Borrowers requesting a cash-out loan on an investment property must provide a letter of explanation (aka “cash-out letter”) regarding the use of the cash-out proceeds.

Co-Borrowers Non-occupant co-borrowers are not allowed.

Credit Each of the following credit components impacts the borrower’s ability to repay the loan. Therefore NO EXCEPTIONS will be allowed on the following items:

Borrowers must have a minimum of 5 trade lines on the credit report. Trade lines may be open or closed, with one seasoned trade line having a minimum 24 month rating and one trade line with at least a $5,000 high credit limit. The seasoning and high credit limit requirements may be met with the same trade line. Authorized user trade lines are not eligible for any portion of the credit requirement.

Bankruptcy, Short Sale, Deed-in-Lieu – None less than four (4) years o Short Sale or Deed in Lieu ≥ 2 years and < 4 years is acceptable with the following

compensating factors: Maximum 70% LTV or existing guidelines, whichever is lower; and Additional 6 months reserves required for subject property (this amount is in

addition to all other reserves required on the loan)

Foreclosure – None in the last seven (7) years o Foreclosure ≥ 3 years and < 7 years is acceptable with the following compensating factors:

Maximum 70% LTV or existing guidelines, whichever is lower; and Additional 6 months reserves required for subject property (this amount is in

addition to all other reserves required on the loan)

Mortgage Lates – 0x30 during the past 24 months

Judgment/Tax Lien/Collections/Charge-Offs – Must be paid. New items with a cumulative total > $5,000 in the last 24 months will exclude the borrower from this program.

Underwriters will evaluate the borrower’s liabilities to help assess Ability to Repay. These will include:

The monthly payment on any simultaneous loan

The consumer’s monthly payment for mortgage-related obligations

The consumer’s current debt obligations, alimony, and child support

Underwriters should consider the following:

Credit limits, usage and overall credit profile – Is this consistent with the income established for qualifying purposes?

Documentation

Option #1 – Asset Qualification

Full Asset Documentation is required for both funds to close and reserves. Assets can be cash in the bank, stocks, bonds, IRAs, 401Ks, mutual funds or retirement accounts. For most asset types, this would include all pages of the most recent twelve (12) months. Asset levels in the verified accounts are expected to be consistent and sustained over the twelve (12) month period. Increases or decreases of greater than 15% over the twelve (12) month period must be explained by the borrower. Additional supporting documentation may be required.

Option #2 - Self-Employed using Bank Statements with/without Asset Amortization: Standard Fannie Mae income documentation is required for W-2 wage earning borrowers

Income and employment must be verified (2 years W2s and current paystub, etc.)

Paystub must be computer generated.

Verbal VOE to be performed prior to closing or if self-employed, an independent written confirmation of self-employment is required (i.e., copy of business license reflecting ownership of company, corporate minutes, etc.) Self-employed, commissioned, or borrowers using overtime or bonus income must have a 2 year history. VVOE must be completed within 10 business day of closing. The following requirements apply to Options #1 and #2: Borrowers must have satisfactory consecutive 12 month rent or mortgage payment history in the 3 years prior to application. Payment shock Payment shock should not exceed 50% if the borrowers currently rent or 100% if the borrowers have prior mortgage history in the past 24 months. The payment shock requirement will be waived for LTVs ≤ 70%. Payment shock is calculated by dividing the difference between new and existing housing payments by the


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existing housing payment.

Payment Shock Example

New Payment (PITIA) $1,500 Difference $ 500

Subtract Existing Payment (Rent or PITIA)

$1,000 Divided by Existing

Payment $1,000

Equals Difference $ 500 Equals Payment Shock % 50%

No Section 32 High Cost Loans will be allowed. In addition, loans defined by certain states as “higher priced”, “high cost”, “subprime”, “high risk”, or “high rate, high fee” loans are prohibited. Section 35 Higher Priced Mortgage Loans will be allowed subject to mandatory impound accounts for 5 years and no property flipping. The borrower must acknowledge their ability to repay the loan by signing the Borrower Affirmation document at closing. Power of Attorney Power of Attorney (POA) is ineligible for:

Loans to foreign nationals

Cash-out loans

Loans to an Inter-Vivos Trust

Financing Types New York Consolidation, Extension & Modification Agreement (NY CEMA) For all Impac refinance products, property located in the state of New York may be structured as a Consolidation, Extension, and Modification Agreement (CEMA) transaction. The most current version of Fannie Mae/Freddie Mac Uniform Instrument (Form 3172) must be used. The following documentation must be provided:

NY Consolidation, Extension and Modification Agreement (Form 3172)

Original Note(s) – Original documents signed by the borrower

Gap Note and Gap Mortgage, if applicable

Consolidated Note – Original documents signed by the borrower

Exhibit A – Listing of all Notes & Mortgages being consolidated, extended and modified

Exhibit B – Legal description of the subject property

Exhibit C – Copy of the consolidated Note

Exhibit D – Copy of the consolidated Mortgage Lost Note Affidavits are not an acceptable substitute for any of the required documents. If original documentation cannot be provided per above, then a CEMA is not allowed.

Escrow Waivers Impounds are required for all HPML transactions. Impounds are required for all loans to foreign nationals.

Foreign Nationals (Option #1 - Asset Qualification Only)

A foreign national is defined as someone who lives in another country and visits the United States for brief periods for business or vacation. In order to be eligible, the borrower must be a legal resident of another country and live and work there. Eligibility:

Foreign Nationals are a non-US Citizen with a valid passport AND valid visa o Borrowers who are residents of countries which participate in the State Department’s Visa

Waiver Program (VWP) will not be required to provide a valid visa. See: http://travel.state.gov/visa/temp/without/without_1990.html

o Evidence that the borrower is in the U.S. legally is required, however, no defined length of stay is required.

Borrower’s visa status must be documented to determine eligibility. Alien Status ID Certification (attached to these guidelines) must be used to ensure compliance with eligibility requirements.

Legible copy of a valid passport, including photograph, signature page and evidence of duration of stay permitted for each borrower, and if applicable, a legible copy of a valid visa (including photograph) for each borrower.

For Canadian and Mexican citizens Impac accepts the following: o A laser visa card; it is both a border crossing card and a B1/B2 visa, or o A NAFTA treaty visa (TN, TC, E1 & E2)

An IRS form W-8BEN, Certificate of Foreign Status must be filed with the IRS (all borrowers). A copy of the Certificate must be retained in the file.

Property Eligibility:

Second Homes and Investment Property only.


http://travel.state.gov/visa/temp/without/without_1990.html

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Escrow Accounts:

Taxes and insurance must be impounded, unless prohibited by law. Mortgage Payment - ACH

Due to frequent travel outside the U.S., it is recommended that all Foreign National borrowers establish an ACH debit for mortgage payment from a U.S. bank. However, this is not a requirement for approval.

Credit Score:

A credit score is not required, unless a U.S. credit report is available; see below. Credit Criteria:

If the borrower has a valid SSN or Tax ID, a traditional U.S. credit report is required

Borrowers that have established credit in the U.S. and do not meet the 24 month 5 rated trades requirement may not have their credit history disregarded. The borrower’s credit history must comply with the profile listed in this section. NOTE: If a credit report is not available, a minimum of one original credit letter must be obtained from a financial institution located in the country of origin or 3 credit references.

o The credit reference letter, on the financial institution’s letterhead must include contact information, borrower’s name and account number, detailing the types and lengths of the institution’s relationship. The account with financial institution must have been opened at least two (2) years.

o Credit reference letter must be an original on institution letterhead and reflect telephone number, address, and website. It should be written in borrower’s native language and any money amounts should be reflected in national currency.

Credit Score 680 if available

Trades 5 trades minimum, all with 24 months credit history

Mortgage 0 x 30 last 24 months

Bankruptcy/Foreclosure/Short Sale/ Deed-In-Lieu

None.

Judgments None.

Collections/Charge-offs/Past Due None within the last 24 months; all items must be paid prior to or at closing

Tax Liens None within the last 24 months; all items must be paid prior to closing

Documentation

Documents signed by borrowers outside of the United States must be notarized by a U.S. embassy or consular official. The certificate of acknowledgment must meet the standard notarial requirements and must include the embassy or consular seal.

Power of Attorney (POA) is not allowed. Translations:

All documents must be translated into English by an independent third party translator. Copies of the original document and the translation will be required.

Verification of Assets and Seasoning Requirements Required assets for loan qualification include down payment, closing costs, and reserves. All assets used for qualifying must be seasoned for 12 months (see Assets). To the extent that required assets are verified as seasoned within a bank on the “Acceptable Bank List” there is no further seasoning requirement within a U.S. bank or financial institution. (See Acceptable Bank List at the end of these guidelines) Down payment, closing costs and reserves (per reserve table in Assets) must be verified with a VOD or computer bank statement as deposited in a U.S. bank prior to closing. If asset documentation (12 month seasoning) is provided from a bank that is not on the “Acceptable Bank List” then the following verification and additional seasoning requirements apply:

At least 75% of the required assets must be verified with computer bank/asset statement(s) as deposited in a U.S. bank or other regulated U.S. financial institution and seasoned for a period of 6 months prior to closing.

o If transfer to U.S. account occurs within 12 months prior to closing, then supporting documentation concerning source and transfer is required.

o Transfers occurring greater than 12 months prior to closing do not require supporting documentation.

Up to 25% of the required assets may be paper-trailed from a financial institution in the borrower’s home country:


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o The borrower must provide the last 3 bank statements or most current quarterly statement, together with a copy of the Wall Street Journal’s conversion table as of the same date as the bank statements, for the purpose of converting the borrower’s foreign currency to U.S. dollars. The underwriter must provide a statement outlining the beginning and ending balances of all foreign bank accounts converted to U.S. dollars. Large deposits are handled per FNMA guidelines.

o Borrower must provide proof of transfer of the remaining funds (up to 25% of required assets) from the home country to a U.S. bank prior to closing.

Income Verification: N/A Additional Restrictions – the following are not allowed on the Foreign National program:

Borrowers with diplomatic immunity

Non-occupant co-borrowers

Gift funds

Gift of equity, non-arms-length transactions, FSBO (for sale by owner) transactions

Geographical Locations/Restrictions

Eligible states are as follows:

Correspondent: All states except Missouri o Note: Texas Cash-out 50(a)(6) loans are eligible

Retail: (Impac is licensed for retail loan origination in the following states) AK, AL, AR, AZ, CA, CO, CT, DC, FL, GA, IA, ID, IL, IN, KS, KY, LA, MD, MI, MN, MS, MT, NC, ND, NE, NH, NJ, NM, NV, OK, OR, PA, SC, SD, TN, TX, VA, VT, WA, WI, WV Branch/LO is responsible for meeting state license requirements for origination in a particular state.

o Note: Texas Cash-out 50(a)(6) loans are eligible

Wholesale: AK, AL, AR, AZ, CA, CO, CT, DC, FL, GA, IA, ID, IL, IN, KS, KY, LA, MD, MI, MN, MS, MT, NC, ND, NE, NH, NJ, NM, NV, OK, OR, PA, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV

o Note: Texas Cash-out 50(a)(6) loans are eligible

Additional restrictions as follows: State specific regulatory requirements supersede all underwriting guidelines set forth by Impac.

Income/Asset Verification Option #1 – Asset Qualification

Option #1 – Asset Qualification Employment and Income are not required to be disclosed on the 1003 loan application. If not disclosed, please enter “Not applicable to this loan” in the respective fields. Business phone number must be reflected on the 1003 (for consumer contact purposes only). Assets must be verified sufficient to cover the loan amount request with sufficient additional reserves to cover all revolving, installment, alimony/child support, and mortgage related expenses for a period of no less than five (5) years, plus the separate reserve requirement based on loan amount listed in the Assets section of these guidelines. Important: The ending balance on the most recent asset statement(s) must be sufficient to cover the required assets including:

Loan Amount Request

Down payment

Closing Costs and Prepaids

Five (5) years of other debt/expenses described above

Separate reserve requirement Eligible Asset Types Considered assets must be comprised of the following readily marketable assets which must be available to the borrower and are limited as follows:

Bank Deposits – Checking, Saving, Money Market accounts = 100%

Publicly traded stocks and bonds = 65% (stock options not allowed)

Mutual Funds = 65%

Retirement Accounts o 401(K) plans or IRA, SEP or KEOUGH accounts and the borrower is < 59.5 years old = 55%

(These can only be used if distribution is not already set up) o 401(K) plans or IRA, SEP or KEOUGH accounts and the borrower is ≥ 59.5 years old = 65%

(These can only be used if distribution is not already set up) Note: Assets must be in liquid or semi liquid form, no privately held stock, deferred compensation or non-regulated financial companies.

Note: For eligible asset types, any debt tied to that asset must be netted out. Example: Stocks bought on


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margin or 401K loan against the 401K account. Ineligible Asset Types

Business funds

Non-liquid assets (automobiles, artwork, business net worth etc…) Example #1: Loan amount: $300,000 Principal and Interest (P & I) for subject = $2,000 Verified Assets:

$200,000 Checking and Savings (100% usable) = $200,000

$300,000 Stocks and Bonds (65% usable) = $195,000

$400,000 401K (65% usable) = $260,000

$300,000 Mutual Funds (65% usable) = $195,000 Total allowable assets = $850,000 $850,000 (allowable assets) minus $300,000 (loan amount) = $550,000 residual assets Total of monthly debt (revolving, installment, alimony/child support, hazard insurance, property tax on the subject property, etc.) excluding subject P&I = $2500 $2,500 X 60 months = $150,000. Required reserves per Option #1 (see Assets) = 6 months x $2,000 (P & I) = $12,000 Since the residual assets are more than the required funds to cover all other debt for 60 months plus required reserves, the loan qualifies for the program. Example #2: Loan amount: $300,000 Principal and Interest (P & I) for subject = $2,000 Verified Assets:

$10,000 Checking and Savings (100% usable) =$ 10,000

$400,000 Stocks and Bonds (65% usable) =$260,000

$100,000 Mutual Funds (65% usable) =$ 65,000 Total allowable assets =$335,000 $335,000 (allowable assets) minus $300,000 (loan amount) = $35,000 residual assets Total of monthly debt (revolving, installment, alimony/child support, hazard insurance, property tax on the subject property, etc…) excluding subject P&I = $700.00 $700 X 60 months = $42,000. Required reserves per Option #1 (see Assets) = 6 months x $2,000 (P & I) = $12,000 Since the residual assets are less than the required funds to cover all other debt for 60 months plus required reserves, the loan does not qualify for the program.

Income/Asset Verification Option #2 - Self-Employed using Bank Statements with or without Asset Amortization

Option #2 - Self-Employed using Bank Statements with or without Asset Amortization: At least one of the borrowers must be self-employed to qualify for this program. Employed Borrowers: Most recent paystub including year-to-date earnings (covering minimum of 30 days) and two years W-2s; or Traditional Written Verification of Employment with 30 days of paystubs and 2 years W-2s. Must have 2 years continuous employment in the same line of work. Gaps of 60 days or less may be accommodated with adequate explanation. W-2 only and/or 1099 transcripts from the IRS are required for the wage earning or retirement income co-borrower. All borrowers must be qualified using current verifiable income, not projected income. Self-Employed borrowers: A borrower with a 25% or greater ownership interest in a business is considered self-employed and must be evaluated as a self-employed borrower. Borrower must document two years current continuous self-employment with business license and statement from corporate accountant/CPA confirming the same. Acceptable business license must be verified by third party (e.g., government entity, borrower’s business


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attorney). Borrowers whose self-employment cannot be independently verified are not eligible. Retirement and Other Income: Retirement income and other fixed documentable income is allowed for qualifying income for both a self-employed borrower and for any non-self-employed or retired co-borrower. Non-taxable income may be “grossed up” by 25%. Rental Income: Rental income used for qualification must be documented with lease(s). Use 75% of lease rent amount minus PITIA for net rental income. Borrower Affirmation for Accurate Income and Debts A Borrower Affirmation document must be signed at closing confirming the income and loan terms on the final 1003. Self Employed Income Calculation Bank statements are used to calculate and show consistency of income for the self-employed borrower. If personal and business bank activity are combined in one bank account: Borrower is to provide the most recent twelve (12) months consecutive bank statements from the same account. A Profit and Loss (P&L) that is prepared by a CPA or Licensed Tax Preparer must be provided. Expenses must be reasonable for the type of self-employment. The P&L will be used for qualifying; revenue must be supported by the bank statements provided. Total deposits per bank statements must be no more than 5% below revenue reflected on the P&L. Example: Revenue per P&L is $100,000 and total business deposits into the bank account are $95,000, the loan would meet the requirement. If the deposits were less than $95,000 the loan would not meet guidelines. Up to 24 months bank statements may be required at the underwriter’s discretion. Income situations that may require additional bank statements for review include but are not limited to inconsistencies in cash flows consistent with occupation type or seasonal types of self-employment. Examples include seasonal income such as that received by a tax accountant whose primary income occurs in the first half of a year, or large isolated payments such as those received by political consultants or promoters who are paid for a specific events or contracts and have a history of similar types of payments. If the borrower maintains separate bank accounts for personal and business, personal bank statements will only be used for qualifying. The borrower is to provide the most recent twelve (12) months consecutive personal bank statements and three (3) months business bank statements (to support the borrower does maintain separate accounts). The deposits will be analyzed and averaged to determine monthly income. If the analysis is inconclusive (e.g. large fluctuations in deposits) a CPA or Licensed Tax Preparer is to provide a P&L covering the twelve (12) month period. When a P&L is provided, monthly income will be determined from the P&L. Up to 24 months bank statements may be required at the underwriters discretion. For both the combined bank statements and the separate bank statement scenarios, beginning and ending balances will be evaluated and must support the overall transaction requested. Low beginning and/or ending balances may require additional documentation up to and including 1040s, 1065s, 1120s, etc. Option to only use business bank statements If the borrower has separate business and personal accounts and the personal account does not show sufficient deposits to qualify, underwriter may use a third party prepared Profit and Loss (P&L) statement and use the business bank statements (similar to the combined accounts above) and use the bottom line income on the P&L for qualifying. Deposits on the business bank statements must be within 5% of the gross receipts on the third party prepared P&L. Non-sufficient funds Non-sufficient funds (NSF) is a term used to indicate that a demand for payment (a check) cannot be honored because insufficient funds are available in the account on which the instrument was drawn. In simplified terms, a check has been presented for clearance, but the amount written on the check exceeds the available balance in the account. An NSF will be counted against the borrower when the borrower’s account is overdrawn. This is the same for “non-sufficient funds” as “over-drafting,” whether or not such “overdraft protection” is enabled. Borrower generally may have no more than 3 instances of non-sufficient funds (NSFs) in a 12 month period. Instances can be within a single month or spread out over the 12 month period. Borrower explanation letter is required. Exception: Underwriter may approve > 3 NSFs in certain instances on a case by case basis so long as it is an isolated situation. Exception must be reviewed and signed off by an underwriting manager. Returned check situations (e.g., from borrower’s accounts receivable) that cause NSFs will be considered separately from above NSF limits. Returned checks that do not result in a negative balance are not considered NSFs. The bank statements should show a trend of ending balances that are stable or increasing over the 12 month (or other examination) period.


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Decreasing income trends must be explained; additional documentation may be required. Low ending balances must be explained; additional documentation may be required. Net deposits must not reflect any other income sources already taken into consideration (i.e. deduct SS payments, W-2 wage earnings etc…that have already been used for income calculation). Asset Amortization The borrower may supplement bank statement income with Asset Amortization.: Asset amortization is a calculation used to generate a monthly income stream from a borrower’s personal assets. It can be combined with other income such as Social Security, Pension or other investment income. There is no age restriction. Eligibility Requirements (Asset Amortization)

Maximum 70% LTV/CLTV/HCLTV for Primary Residence and Second Homes Only

Borrower and Co-Borrower must be individual or co-owners of all asset accounts with no other account holders listed on the documentation

100% of eligible assets must be verified and will be amortized over the term of the loan

All assets must be in a U.S. financial institution—No Foreign Assets

The sum of eligible assets as defined are net of any discounts and minus any funds used for closing and/or minimum reserves required for the program.

Eligible Asset Types (Asset Amortization) Considered assets must be comprised of the following readily marketable assets which must be available to the borrower with no penalty and are limited as follows (after deduction of any funds used for closing or reserves):

Bank Deposits – Checking, Saving, Money Market accounts = 100%

Publicly traded stocks and bonds = 65% (stock options not allowed)

Mutual Funds = 65%

Retirement Accounts o 401(K) plans or IRA, SEP or KEOUGH accounts = 65%

(These can only be used if distribution is not already set up) For eligible asset types, any debt tied to that asset must be netted out. Example: Stocks bought on margin or 401(K) loan against the 401(K) account. Assets must be in liquid or semi-liquid form, no privately held stock, deferred compensation or non-regulated financial companies. Ineligible Asset Types

Business funds

Non-liquid assets (automobiles, artwork, business net worth, etc.) Asset Amortization Calculation Policy:

Eligible asset amount to be amortized over the term of the loan (e.g., 360 months for a 30 year loan, 180 months for a 15 year loan)

Example of Asset Amortization for 30 year loan: Savings Account Balance $100,000 ($100,000 Usable toward calculation) Stock Fund Balance $100,000 ($65,000 Usable toward calculation) Mutual Fund Balance $10,000 ($6,500 Usable toward calculation) Total Usable toward calculation = $171,500/360 = $476.39 monthly income

Limitations on Other Real Estate Owned

Option #1 – Asset Qualification Ownership of NOO properties requires additional reserves and Debt Coverage Ratio (DCR) requirement. Any investment properties owned by the borrower must show a debt coverage ratio of at least 1.20 (may be cumulative if multiple properties are owned). Leases will be required. Debt Coverage Ratio (DCR)

The debt coverage ratio is calculated by taking 80% of the gross rents divided by the PITIA of the respective property

Rents are derived from the rental/lease agreement(s)

DCR Requirement = 1.20 Debt Coverage Ratio Example Gross Rent = $1,200 Vacancy/Expense Factor = 20% = $240 Net Rent = $960 DCR Requirement = 1.20


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$960 divided by 1.20 = $800 PITIA may not exceed $800 per month Net Rent(s) must be ≥ 1.2 times PITIA This calculation may be cumulative for all rents and all PITIAs. If the Debt Coverage Ratio (DCR) for borrower’s other investment properties falls short of the 1.20 requirement, the following additional reserves are required per the sample calculation below. Program DCR Requirement = 1.20 Actual DCR for investment properties = .93 DCR Shortage = 1.20 - .93 = .27 Actual total PITIA of other investment properties = $1400 Additional monthly liability for reserve calculation = $1400 x .27 = $378 Additional Reserves = 60 months x $378 = $22,680 The following requirements apply to Options #1 and #2: Loan/Property restrictions per borrower are as follows:

Borrowers limited to eight (8) loans with Impac not to exceed $2,000,000.

Foreign Nationals limited to two (2) loans with Impac not to exceed $2,000,000 total.

If borrower only has one (1) loan with Impac, including the subject property, that loan may exceed $2 million (up to the guideline maximum herein).

Borrowers with > 4 financed properties are ineligible for cash-out when subject is second home or investment property.

Borrowers with 5 – 10 financed properties are eligible for purchase and rate/term transactions on 2nd

home or investment property with 720 minimum score.

Borrowers with > 10 financed properties are not eligible for any 2nd

home or investment property transactions (purchase, rate/term, or cash-out)

Borrower may have Impac financing on a maximum of 10% of the properties in a PUD or condominium project.

o For projects ≤ 10 total units, financing on a maximum of 1 unit is allowed

Loan Amount

Minimum loan amount = $100,000

Mortgage Insurance Mortgage insurance is not required

Occupancy Primary Residence – 1-4 units Second Homes – 1-unit Investment Properties – 1-4 units

Points and Fees Maximum 5% Limit. The points and fee limit applies to all occupancy types.

Prepayment Penalty None

Property Types Eligible

1-unit single family residences (attached and detached) and PUDs (attached and detached)

2-4 unit properties (within matrix parameters)

Condominiums - FNMA Eligible

Both FNMA Condo Project Manager (CPM) and FNMA Limited Review are allowed

Detached Condo units that are Principal Residences may be processed with Limited Review (see B4-2.2-03, Limited Review Process for Detached Condo Units)

Non-Warrantable Exception: o The FNMA investment property concentration limits (i.e., the percentage of non-owner

occupied properties within a project) do not apply, and o Minimum 50% of units in project (or subject legal phase, considered with prior legal

phases) must be sold or under contract. Limited Review (see B4-2.2-02, Limited Review Process for Attached Condo Units) Limited Review eligibility criteria for attached units differ depending upon the occupancy type and LTV/CLTV/HCLTV ratios, and are as follows:

Occupancy Type Maximum LTV/CLTV/HCLTV

Principal residence ≤ 85%

Second home ≤ 75%


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Investment property Not allowed

Note: Mortgages secured by attached units in new condo projects are not eligible for Limited Review. See FNMA guidelines for restrictions on Florida condominiums. Ineligible

Acreage greater than 20 acres (appraisal must include total acreage)

Agricultural zoned property

Condo hotel

Co-ops

Hobby Farms

Income producing properties with acreage

Leaseholds

Log Homes

Manufactured housing

Mixed use properties

Modular homes

Properties subject to oil and/or gas leases

Title may not be held in a business name

Unique properties

Working farms, ranches or orchards

Qualifying Rate and Ratios

Option #1 – Asset Qualification Qualifying Rate and Ratios

N/A Option #2 - Self-Employed using Bank Statements with/without Asset Amortization: Qualifying Rate and Ratios

5/1, 7/1, 10/1 ARM – Qualify at the greater of the fully-indexed rate or Note rate

ARM qualifying ratios are based on a fully amortizing principal and interest payment.

Interest Only loans qualify at the greater of the fully-indexed rate or note rate based on the scheduled remaining loan term at the time of recast after the interest only period has expired.

Fixed Rate loans qualify at the note rate Interest Only loan qualifying payment example: Loan Amount = $100,000 ARM Type = 5/1 ARM 1-Year LIBOR Index = 0.685% Margin = 2.75% Start Rate/Note Rate = 5% Start Rate/Note Rate of 5% is greater than Index plus Margin (0.685 + 2.75 = 3.435%) Term = 25 years (scheduled fully amortizing term after interest only period expires, 30 – 5 = 25) $100,000 @ 5% interest, 25 year amortization = $584.59 monthly qualifying payment DTI Ratio

Maximum DTI is 50% (applies to both fully amortizing and interest only)

For loans with DTI > 43% underwriter may require additional reserves based on borrower’s residual income after total debt payments. Follow VA requirements. Maximum increase of six (6) months reserves. Additional reserves are not required if the residual income exceeds the table amount by over 20%.

Section 35 Higher Priced Mortgage Loans (HPMLs) will be allowed subject to mandatory impound account for 5 years and no property flipping.

Limitations on HPML loans for resale transactions within 180 days When a second appraisal is required per the TILA HPML Appraisal Rule the loan is ineligible. For principal residences, when the price reflected in the buyer’s purchase agreement is more than a certain amount higher than the seller’s acquisition price, the rule requires a second appraisal. These amounts are:

More than a 10% increase if the seller acquired the property in the past 90 days;

More than a 20% price increase if the seller acquired the property in the past 91 to 180 days

See the TILA HPML Appraisal Rule for exemptions from this requirement.

Secondary Financing Allowed for arm’s-length transactions in accordance with FNMA guidelines and program CLTV limits

Temporary Buydown Not allowed


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Underwriting

ALL LOANS: Loans must be manually underwritten and fully documented. All loans must be underwritten in compliance with the Ability to Repay standards set forth in 12 C.F.R. §1026.43. For additional topics not specifically or fully addressed by 12 C.F.R. §1026.43 guidance or herein, Fannie Mae underwriting guidelines should be followed Underwriter may request a copy of any inspection where repairs or remediation (monetary or other) are specified in a purchase contract, regardless of whether repairs have been completed. The underwriter must be comfortable that the borrower is able to repay the loan and that belief must be supported by information from independent third parties. All factors in the loan file must be viewed in totality to reach this conclusion. Non-arm’s-length transactions are not allowed. Guideline Variance \ Exceptions: Minor exceptions to guidelines may be considered on a case by case basis. Compensating factors include but are not limited to reserves well above requirement (prior to any cash out), depth of credit, long term employment stability and 15% or greater reduction in mortgage payment. All exceptions must be submitted per the Impac Exception Policy, approved by Underwriting Senior Management, Warehouse Lending and Capital Markets. Underwriters should:

Analyze payment shock by comparing the existing housing payment to the anticipated housing payment, and

Make a sound risk assessment of the resources of the applicant before finalizing the loan. An underwriter has the discretion to require any additional documentation they feel is appropriate and reasonable to support that assessment.

If underwriter requires tax returns to make the proper risk assessment then borrower will be ineligible for this program and underwriter will make a counter offer to another product, if applicable.

Impac Underwriting Manager review and signature is required for loan amounts > $1,000,000 File must include title commitment with 24 months title history. CORRESPONDENT ONLY:

Loans submitted under this program require prior approval by Impac. Delegated underwriting is not allowed.

A third party fraud report must be ordered and reviewed by the underwriter.

VA Residual Income Calculation (Used for Option #2 when bank statements are used for qualifying)

Use VA Form 26-6393 Loan Analysis to calculate residual income. http://www.vba.va.gov/pubs/forms/VBA-26-6393-ARE.pdf

1. Calculate the total gross monthly income of all occupying borrowers.

(Note: Do not gross up non-taxable income for the residual income calculation)

2. Deduct from gross monthly income: a. State income tax b. Federal income tax c. Municipal or other income tax d. Retirement or Social Security tax e. Proposed total monthly fixed payment (total mortgage payment + all recurring monthly

obligations) f. Estimated maintenance and utilities (use $0.14 per square foot of gross living area) g. Job related expenses (if applicable – Employee Business Expense from IRS Form 2106)

3. Subtract the sum of the deductions above from the total gross monthly income of all occupying borrowers.

The balance is residual income. Compensating Factor Residual income may be cited as a compensating factor provided it can be documented and it is at least equal to the applicable amounts for household size and geographic region found on the Table of Residual Incomes by Region. To use residual income as a compensating factor, count all members of the household of the occupying borrowers without regard to the nature of their relationship and without regard to whether they are joining on title or the note. From the table, select the applicable loan amount, region and household size. If residual income equals or exceeds the corresponding amount on the table, it may be cited as a compensating factor.


http://www.vba.va.gov/pubs/forms/VBA-26-6393-ARE.pdf

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Exception: The lender may omit any individuals from “family size” who are fully supported from a source of verified income which is not included in effective income in the loan analysis. These individuals must voluntarily provide sufficient documentation to verify their income to qualify for this exception.

VA Residual Income Tables (VA Lender Manual Chapter 4.9) (Used for Option #2 when bank statements are used for qualifying)

Table of Residual Incomes by Region for Loan Amounts of $100,000 and above

Family Size Northeast Midwest South West

1 $450 $441 $441 $491

2 $755 $738 $738 $823

3 $909 $889 $889 $990

4 $1,025 $1,003 $1,003 $1,117

5 $1,062 $1,039 $1,039 $1,158

Over 5 Add $80 for each additional member up to a family of seven.

Key to Geographic Regions Used in the Preceding Tables

Northeast

Connecticut New Hampshire Pennsylvania

Maine New Jersey Rhode Island

Massachusetts New York Vermont

Midwest

Illinois Michigan North Dakota

Indiana Minnesota Ohio

Iowa Missouri South Dakota

Kansas Nebraska Wisconsin

South

Alabama Kentucky Puerto Rico

Arkansas Louisiana South Carolina

Delaware Maryland Tennessee

District of Columbia Mississippi Texas

Florida North Carolina Virginia

Georgia Oklahoma West Virginia

West

Alaska Hawaii New Mexico

Arizona Idaho Oregon

California Montana Utah

Colorado Nevada Washington

Wyoming


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Acceptable Bank List for Foreign National Asset Documentation Agricultural Bank of China Bank of America Bank of China Bank of New York Mellon Barclays BBVA BNP Paribas Citigroup Credit Suisse Deutsche Bank Goldman Sachs Groupe BPCE Group Crédit Agricole HSBC Industrial and Commercial Bank of China Limited ING Bank JP Morgan Chase Macquarie Bank Limited Mitsubishi UFJ FG Mizuho FG Morgan Stanley Nordea Royal Bank of Scotland Santander Société Générale Standard Chartered State Street Sumitomo Mitsui FG UBS Unicredit Group Wells Fargo


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Borrower Affirmation – Option #1 – Asset Qualification

Date: Loan No Borrower Name:

1. I understand that Impac Mortgage Corp. will determine my Ability to Repay this mortgage loan,

as it is required to do under existing law, solely on the basis of existing assets that I currently

maintain.

2 I have eligible assets in the amount of $ which are sufficient to cover my monthly

expenses over the next five (5) years.

3. I understand that my monthly payment on this loan will be as follows:

For years My monthly payment is $ If this period is less than 30 years, then I understand my payment may adjust (more than once) after the first years.

4. I understand that my property taxes, insurance and mortgage insurance (if applicable) on this

property will be approximately this amount per month $ (system generated)

These be impounded. If not, I am responsible to pay them directly.

5. I believe I can afford to make the monthly payment on the loan.

6. I am not aware of anything in the future that will affect my ability to make this loan payment.

1. My loan program did not require that I submit my prior tax returns. I understand that if I had

provided verifiable documentation of my income, such as my tax returns or W-2 wage statements

or other documentation deemed necessary to support my income, I may have been able to

qualify for a different loan program with different loan terms or conditions such as a lower interest

rate.

NOTE: If there is a discrepancy between the terms in this document and the actual loan documents,

the terms of the loan documents prevail. I certify that the above information and the information on the final Uniform Residential Loan Application (Form 1003) is true and correct as of this day and that it represents an accurate picture of my financial status. _____________________________________ _______________________________ Borrower name Borrower name

_____________________________________ _______________________________ Borrower name Borrower name

(Borrower Affirmation - Assets Document v7b - Rev 7/25/14)


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Borrower Affirmation – Option #2 - Bank Statements Used to Qualify

Date: Loan No Borrower Name:

2. My average monthly income is $

3. I understand that my monthly payment on this loan will be as follows:

For years My monthly payment is $ If this period is less than 30 years, then I understand my payment may adjust (more than once) after the first years.

4. I understand that my property taxes, insurance and mortgage insurance (if applicable) on this

property will be approximately this amount per month $ (system generated)

These be impounded. If not, I am responsible to pay them directly.

5. I believe I can afford to make the monthly payment on the loan.

6. I am not aware of anything in the future that will affect my ability to make this loan payment.

7. If my loan program did not require that I submit my prior tax returns, I understand that if I had

provided additional verifiable documentation of my income, such as my tax returns or W-2 wage

statements or other documentation deemed necessary to support my income, I may have been

able to qualify for a loan with different loan terms or conditions such as a lower interest rate.

NOTE: If there is a discrepancy between the terms in this document and the actual loan documents,

the terms of the loan documents prevail. I certify that the above information and the information on the final Uniform Residential Loan Application (Form 1003) is true and correct as of this day and that it represents an accurate picture of my financial status. _____________________________________ _______________________________ Borrower name Borrower name

_____________________________________ _______________________________ Borrower name Borrower name

(Borrower Affirmation – Bank Statements Document v7b - Rev 7/25/14)


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Alien Status ID Certification

Attach legible enlarged copies of identification.

I hereby certify that I have seen and reviewed the following original document(s):

Form of Identification: Passport _______ Alien ID Card _______

Name as shown on ID: ________________________________________________

INS/Registration #: ___________________________________________________

Type/Card #: ________________________________________________________

(Lower left corner of card: e.g., B1/B2, E1 & E2, I-151, I-551, I-94, I-688, I-688B, TC, TN)

Expiration Date? NO _______ YES _______ DATE _________________

Visa Status ___________________________________________________________

(Required for E-1, G-4, H-1, L-1, NATO-5, and NATO-6 status)

Recent Arrival: YES ______ NO ______ Date of Arrival __________.

I hereby certify that this information is true and correct.

Borrower’s Signature: __________________________________ Date: ___________

Originating Company

Representative: _______________________________________ Date: ___________

Rev 7/10/14

# # #


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Alt Income Combined Underwriter Worksheet - 12 month bank statement

CPA/Licensed tax preparer gross revenue for 12 month period per P&L: $1,000,000

Deposits Month Year Dollar Amt

1 $50,000

2 $75,000

3 $54,000

4 $44,000

5 $65,000

6 $80,000

7 $76,000

8 $90,000

9 $80,000

10 $100,000

11 $120,000

12 $140,000

Total $974,000

Deposits as a percentage of revenue 97.40%

Net income per P&L: $500,000 Monthly Income: $41,666.67

Are Gross Deposits 95% or greater of revenue per P&L? Yes No

Are deposits consistent with occupation Yes No

Are ending balances per bank statements consistent or increasing over time? Yes No

Are the bank statements absent of O/D or NSF's beyond allowable Yes No

If any of the answers to the above questions are no,

the loan will require 2nd review by Underwriting Management

Underwriter name: ____________________________ Date: ___________________


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Alt Income Separate: Underwriter Worksheet - 12 month bank statement (personal)

Deposits Month Year Dollar Amount

1 $10,000

2 $8,000

3 $7,000

4 $10,000

5 $12,000

6 $10,000

7 $13,000

8 $12,000

9 $15,000

10 $15,000

11 $16,000

12 $17,000

Total $145,000

Monthly Income: $12,083

Are the deposits consistent and stable Yes No

If no, P&L must be utilized for qualifying

P&L net income for 12 month period: $150,000


Min. 3 mo. Business bank statement provided? Yes No

(to prove separate accounts)

Are the bank statements absent of overdrafts and NSF's in excess of allowable? Yes No

Are the deposits consistent with the borrowers occupation: Yes No

Are ending balances per bank statements increasing or consistent over time? Yes No


the loan will require 2nd review by Underwriting Management

Underwriter name ___________________________________ Date _______________


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Alt Income Separate: Underwriter Worksheet - 24 month bank statement (personal)

Deposits Month Year Dollar Amount

1 $10,000

2 $11,000

3 $15,000

4 $17,000

5 $18,000

6 $20,000

7 $21,000

8 $22,000

9 $25,000

10 $25,000

11 $25,000

12 $26,000

13 $26,000

14 $27,000

15 $28,000

16 $29,000

17 $29,000

18 $30,500

19 $30,600

20 $30,700

21 $31,000

22 $31,500

23 $32,000

24 $32,000

Total $592,300


Are deposits consistent and stable? Yes No

If no, P&L must be utilized for qualifying

P&L net income for 24 month period: $600,000


Min 3 mo. Business bank statement provided? Yes No

(to prove separate accounts)

Are the bank statements absent of overdrafts and NSF's in excess of allowable Yes No

Are the deposits consistent with the borrowers occupation? Yes No

Are ending balances per bank statements increasing or consistent over time: Yes No


the loan will rquire 2nd review by Underwriting Management

Underwriter name: _________________________________ Date:_______________________


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