FHA 2355600004VA9102010000

Correspondent – Credit Policy – Revised Overlays/Selling Guide Update

Effective Immediately

On Q Financial, Inc. has updated our overlays to add, remove and clarify certain scenarios. Below is an overview of the changes that will take effect for all loans in process.

On Q Financial, Inc. now allows Singlewide Manufactured Homes and properties with greater than 20 acres!

Overlays – Delegated

Changed/Added:

  • Removed Non-Delegated from the overlay matrix. Non-Delegated overlays are now located within “Overlays – On Q Financial, Inc. Non-Del Correspondent and Wholesale Division” attached
  • Borrower Eligibility: If the borrower has purchased or refinanced their primary residence within the last 12 months, will be retaining the property, and the subject is a new primary residence the file must contain an occupancy waiver from the Servicer on the previous primary residence, as required by section 6 of their Security Instrument.
  • GNMA Seasoning Sections to include GNMA pooling requirements

Removed:

  • Ineligible Assets – Trade Equity
  • Assets – Down payment funds cannot be gifted on loan amounts greater than $750,000
  • Condominiums – Require HO-6 policy to have minimum coverage in the amount of 10% of the appraised value, as determined by the insurer
  • Employment and Income section
    • FNMA and Freddie Requirement for borrower requirements of meeting option 1 or 2 for qualifying income commencing after note date
    • Borrowers who were out of the work force due to unemployment for a period of 6 months or longer must be on the current job 6 months or longer to use income for qualifying.
  • Escrow Holdbacks – The maximum dollar amount to be the lesser of the $30k or the cost to complete the incomplete items does not exceed 10% of the as completed value or the mortgaged. Property must be complete upon On Q Financial, Inc. Purchase.
  • Manufactured Housing – AUS approval required for FNMA and Freddie, Max 80% LTV and borrower must have a minimum of 5% contribution from own funds
  • Singlewide Manufactured Homes
  • Parcels exceeding 20 acres
  • Ratios- VA Purchase >50% DTI

Overlays – Non-Del Correspondent and Wholesale Division

Changed/Added:

  • Combined both Non-Delegated and Wholesale Overlays onto one document
  • Borrower Eligibility: If the borrower has purchased or refinanced their primary residence within the last 12 months, will be retaining the property, and the subject is a new primary residence the file must contain an occupancy waiver from the Servicer on the previous primary residence, as required by section 6 of their Security Instrument.
  • Freddie Mac HomePossible Program and Overlay requirements
  • GNMA Seasoning Sections to include GNMA pooling requirements

Removed

  • Ineligible Assets – Trade Equity
  • Assets – Down payment funds cannot be gifted on loan amounts greater than $750,000
  • Escrow Holdback – removed requirement that property must be complete prior to funding/purchase
  • Mortgage Credit Rejects
  • Parcels exceeding 20 acres
  • Owner Occupied Only for VA
  • Ratios- VA Purchase >50% DTI
  • Singlewide

Selling Guide Update: The below information has been added to the Selling Guide.

Escrows

The seller is required to pay all escrow related expenses prior to and 30 days after purchase. This includes taxes and all insurance related items. Private Mortgage insurance will be adjusted for on the PA accordingly.

Post Purchase Adjustments and Escrow Reconciliation

The Correspondent Seller’s approved user(s) can review the Purchase Advise (PA) online and on each transaction the PA will be emailed to the contact on file. In certain cases, there maybe information that was not provided such as a principle reduction, property tax payment, or inaccuracies in registration.

To limit discrepancies On Q Financial, Inc. strongly advises to review the PA within 30 days of purchase.

For resolution or clarification on PA’s, the seller should contact the Correspondent Purchase Advice Team CorrPurchaseAdvice@onqfinancial.com . If it is regarding a reconciliation, supporting documentation should be provided such as proof of payment, CD, IEAD’s.

Files purchased after 60 days are considered aged and ineligible for a refund by the borrower or On Q Financial, Inc., but On Q Financial, Inc. reserves the right to reconcile up to 12 months after the purchase date. On Q Financial, Inc. will not reimburse escrow funds to the Correspondent for loans sold or paid in full.

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