Niches 1st Mortgages
This matrix should be used to
find general program information/
product types, unusual property or
loan characteristics. Please consult
the Prime 1st Mortgages matrix for
detailed program criteria.
Company Name
PROPERTY-RELATED ITEMS
1 Acreage: Max acres on res. property (U=Unlimited)
2 Condo: Non-FNMA/FHLMC warrantable
3 Condo: With only 2-3 units
4 Condotels at resort destinations
5 Co-ops
6 Dome homes
7 Land: Purchase of subdivided lot
8 Land: Purchase of undeveloped raw land
9 Log homes
10 Manufactured home (post-1976) “real” property, doublewide
11 Second dwelling on single tax lot
12 Zoning: Non-owner < 5 units: Zoned other than residential
123456789101112
MISCELLANEOUS
13 Aliens/foreign nationals: No green
card, second home
14 Aliens/foreign nationals: No green card,
investment property loans are available
15 Builders, Realtors, developers:
No-income verifier loans available
16 Corps., trusts, partnerships and LLCs
17 Minimum loan amount
18 Non-owner: More than 10 financed properties allowed regardless of loan amount
19 Ratio: Combined ratios are allowed
with non-occupant co-borrower
20 Remodel: Conventional at after-remodel value
13
14
15
16
17 18 19 20
PROGRAMS AND OPTIONS
21 Bridge loans
22 FHLMC: Loan Prospector (LP)
23 FHLMC: Affordable Gold
24 FNMA: Desktop Originator (DO)
25 FNMA: MyCommunityMortgage
26 FNMA: Desktop Underwriter (DU)
27 Govt.: FHA Direct Endorsement
28 Govt.: VA
29 Lock: Longest lock available (number of days)
30 Lock without property address
31 Pledged asset option
32 Reverse mortgages
33 Tenants-in-common ( TIC)
34 Rural property/part-time farm
21
22 23 24 25 26 27 28 29 30 31 32 33 34
Direct Mortgage Corp.
801-924-7737
www.DirectMortgage Wholesale.com
U
Y
Y
50K
Y
YYYYYYY60
Y
NATIONWIDE except: AK AR DC DE IA IN KS KY MA MD ME MS ND NE NH NJ NY PA RI SD VT WV
Dumont Land Finance Corp.
877-526-3111
www.dumontland.com
U
Y
*
15K
CO GA MO NM OK TX VA
Rural, personal use only. 5-acre minimum, $5K max/acre
*
Merit Mortgage Services Inc.
310-327-4530
www.meritwholesale.com
10
YY
60K
Y
Y
Y
YY55
AZ CA ID NV OR WA
1234567
Manufactured home specialists. Min FICO of 580, manual U/ W with min FICO of 580, non-occupant co-borrowers and singlewides available on
FHA programs. Conventional programs include LP A- levels 1-4.
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22 23 24 25 26 27 28 29 30 31 32 33 34
Tell lenders you found them
in Scotsman Guide
Scotsman Guide makes every attempt to ensure the quality of matrix and directory information, which all listed lenders verify or update monthly. Because of the production
cycle and dynamic nature of the industry, loan product terms and availability may not reflect the latest changes. Please contact lenders directly for the most-recent program
details. If you believe data is inaccurate or misrepresented, please e-mail: matrixfeedback@scotsmanguide.com.
The Case for Stricter Guidelines
Tighter underwriting makes the mortgage business more difficult — but potentially safer
By Andrew Newton, underwriting and credit-policy manager, and Christi Becker, underwriter, Gold Star Mortgage Financial Group
In a time of massive upheaval
inside the mortgage industry, one area
experiencing significant change is
underwriting. Many transformations taking place affect industry professionals and
consumers alike. They also make it more
difficult to close purchase and refinance
transactions.
In 2004, the Bush administration
loosened underwriting guidelines to help
more Americans qualify for home loans.
Those changes, however, led some consumers to enter agreements that required
them to live beyond their means. In addition to the relaxed guidelines, alternative
mortgage products such as pay-option
ARMs and stated-income loans caused
even more problems.
Some mortgage professionals are unhappy with the tightening of previously
loose guidelines, but market restrictions
are necessary. Considering this, mortgage
brokers and borrowers must be prepared
to provide more documentation to support what’s listed on loan applications.
This includes:
■ Income documentation: New guidelines require submission of pay stubs for
all employed borrowers and tax returns for
self-employed borrowers. Previously, many
lenders required only a verbal verification of
employment for many loan types.
■ Asset documentation: Lenders now typically review and inspect bank deposits much
more closely.
■ Appraisals: Lenders now commonly
scrutinize appraisals thoroughly, especially
in declining markets. Finding recent comparables — those within six months — often
is more difficult, and support for estimated
values can be hard to find.
■ Employment verification: A two-year
work history often is required for all
Andrew Newton has more than 10 years’ lending-industry
experience. He has been the underwriting and credit-policy
manager for Gold Star Mortgage Financial Group since
2005. He can be reached at anewton@goldstarfinancial.
com. Christi Becker, underwriter, has been in the banking
industry since 1987. She is experienced with underwriting
conventional, jumbo, Federal Housing Administration and
U.S. Department of Veterans Affairs loans. She has been
with Gold Star Mortgage Financial Group since 2008. E-mail cbecker@goldstarfinancial.com.
borrowers. Previously, many underwriting
guidelines required proof of employment for
a shorter amount of time.
These changes and others have caused
brokers to alter how they operate. For example, many brokers now begin property and
borrower research, including credit history,
as soon as they take a loan application. Conducting early research can uncover issues
that could cause problems later. Such discoveries can help brokers and clients avoid wasting time and money on impossible deals. For
deals that appear feasible, brokers should
price out the loan based on the information
received from a trimerged credit report and
an estimated loan-to-value ratio.
much of the same for the next four to five
years — or until government agencies become more comfortable with the housing
market. We now know where loosened
underwriting guidelines can lead. It’s up
to regulators and industry professionals
to make sure we don’t go down the same
path again.
“Conducting early research
can uncover issues
that could cause
problems later.”
When the loan arrives at a lender’s underwriting department, that department
must use all the resources it can to jus- The trend toward plain-vanilla loans
tify approving the loan. Quality assur- and the retreat from exotic lending vehicles
ance has become a more important part might make it harder to do business, but it
of an underwriter’s job in the past six to 12 also makes it safer. Tightened under writ-months. Information sources that offer in- ing guidelines and conservative changes to
sights into property values and borrowers’ loan programs have caused many brokers
backgrounds can prove invaluable. and other industry professionals to change
Conducting in-depth research is good careers. In many cases, those who have left
for borrowers and the economy. As weak the industry should never have entered it
loans are weeded out and as stronger to begin with.
loans receive approval, a future with fewer As today’s tightened market continues for
delinquencies and foreclosures likely the foreseeable future, upstanding brokers
will develop. will continue to find funding for solid bor-
As the industr y moves for ward in rowers. The road ahead may be rough, but at
this new climate, brokers should expect least we’re headed in the right direction.
