Mid-America-Portfolio-Products-9-26-15 (3) (2)

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Borrowers WithPortfolio Products

Mid America Mortgage, Inc., NMLS 150009 (www.nmlsconsumeraccess.org) is an equal opportunity lender, Arizona Lic BK 091759; licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act Lic 4131103 and Finance Lenders Law Lic 603J732; regulated by the Colorado Division of Real Estate; Georgia Lic 31847; Illinois Residential Mortgage Licensee MB.6760775; Kansas Licensed Mortgage Company MC.0025093; Massachusetts Lic ML150009; Licensed by the New Hampshire Banking Department; Oregon ML-5045; Washington Lic CL-150009.


Portfolio Products• Early Access• Expanded Ratio• Asset Inclusion• Alternative Income• Non-Warrantable Condos• Investor Product

Why Offer PortfolioLending Solutions?

• Large underserved market

• 15% of the market do not qualify for traditional financing

• Perfect to offset the impacts of a rising rate environment

• Significantly reduced repurchase risk vs other market outlets

• Differentiator in the marketplace

• Ability to provide access to credit - Expand your customer base


Common Elements Early Access - Asset Inclusion - Alternative Income - Expanded Ratio

• Loan amounts- $100,000 to $1,500,000 (Early Access max- $1,000,000)

• Minimum FICO – 700 (Early Access min- 620)

• Maximum LTV - 80% primary residence - 75% second home - 70% NOO

• 15 & 30 yr fixed

• 5/1 & 7/1 ARMS


Common Elements • Purchase & refinance

Cash out permitted on Alternative Income & Expanded Ratio

Cash out not permitted on Early Access & Asset Inclusion

• No gift of funds (exception- Expanded Ratio)

• Texas transactions subject to 50 (a) (6) – Not eligible

• Residual income test is applicable



Common Elements

Reserves

• < $417,000 - 6 months PITIA

• > $417,000 - 12 months PITIA

• Investment properties - + 6 months PITI each add’l property

• No gifts for reserve requirements

• Exception- Early Access- reserves based on credit


• Meets all requirements of QM

• Borrowers who experienced adverse credit event

• Not eligible for regular agency or jumbo loan

• No documented hardship required

• Lower FICO (620) than traditional jumbo investors

• Less restrictive than GSEs and jumbo investors

Early Access


• Foreclosure:

• Bankruptcy:

• Short Sale:

• Deed-in-lieu:

FNMA - 7 year wait

FNMA - 4 year wait

FNMA - 4 year wait

FNMA - 4 year wait

BLS - 3 years

BLS - 2 years

BLS - 2 years

BLS – 2 years

Early Access


Reserves

• Zero late payments in last 18 months

- 9 months PITIA

• Any late payments in last 18 months

-12 months PITIA

• Investment properties

+6 months PITIA each add’l property

• No gifts for reserve requirements

Early Access


Real Portfolio Scenario

• Owner occupied purchase in Dallas, TX

• Sale Price- $600K

• Loan Amount- $480K (80% LTV)

• Credit score- 717

Early Access



• Problem - 2 short sales of investment properties in last 3 years

• Denied by 2 other lenders

• 9+ months PITI reserves

• Met the residual income calculation

• Closed using Early Access - 5/1 ARM at 5.75%

Early Access


• Prospects DTI exceeds agency & jumbo rules (43%)

• Maximum DTI - 55% (must meet 1.5x residual income test)

• Only product that permits gift of funds- primary residence

• Applies to down payment and closing costs- Min. 5% own funds

Expanded Ratio



• Married couple - Both employed in technology industry

• Purchase- $1,000,000 property in CA

• Mortgage amount - Jumbo at $750,000

• FICO - 702

Expanded Ratio



• Problem - 51.18% DTI

• Told they’d have to wait

• Closed using Expanded Ratio 5/1 ARM at 4.875%

Expanded Ratio


• Prospects whose DTI exceeds 43%

• Don’t have traditional income per source Appendix

Q

• Sufficient assets to supplement income to meet

payment obligation

• Assets can be retirement funds

• No max DTI prior to inclusion - LTV reduced if 60%+

• No cash out refis

Asset Inclusion




• Married couple moving from CA to PA

• Purchase price - $537,000

• Mortgage amount - $402,750 (75 % LTV)

• 779 FICO

• In CA, Husband self-employed- Wife employed

Asset Inclusion



• Problem - Husband taking W-2 employment in PA - Wife not working

• DTI - 59%

• Closed using Asset Inclusion

• $515,000 total assets remaining after purchase completed

Asset Inclusion


• Prospect does not meet guidelines for qualifying sources of income

• Self-employed with partial / incomplete 2nd year income• Self-employed- recent year’s tax return is higher

• Commission / bonus applicants -

• Changed from salaried to non-salaried

• Major part of commission-paid year end

Alternative Income



• Dentist with 2 offices - adding a 3rd

• Purchase - Investment property in CA

• Sale price-$235,000

• Mortgage amount- $137,000 (60% LTV)

• FICO - 789

Alternative Income



• Problem - Insufficient income to qualify

• Used projected income based on opening of previous offices

• Closed using Alternative Income 5/1 ARM at 5.0%

Alternative Income


Non-WarrantableCondos

• Applies to all portfolio products (except Investor)

• Max LTV- 70%

• 60% of total units must be sold or under contract

• Single entity ownership- up to 20%

• Primary and 2nd homes only



• Delinquency-• Typical lender- no more than 10% of owners 60 days +

• MAM portfolio- no more than 25% of owners 30 days+

• Waived if current reserves >30% of operating budget

• Budget - 10% reserve allocation not needed if current reserve > 20% of operating expenses

• Commercial influence - None defined. Must be common and customary to market



Real Portfolio Scenario• Applicant owned a residence In PA• Purchasing vacation home in Jersey shore town• Sales price- $143,000• Loan amount- $100,000 (70% LTV)• FICO - 780




• Problem- Non-warrantable• Closed on a 7/1 ARM at 5.375%


• Experienced investor only

• Own at least 3 investment properties

• Minimum 3 years owning, retaining, managing

Investor Program


• Purchase and refinance (including cash out)

• 1-4 units (PUDs and FNMA condos okay)

• Loan amounts - Max - $1 mm | Min - $100K

• Minimum FICO - 680 (adjusts for LTV and cash out refis)

• Maximum LTV – 65%

Investor Program


• 15 & 30 yr fixed; 5/1 & 7/1 ARMS

• No DTI calculated

• No 4506-T required

• 3 year prepayment penalty

Investor Program


• Qualifying income- Cash flow from subject property only

• Rental income for subject property- from comparable rent schedule

• Must have positive cash flow based on 80% of rental income

• Expanding state approvals

Investor Program


• Maximum Financed Properties

FNMA- 10 Properties

FHLMC- 4 Properties

Jumbo Sources- 4 Properties

MAM Investor- Unlimited Properties

Investor Program


Portfolio Scenario

• NJ Realtor with 20 years buying and renting

• Refi out of an interest only loan

• Value- $350,000

• Loan amount- $227,500 (65% LTV)

• FICO- 799

• Liquid Reserves- $2 M

Investor Program


Portfolio Scenario

• Problem- Owners 14 properties

• Closed on a 5/1 ARM at 6.875%

Investor Program


Action Steps• Two ways to generate Mid America Mortgage Portfolio Loans

1) Second look on QM fallout -submit before denial must be issued

-No additional documentation

2) Marketing and sales effort focused on Portfolio prospects


Action Steps• Review your leads and current pipeline for opportunities

• Set appointments with referral sources - intro your portfolio solutions

• Presentations to inform & educate Realtors and other referral sources

• Call your Mid America Mortgage rep with scenarios or use Portfolio

scenario form/desk


Questionsand Answers


Thanks For Your Business


Documents

Mid-America-Portfolio-Products-9-26-15 (3) (2)