SONYMA GENERAL - StudioLabs 2018mtol.vertasource.com/DocumentUploads/201607271659548377...SONYMAPRO.DOC Revised 9/15/99 2 POOL INSURER 1. Genworth Mortgage Insurance 310 Great Oaks

SONYMA Procedures 1 Exhibit 02-244

SONYMA

GENERAL “SONYMA” stands for State of New York Mortgage Agency. This agency came into existence in order to provide low interest rate mortgages on residential properties in primarily targeted areas, to first-time home buyers who may not be able to qualify for a higher rate conventional mortgage. The money is made available for this program through the sale of tax-exempt bond issues. Thus, this program has: Borrower/property eligibility parameters

* Income limits * Purchase price limits * Recapture requirements

SONYMA INFORMATION Address: State of New York Mortgage Agency

641 Lexington Avenue New York, New York 10022 Tel: 212-688-4000

Hours Available: Monday-Friday, 11:00 AM - 12:00 PM

Loan Reviewers: 2:00 PM - 4:30 PM Status Calls: 10:00 AM - 4:00 PM (Mon-Fri) Lucy Angomas, x412 Joe Lindicy, x417

* For reservations, extensions: Request by fax only. * Fee Waivers: Request by mail only.

SONYMAPRO.DOC Revised 9/15/99 2

POOL INSURER

1. Genworth Mortgage Insurance

310 Great Oaks Bouleveard Albany, NY 12203

Underwriting Department: 2. SONYMA Mortgage Insurance Fund

Fifth Floor 641 Lexington Avenue New York, New York 10022 Attention: Mike Esposito

NOTE: Financing of One-Time Premiums is not allowed.

RATES Rates are published, generally on the first of each month, in SONYMA’s monthly bulletin. SONYMA does reserve the right to change the rate at any time (see Exhibit A).


SONYMA HIGHLIGHTS

* Must be owner-occupied, primary residence. * Must meet: income limits

purchase price limits * First-time buyers only** * Three years, complete, signed tax returns on: (no exceptions)

1. All non-targeted properties 2. Self employed applicants where LTV is over 90%.

* 97% Financing

a) Applicant must have 3% of own funds b) Requires pre-closing counseling c) Requires post-closing early delinquency intervention (written

consent from customer required) * 2-4 family properties must be at least five years old, except for two family in

target area. No Commercial/Business use allowed. * If primary source of income is derived from business run out of their home, DO

NOT TAKE THE APPLICATION. * Must be arms-length transaction. * 1% LOCK-IN FEE/1% additional point due at closing. * Total points from customer equals two percent (2%).

a) One point due at Lock-in. b) One point due at Closing. c) M&T retains 1.5%. d) SONYMA will “net out” their .5% at time of loan purchase.

* Remaining economic life of property MUST be at least five years or more than

the term of the loan. * If a septic inspection is a contingency on the contract, it will be a contingency on

our commitment. ** Unless they are buying in a targeted area.


GENERAL SONYMA GUIDELINES

1. SONYMA application packages, with all necessary origination forms, will be

made available for originators across the state.

These packages will consist of the following documents:

a. Notice Concerning Charges due at application for SONYMA mortgage loans and Lock-In (MG-267(8/98)

b. Uniform Residential Loan Application (1003) c. Credit information letter d. Originators SONYMA checklist (F3 and F4 Rev. 3/93) e. W-9 or W-8 f. Servicing disclosure (Rev. 11/5/96) g. Property Sellers Affidavit (210/4-99) h. Recapture Notification & Mortgagor’s Affidavit (211/4-99) i. Gift Letter (if applicable) j. Form 4506 (if applicable) k. Earnest Money Statement l. Authorization to Release Mortgage Information (if applicable) m. Borrower’s certification for post-closing early delinquency

These packages will be prepared and maintained by each individual sales office.

2. Commitment letters will NOT be issued until we receive verbal approval from

SONYMA AND the pool insurer. 3. Only 20% of our volume can be multi family properties. 4. Income to debt ratios are 33/38. However there is some flexibility depending on

compensating factors, except on LTV’s over 95%. 5. Power of attorney cannot be used by the seller unless the seller is completely

incapacitated due to illness and is thus unable to sign the documents. In these cases we must receive a certified statement from the attending physician regarding the seller’s incapacity and a copy of the recorded power of attorney.


LOCK-IN PERIODS

1. Short-term Lock-in for Existing Construction

ONE OPTION:

A. Lock at application for 100 days

1. Collect 1% lock-in fee (refunded only if declined). 2. Lender must fax SONYMA “Lock-in Request Form” within 20 days of loan

application date. 3. Loan must close within 90 days and be purchased within 120 days by

SONYMA.

2. Long-term Lock-in for proposed Construction

TWO OPTIONS:

A. Lock at application - You are setting a qualifying rate of 1% over current rates.

1. Same as short-term. 2. Same as short-term. 3. Loan must close within 220 days of lock-in and must be purchased

within 240 days by SONYMA.

B. SONYMA will guarantee that the interest rate will be the lesser of:

1. Long term qualifying rate (1% above current short term rates). 2. Current short-term rates at time of closing.

Loan is not actually locked until closing; therefore, if the market goes over 1%, customer’s rate will not. Customer must close within required time frames.


BORROWER REQUIREMENTS

A. 1st Time Homebuyer: - Non-Target Area

* The applicant(s) must not have had, at any time during the three year period prior to applying for a SONYMA mortgage, any ownership interest in a residential property. This includes vacation homes or investment properties. (No real estate tax or home mortgage interest deduction can be claimed on tax returns.)

* If either spouse was not a first-time homebuyer as defined above, both will

not be considered a first-time homebuyers, whether or not both sign the mortgage.

* If an applicant currently owns a mobile home, they can qualify as a first-

time homebuyer if:

- mobile home is NOT permanently attached to land - they have NOT claimed real estate or mortgage interest

deduction on their income tax returns.

* To confirm their eligibility they must complete and execute the Mobile Homeowners Eligibility Affidavit (form 217/4-99) at time of application.

* The only time an applicant does not have to be a 1st time homebuyer is

when they are purchasing a property in a targeted area. B. Income Limits

* Total combined annual household income for each “household member” occupying the property must be within the applicable income limits.

* A “household member” is:

- mortgagor - mortgagor’s spouse - any person signing the note or mortgage** - any person age 21 or older who expects to occupy the property

** does not include guarantor if they are not going to occupy


C. Property Requirements

1. Must be owner-occupied. 2. Cannot be used for commercial or business use. 3. Located in New York State. 4. Cannot be a land contract. 5. Total acquisition cost cannot exceed purchase price limits. 6. Minimum 500 square feet.

Manufactured housing = 840 square feet / 20 feet wide 7. Multi-family: 2-4 family not advertised as a boarding house during the

previous five years and occupied as a residence for five years preceding closing, except for new build two-family in target area.

NOTE: If new build, and they have owned the land for more than two years, the cost/value of the land SHOULD NOT be included as part of the acquisition cost.

D. Recapture Requirement

* Our applicants must be advised of the potential payment that they may be required to pay to the federal government as a result of receiving a tax-exempt financed SONYMA mortgage.

* The payment will only be required if:

- property is sold within the first 9 years and sold for a profit

- applicants adjusted gross income is higher than the maximum

income limit for their area based on the year sold and family size.


ORIGINATION PROCEDURES

The main ingredient to a successful SONYMA mortgage is a complete application package. It is the originator’s responsibility to ensure that the following procedures are completely adhered to: A. SETTING UP THE APPOINTMENT

When setting up the appointment with an applicant, you must determine the following:

1. Is the property in a targeted or non-targeted area?

This can be determined by calling 1-800-382-HOME.

NOTE: If property is located in a non-targeted area, three years of

complete signed tax returns will be required prior to underwriting.

2. Does the customer meet the income limits?

This is based on:

- location of property by county - targeted or non-targeted area - size of family living in home at closing

3. Does the purchase price fall within the limit?

This is based on:

- location of property by county - targeted or non-targeted area - property type (1-4 family) - single family: if new or existing

B. TAKING THE APPLICATION Application packages for SONYMA mortgages are available to all our originators and contain regular mortgage documents along with necessary SONYMA forms. In addition, originators should utilize our SONYMA checklist to ensure they are completing all necessary documentation.


An incomplete application package will NOT be processed. 1. Complete the following application forms in the same manner as conventional

loan application.

a) Credit Information Letter b) Originator’s SONYMA checklist (F3 and F4, Rev. 3/93) c) W-9 or W-8 d) Servicing Disclosure e) Gift letter (if applicable) f) Form 4506 (if applicable) g) Earnest Money Statement h) Authorization to Release Mortgage Information (if applicable)

* Fully executed Sales Contract or Fully Executed Binder is required at time of application.

2. Complete the following application forms in the same manner as conventional

loan EXCEPT:

A. Indicate at the top of the Uniform Residential Loan Application that A SONYMA mortgage is being applied for.

B. Complete the Mortgage Application Worksheet by:

1. Circle “T” if the property is in a targeted area, and “NT” if the

property is in a non-target area.

NOTE: When calculating the per diem interest, it must be done based on a 360-day year, i.e.

loan amount = $50,000 interest rate = 8.3% $50,000 x 0.83 = $4,150 / 360 = $11.5277 interest per day

2. Indicate under “Special Conditions” if a grant or subsidy is being

used.


C. Notice Regarding Charges Due at Application and Lock-In for SONYMA Mortgage Loans #MG-267 (8/98) (see Exhibit L)

1. Enter the dollar amount of the lock-in fee.

2. Enter the number of days of the lock-in period.

3. Check appropriate box for Construction loans with a Long-Term

lock-in period.

D. The Seller’s Affidavit (SONYMA Form 210/4-99) is confirmation by the Seller of the purchase price and that the property qualifies per SONYMA guidelines. (See Exhibit N.) The Seller is to complete this form as follows.

1. Enter all applicant(s) names.

2. Check appropriate line as property exists. (If [D] is checked, circle

number of units.)

3. Enter purchase price. (This figure must be the same figure as line 7 in Part III on the Acquisition Cost section of the Recapture Notification and Mortgagor’s Affidavit.)

4. Answer question #7 if the property has previously been occupied.

5-7. Answer questions #8-10 if the property is newly constructed.

8. For each Seller, a Notary Public must execute this form.

9. If the Seller is a Partnership, a Notary Public must execute this

form.

10. If the Seller is a Corporation, the Notary Public must execute this form and a Corporate Seal must be provided. (Corporate Seal can only be waived if the language regarding the Seal is deleted by the Notary Public.)

NOTE: Provide the Seller with a self-addressed stamped envelope

to return documents if necessary.

NOTE: Power of Attorney cannot be used unless the Seller is incapacitated. Also, this form must be completed correctly and received by M&T Bank’s Mortgage Processing Department prior to submitting the loan to SONYMA.

E. The Recapture Notification and Mortgagor’s Affidavit, Form #211/4-99 (see Exhibit O) is a SONYMA-required affidavit that is to be completed and signed by all applicants and guarantors at application and again at Closing. The


purchasers are to complete this form as follows:

1-3. Self-explanatory.

Part II - General Information

4. Borrower’s names

5. Check appropriate lines as property exists. (If [D] is checked, circle number of units.)

6. For question #5, if the property is a 2-4 family home, circle the number of

units as follows:

2-Family - circle 1 3-Family - circle 2 4-Family - circle 3

NOTE: If property is a single-family home, do not circle anything.

7. For question #9, check (A) if a first-time homebuyer or (B) if they have

owned a home in the past three years, but they are buying in a target area.

8. Complete section 9C only if the property is in a non-target area.


Part III - Acquisition Cost of the Residence

This section is completed by the applicant(s) in order to confirm the sales price. Complete this section as follows:

#1 If existing home, enter total purchase price. If new build and purchasing

land from builder, enter contract price.

#1a (leave blank)

#2 If land was purchased separately during the past two years, enter purchase price for land.

If there is a subsidy or grant involved and it was deducted from the sales price, the subsidy amount should be added here.

NOTE: If the subsidy/grant is given by the city or state it should be acceptable to SONYMA and will be reviewed by them at time of underwriting.

#3 If purchased land separately, enter materials and construction costs(s),

including subcontractors.

#4 Self-explanatory; enter costs of fixtures if purchased separately.

#5 Enter any amount that the applicant is paying towards closing costs that is above and beyond what they would normally pay.

#6 If there are ANY non-realty items listed on the contract (i.e. refrigerator, washer, etc.) their value must be deducted from the purchase price (enter value on this line) UNLESS the contract specifically states that they have no value and are being left for the seller’s convenience. An addendum to the purchase contract stating this is acceptable.

#7 Add lines 1-5 and subtract line 6. This equals your total acquisition cost.

NOTE: The figure on line 7 is the figure that:

- must meet purchase price limits - must be entered on seller’s and mortgagors affidavits

If the acquisition cost changes between time of application and closing, the seller’s affidavit, mortgagors affidavit and the acquisition cost worksheet will have to be redone. Please make sure we know what the purchase price is and complete this form accurately.


Part IV - Income Eligibility. This section is used to calculate the customer(s) income and to insure the SONYMA income limits are adhere to. These figures are reaffirmed on the day of closing to insure the same.

A. Sources:

Indicate (under the “Prior to Loan Application” column) a breakdown of all the monthly income of our applicants, as well as any income of anyone 21 or older who will be residing in the subject property. Multiply this figure by 12. Do not lump income together

B. Total:

Indicate the total annualized gross income. This figure must be within the income limits allowed.

NOTE: If an applicant claims business expenses on their tax returns, it is NOT to be deducted when calculating income eligibility. It will be taken into account when calculating income to debt ratios.

Do not include guarantors income if they are not going to occupy.

Part V - Certification 1. Have Purchaser(s) and Guarantor(s) (if applicable) execute form. 2. Each Purchaser’s as well as each Guarantor’s (if applicable) signature

must be notarized. 3. This form must be reaffirmed at closing by the Purchaser(s) and the

Guarantor(s) if applicable.

Determining Your Recapture Tax - Attachments 1 - 4

These attachments are provided for the customer’s use. They must be provided to the customer at application. They are to explain what the Recapture Tax is and how it works. It is necessary for the Originator to explain this information to the customer(s). See Exhibit B1 for adjusted Household Income that must be utilized when calculating potential IRS Recapture Tax Liability after selling a SONYMA financed home.


C. GENERAL

1. Be sure to utilize the following:

a. SONYMA purchase price limits b. SONYMA income limits c. Pool insurance rates (if applicable) d. SONYMA fee matrix e. Short-Term/Long-Term Lock-in Closing and Purchase Timeframe

chart f. SONYMA income document matrix

2. Be sure to have complete tax returns for income purposes and to ensure

no prior home ownership.

3. Utilize the underwriting section of this manual to assist you in determining SONYMA guidelines.

4. Follow normal registration procedures and deliver a complete application within 24 hours of registering the loan.

5. On all loans in which the borrower will contribute less than 3% equity,

Homebuyer Counseling is required and borrowers will be subject to the post-closing early delinquency intervention program should the loan become delinquent during the seven years immediately following the date and mortgage closed. Signed certification agreeing to participate in the program has been eliminated, however, the originator is responsible for explaining this to the borrower.


REGISTRATION/INPUT PROCEDURES

1. When the SONYMA application package is received, review it for the following documents:

a) Three years of signed tax returns with all schedules and W-2s. This is required for all properties located in a Non-Target area, as well as for self-employed borrowers.

b) Contract of Sale executed by all parties.

c) Evidence Seller’s Affidavit has been requested.

d) Recapture Notification and Mortgagor’s Affidavit is in file or has been requested because signatures still need to be notarized.

e) Verify that the property is in a Target/Non-Target Area by comparing the census tract number with SONYMA’s Target Area List.

f) Check income and purchase price limits.

g) Assign to designated attorney (see Exhibit NN). 2. Register the loan with SONYMA using the following procedures:

Complete the SONYMA Reservation Worksheet and Lock Confirmation, Form 231/1-98 (see attached Exhibit V).

Enter our name and originator code of #952.

1. Branch Code: A = Albany B = Buffalo I = Ithaca E = Exchange Division

2. M&T employee’s name, phone and fax number who completed form.

* All other information on form is self-explanatory.

Fax this form to SONYMA at: 212-872-0406

Attn: Wendy Gonzales or

Marcia Hamilton NOTE: All employee loans must have written consent from SONYMA, prior to

taking the application.


Send request to: State of New York Mortgage Agency

641 Lexington Avenue New York, New York 10022

or fax to: 212-872-0426

Attn: George Leocata Administrative Vice President

If granted, process Alt Doc. Employee 1% discount not applicable.

3. The loan must be locked with SONYMA within 20 days from the date of

application. The following SONYMA Loan Reservation Worksheet and Lock-in Request form 238/1-98 (see Exhibit W) must be completed and mailed to SONYMA, along with a copy of the original application.

The form should include the following:

a) Date b) Enter SONYMA loan # c) Our name d) Name of M&T employee completing form e) Phone number of M&T employee completing form f) Signature of M&T employee

When Corresponding with SONYMA by Fax: 4. The original SONYMA Reservation Worksheet, fax cover sheet and the TCR report from the fax machine are kept in Registration/Input as the file moves on. The Reservation Worksheets are kept until verified on the SONYMA Lock-In Confirmation report that SONYMA has received the Lock-in request and has assigned the loan a Bond Series as well as a SONYMA number. This number is put on the original SONYMA Reservation Worksheet by Registration/Input employee and given back to the processor. The fax cover sheet and TCR report from the fax machine are kept to confirm registration in the event of an error.


When Corresponding with SONYMA by Mail:

A copy of the overnight receipt is kept as well as a list of names and what was sent for each file. 5. Complete the rest of the Registration/Input documents as you would a Conventional loan. 6. When inputting information on the system, use the following information in Database 295:

* On LOCK Screen:

Use Product Code: 186

* On BORR2 Screen:

Prepaid Interest: Enter 360 days

* On the BORR3 screen, enter “Y” when asked if it is a SONYMA loan. Also indicate if the property is in a Target or Non-Target area.

* On the BORR3 screen, enter “ALT DOC” if it is an employee loan or being

processed using ALT DOC.

* On PMI Screen:

Pool Insurance: Indicate correct Radian coverage (see attached Exhibit J).

* Fees excluded from GFE: Broker Fee Doc Prep Fee (unless M&T is preparing docs) Underwriting Fee


If the loan is: Lock-in at Application - Short-Term

* Application Date should be the date on the lock-in.

* The term is 100 days.

* 1% lock-in fee required. Lock-in at Application - Long-Term

* Application Date should be the date on the lock-in.

* The term is 220 days.

* 1% lock-in fee required.


PROCESSING

1. Review file for completeness. Pre-qualify and process loan based on guidelines outlined in the SONYMA Seller’s Guide.

a. For non-target area properties, determine that borrower(s) is a first-time homebuyer and package contains previous 3 years complete and signed 1040s.

b. Determine household income is within the applicable household income limit.

c. Determine purchase price is within the acquisition cost limits.

d. Documents cannot be over 90 days old at the time of submission.

e. Write the assigned SONYMA bond series and number on the upper right- hand corner of every document.

f. Be sure all forms that are filled out are neat and legible.

g. All SONYMA forms are to be filed under the “miscellaneous” tab in our file, using the SONYMA Review Checklist (see Exhibit CC). 2. Submit loan to Underwriting for a decision. Once the loan has been approved, a copy of the credit package must be forwarded (by overnight mail) to the Pool Insurer before the loan package is submitted to SONYMA.

The documents must be arranged in the following order and secured with an ACCO-type fastener:

- Pool Insurer’s Application** - Blue copy of the Mortgage Loan Eligibility Form #212/1-95 - Copy of the Residential Loan Application - Copy of the Factual Data Credit Report - Copy of the VOD(S) - Copy of the VOE(s) - Copy of the Appraisal - Copy of the Purchase Offer - Copy of any additional documentation appropriate to the transaction.


Complete the Radian Mortgage Insurance Application (see attached Exhibit BB). Be sure to:

1. Check appropriate SONYMA loan type. 2. Indicate the percentage of coverage needed (refer to Radian chart,

Exhibit J). 3. Print and sign your name. Indicate your fax and phone numbers. Indicate

the date completed. 3. Forward the package to Radian at:

Radian 425 Broadhollow Road, Suite 400 Melville, New York 11747

Phone: (800) 262-2169 (CMAC-1NY) Fax: (516) 249-1017

4. Once Radian has approved the loan and faxed an approval back to us, we can submit the loan to SONYMA. 5. The documents must be arranged in the following order and secured with an ACCO-type fastener (THE ASSIGNED SONYMA NUMBER MUST APPEAR ON EVERY DOCUMENT):

* A copy of the approved pool insurance certificate * The original Application Loan File Checklist (Form #225/4-99). Keep a

copy for our file.** * White, yellow, and pink copies of the Mortgage Loan Eligibility Form

(Form #212/1-95). Keep a copy for our file. * Green, pink, and white copies of the loan verification form (Form #213/1-

93). The blue copy is for our file. * The original Seller’s Affidavit. Keep a copy for our file. * A copy of the Recapture Notification and Mortgagor’s Affidavit * A copy of the executed Contract of Sale * A copy of the executed and dated Residential Loan Application * A copy of VOE(s) and supporting documentation * A copy of VOD(s) and supporting documentation * A copy of Factual Data Credit Report * A copy of Appraisal (including three original photos of subject attached to

an 8 ½" x 11" sheet of plain paper). * Copies of most recent three year’s signed 1040s (including all schedules

and W-2s). If returns show an itemization for real estate tax and/or home mortgage interest deductions, then a separate notarized affidavit from the borrower explaining these deductions must be submitted.

* Copies of subsidy documentation, if applicable * Copies of any other documentation appropriate to this transaction


* (LTV’s over 95%) Evidence borrower has received Home buyer counseling

** The purpose of the SONYMA Application Loan File Checklist (See Exhibit Y) is to ensure a complete and accurate file is being submitted to SONYMA. Each space needs to be addressed with either a “check” mark ( ) or an “na.” If a “check” mark has been placed next to an item, it needs to be in the file to SONYMA.

*** Complete the SONYMA Loan Verification Form, Form #213/1-93 (see attached Exhibit AA). 1. Box #15 is the same as #4. 2. Box #16 - indicate, if applicable, what subsidy or grant is involved.

All boxes need to be filled in completely and accurately. If any question is not

known, indicate TBD (To Be Determined) or N/A (if it is not applicable). 6. Once the package has been completed, it needs to be sent overnight mail to:

State of New York Mortgage Agency Senior Loan Officer/Originations 641 Lexington Avenue New York, New York 10022

7. Upon SONYMA’s review the processor will receive a fax advising them of SONYMA’s decision (including pended notices)* on each loan. SONYMA will advise M&T of its final decision by faxing and mailing the executed Mortgage Loan Eligibility Form.

*If SONYMA has pended the loan for any reason, it is the processor’s responsibility to forward the necessary information to SONYMA. 8. After SONYMA has approved the loan, the loan must go back to the underwriter. The underwriter will add any necessary conditions to the system. 9. When generating the Commitment Letter use the following FiTECH codes for the type of loan that applies.

FIXED COMMIT 10. If SONYMA declines the loan, follow conventional decline procedures.


UNDERWRITING

Below are general guidelines to utilize when underwriting a SONYMA loan. Be sure to refer to your SONYMA Seller’s Guide for issues not addressed. 1. Downpayment

a. No gifts from seller.

b. Cash on up to $1,000 must be deposited into an account.

c. No secondary financing unless it is from a Federal, State or local agency and is approved by SONYMA and Pool Insurer.

- Maximum mortgage is based on adjusted sales price, i.e.: Sales Price $100,000 Subsidy - 25,000

$ 75,000

Maximum we can lend is 97% of $75,000 = $72,750, LTV = $72,750/$100,000 = 72.75; therefore, no PMI is required.

d. For project loans (condos, co-ops, PUDs) seller concessions are limited

to 3 percent for LTVs to 97%.

e. Sales concessions must be common for the area and appraiser must state such on appraisal.

f. Gifts from immediate family members allowed on 1-4 units properties and

may cover escrows. Borrowers must make a 3% investment from their own funds. 2. Credit

a. Alimony payments may be deducted if less than 10 payments remain - Applicants can pay these down to qualify.

b. Child support payments are deducted from payer’s income.

c. Installment debt not included if less than 10 payments remain - applicants can pay these down to qualify.

d. 5% revolving & 2% on single payment notes (American Express, etc.).

e. Bankruptcy:


* Discharged at least three years from date of application * Re-established good credit * Must have stable employment * Explain circumstances (must be beyond their control) * Copy of all bankruptcy papers

3. Income

a. Bonus, commission, overtime, part-time income - average last 2 years tax returns.

b. For self-employed the minimum documentation requirements are:

* YTD P&L (if 1st quarter of business fiscal year has passed) * Average income over time period

c. Employed by family business: average previous 2 years of income, need

pay stubs and VOE.

d. Job changes/residence changes must be explained if:

* 3 or more employment changes within the previous 5 years * 4 or more changes in residence over the previous 6 years

e. Rental income:

* 3-4 family units/maximum LTV = 90% * 75% of:

1. actual rent or 2. economic rent per appraisal

* Leases are required

f. Ratio guidelines are 33/38.

g. Child support/alimony income must be documented as received regularly and noted to continue for 2 or more years.

h. Unemployment income is not used when qualifying for a mortgage, but must be taken into consideration for the income limits.


4. Borrowers

a. Guarantors:

* Must be blood relative * Income will not be used to qualify borrower under debt/income

ratios (borrower must qualify at 33/38 on his own) * Strengthens lack of credit only

b. Must be arms-length transaction

* The following are not acceptable:

1. Employee buying from employer 2. Family member buying from family business 3. Realtors buying from their own listings 4. Partner buying from own partnership

* Applicant buying from a family member is reviewed on a case-by-

case basis.

c. Foreign Mortgagor

* Must have: 1. Copy of Green Card (front and back)

-an affidavit at closing can be executed by bank attorney that he saw the card, if consumer will not provide a copy

2. 2-year job history in U.S. (No foreign income can be used) 3. An established asset base in a U.S. institution 4. 2-year credit history established in U.S.

5. Inheritance Transactions

a. Maximum mortgage based on sales price minus the mortgagor’s share of ownership, i.e.:

Sales Price $100,000 25% Share - 25,000

$ 75,000 97% of $75,000 = $72,750 maximum we can lend LTV = $72,750/$100,000 = 72.75 (no PMI needed)

b. 3% down must be borrower’s own funds

c. Other members of estate cannot be gift donors.

6. Appraisals

a. Good up to 6 months with recertification of value after 4 months


b. A new appraisal is required after 6 months c. PUDs are done on the old PUD appraisal form which is the same as

condo’s #465 d. Remaining economic life must be at least 5 years greater than term e. Satisfactory Completion Certificate required f. Notify SONYMA of any discontinued appraiser previously submitted to

SONYMA g. Maximum lot size is 5 acres h. Minimum 500 square feet of living area on the dwelling i. Mother/daughter type properties and properties with accessory

apartments are prohibited 7. Alt Doc

a. One most recent pay stub identifying borrower and showing YTD and current income

b. To use overtime, bonus or commission, we need:

1. Computer-generated payroll statements covering 4 months 2. Confirm with employer that it will continue

c. An original W-2 copy (1 of 3 parts received from employer) for the last 2

years.

d. All other guidelines the same as conventional loans 8. Lease Provisions (Leasehold)

a. Remaining term of at lease must equal or exceed term or mortgage

b. Lease rental must be included in housing expense 9. Mobile Homes

a. Minimum 840 square feet b. 20 feet width, minimum c. Certification from BOCA, ICBO, or SBCC d. Maximum LTV 90% - single wide

Maximum LTV 97% - double wide e. Unit must be constructed after 6/15/76. f. Should have a carport or garage or matching storage shed.

10. Sellers

If property is being sold by an estate, proof of executorship is required.


11. Condos/PUDs/HOA

a. Presale requirements:

1. Up to 90% LTV: at least 40% of the units must be under a contract of sale.

2. 90.1% - 97% LTV: at least 51% of the units must be under a contract of sale.

b. Investor concentration cannot exceed 30%.

c. Projects must be a minimum of 10 units.

d. Units in developments with eviction plans are not eligible.

e. Project approval:

1. 49 or less units: up to 2 units can be financed without approval

2. 50 or more units: up to 3 units can be financed without approval (All additional units will require project approval and it is the Seller’s responsibility).

3. NEWLY CONSTRUCTED OR CONVERTED PROJECTS MUST

HAVE PROJECT APPROVAL BEFORE SUBMISSION.

4. Documentation requirements for project approval: a) Project documents:

- Covenants, conditions, and restrictions - Articles of Incorporation & Bi-Laws for HOA - Master Deed - Declaration Trust

b) Last 2 years financial statements and operating budget (Conversions: replacement reserves should be itemized and equal a minimum of 15% of total expenses).

c) Legal opinion regarding compliance with applicable laws. d) Information on number of units owned by non-owner-

occupied versus investors vs. owner-occupied.


e) Master appraisal and individual appraisals for each type of unit (conversion projects: appraiser should discuss projects experience as apartment or other use)

f) Specifics for New Construction and Conversion - Financial statements, resume, builder/developer with

contact name and phone number - Promotional literature - Engineers report - Sales price listing

12. Co-op Loans

a. Maximum LTV = 90%

b. Minimum square footage = 500

c. Project must have a minimum of 12 units

d. Project with eviction plans are NOT eligible

e. Required docs for project approval:

1. Prospectus or By-laws of cooperative corporation

2. Proprietary lease

3. Last 2 years financial statements and operating budget

4. Information on number of units owned by non-occupying investors vs. occupying

5. Master appraisal and individual appraisal for each type of unit

6. Existing building: a) Minutes from last six Board meetings b) Most recent financial disclosure to NYS Attorney General

7. New Construction/Conversions

a) Financial statements, resume, contact person and phone number of builder/developer.

b) Professional management agreement or plans for management.


c) Promotional literature, phones, and feasibility study or marketing plan.

d) Engineer’s Report (conversions only) and plot plan.

e) Sales and price listings.

f) Co-op shares and proprietary lease must be assigned to SONYMA.

g) SONYMA’s Recognition Agreement executed by Co-op corporation.

h) All additional annexing, phasing or construction with reference to project must be complete prior to closing.

i) Investor concentration cannot exceed 25% of sold units.

j) Remaining term of underlying mortgage must be at least 5 years from date of loan application. Exception as of residential loan application date:

1. 51% project presale 2. Fully effective co-op plan for at least 4 years

k) Term of proprietary lease must be at least equal to term of

our loan.

l) Nothing more than 30-day right of first refusal by Co-op Corporation for a transfer of possession.

m) Co-ops with flip taxes will be handled on case-by-case basis.

n) Limited equity co-op share loans are reviewed on a case-by- case basis.

o) 1. If individual units proportionate share of the co-ops underlying mortgage exceeds 25% of the units total appraised value, the appraised value will be decreased by that amount exceeding 25% and then LTV is determined, i.e.:


Appraised value of unit = $100,000 Proportionate share of underlying mortgage = 30% = $30,000 Amount of underlying mortgage exceeding 25% = 5% = $5,000 Adjusted appraised value = 100-5) = $95,000 Max loan = 90% of sales price or adjusted appraised value

2. If proportionate share of underlying mortgage > 50%,

SONYMA financing is not available.

p) Actual docs required (See page 59 of SONYMA manual)

GENERAL Age of Documents 1. Indicate under “In-House Conditions” if a grant or subsidy is being used. 2. All documents cannot be more than 90 days old at the time of submission to SONYMA for approval. 3. Approvals

a. Underwrite the file using the SONYMA Seller’s Guide and return to processor.

b. After SONYMA approval, update conditions from pool insurer and/or SONYMA if necessary (FiTECH procedures are the same as a conventional loan). 4. Declines

If SONYMA declines the loan, follow the same decline procedure as for a conventional loan.


COMMITMENT REVIEWERS

Follow normal procedures for reviewing a commitment letter. The following attachments must be sent out with the commitment letter: 1. Send original Recapture Notification and Mortgagor’s Affidavit to the Bank Attorney, so it can be reaffirmed at closing (see Exhibit O). 2. Attach SONYMA’s Survey Instructions to the borrower’s copy of the commitment letter as well as the Borrower’s Attorneys copy of the commitment letter (see attached Exhibit KK).


CLOSING

REVIEW Upon receipt of a SONYMA loan in the Closing Department: 1. Do an initial review of the file (see attached Exhibit DD). 2. The following information must be verified under the Miscellaneous Tab using the SONYMA Review Checklist (see attached Exhibit CC):

a. A copy of the Recapture Notification and Mortgagor’s Affidavit. (original should have been sent to Bank Attorney) (see Exhibit O).

b. A copy of the Seller’s Affidavit (original with SONYMA).* (See Exhibit N.)

c. The original Mortgage Loan Eligibility Form indicating SONYMA’s approval at the bottom.* (See Exhibit Z.) 3. Update the UPDO4 screen in Database 295 with today’s date and name of the person doing the review. 4. The following information must be verified under the Insurance Tab:

a. Pool Insurer’s Certificate

b. PMI Certificate (check any closing conditions, this information must also be provided to Post-Closing) 5. If the subject property is a co-op, instruct the closing agent to indicate the following

information in box 6 of the UCC-1, Assignee(s) of Secured Party and Address(es):

State of New York Mortgage Agency 641 Lexington Avenue New York, New York 10022


SCHEDULING

Schedule the loan as you would a Conventional loan with the following additional steps: 1. Re-verify the interest rate using the current SONYMA Bulletin, the Lock-in Agreement, the commitment letter, and the weekly SONYMA Lock-in Confirmation report. 2. If a long term Lock-in loan closes before the expiration date, they receive the lower of the rate they are locked in at, or the current Short Term rate, whichever is lower. When this occurs, the following documentation needs to be re-done:

a. Revised commitment letter b. Truth-In-Lending statement

3. Complete the Confirmation of Closed Loans memo (see Exhibit LL) and fax to SONYMA at (212) 872-0426 every Monday to notify them of closed loans for the previous week. 4. Always collect 1% Lock-in at Closing.

NOTE: - Interim Interest is calculated on 360 days - Escrow is required for Hazard Insurance - No doc prep and underwriting fees - Escrow holdbacks need to be approved by SONYMA for

unusual circumstances and 1 ½ times is held - NO escrow holdback for interior repairs. - All work is to be completed by 7/1

SPECIAL CONSIDERATIONS

• Hazard Insurance - B III rating or better. • Any contingencies placed on the loan by SONYMA or the Pool Insurer must be

submitted to SONYMA and the Pool Insurer prior to closing (see Exhibit MM). • If rate changes on the loan by more than .5%, the Pool Insurer must be notified

and a new certificate is required. • The document expiration date is the same expiration date as the Insurance

Certificate. If no PMI is required, the expiration date of the documents is 180 days from the approval date.


SURVEY REQUIREMENTS • Must be dated or redated within six months of closing date. • Certified to SONYMA by a licensed surveyor or engineer acceptable SONYMA will also accept either:

a. A survey more than six months from the Closing date provided a Title Company survey inspection is cited within the Title Policy. The inspection must not have taken place more than six months from the Closing date and contains no material, adverse or substantial changes from the survey being submitted.

or

b. A Survey Endorsement written into the Title Policy containing the following language: “This policy insures against loss or damage by a violation, encroachment, or adverse matter that would have been disclosed by an accurate survey.”

FUNDING Fund the SONYMA mortgage the same way you would a Conventional loan.


SONYMA Exhibit Index

Form Number Exhibit Title AND Date

General

A SONYMA Monthly Availability of Funds N/A and Notice of Terms Bulletin

B SONYMA Income Limits 7/13/98

B1 Adjusted qualifying income for recapture 2/6/98

provision

C SONYMA Purchase Price Limits 2/97

E SONYMA Target Area Listing 5/96

J-1, J-2 Radian Rates 10/94

MIF Rates 3/24/97

Originations

L Notice Concerning Charges Due at MG-267, 8/98 Application

L-1 Notice Concerning Charges Due at MG-267, 8/98

Application (Constructive Incentive)

N Property Seller’s Affidavit 210, 4/99

O Recapture Notification and Mortgagor’s 211, 4/99 Affidavit



P Mobile Homeowner Eligibility Affidavit 217, 4/99

Registration

V SONYMA Loan Reservation Worksheet 238/1-98 and Lock-in Request form

Processing

Y SONYMA Application Loan File 225, 4/99 Checklist

Z SONYMA Mortgage Loan Eligibility 212, 1/95

Form

AA SONYMA Loan Verification Form 213, 1/93

BB Radian Mortgage Insurance Application 12/94 MIF Mortgage Insurance Application 4/97

EE SONYMA Lock-In Extension Request 235, 12/95

Expiring Loans

FF SONYMA Reservation Cancellation 228, 7/97 Form



GG SONYMA Request for Lock-In Fee 234, 12/95

Waiver

Underwriting

HH Underwriter Condition Worksheet N/A

Closing

II SONYMA Closing and Purchase 10/93 Time Frames

JJ SONYMA Doc Prep Form 2/95

EE SONYMA Lock-In Extension Request 235, 12/95

for Expiring Forms

FF SONYMA Reservation Cancellation Form 228, 7/97

GG SONYMA Request for Lock-In Fee 234, 12/95

KK SONYMA Survey Requirements 5/97

LL Confirmation of Closed Loan Memo 2/95


MM Radian Primary/Pool Insurance N/A

Certificate

OO Letter to Builder (Construction Incentive) N/A

PP SONYMA Rider (Split Rate) 236, x/9x -or- 236, 4/99 Use 236/9-98 if using standard FannieMae/FHLMC mortgage (currently plotted in FiTECH), Use 236/4-94 if using the new FannieMae/FHLMC mortgage (currently not used if M&T prepares the docs).

QQ Closed Loan Document checklist 223, 4-99



Cooperative

RR Low Interest Rate Closed Co-op Share 224, 4-99 Loan Checklist

SS Security Agreement - Co-op 8/4-99

TT Co-op Rider 10/5-97

Co-op Loan Note 2/4-99

Rider to SONYMA Cooperative 12/7-94 Share Loan Note (Construction Incentive)

Acceptance of Assignment and 3/4-99 Assumption of Lease

Assignment of Lease to Lender 4/4-99

Stock Power 9/4-99

Recognition Agreement - Blumberg Form Exhibit 6

No Lien Affidavit 7/4-99

Lien Search of Apartment Exhibit 7

Assignment of Loan 5/4-99