Maryland Mortgage Program Morning Workshop Series

1
Maryland Mortgage ProgramMorning Workshop
Series
Martin O'Malley GOVERNOR Anthony G. Brown LT.
GOVERNOR Raymond A. Skinner SECRETARY
Clarence J. Snuggs DEPUTY SECRETARY
2
Mortgage Products

• Homeownership Accomplishments
• Calendar Year 2007
• Total Loans 4,079
• Total Loan Amount 828.7 million
• Calendar Year 2008
• Total Loans 2,315
• Total Loan Amount 450 million
• Calendar Year 2009
• Total Loans 689
• Total Loan Amount 108.6 million
• January,
  2010

3
CDA STAFF CONTACT INFORMATION

• Assistant Director of CDA
• Bill Manahan manahan_at_mdhousing.org 410-514-7508
• Pre-closing questions - contact CDA Underwriting
• Astrid Donis donis_at_mdhousing.org 410-514-7520
• Carlette Brisker brisker_at_mdhousing.
  org 410-514-7517
• Dale Quisgard quisgard_at_mdhousing.or
  g 410-514-7924
• Kristine Clark clark_at_mdhousing.org 410-514-7014
• Post-closing questions - contact CDA Purchasers
• Brooke Bell bell_at_mdhousing.org 410-514-7147
• Carolyn Hunt hunt_at_mdhousing.org 410-514-750
  4
• Vi Creek creek_at_mdhousing.org 410-514-7516
• Vicki Jones jonesv_at_mdhousing.org 410-514-7519

4
CDA STAFF CONTACT INFORMATION

• Email Judy Shannon shannon_at_mdhousing.org for
  Census Tract ,
• PFA New Construction, Request for POA approvals
  for Seller Affidavit/Confirming Affidavit
• Attachment R Fax only to
  410-729-3723
• (24 hour turn time / 4pm daily cut-off)
• All Conditions Fax only to 410-729-3722
• (24 hour turn time / 4pm daily cut-off)
• Commitments Peggy Otto
  otto_at_mdhousing.org
• MERS and Purchase Advice Pat Smith
  smithp_at_mdhousing.org
• Final Documents Vi Creek
  creek_at_mdhousing.org

5
Mortgage Products
Martin O'Malley GOVERNOR Anthony G. Brown LT.
GOVERNOR Raymond A. Skinner SECRETARY
Clarence J. Snuggs DEPUTY SECRETARY
6
Mortgage Products

• Fixed interest rate - entire term of loan
• FHA, VA, or RHS loan types
• Downpayment/closing cost assistance
• available

30-Year Mortgage
7
Maryland Mortgage Program
FIXED Interest Rates (as of 2/19/10)
3 points 2 points 2 points 2 points 1 point 0 points
30-year Amortizing 30-year Amortizing 30-year Amortizing 30-year Amortizing 30-year Amortizing 30-year Amortizing
4.875 4.875 5.0 5.125 5.125 5.25
Interest rates and points subject to change at
any time, always consult CDAs website for
current pricing.
8
Whos Eligible?
Martin O'Malley GOVERNOR Anthony G. Brown LT.
GOVERNOR Raymond A. Skinner SECRETARY
Clarence J. Snuggs DEPUTY SECRETARY
9
Eligibility Guidelines

• Eligible Borrowers
• Income Purchase Price Limits
• Assets
• First-Time Homebuyer
• Property Requirements
• Home Inspection
• Homebuyer Education

10
Eligible Borrowers

• Single borrower, or if married, one borrower must
  be 18 years of age
• If married, both spouses are not required to
  apply
• If separated, a Separation Affidavit must be
  completed
• Co-signers are NOT permitted

11
Eligible Borrowers (continued)

• Must intend to occupy the property as a principal
  residence within 60 days of closing
• May not exceed income limits
• Borrowers cannot own any other real property at
  the time of closing

12
Eligible Borrowers (continued)

• Citizenship of the United States is not required
  to obtain a CDA loan
• Borrower must have a valid social security number
  and,
• Be eligible to work in the United States

13
Eligible Borrowers (continued)
Income Limits

• Total projected Annual Household Income may not
  exceed applicable income limit
• Projected income for ALL household members
  (including overtime, part-time, commissions,
  etc.) is utilized to determine income
• Eligibility Calculator on website under Tools
• www.mmprogram.org/tools.aspx

14
Eligible Borrowers (continued)
Calculating Projected Household Income

• CDA requires one month current and consecutive
  paystubs
• Monthly x 12 months
• Twice-monthly x 24 weeks
• Every other week x 26 weeks
• Weekly x 52 weeks
• One of the above calculations is the eligibility
  income for the LOL reservation

15
Eligible Borrowers (continued)
Calculating Projected Household Income

• Other Sources of Income
• Overtime
• Bonus
• Commission
• Business Income/Self Employed Borrower
• Interest, Dividends, etc
• Unemployment Compensation
• Alimony or Child Support
• Public Assistance
• Allowances, etc
• CDA calculates income for ELIGIBILITY
• Lender calculates income for AFFORDABILITY

16
Purchase Price Limits
Maximum Acquisition Cost

• May not exceed limits established for applicable
  jurisdiction
• Includes contract sales price, capitalized ground
  rent, additional cost and value of lot owned by
  the borrower for 2 years or less
• Does NOT include any closing costs, points or fees

17
Assets
Asset Restrictions

• An asset test is required for borrowers whose
  assets equal or exceed 20 of the purchase price
• A gift of equity (difference between the
  appraised value and the purchase price) in a
  non-arms length transaction is considered an
  asset
• Retirement funds that are not being used to
  purchase the home and any secondary financing are
  NOT included in the calculation
• Relocation benefits under the Uniform Relocation
  Act in connection with condemnation proceedings
  are not included in the calculation

18
Eligibility Guidelines Definitions
First-Time Homebuyers

• Federal Definition Borrowers who have not had a
  present ownership interest in a principal
  residence in the last three years
• Borrowers who are purchasing in a TARGETED AREA
  do NOT need to meet the first-time homebuyer
  definition

19
Eligibility Guidelines (continued)
First Time Homebuyers - Veterans

• Veterans purchasing in a non-targeted area are
  exempt from the first-time homebuyer rule and may
  have owned a home in the past three (3) years
• A veteran may use this exemption only one time
  (does NOT have to be a VA loan)
• A copy of the DD-214 must be presented to the
  Lender

20
Eligibility Guidelines (continued)
Verifying First-Time Homebuyer Status In
Non-Targeted Areas

• Submit three (3) years signed tax returns
• OR
• Tri-merge credit report verifying three (3) years
  rental history
• If credit report does not show rental history,
  also submit verification of rental history for
  previous three (3) years

21
Eligibility Guidelines (continued)
Targeted Area vs. Priority Funding Area
Different Meanings

• Targeted Area
• Targeted areas are designated by the Federal
  Government
• To promote investment, borrower does not have to
  be a first-time homebuyer if property is located
  in Targeted Area

22
Eligibility Guidelines (continued)
Targeted Areas (continued)

• The following jurisdictions are designated
  targeted areas
• Allegany Co. Baltimore City
  Caroline Co. Garrett Co.
• Dorchester Co. Kent Co.
• Somerset Co.

23
Eligibility Guidelines (continued)
Targeted Areas (continued)

• In addition, portions of other counties are
  targeted areas
• To determine if a specific area is targeted
• http//www.mmprogram.org/TargetedAreas.aspx

24
Priority Funding Areas
Eligibility Guidelines (continued)

• Older community or locally-designated growth area
  where State and local governments already have a
  significant financial investment in the existing
  infrastructure
• If new construction, it MUST be located in a
  Priority Funding Area

25
Priority Funding Areas
Eligibility Guidelines (continued)

• Refer to http//mdpgis.mdp.state.md.us/pfa/pfa.h
  tm
• In the locate box enter the property address
• Click on Locate, then the globe on the left hand
  side of the page, and in the globe a drop down
  box will appear, click Legend
• Print out the property address page with chart
  and place in loan file for submission to CDA

26
Eligible Property Types

• Detached
• Attached
• Semi-detached
• Townhouses
• Modular
• Condominium
• Manufactured Housing (with State Seal of
  Approval must be a double-wide with 800 minimum
  square feet)

27
Eligible Property Types (continued)
Maximum Lot Size

• Urban/ Suburban 1 Acre
• Rural 3 Acres

28
Eligible Property Types (continued)
Housing Standards

• Existing Homes Home Inspection items
  determined by the Lender as imminent fire, safety
  and health hazards must be addressed necessary
  repairs must be certified as complete prior to
  closing

29
Eligible Property Types (continued)
Housing Standards

• Newly Constructed Homes satisfactory Final
  Inspection Report - property must be certified
  100 complete prior to closing
• Home Inspection not required for new construction
  or a rehabilitation that cost 50 or more of the
  sales price of the property
• Well/Septic if noted unsatisfactory in appraisal
  or home inspection, a satisfactory certificate is
  required

30
Eligible Property Types (continued)
Housing Standards

• Termite Inspection required if infestation is
  noted in appraisal or home inspection a
  certificate is required and treatment if
  recommended. If resulting damage is structural,
  it must be repaired
• Property must meet minimum standards of the
  Guarantor
• Escrows satisfied with evidence of release only
  exceptions are weather related

31
Counseling Requirements

• Homebuyer Education is Required
• A counseling certificate is required from the
  homebuyer education class provider
• Lenders Certification of Completion form is
  required
• If the borrower is applying for DSELP, specific
  requirements for Baltimore City, Anne Arundel,
  Baltimore and Harford Counties must be followed

32
Counseling Requirements (continued)
(if utilizing DSELP or matching funds)

• Refer to www.mmprogram.org for additional
  information on counseling requirements

33
Credit Scores

• CDA Loans
• Minimum credit score 620
• If the borrower has no credit score and the loan
  is a manually underwritten FHA loan, the loan
  will be eligible if the borrower has acceptable
  non-traditional credit as determined by current
  Insurer underwriting guidelines
• The Lender must include a complete copy of the
  Credit Report in the Pre-Closing compliance file
• Effective 11/20/09 refer to Directive 2009-20

34
Ratios

• For all manually underwritten loans CDA supports
  a benchmark DTI of 36
• This benchmark can be exceeded up to a maximum
  DTI of 45 with strong compensating factors as
  defined by the Insurer and documented by the
  underwriter on the Underwriting Transmittal Form

35
Ratios (continued)

• The maximum DTI for all loans underwritten by an
  automated system is 45
• Effective December 1, 2009, Lenders are required
  to submit the full credit file that supports the
  decision of the Lenders underwriter
• Refer to Directives 2009-1 and 2009-19

36
Loan-To-Value Ratios

• CDA maximum LTV cannot exceed 100 or 103 if the
  upfront mortgage insurance premium is financed in
  the mortgage a maximum CLTV is not specified for
  the Maryland Mortgage Program (MMP)
• For loans with an LTV of 80 or less, the
  maximum CLTV is 100.
• Refer to your guarantors guidelines (i.e.,
  FHA,VA or RHS)

37
Other Second Mortgage Products

• PERMITTED IF
• Terms are acceptable and meet requirements of the
  guarantor
• Separate lien is recorded after the MMP DOT (no
  deed covenants permitted)
• Terms of repayment (if any) are incorporated into
  underwriting

38
Federal First-Time Homebuyer Tax Credit

• The Federal First-Time Homebuyer Tax Credit can
  be used by a borrower whos home purchase is
  financed by tax-exempt mortgage revenue bonds
• The contract to purchase a principal residence
  must be signed by April 30, 2010 and closing must
  be on or before June 30, 2010
• Maximum amount of the tax credit is the lesser of
  8,000 or 10 of the purchase price for qualified
  first-time homebuyers

39
Federal First-Time Homebuyer Tax Credit
(continued)

• Repeat homebuyers are now eligible for up to
  6,500 in tax credits if they have owned and
  occupied a primary residence for a period of 5
  consecutive years during the last 8 years

40
Recapture Tax Reimbursement

• CDA has removed the confusion and worry about
  recapture tax! Federal law provides for a
  possible recapture tax when some homeowners sell
  their home within the first 9 years after
  receiving a mortgage through CDA (see
  www.irs.ustreas.gov for information)
• CDA will reimburse any CDA homebuyer, who settled
  on their home on or after July 1, 2005, the
  amount of any recapture tax that the homebuyer
  pays in connection with the sale of their home

41
Ineligible Use of Loan Proceeds

• To enrich borrower
• Refinance existing mortgage
• Lot loans
• Construction or bridge loans

• Land installment contracts
• Wrap-around mortgage
• Facilitate Sale of Contract rights

NOTE 1031 Like-Kind exchange refer to
Lenders Manual for requirements
42
Down Payment Settlement Expense
Loan Program
Martin O'Malley GOVERNOR Anthony G. Brown LT.
GOVERNOR Raymond A. Skinner SECRETARY
Clarence J. Snuggs DEPUTY SECRETARY
43
DSELP

• 3,500 toward downpayment or closing costs for a
  limited time!
• 0 deferred loan
• Repayable in full upon sale or transfer, or when
  the first mortgage is paid off or refinanced
• DSELP loan term must equal term of the first
  mortgage
• DSELP loan required to be in 2nd lien position.
• Available only with a CDA loan

44
Partner Match Programs
Martin O'Malley GOVERNOR Anthony G. Brown LT.
GOVERNOR Raymond A. Skinner SECRETARY
Clarence J. Snuggs DEPUTY SECRETARY
45
Partner Match Programs

• House Keys 4 Employees (HK4E) with
• Smart Keys 4 Employees (SK4E) component
• Builder/Developer Incentive Program (BDIP)
• Community Partners Incentive Program (CPIP)
• These programs are only available with a CDA loan

46
House Keys For Employees(HK4E)
Martin O'Malley GOVERNOR Anthony G. Brown LT.
GOVERNOR Raymond A. Skinner SECRETARY
Clarence J. Snuggs DEPUTY SECRETARY
47
House Keys 4 Employees

• Workforce Housing Initiative
• Additional downpayment assistance through
  employer matching contributions
• An employer partnership initiative developed by
  DHCD that matches funds from employers to help
  their employees who want to buy a home

48
House Keys 4 Employees (continued)

• What is it?
• Provides additional downpayment assistance can
  be used in addition to downpayment assistance
  through DSELP
• May only be used in conjunction with CDA mortgage
  loans
• Refer to CDAs website for current list of
  participating employers

49
House Keys 4 Employees (continued)

• DHCD will match dollar-for-dollar up to 5,000
  from a participating employer toward downpayment
  and closing costs
• The HK4E match from DHCD is a 0 deferred loan,
  repayable when the home is sold or transferred,
  or when the first mortgage is paid off or
  refinanced

50
House Keys 4 Employees (continued)

• Employer submits one page Employer Participation
  Agreement to enroll in the program
• Employee submits a HK4E Verification of Partner
  Contribution Form to their employer
• Employee presents the completed Verification of
  Partner Contribution form to their CDA lender
• Employee is responsible for ensuring the employer
  contribution is available at settlement

51
House Keys 4 Employees State of Maryland
Employees Only

• State of MD employees only provide a copy of
  the borrowers pay stub in lieu of signed HK4E
  Verification of Partnership Contribution form
• A State employee can receive 2,500 from the
  State of MD as the employer 2,500 HK4E Program
  match for a total HK4E contribution of 5,000
• Total combined funds for the State of MD
  employers partner contribution 2,500 CDA
  match for HK4E 2,500 eligible SK4E match
  2,500 are reserved at 7500
• Lender provides the funds at closing
• Employees of the Universities under the
  University of MD System are excluded from this
  program

52
House Keys 4 Employees (continued)
Examples using a 200,000 loan amount
Example 1 Employer contribution 5,000
DSELP 3,500
Participating HK4E employer contribution/Local Match 5,000
HK4E dollar-for-dollar match 5,000
Total closing cost assistance 13,500
Example 2 Employer contribution 1,000
DSELP 3,500
HK4E employer contribution/Local Match 1,000
HK4E dollar-for-dollar match 1,000
Total closing cost assistance 5,500
53
Smart Keys 4 Employees

• A Smart Growth enhancement to the House Keys
  4 Employees (HK4E) Program that allows borrowers
  to receive additional matching funds if
• Subject property is located in a Priority Funding
  Area
• Subject property is within 10 miles of borrowers
  place of employment or within the boundaries of
  the local jurisdiction
• DHCD will double the amount of the normal HK4E
  match (up to a maximum of 10,000.00) for
  borrowers that meet this criteria

54
Smart Keys 4 Employees
Example - 200,000 and loan amount
Participating HK4E Employer contribution/Local Match 2,500
HK4E dollar-for-dollar match (DHCD contribution) 2,500
Smart Keys 4 Employees Match (DHCD contribution) 2,500
Total contribution for closing cost assistance 7,500
55
Builder/Developers Incentive Program(BDIP)
Martin O'Malley GOVERNOR Anthony G. Brown LT.
GOVERNOR Raymond A. Skinner SECRETARY
Clarence J. Snuggs DEPUTY SECRETARY
56
Builder/Developer Incentive Program

• The Builder/Developer Incentive Program (BDIP)
  enables eligible homebuyers to receive
  supplemental downpayment and/or closing cost
  assistance IN ADDITION to the standard programs
  (DSELP) that are currently available through CDA

57
Builder/Developer Incentive Program (continued)

• The BDIP match from DHCD is a 0 deferred loan,
  repayable when the home is sold or transferred,
  or when the first mortgage is paid off or
  refinanced
• DHCD will match dollar-for-dollar up to 5,000
  from a participating builder/developer toward
  downpayment and closing costs
• Refer to CDAs website for current list of
  participating Builders/Developers

58
Community Partners Incentive Program(CPIP)
Martin O'Malley GOVERNOR Anthony G. Brown LT.
GOVERNOR Raymond A. Skinner SECRETARY
Clarence J. Snuggs DEPUTY SECRETARY
59
Community Partners Incentive Program

• The Community Partners Incentive Program (CPIP)
  enables eligible homebuyers to receive
  supplemental downpayment and/or closing cost
  assistance IN ADDITION to the standard programs
  (DSELP) that are currently available through CDA

60
Community Partners Incentive Program

• A community partner may be a foundation,
  non-profit organization or a local government
  interested in expanding workforce housing
  opportunities
• The Community Partners Incentive Program provides
  a DHCD dollar for dollar match up to 5,000 to
  the funds contributed by the participating
  community partner

61
Community Partners Incentive Program

• The (CPIP) match from DHCD is a 0 deferred loan,
  repayable when the home is sold or transferred,
  or when the first mortgage is paid off or
  refinanced
• DHCD will match dollar-for-dollar up to 5,000
  from a participating community partner toward
  downpayment and closing costs
• Refer to CDAs website for current list of
  participating Community Partners

62
BDIP AND CPIP Programs

• Both of the above programs work in the same
  fashion as the House Keys 4 Employees program
• Refer to the HK4E program description for details
  on signing up partners, reserving funds, etc.

63
Maryland Mortgage Program

• Combining Assistance Programs
• House Keys for Employees (HK4E),
  Builder/Developer (BDIP) and the Community
  Partner (CPIP) programs can be utilized either as
  stand alone forms of assistance, OR
• Partners Match Programs can be combined with
  DSELP programs
• Combined total matching funds from DHCD (HK4E,
  BDIP, CPIP) may not exceed 5,000 unless using
  House Keys 4 Employees with Smart Keys 4
  Employees

64
HopeHomeowners Preserving Equity
65
HOPE Hotline

• 1-877-462-7555
• The HOPE Hotline is available 24 hours daily for
  consumers who have questions regarding mortgage
  delinquency, foreclosure and assistance available
  from the State of Maryland
• Through December, 2009 over 31,000 consumers have
  called the Hotline

66
Website

• www.mdhope.org
• Help for Homeowners
• Help for Renters
• Housing Counselors
• Resources for Maryland Families
• Avoiding Fraud
• Upcoming Events Workshops
• Consumer Information Kit

67
How Does It All Work?
Martin O'Malley GOVERNOR Anthony G. Brown LT.
GOVERNOR Raymond A. Skinner SECRETARY
Clarence J. Snuggs DEPUTY SECRETARY
68
Maryland Mortgage Program Website www.mmprogram.or
g (no password required)
Martin O'Malley GOVERNOR Anthony G. Brown LT.
GOVERNOR Raymond A. Skinner SECRETARY
Clarence J. Snuggs DEPUTY SECRETARY
69
(No Transcript)
70
Lenders Only Tab
71
Lender-On-LineYour Reservation Pipeline
Management Tool
Martin O'Malley GOVERNOR Anthony G. Brown LT.
GOVERNOR Raymond A. Skinner SECRETARY
Clarence J. Snuggs DEPUTY SECRETARY
72
Reserve Your Loan Now!

• LOAN RESERVATIONS
• LENDER ON LINE
• https//lol.dhcd.state.md.us
• Online Reservation System

73
Loan Reservations
Lender-on-Line (LOL) is a secure website for CDA
approved lenders to

• Make reservations for the first mortgage and
  DSELP/partner match programs
• Check the status of a loan received by CDA
• Get the latest updates on CDA rates products
• Gain access to the CDA Lenders Manual
• Download the most recent CDA forms documents
• Check the status of submitted loan for conditions
• Pull reports
• Open conditions reports
• Expired commitment reports
• Purchase Advice Report to include MMP
  DSELP/Partner Match Programs

74
Loan Reservations (continued)

• Access/Password to LOL is given to the Lender
  Administrator for your company
• Funds are reserved for the first mortgage, DSELP
  and/or HK4E/BDIP/CPIP by using Lender-On-Line
  (LOL) system
• All fields are required to be completed with and
  without an asterisk before clicking the submit
  button
• Do not reserve funds for your borrower until the
  contract has been fully ratified signed by all
  parties
• Short Sale- Buyer and seller have signed the
  contract and lender approval has been obtained
• Foreclosed properties- Bank required to sign the
  contact to be considered a valid fully ratified
  contract
• CDA reserves the right to cancel any reservation
  or deny the purchase of a loan that does not have
  a ratified contract prior to reservation

75
Loan Reservations (continued)

• Existing homes- reservations expire 60 days from
  the date of reservation
• New Construction- reservations expire 120 days
  from the date of reservation
• (Refer to new Directive 2010-1/1/15/10)
• Loans must be approved for purchase by CDA on or
  before the expiration date to avoid
  cancellation/non-purchase
• In order for lenders to earn their 2 highest
  fee, loans must be approved on or before
  reservation expiration date expires
• Lenders are not allowed to charge borrowers an
  extension fee

76
Base Realignment Program (BRAC)

• BRAC related information is now needed at time
  of loan reservation
• Ask at time of application if borrower or
  immediate family member is part of the Base
  Realignment Program
• When registering the loan in LOL, indicate this
  information under Project Name

77
LENDER ON-LINE https//lol.dhcd.state.md.us
78
Select a Mortgage Program
79
Select a Second Mortgage Program(optional)
80
DSELP/PARTNER MATCH PROGRAM(S) RESERVATION
COMBINATION
81
(No Transcript)
82
(No Transcript)
83
Capitalized Ground Rent Calculation Annual
Ground Rent divided by 12 X 200 Capitalized
Ground Rent 90 annual / 12 months 7.5 X 200
1,500 To be completed on page 12 of the Buyers
Affidavit
84
Enter ANNUAL ELIGIBILITY INCOME
85
(No Transcript)
86
Lender Condition Pipeline Reports
Martin O'Malley GOVERNOR Anthony G. Brown LT.
GOVERNOR Raymond A. Skinner SECRETARY
Clarence J. Snuggs DEPUTY SECRETARY
87
Lender Pipeline Reports Condition/Exceptions
88
Conditions / Exceptions Report
89
Select Stage(s) to Include in Report
Select Stage(s) then click insert
90
Detailed Pipeline Report
91
Commitment Expiration Report
92
Commitment Expiration Report
93
All Loans In Lender Pipeline (Not Yet Purchased)
Report
94
Sample Pipeline Report
95
Purchase Report
Martin O'Malley GOVERNOR Anthony G. Brown LT.
GOVERNOR Raymond A. Skinner SECRETARY
Clarence J. Snuggs DEPUTY SECRETARY
96
Purchase Report
97
Enter Report Criteria
Report Options ALWAYS Check both boxes
ALWAYS enter Wednesday Purchase date
98
Detailed Weekly Purchase Report
99
Attachment RLender Revisions
Martin O'Malley GOVERNOR Anthony G. Brown LT.
GOVERNOR Raymond A. Skinner SECRETARY
Clarence J. Snuggs DEPUTY SECRETARY
100
Attachment R - Reminders

• Fax only to dedicated fax [phone]
• 24 hour turnaround time (approval/denial)
• 4pm daily cut-off
• Rush faxes cannot always be accommodated
• Lenders are required to notify CDA immediately if
  the reservation is cancelled (borrower not going
  forward with a CDA loan)
• Send all required supporting documentation with
  the Attachment R
• Approval/denials are emailed-keep the approval
  email with the Attachment R/supporting
  documentation and place in the file sent to CDA

101
Attachment R- Substituting Property

• Provide release from the original ratified
  contract
• Provide a copy of the new legible ratified
  contract
• Provide documentation for reason of substitution
  beyond the borrowers control
• Ex. failed home inspection
• Unacceptable reasons for substitution
• Lender reserved the reservation prior to ratified
  contract
• Lender thought the verbal contract was written
• Lender thought the bank would approve the Short
  Sale/Foreclosure
• Borrower wants to buy a different property

102
2 Program/Rate change i.e. MMP 0PT
30YR 6.25 To MMP2 30YR 6.75 Refer to
programs/rates available at time
of original reservation date
Email Address Required
3 Substitution of property
Use 6 for any other change not listed on both
pages i.e. cancellations
103
Both pages are required with every
request. Lender signature/date required
104
Pre-Closing ComplianceFile Submission and Review
Martin O'Malley GOVERNOR Anthony G. Brown LT.
GOVERNOR Raymond A. Skinner SECRETARY
Clarence J. Snuggs DEPUTY SECRETARY
105
COMPLIANCE REVIEWS

• CDA Compliance Review Process
• Lender submits Pre-Closing Compliance file for
  CDAs review and approval prior to loan closing
• Lender submits Post-Closing Compliance file for
  review and approval in order for loan to be
  purchased by CDA

106
Pre-Closing Compliance
Looking for a Document?

• FOR CURRENT FORMS AND DOCUMENTS GO TO
• www.mmprogram.org click on Lenders Only at the
  top of the home page, then choose Attachments
  and Loan Documents,
• https//lol.dhcd.state.md.us, after logging on
  with your User ID and Password, click on the
  Program Documents tab at the top of the home
  page

107
Pre-Closing Compliance (continued)
Document GuidelinesProgram Loan Documents

• Buyers Affidavit
• Supplemental Buyers Affidavit
• Notice to Buyers

• Sellers Affidavit power of attorney can only
  be used if seller is mentally or physically
  incapacitated OR has an active military POA. The
  POA must be pre-approved by CDA, (include
  documentation of the incapacity)

108
Pre-Closing Compliance (continued)
Document GuidelinesProgram Attachments

• Attachment K Pre-Closing Checklist
• Summit documents in order according to the
  checklist
• Attachment C Lender Cert. of Completion-
  Housing Counselling
• Attachment D Income Eligibility Worksheet
• Attachment F Asset Test (if assets 20 or
  more of purchase price)
• Attachment J Affidavit in Lieu of Current
  Years Tax Return (if appl.)
• Attachment T- Certification of Pregnancy (if
  appl.)
• Attachment R- Lender Revisions approval emails

109
Pre-Closing Compliance (continued)
Document Guidelines-DSELP/Partner Match

• In addition, the following forms (as
  applicable) must be included in the Pre-closing
  Compliance file
• DSELP DSELP/Partner Match Application/Affidavit
• HK4E Verification of Partner Contribution form
  (unless borrower is State of Maryland Employee)
• SK4E PFA and Map Directions print out
• BDIP Verification of Builder/Developer
  Contribution form
• CPIP Verification of Community Partner
  Contribution Form

110
DSELP/Partner Match Program Application and
Affidavit
Borrower(s)? Name
Total amount of the funds coming from CDA only
Lenders Name
Borrower(s) and non-borrower holding title must
sign date
111
Example of the Verification of Partner
Contribution signed document.
112
SK4E VERIFICATION PRINTOUTS
Example of required documents to be included.
PFA PRINTOUT MAPQUEST
113
Pre-Closing Compliance (continued)
Processing Guidelines

• Lender takes borrowers application, qualifies
  borrower(s) following insurer/guarantor and
  lender underwriting guidelines
• Lender determines borrower and property
  eligibility for the Program
• Lender reserves funds in Lender-on-Line

114
Pre-Closing Compliance (continued)
Processing Guidelines

• Lender secures underwriters approval (automated
  or manual underwriting)
• Refer to Lenders Manual for credit score
  requirements
• Lender secures insurer/guarantor approval
• Lender required to place Maryland CDA EIN
  526002033 on the FHA Underwriting Transmittal
  Summary (HUD-92900LT) for all FHA loans utilizing
  Maryland CDA secondary financing or grant
  programs
• Lender submits Pre-Closing Compliance file to CDA
  

115
Pre-Closing Compliance (continued)
Pre-Closing

• Pre-Closing Compliance Checklist (Attachment K)
  outlines the required documentation to be
  included in the file for CDA review
• Refer to CDAs website for the most current form
  as program guidelines change, applicable
  documentation updates are reflected in the
  Pre-Closing Compliance Checklist
• Lender must submit complete credit package with
  supporting documentation

116
Pre-Closing Compliance (continued)
Pre-Closing

• Files are reviewed in the order they are received
  in CDAs office
• A Pending status in the Reviewed Stage will
  be listed in LOL while file is being reviewed
• An Approval or Incomplete status in the
  Reviewed Stage will be listed in LOL after the
  file review is complete

117
Pre-Closing Compliance (continued)
Processing Guidelines

• Lenders are responsible for checking LOL for
  outstanding conditions
• Fax documentation to clear conditions to
• 410-729-3722
• 24 hour turn time to clear conditions cut-off
  time 400 p.m.
• Re-check to ensure all conditions submitted are
  cleared and no new conditions were added as a
  result of documentation submitted
• Questions on conditions email the underwriter or
  purchaser listed on the reservation

118
Pre-Closing Compliance (continued)
Errors Commonly Found in Pre-Closing Files

• Incomplete borrower(s) income documentation
• Incomplete/missing occupant (non-borrower) income
  documentation
• Incomplete Buyers/Sellers Affidavit
• Unsigned tax returns or transcripts

119
Pre-Closing Compliance (continued)
Errors Commonly Found in Pre-Closing Files

• Full credit report not in the file
• Partner Match Verification forms missing from
  file
• FHA Underwriting Transmittal not signed and dated
  by Underwriter
• RESPA Disclosures
• FHA Disclosures

120
DSELP Commitments
Martin O'Malley GOVERNOR Anthony G. Brown LT.
GOVERNOR Raymond A. Skinner SECRETARY
Clarence J. Snuggs DEPUTY SECRETARY
121
DSELP Commitments

• DSELP Closing Instructions Commitment Letter
  are issued after CDA has approved the loan
• Documents are emailed to the contact listed on
  the Attachment K
• Borrower(s) to sign all required DSELP documents
  at closing
• Return to CDA in the post closing package

122
Closing
Martin O'Malley GOVERNOR Anthony G. Brown LT.
GOVERNOR Raymond A. Skinner SECRETARY
Clarence J. Snuggs DEPUTY SECRETARY
123
Closing Day Reminders
The following documents are required in the
Post-Closing file, if applicable

• Well/Septic if noted unsatisfactory in appraisal
  or home inspection, a satisfactory certificate is
  required
• Termite Inspection required if infestation is
  noted in appraisal or home inspection a
  certificate is required and treatment if
  recommended. If resulting damage is structural,
  it must be repaired

124
Closing Day Reminders (continued)

• Survey (only if required by the title company)
• Hazard Insurance and Flood Insurance a receipt
  on the insurance companys letterhead stating the
  the first years hazard insurance premium was
  paid in full (dollar amount of premium must be
  stated in letter) is required for all loans
  regardless of the fact that the premium was paid
  outside of closing (a POC item) or paid at
  closing. (see Directive 2008-12 dated 6/6/08)

125
Closing Day Reminders (continued)

• Correct monthly mortgage insurance must be
  disclosed on all RESPA documents and signed by
  borrower
• Disclose correct monthly mortgage insurance
  payment in first payment letter
• Ground Rent is required to be included in the
  Principle, Interest, Taxes and Insurance payment
  (PITI). This should also be disclosed on all
  RESPA Documents and signed by the borrower

126
Closing Day Reminders (continued)
Title Insurance Binder/ Policy

• Title Commitment Tenants In Common is not a
  permitted form of ownership
• ALTA 06 Residential Loan Policy revised 06/17/07
• Title Binder ALTA short form preferred
• Title Binder-insured parties appear as (lender
  and insurer (if applicable)) and/or their
  successors and assigns, as their interests may
  appear
• Title Binder-Lender coverage loan amount or
  greater

127
Closing Day Reminders (continued)

• Title Binder-Effective date on or before
  settlement date and not expired (Provide GAP- if
  binders effective date is over 60 days old)
• Title Binder-Names vesting the same as Warranty
  Deed, DOT DSELP/Partner Match DOT
• Title Binder-Leasehold or fee simple
• Title Binder-Include if not using Short Form-
  Endorsement- ALTA 4 Condo or ALTA 5 PUD

128
Settlement Document Guidelines
Post-Closing Purchase Compliance File -

• Notice to Borrower with Information for
  Calculating Potential Recapture Tax this form
  changes annually - use current form
• Buyers Confirming Affidavit
• Sellers Confirming Affidavit (must be signed and
  dated on or after closing by Seller POA not
  acceptable unless seller is mentally/physically
  incapacitated OR holds active military POA and
  pre-approved by CDA)
• All RESPA Closing Disclosures and mandatory
  insurer forms

129
Settlement Document Guidelines (continued)

• If the borrower is receiving a DSELP, HK4E,
  SK4E, BDIP or CPIP loan
• DSELP/Partner Match Deed of Trust (certified true
  copy - original document to be recorded)
• DSELP/Partner Match Deed of Trust Note
• DSELP/Partner Match Commitment Letter This
  document is not on CDAs website. The commitment
  letter is emailed to the lender upon loan
  approval and is signed by the borrower(s) at
  closing
• Any excess funds must be applied as a principal
  curtailment to the first mortgage loan, not the
  DSELP loan

130
Settlement Document Guidelines (continued)

• When a borrower is receiving funds from both
  DSELP and either HK4E, SK4E, BDIP, CPIP, one
  DSELP/Partner Match Deed of Trust, Note, and
  Commitment Letter are signed for the combined
  loan amount
• If a borrower is receiving only a HK4E, BDIP or
  CPIP loan, the borrower will sign the
  DSELP/Partner Match Deed of Trust, Note, and
  Commitment Letter, since the HK4E, SK4E, BDIP and
  CPIP programs utilize the DSELP/Partner Match
  closing documents

131
DSELP/Partner Match Closing Instructions
Instructions state how to properly
execute/record DSELP/Partner Match
DOT DSELP/Partner Match Note Title
Binder/Policy lien info
132
DSELP/Partner Match Commitment Letter
133
DSELP/Partner Match Commitment Letter (continued)
Borrower(s) non-borrower holding title to to
sign date at closing Executed doc is included
in the post-closing package sent to CDA
134
DSELP/Partner Match Note
Closing date to match the 1st mortgage note
Loan amount to match LOL reservation
Borrower(s) name non-borrower holding title
1st line Numeric loan amount 2nd line Written
loan amount
To match the 1st mortgage note maturity date
135
DSELP/Partnership Match Note (continued)
Reminder to complete with the county
1st line borrowers signature Type borrower
name under the line Non-borrower holding title
must sign
Complete notary section executed same day as
closing
136
DSELP/Partnership Match Deed of Trust
Borrower(s) name non-borrowers holding title
Closing Date Same as 1st Mortgage Note
Executed for the total amount of funds coming
from CDA only
137
Property Address
Complete Ground Rent info for properties that
are Leasehold
138
Borrower Section Notary section to be
fully executed at closing include stamp/seal
Agent for the Lender Notary section to be
fully executed at closing include stamp/seal
Certification is required to be fully executed
prior to recording and in the post-closing file
submitted to CDA
139
Section 1 enter the Lenders name Enter the
dollar amount of the 1st mortgage
Complete 2 only if the borrower received a loan
that is not from CDA otherwise STRIKE OUT IF NOT
APPLICABLE
140
HUD-1 DSELP/Partnership Match Programs
Example 1 DSELP HK4E Line 209 CDA-
DSELP/HK4E 8,500 (D 3,500 H 5,000
8,500) Line 210 Employer match Balt. City
Public School 5,000 Example 2 DSELP HK4E
SK4E Line 209 CDA-DSELP/HK4E/SK4E     
                 13,500 (D 3,500 H
5,000 S 5,000 13,500) Line
210 Employer match Balt. City Public
School    5,000 Example 3
DSELPHK4ESK4ECPIP Line 209 CDA-DSELP/HK4E/SK4E
/CPIP 12,000 (D 3,500 H 3,500 S 3,500
C 1,500 12,000) Line 210 Employer match 
Balt. City Public School     3,500 Line
211 Community Partner match Home Partnership,
Inc. 1,500
141
HUD-1 EXAMPLES (continues)

• Example 5 HK4E Only (Non-State of MD partner)
• Line 209 CDA- HK4E 3,000
• Line 210 Employer match Balt. City Public
  School 3,000
• Example 6 DSELP/HK4E/SK4E (State of MD
  Government Employer)
• Line 209 CDA-DSELP/HK4E/SK4E/ST OF MD 11,000
• (D 3,500 H 2,500 S 2,500 ST 2,500
  11,000)
• Example 7 HK4E (State of MD Government
  Employer)
• Line 209 CDA HK4E/ST of MD 5,000
• (H 2,500 ST 2,500 5,000)

142
MERS Deed of Trust

• Martin O'Malley
• GOVERNOR
• Anthony G. Brown
• LT. GOVERNOR
• Raymond A. Skinner
• SECRETARY
• Clarence J. Snuggs
• DEPUTY SECRETARY

143
If you are a MERS member

• MIN Information Sheet is required as proof MIN
  is registered with MERS
• MERS as Original Mortgagee (MOM) Security
  Instrument is required
• The Mortgage Identification Number (MIN) is
  required on the 1st page of the Security
  Instrument(s) prior to closing the loan
• The approved MOM language is to be used
• Correct MIN, Mortgagee, and SIS Number
• If you are not a MERS member and would like to
  become a member
• Information about MERS membership can be obtained
  from the MERS website www.mersinc.org or by
  contacting a MERS Regional Director at (800)
  646-MERS (6377)

144
Post-Closing Compliance
Martin O'Malley GOVERNOR Anthony G. Brown LT.
GOVERNOR Raymond A. Skinner SECRETARY
Clarence J. Snuggs DEPUTY SECRETARY
145
Post-Closing Compliance
Processing Guidelines

• Post-Closing Compliance Checklist (Attachment L)
  states the required documentation to be included
  in the file for CDA review
• Refer to website for most current form as
  program guidelines change, applicable
  documentation updates are reflected in the
  Post-Closing Compliance Checklist

146
Post-Closing Compliance (Continued)
Processing Guidelines

• Purchase file must be submitted prior to
  commitment expiration date or loan may not be
  purchased
• Original Note must be included in purchase file
  endorsed to Maryland Community Development
  Administration (on the front or back of the note)

147
Post Closing Compliance (continued)

• MI Premiums a screen print from the
  Insurer/Guarantors website must be provided
  indicating that the status is active and required
  premiums have been paid (see Directive 2008-16,
  dated 6/13/08)
• Initial Escrow Disclosure Statement and First
  Payment Letter signed by the borrower (initials
  not allowed)
• All notary sections are completed
• 81 Tax Service Fee listed on HUD-1 or a letter
  on lender letter head stating you will be
  forwarding the fee to Bogman

148
Post-Closing Compliance (continued)
Processing Guidelines

• HUD-1 DSELP and/or DSELP/HK4E, SK4E BDIP or CPIP
  named as a loan and not a grant. The dollar
  amount must match the dollar amount on
  DSELP/Partner Match commitment letter
• DSELP/Partner Match Note to have same maturity
  date as MMP First Mortgage
• Excess funds are applied as a principal
  curtailment to the first mortgage loan

149
Post-Closing Compliance (continued)
Processing Guidelines

• Non-borrowing occupant taking title
• Signs first and second mortgage DOT and
  Tax-Exempt Rider
• Title Commitment/Final Policy shows title vested
  in all names
• Signs Buyers Confirming Affidavit

150
Post-Closing Compliance (continued)
Compliance Review Submission

• Lender will receive maximum compensation if the
  file is approved for purchase within 60 days for
  existing home loans, or 120 days for new
  construction

151
Post-Closing Compliance (continued)
Common Post-Closing Errors

• DSELP Partner Match Form missing from file
• DSELP/Partner Match Note maturity date incorrect
  must match first mortgage
• SK4E jurisdiction map and PFA map missing from
  file
• Deed of Trust (first mortgage and/or
  DSELP/Partner Match) missing legal description
• Current payment history not in file
• Hazard paid receipt for 1st year with premium
  dollar amount paid in full missing on Insurance
  Company letter head

152
Post-Closing Compliance (continued)
Common Post-Closing Errors

• Wrong Form of Recapture Tax Notice (changes
  annually)
• DSELP Deed of Trust incomplete and/or missing DOT
  Exhibit B as applicable for allowable
  additional liens
• Title Commitment schedule B section 2 1-6
  standard items not deleted endorsement accepted
  stating these items will be deleted on final
  policy
• Attachment R forms approval emails not in file
  (if applicable)

153
CDA Purchase Reminders

• CDA purchases loans once a week on Wednesday
• Friday cut-off for loans to be purchased the
  following week
• Lenders pull their purchase reports for the
  Wednesday purchase date for MMP DSELP loans
• MMP funds are wired on Wednesday
• DSELP funds are electronically transferred (EFT)
  within 7 business days of the purchase date

154
Servicing to Bogman, Inc.

• Martin O'Malley
• GOVERNOR
• Anthony G. Brown
• LT. GOVERNOR
• Raymond A. Skinner
• SECRETARY
• Clarence J. Snuggs
• DEPUTY SECRETARY

155
Bogman, Inc. Contacts

• Communicate with the servicer via email
• Loan Servicing Manager Mary Prator
  mprator_at_bogmaninc.com 40-482-1056
• Loan Administration Gail Neff-Tebeleff
  gail_at_bogmaninc.com 240-482-1061
• New Loan Setup David Wolf david_at_bogmaninc.com 2
  40-482-1076
• New Loan Administrator Leah Nagel lnagel_at_bogmanin
  c.com 240-482-1084
• New Loan Deepa Baniya dbaniya_at_bogmaninc.com 240
  -482-2284
• Mortgage Insurance Admin Brian Jenkins brian_at_bogma
  ninc.com 240-482-1051
• Hazard Insurance MaryAnn Clifford
  mclifford_at_bogmaninc.com 240-482-1053
• Taxes Steve Wolf swolf_at_bogmaninc.com 240-482-1
  077
• Foreclosure Specialist Nina Payne npayne_at_bogmanin
  c.com 240-482-1105
• Default Manager Sonja Veney sveney_at_bogmaninc.co
  m 240-482-1064
• Bogman Toll Free Customer Number 1-877-482-1051
• Bogman Fax Number 301-622-0058

156
Loan Servicing

• Loan Transfer After Purchase (Refer to
  guidelines in Lenders Manual)
• Loan files required to be submitted to Bogman
  within 16 days after purchase
• Bogman, Inc.
• Attention David Wolf
• 12301 Old Columbia Pike, Suite 200
• Silver Spring, MD 20904-1656
• Loans are to be fully serviced by Lender until
  loan is transferred to CDAs servicer,
  Bogman,Inc.
• Make sure mortgage insurance and hazard insurance
  are in effect at time of transfer if the proof
  of insurance is not provided, CDA will require
  lender to repurchase the loan
• Transaction history to date of loan transfer to
  Bogman must be included in the submission file

157
Loan Servicing (Continued)

• FHA An individual HUD form 92080 must be
  completed. Also, a copy of the screen-print from
  the FHA Connection showing Mortgage Record Change
  complete.
• Bogmans HUD MTG ID is 1947209992
• CDA Holder 1943509993
• Loan must be transferred within 48 hours of
  receiving the purchase advice. The lender must
  list
• Bogman, Inc. as the Sub-servicer. Their MERS ID
  is 1004833
• Maryland Community Development Administration as
  the Servicer and Investor. MERS ID is 1008248
• All items on the Bogman Monthly Issues Report are
  required to be cleared within 1 week to avoid the
  possibility of a loan having to be repurchased by
  the Lender

158
Loan Transfer Highlights

• Refer to Attachment P for complete instructions
  on proper loan transfer to servicer it includes
  important information on loan transfer to Bogman,
  Inc.
• Items of importance in Attachment P are servicing
  file set up, monetary items, Tax service fee of
  81.00 (payable to Bogman) is submitted with the
  package, escrows, sample good-bye letters, sample
  hazard insurance letters and the Bogman loan
  information sheet

159
Final Documents
Martin O'Malley GOVERNOR Anthony G. Brown LT.
GOVERNOR Raymond A. Skinner SECRETARY
Clarence J. Snuggs DEPUTY SECRETARY
160
Final Documents
Compliance Review Submission

• Original Deed of Trust, Title Policy, FHA
  Mortgage Insurance Certification, VA Loan
  Guaranty Certificate, or RHS Loan Note Guaranty
  if not available at time of loan purchase, must
  be submitted to CDA within 180 days after loan
  purchase or loan will be subject to repurchase by
  the lender
• Final documents should be submitted to CDA after
  lender receives purchase advice indicating loan
  has been purchased

161
Final Documents (continued)

• Send all final documents at the same time
• Original Recorded 1st Mortgage Deed of Trust and
  DSELP Deed of Trust (court certified copy
  acceptable only if original lost)
• All MERS loan must have the following three
  requirements to be a satisfactory MOM loans
  assigned to MERS
• Legal title to the mortgage lien must be vested
  in Mortgage Electronic Registration Systems, Inc.
  
• The 18-digit mortgage identification number
  (MIN), as well at the SIS telephone number on all
  security documents.
• Notices provisions in the mortgage, deed of trust
  and other security instruments should be modified
  to add Mortgage Electronic Registration Systems,
  Inc.
• Tax Exempt Financing Rider recorded with 1st
  Mortgage DOT only
• All Riders are included with the recorded Final
  DOT

162
Final Documents (continued)

• IF INCORRECT FORM USED, DOT INCOMPLETE, OR RIDERS
  NOT ATTACHED WHEN DOT WAS RECORDED, CONTACT CDA
  IMMEDIATELY. DO NOT CHANGE/CORRECT THE DOT
  WITHOUT CDA INSTRUCTIONS
• Title Policy sent with all applicable
  endorsements (ALT 4 condo, ATL 5 PUD, ALT 8.1
  Environmental.) Short form is preferred
• Endorsements are original and executed by
  authorized signatories
• Incorrect final documents are returned to the
  lender at the lenders expense from CDA. Issues
  must be corrected before sending back to CDA

163
Website
www.mmprogram.org new product information interest
rate updates fact sheets on loan products
income purchase price limits downpayment
closing cost assistance programs homeownership
counseling information download homebuyers
kit eligibility calculator under Tools Please
consider attending future Training Classes to be
informed of CDAs latest change and updates