Exhibit 99.5
EXECUTIVE
SUMMARY
Third Party Due Diligence Review
Overview
Consolidated Analytics, Inc (“Consolidated Analytics”), a third-party due diligence provider, performed the review described below on residential mortgage loans acquired by APF II Resi O4B, LLC through a bulk purchase. The review included a total of 272 newly originated residential mortgage loans acquired through a bulk purchase, in connection with the securitization identified as HOMES 2025-NQM3 (the “Securitization”). The Review was conducted from August 2022 through March 2025 on mortgage loans originated between August 2022 and March 2025.
Scope of Review
Credit Review
Consolidated Analytics performed a “Credit Review” to verify compliance with guidelines in effect at the time of loan origination, or other guidelines provided by Client prior to review, and ensure the characteristics used by the underwriter are supported by the file documentation; and determine whether any loans outside of those guidelines contain legitimate and approved exceptions with compensating factors.
The Credit Review attempted to confirm the following:
| a. | QM or ATR Validation / Review of 8 Key Underwriting Factors |
| i. | Income / Assets |
| ● | Validate borrower(s) monthly gross income |
| ● | Validate funds required to close, required reserves |
| ● | Review file documentation for required level of income and asset verifications |
| ii. | Employment Status |
| ● | Review file documentation for required level of employment |
| iii. | Monthly Mortgage Payment |
| ● | Confirm program, qualifying rate, terms |
| iv. | Simultaneous Loans |
| ● | Validate all concurrent loans are included in the DTI to properly assess the ability to repay |
| v. | Mortgage Related Obligations: PITI, HOA, PMI, etc. |
| ● | Validate subject loan monthly payment (PITI) and associated obligations |
| vi. | Debts / Obligations |
| ● | Validate monthly recurring liabilities |
| vii. | DTI and/or Residual Income |
| ● | Validate debt-to-income ratio (DTI) based upon income and debt documentation provided in the file |
| ● | Documentation meets Appendix Q requirements for QM Loans |
| viii. | Credit History |
| ● | Review credit report for credit history and required credit depth including any / all inquiries |
| ● | Determine representative credit score from credit report |
| b. | Validate loan-to-value (LTV) and combined loan-to-value |
| c. | Review borrower’s occupancy |
| d. | Validation through third party resource of the subject properties most recent twelve (12) month sales history |
| e. | Confirm sufficient evidence in loan file, by reviewing the underwriter’s decision to approve the loan based upon the borrows income, debt, and credit history, to support borrower’s willingness and ability to repay the debt |
| f. | Confirm that Final 1003 is sufficiently completed |
| g. | Provide Audit 1008 with accurate data based on file documentation |
| h. | Confirm Loan Approval conditions were met |
| i. | Review condominium questionnaire to verify all information is complete, prepared by an authorized representative, and address any red flags that may deem condominium project ineligible |
| j. | General QM for any loans originated under the GQM Rule |
| i. | Pricing Thresholds: |
| a. | Pricing for First Lien Loans: |
| i. | 2.25% for a first-lien covered transaction with a loan amount greater than or equal to the applicable dollar amount threshold; and |
| ii. | 3.5% for a first-lien covered transaction with a loan amount greater than or equal to the applicable dollar amount threshold; and |
| iii. | 6.5% for a first-lien covered transaction with a loan amount less than the applicable dollar amount threshold. |
| b. | Pricing for Subordinate Lien Loans: |
| i. | 3.5% for a subordinate-lien covered transaction with a loan amount greater than or equal to the applicable dollar amount threshold; and |
| ii. | 6.5% for a subordinate-lien covered transaction with a loan amount less than the applicable dollar amount threshold. |
| c. | Pricing for Manufactured Homes: |
| i. | 2.25% for a first-lien covered transaction secured by a manufactured home with a loan amount equal to or greater than the applicable dollar amount threshold; and |
| ii. | 6.5% for a covered transaction secured by a manufactured home with a loan amount less than applicable dollar amount threshold. |
| ii. | Consider Income and Assets: |
| ○ | Consumer’s current or reasonably expected income or assets (other than the value of the dwelling that secures the loan; |
| ○ | The consumer’s debt obligations, alimony, child support; and |
| ○ | The monthly DTI or residual income. |
| iii. | Verification of Income and Assets: |
| a. | Verification in compliance with one of the “safe harbor” guidelines will meet the QM verification requirement. A creditor is allowed to “mix and match” provisions of the different guidelines rather than only apply one guideline per loan. |
The specific guidelines that the CFPB is designating for the safe harbor are: The GQM Rule provides that if the creditor verifies the consumer’s income or assets, debt obligations, alimony, child support, and monthly DTI or residual income by meeting the standards of certain specified
third-party underwriting manuals, then a creditor is presumed to have complied with the verification requirement. These specified manuals are:
| i. | Chapters B3-3 through B3-6 of the Fannie Mae Single Family Selling Guide, published June 3, 2020; |
| ii. | Sections 5102 through 5500 of the Freddie Mac Single-Family Seller/Servicer Guide, published June 10, 2020; |
| iii. | Sections II.A.1 and II.A.4-5 of the Federal Housing Administration’s Single Family Housing Policy Handbook, issued October 24, 2019; |
| iv. | Chapter 4 of the U.S. Department of Veterans Affairs’ Lenders Handbook, revised February 22, 2019; |
| v. | Chapter 4 of the U.S. Department of Agriculture’s Field Office Handbook for the Direct Single Family Housing Program, revised March 15, 2019; and |
| vi. | Chapters 9 through 11 of the U.S. Department of Agriculture’s Handbook for the Single Family Guaranteed Loan Program, revised March 19, 2020. |
Compliance Review
Consolidated Analytics performed a “Compliance Review” to determine, as applicable, to the extent possible and subject to the caveats below, whether the loan complies with applicable regulatory requirements as noted below, each as amended, restated and/or replaced from time to time. In relation to cash out refinances of investment property loans, documentation provided in the loan file will be reviewed only to validate the use of cash out proceeds for business purposes at the origination/consummation of the loan. In the event use of proceeds cannot be validated, or are deemed to be utilized for consumer purposes, the loan would then be subject to a “Compliance Review” of applicable regulatory requirements as noted below, each as amended, restated and/or replaced from time to time. The Compliance Review included the following:
| a. | Test Loan Estimate(s) for accuracy and completeness as well as timing requirements as required by TRID Regulations |
| b. | Test Closing Disclosure(s) for accuracy and completeness as well as timing requirements as required by TRID Regulations |
| c. | Tolerance Testing |
| i. | Compare Loan Estimate and Closing Disclosures |
| ii. | Identify Tolerance Violations and applicable cost to cure |
| d. | Comprehensive review of Closing Disclosure to determine transaction accuracy |
| e. | Recalculation of APR and Finance Charge |
| f. | Testing of: |
| i. | Federal High Cost Mortgage provisions |
| ii. | Federal Higher Priced Mortgage Loans provisions |
| iii. | Local and/or State Anti-predatory and High Cost provisions |
| iv. | HOEPA Points and Fees |
| g. | Determine whether specified federal disclosures were provided timely based upon comparison of the application date to the dates on such disclosures |
| i. | Service Provider List |
| ii. | Home Ownership Counselling Disclosure |
| iii. | ARM Disclosure |
| h. | Compliance with QM as it relates to: |
| i. | APR Test |
| ii. | Points & Fees Test |
| iii. | Prepayment Penalty Test |
| iv. | Product Eligibility Testing |
| i. | Notice of Right to Cancel (Rescission) Review |
| i. | Confirm transaction date, expiration date, and disbursement date |
| ii. | Confirm document is properly executed by all required parties to the transaction |
| iii. | Confirm the correct Right of Rescission document was executed for the transaction type |
| iv. | Confirm a full three (3) day rescission period was provided to the borrower |
| j. | Confirm through NMLS the loan originator and originating firm’s license status was active and properly disclosed on appropriate loan documents |
| k. | Check the Loan participants against the exclusionary list provided by Client or by the purchaser of the Loan(s) |
| l. | Review closing documents to ensure that the Mortgage Loan information is complete, accurate, and consistent with other documents; Confirm collateral documents have been recorded or sent for recording |
The Compliance Review did not include any federal, state or local laws, constitutional provisions, regulations or ordinances that are not expressly enumerated above. Furthermore, the findings reached by Consolidated Analytics are dependent upon its receiving complete and accurate data regarding the loans from loan originators and other third parties upon which Consolidated Analytics is relying in reaching such findings.
Valuation Review
Consolidated Analytics performed a “Valuation Review,” which included the following:
| a. | Review original appraisal, determination that property is in “average” condition or better, or property requires cosmetic improvements (as defined by the appraiser) that do not affect habitability. Should an area of concern be identified with the condition of the property, Consolidated Analytics will alert Client. |
| b. | Review appraisal, determination that property is completely constructed and appraisal is on an “as is basis,” or property is identified as not completely constructed by originating appraiser. |
| c. | Review and determine if the appraisal report was performed on appropriate GSE forms and if the appraiser indicated in the body of the subject appraisal that the appraisal conforms to USPAP standards. |
| d. | Review and determine the relevance of the comparable properties and ensure that a rational and reliable value was provided and supported as of the effective date of the Origination Appraisal. |
| e. | Review adjustments (line item, net and gross adjustments) to ensure they are reasonable. |
| f. | Ensure that the appraisal conforms to the guidelines provided from the Client. |
| g. | Review appraisal to ensure all required documents were included. |
| h. | Review location map provided within the appraisal for external obsolescence. |
| i. | Ensure highest and best use and zoning complies with guidelines. |
| j. | Confirm there are no marketability issues that affect the subject property. |
| k. | Ensure subject property does not suffer any functional obsolescence. |
| l. | Where applicable, determine if the file did not contain the appraisal or other valuation method and a review could not be performed. |
| m. | Additional valuation products were not required when the CU score provided was 2.5 or below or the appraisal LCA risk score was eligible for Collateral Rep and Warranty relief. In the event the CU score was greater than 2.5 or the LCA score was not eligible for R&W relief, an additional valuation product was obtained to confirm value was supported within 10% tolerance. In some instances, based on guidance from the seller, CDA’s were ordered on loans that had an acceptable CU score or R&W eligibility. |
Consolidated Analytics applied a cascade methodology to determine if the original appraised value was reasonably supported when compared to an independent third party valuation product.
For loans reviewed in a post-close valuation review scenario (272 loans in total):
One hundred seventy-one (171) loans had CU scores of 2.5 or less or were eligible for Collateral Rep and Warranty relief.
Seven (7) loans had a Secondary Appraisal, seven (7) loans had an AVM, and one hundred forty-seven (147) loans had Desktop Reviews. Consolidated Analytics has independent access to the Desktop Reviews ordered by the Aggregator.
If a loan with an AVM or Desktop Review fell outside of a -10% tolerance, was inconclusive, or a PIW was present, then an additional valuation product was completed. There were zero (0) occurrences of this.
Product totals may not sum due to multiple products for each loan.
TAPE INTEGRITY REVIEW RESULTS SUMMARY
Of the two hundred seventy-two (272) mortgage loans reviewed, one hundred eight (108) unique mortgage loans (39.71% by loan count) had a total of two hundred sixty-three (263) discrepancies across thirty-seven (37) data fields. A blank or zero value on the data tape when an actual value was captured by Consolidated Analytics was not treated as a data variance.
| Fields Reviewed | Discrepancy Count | Percentage |
| Borrower Appraisal Receipt Date | 47 | 17.87% |
| Qualifying Total Reserves Number of Months | 38 | 14.45% |
| Total Qualified Assets Available | 25 | 9.51% |
| Qualifying Total Monthly Liabilities | 18 | 6.84% |
| Total Liquid Assets Available For Close | 17 | 6.46% |
| Qualifying All Borrower Residual Income | 16 | 6.08% |
| Application Date | 11 | 4.18% |
| Cash Disbursement Date | 11 | 4.18% |
| QM Qualifying Total Debt Income Ratio | 9 | 3.42% |
| Origination_Date | 9 | 3.42% |
| Months Reserves | 8 | 3.04% |
| Qualifying FICO | 7 | 2.66% |
| Cash out Include Debt Paid at Close | 6 | 2.28% |
| Borrower 1 Citizen | 4 | 1.52% |
| Borrower 1 Qualifying Income | 4 | 1.52% |
| Original_Collateral_Value_Date | 3 | 1.14% |
| Original_PITI_Payment | 3 | 1.14% |
| DSCR | 3 | 1.14% |
| All Borrower Total Income | 2 | 0.76% |
| Calculated DSCR | 2 | 0.76% |
| Qualifying Monthly P&I Amount | 2 | 0.76% |
| Qualifying Total Debt Income Ratio | 2 | 0.76% |
| Reviewed Appraised Property Value | 2 | 0.76% |
| Number of Borrowers | 1 | 0.38% |
| Index | 1 | 0.38% |
| Qualifying CLTV | 1 | 0.38% |
| Lock Term (Days) | 1 | 0.38% |
| Total_Number_of_Borrowers | 1 | 0.38% |
| Original_Collateral_Value_Type | 1 | 0.38% |
| Borrower_First_Time_Buyer | 1 | 0.38% |
| Borrower 1 FTHB | 1 | 0.38% |
| Interest Rate | 1 | 0.38% |
| Loan Purpose | 1 | 0.38% |
| Closing/Settlement Date | 1 | 0.38% |
| Property Type | 1 | 0.38% |
| Gross Rent | 1 | 0.38% |
| Note Date | 1 | 0.38% |
| Grand Total | 263 | 100.00% |
Summary of Results
OVERALL RESULTS SUMMARY
Final Loan Grades
| Overall Loan Results: | |||
| Event Grade | Loan Count | Original Principal Balance | Percent of Sample |
| Event Grade A | 223 | $112,738,757.00 | 81.99% |
| Event Grade B | 49 | $21,660,550.00 | 18.01% |
| Event Grade C | 0 | $0.00 | 0% |
| Event Grade D | 0 | $0.00 | 0% |
| Total Sample | 272 | $134,399,307.00 | 100.00% |
| Credit Results: | ||
| Event Grade | Loan Count | Percent of Sample |
| Event Grade A | 235 | 86.40% |
| Event Grade B | 37 | 13.60% |
| Event Grade C | 0 | 0% |
| Event Grade D | 0 | 0% |
| Total Sample | 272 | 100.00% |
| Compliance Results (As applicable, 51 loans within population did not receive a Compliance Review): | ||
| Event Grade | Loan Count | Percent of Sample |
| Event Grade A | 214 | 96.83% |
| Event Grade B | 7 | 3.17% |
| Event Grade C | 0 | 0% |
| Event Grade D | 0 | 0% |
| Total Sample | 221 | 100.00% |
| Valuation Results: | ||
| Event Grade | Loan Count | Percent of Sample |
| Event Grade A | 264 | 97.06% |
| Event Grade B | 8 | 2.94% |
| Event Grade C | 0 | 0% |
| Event Grade D | 0 | 0% |
| Total Sample | 272 | 100.00% |
Exception Category Summary
The table below summarizes the individual exceptions which carried an associated “A”, “B”, “C”, or “D” level exception grade. One loan may have carried more than one exception. In such cases, the exception with the lowest grade would drive the loan grade for that particular area of the review. The overall loan grade is the lowest grade for any one particular review scope (ex. a loan with a Compliance Grade of “B”, a Credit Grade of “A”, and a Property Grade of “A” would receive an overall Loan Grade of “B”).
| Exception Type | Exception Level Grade | Exception Category | Total |
| Credit | A | No Credit Findings | 124 |
| No Findings | 29 | ||
| All Interested Parties Not Checked with Exclusionary Lists | 18 | ||
| Housing History Does Not Meet Guideline Requirements | 9 | ||
| Property Title Issue | 7 | ||
| Income and Employment Do Not Meet Guidelines | 6 | ||
| Borrower residency documentation not provided or issue with documentation | 6 | ||
| Verification of Rent (VOR)/Verification of Mortgage (VOM) Document is incomplete | 6 | ||
| The Final 1003 is Incomplete | 5 | ||
| Asset Qualification Does Not Meet Guideline Requirements | 4 | ||
| Borrower 2 3rd Party VOE Prior to Close Missing | 3 | ||
| Rent Loss Insurance Missing | 3 | ||
| Audited Reserves are less than Guideline Required Reserves (Dollar Amount) | 3 | ||
| Entity Documentation - Missing or Defective | 3 | ||
| Missing verification of taxes, insurance, and/or HOA fees for non-subject property | 2 | ||
| Approval/Underwriting Summary Not Provided | 2 | ||
| Approval/Underwriting Summary Partially Provided | 2 | ||
| Closing Disclosure/Settlement Statement Missing or Defective | 2 | ||
| Missing Letter of Explanation (Credit) | 2 | ||
| Hazard Insurance Policy is Partial | 2 | ||
| DSCR is less than guideline minimum | 2 | ||
| Closing Documentation Missing or Defective | 2 | ||
| OFAC Check Not Completed and/or Cleared | 2 | ||
| Credit Report Missing or Defective | 2 | ||
| ATR: Current Employment Not Verified | 2 | ||
| Missing evidence of self employment | 2 | ||
| Third Party Fraud Report not Provided | 2 | ||
| Final Loan Application is Partial | 2 | ||
| Title Insurance Missing or Defective | 2 | ||
| Note Document Indicator is Missing | 1 | ||
| Borrower 3 3rd Party VOE Prior to Close Missing | 1 | ||
| Sales Contract Missing or Defective | 1 | ||
| Deed Missing or Defective | 1 | ||
| Missing VOM or VOR | 1 | ||
| Delinquent Credit History Does Not Meet Guideline Requirements | 1 | ||
| Potential Fraud Reflected on Fraud Report | 1 | ||
| Audited LTV Exceeds Guideline LTV | 1 | ||
| Title Coverage is Less than Subject Lien | 1 | ||
| Asset Documentation Aged | 1 |
| Missing Verification of Subject Property Taxes, Insurance, HOA or Other Payments | 1 | ||
| Final Loan Application is Missing | 1 | ||
| Borrower Non-US Citizen Identification Document Missing | 1 | ||
| Background Check Missing or Defective | 1 | ||
| Cash Out Does Not Meet Guideline Requirements | 1 | ||
| TITLE INSURANCE COVERAGE - INADEQUATE COVERAGE | 1 | ||
| Audited CLTV Exceeds Guideline CLTV | 1 | ||
| Trust/POA Does Not Meet Guideline Requirements | 1 | ||
| CLOSING PROTECTION LETTER MISSING OR DEFECTIVE | 1 | ||
| Borrower 1 3rd Party VOE Prior to Close Missing | 1 | ||
| Missing letter of explanation | 1 | ||
| Borrower 1 CPA Letter Missing | 1 | ||
| Missing Letter of Explanation (Income) | 1 | ||
| Hazard Insurance Policy is Missing | 1 | ||
| Borrower Income Verification does not match Approval | 1 | ||
| Borrower 1 Credit Report is Incomplete | 1 | ||
| Missing VVOE dated within 10 days consummation | 1 | ||
| HO6 Master Insurance Policy is Missing | 1 | ||
| Asset 2 Missing | 1 | ||
| Borrower 1 Executed 4506-T Missing | 1 | ||
| Note Missing or Defective | 1 | ||
| Housing history does not meet guidelines | 1 | ||
| PAYOFF STATEMENT MISSING OR DEFECTIVE | 1 | ||
| Asset 1 Does Not Meet Guideline Requirements | 1 | ||
| Prepayment Penalty Indicator is Missing | 1 | ||
| INSUFFICIENT ASSETS TO CLOSE | 1 | ||
| Audited DTI Exceeds Guideline DTI | 1 | ||
| Minimum DSCR | 1 | ||
| Subject Property Lease - Missing or Defective | 1 | ||
| Missing Certificate of Occupancy | 1 | ||
| Credit Report Aged | 1 | ||
| Missing Closing/Final Verbal VOE | 1 | ||
| Audited HCLTV Exceeds Guideline HCLTV | 1 | ||
| Borrower 2 Credit Report is Incomplete | 1 | ||
| FIRST PAYMENT LETTER MISSING OR DEFECTIVE | 1 | ||
| Verification of Borrower Liabilities Missing or Incomplete | 1 | ||
| Fraud Report Shows Uncleared Alerts | 1 | ||
| VERIFICATION OR MORTGAGE MISSING OR DEFECTIVE | 1 |
| Hazard insurance dwelling coverage is not sufficient | 1 | ||
| Hazard Insurance Effective Date is after the Disbursement Date | 1 | ||
| Total Credit Grade (A) Exceptions: | 306 | ||
| B | Audited LTV Exceeds Guideline LTV | 13 | |
| Audited HCLTV Exceeds Guideline HCLTV | 10 | ||
| Audited CLTV Exceeds Guideline CLTV | 10 | ||
| Audited Reserves are less than Guideline Required Reserves (Dollar Amount) | 5 | ||
| DSCR is less than guideline minimum | 3 | ||
| Excessive LTV Ratio | 2 | ||
| Asset Qualification Does Not Meet Guideline Requirements | 2 | ||
| Audited Loan Amount is less than Guideline Minimum Loan Amount | 2 | ||
| Housing History Does Not Meet Guideline Requirements | 2 | ||
| Borrower 1 3rd Party VOE Prior to Close Missing | 2 | ||
| Borrower Contributions Do Not Met Guideline Minimum | 2 | ||
| Borrower 1 Credit Report is Incomplete | 1 | ||
| Missing Closing/Final Verbal VOE | 1 | ||
| Income/Employment General | 1 | ||
| Underwriting LTV exceeds Guideline Maximum Allowable | 1 | ||
| Underwriting CLTV exceeds Guideline Maximum Allowable | 1 | ||
| Audited DTI Exceeds Guideline DTI | 1 | ||
| Income and Employment Do Not Meet Guidelines | 1 | ||
| Cash Out Does Not Meet Guideline Requirements | 1 | ||
| Missing Business Entity Formation Document | 1 | ||
| Delinquent Credit History Does Not Meet Guideline Requirements | 1 | ||
| Payment shock exceeds guideline | 1 | ||
| Audited Interested Party Contribution Exceeds Guideline Program Maximum | 1 | ||
| Audited FICO is less than Guideline FICO | 1 | ||
| Verification of Rent (VOR)/Verification of Mortgage (VOM) Document is incomplete | 1 | ||
| Borrower does not meet residual income requirement | 1 | ||
| Borrower owns more financed properties than allowed per guidelines | 1 | ||
| Total Credit Grade (B) Exceptions: | 69 | ||
| Compliance | No Compliance Findings | 151 | |
| Higher-Priced Mortgage Loan Test | 41 | ||
| CA AB 260 Higher-Priced Mortgage Loan Test | 9 | ||
| NC Rate Spread Home Loan Test | 3 | ||
| MD COMAR Higher-Priced Mortgage Loan Test | 3 | ||
| Charges That Cannot Increase Test | 3 | ||
| Charges That In Total Cannot Increase More Than 10% Test | 3 | ||
| Missing Required Affiliated Business Disclosure | 2 |
| Evidence of Appraisal Delivery to Borrower not Provided or Late (12 CFR 1002.14(a)(1)) | 2 | ||
| Homeownership Counseling Disclosure Is Missing | 2 | ||
| Initial Closing Disclosure Delivery Date Test | 2 | ||
| Originator NMLS Status is Not Found | 1 | ||
| Higher-Priced Mortgage Loan | 1 | ||
| Right of Rescission is Missing | 1 | ||
| Higher-Priced Mortgage Loan Evidence of Appraisal Delivery to the Borrower Not Provided (12 CFR 1026.35(c)(6)) | 1 | ||
| TILA Right of Rescission Test | 1 | ||
| Missing Credit Score Disclosure (FACTA) | 1 | ||
| Purchase Contract does not Match Final CD | 1 | ||
| Missing evidence required disclosure provided at closing | 1 | ||
| Security Instrument Indicator is Missing | 1 | ||
| CT Nonprime Home Loan Test | 1 | ||
| Condo Rider is Missing | 1 | ||
| Initial Loan Estimate Delivery Date Test (from application) | 1 | ||
| Total Compliance Grade (A) Exceptions: | 233 | ||
| B | Charges That Cannot Increase Test | 3 | |
| Charges That In Total Cannot Increase More Than 10% Test | 2 | ||
| Incorrect rescission model used - RTC form model H-8 used for Same Lender or Lender Affiliate Refinance | 1 | ||
| Evidence of Appraisal Delivery to Borrower not Provided or Late (12 CFR 1002.14(a)(1)) | 1 | ||
| Total Compliance Grade (B) Exceptions: | 7 | ||
| Property | A | No Property Findings | 200 |
| Appraisal Review - Missing | 4 | ||
| FEMA Declared Disaster Dated Prior to the Note Date, After Appraisal Date | 4 | ||
| Third Party Valuation Product Not Provided within 10% Tolerance | 3 | ||
| Property/Appraisal General | 2 | ||
| HOA Questionnaire is Missing | 2 | ||
| Hazard Insurance Missing or Defective | 2 | ||
| Appraisal incomplete (missing map, layout, pages, etc.) | 1 | ||
| Ineligible Project – Litigation | 1 | ||
| Appraisal is Expired | 1 | ||
| Ineligible Property | 1 | ||
| FLOOD CERT OR EVIDENCE NOT IN A FLOOD ZONE MISSING | 1 | ||
| Total Property Grade (A) Exceptions: | 222 | ||
| B | HOA Does Not Meet Guidelines | 4 | |
| Subject Property Lease - Missing or Defective | 1 | ||
| Property has been listed for sale in the past 6 months | 1 | ||
| Appraisal is Expired | 1 | ||
| Misrepresentation of the Physical Characteristics | 1 | ||
| Total Property Grade (B) Exceptions: | 8 |
Event Grade Definitions
| Final Loan Grade | |
| A | Loan meets Credit, Compliance, and Valuation Guidelines |
| B | The loan substantially meets published Client/Seller guidelines and/or eligibility in the validation of income, assets, or credit, is in material compliance with all applicable laws and regulations, and the value and valuation methodology is supported and substantially meets published guidelines. |
| C | The loan does not meet the published guidelines and/or violates one material law or regulation, and/or the value and valuation methodology is not supported or did not meet published guidelines. |
| D | Loan is missing documentation to perform a sufficient review. |
| Credit Event Grades | |
| A | The loan meets the published guidelines without any exceptions. The employment, income, assets and occupancy are supported and justifiable. The borrower’s willingness and ability to repay the loan is documented and reasonable. |
| B | The loan substantially meets the published guidelines but reasonable compensating factors were considered and documented for exceeding published guidelines. The employment, income, assets and occupancy are supported and justifiable. The borrower’s willingness and ability to repay the loan is documented and reasonable. |
| C | The loan does not substantially meet the published guidelines. There are not sufficient compensating factors that justify exceeding the published guidelines. The employment, income, assets or occupancy are not supported and justifiable. The borrower’s willingness and ability to repay the loan were not documented or are unreasonable. |
| D | There was not sufficient documentation to perform a review or the credit file was not furnished. |
| Compliance Event Grades | |
| A | The loan is in compliance with all applicable laws and regulations. The legal documents accurately reflect the agreed upon loan terms and are executed by all applicable parties. |
| B | The loan is in material compliance with all applicable laws and regulations. The legal documents accurately reflect the agreed upon loan terms and are executed by all applicable parties. Client review required. |
| C | The loan violates one material law or regulation. The material disclosures are absent or the legal documents do not accurately reflect the agreed upon loan terms or all required applicants did not execute the documents. |
| D | There was not sufficient documentation to perform a review or the required legal documents were not furnished. |
| Valuation Event Grades | |
| A | The value is supported within 10% of the original appraisal by the AVM or there are other supporting documents in the originators loan file package (CDA, Field Review or Second Appraisal). The appraisal was performed on an “as-is” basis and the property is complete and habitable at origination. The appraiser was appropriately licensed and used GSE approved forms. |
| B | The value is not supported within 10% of the original appraisal by the AVM and there are no other valuation support documents in the loan file provided by the Seller. The valuation methodology substantially meets the published guidelines but reasonable compensating factors were considered and documented for exceeding guidelines. The appraisal was performed on an “as-is” basis and the property is complete and habitable. The appraiser was appropriately licensed and used GSE approved forms. |
| C | The value is not supported within 10% of the original appraisal. The valuation methodology did not meet the published guidelines and there were not sufficient compensating factors for exceeding published guidelines. The property is in below “average” condition or the property is not complete or requires significant repairs. The appraisal was not performed on an “as is” basis. The appraiser was not appropriately licensed or did not use GSE approved forms. |
| D | The file was missing the appraisal or there was not sufficient valuation documentation to perform a review. |