1.

Credit Qualification

1.1

Guidelines

1.2

Employment

1.3

Income

1.4

Assets

1.5

Debt Ratio

1.6

Property Valuation

1.7

Loan-to-Value Ratio

1.8

Credit History

1.9

Credit Scores

1.10

Compensating Factors

2.

Document Review

2.1

Collateral Docs

2.1.1

Title Commitment / Policy

2.1.2

Mortgage Note / Security Instrument

2.1.3

Mortgage / Deed of Trust

2.1.4

Conveyance Deed

2.2

Closing Docs

2.2.1

Final Hud-1 Settlement Statement

2.2.2

Final Truth-in-Lending Disclosure

2.2.3

Notice of Right to Cancel

2.3

Credit Docs

2.3.1

Loan Application

2.3.2

Underwriting Worksheet

2.3.3

Credit Report

2.3.4

Housing Payment History

2.3.5

Letters of Explanation

2.3.6

Gift Letters

2.3.7

Income Documentation

2.3.8

Asset Documentation

2.3.9

Property Valuation Tools

2.3.10

Proof of Insurance

3.

Regulatory Compliance

3.1

Third Party Fees

3.2

Federal Truth in Lending Act/Regulation Z:

3.3

Business Days as Defined by Regulation Z:

3.4

MDIA (Mortgage Disclosure Information Act) - Applications Dated After 07/30/2009 and Prior to 10/03/2015):

3.4.1

Initial Delivery: Creditor must deliver the Initial Disclosures within 3 “general” business days of application

3.4.2

No Pre-disclosure Fees: Creditor may not charge fees, other than credit report fee, prior to borrower receiving the Initial Disclosures

3.4.3

7 Day Waiting Period: Creditor must deliver the Initial Disclosures more than 7 “specific” business days prior to closing

3.4.4

3 Day Waiting Period: Creditor must issue revised disclosures if APR in initial disclosures becomes inaccurate.  Closing may not occur until the 3rd “specific” business day after the consumer receives the corrected disclosures.

3.4.5

APR on Final TIL: APR on Final TIL must be within tolerance 1/8 or ¼ of percent difference in APR based on regular or irregular payment stream.

3.5

Home Ownership Equity Protection Act (HOEPA) testing, to include:

3.5.1

APR test [HOEPA (§1026.32(a)(1))] and [HPML(§1026.35(a)(1))]

3.5.1.1

If missing initial application, missing initial application date or missing rate lock confirmation results in inability to determine application date or rate set date for purposes of high cost / higher-priced mortgage loan testing, vendor will test based on: (1) a six-month window prior to closing date for missing application date; and (2) all dates between application and closing for missing rate set date. A condition should be set to identify that the application date or rate lock date is missing and that alternative (look-back) testing was utilized. Other evidence in the file (e.g. date of initial disclosures, rate lock expiration on GFE) may be relied upon to estimate application or rate set date but will be determined by the Client on a case by case basis.

3.5.2

Points and Fees test [HOEPA (§1026.32(a)(2))]

3.5.3

Review of HOEPA disclosure (§1026.32(c)) for accuracy (i.e. payment stream, highest payment scenario; dates disclosed, dates acknowledged)

3.5.4

Review and confirm documentation type (i.e. full, stated, no ratio)

3.5.5

Review for evidence of prepayment penalty

3.5.6

Verification of Debt to Income conformity, when necessary.

3.6

RESPA/Regulation X (Loans with an Application Date prior to 10/03/2015):

3.6.1

Good Faith Estimate (GFE):

3.6.2

Consultant will confirm compliance with current RESPA requirements in effect at origination of the Mortgage Loan including:

3.6.3

Confirm the presence of the current GFE form in effect at the time of origination.

3.6.4

Verify the GFE was provided to the borrower(s) within three days of “Application”.

3.6.5

Application shall be defined by Regulation X and generally be considered complete when the following seven conditions are met:

3.6.5.1

Borrower(s) First and Last Name

3.6.5.2

Borrower(s) Social Security Number (to enable the loan originator to obtain a credit report)

3.6.5.3

Subject Property Address (including “To Be Determined”)

3.6.5.4

Mortgage Loan Amount Sought

3.6.5.5

Estimation of Property Value

3.6.5.6

Monthly Income

3.6.5.7

Any other requirement as defined in the lender’s policies and procedures

3.6.6

Consultant will verify that all Broker fees, including Yield Spread Premium (“YSP”) were accurately disclosed and reflected in the appropriate locations.

3.6.7

Fees will be reviewed to ensure they are reasonable and customary fees for the lender and title and escrow companies and that those fees were accurately disclosed on the GFE and were reflected in the proper location on the document.

3.6.8

Analysis to determine whether a Changed Circumstance form is required to accompany each revised Good Faith Estimate (GFE)

3.6.9

Change of Circumstance Definition:

3.6.9.1

Acts of God, war, disaster or other emergency;

3.6.9.2

Information particular to borrower or transaction that was relied on in providing the GFE and that changes or is found to be inaccurate after GFE has been provided to borrower;

3.6.9.3

New information particular to the borrower or transaction that was not relied on in providing the GFE; or

3.6.9.4

Other circumstances that are particular to borrower or transaction, including boundary disputes, need for flood insurance or environmental problems

3.6.9.5

In the event any of the above occurs, the loan originator is required to provide a new revised GFE to the borrower within 3 business days of receiving information sufficient to establish “changed circumstances” and document the reason the revised GFE was provided.

3.6.9.6

Rate Locks: If the rate has not been locked by the borrower or a locked rate has expired, the charge or credit for rate chosen, adjusted origination charges, per diem interest and loan terms related to the rate may change.  If borrower later locks the rate, a new GFE must be provided showing the revised rate-dependent charges and terms.  All other charges and terms must remain the same as on the original GFE, except as otherwise provided above for “changed circumstances.”

3.6.10

Final HUD-1:  Consultant will confirm compliance with current RESPA requirements in effect at origination of the Mortgage Loan including:

3.6.10.1

Confirm the presence of the current applicable Final HUD-1 form

3.6.10.2

Confirm the Final HUD-1 accurately lists all broker and YSP fees.

3.6.11

Good Faith Estimate (GFE) and Final HUD-1 Analysis:  Confirm compliance with current RESPA requirements in effect at origination of the Mortgage Loan including:

3.6.11.1

Analysis of Origination fees disclosed on the Good Faith Estimate (GFE) and those charged to the borrower(s) on the Final HUD-1 (no variance) - No variance for the following charges:

3.6.11.1.1

Origination Charge

3.6.11.1.2

Credit or Charge for Interest Rate Chosen

3.6.11.1.3

Adjusted Origination Charge

3.6.11.1.4

Transfer Taxes

3.6.11.2

Analysis of Third-Party fees disclosed on the Good Faith Estimate (GFE) and those charged to the borrower(s) on the Final HUD-1 (10% tolerance) - 10% tolerance between GFE and actual charges at settlement for sum of following services:

3.6.11.2.1

Lender-required settlement services (lender selects third-party provider);

3.6.11.2.2

Lender-required services, title services and required title insurance, and owner’s title insurance, when the borrower uses a settlement service provider identified by the loan originator; and

3.6.11.2.3

Government recording charges

3.6.12

Analysis to confirm all fees are accurately reflected in the correct tolerance category on the Good Faith Estimate (GFE) and Final HUD-1

3.6.13

Analysis to confirm lender accurately provided borrower adequate restitution in the event of tolerance violations and timelines for restitution/document correction were adhered to

3.6.14

Analysis to confirm loan terms are accurately disclosed between the Good Faith Estimate (GFE) and Final HUD-1

3.6.15

Analysis to confirm page 3 of the HUD-1 accurately reflects fees disclosed on the Good Faith Estimate (GFE) and Final HUD-1

3.7

QM / ATR (Qualified Mortgage     / Ability to Repay)

•

Consultant will incorporate checkpoints for the ATR’s eight verification steps for any origination QC work. Consultant has the option to run ATR checks on any transactions subject to QM that falls outside the ability to meet QM guidelines, whether due to coverage exceptions or due to failing QM criteria. Thus, any transaction that is being tested for QM will also have the ability to be screened for ATR if the QM testing fails or the loan is exempt from QM

•

Consultant is required to verify all information within the scope of the eight verification steps before an ATR loan can pass. These eight tests include verifications of any amounts used in the loan consideration and a page(s) reference to the third-party records/documentation/images

o

Income and Assets

o

Current Employment Status

o

Monthly qualifying payments for the proposed loan

o

Monthly payment on any simultaneous loans

o

Monthly payment for mortgage related obligations for the proposed loans

o

Debts, alimony and child support

o

Qualifying monthly DTI and/or residual income

o

Credit History

•

If all of the verifications are made and each of the eight topic areas is confirmed to agree with the representations made by the lender, and there are no credit exceptions to the lender’s guidelines, the loan will pass the ATR test. If any of the conditions fail or the loan lacks the documentation to support the stated values in any of the areas, affected items will not be considered verified and the loan will be subject to failing the ATR test.

•

ATR results will be reported as ATR-Pass. ATR-Fail and ATR-Exempt.  This is in addition to existing credit and compliance related reporting by the Consultant.

•

Legacy QM (for applications taken on or after January 10, 2014 until September 30, 2022);

•

REGULAR PAYMENTS. Provides for regular periodic payments that are substantially equal, except for the effect of certain interest rate changes for adjustable or step rates.

•

POINTS AND FEES.  Points and fees do not exceed the applicable threshold for the appropriate loan amount.

o

Finance charges, unless excluded;

o

The portion of upfront private mortgage insurance that exceeds FHA premiums;

o

Loan originator compensation – Compensation/YSP known at the time of the consummation will be included but Consultant does not review lender or broker compensation programs as part of its QM testing;

o

Real estate-related fees if the creditor receives direct or indirect compensation in connection with the fee or charge, the fee or charge is paid to a creditor affiliate or the fee or charge is not reasonable;

o

Premiums for credit insurance, credit property insurance, and other insurances where the creditor is the beneficiary, debt cancellation or suspension coverage payments;

o

Maximum prepayment penalty; and

o

Prepayment penalty paid in a refinance.

o

Interest;

o

Bona fide third-party charges not retained by the creditor;

o

Government mortgage insurance premiums;

o

Private mortgage insurance premiums up to an amount equal to government insurance premiums;

o

Up to two bona fide discount points if the interest before the discount does not exceed APOR by 1% based on a calculation that is consistent with established industry practices for determining the amount of reduction in the interest rate or time-price differential appropriate for the amount of discount points paid by the consumer; if no discount points excluded up to one bona fide discount point if the loan’s interest rate before the discount does not exceed APOR 2%; and

o

Sellers points

o

3 percent of the total loan amount for a loan greater than or equal to $100,000;*

o

$3,000* for a loan greater than or equal to $60,000* but less than $100,000;*

o

5 percent of the total loan amount for a loan greater than or equal to $20,000* but less than $60,000;*

o

$1,000* for a loan greater than or equal to $12,500* but less than $20,000;*

o

8 percent of the total loan amount for a loan less than $12,500*

3.7.4

Legacy QM

•

Monthly Payment.  The amount of the monthly payment on the loan is calculated using the maximum rate that may apply during the first five years and considers the monthly payment for simultaneous loans and mortgage obligations.

•

Appendix Q.  Considers and verifies income, assets, employment, and debts in accordance with Appendix Q.

•

DTI.  The DTI ratio of total monthly debt to total monthly income does not exceed 43 percent.

3.7.5

Revised QM

•

As part of the “consider” requirement, Consultant will review the (i) creditor’s policies and procedures provided by Client, as well as any exceptions thereto, for how the creditor takes into account the underwriting factors enumerated above, and (ii) the documentation retained by creditor, such as an underwriting worksheet or a final automated underwriting system certification, showing how the creditor took these factors into account in its ability-to-repay determination.

•

Consider and Verify Safe Harbor.  Creditor is deemed to have complied with this “verify” requirement if it complies with the verification standards in one or more of these following agency manuals:

o

For purposes of compliance with verified safe harbor, a creditor must comply with only those provisions in the manuals that require creditors to verify income, assets, debt obligations, alimony and child support using specified documents or to classify and count particular inflows, property, and obligations as income, assets, debt obligations, alimony, and child support,

•

Revised versions of manuals.  A creditor also complies with the verified safe harbor where is complies with revised versions of the manuals listed above provided that the two versions are “substantially similar”.

•

The Revised QM Rule permits the creditor to “mix and match” verification standards from different agency manuals.  Consultant will test the creditor’s “verification” of third- party records in instances when the creditor either uses (i) its own procedures or alternatively, (ii) the verification standards of one or more of the agency handbooks listed above.

•

Note:  the creditor (or client, as the case may be,) must provide written policies and procedures and related documentation such as underwriter worksheets in order for Consultant to review loans under the Revised QM Rules, and in particular, with regard to the “consider” and “verify” requirements.  Further, if the creditor (or client, as the case may be) intends to use the verification safe harbor, its written policies and procedures must specify the precise agency handbook(s) that it is relying on with specific references to the particular provisions addressing income, assets, debt obligations, alimony and child support using specified documents or to classify and count particular inflows, property, and obligations as income, assets, debt obligations, alimony, and child support – as well as the specific dates(s) of the agency handbook(s) issuance, publication or revision.  In addition, Consultant is not responsible for determining whether revised versions of the manuals listed above are “substantially similar” for purposes of the verification safe harbor; such a determination of the sole responsibility of the creditor (or client, as the case may be).

•

Note: due to the inherent subjectivity of the foregoing “consider” and “verify” requirements, Consultant will review the creditor’s (or client’s, as the case may be) (i) policies and procedures and worksheets and (ii) methods and criteria for verification of income and assets (regardless of whether the “safe harbor” is utilized) for content only, and will not opine whether such policies and procedures,  worksheets and verification methods and criteria themselves comply with applicable

law, and cannot guarantee that a court, governmental regulator, rating agency or another third party diligence provider would reach the same conclusions using such work product.

•

APOR.  The APR on the loan does not exceed the threshold for the loan amount (values marked with “*” are indexed for inflation):

-

For a first-lien loan with a loan amount greater than or equal to $110,260,* 2.25% or more percentage points;

-

For a first-lien loan with a loan amount greater than or equal to $66,156* but less than $110,260*, 3.5% or more;

-

For a first lien loan with a loan amount less than $66,156,* 6.5 or more percentage points;

-

For a subordinate-lien loan with a loan amount great than or equal to $66,156*, 3.5 or more percentage points; and

-

For a subordinate-lien loan with a loan amount less than $66,156*, 6.5 or more percentage points.

3.7.6

Agency QM/ Temporary Qualified Mortgage (TQM) covered by the GSE Patch

3.7.7

Safe Harbor for Revised QM Rules

•

Current testing for Higher Priced Covered Transactions will be performed using one of two formulas, normal QM and FHA TQM. For QM, a loan will be considered a Higher Priced Covered Transaction if the APR exceeds the Average Prime Offer Rate by 1.50% or more percentage points on conforming First Liens and 3.50% or more percentage points on Second Liens. For FHA TQM, the formula is modified to be the Average Prime Offer Rate plus 1.15%, plus the monthly MI premium factor

3.8

Additional Disclosures and Requirements:

3.8.1

Servicing Transfer Disclosure (for applications prior to 10/03/2015):

3.8.1.1

Confirm the presence of the Servicing Transfer Disclosure form in file

3.8.1.2

Verify the Servicing Transfer Disclosure was provided to the borrower(s) within three general business days of “Application”

3.8.2

Special Information Booklet (for applications prior to 10/03/2015)/ Home Loan Tool Kit (for applications on or after 10/03/2015):

3.8.2.1

Confirm the presence of the Home Loan Tool Kit is in file for covered loans.

3.8.2.2

Confirm the Home Loan Tool Kit is provided within three general business days of application

3.8.3

Affiliated Business Disclosure

3.8.3.1

Confirm the presence of the Affiliated Business Disclosure in file in the event the lender has affiliated business arrangements

3.8.3.2

Confirm the Affiliated Business Disclosure provided within three general business days of “Application” (Consultant reviews for this disclosure to be provided within three general business days, as the lender will typically know at the time of application if borrower(s) will be referred to affiliates for provision of third-party services)

3.8.3.3

Confirm the Affiliated Business Disclosure is executed.

3.8.4

Initial Escrow Disclosure Statement

3.8.4.1

Confirm the presence of the Initial Escrow Disclosure Statement in file

3.8.4.2

Confirm the Initial Escrow Disclosure Statement was provided at closing or within 45 days after settlement

3.9

National Flood Insurance Program (NFIP)

3.10

Homeowner’s Flood Affordability Act (HFIAA)

3.10.1

Frequency – Payable with same frequency as payments designated for the loans

3.10.2

Exceptions

3.10.2.1

Loan is an extension of credit primarily for business, commercial or agricultural purposes

3.10.2.2

Loan is in a subordinate position to a senior lien secured by the same residential improved real estate or mobile for which the borrower has obtained flood insurance

3.10.2.3

Flood Insurance coverage for the residential real estate is provided by a policy that

3.10.2.3.1

Meets requirements

3.10.2.3.2

Provided by a condominium association, cooperative or other applicable group and

3.10.2.3.3

The premium for which is paid by the condominium associate, cooperative, homeowners association, or other group as a common expense.

3.11

Equal Credit Opportunity Act (Regulation B)

3.11.1

Confirm the lender has provided the borrower a disclosure of the right to receive a copy of appraisals within three (3) business days of application.  This disclosure requirement may be met by disclosure on the Loan Estimate pursuant to 12 CFR § 1026.27(m)(1).

3.11.2

Confirm that the lender has provided (delivered) copies of appraisals and all other written valuations (as disclosed to the borrower on the HUD-1 and/or contained in the Mortgage Loan File) to the borrower at least three (3) business days prior to consummation Opus uses the following test: Was appraisal/valuation documentation processed at least 6 days prior to account opening/ consummation date (3 day rule plus 3 days mailing time)?

3.11.3

For a borrower that has waived the 3-business day disclosure requirement, confirm that the borrower has either (1) signed the waiver at least three (3) business days prior to consummation or (2) has signed an acknowledgment that the waiver occurred at least three (3) business days prior to consummation. Additionally, confirm that the lender has provided copies of appraisals and other written valuations at or prior to consummation.

3.12

Fair Credit Report Act (Regulation V)

3.12.1

Confirm that the lender has provided the borrower the risk-based pricing notice (as required by 12 CFR § 1022.73) or credit score disclosure (as required by 12 CFR § 1022.74(d)), as applicable; (a) If the lender has provided the risk-based pricing notice, confirm the disclosure was provided before consummation, but not earlier than the approval

decision was communicated to the consumer; and (b) If the lender has provided the credit score disclosure, confirm the disclosure was provided before consummation.

3.12.2

Confirm that the lender has provided a copy of the disclosure of credit score and the Notice to Home Loan Applicant (as required by 15 U.S.C. § 1681g) before consummation.

3.13

Regulatory Compliance Disclaimer

3.14

Seasoning and Certain Compliance Exceptions

4.

High Cost - State & Local Anti-Predatory Regulations:

4.1

Arkansas Home Loan Protection Act, AR. Stat. Ann. § 23-53-101 et seq.

4.2

California Anti-Predatory Lending Statute, CA. Fin. Code § 4970 et seq.

4.3

California Higher Priced Mortgage Loan Statute, CA. Fin Code § 4995 et seq.

4.4

Colorado Consumer Equity Protection Act, CO. Rev. Stat. § 5-3.5-101 et seq. and as amended by Senate Bill 216 (2007) and House Bill 1322 (2007)

4.5

Colorado Consumer Credit Code, CO. Rev. Stat. 5-1-101 et seq.

4.6

Connecticut Abusive Home Loan Lending Practices Act, CT. Stat. Ann. §36a-746 et seq. and the Responsible Lending and Economic Security Act, CT. House Bill 5577 (2008).

4.7

Connecticut Nonprime Home Loan Statute, CT. Gen. Stat. §§ 36a-760 et seq. (as originally enacted and as amended by Senate Bill 949.

4.8

District of Columbia Home Loan Protection Act of 2002, D.C. Official Code § 26-1151.01 et seq., as implemented by 20 D.C. Municipal Reg. § 2000.1 et seq. and DC Mortgage Disclosure Act of 2007.

4.9

Florida Fair Lending Act, FL. Stat. Ann. § 494.0078 et seq.

4.10

Georgia Fair Lending Act, GA. Stat. Ann. § 7-6A-1 et seq. (as originally enacted by House Bill 02-1361 and as modified by Senate Bill 03-53)

4.11

Idaho Residential Mortgage Practices Act, ID. Code § 26-3101 et seq.

4.12

Illinois High Risk Home Act, IL. Comp Stat. tit. 815, §§137/5 et seq.

4.13

Illinois High Risk Home Loan Regulations, 38 IL. Admin. Code § 345.10 et seq.

4.14

Illinois High Risk Home Loan Act, Public Act. 93-0561 (2003).

4.15

City of Chicago, Illinois, Anti-Predatory Lending Ordinance, Chicago Municipal Code, §§ 2-32-440; 2-32-455; 2-92-325; 4-4-155; 8-4-325.

4.16

Cook County, Illinois, Anti-Predatory Lending Ordinance, Ordinance No. 240864 (2001) as amended by Illinois SB 1167 (2007).

4.17

Indiana Home Loan Practices Act, IN. Code § 24-9-1-1 et seq. and as amended by 2005 In. P.L. 141 § 6 P2013-011.

4.18

Kansas Consumer Credit Code, KS. Stat. Ann. § 16a-1-101 et seq. Sections 16a-1-301, 16a-3-207 and 16a-3-308a.

4.19

Kentucky Anti-Predatory Lending Statute, KY. Rev. Stat. § 360.100 et seq. and as amended by KY. House Bill 552 (2008).

4.20

Maine, An Act to Enhance Consumer Protections in Relation to Certain Mortgages, 9A ME. Rev. Stat. Ann. §§ 8-101; 8-103(1); 8-206(8); 8-206A and ME. Legislative Document 1869 (2007).

4.21

Maryland Commercial Law, MD. Stat. Ann. §§ 12-124.1; 12-127; 12-409.1; 12-1029 and as amended by MD. Senate Bill 270 (2008) and Maryland Regulations under the MD. Mortgage Lender Law (2009).

4.22

Maryland Regulations for Higher Priced Mortgage Loans, as promulgated under the MD. Mortgage Lender Law, MD. Code Ann., Fin. Instit. Code §§ 11-501 et seq.; MD. Code Regs. §§ 09.03.06.01 et seq.

4.23

Massachusetts High Cost Mortgage Regulations, 209 CMR § 32.32 et seq. including MA. House Bill 4387 (2008) 20. MA. Predatory Home Loan Practices Act, M.G.L. Chapter 183(C).

4.24

Massachusetts Regulations for Higher Priced Mortgage Loans, 209 MA. Code Regs. §§ 32.00

4.25

Massachusetts “Borrower’s Interest” Standard, M.G.L. Chapter 183, §28C.

4.26

Massachusetts Mortgage Lender and Broker Regulations, 940 CMR § 8.00 (15-17).

4.27

Michigan Consumer Mortgage Protection Act, MI. Stat. Ann. § 445-1631 et seq.

4.28

Minnesota Mortgage Originator and Service Licensing Act, § 58.137 et al. (S.F. 2988 (2002) and as amended by House File 1004 and SF 98 (2007) and SF 3154 and 3214 (2008).

4.29

Nebraska Mortgage Bankers Registration and Licensing Act, NE. Stat.§ 45-702 et seq.

4.30

Nevada Anti-Predatory Lending Law, NV. Rev. Stat. § 598D.010 et seq. and as amended by AB 440 and 492.

4.31

New Jersey Home Ownership Security Act of 2002, NJ. Stat. Ann. § C:46:10B-22 et seq. and as amended by PL. 2004, Ch. 84 § 1.

4.32

New Mexico Home Loan Protection Act, NM. Stat. Ann. § 58-21A-1 et seq. and as amended by Senate Bill 342 (2009).

4.33

New York High Cost Home Loan Regulations, 3 NYCCR Part 41 (2001).

4.34

New York High Cost Home Loan Act, NY. Bank. L. Ch. 626., as implemented by 3 NYCCR Part 41 (2003) and as amended by Senate Bill 8143-A (2008). Banking Law Article 6-l (2003) and 6-m (2008).

4.35

North Carolina Anti-Predatory Lending Law, NC. Gen. Stat. §§ 24-1.1A to 24-10.2 and North Carolina Amendments to Anti-Predatory Lending Law, NC. Gen. Stat. §§ 24-9; 24-1.1(E)(a); 24-10.2(a) and as amended by House Bill 1817 (2007).

4.36

Ohio Anti-Predatory Lending Statute, OH. Rev. Code Ann. §§ 1349.25 to 1349.37and § 1.63 and as amended by S.B. 185.

4.37

City of Cleveland Heights, Ohio, Anti-Predatory Lending Ordinance, Ordinance No. 72-2003.

4.38

Oklahoma Anti-Predatory Lending Law, House Bill No. 1574 (2003).

4.39

Oklahoma Higher –Priced Mortgage Loans Law, OK. Admin. Code §§ 160:45-9-1 et seq.

4.40

Pennsylvania Consumer Equity Protection Act, 63 PA. Cons. Stat. Ann. § 456.501 et seq.

4.41

City of Providence, Rhode Island Predatory Lending Ordinance, Ordinance No. 245, Chapter 2006-33 as amended.

4.42

Rhode Island Home Loan Protection Act, Chapter 25.2 of Title 34 of RI. Gen. Laws. §§ 34-25.2-1 et seq., including the Emergency and Final Regulations.

4.43

South Carolina High-Cost and Consumer Home Loans Act, SC. Code § 37-23-10 et seq.

4.44

South Carolina Consumer Protection Code, SC. Code 37-1-101 et seq.

4.45

Tennessee Home Loan Protection Act, TN. Code Annotated §§ 45-20-101 et seq., Title 47 et seq.

4.46

Texas High-Cost Home Loan Statute, TX. Fin. Code Ann. § 343.201 et seq.

4.47

Texas Constitution, Section 50(a)(6), Article XVI

4.48

Utah Residential Mortgage Practices Amendments, UT. Code Ann. § 61- 2c-102 et seq.

4.49

Utah High Cost Home Loan Act, UT. Code § 61-2d-101 et seq.

4.50

Vermont Interest Act, 9 V.S.A. § 104, implemented by Regulation B-98-2.

4.51

Virginia Mortgage Lender and Broker Act (for loans originated prior to July 1, 2003), VA. Code Ann. §§ 6.1-413; 6.1-422, 6.1-428.

4.52

Virginia Mortgage Lender and Broker Act (for loans originated after July 1, 2003), VA. Code Ann. §§ 6.1-411; 6.1-422.1, 6.1-425.1; 6.1-425.2.

4.53

Washington House Bill 2770, Mortgage Lending and Homeownership, Chapter 108, Laws of 2008.

4.54

Wisconsin Responsible High Cost Mortgage Lending Act, WI. Stat. § 428.202.

4.55

West Virginia Residential Mortgage Lender, Broker and Servicer Act, WV. Code § 31-17-1 et seq.

4.56

Wyoming Credit Code, WY. Stat. Ann. §§ 40-14-101 et seq.

5.

Misrepresentation and Third Party Product Review

5.1

Misrepresentation Review

5.1.1

Signatures

5.1.2

Alerts

5.1.3

Social Security Numbers

5.1.4

Document Integrity

5.1.5

Data Consistency

5.1.6

Third Party Fraud Tools

5.2

Independent Third Party Values

5.2.1

For loans seasoned less than 12 months a retroactive desk review will generally be ordered.  If the retroactive desk review supports the origination appraised value within a 10% variance no additional products will be required.  If the retroactive desk review does not support the original appraised value within a 10% variance, a secondary valuation product such as a field review or drive-by appraisal will be required.  If the loan is seasoned more than 12 months generally a BPO can be ordered.  The seasoning and products can be adjusted to meet specific rating agency requirements.

5.2.2

Consultant will also perform the following steps

5.2.2.1

Based on review of the original appraisal

5.2.2.1.1

Property is complete

5.2.2.1.2

Value is based on as-is condition

5.2.2.1.3

Property is described as average or better condition

5.2.2.1.4

No apparent appraiser independence violation statements

5.2.2.1.5

Appraisal addresses any adverse comments

5.2.2.2

Appraisal is completed on appropriate GSE Form

5.2.2.2.1

Appraisal contains required attachments

5.2.2.3

Appraiser was appropriately licensed at the time the appraisal was signed

5.2.3

If the valuation vendor des not supply the updated valuation product directly to the Consultant, the Client will authorize the valuation vendor to issue an attestation with sufficient information for the Consultant to determine the correct valuation product was utilized to verify the accuracy of the origination appraisal.

5.2.4

Value Review Disclaimer

5.2.4.1

The individuals performing the above procedures are not person providing valuations for the purpose of the Uniform Standards of Professional Appraisal Practice (“USPAP”) or necessarily

5.2.4.2

Opus makes no representation or warranty as to the value of the mortgaged property, notwithstanding that Opus may have reviewed the valuation information for reasonableness.

5.2.4.3

Opus is not an Appraisal Management Company (“AMC”) and therefore does not opine on the actual value of the underlying property.

5.2.4.4

Opus is not a creditor within the meaning of the Equal Credit Opportunity Act (“ECOA”) or other lending laws and regulations, and therefore opus will not have and communications with or responsibility to any individual concerning property valuations.

5.3

Payment History and Servicing Comments

5.3.1

– Timely payment posting

5.3.2

– Request for modification

5.3.3

– Property condition issues

5.3.4

– Change in occupancy

5.3.5

– Change in ability to pay

5.3.6

– Other items impacting the enforcement of the lien

5.4

Title Reports

5.4.1

If the loan is season over 24 months Consultant will facilitate the ordering of title reports.  Consultant and client agree the vendor providing the title reports will be responsible for issuing a separate 15E.

5.4.2

Consultant is not responsible for the accuracy of the title reports, nor makes any representations or warranties with respect to any of the information contained in the title reports.

5.5

Updated FICO Scores

5.6

Properties in FEMA declared disaster zones.

5.6.1

No apparent damage to the property

5.6.2

Property appears to be occupied

6.

Data Compare

6.1

- Appraised Value

6.2

CLTV

6.3

DTI

6.4

FICO

6.5

Interest Only

6.6

Interest Rate

6.7

Loan Term

6.8

Loan Purpose

6.9

LTV

6.10

Occupancy

6.11

Original Balance

6.12

Property Address

6.13

Property City

6.14

Property State

6.15

Property Type

6.16

Sales Price

6.17

Second Mortgage Lien Amount

6.18

Self Employed

6.19

Units

6.20

Zip Code

6.21

Loan Type

6.22

QM Status

7.

Fitch Grading Criteria

8.

Moody’s Grading Criteria

10.

Standard & Poor’s Grading Criteria

11.

DBRS Grading Criteria

12.

Opus Grading Criteria

12.1

Opus Credit Grades

12.1.1

Opus Level 1 Credit Grade Definition

12.1.2

Opus Level 2 Credit Grade Definition

12.1.3

Opus Level 3 Credit Grade Definition

12.2

Opus Property Grades

12.2.1

Opus Level 1 Property Grade Definition

12.2.2

Opus Level 2 Property Grade Definition

12.2.3

Opus Level 3 Property Grade Definition

12.3

Opus Compliance Grades

12.3.1

Opus Level 1 Compliance Grade Definition

12.3.2

Opus Level 2 Compliance Grade Definition

12.3.3

Opus Level 3 Compliance Grade Definition

Data Element	Count	Accuracy
All Borrower Total Income	6	91.78%
AUS Type	7	90.41%
Borrower 1 Self-Employment Flag	3	95.89%
Mortgage Origination Channel	16	78.08%
Note Date	1	98.63%
Property Value	1	98.63%
Property Zip Code	5	93.15%
Qualifying Total Debt Income Ratio	21	71.23%
Refinance Type	14	80.82%
Total Loans	73

S&P	Moody’s	Fitch	Kroll	DBRS	Definition
A	A	A	A	A	Loan conforms to all applicable guidelines, no conditions noted
B	B	B	B	B	Loan does not meet every applicable credit guideline.  However, most of the loan characteristics are within the guidelines and there are documented and significant compensating factors
C	C	C	C	C	The loan does not meet every applicable credit guideline, and most of the loan characteristics are outside of guidelines; or there are weak or no compensating factors
D	D	D	D	D	The loan file is missing critical documentation required to perform the review

S&P	Moody’s	Kroll	DBRS	Definition
A	A	A	A	The loan was originated in compliance with applicable federal, state, and local predatory and high cost, TILA, and Regulation Z laws and regulations
B	B	B	B	The loan was originated in compliance with applicable federal, state, and local predatory and high cost, TILA, and Regulation Z laws and regulations; however, minor evidentiary issue(s) exist
C	C	C	C	The includes material violation(s) with applicable federal, state, and local predatory and high cost, TILA, and Regulation Z laws and regulations
D	D	D	D	The loan file is missing critical documentation required to perform the review

Fitch	Definition
A	The loan was originated in compliance with applicable federal, state, and local predatory and high cost, TILA, and Regulation Z laws and regulations
B	The loan is in compliance with all applicable laws and regulations and a benefit to the borrower is present and documented
C	The includes material violation(s) with applicable federal, state, and local predatory and high cost, TILA, and Regulation Z laws and regulations
D	The loan file is missing critical documentation required to perform the review

Moody’s	Fitch	Kroll	DBRS	Definition
A	A	A	A	Value is within a 10% variance of third party product. Appraisal meets lender guidelines. Subject property is 100% complete. Property condition is average or better. Standard GSE form was utilized. Appraiser is licensed. Appraisal is complete.
B	B	B	B	Meets all terms for an A, but property requires cosmetic or minor repairs that do not effect value or habitability
C	C	C	C	Any of the following items: Origination value and third party valuation product value has a variance of 10% or greater, cannot validate value, property is incomplete, property condition is less than average, GSE form was not utilized, and/or the appraisal and/or does not meet guidelines
D	D	D	D	The loan file was missing the appraisal and/or other valuations products needed to complete the review

S&P	Definition
A	First Level Review Value is within a 10% variance to the original appraisal. Appraisal meets lender guidelines. Subject property is 100% complete. Property condition is average or better. Standard GSE form was utilized. Appraiser is licensed. Appraisal is complete.
B	First Level Review Value is greater than a 10% variance to the original appraisal but the second level review value is within 10% variance of the original appraised value. In addition, property requires cosmetic or minor repairs that do not effect value or habitability
C	Any of the following items: Second Level Review Value is greater than a 10% variance to the original appraisal, cannot validate value, property is incomplete, property condition is less than average, GSE form was not utilized, and/or the appraisal and/or does not meet guidelines
D	The loan file was missing the appraisal and/or other valuations products needed to complete the review

Overall Grade Summary
DBRS and Fitch NRSRO Grade	# of Loans	% of Loans
A	57	78.08%
B	16	21.92%
C	0	0.00%
D	0	0.00%
Compliance Grade Summary
DBRS and Fitch NRSRO Grade	# of Loans	% of Loans
A	62	84.93%
B	11	15.07%
C	0	0.00%
D	0	0.00%
Credit Grade Summary
DBRS and Fitch NRSRO Grade	# of Loans	% of Loans
A	70	95.89%
B	3	4.11%
C	0	0.00%
D	0	0.00%
Property Grade Summary
DBRS and Fitch NRSRO Grade	# of Loans	% of Loans
A	71	97.26%
B	2	2.74%
C	0	0.00%
D	0	0.00%