SEMT 2026-INV3

 Redwood Trust, Inc.







Opus Capital Markets Consultants, LLC



5718 Westheimer Road – Suite 1000 | Houston, TX 77057 | www.opuscmc.com | 224.632.1300


Executive Narrative

May 07, 2026

Performed by
Opus Capital Markets Consultants, LLC

For
Redwood Trust, Inc.

The report summarizes the results of a due diligence review performed on a pool of 449 loans provided by Redwood Trust (“Customer”) who provided Opus Capital Markets Consultants, LLC (“Consultant”) with a data tape, from which 100% of the loan sample was chosen and loaded into the LauraMac underwriting software. Consultant performed a detailed credit and compliance review of all loans.

As detailed herein, the pool contains four hundred forty-nine (449) credit and compliance loans identified as  one hundred forty-four (144) QM: Average Prime Offer Rate (APOR) loans and three hundred five (305) ATR/QM: Exempt loans, all of which are Business Purpose loans. All four hundred forty-nine (449) loans were conforming and eligible for GSE delivery. For credit, loans eligible for GSE delivery were underwritten to the AUS, Redwood Guidelines and Variance Overlay; and were underwritten in accordance with the regulatory compliance scope in terms of Exhibit A.



 
EXHIBIT A
 

 
Regulatory Compliance
 
For each Mortgage Loan, Consultant shall determine, to the extent possible and subject to caveats below, whether such Mortgage Loan at the time of origination complied with:

1.
The “material”1 disclosure requirements of the federal Truth-in-Lending Act (“TILA”), as amended by the Home Ownership and Equity Protection Act (“HOEPA”) and Dodd-Frank, 15 U.S.C. § 1601 et seq. and implemented by Regulation Z, 12 C.F.R. Part 1026, including the material provisions relating to Higher-Priced Mortgage Loans in Regulation Z, 12 C.F.R. §§ 1026.35, and the early TIL disclosure provisions of the Mortgage Disclosure Improvement Act (“MDIA”), as implemented by Regulation Z, 12 C.F.R. §§ 1026.17 et seq; and as amended by the TILA-RESPA Integrated Disclosure (“TRID”) Rule, as set forth below:

a.
For Right of Rescission

i.
A review of the Notice of Right to Cancel, including a verification of the transaction date and expiration date, ensuring proper execution of the Notice of Right to Cancel by all required parties, verifying the disbursement date and determining if a full three (3) day rescission period was adequately provided to the borrower(s).

A.
This review is also to be performed on transactions that are exempt from the rescission requirement but on which a Notice of Right to Cancel was provided.

B.
A condition must be placed if the transaction is a refinance by the original creditor and the borrower was provided the Form H-8 rescission notice. Consultant will note in the condition whether there was a new advance that is subject to rescission per TILA/Regulation Z.

b.
For TILs (Application Dates prior to 10/3/2015)

i.
Confirm the initial TIL disclosure and final TIL disclosures were provided.

ii.
Review and compare the initial and final TIL, and any re-disclosed TIL(s), with a reportoutlining any TILA violations, including a recalculation of disclosed finance charge, proper execution by all required parties, principal and interest calculations, proper completion of the interest rate and payment summary, recalculation of disclosed APR, and a review to determine disclosure differences were within the allowed tolerances and disclosures were provided within the required timeframes;


1 These “material” disclosures include the required disclosures of the APR, the finance charge, the amount financed, the total number of payments, the payment schedule, and if the loan is subject to the Homeownership and Equity Protection Act (“HOEPA”), the disclosure requirements and prohibitions of that statute which are set forth in 12 C.F.R. §§ 1026.32(c) and (d).


 c.
For TRID Disclosures (Application Dates on or after 10/3/2015)

i.
Confirm the initial Loan Estimate (LE) was delivered within three (3) business days ofapplication and seven (7) business days prior to consummation in accordance withClient’s Underwriting Guidelines;

ii.
Review the required sections of each LE to ensure they were populated in accordancewith the TRID Rules. (If the file reflects more than one LE was provided, each revised LEmust have corresponding Change of Circumstance documentation. The 0% and 10% fee tolerance evaluations will be based on the fee amounts disclosed on the initial LE and any valid changes documented and disclosed after the initial LE;

iii.
Confirm the Closing Disclosure (CD) confirm the borrower received the initial CD at least three (3) business days prior to consummation;

iv.
Review the required sections of each CD to ensure they were populated in accordance with the TRID Rules. (Any fee tolerance issues to be cured at closing or within 60 days ofloan consummation.)

2.
Section 4 of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. §2603 and 2604, as implemented by Regulation X, 12 C.F.R. Part 1024, and as amended by the TRID Rule;

3.
The disclosure requirements and prohibitions of Section 50(a)(6), Article XVI of the Texas Constitution;

4.
Confirmation that one of the following are in the loan file, per the Fair Credit Reporting Act: Consumer Credit Score Disclosure, Your Credit Score and the Price You Pay for Credit, or Notice to Home Loan Applicant;

5.
Sections 1411 and 1412 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) amending TILA, as implemented by Regulation Z, 12 C.F.R. 1026.43: the general Ability to Repay underwriting standards (12 C.F.R. 1026.43(c)); refinancing of non-standard mortgages (12 C.F.R. 1026.43(d)); Qualified Mortgages (12 C.F.R. 1026.43(e) (including qualified mortgages as defined by the Department of Housing and Urban Development (24 C.F.R. 201 and 203 et seq.) and the Department of Veterans Affairs (38 C.F.R. Part 36 et seq.; and Balloon-payment qualified mortgages made by certain creditors (12 C.F.R. 1026.43(f)) In accordance with “Ability to Repay and Qualified Mortgage Review” description below;

6.
The Loan Originator Compensation and Prohibitions on Steering provisions of TILA, as implemented by Regulation Z, 12 C.F.R 1026.36;

7.
The requirements for Higher-Price Mortgage Loans, as implemented by Regulation Z, 12 C.F.R. 1026.35;

8.
The appraisal and valuation requirements of TILA and the Equal Credit Opportunity Act, as implemented by Regulation Z, 12 C.F.R. 1026.35 and Regulation B, 12 C.F.R. 1002.14, respectively;

9.
The counseling requirements of TILA, as implemented by Regulation Z, 12 C.F.R. 1026.36(k) and RESPA, as implemented by Regulation X, 12 C.F.R. 1024.20;

10.
The escrow requirements of TILA and RESPA, as implemented by Regulation Z, 12 C.F.R 1026.35, and Regulation X, 12 C.F.R 1024.17, respectively;

11.
The disclosure requirements and prohibitions of any applicable state, county and municipal laws and ordinances, as amended, that have been enacted to regulate so-called “predatory lending”:

12.
Consultant shall confirm that any mortgage property located in an area identified on a flood hazard map or flood insurance rate map issued by the Federal Emergency Management Agency as having special flood hazards is subject to a qualified flood insurance policy that appears to be is in effect.

13.
For any loans designated as TILA exemption, Consultant shall review the loan file for evidence that the primary purpose of the loan was for commercial or business purposes, including, but not limited to a business purpose certification.

14.
Documentation. Review of the following documents for regulatory compliance:

a.
Final HUD-1 Settlement Statement (“HUD-1”), if applicable

i.
If the loan is in an escrow state, the HUD-1 will be considered final as follows:

A.
HUD-1 is marked Final;

i.
If HUD-1 is not marked Final, it must be stamped certified by the closing agent.

ii.
There should be no markings indicating that the HUD-1 is estimated.

B.
HUD-1 is signed by all parties (including closing agent) or stamped certified by the closing agent; and

C.
If HUD-1 is stamped, the HUD-1 / stamp should be signed or initialed by the closing agent; if the stamp does not contain the signature or initials, it must identify the name of the closing agent.

b.
Final Truth in Lending Disclosure (“TIL”), if applicable


c.
Loan Estimate, if applicable

i.
The Loan Estimate in will be considered delivered based on the date issued, subject to the three-day mailing rule unless the file contains documentation indicating earlier receipt. The loan file may contain one or more Loan Estimates with the latest one provided up until three business days prior to the issuance of an initial Closing Disclosure.

d.
Closing Disclosure, if applicable

i.
The Closing Disclosure in the loan file will be considered delivered based on the date issued, subject to the three-day mailing rule unless the file contains documentation indicating earlier receipt. The loan file may contain one or more Closing Disclosures with the latest one provided up until the consummation date being considered the Final with any delivered post consummation considered as a corrected Closing Disclosure.

e.
Notice of Right to Cancel (if applicable)

f.
Initial TIL, if applicable

g.
Good Faith Estimate (“GFE”), if applicable

h.
Note

i.
Mortgage/Deed of Trust

j.
FACTA disclosures

k.
Third Party Fees

i.
Third party fees on the HUD-1 or Closing Disclosure if applicable referred to as HUD-1/Closing Disclosure, must be shown as paid to the third-party provider. A condition must be set if a third-party fee is paid to the lender, investor, etc. or the payee is blank.

ii.
CONSULTANT will condition for evidence in the file indicating that a charge on the HUD-1/Closing Disclosure exceeds the actual cost to the borrower (i.e. cost printed / stamped on the face of the document showing an amount less than the charge on the HUD-1/Closing Disclosure). Variations of less than $1 are deemed to be within reasonable limits and are not to be reported.

iii.
Any refunds that are provided to the borrower must be accompanied by a revised HUD-1/Closing Disclosure to show the final, accurate charges to the borrower.

Each loan reviewed will be assigned a Compliance condition grade in accordance with the Rating Agency Criteria as more fully described in Section 2(f).

Consultant will not make a determination as to whether the loans comply with federal, state or local laws, constitutional provisions, regulations or ordinances that are not expressly enumerated above. Furthermore, the findings reached by Consultant are dependent upon its receipt of complete and accurate data regarding the loans from loan originators and other third parties upon which Consultant is relying in reaching such findings.

Ability to Repay and Qualified Mortgage Review

1.
For Agency Eligible Loans Only: Consultant reviews applicable loans for compliance with the Qualified Mortgage (QM) rule requirements set forth in Regulation Z (12 C.F.R. 1026.43 et seq.) based upon the loan’s designation (Safe Harbor QM, Rebuttable Presumption QM, Exempt). Consultant determines the loan’s status under the QM rule requirements and assigns a due diligence loan designation. Consultant notes as a material exception if the due diligence findings do not confirm the same loan designation. Additionally, Consultant notes if a loan designation was not provided. Consultant will verify if each loan meets the requirements for a QM under § 1026.43(e)(2)—whether the loan is a safe harbor QM under § 1026.43(e)(1)(i) or a rebuttable presumption QM under § 1026.43(e)(1)(ii). Consultant will verify the presence of documentation for lender determination of QM and indicating factors in its ability-to-repay determination, including how the originator applied its policies and procedures in verification.  For loans applications taken on or after June 1, 2021, Consultant will verify whether the loan meets the requirements of the revised general QM definition effective March 1, 2021.

2.
For loans for which applications were received prior to July 1, 2021, if a loan was designated as QM and identified as eligible for guarantee, purchase, or insurance by an applicable agency as permitted under the QM final rule, Consultant reviews the loan to determine whether, based on available information in the loan file the loan satisfied (i), (ii) and (iii) in the paragraph (3)(a)(i) below and reviews the Automated Underwriting System output within the file to confirm agency eligibility.

3.
For Non-Agency Eligible Loans: Consultant reviews applicable loans for compliance with the Ability to Repay (ATR) but not Qualified Mortgage (QM) rule requirements set forth in Regulation Z (12 C.F.R. 1026.43 et seq.).
a.   Qualified Mortgage:

 i.
For QM (Safe Harbor or HPCT) designated loans, Consultant reviews the loan to determine whether, based on available information in the loan file: (i) the loan contains risky loan features and terms (e.g. an interest only feature or negative amortization), (ii) the “points and fees” exceed the applicable QM threshold, (iii) the monthly payment was calculated appropriately.  Consultant reviews to the applicable consider and verify requirements under the QM rule depending on whether the QM was originated under the original general QM definition or the revised general QM definition effective March 1, 2021.


ii.
For each QM designated loan that satisfied the applicable requirements enumerated above, Consultant then determines whether the loan is a Safe Harbor QM or Higher Priced QM by comparing the loan’s actual annual percentage rate, as recalculated, to the applicable average prime offer rate plus a certain percentage. For QM designated loans originated under the revised general QM definition effective March 1, 2021, Consultant also determines whether the loan exceeds the pricing thresholds for QM loans.
b.   Ability to Repay:

 i.
The ability to repay portion of the review for non-agency eligible loans only will focus on the eight factors detailed in the ATR Rule as detailed below for non-agency eligible loans. The Consultant will review the loan file to determine if the creditor verified and considered each of the eight factors utilizing  reasonably reliable third-party documentation at or before consummation.

1.
Current or reasonably expected income or assets that the consumer will rely on to repay the loan.

2.
Current employment status

3.
Monthly mortgage payment for subject loan using the introductory or fully indexed rate, whichever is higher, and monthly, fully amortizing payments that are substantially equal.

4.
Monthly payment on any simultaneous loans secured by the subject property.

5.
Monthly payments for property taxes and hazard/flood insurance and certain other costs related to the property such as homeowner’s association fees or ground rent.

6.
Debts, alimony, and child support obligations

7.
Monthly debt-to-income ratio or residual income

8.
Credit history

ii.
For loans designated as agency eligible, Consultant will not review for compliance with the requirements of Appendix Q or General Ability to Repay.

iii.
Consultant reviews loans to determine their conformity with the ATR/QM factors above and is not rendering an independent assessment or analysis. Consultant’s review is based on information contained in the loan file at the time it is provided to Consultant, and only reflects information as of that point in time and does not mean any regulator, judicial or agency will agree with the Consultant’s conclusion.


a)
Regulatory Compliance Disclaimer

Please be advised that Consultant will not make a determination as to whether loans complied with federal, state or local laws, constitutional provisions, regulations or ordinances that are not expressly enumerated herein. There can be no assurance that the review uncovered all issues relating to the origination of the mortgage loans, their compliance with applicable law and regulation and the original appraisals relating of the mortgaged properties or uncovered all relevant factors that could affect the future performance of the mortgage loans. Furthermore, the findings reached by Consultant are dependent upon its receiving complete and accurate data regarding the mortgage loans from loans originators and other third parties upon which Consultant is relying in reaching such findings.

Please be further advised that Consultant does not employ personnel who are licensed to practice law in various jurisdictions, and the findings set forth in the reports prepared by Consultant do not constitute legal advice or opinions. They are recommendations or conclusions based on information provided to Consultant. All final decisions as to whether to purchase or enter into a transaction related to any individual mortgage loan or the mortgage loans in the aggregate, any investment strategy and any legal conclusions, including potential liability related to the purchase or other transaction involving any such loans, shall be made solely by the Client, or other agreed upon party, that has engaged Consultant to prepare its reports pursuant to its instructions and guidelines. Client, or other agreed upon party, acknowledges and agrees that the scoring models applied by Consultant are designed to identify potential risk and the Client, or other agreed upon party, assumes sole responsibility for determining the suitability of the information for its particular use.


 b)
Seasoning And Certain Compliance Exceptions

Pursuant to the applicable NRSRO criteria, Consultant graded certain compliance exceptions as non-material based on seasoning of the mortgage loan. Certain mortgage loans were seasoned beyond the applicable period under TILA in which affirmative claims could be brought by a consumer. The time period is not limited for claims, other than recession, which are raised as a defense to foreclosure. Information contained in any Consultant reports related to the applicable statute of limitations for certain claims may not be accurate or reflect the most recent controlling case law. Further, a particular court in a particular jurisdiction may extend, not enforce or otherwise allow claims beyond the statute of limitations identified in the report based on certain factors, including the facts and circumstances of an individual loan.

Additional Disclosures and Requirements:

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

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


o
Confirm the presence of the Servicing Transfer Disclosure form in file

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


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

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

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


•
Affiliated Business Disclosure

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

o
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)

o
Confirm the Affiliated Business Disclosure is executed.


•
Initial Escrow Disclosure Statement

o
Confirm the presence of the Initial Escrow Disclosure Statement in file

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

Equal Credit Opportunity Act (Regulation B)


 •
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).

•
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)?

•
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.

Fair Credit Report Act (Regulation V)
 

 •
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.

•
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.

High-Cost, State & Local Anti-Predatory Regulations
 
In addition to federal thresholds, Consultant will review the anti-predatory lending statutes in the following states and local municipalities, as applicable, as well as any additional applicable regulations implemented during the Term of this SOW.


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

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

•
California Higher-Priced Mortgage Loan Statute, Cal. Fin. Code §4995 et seq.

•
Colorado Consumer Equity Protection Act, Colo, Rev. Stat. § 5-3.5-101 et seq..

•
Connecticut Abusive Home Loan Lending Practices Act, Conn. Stat. Ann. §36a- 746 et seq., as amended from time to time.

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


•
District of Columbia Home Loan Protection Act, D.C. Official Code § 26-1151.01 et seq., as implemented by 20 D.C. Municipal Reg § 2000.1 et seq.

•
Florida Fair Lending Act, Fla. Stat. Ann. § 494.0078 et seq. (for loans closed before July 1, 2014).

•
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).

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

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

•
Illinois High Risk Home Loan Act, Public Act. 93-0561 (2003) codified at 815, ILCS §§ 137/5 et seq., and as amended by SB 1692 (2012), effective January 10, 2014.

•
Illinois Predatory Lending Database Program, Public Act 95-0691 (SB 1167).

•
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.

•
Cook County, Illinois, Anti-Predatory Lending Ordinance, Cook County Code of Ordinances § 34-341.

•
Cook County, Illinois, Anti-Predatory Lending Pilot Program, Illinois House Bill 4050 (2005).

•
Indiana Home Loan Practices Act, as amended by HB 1179 (2005), Ind. Code §24-9-1 et seq.

•
Section 16a-3-308a of the Kansas Consumer Credit Code, Kan. Stat. Ann. §16a.101 et seq.

•
Kansas Consumer Credit Code

•
Kentucky Anti-Predatory Lending Statute, Ky. Rev. Stat. § 360.100 et seq.

•
Maine, An Act to Enhance Consumer Protections in Relation to Certain Mortgages (for loans closed prior to September 27, 2011), Me. Rev. Stat. Ann.  Tit. 9-A, §§ 8-103(1); 8-206(8);8-206A, as amended by Legislative Documents 1869 (2007), 2125 (2008) and 1439 (2009).

•
Maine   Consumer   Credit   Code   -   Truth-in-Lending, (for  loans  closed  on  or  after  September 27, 2011), Me. Rev. Stat. Ann. tit. 9-A, §§ 8-501 et seq., as amended from time to time.

•
Maryland Commercial Law, Md. Code Ann., Com. Law §§ 12-124.1; 12-127; 12- 409.1; 12-1029.

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

•
Massachusetts High-Cost Mortgage Regulations, 209 CMR Parts 32 and 40, as amended from time to time.

•
Massachusetts Predatory Home Loan Practices Act, M.G.L. Chapter 183C, §§ 1 et  seq.

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

•
Massachusetts Mortgage Lender and Broker Regulations, 940 CMR §800 (15-17).

•
Massachusetts Regulations for   Higher Priced Mortgage Loans, 209 CMR §§ 32.00 et.seq., as amended from time to time.

•
Massachusetts Subprime ARMs to First Time Homebuyers, M.G.L. Chapter 184, §17B.5.

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

•
Minnesota Mortgage Originator and Service Licensing Act, § 58.137  et seq. (S.F. 2988 (2002)), as amended by House File 1004 (2007) and Senate File 988 (2007).

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

•
Nevada Anti-Predatory Lending Law, Assembly Bill No. 284 (2003) and Amended by Assembly Bill No. 440 (2007), codified as NRS § 598D.010 et seq.

•
New Jersey Home Ownership Security Act of 2002, NJ Stat. Ann. § C:46:10B-22  et seq., as amended from time to time.

•
New Mexico Home Loan Protection Act, Senate Bill 449 (Regular Session 2003), codified at NM Rev. Stat. § 58-21A-1 et seq. and as amended from time to time.

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

•
New York High-Cost Home Loan Act, N.Y. Bank. L. Ch. 626., as codified in NY Bank. Law § 6-l, and as implemented by 3 NYCCR Part 41 as amended from time to time.

•
New York Subprime Home Loans Statute, NY Bank. Law § 6-m.


•
North Carolina Anti-Predatory Lending Law, N.C. Gen. Stat. §§ 24-1.1A to 24- 10.2 and North Carolina Amendments to Anti-Predatory Lending Law, N.C. Gen.  Stat. §§ 24-9; 24-1.1(E)(a); 24-10.2(a), as amended from time to time.

•
Ohio  Anti-Predatory  Lending  Statute,  HB  386  as  amended  by  Senate  Bill  185  (2006), and as codified in various sections of the Ohio Code.

•
Ohio Consumer Sales Practices Act, Ohio Rev.  Code  Ann.  §  1345.01,  as  implemented by Ohio Admin. Rules § 109 4-3-01 et seq.

•
City of Cleveland Heights, Ohio, Anti-Predatory Lending Ordinance, Ordinance  No. 72-2003 (PSH), Mun. Code §§ 757.01 et seq.

•
Summit County, Ohio, Anti-Predatory Lending Ordinance, Ordinance No. 2004- 618, Muni. Code §§ 201.01 et seq.

•
Oklahoma Anti-Predatory Lending Law, House Bill No. 1574 (2003), as codified in various sections of Title 14A of the Oklahoma Consumer Credit Code.

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

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

•
Rhode Island Home Loan Protection Act,  R.I.  Gen.  L.  34-25.1-2 et  seq,  as  implemented  by  Emergency  Banking  Regulation  3  (2006)  and  Final  Banking  Regulation 3 (2007) and amended by Senate Bill 371 (2007).

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

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

•
Tennessee Home Loan Protection Act, Tenn. H.R. 3597 (2006), as codified at Tenn.  Code Ann. §§ 45-20-101 et seq.

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

•
Section 50(a)(6), Article XVI of the Texas Constitution

•
Section 50(f)(2), Article XVI of the Texas Constitution

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

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

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

•
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.

•
Virginia Mortgage Lender and Broker Act (for loans originated on or after July 1, 2003 to September 30, 2010, as amended), Va. Code Ann. §§ 6.1-411, 6.1-422.1, 6.1-425.1 and 6.1-425.2.

•
Virginia Mortgage Lender and Broker Act (for loans originated on or after October 1, 2010), Va. Code Ann. §§ 6.2-1600 et seq., as amended from time to time.

•
Virginia Senate Bill 797 (2008), effective July 1, 2008 (uncodified).

•
Washington House Bill 2770, Mortgage Lending Ownership

•
West Virginia Residential Mortgage Lender, Broker and Servicer Act, W.Va.  Code § 31-17 et seq.

•
Wisconsin Responsible High-Cost Mortgage Lending Act, Wis. Stat. § 428.202, as implemented by Wis. Admin. Code DFI-Bkg 46.01 et seq.

•
Wyoming Credit Code

Flood Insurance Testing

National Flood Insurance Program (NFIP)
Each mortgage loan will be reviewed to ensure adherence to flood insurance coverage requirements as outlined under the NFIP, including identification of flood zones and subsequent policy documentation for evidence of adequate coverage amounts.
Homeowner’s Flood Affordability Act (HFIAA)
Each mortgage loan made by an FDIC-supervised institution or servicer acting on its behalf shall require the escrow of all premiums and fess for flood insurance for any designated loan secured by residential improved real estate or a mobile home, made, increased, extended or renewed on or after January 1, 2016.
Frequency – Payable with same frequency as payments designated for the loans
Exceptions

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

•
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

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

a.
Meets requirements

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

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

 
Misrepresentation and Third-Party Review

Validate that fraud reports and independent third-party property valuations reports are in the file. The review will consist of the following:

1) Misrepresentation Review and Valuation Review
Review on each loan to identify potential misrepresentations of income, employment, identity, occupancy, transaction and appraisal misrepresentation or other areas of potential misrepresentation. The Misrepresentation may include the following:


 •
Signatures: Validate signature consistency across documents. To the extent imaged or hard copy files are provided, Consultant will utilize reasonable efforts to validate the consistency of signatures across documents.

•
Alerts: Assess credit report alerts for accuracy and potential issues.

•
Social Security Numbers: Compare SSN(s) across all file documents.

•
Document Integrity: Review for apparent alterations to loan documents. To the extent imaged or hard copy files are provided, Consultant will utilize reasonable review of alterations to the loan documents.

•
Data Consistency: Review the documents contained in the loan file for consistency of data.

•
Third Party Fraud Tools: To the extent a third party fraud tool is contained in the loan file, the Consultant will ensure high level or critical warnings are reviewed and addressed. If a third party fraud tool is not provided, the Consultant will order a third party fraud tool and cost will be passed through as noted in Exhibit T

Independent Third-Party Values
Review each loan to determine whether a third party valuation product was required and if required, that the third party product value was compared to the original appraised value to identify a value variance and apply the appropriate rating agency grade after reviewing the required valuation products.  i) Consultant will perform the following steps.

 •
Property is complete

•
Value is based on as-is condition or provides satisfactory completion of all material conditions including inspections, licenses, and certifications (including certificates of occupancy) to be made or issued with respect to all occupied portions of the mortgaged property and with respect to the use and occupancy of the same, have been made or obtained from the appropriate authorities.

•
Property is described in average or better condition

•
No apparent appraiser independence violation statements

•
Appraisal addresses any adverse comments

•
Appraisal is completed on appropriate GSE Forms

•
Appraisal contains required attachments.

•
Appraiser was appropriately licensed at the time the appraisal was signed

If the valuation vendor does 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.

Value Review Disclaimer

 •
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 licensed as appraiser under Federal or State law, and the services being performed do not constitute appraisal reviews for the purposes of USPAP or Federal or State law.

•
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.

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

•
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.

Properties in FEMA declared disaster zones.
If a FEMA declared disaster occurs after the inspection date on the appraisal, Consultant will review the file to determine if an exterior inspection to ensure:

 •
No apparent damage to the property

•
Property appears to be occupied

 
Data Compare
 
Client will provide a data tape with the following data fields and Consultant will compare the field to the applicable source document and report any variance


 •
Appraised Value

•
CLTV

•
DTI

•
FICO

•
Interest Only

•
Interest Rate

•
Loan Term

•
Loan Purpose

•
LTV

•
Occupancy

•
Original Balance

•
Property Address

•
Property City

•
Property State

•
Property Type

•
Sales Price

•
Second Mortgage Lien Amount

•
Self Employed

•
Units

•
Zip Code

•
Loan Type

•
QM Status

 
Rating Agency Grading Criteria
 
Fitch Ratings Grading Criteria
Grading shall be provided for each exception, each exception category and holistically for each loan. The methodology for the application of the RMBS grading as defined by Fitch in their current industry publications as updated from time to time.

Moody’s Investor Services Grading Criteria
Grading shall be provided for each exception, each exception category and holistically for each loan. The methodology for the application of the RMBS grading as defined by Moody’s in their current industry publications as updated from time to time.

Kroll Bond Rating Agency LLC Grading Criteria
Grading shall be provided for each exception, each exception category and holistically for each loan. The methodology for the application of the RMBS grading as defined by Kroll in their current industry publications as updated from time to time.

S&P Global Ratings Grading Criteria
Grading shall be provided for each exception, each exception category and holistically for each loan. The methodology for the application of the RMBS grading as defined by Standard & Poor’s in their current industry publications and updated from time to time.

DBRS Morningstar Grading Criteria
Grading shall be provided for each exception, each exception category and holistically for each loan. The methodology for the application of the RMBS grading as defined by DBRS in their current industry publications and updated from time to time.

 
Opus Grading Criteria
 
Grading shall be provided for each exception, each exception category and holistically for each loan. The following grading is not intended for securitization reviews and Opus will not issue a Rating Agency Narrative, Reliance or Form ABS Due Diligence 15E if Client elects to utilize the following grading criteria. The methodology for the application of grading is defined by Opus and updated from time to time shall be determined as follows:

Opus Credit Grades


 •
Level 1 Credit Grade Definition: Loan was originated in accordance with the mortgage loan originator underwriting guidelines without exception.

•
Level 2 Credit Grade Definition: Loan was originated in substantial compliance with the originator's underwriting guidelines and there are sufficient compensating factors for any exceptions.

•
Level 3 Credit Grade Definition: Loan was not originated in substantial compliance with the originator's underwriting guidelines and there are insufficient compensating factors for the exceptions or is missing material documentation.

Opus Property Grades


 •
Level 1 Property Grade Definition: Property value appears to be within 10% of original appraised amount and there are no material deficiencies in the appraisal process.

•
Level 2 Property Grade Definition: Property value appears to be within 10% of original appraised amount, but minor issues in the appraisal process were identified.

•
Level 3 Property Grade Definition: Property value does not appear to fall within 10% of the original appraised value and/or material deficiencies exist with respect to the appraisal process or the file is missing material documentation.

Opus Compliance Grades


 •
Level 1 Compliance Grade Definition: Loan complies with all applicable laws and regulations reviewed under the applicable scope of work.

•
Level 2 Compliance Grade Definition: There are minor issues regarding legal and/or regulatory compliance but such issues do not represent risks to the enforceability of the borrower's obligation under the loan documents and will not result in assignee liability to the investor.

•
Level 3 Compliance Grade Definition: Loan is not in compliance with laws and regulations reviewed under the applicable scope of work or the loan is missing material documentation.





REDACTED INFORMATION
 

 •
Borrower Name

•
Co-Borrower Name

•
SSNs

•
Property Address, City, County, MSA, Zip

•
Mailing Address

•
Account Number, including Originator and Servicer Loan Number

•
Origination Date

•
Names of Borrowers or any other Individuals

•
Company and Entity Names

•
Financial Institution Names

•
Job Position Titles

•
Any Address

•
Any Location Information (other than state), including City, County, MSA and Zip

•
Account Numbers of any type

•
Insurance Claim Numbers

•
Insurance Policy Numbers

•
Foreclosure Action dates and Case Numbers

•
Bankruptcy Action dates and Case Numbers

•
Any reference that would allow the identification of the location of a property (e.g. neighborhood, body of water, schools, major highways)





Pool Details

Purpose
 
Type
Count
% of Pool
 
Cash out Refi
66
14.70%
 
Purchase
286
63.70%
 
Rate / Term Refi
97
21.60%
 
Total
449
100.00%
 
 
Property Type
Type
Count
% of Pool
Single Family Detached
171
38.08%
Co-op
0
0.00%
Condo, Low Rise
59
13.14%
Condo, High Rise
0
0.00%
PUD
120
26.73%
1 Family Attached
20
4.45%
2 Family
40
8.91%
3 Family
18
4.01%
4 Family
21
4.68%
Total
449
100.00%
 
Occupancy
Type
Count
% of Pool
Primary Residence
1
0.22%
Second Home
96
21.38%
Investment Property
352
78.40%
Total
449
100.00%
 
Product Type
Type
Count
% of Pool
Fixed
449
100.00%
ARM
0
0.00%
Total
449
100.00%




Tape Discrepancies

Data Element
Count
Accuracy
Borrower 1 First Name
11
97.55%
Borrower 1 Last Name
6
98.66%
Borrower 1 SSN
1
99.78%
Borrower 2 First Name
3
99.33%
Borrower 2 Last Name
4
99.11%
Escrow Flag
6
98.66%
Interest Rate
3
99.33%
Number of Units
3
99.33%
Property Address
9
98.00%
Property Attachment Type
90
79.96%
Property City
2
99.55%
Property Value
2
99.55%
Property Zip Code
1
99.78%
Qualifying CLTV
4
99.11%
Qualifying FICO
4
99.11%
Qualifying LTV
2
99.55%
Sales Price
2
99.55%
Subject Property Type
13
97.10%
Total Loans
449
  



 
Multiple Loans to One Borrower: TPR firm reviewed common identifiers for all loans in the population and confirmed there was eleven (11) obligors with multiple loans in the pool.
 
Property Inspection Waivers:  Fifty Two (52) loans contained a Property Inspection Waiver (PIW). An AVM or BPO was obtained as a secondary product to confirm the value indicated on the PIW. An initial property value grade of a “C” was assigned to the PIW loan. If the secondary product supported the value indicated on the PIW, a final property grade of a “B” was assigned. 




Loan Grading Definitions
Credit

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


Compliance

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


Property Valuation


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 affect 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 affect 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





Loan Review Findings
The following summarizes Consultant’s final loan securitization and event grades assigned to the final reviewed loan pool and reported in the Agency Grading Report dated May 04, 2026.


Overall Grade Summary
Fitch and Kroll NRSRO Grade
# of Loans
% of
Loans
A
350
77.95%
B
98
21.83%
C
1
0.22%
D
0
0.00%
 

Compliance Grade Summary
Fitch and Kroll NRSRO Grade
# of Loans
% of
Loans
A
409
91.09%
B
39
8.69%
C
1
0.22%
D
0
0.00%
 

Credit Grade Summary
Fitch and Kroll NRSRO Grade
# of Loans
% of
Loans
A
441
98.22%
B
8
1.78%
C
0
0.00%
D
0
0.00%
 

Property Grade Summary
Fitch and Kroll NRSRO Grade
# of Loans
% of
Loans
A
396
88.20%
B
53
11.80%
C
0
0.00%
D
0
0.00%



Loans Reviewed (449)


409037805
409038701
409038781
409038865
409040662
409040747
409037829
409038702
409038782
409038866
409040663
409040748
409037860
409038704
409038783
409038867
409040664
409040750
409037881
409038705
409038784
409038868
409040665
409040751
409038623
409038706
409038785
409038869
409040666
409040752
409038624
409038707
409038786
409038870
409040668
409040753
409038625
409038708
409038787
409038871
409040669
409040755
409038626
409038709
409038788
409038873
409040670
409040756
409038627
409038710
409038789
409038874
409040671
409040757
409038628
409038711
409038790
409038875
409040673
409040758
409038630
409038712
409038791
409038876
409040674
409040759
409038631
409038713
409038792
409038877
409040675
409040760
409038632
409038714
409038793
409038878
409040676
409040761
409038633
409038715
409038794
409038879
409040677
409040762
409038634
409038716
409038795
409038880
409040678
409040763
409038635
409038717
409038796
409038881
409040680
409040764
409038636
409038718
409038797
409038882
409040681
409040765
409038637
409038719
409038798
409038883
409040682
409040766
409038638
409038720
409038799
409038884
409040683
409040767
409038639
409038721
409038800
409038885
409040684
409040768
409038640
409038722
409038801
409038886
409040685
409040769
409038641
409038723
409038802
409038887
409040686
409040770
409038642
409038724
409038803
409038888
409040687
409040771
409038643
409038725
409038804
409038889
409040688
409040772
409038644
409038726
409038805
409038890
409040689
409040773
409038645
409038727
409038806
409038891
409040690
409040774
409038646
409038728
409038807
409038892
409040691
409040775
409038648
409038729
409038808
409038893
409040692
409040776
409038649
409038730
409038809
409038894
409040693
409040777
409038651
409038731
409038810
409038895
409040694
409040778
409038652
409038732
409038811
409038896
409040695
409040779
409038653
409038733
409038812
409038897
409040696
409040780
409038654
409038734
409038813
409038898
409040698
409040781
409038655
409038735
409038814
409038899
409040699
409040782

409038656
409038736
409038815
409038900
409040700
409040783
409038657
409038737
409038816
409038901
409040701
409040784
409038658
409038738
409038817
409038902
409040702
409040785
409038659
409038739
409038818
409038903
409040703
409040786
409038660
409038740
409038819
409038904
409040704
409040787
409038661
409038741
409038821
409038905
409040705
409040788
409038662
409038742
409038824
409038906
409040706
409040789
409038663
409038744
409038825
409040625
409040707
409040790
409038665
409038745
409038826
409040626
409040709
409040791
409038666
409038747
409038827
409040627
409040710
409040792
409038667
409038748
409038828
409040628
409040711
409040793
409038668
409038749
409038829
409040629
409040712
409040794
409038670
409038750
409038830
409040630
409040713
409040795
409038671
409038751
409038831
409040631
409040714
409040796
409038672
409038752
409038832
409040632
409040715
409040797
409038673
409038753
409038833
409040633
409040716
409040798
409038675
409038754
409038834
409040634
409040717
409040800
409038676
409038755
409038835
409040635
409040720
409040801
409038677
409038756
409038836
409040636
409040721
409040802
409038678
409038757
409038837
409040637
409040722
409040803
409038679
409038758
409038838
409040638
409040723
409040805
409038680
409038759
409038840
409040639
409040724
409040807
409038681
409038760
409038841
409040640
409040725
409040808
409038682
409038762
409038842
409040641
409040726
409040810
409038683
409038763
409038843
409040642
409040727
409040811
409038684
409038764
409038844
409040643
409040728
409040812
409038685
409038765
409038845
409040644
409040729
409040813
409038686
409038766
409038847
409040645
409040730
409040814
409038687
409038767
409038848
409040646
409040732
409040815
409038688
409038768
409038849
409040647
409040733
409040817
409038689
409038769
409038851
409040648
409040735
409040818
409038690
409038770
409038853
409040649
409040736
409040819
409038691
409038771
409038854
409040650
409040737
409040820
409038692
409038772
409038855
409040651
409040738
409040821
409038693
409038773
409038856
409040653
409040739
409040822
409038694
409038774
409038857
409040654
409040740
409040823
409038695
409038775
409038859
409040656
409040741
409040824
409038697
409038776
409038860
409040657
409040742
409040825
409038698
409038777
409038861
409040658
409040744
409040826
409038699
409038779
409038862
409040659
409040745
409040827
409038700
409038780
409038863
409040661
409040746
 





 If you have any questions, please contact Uriah Clavier at Uriah.Clavier@opuscmc.com.