Review	Reviewed Total	% of Final Securitization Population
Credit Population	15	100%
Compliance Population	15	100%
Valuation Population	15	100%
Data Integrity Population	15	100%

•

Assessed whether the characteristics of the mortgage loans and the borrowers conformed to the Guidelines cited above;

•

Analyzed asset statements to determine whether funds to close and reserves were within the Guidelines;

	INITIAL RA GRADES - OVERALL			FINAL RA GRADES - OVERALL
NRSRO Grade	Moody’s	%		NRSRO Grade	Moody’s	%
A	2	13.33%		A	7	46.67%
B	0	0.00%		B	3	20.00%
C	2	13.33%		C	1	6.67%
D	11	73.33%		D	4	26.67%

	FINAL RA GRADES - COMPLIANCE					FINAL RA GRADES - CREDIT
NRSRO Grade	Moody’s	%		NRSRO Grade	Moody’s		%
A	10	66.67%		A	7		46.67%
B	4	26.67%		B	3		20.00%
C	0	0.00%		C	1		6.67%
D	1	6.67%		D	4		26.67%

	FINAL RA GRADES - PROPERTY
NRSRO Grade	Moody’s	%
A	11	73.33%
B	0	0.00%
C	0	0.00%
D	0	0.00%
N/A	4	26.67%

1.

The application is signed by all listed borrowers;

2.

The application is substantially filled out; and

3.

All known borrower-owned properties are disclosed on the Real Estate Owned section.

1.

A credit report and/or other credit history documentation is present for each borrower;

2.

The monthly consumer debt payments for use in the debt to income and/or residual income calculation, as applicable;

4.

Gathered data required for ASF Report submission which may include:

a)

Most recent FICO Score (scores from Equifax, Experian, and Transunion if available)

b)

Most recent FICO date

c)

Longest Trade Line

d)

Maximum Trade Line

e)

Number of trade lines

f)

Credit Usage Ratio

1.

Verbal or Written VOE’s

2.

Pay stubs

3.

W-2 forms

4.

Tax returns

5.

Financial statements

6.

Award letters

7.

Bank statements

1.

VOD’s

2.

Depository account statements

3.

Stock or security account statements

4.

Gift funds

5.

Settlement statement or other evidence of conveyance and transfer of funds if a sale of assets was involved

1.

Verified that the hazard insurance meets the minimum required amount of coverage in the Guidelines;

2.

For condominium properties, confirmed that the blanket policy meets the minimum amount of coverage;

3.

Confirmed that the flood cert is for the correct borrower, property, lender and loan number and is a “Life of Loan” certification;

4.

For properties is in a flood zone per the flood cert, confirmed that flood insurance in the file meets the minimum required amount of coverage and meets guideline requirements;

5.

Confirmed that the mortgagee clause lists the lender’s name and “its successors and assigns”; and

6.

Confirmed that the premium amount on both the hazard and flood insurance match what was used in the DTI calculations.

1.

Reviewed for any name variations for the borrowers and confirm that the variations have been addressed in the loan file;

2.

Reviewed for any social security number variations for the borrowers and confirmed that the variations have been addressed in the loan file;

3.

Reviewed for any potential occupancy issues based on the borrowers’ address history and confirmed that any issues have been addressed in the loan file;

4.

Reviewed for any employment issues and confirm that any issues have been addressed in the loan file;

5.

Reviewed for any additional consumers associated with the borrowers’ profiles and confirmed the materiality and material issues have been addressed in the loan file; and

6.

Addressed all red flag issues.

1.

A review of the completeness and accuracy of the information obtained in the mortgage origination process;

2.

A review of closing documents to ensure that the mortgage file information is complete, accurate, and consistent with other documents in the mortgage file;

3.

Selene reviewed the mortgage file documents to determine that the mortgage was properly underwritten;

4.

Verification that the DTI, LTV, asset reserves, property type, transaction type (maximum loan amount, loan purpose, occupancy, etc.), and FICO scores meet or exceed the guideline requirements;

5.

Verification that all borrowers are eligible based on the Guidelines and information in the loan file; and

6.

Verification that there is appropriate documentation present to confirm that applicable documents have been recorded or have been sent for recording.

1.	Federal Truth in Lending Act (“TILA”), as implemented by Regulation Z, 12 C.F.R. Part 1026, as set forth below:

	a)	Rescission (§1026.23):
		i)	failure to provide the right of rescission notice;
		ii)	failure to provide the right of rescission notice in a timely manner and to the correct consumer(s);
		iii)	errors in the right of rescission notice;
		iv)	failure to provide the correct form of right of rescission notice;
		v)	failure to provide the three (3) business day rescission period;
		vi)	any material disclosure violation on a rescindable mortgage loan that gives rise to the right of rescission under TILA, which means the required disclosures of the annual percentage rate, the finance charge, the amount financed, the total of payments, the payment schedule, the HOEPA disclosures, or those related to prepayment penalties on covered transactions; and
		vii)	with respect to applicable exception remediation measures, confirm that a letter of explanation, a refund if applicable, new corrected material disclosures and a new notice of right to cancel was provided.
	b)	TIL Disclosure (§§1026.17, 18 and 19) as applicable for loans with application dates prior to October 3, 2015:
		i)	review and comparison of the initial and final TIL disclosures, and any re-disclosed TIL(s);
		ii)	proper execution by all required parties;
		iii)	principal and interest calculations, and proper completion of the interest rate and payment summary; and
		iv)	timing of initial and re-disclosed TIL(s).
	c)	Tolerances (§§1026.18, 22 and 23):
		i)	inaccurate Annual Percentage Rate (APR) outside of applicable tolerance by comparing disclosed APR to re-calculated APR; and
		ii)	inaccurate Finance Charge outside of applicable tolerance by comparing disclosed Finance Charge to re-calculated Finance Charge.
	d)	High-cost Mortgage (§§1026.31, 32 and 33):
		i)	points and fees threshold test;
		ii)	APR threshold test;
		iii)	prepayment penalty test; and
		iv)	compliance with the disclosure requirements, limitation on terms and prohibited acts or practices in connection with a high-cost mortgage.
	e)	Higher-priced Mortgage Loan (§1026.35):
		i)	APR threshold test; and
		ii)	compliance with the escrow account and appraisal requirements.
	f)	With respect to brokered mortgage loans, the Prohibitions and Restrictions related to Loan Originator Compensation and Steering (§1026.36):
		i)	review relevant documentation to determine if compensation to a Loan Originator was based on a term of the transaction;
		ii)	review relevant document to determine if there was dual compensation; and

		iii)	review the presence of the mortgage loan option disclosure and to determine if the Steering Safe Harbor provisions were satisfied.
	g)	Homeownership counseling (§1026.36):
		i)	determine if the creditor obtained proof of homeownership counseling in connection with a mortgage loan to a first-time homebuyer that contains a negative amortization feature.
	h)	Prohibition on Financing Credit Insurance (§1026.36):
		i)	determine if the creditor financed, directly or indirectly, any premiums or fees for credit insurance.
	i)	Nationwide Mortgage Licensing System (NMLS) & Registry ID on Loan Documents (§1026.36):
		j)	review for presence of mortgage loan originator organization and individual mortgage loan originator name and NMLSR ID, as applicable, on the credit application, note or mortgage loan contract, security instrument, Loan Estimate and Closing Disclosure; and (ii) verify the data against the NMLSR database, as available.

2.	Sections 1098 and 1100A of Dodd-Frank amending TILA and RESPA, as implemented by Regulation Z, 12 C.F.R. Part 1026, as set forth below (applicable only for mortgage loans with application dates on or after October 3, 2015):

a)	Loan Estimate (LE) (§§1026.19 and 37):
			i)	confirm the presence of LE for applications on or after October 3, 2015;
			ii)	confirm the initial LE date indicates it was delivered or placed in the mail within three (3) business days of application;
			iii)	confirm that certain sections of each LE determined to carry assignee liability were completed and that information was reflected in the appropriate locations, which was based solely on the information disclosed on the LE;
			iv)	confirm the initial LE was delivered or placed in the mail not later than seven (7) business days prior to consummation of the transaction, or such period was waived due to a bona fide financial emergency;
			v)	confirm that each revised LE is accompanied by valid written documentation explaining the reason for re-disclosure to allow for fee increases based on a valid change of circumstance and was timely provided within 3 business days of issuance;
			vi)	confirm borrower received LE not later than four (4) business days prior to consummation; and
			vii)	confirm LE was not provided to the borrower on or after the date of the CD.
	b)	Closing Disclosure (CD) (§§1026.19 and 38):
		i)			confirm the presence of CD for applications on or after October 3, 2015;
		ii)			confirm the borrower received CD at least three (3) business days prior to consummation, or that such period was waived due to a bona fide financial emergency;
		iii)			confirm that certain sections of each CD determined to carry assignee liability were accurately completed and that information was reflected in the appropriate locations, which, in certain instances, was based solely on the information disclosed on the CD;
		iv)			confirm that a revised CD was received in a timely manner if the initial or any revised CD became inaccurate;
		v)			identify tolerance violations based on the charges disclosed on the initial and interim LE’s, initial CD, and reflected on the final CD; and
		vi)			with respect to tolerance violations based on the disclosed charges on the LE and CD and other applicable exceptions, confirm that the creditor cured or remediated the violations in accordance with the Structured Finance Association TRID 3.0, as may be updated from time to time.

3.	Sections 1411 and 1412 of the Dodd-Frank Wall Street Reform and Consumer Protection Act amending TILA, as implemented by Regulation Z, 12 C.F.R. 1026.43, as set forth below:

a)

the general Ability to Repay (“ATR”) underwriting standards (12 C.F.R. 1026.43(c));

b)

refinancing of non-standard mortgages (12 C.F.R. 1026.43(d)); and

c)

Balloon-payment qualified mortgages made by certain creditors (12 C.F.R. 1026.43(f)).

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

5.	Federal Truth in Lending Act (“TILA”), as implemented by Regulation Z, 12 C.F.R. Part 1026, as set forth below:

	a)	Rescission (§1026.23):
		i)	failure to provide the right of rescission notice;
		ii)	failure to provide the right of rescission notice in a timely manner and to the correct consumer(s);
		iii)	errors in the right of rescission notice;

					iv)				failure to provide the correct form of right of rescission notice;
					v)				failure to provide the three (3) business day rescission period;
					vi)       vii)				any material disclosure violation on a rescindable mortgage loan that gives rise to the right of rescission under TILA, which means the required disclosures of the annual percentage rate, the finance charge, the amount financed, the total of payments, the payment schedule, the HOEPA disclosures, or those related to prepayment penalties on covered transactions; and with respect to applicable exception remediation measures, confirm that a letter of explanation, a refund if applicable, new corrected material disclosures and a new notice of right to cancel was provided
		b)			TIL Disclosure (§§1026.17, 18 and 19) as applicable for loans with application dates prior to October 3, 2015:
					i)				review and comparison of the initial and final TIL disclosures, and any re-disclosed TIL(s);
					ii)				proper execution by all required parties;
					iii)				principal and interest calculations, and proper completion of the interest rate and payment summary; and
					iv)				timing of initial and re-disclosed TIL(s).
		c)			Tolerances (§§1026.18, 22 and 23):
					i)				inaccurate Annual Percentage Rate (APR) outside of applicable tolerance by comparing disclosed APR to re-calculated APR; and
					ii)				inaccurate Finance Charge outside of applicable tolerance by comparing disclosed Finance Charge to re-calculated Finance Charge.
		d)			High-cost Mortgage (§§1026.31, 32 and 33):
					i)				points and fees threshold test;
					ii)				APR threshold test;
					iii)				prepayment penalty test; and
					iv)				compliance with the disclosure requirements, limitation on terms and prohibited acts or practices in connection with a high-cost mortgage.
		e)			Higher-priced Mortgage Loan (§1026.35):
				i)				APR threshold test; and
				ii)				compliance with the escrow account and appraisal requirements.
	f)			With respect to brokered mortgage loans, the Prohibitions and Restrictions related to Loan Originator Compensation and Steering (§1026.36):
					i)				review relevant documentation to determine if compensation to a Loan Originator was based on a term of the transaction;
					ii)				review relevant document to determine if there was dual compensation; and
					iii)				review the presence of the mortgage loan option disclosure and to determine if the Steering Safe Harbor provisions were satisfied.
		g)			Homeownership counseling (§1026.36):
					i)				determine if the creditor obtained proof of homeownership counseling in connection with a mortgage loan to a first-time homebuyer that contains a negative amortization feature.
		h)			Prohibition on Financing Credit Insurance (§1026.36):
					i)				determine if the creditor financed, directly or indirectly, any premiums or fees for credit insurance.
			i)			Nationwide Mortgage Licensing System (NMLS) & Registry ID on Loan Documents (§1026.36):
					i)				review for presence of mortgage loan originator organization and individual mortgage loan originator name and NMLSR ID, as applicable, on the credit application, note or mortgage loan contract, security instrument, Loan Estimate and Closing Disclosure; and (ii) verify the data against the NMLSR database, as available.

6.	Federal Real Estate Settlement Procedures Act (“RESPA”), as implemented by Regulation X, 12 C.F.R. Part 1024, as set forth below:

	a)	Good Faith Estimate (GFE) (§1024.7), as applicable for loans with application dates prior to October 3, 2015:
		i)	confirm the presence of the current GFE form in effect at the time of origination;
		ii)	verify GFE was provided to the borrower(s) within three (3) business days of application;
		iii)	verify all sections of the GFE were accurately completed and that information was reflected in the appropriate locations;

		iv)	determine whether a valid and properly documented changed circumstance accompanies any changes to mortgage loan terms and/or fees on any revised GFEs over the applicable tolerance(s); and
		v)	confirm the presence of a settlement service provider list, as applicable.
	b)	Final HUD-1/A Settlement Statement (HUD) (§1024.8), as applicable for loans with application dates prior to October 3, 2015:
		i)	confirm current applicable HUD form was provided;
		ii)	determination that the mortgage loan file contains the final HUD;
		iii)	escrow deposit on the final HUD matches the initial escrow statement amount; and
		iv)	verify all sections of the final HUD were accurately completed and that information was reflected in the appropriate locations.
	c)	GFE and Final HUD Comparison (§1024.7), as applicable for loans with application dates prior to October 3, 2015:
		i)	review changes disclosed on the last GFE provided to the borrower(s) to determine that such changes were within the allowed tolerances;
		ii)	confirm mortgage loan terms and fees disclosed on the third page of the final HUD accurately reflect how such items were disclosed on the referenced GFE, page 2 of the final HUD and mortgage loan documents; and
		iii)	review any documented cure of a tolerance violation to determine that the proper reimbursement was made and a revised HUD was provided at or within 30 days of settlement.
	d)	Additional RESPA/Regulation X Disclosures and Requirements (§1024.6, 15, 17, 20, and 33):
			i)	confirm the presence of the Servicing Disclosure Statement form in the mortgage loan file;
			ii)	verify the Servicing Disclosure Statement was provided to the borrower(s) within three (3) business days of application;
			iii)	confirm the presence of the Special Information Booklet in the mortgage loan file or that the mortgage loan file contains documentary evidence that the disclosure was provided to the borrower;
			iv)	confirm the Special Information Booklet was provided within three (3) business days of application;
			v)	confirm the presence of the Affiliated Business Arrangement Disclosure in the mortgage loan file in the event the lender has affiliated business arrangements;
			vi)	confirm the Affiliated Business Arrangement Disclosure was provided no later than three (3) business days of application;
			vii)	confirm the Affiliated Business Arrangement Disclosure is executed; and
			viii)   ix)   x)	confirm the presence of the Initial Escrow Disclosure Statement in the mortgage loan file and proper timing. confirm that the creditor provided the borrower a list of homeownership counselling organizations within three (3) business days of application; and confirm that the list of homeownership counselling organizations was obtained no earlier than 30 days prior to when the list was provided to the mortgage loan applicant.

7.	Sections 1098 and 1100A of Dodd-Frank amending TILA and RESPA, as implemented by Regulation Z, 12 C.F.R. Part 1026, as set forth below (applicable only for mortgage loans with application dates on or after October 3, 2015):

a)	Loan Estimate (LE) (§§1026.19 and 37):
		i)	confirm the presence of LE for applications on or after October 3, 2015;
		ii)	confirm the initial LE date indicates it was delivered or placed in the mail within three (3) business days of application;
		iii)	confirm that certain sections of each LE determined to carry assignee liability were accurately completed and that information was reflected in the appropriate locations, which, in certain instances, was based solely on the information disclosed on the LE;
		iv)	confirm the initial LE was delivered or placed in the mail not later than seven (7) business days prior to consummation of the transaction, or such period was waived due to a bona fide financial emergency;
		v)  confirm if the file indicates a fee was imposed, other than for a credit report, prior to borrower receiving LE and indicating an intent to proceed with the transaction;

		vi)	confirm that any written estimate of terms or costs provided prior to receipt of a LE contained the required disclosures;
		vii)	confirm that each revised LE is accompanied by valid written documentation explaining the reason for re-disclosure to allow for fee increases based on a valid change of circumstance and was timely provided within 3 business days of issuance;
		viii)	confirm the presence and timely provision of a settlement service provider list (when consumer is given the opportunity to shop for services);
		ix)	confirm borrower received LE not later than four (4) business days prior to consummation; and
		x)	confirm LE was not provided to the borrower on or after the date of the CD.
	b)	Closing Disclosure (CD) (§§1026.19 and 38):
		i)	confirm the presence of CD for applications on or after October 3, 2015;
		ii)	confirm the borrower received CD at least three (3) business days prior to consummation, or that such period was waived due to a bona fide financial emergency;
		iii)	confirm that certain sections of each CD determined to carry assignee liability were accurately completed and that information was reflected in the appropriate locations, which, in certain instances, was based solely on the information disclosed on the CD;
		iv)	confirm that a revised CD was received in a timely manner if the initial or any revised CD became inaccurate;
		v)	identify tolerance violations based on the charges disclosed on the initial and interim LE’s, initial CD, and reflected on the final CD;
		vi)	with respect to tolerance violations based on the disclosed charges on the LE and CD, confirm that the creditor cured the violations no later than 60 days after consummation, or within 60 days of discovery; and
		vii)	with respect to applicable exception remediation measures for numerical exceptions, confirm that a letter of explanation, as well as a refund as applicable, was delivered or placed in the mail no later than 60 days after discovery of the exception establishing the need for a revised CD or with respect to exception remediation measures for non-numerical exceptions, that a corrected CD was delivered or placed in the mail no later than 60 days after consummation. (In an attempt to establish a best practices approach to pre-securitization due diligence, as it applies to TILA RESPA Integrated Disclosure testing, the Structured Finance Association (“SFA”) has a working group that consists of industry participants including third party review providers and law firms who are discussing a standardized approach to remediation considerations. This approach is intended to be based on a reasoned legal analysis that expressly assumes that courts will interpret TRID in accordance with the principals of liability set forth in the letter to the MBA from Richard Cordray, the Director of the CFPB. No assurances can be provided that the courts in question will interpret TRID in accordance with the SFA industry group proposal.)
	c)	Your Home Loan Toolkit (§1026.19):
		i)	confirm the presence of Your Home Loan Toolkit in the mortgage loan file or that the mortgage loan file contains documentary evidence that the disclosure was provided to the borrower; and
		ii)	confirm Your Home Loan Toolkit was delivered or placed in the mail not later than three (3) business days after receipt of application

4.	Sections 1411 and 1412 of the Dodd-Frank Wall Street Reform and Consumer Protection Act amending TILA, as implemented by Regulation Z, 12 C.F.R. 1026.43, as set forth below:

d)

the general Ability to Repay underwriting standards (12 C.F.R. 1026.43(c));

e)

refinancing of non-standard mortgages (12 C.F.R. 1026.43(d));

f)

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

g)

Balloon-payment qualified mortgages made by certain creditors (12 C.F.R. 1026.43(f));

5.	The Equal Credit Opportunity Act, as implemented by Regulation B, 12 C.F.R. Part 1002, as set forth below:

iv)

with respect to a borrower that has waived the three (3) business day disclosure requirement, confirm that (a) the borrower has signed the waiver or other acknowledgment at least three (3) business days prior to consummation; and (b) that the lender has provided copies of appraisals and other written valuations at or prior to consummation.

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

7.	Federal and state specific high-cost provisions, as further enumerated in Schedule 1, attached hereto.

1.

Executive Summary - A written summary of the process used to review the loans, a results breakdown, and narrative tailored to agency grading.

2.

Data Discrepancy Loan Level Tape Compare- An electronic data file which reflects the discrepancies discovered during the due diligence review against the current ASF tape.

3.

Attestation Statement - Selene will provide the written statement as required by the applicable rating agencies.

4.

Reliance Letter(s) - Selene will provide written reliance letters, on mutually agreeable terms, for other transaction parties as requested by Client.

5.

ASF Tape-An electronic data file in ASF format is produced from the system and delivered to the rating agencies or location of your choice.

6.

Agency Exceptions- a report showing exceptions and all efforts made to clear the exception.

7.

Valuation Summary- a report detailing all valuation products review and/or obtained with respect to each asset and any variances from the original appraisal.

8.

Form 15E (17g10 requirement) –Selene will promptly provide a properly completed and executed Form ABS Due Diligence-15E after the due diligence services described in this SOW are completed.  The Form ABS Due Diligence-15-E will not contain detailed findings, or personally identifiable information of individual borrowers.

o

The individuals performing the aforementioned original appraisal assessment are not persons providing valuations for purposes of the Uniform Standards of Professional Appraisal Practice (“USPAP”) or necessarily licensed as appraisers under Federal or State law, and the services being performed by such persons do not constitute “appraisal reviews” for purposes of USPAP or Federal or State law.

o

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