MORGAN STANLEY RESIDENTIAL MORTGAGE LOAN TRUST 2026-NQM11 ABS-15G
Exhibit 99.3
EXECUTIVE
SUMMARY
Third Party Due Diligence Review
September 30, 2026
Overview
Consolidated Analytics, Inc (“Consolidated Analytics”), a third-party due diligence provider, performed the review described below on residential mortgage loans originated by Morgan Stanley Mortgage Capital Holdings LLC (the “Client”). The review included a total of 560 residential mortgage loans in connection with certain MSRM 2026 October Securitization transactions (each a “Securitization”). The Review was conducted from September 2025 through September 2026 on mortgage loans originated between September 2025 and July 2026.
Scope of Review
Credit Review
Consolidated Analytics performed a “Credit Review” to verify compliance with guidelines in effect at the time of loan origination, or other guidelines provided by Client prior to review, and ensure the characteristics used by the underwriter are supported by the file documentation; and determine whether any loans outside of those guidelines contain legitimate and approved exceptions with compensating factors.
The Credit Review attempted to confirm the following:
| a. | QM or ATR Validation / Review of 8 Key Underwriting Factors |
| i. | Income / Assets |
| ● | Validate borrower(s) monthly gross income |
| ● | Validate funds required to close, required reserves |
| ● | Review file documentation for required level of income and asset verifications |
| ii. | Employment Status |
| ● | Review file documentation for required level of employment |
| iii. | Monthly Mortgage Payment |
| ● | Confirm program, qualifying rate, terms |
| iv. | Simultaneous Loans |
| ● | Validate all concurrent loans are included in the DTI to properly assess the ability to repay |
| v. | Mortgage Related Obligations : PITI, HOA, PMI, etc. |
| ● | Validate subject loan monthly payment (PITI) and associated obligations |
| vi. | Debts / Obligations |
| ● | Validate monthly recurring liabilities |
| vii. | DTI and/or Residual Income |
| ● | Validate debt-to-income ratio (DTI) based upon income and debt documentation provided in the file |
| ● | Documentation meets Appendix Q requirements for QM Loans |
| viii. | Credit History |
| ● | Review credit report for credit history and required credit depth including any / all inquiries |
| ● | Determine representative credit score from credit report |
| b. | Validate loan-to-value (LTV) and combined loan-to-value |
| c. | Review borrower’s occupancy |
| d. | Validation through third party resource of the subject properties most recent twelve (12) month sales history |
| e. | Confirm sufficient evidence in loan file, by reviewing the underwriter’s decision to approve the loan based upon the borrower’s income, debt, and credit history, to support borrower’s willingness and ability to repay the debt |
| f. | Confirm that Final 1003 is sufficiently completed |
| g. | Provide Audit 1008 with accurate data based on file documentation |
| h. | Confirm Loan Approval conditions were met |
| i. | Review condominium questionnaire to verify all information is complete, prepared by an authorized representative, and address any red flags that may deem condominium project ineligible |
| j. | General QM for any loans originated under the GQM Rule |
| i. | Pricing Thresholds: |
| a. | Pricing for First Lien Loans: |
| i. | 2.25% for a first-lien covered transaction with a loan amount greater than or equal to the applicable dollar amount threshold; and |
| ii. | 3.5% for a first-lien covered transaction with a loan amount greater than or equal to the applicable dollar amount threshold; and |
| iii. | 6.5% for a first-lien covered transaction with a loan amount less than the applicable dollar amount threshold. |
| b. | Pricing for Subordinate Lien Loans: |
| i. | 3.5% for a subordinate-lien covered transaction with a loan amount greater than or equal to the applicable dollar amount threshold; and |
| ii. | 6.5% for a subordinate-lien covered transaction with a loan amount less than the applicable dollar amount threshold. |
| c. | Pricing for Manufactured Homes: |
| i. | 2.25% for a first-lien covered transaction secured by a manufactured home with a loan amount equal to or greater than the applicable dollar amount threshold; and |
| ii. | 6.5% for a covered transaction secured by a manufactured home with a loan amount less than applicable dollar amount threshold. |
| ii. | Consider Income and Assets: |
| ○ | Consumer’s current or reasonably expected income or assets (other than the value of the dwelling that secures the loan; |
| ○ | The consumer’s debt obligations, alimony, child support; and |
| ○ | The monthly DTI or residual income. |
| iii. | Verification of Income and Assets: |
| a. | Verification of compliance with one of the “safe harbor” guidelines will meet the QM verification requirement. A creditor is allowed to “mix and match” provisions of the different guidelines rather than only apply one guideline per loan. |
The specific guidelines that the CFPB is designating for the safe harbor are: The GQM Rule provides that if the creditor verifies the consumer’s income or assets, debt obligations, alimony, child support, and monthly DTI or residual income by meeting the standards of certain specified third-party underwriting manuals, then a creditor is presumed to have complied with the verification requirement. These specified manuals are:
| i. | Chapters B3-3 through B3-6 of the Fannie Mae Single Family Selling Guide, published June 3, 2020; |
| ii. | Sections 5102 through 5500 of the Freddie Mac Single-Family Seller/Servicer Guide, published June 10, 2020; |
| iii. | Sections II.A.1 and II.A.4-5 of the Federal Housing Administration’s Single Family Housing Policy Handbook, issued October 24, 2019; |
| iv. | Chapter 4 of the U.S. Department of Veterans Affairs’ Lenders Handbook, revised February 22, 2019; |
| v. | Chapter 4 of the U.S. Department of Agriculture’s Field Office Handbook for the Direct Single Family Housing Program, revised March 15, 2019; and |
| vi. | Chapters 9 through 11 of the U.S. Department of Agriculture’s Handbook for the Single Family Guaranteed Loan Program, revised March 19, 2020. |
Compliance Review
Consolidated Analytics performed a “Compliance Review” to determine, as applicable, to the extent possible and subject to the caveats below, whether the loan complies with applicable regulatory requirements as noted below, each as amended, restated and/or replaced from time to time. In relation to cash out refinances of investment property loans, documentation provided in the loan file will be reviewed only to validate the use of cash out proceeds for business purposes at the origination/consummation of the loan. In the event use of proceeds cannot be validated, or are deemed to be utilized for consumer purposes, the loan would then be subject to a “Compliance Review” of applicable regulatory requirements as noted below, each as amended, restated and/or replaced from time to time. The Compliance Review included the following:
| a. | Test Loan Estimate(s) for accuracy and completeness as well as timing requirements as required by TRID Regulations |
| b. | Test Closing Disclosure(s) for accuracy and completeness as well as timing requirements as required by TRID Regulations |
| c. | Tolerance Testing |
| i. | Compare Loan Estimate and Closing Disclosures |
| ii. | Identify Tolerance Violations and applicable cost to cure |
| d. | Comprehensive review of Closing Disclosure to determine transaction accuracy |
| e. | Recalculation of APR and Finance Charge |
| f. | Testing of: |
| i. | Federal High-Cost Mortgage provisions |
| ii. | Federal Higher Priced Mortgage Loans provisions |
| iii. | Local and/or State Anti-predatory and High-Cost provisions |
| iv. | HOEPA Points and Fees |
| g. | Determine whether specified federal disclosures were provided timely based upon comparison of the application date to the dates on such disclosures |
| i. | Service Provider List |
| ii. | Home Ownership Counselling Disclosure |
| iii. | ARM Disclosure |
| h. | Compliance with QM as it relates to: |
| i. | APR Test |
| ii. | Points & Fees Test |
| iii. | Prepayment Penalty Test |
| iv. | Product Eligibility Testing |
| i. | Notice of Right to Cancel (Rescission) Review |
| i. | Confirm transaction date, expiration date, and disbursement date |
| ii. | Confirm document is properly executed by all required parties to the transaction |
| iii. | Confirm the correct Right of Rescission document was executed for the transaction type |
| j. | Confirm through NMLS the loan originator and originating firm’s license status was active and properly disclosed on appropriate loan documents |
| k. | Check the Loan participants against the exclusionary list provided by Client or by the purchaser of the Loan(s) |
| l. | Review closing documents to ensure that the Mortgage Loan information is complete, accurate, and consistent with other documents; Confirm collateral documents have been recorded or sent for recording |
The Compliance Review did not include any federal, state or local laws, constitutional provisions, regulations or ordinances that are not expressly enumerated above. Furthermore, the findings reached by Consolidated Analytics are dependent upon receiving complete and accurate data regarding the loans from loan originators and other third parties upon which Consolidated Analytics is relying in reaching such findings.
Valuation Review
Consolidated Analytics performed a “Valuation Review,” which included the following:
| a. | Review original appraisal, determination that property is in “average” condition or better, or property requires cosmetic improvements (as defined by the appraiser) that do not affect habitability. Should an area of concern be identified with the condition of the property, Consolidated Analytics will alert Client. |
| b. | Review appraisal, determination that property is completely constructed and appraisal is on an “as is basis,” or property is identified as not completely constructed by originating appraiser. |
| c. | Review and determine if the appraisal report was performed on appropriate GSE forms and if the appraiser indicated in the body of the subject appraisal that the appraisal conforms to USPAP standards. |
| d. | Review and determine the relevance of the comparable properties and ensure that a rational and reliable value was provided and supported as of the effective date of the Origination Appraisal. |
| e. | Review adjustments (line item, net and gross adjustments) to ensure they are reasonable. |
| f. | Ensure that the appraisal conforms to the guidelines provided from the Client. |
| g. | Review appraisal to ensure all required documents were included. |
| h. | Review location map provided within the appraisal for external obsolescence. |
| i. | Ensure highest and best use and zoning complies with guidelines. |
| j. | Confirm there are no marketability issues that affect the subject property. |
| k. | Ensure subject property does not suffer any functional obsolescence. |
| l. | Where applicable, determine if the file did not contain the appraisal or other valuation method and a review could not be performed. |
| m. | Additional valuation products were not required when the CU score provided was 2.5 or below or the appraisal was eligible for FHLMC Collateral Rep and Warrant Relief. In the event the CU score was greater than 2.5, or the appraisal was Not Eligible for FHLMC Collateral R&W Relief, an additional valuation product was obtained to confirm value was supported within 10% tolerance. Based on guidance from the seller, secondary valuation products may have been provided on loans that had an acceptable CU score or were Eligible for FHLMC R&W Relief. |
Consolidated Analytics applied a cascade methodology to determine if the original appraised value was reasonably supported when compared to an independent third-party valuation product.
For loans reviewed in a post-close valuation review scenario (560 loans in total):
Thirty-five (35) loans had an AVM, fifteen (15) loans had a Secondary Appraisal, and two hundred fifty-nine (259) loans had Desk Reviews. Consolidated Analytics has independent access to the valuation products ordered by the Client.
If a loan with an AVM or Desk Review fell outside of a -10% tolerance, had an AVM FSD score that exceeded allowable thresholds, or was inconclusive, then an additional secondary valuation product was obtained. There were three (3) occurrences of this. In these instances, one (1) Desk Reviews, zero (0) Field Reviews, and two (2) Secondary Appraisals were obtained, all of which supported value.
There were zero (0) PIW loans.
Product totals may not sum due to multiple products for each loan
TAPE INTEGRITY REVIEW RESULTS SUMMARY
Of the five hundred sixty (560) mortgage loans reviewed, two hundred seventy (270) unique mortgage loans (48.21% by loan count) had a total of five hundred sixty-five (565) discrepancies across fifty-five (55) data fields. A blank or zero value on the data tape when an actual value was captured by Consolidated Analytics was not treated as a data variance.
| Fields Reviewed | Discrepancy Count | Percentage |
| Qualifying All Borrower Residual Income | 78 | 13.81% |
| Qualifying Total Reserves Number of Months | 52 | 9.20% |
| DSCR | 47 | 8.32% |
| MIN No | 39 | 6.90% |
| Property Value | 38 | 6.73% |
| Application Date | 38 | 6.73% |
| Amortization Term | 27 | 4.78% |
| Qualifying Total Debt Income Ratio | 22 | 3.89% |
| PITIA | 21 | 3.72% |
| Note Date | 20 | 3.54% |
| Property Type | 15 | 2.65% |
| ULI | 15 | 2.65% |
| Qualifying FICO | 14 | 2.48% |
| T&I | 12 | 2.12% |
| T & I Payment | 10 | 1.77% |
| Qualifying CLTV | 10 | 1.77% |
| Lock Date | 9 | 1.59% |
| P&I | 8 | 1.42% |
| Verified Doc Type | 7 | 1.24% |
| Calculated DSCR | 7 | 1.24% |
| Credit QM/ATR Designation | 6 | 1.06% |
| Loan Purpose | 5 | 0.88% |
| Qualifying LTV | 5 | 0.88% |
| Loan Amount | 5 | 0.88% |
| Mo Pymt (P&I) | 5 | 0.88% |
| Prepayment Penalty | 4 | 0.71% |
| Seller Name | 3 | 0.53% |
| Maturity Date | 3 | 0.53% |
| First Payment Date | 3 | 0.53% |
| Interest Rate | 3 | 0.53% |
| Originator Doc Type | 2 | 0.35% |
| Total Qualified Assets Available | 2 | 0.35% |
| Borrower Appraisal Receipt Date | 2 | 0.35% |
| Escrows | 2 | 0.35% |
| Closing/Settlement Date | 2 | 0.35% |
| Qualifying Total Monthly Liabilities | 2 | 0.35% |
| Loan Product Type | 2 | 0.35% |
| Co Borrower First Name | 2 | 0.35% |
| Original LTV | 2 | 0.35% |
| Originator QM Status | 1 | 0.18% |
| Amortization Type | 1 | 0.18% |
| Street Address | 1 | 0.18% |
| Monthly Taxes | 1 | 0.18% |
| Closing Date | 1 | 0.18% |
| Qualifying Rent | 1 | 0.18% |
| Property No Units | 1 | 0.18% |
| Lock Term (Days) | 1 | 0.18% |
| Occupancy | 1 | 0.18% |
| Number of Units | 1 | 0.18% |
| Total Liquid Assets Available For Close | 1 | 0.18% |
| Property City | 1 | 0.18% |
| Co Borrower Last Name | 1 | 0.18% |
| Qualifying Value | 1 | 0.18% |
| Sales Price | 1 | 0.18% |
| Origination Date | 1 | 0.18% |
| Grand Total | 565 | 100.00% |
Summary of Results
OVERALL RESULTS SUMMARY
Final Loan Grades
| Overall Loan Results: | |||
| Event Grade | Loan Count | Original Principal Balance | Percent of Sample |
| Event Grade A | 502 | $219,476,901.00 | 89.64% |
| Event Grade B | 58 | $45,883,512.00 | 10.36% |
| Event Grade C | 0 | $0.00 | 0% |
| Event Grade D | 0 | $0.00 | 0% |
| Total Sample | 560 | $265,360,413.00 | 100.00% |
| Credit Results: | ||
| Event Grade | Loan Count | Percent of Sample |
| Event Grade A | 526 | 93.93% |
| Event Grade B | 34 | 6.07% |
| Event Grade C | 0 | 0% |
| Event Grade D | 0 | 0% |
| Total Sample | 560 | 100.00% |
| Compliance Results: (As applicable, 368 loans within the population did not receive a Compliance Review) | ||
| Event Grade | Loan Count | Percent of Sample |
| Event Grade A | 172 | 89.58% |
| Event Grade B | 20 | 10.42% |
| Event Grade C | 0 | 0% |
| Event Grade D | 0 | 0% |
| Total Sample | 192 | 100.00% |
| Valuation Results: | ||
| Event Grade | Loan Count | Percent of Sample |
| Event Grade A | 551 | 98.39% |
| Event Grade B | 9 | 1.61% |
| Event Grade C | 0 | 0% |
| Event Grade D | 0 | 0% |
| Total Sample | 560 | 100.00% |
Exception Category Summary
The table below summarizes the individual exceptions which carried an associated “A”, “B”, “C”, or “D” level exception grade. One loan may have more than one exception. In such cases, the exception resulting in the lowest grade would drive the loan grade for that component of the review. The overall loan grade is the lowest grade for any one review scope (ex. a loan with a Compliance Grade of “B”, a Credit Grade of “A”, and a Property Grade of “A” would receive an overall Loan Grade of “B”).
| Exception Type | Exception Level Grade | Exception Category | Total |
| Credit | A | No Credit Findings | 388 |
| Entity Documentation - Missing or Defective | 11 | ||
| Deed Missing or Defective | 7 | ||
| Income and Employment Do Not Meet Guidelines | 5 | ||
| Missing verification of taxes, insurance, and/or HOA fees for non-subject property | 5 | ||
| Missing Lender Income Calculation Worksheet | 5 | ||
| Missing VOM or VOR | 4 | ||
| Closing Protection Letter Missing or Defective | 4 | ||
| Audited DTI Exceeds Guideline DTI | 4 | ||
| Title Insurance Missing or Defective | 4 | ||
| Approval/Underwriting Summary Not Provided | 3 | ||
| Audited Reserves are less than Guideline Required Reserves (Number of Months) | 3 | ||
| Audited Reserves are less than Guideline Required Reserves (Dollar Amount) | 3 | ||
| Borrower 2 Non-US Citizen Identification Document Missing | 3 | ||
| Asset Documentation Missing or Defective | 3 | ||
| Borrower Non-US Citizen Identification Document Missing | 3 | ||
| Flood Insurance Policy Missing | 3 | ||
| Insufficient Assets to Close | 2 | ||
| Application Profile Missing | 2 | ||
| Subject Property Lease - Missing or Defective | 2 | ||
| Background Report Aged | 2 | ||
| Hazard Insurance Missing or Defective | 2 | ||
| Borrower 1 3rd Party VOE Prior to Close Missing | 2 | ||
| Asset 1 Does Not Meet Guideline Requirements | 2 | ||
| Borrower 1 Credit Report is Missing | 2 | ||
| Third Party Fraud Report Partially Provided | 2 | ||
| Borrower 1 Gap Credit Report is Missing | 2 | ||
| Guideline Seasoning not Met | 2 | ||
| Borrower 2 3rd Party VOE Prior to Close Missing | 2 |
| Hazard Insurance Policy is Missing | 2 | ||
| Borrower Contributions Do Not Met Guideline Minimum | 2 | ||
| Missing Verification of Subject Property Taxes, Insurance, HOA or Other Payments | 2 | ||
| Appraisal Review - Missing | 2 | ||
| PUD Rider is Missing | 2 | ||
| Asset Qualification Does Not Meet Guideline Requirements | 2 | ||
| Third Party Fraud Report not Provided | 2 | ||
| DSCR Minimum Not Met | 2 | ||
| Tradelines do not meet Guideline Requirements | 2 | ||
| Assets do not meet guideline requirements | 2 | ||
| Verified Liquid Assets Insufficient For Closing | 2 | ||
| Mortgage Payment History Missing or Defective | 1 | ||
| Title Insurance Coverage - Inadequate Coverage | 1 | ||
| Borrower 1 Paystubs Less Than 1 Month Provided | 1 | ||
| Evidence of Primary Residence and Rent-Free Scenario Missing or Defective | 1 | ||
| Missing Property Tax Cert | 1 | ||
| Excessive Seller Contributions | 1 | ||
| Purchase Contract is Missing | 1 | ||
| Flood Certificate Missing | 1 | ||
| The Note is Missing | 1 | ||
| Flood Insurance Expiration Date is before the Disbursement Date | 1 | ||
| Missing income documentation | 1 | ||
| Borrower 2 Gap Credit Report is Missing | 1 | ||
| Audited HCLTV Exceeds Guideline HCLTV | 1 | ||
| Fraud Report Shows Uncleared Alerts | 1 | ||
| Other Property Insurance Policy Effective Date is after the Disbursement date | 1 | ||
| Guarantor Identification Missing or Defective | 1 | ||
| Rent Loss Coverage Not Sufficient | 1 | ||
| Borrower 2 IRS Transcripts Do Not Match Income Docs | 1 | ||
| The Initial 1003 is Missing | 1 | ||
| Hazard Insurance Effective Date is after the Disbursement Date | 1 | ||
| Desk Review Variance > 10% | 1 | ||
| Asset 2 Missing | 1 | ||
| Borrower 1 Business Bank Statements Missing | 1 | ||
| Borrower 1 CPA Letter Missing | 1 | ||
| Approval/Underwriting Summary Partially Provided | 1 | ||
| Hazard Insurance Policy is Partial | 1 | ||
| Borrower 1 IRS Transcripts Do Not Match Income Docs | 1 | ||
| Verification of Rent (VOR)/Verification of Mortgage (VOM) Document is incomplete | 1 | ||
| Audited LTV Exceeds Guideline LTV | 1 |
| B1 Tax Preparer Credential Verification Does Not Meet Guidelines | 1 | ||
| Credit Event – Requirement Not Met | 1 | ||
| HO6 Master Insurance Policy is Missing | 1 | ||
| Credit Report Missing or Defective | 1 | ||
| Housing History Does Not Meet Guideline Requirements | 1 | ||
| Release of Lien/Subordination Agreement/Satisfaction Missing or Defective | 1 | ||
| Audited CLTV Exceeds Guideline CLTV | 1 | ||
| Sales Contract Missing or Defective | 1 | ||
| Income/Employment General | 1 | ||
| The Deed of Trust is Not Executed | 1 | ||
| Insufficient Assets for Reserves | 1 | ||
| The Note is Incomplete | 1 | ||
| Asset 3 Missing | 1 | ||
| The Note is Not Executed | 1 | ||
| Missing Background Check | 1 | ||
| DSCR is less than guideline minimum | 1 | ||
| Missing Business Entity Formation Document | 1 | ||
| Asset 2 Does Not Meet Guideline Requirements | 1 | ||
| Missing Credit Report Supplement | 1 | ||
| Borrower 2 CPA Letter Missing | 1 | ||
| Missing explanation and supporting documentation for large deposit(s) | 1 | ||
| HO6 Insurance Policy Expiration Date is before the Note Date | 1 | ||
| HO-6 Insurance Policy is Missing | 1 | ||
| Total Credit Grade (A) Exceptions: | 556 | ||
| B | Approval/Underwriting Summary Partially Provided | 4 | |
| Title Coverage is Less than Subject Lien | 4 | ||
| Hazard Insurance Missing or Defective | 4 | ||
| Significant Derogatory Credit Event – Requirement Not Met | 3 | ||
| Non-Occupant Borrower Requirements Not Met | 3 | ||
| Excessive LTV Ratio | 3 | ||
| Housing History Does Not Meet Guideline Requirements | 3 | ||
| DSCR Restrictions | 2 | ||
| Approval/Underwriting Summary Not Provided | 2 | ||
| Short Term Rental Documentation Missing or Defective | 2 | ||
| Missing letter of explanation | 1 | ||
| Maximum Loan Amount Exceeded | 1 | ||
| Title Insurance Missing or Defective | 1 | ||
| Audited HCLTV Exceeds Guideline HCLTV | 1 | ||
| Minimum Credit Trade Line Requirement Not Met | 1 | ||
| Audited Loan Amount is greater than Guideline Maximum Loan Amount | 1 | ||
| First Time Homebuyer | 1 |
| Audited LTV Exceeds Guideline LTV | 1 | ||
| Audited DTI Exceeds Guideline DTI | 1 | ||
| Audited CLTV Exceeds Guideline CLTV | 1 | ||
| Income and Employment Do Not Meet Guidelines | 1 | ||
| Borrower 2 3rd Party VOE Prior to Close Missing | 1 | ||
| Insufficient Assets to Close | 1 | ||
| Total Credit Grade (B) Exceptions: | 43 | ||
| Compliance | A | No Compliance Findings | 112 |
| Higher-Priced Mortgage Loan Test | 19 | ||
| eSigned Documents Consent is Missing | 16 | ||
| Charges That Cannot Increase Test | 14 | ||
| Missing Required Affiliated Business Disclosure | 8 | ||
| Initial Closing Disclosure Delivery Date Test | 6 | ||
| Lender Credits That Cannot Decrease Test | 6 | ||
| Charges That In Total Cannot Increase More Than 10% Test | 5 | ||
| Initial Loan Estimate Delivery Date Test (from application) | 3 | ||
| Evidence of Appraisal Delivery to Borrower not Provided or Late (12 CFR 1002.14(a)(1)) | 3 | ||
| CA AB 260 Higher-Priced Mortgage Loan Test | 2 | ||
| Homeownership Counseling Disclosure Is Missing | 2 | ||
| Intent to Proceed is Missing | 2 | ||
| TILA Finance Charge Test | 1 | ||
| Revised Loan Estimate Delivery Date Test (prior to consummation) | 1 | ||
| TRID: Missing Closing Disclosure | 1 | ||
| Clarification of Application Date | 1 | ||
| Texas F2 Notice for Home Equity Disclosure Not Provided Within 3 Days of Application Date or 12 Days of Closing Date | 1 | ||
| Initial Loan Estimate Delivery Date Test (prior to consummation) | 1 | ||
| TILA Right of Rescission Test | 1 | ||
| NY Subprime Home Loan Test | 1 | ||
| MA 209 CMR 32.35 Higher-Priced Mortgage Loan Test | 1 | ||
| RESPA Homeownership Counseling Organizations Disclosure Date Test | 1 | ||
| Total Compliance Grade (A) Exceptions: | 208 | ||
| B | Evidence of Appraisal Delivery to Borrower not Provided or Late (12 CFR 1002.14(a)(1)) | 7 | |
| Charges That Cannot Increase Test | 3 | ||
| Missing Required Affiliated Business Disclosure | 2 | ||
| Incorrect rescission model used - RTC form model H-8 used for Same Lender or Lender Affiliate Refinance | 1 | ||
| eSigned Documents Consent is Missing | 1 | ||
| Lender Credits That Cannot Decrease Test | 1 | ||
| Charges That In Total Cannot Increase More Than 10% Test | 1 | ||
| RESPA Homeownership Counseling Organizations Disclosure Date Test | 1 |
| TILA Finance Charge Test | 1 | ||
| Final CD: Non-Escrowed Property Costs over Year 1 description is missing or inaccurate | 1 | ||
| Homeownership Counseling Disclosure Is Missing | 1 | ||
| Total Compliance Grade (B) Exceptions: | 20 | ||
| Property | A | No Property Findings | 175 |
| Appraisal Review - Missing | 38 | ||
| Hazard Insurance Missing or Defective | 7 | ||
| Third Party Valuation Product Not Provided within 10% Tolerance | 4 | ||
| Ineligible Property | 3 | ||
| Market Rent - Missing or Defective | 3 | ||
| Condo Approval Missing | 2 | ||
| HOA Questionnaire is Missing | 2 | ||
| The appraiser was not licensed (Primary Value) | 1 | ||
| Subject Property Lease - Missing or Defective | 1 | ||
| Appraisal Missing or Defective | 1 | ||
| Condo Questionnaire Missing or Defective | 1 | ||
| The appraisal was completed “Subject To” and the Completion Certificate in file is incomplete. | 1 | ||
| Flood Certificate Missing or Defective | 1 | ||
| Flood Insurance Missing or Defective | 1 | ||
| Flood Certification/Determination - Missing | 1 | ||
| Completion Report or 1004D - Missing | 1 | ||
| Total Property Grade (A) Exceptions: | 243 | ||
| B | Hazard Insurance Missing or Defective | 2 | |
| Ineligible Property – Square Footage | 1 | ||
| Desk Review Variance > 10% | 1 | ||
| Non-Occupant Borrower Requirements Not Met | 1 | ||
| Property/Appraisal General | 1 | ||
| Third Party Valuation Product Not Provided within 10% Tolerance | 1 | ||
| Condo Approval Missing | 1 | ||
| Ineligible Property | 1 | ||
| Total Property Grade (B) Exceptions: | 9 |
Event Grade Definitions
| Final Loan Grade | |
| A | Loan meets Credit, Compliance, and Valuation Guidelines |
| B | The loan substantially meets published Client/Seller guidelines and/or eligibility in the validation of income, assets, or credit, is in material compliance with all applicable laws and regulations, and the value and valuation methodology is supported and substantially meets published guidelines. |
| C | The loan does not meet the published guidelines and/or violates one material law or regulation, and/or the value and valuation methodology is not supported or did not meet published guidelines. |
| D | Loan is missing documentation to perform a sufficient review. |
| Credit Event Grades | |
| A | The loan meets the published guidelines without any exceptions. Employment, income, assets and occupancy are supported and justifiable. The borrower’s willingness and ability to repay the loan is documented and reasonable. |
| B | The loan substantially meets the published guidelines, but reasonable compensating factors were considered and documented for exceeding published guidelines. Employment, income, assets and occupancy are supported and justifiable. The borrower’s willingness and ability to repay the loan is documented and reasonable. |
| C | The loan does not substantially meet the published guidelines. There are not sufficient compensating factors that justify exceeding the guidelines published. Employment, income, assets or occupancy are not supported and justifiable. The borrower’s willingness and ability to repay the loan were not documented or are unreasonable. |
| D | There was not sufficient documentation to perform a review, or the credit file was not furnished. |
| Compliance Event Grades | |
| A | The loan complies with all applicable laws and regulations. The legal documents accurately reflect the agreed upon loan terms and are executed by all applicable parties. |
| B | Nonmaterial exceptions identified but do not impact the enforceability of the mortgage loan or statute of limitations has expired on the loan. Remedy to cure or reasonably good faith effort to re-disclose was made to conform to applicable laws and regulations. All cures are fully documented by copies of the originator refund letter to the borrower, referencing the violation, canceled check, and proof of delivery. |
| C | The loan violates one material law or regulation. A benefit to the borrower cannot be determined. Required material disclosures are absent from the loan file, or the legal documents do not accurately reflect the loan terms agreed upon. All required applicants did not execute the documents. |
| D | There was not sufficient documentation to perform a review, or the required legal documents were not furnished. |
| Valuation Event Grades | |
| A | Secondary value is supported within 10% of the original appraisal value. AVM used as a secondary valuation product has a value within 10% of the original appraised value and an FSD score less than or equal to .15. The appraisal was performed on an “as-is” basis and the property is complete and habitable at origination. The appraiser was appropriately licensed, and the appraisal form is compliant with Uniform Standards of Professional Appraisal Practices (USPAP), Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) and satisfies applicable legal and regulatory requirements. |
| B | Additional secondary valuation products were obtained to support the original appraised value within 10%. The valuation methodology substantially meets the published guidelines, but reasonable compensating factors were considered and documented for exceeding guidelines. The appraisal was performed on an “as-is” basis and the property is complete and habitable. The appraiser was appropriately licensed and used GSE approved forms. |
| C | The value cannot be supported within 10% of the original appraisal. The valuation methodology did not meet the published guidelines and there were not sufficient compensating factors for exceeding published guidelines. The property is in below “average” condition, or the property is not complete or requires significant repairs. The appraisal was not performed on an “as is” basis. The appraiser was not appropriately licensed, or the appraisal was not performed using USPAP and FIRREA compliant appraisal forms |
| D | The appraisal is missing from the loan file or there was not sufficient valuation documentation to perform a review. AVM was used as a secondary value with a FSD > 0.15, or an AVM performed by a non-Fitch-reviewed vendor. |