Texas Veterans Land Board Housing Assistance

Texas Veterans Land Board Housing
Assistance Program
Citibank Correspondent Lending
Special Programs Division
Rev. 6/20/2016
Texas Veterans Land Board Eligibility
Veterans living in Texas are eligible if they:
Eligibility Requirements
•
At least 18 years of age
•
A Bona Fide and legal resident of Texas on the date of application and meet the following
requirements.
Service Requirements
1
•
An active duty military member.
•
A member of the Texas National Guard.
•
A reserve component military member having completed 20 qualifying year for retirement.
•
A Veteran having served at least 90 active duty days unless discharged sooner due to service
connected disability and not discharged dishonorably.
•
A surviving spouse of a Veteran listed as missing in action or whose death was service connected.
•
Have successfully repaid any previous TVLB loan
Texas Veterans Land Board Eligibility (Cont’d)
 Download Forms from www.texasveterans.com website
Required Forms
 Request for Certification – VLB Form 41
 Veteran’s Declaration of Eligibility – VLB Form 42
 DD-214/Statement of Service
 Verify Veteran has completed and signed all applicable forms
 Submit forms
 Via e-mail to certs@glo.texas.gov
 By fax to the Austin VLB office at 512-475-0936
 By mail: Texas Veterans Land Board P.O. Box 12873 Austin, Texas 78711-2873
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Request for Certification – VLB Form 41
3
Veteran’s Declaration of Eligibility – VLB Form 42
4
DD-214/Statement of Service
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Pricing
 Rates are published by TVLB every Monday morning and are good through Friday on
VLB’s website at www.texasveterans.com
 Current Interest Rate: *
 The lock period is 60 days
 Rate Reductions:
– Veteran’s w/ Disabilities:
.50 bps
– Disaster Relief Initiative:
.25 bps
*VLB Base Rate and rate reductions are subject to adjustment on the first business day of
each week.
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Program Options
Veterans with Disabilities Program
• .50% reduction of Note rate
• The Veteran must have a compensable service-connected disability of 30%
as verified by the U.S. Department of Veterans Affairs
• The TVLB will accept the following as evidence: Current Certificate of
Eligibility (COE) that reflects the disability compensation amount that is at
least 30 % based on VA’s compensation chart, VA Award Letter/Letter of
Indebtedness dated within 12 months of closing.
• Review the approved documentation to determine the Veteran has a
service-connected disability of at least 30% prior to obtaining an interest
rate commitment.
• Include a copy of the approved documentation in the file submission
package.
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Program Options
Disaster Relief Initiative
•
.25% reduction of Note rate
• For any VHAP- eligible Veteran whose primary residence (either owned or rented) was
destroyed by the Disaster and who qualifies for home purchase financing under VHAP
guidelines (see VLB bulletin #15-03 for further information)
• The eligible Veteran must have resided in a Texas county that has been declared a
disaster area (by either FEMA or the Texas Governor). A listing of applicable counties
can be found in the Governor’s proclamation of July 30, 2015, under his authority as
Governor pursuant to Section 418.014 of the Texas Government Code, 22 which is
available at the following website - http://gov.texas.gov/news/proclamation (“Disaster
Declaration”).
• In addition to standard VHAP eligibility, the Veteran’s residence must have been
destroyed by the event leading to the Disaster Declaration. Interested Veterans must
contact the VLB to obtain the required Disaster Program Affidavit prior to applying for a
loan with Citibank.
• Lenders must present to Citibank the proposed borrower’s “Notice of Eligibility” prior to
receiving a rate lock as the form will include verbiage from VLB indicating approval for
discount. The VHAP Certification of Eligibility Application has been revised and can be
found on the VLB website at http://www.glo.texas.gov/vlb/index.html along with the
Disaster Affidavit they will be required to complete.
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Affidavit – Disaster Relief Initiative
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Loan Registration
10

Notice of Eligibility must be
issued prior to obtaining a
lock confirmation. (Will
include approval for new
rate reduction)

Due to verification with
TVLB Administration, lock
process may be up to 48
hours to ensure rate and
eligibility. If Notice of
Eligibility is not issued when
lock is submitted this could
cause worse case pricing
based on the date the
Eligibility is received.

Lock is good for 60 days
which includes closed loan
delivery to Citibank

NOTE: Items with arrows
are common information we
see missing when lock is
submitted and we may
require an updated lock
request.

If your client is an applicant
for the Veterans with
Disabilities Program, you
must check the designated
box and provide the correct
rate information
Loan Eligibility

Products: VA, FHA and Conventional

Loan Limit: $417,000 (not to exceed FHA limits for area)

Maximum LTV:

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•
Conventional: One Note-95%
•
FHA: maximum allowed by FHA
•
VA: max allowed by VA and the guaranty and down payment must equal 25% of the
lesser of the CRV or sales price
Eligible Terms: 15-, 20-, 25- or 30-year loan terms
Loan Eligibility (Cont’d)
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
Eligible Lending Area: wholly located within the boundaries of the State of Texas

No Maximum Acreage

Owner Occupied Only

Assumptions generally not allowed

Down Payment Assistance: borrowers can obtain a gift from a relative or a grant from an
employer or a public agency (gifts or grants from non-profit organizations need prior
approval)

Refinances, except Construction to Permanent refinances, are not allowed

Construction to Permanent Financing
•
Interim financing cannot exceed 24 months
•
Veteran must sign the TVLB Take Out Affidavit and provide a copy of the interim
financing agreement (as referenced on Renewal and Extension Rider)
•
2-4 family units are NOT eligible
•
“One-Time Closings” are NOT eligible
Property Types
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
Single Family Detached/Attached

Townhouse or Town Home

Condominium

2-4 units constructed at least 5 years prior to loan closing

Manufactured Housing
•
FHA/VA only per GNMA guidelines
•
SFR
•
Factory Built after June 15, 1976
•
Delivered on site in at least two sections
•
Permanent Foundation
•
Dimensions not less than 20 ft x 40 ft
•
Sloping Roof
•
Not Eligible: Mobile Homes
ENERGY STAR Program
 All new construction loans must meet the U.S. Environmental Protection Agency’s
(EPA) ENERGY STAR rating as an energy efficient home or A HERS Index Score of
75 or less following the RESNET National Home Energy Rating Standards and must
have an energy rating Certificate that documents the HERS Index score of 75 or less
to be eligible for purchase. We will accept all versions as long as the rating, address
and HERS rater signature is on the form.
 A government-backed symbol for a home that is significantly more energy efficient
than a standard home
 Rating obtained from an independent third-party who is accredited by RESNET
(http://www.natresnet.org/)
 Property must achieve an ENERGY STAR rating or A HERS Index score of no more
than 75 to participate in the VHAP program
 Copy of the ENERGY STAR certificate or TVLB approved HERS certificate with
score must be included in file
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Fraud Report
Corr Manual Section 911 - Fraud Mitigation
Fraud Mitigation

All loan files submitted for purchase must include a commercially available current, automated,
composite fraud report covering six basic elements ("Fraud Report").
Correspondents are required to run and provide a copy of a Fraud Report for each loan submitted to Citi
for purchase and show evidence of resolution for any reported issue. The Report and evidence of
resolution, if needed, must be provided prior to loan purchase.
Alert Types
At a minimum, the following six elements must be addressed in the Fraud Report:
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Alert Types
Require Elements in Alert Type
Social Security Number ("SSN")
Verify borrower/co-borrower's SSN including, but not limited to, database checks to identify: Deceased, never been
issued, invalid, SSN not associated with name, date of birth date range inconsistent with SSN issue date, additional
names associated with the SSN
Address
Verify borrower/co-borrower's current address
Phone Number
Verify borrower/co-borrower's current phone number
Employment
Verify borrower/co-borrower's current employer's address
Liabilities
Must run a MERS report on borrower/co-borrower and confirm no undisclosed real estate liability obtained before closing
subject loan.
Property alerts
Subject property address verification
Fraud Report
Corr Manual Section 911 - Fraud Mitigation
Acceptable Vendors
There are many vendors able to supply a Fraud Report. Listed below are vendors whose reports using the above elements Citi has found
acceptable.
Company
Fraud Tool Name
CoreLogic1
LoanSafe Fraud Manager, Encore, LoanSafe Risk Manager, and LoanSafe 2.0
Interthinx
Fraud GUARD
Data Verify
(a CBCInnovis family company)
DRIVE
Kroll Factual Data
Risk Suite Fraud Products
(Identity Report with Fraud Score, Collateral Fraud Analysis, and Income and Employment Fraud Analysis)
Digital Risk
Risk IQ
LPS Verification Bureau
1003 Appscan – must also include a MERS report
Veri-Tax
Veri-Tax Mortgage Fraud Report – must also include a MERS report
Lexis Nexis
Mortgage Fraud Report – must also include a MERS report
PitchPoint Solutions, Inc.
PitchPoint Mortgage Fraud Report
Avantus3
LoanShield Borrower Review2
1. CoreLogic - this company (a spinout of First American Corporation) provides products formerly offered by First American CoreLogic and
BasePoint Analytics. Encore is a hybrid product that combines a Credco tri-merge credit report with the CoreLogic LoanSafe 2.0 or Fraud Manager
Tools and MERS.
2.
In order to use Avantus LoanShield Borrower Review with MERS alerts, the lender must have an established MERS Member Number and have
provided it to Avantus prior to requesting the fraud report.
Appraiser-Monitor/Ineligible List
Corr Manual Section 502 - Appraiser Requirements
Appraiser Eligibility

In an effort to assist Correspondents in the selection of an appraiser, Citi posts an Appraiser- Monitor/Ineligible List (on the Forms
page of the Citi Correspondent website) instead of an Approved Appraiser List. Correspondents may use any appraiser NOT on the
Appraiser- Monitor/Ineligible List, subject to the other guidelines for appraisers and their appraisals set forth in this Manual.

The Appraiser- Monitor/Ineligible List will show two categories of appraisers:
1. Appraisers that will require "monitoring" will be identified on the list with the caption "AMC Field Review Required" and
Correspondents must take the following additional step: Correspondents submitting loans for purchase with an appraisal from
an appraiser designated on the list with the caption "AMC Field Review Required" will also be required to obtain a Field
Review from any Appraisal Management Company (AMC) to validate the finding of the original appraisal before the loan will
be considered further for purchase. The Field Review Appraiser used cannot appear on the Appraiser- Monitor/Ineligible List. If
a Field Review is ordered, verify the value of the Field Review is equal to or lower than the appraised value and the lowest
value should be used to close the loan. If the appraisal was ordered prior to the date the appraiser was added to the list, Citi
will review the appraisal for exception approval. if the appraisal was ordered after the appraiser was added to the list, a field
review from any Appraisal Management Company (AMC) is required to validate the finding of the original appraisal before the
loan will be considered further for purchase. The Field Review Appraiser used cannot appear on the AppraiserMonitor/Ineligible List.
2. Appraisers whose appraisals are ineligible for submission to us will be designated on the list with the caption "Appraiser
Ineligible" and the following rule will apply: Citi will not purchase loans based on appraisals prepared by appraisers
designated on the list with the caption "Appraiser Ineligible". If the appraisal was ordered prior to the date the appraiser was
added to the list, Citi will review the appraisal for exception approval; if the appraisal was ordered after the appraiser was
added to the list, the appraisal is not acceptable. A new appraisal must be ordered.
NOTE: Adherence to the Appraiser- Monitor/Ineligible List is required for all Conventional, FHA and VA loan transactions, including
bond, and VLB.

The Appraiser- Monitor/Ineligible List is posted on the Citi Correspondent website and updated daily. A website login is required to
access the list.
NOTE: Our review process for VA loans is to submit the appraisal to our Appraisal Collateral department for an additional review.
Once we receive those results we will notify the correspondent if additional items will be needed. There is nothing required from the
lender unless we notify you of additional items.
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Underwriting

Automated Underwriting
•
17
DU and LP are acceptable for Conventional, FHA and VA loans

Appraisals must provide for interior/exterior inspections. Appraisal Form 1004 is required.

Standard mortgage insurance coverage must be obtained regardless of the AUS findings.

Please follow agency guidelines for minimum FICO score.

Follow agency guidelines for DTI requirements.
Allowable Fees
 Reasonable and customary (e.g., 1% origination fee and actual costs for appraisal fees,
title insurance, credit report, etc.)
 1% Participation Fees (optional) on the Program Loan. (This fee may not be financed with
an FHA or VA loan.)
 No Discounts Allowed
 Review Fee:
– $200 Review fee (cannot be passed to veteran)
– $70 Tax Service Contract fee for government loans
– $89 Tax Service Contract fee for conventional loans
– $10 Life of loan Flood Monitoring fee
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Loan Packaging and Delivery
 Citi Special Programs File Checklist and Stacking Order
o Located at http://correspondent.citimortgage.com/SpecialPrograms/index.jsp under
Operational Guidelines, Citi Specific Program Guidelines, Exhibits, Exhibit #1 Citi File
Stacking Order.
 Turn time for initial file review is 4-5 business days. A pending letter is sent after review of
the file. A pended report is sent twice a week for all loans in pended status.
 Lenders are required to upload loan files to Citi’s secure website. Please contact customer
relations to set up a short training call at 800-967-2205.
 Loans are purchased every business day. Wire sent same day.
Citibank, N.A.
Attn: Correspondent Special Programs/TVLB
6400 Las Colinas Blvd
#CC1-45
Irving TX 75039
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Top Pre-Purchase Suspense
 Missing items listed on the NOV
 NOV required documentation is not fully completed (VA case number, signatures and dates)
 Incomplete 92900-A; missing signatures
 Documentation to determine the Veteran has a service-connected disability – Award letter
 Missing items listed on AUS findings
 VA form 1820 incomplete
 Missing or Incomplete Energy Star/HERS documents
 Breakdown of Origination Charge on HUD-1/Closing Disclosure
21
NOV Items
22

Common Items above are missing from the submission package

NOV # 2 Sometimes is marked for one but the other is submitted in the package

NOV # 5, 7 and 8 (if applicable)

NOV # 10 if marked Final Inspection must be from lender or appraiser specified

NOV # 12 Sometimes marked for one but the other is submitted in the package

NOV # 13
NOV Cont’d

23
Most common issues we
see is item is marked but
not in file at submission
92900A Discrepancies
18-20
To be completed by lender

24
To be completed by all
borrowers
The examples in the next two slides show items that normally are missing. FHA requires all 4 pages to
be completed on initial and final. VA requires pages 1-2 of the final.
92900A Discrepancies (Cont’d)
or
To be completed by the lender

25
FHA pages 3-4 most common fields missing
To be completed by all borrowers
Award letter (proof of disability)
Should be dated within a year of the note and
30% and above to qualify for the disability of .50
26
Missing items listed on AUS findings

27
Most common items missing when reference in the DU are, assets, and income documents. If
referenced in DU please provide best copies of documents obtained to underwrite the loan
1820 Form Discrepancies
Usually
missing
legal
description
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1820 (Cont’d)
To be completed by lender
To be completed by all borrowers
If sales price exceeds
value boxes D or E
must be completed
If active statement on
COE, this statement
must be checked
29
If not initialed by veteran
boxes 28B-28D must be
completed
Relationship Expectation and Performance Monitoring
PRE-PURCHASE
REVIEW (PPR)
Analyzes Loan Data /
Documents
QUALITY CONTROL
Performs PostPurchase Reviews To
Assess Manufacturing
Quality
YOUR SELF
MONITORING
OUR FEEDBACK
Customer
Performance
Accountability &
Monitoring
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• Reviews 100% of all loans – 4-10 business days (closed package to initial
suspense or purchase)
• Loans that do not meet data / documentation requirements are suspended and
not purchased
• Our expectation is to purchase one-touch loan submissions
• Performs Agency and government compliant loan reviews on a sample of
production
• Segments defects into three tiers, based upon risk of repurchase
• Our Tier 1 (high probability of repurchase) defect rate expectation is 5% or
below
• Review semi-monthly reporting, which displays common defects, trends, and
loan level data for research
• Take action to improve control environment to prevent defects from recurring
• Recognize interpretation gaps and solicit feedback in order to better align with
our policies
• Defect trends are reviewed monthly; if applicable, deliver tailored performance
review presentation that focuses on your trends
• Work with you to discover root causes of issues and recommend solutions
• Schedule meetings to assess control environment
• Provide notification of training opportunities and new Best Practice flyers
• Recommend a loss of underwriting delegation or approval eligibility for those
that are unable to perform at the expectation, or unwilling to collaborate with us
to address manufacturing issues
Quality First Tool Kits
• Reflecting our commitment, we have published a Quality Tool Kit to help you increase the quality of your originations
• The Tool Kit provides detail of our commitment, expectations, performance monitoring framework, common
manufacturing defects, resources and tools, and specific Best Practice fact sheets developed as a result of our top
post-purchase defects
• Visit the Solutions site, www.agentsite.com/solutions, to find additional ‘Quality First’ information or print any of the
Quality Tool Kit components
Partial List of available Best Practices:
31
•
Quality First
•
FHA Loan Quality Performance Tips
•
Tips For Quality Control
•
Income Documentation
•
Top Pre-Purchase Defects
•
Personal Gift Funds: Conventional
•
Conventional: Top Critical Errors
•
Personal Gift Funds: FHA
•
Completing HUD Form 92900-A
•
VA Loan Quality Performance Tips
•
Asset Verification
•
Verbal Verification of Employment
•
Assets – Paper Trail of Large Deposits
•
Verification of Mortgage
•
Automated Underwriting Systems (AUS)
•
CAIVRS
•
Debt Calculation
Top Post Purchase Defects
Defect
Incorrect
Income
Calculations
Incorrect
Debt
Calculations
32
Critical Issues
•
Incorrect net rental income calculations
•
Unreimbursed expenses not deducted
from gross income
•
Missing documentation showing
overtime / bonus income continuation
•
Excluding deferred student loans,
recently acquired debt, & debt not on
credit report
•
Student loan deferment expires within
12 months
•
Rental income / loss calculation errors
Solutions / Best Practices
•
Document calculations on
income analysis form (Fannie
Mae 1084 or Freddie Mac 91)
when W2 income is not present
•
Leverage our reference guide on
completing the 1084 or 91 form
•
Provide underwriter rationale
and documentation when
omitting a debt
•
Debts not present on credit
report but disclosed in file must
be addressed
Resources
 Citi Solutions
– Website: www.agentsite.com/solutions

When you log onto this site with your correspondent ID, you will find a copy of this Orientation
Overview. Additionally you will see an overview of the Citi Special Programs Website, a link to
the Citi Special Programs Website, and very importantly, our Best Practice documents, which will
assist you delivering loans that will be promptly and efficiently purchased.
 Citi Special Programs Website
– Website: correspondent.citimortgage.com/SpecialPrograms


33
Our website is where you will find bulletins, announcements, manuals, and forms, as well as
specific program information.
For more detailed information about the program, please refer to the Operational Guidelines Tab
and select Citi Special Programs Guidelines, Texas Veterans Land Board.
Contacts
Correspondent Special Programs Division
1-800-967-2205

Customer Relations Division
– Option 1, enter ISN, option 7
– Cspdallas@citi.com
Customer relations is available to assist with questions regarding loan scenarios, registrations, loan
status, suspense, purchase and post purchase items.
Additional Information can be located on the special programs website using the link below:
 http://correspondent.citimortgage.com/SpecialPrograms/index.jsp
Rev. 6/20/2016
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