MMC Initial Information Request



MULTI-STATE MORTGAGE COMMITTEE

Officially on Behalf of the Identified Joint States

INITIAL INFORMATION REQUEST

To: INSTITUTION

As indicated in the Joint Examination cover letter, the identified states are conducting a Joint Examination of INSTITUTION (INSTITUTION) with an on-site review date scheduled for June XX, 20XX. This information request is intended to provide the Joint Examination States with necessary information prior to the commencement of the on-site portion of the examination. Production dates for information are listed at the beginning of each section; however, as information becomes available I would appreciate receiving it on a flow basis.

An additional information request will be made prior to the on-site portion of the examination. As Examiner-in-Charge I am assigned as your primary contact for all Joint Examination issues. In this role I will be communicating with you frequently over the next few weeks. Please feel free to address any Joint Examination concerns with me directly and where necessary I will relay the concerns to the appropriate state.

If you should have any questions regarding the attached information request or the Joint Examination review process in general, please feel free to contact me at Msmith@state.pa.us or 717-772-XXXX. Thank you for your cooperation.

Sincerely,

Mike Smith, Financial Institutions Examiner

Multi-State Examiner-in-Charge

AUTHORIZING STATE SIGNATURES

Don Debastiani John Prendergast

Director, Bureau of Non-Depository Examinations Chief Risk Officer

PA Department of Banking MA Division of Banks

Charlie Fields, Jr. Darin Domingue

Non-Depository Entities Division Deputy Chief Examiner

NC Commissioner of Banks Office LA Department of Financial Institutions

Traci McCain Rodney E. Reed

Director, Mortgage Division Finance Bureau Chief

MS Department of Banking & Consumer Finance IA Division of Banking

Kevin Glendening Thomas J. Giallanza

Deputy Bank Commissioner Assistant Superintendent

KS Office of the State Bank Commissioner AZ Department of Financial Institutions

NOTE: THE ABOVE PARTIES ARE FOR ILLUSTRATION PURPOSES ONLY

Information Request: INSTITUTION

Index

Page

Section I Loan Portfolio Request 4

Section II Information Request 6

Section III Institution Questionnaire 10

Section IV Financials and Background Information 16

Attachment 1 Required Data Fields – Mortgage Loan Delinquency Report 17

Attachment 2 Attestation of Corporate Officer 20

Section I – LOAN PORTFOLIO REQUEST

Date Due: May XX, 20XX

Prior to beginning the onsite portion of the examination, the Joint Examination States will conduct an offsite review of your loan portfolio using an automated compliance solution. Use of the software will make our review more efficient and lessen your regulatory burden and overall cost. This process will be used to more effectively scope your loan portfolio. Please provide the electronic transaction data as instructed below for all real estate secured loans originated or closed in the Joint Examination States for the period beginning MM/DD/YYYY and ending MM/DD/YYYY.

Note: The Licensee Examination File (“LEF”) format is the only acceptable format for this process.

Instructions for providing electronic transaction data is below. Loan data is requested on loans funded or closed between MM/DD/YYYY and MM/DD/YYYY.

• Go to . Sign in to the site or if you have not yet registered, you will need to do so. This site contains all the instructions and information needed to create the LEF and complete the data submission process. This site will be used to transfer the requested loan data to the Joint Examination States. Complete all steps explained on .

o Contact all technology vendors that you employ or software providers which you have utilized to determine if they have the ability to create the LEF. If you use ComplianceEase®, contact your client support representative for special data-submission instructions.

o Include all real estate secured loans funded or closed in each Joint Examination State. Do not include cancelled or denied loans.

Section II – Information Request

Date Due: May 24, 2009

Please provide the following information and documents for INSTITUTION on a flow basis as available. Unless otherwise noted, the review period for the responses should be April 1, 2007 through March 31, 2009:

Lending Administration

1. Descriptions and program parameters for each type of real estate secured loan originated (please note if certain products are no longer offered). Indicate whether INSTITUTION offered or purchased:

a. Interest Only ARMs

b. Step ARMs (e.g. 2/28s, etc.)

c. Payment Option ARMs

d. Hybrid ARMs

e. Extended term loans (e.g. 40 year amortization)

f. Transactions where borrowers have subprime characteristics (e.g. low credit score)

g. Transactions with reduced documentation or no documentation

h. Transactions with simultaneous second lien mortgages

i. Transactions with prepayment penalties

j. Transactions with balloon payments

k. Transactions with no monthly payments escrowed for taxes, insurance or other charges

l. Reverse mortgage loans

m. Other (describe each additional type of loan offered or purchased)

2. Pricing and underwriting standards for all real estate secured loans originated.

3. Volume of originations and purchased loans by product type for all real estate secured loans.

4. The number of loans that were repurchased and the percentage of repurchased loans compared to total loans.

5. Copies of all policies, procedures, and standards in place during the examination period. If significant changes have been made since the review period, please describe. Policies should include, but are not limited to:

a. Third-party coverage (e.g. mortgage broker relationships, appraisers, etc.);

b. Direct and indirect origination activities;

c. Marketing and solicitation;

d. Underwriting;

e. Loan servicing;

f. Quality control, monitoring and management review;

g. Employee compliance training;

h. Compensation and incentives;

i. Investment lending; and

j. Secondary market activities.

6. Provide a list of all originators and lenders with whom you regularly did business, along with the estimated percentage of total activity conducted with each. In other words, if you were an originator, the list should include each lender for which you originated loans. If you were a lender, the list should include each originator you accepted loan submissions from.

7. A list of any entities from which servicing or ownership rights to mortgage loans were purchased.

8. A description of compensation/incentive programs, fees and overage guidelines, including third party compensation.

9. Descriptions of insurance or ancillary products offered in connection with real estate secured loans. If debt cancellation agreements were offered, please list separately.

10. A description of the method of conducting residential property appraisals, including the criteria used for appraising properties. If an outside appraiser or other organization provides this service, provide the firm’s name and a copy of its procedures.

11. Procedures for loans subject to Section 32 of Regulation Z to the Truth in Lending Act (HOEPA or High Cost Loans).

12. Procedures for providing notice of the right of rescission and disbursement of proceeds in rescindable transactions.

13. A description of the firm’s method(s) used to calculate the annual percentage rate (APR) for the various types of real estate secured loans and lines the firm extends.

14. Copies of notification forms used in conjunction with administering ARM rate changes for all products.

15. A copy of the billing error resolution policy and procedures for home equity transactions and copies of error resolution notices and related forms.

16. Copies of loan payment histories and monthly statements for two different customers who have had late payments for at least two consecutive months. Provide at least six months of account history, including the period in which payments were late. In addition, provide a copy of the original note signed by the borrower(s).

17. For each type of real estate secured open-end account offered, provide a copy of two customer periodic billing statements (front and back) for three consecutive months and a description of the method(s) used to calculate annual percentage rate (APR) changes. In addition, provide a copy of the original note signed by the borrower(s). Please do not provide employee accounts.

18. A copy of the firm's policy and procedures to:

a. Calculate escrow amounts for settlement and the annual analysis of monthly payments and

b. Notify borrowers of transfer of servicing.

Collections, Workouts and Modifications

1. Copies of all policies, procedures, standards, and training manuals for mortgage collection and loan workouts/modifications.

2. Sample copies of any reports produced and used for monitoring servicing, distressed accounts, (e.g., work-outs, modifications) and collections.

3. A copy (one each) of examples of all form letters sent to consumers concerning mortgage collections including loan workouts/modifications.

4. Provide a mortgage loan delinquency report for all real estate secured loans sixty (60) days or more delinquent as of March 31, 20XX. This information should be produced in an Excel spreadsheet using the fields and instructions provided in Attachment 1 to this request.

Regulatory Reports, Compliance Testing and Internal Audit

1. Copies of compliance risk assessments completed during the examination period.

2. Copies of all compliance-related regulatory review reports (state or federal) and compliance testing reports from April 1, 2007 to present.

3. A list of compliance related audits completed during the last five years.

Complaints and Litigation

1. A list of mortgage borrower complaints received from April 1, 2007 to present, along with the reason for the complaint and resolution of the complaint. Also, provide copies of reports used in reviewing or tracking the handling of consumer complaints processed during the review period.

2. A list (including current status/outcome) of any threatened, pending or settled litigation. Include:

a. The nature of the claim and the stage of the proceeding (including a probable trial date);

b. The amount in question

c. How management is responding or intends to respond to the claim (for example, contest the claim vigorously or seek an out of court settlement)

d. An estimate of the amount of the potential loss or the range of such loss

Marketing and Disclosures

1. All marketing materials, including but not limited to solicitations for non-conventional loan[1]. Samples should include, but are not necessarily limited to, printed materials (print ads, brochures, direct mailings, flyers, etc.), radio or television transcripts, telemarketing scripts, Internet screen shots, email solicitations, and any instructions on oral solicitations by sales staff.

2. A sample of communications used with consumers including:

a. Letters, notices, instructions, warnings, etc.

b. Monthly payment statements for each type of loan.

3. Copies of additional disclosures (those not required by federal or state law) and indicate when they were provided to the customer.

4. A description of the methodology used to select existing and potential customers for new originations, refinances and collection re-writes.

Current Business Plan

1. A copy of the current business plan. Identify any new or proposed material changes in business strategy. Include the mission statement, budget projections, and assumptions.

Attestation of Corporate Officer

1. The Attestation of Corporate Officer contained in Attachment 2 to this request must be completed by a duly authorized corporate officer.

2. The Attestation covers this entire request and any subsequent written requests made under this Joint Examination.

3. The Attestation is to be signed in ink and the original returned to the EIC no later than the start of the onsite examination.

Section III – Institution Questionnaire

Date Due: Please begin providing answers to this questionnaire as soon as possible, and continue to provide on a flow basis. Electronic production is preferable. By May 12, 20XX, please provide an estimate of the date upon which each section will be produced. Contact the EIC immediately with any concerns or questions about delay in production.

The following questionnaire is intended to save time and resources for both the institution and the review team. Please answer all questions thoroughly; simple yes/no answers are not sufficient for most questions. Please provide further explanation as needed to assist in clarifying your response and aid the examiner in understanding your practices.

The following questions pertain to transactions originated or closed during the review period, unless otherwise indicated. If significant changes have been made since the review period, please note that in the response.

A. GENERAL

1. If applicable, detail your test for determining if a borrower falls into the subprime category.

2. Describe the lending institution’s various origination channels (e.g., correspondent, wholesale, retail) used to source mortgage loans and the number of approved and active members for 2007 versus current day (e.g. 2,000 approved brokers of which 1,000 are active).

B. CONSUMER CONTACT/ORIGINATION

1. Are product descriptions provided to the consumer? At what point in the transaction is this information provided to the consumer?

2. What steps does the institution take to alert consumers to the risks of non-conventional loan, including the likelihood of increased future payment obligations? How is this information communicated? At what point(s) in the transaction is this information provided to consumers?

3. Does the institution incorporate elements designed to help minimize potential consumer confusion and complaints, foster good customer relations, and reduce legal and other risks to the institution?

4. Does the institution apprise consumers of potential increases in payment obligations for non-conventional loans, including circumstances in which interest rates reach a contractual limit? How is this information communicated to the consumer?

5. Does the institution inform the consumer of the difference between the initial rate and fully indexed rate, as well as the highest possible rate achievable in the loan? How and when does the institution inform the consumer of this difference?

6. If the institution offers both reduced and full documentation loan programs and there is a pricing premium attached to the reduced documentation program, are consumers alerted to this fact?

7. If applicable, are borrowers informed of all broker compensation and options for paying broker fees? How and when is this information provided?

8. If the borrower’s monthly payments will not include escrowed reserves for taxes, insurance and other items, are they fully informed of this fact? Are borrowers informed of the requirement to make payments for real estate taxes and insurance in addition to their loan payments, if not escrowed, and the fact that taxes and insurance costs can be substantial? Are borrowers informed that failure to make real estate tax payments may result in the loss of their home? How and when are they informed?

9. Are borrowers informed that failure to maintain hazard insurance on their property will result in the institution “force placing” hazard insurance and billing the payments to the borrower? Does the institution have specific policies related to force placing insurance?

10. What does the institution consider to be a high debt-to-income (DTI) ratio for each product type?

11. For high DTI loans does the institution counsel borrowers on the level of general living expenses and commitments that may be impacted by the borrower’s decision to accept a non-conventional loan with an unpredictable future payment stream?

12. If the institution may impose a penalty in the event that the consumer prepays the mortgage, are consumers alerted to this fact and to the need to ask about the amount of any such penalty? Is the communication in addition to the TILA disclosure? How and when is this information communicated?

13. With regard to prepayment penalties:

a. Does the institution offer prepayment penalty periods for loans that extend beyond the earliest payment recast, based on the contractual minimum payment and maximum negative amortization or periodic adjustment?

b. At what point in the qualification process is a borrower made aware that there will be a prepayment penalty (PPP) and the means of disclosing the PPP?

c. Do disclosures detail the potential impact of the PPP and describe the benefit of taking a loan with a PPP feature to the consumer?

d. Describe the various PPP options and the impact on pricing.

C. INDIRECT ORIGINATION THROUGH THIRD PARTIES

1. Has the institution implemented systems and controls for establishing and maintaining relationships with third parties, including procedures for performing due diligence? What are those systems and controls?

2. If appraisal, loan documentation, credit problems or consumer complaints are discovered in third-party originations, how does the institution take action? What remedial actions are taken?

D. UNDERWRITING

1. How is the borrower’s repayment capacity evaluated?

a. Does the institution consider the borrower’s overall ability to handle financial obligations? For example, for high DTI loans does the institution counsel borrowers on the level of general living expenses and commitments that may be impacted by the borrower’s decision to accept a non-conventional loan with an unpredictable future payment stream?

b. Does the institution fully consider monthly amounts for taxes, insurance and other items when determining the borrower’s ability to repay the loan?

c. What rate is used to qualify the borrower and determine repayment capacity?

d. Are borrowers qualified based on the ability to repay at the fully-indexed rate with a fully-amortizing term?

e. What payment schedule is used to determine the borrower’s ability to repay the loan (e.g. analyzed rate, monthly payment, and term)?

2. Do the institution’s standards address the effect of a substantial payment increase on the borrower’s capacity to repay when loan amortization begins?

3. Do qualifying standards recognize the potential impact of payment shock, especially for borrowers with high loan-to-value (LTV) ratios, high DTI ratios, and low credit scores?

4. What are the tolerances for recognizing payment shock? In other words, what triggers and parameters are set to identify situations in which borrowers may be unable to adequately service the debt when the loan is adjusted and/or recast?

5. What are the institution’s standards for “stated” income/reduced documentation lending? With regard to the use of “stated” income/reduced documentation:

a. What borrower characteristics permit use of “stated” income and not “full” documentation?

b. What procedures are in place to verify the accuracy of the “stated” income prior to closing?

c. Are any disclosures provided to the consumer about the use of “stated” income on the application and/or the effect on the interest rate? Indicate at what time during loan processing the disclosure is provided to consumer.

d. What is the pricing premium for “stated” income loan?

6. What mitigating factors does the institution require to support the borrower’s repayment capacity when risk layering[2] is present (e.g. higher credit scores, lower LTV and DTI ratios, significant liquid assets, mortgage insurance or other credit enhancements)?

7. What limits has management placed on risk layering?

8. What steps does the institution take to minimize the likelihood of disruptive early recastings and extraordinary payment shock when setting introductory rates?

9. Do the institution’s product terms consider the spread between the introductory rate and the fully indexed rate and the impacts of future adjustments? In other words, when setting loan terms, is consideration given to the payment shock that can result from very low introductory interest rates (sometimes called “teaser” rates)?

10. Does the institution offer loans where the introductory rate (“teaser rate”) is 300 basis points or more below the fully-indexed rate?

E. RISK MANAGEMENT

1. What performance measures and management reporting regarding legal and compliance has the institution implemented?

2. What control systems has the institution designed to address compliance and consumer information concerns once identified?

3. How does the institution determine acceptable levels of risk? Be specific as to practices, accounting procedures and policy exception tolerances.

4. Are loan terms based on a disciplined analysis of potential exposures and compensating factors to ensure risk levels remain manageable? What analysis is employed?

5. Does the institution measure concentrations of certain types of products? If so, describe the process.

6. Were there growth and volume limits by loan type during the examination period? What were the limits? What are they now?

7. Has management instituted performance measures and management reporting to monitor consumer contact and the origination of loans?

8. Has the institution considered the effect of employee incentive programs on volumes or pricing of certain products? How are the programs monitored to ensure that they are operating according to policy and not creating compliance issues?

9. Does the institution have a quality control function? If so, does quality control and/or internal audit regularly review a sample of loans originated by sales staff and a representative sample of processors and underwriters to confirm that policies are being followed?

a. How is the sample selected?

b. When control systems or operating practices are found deficient, are business-line managers held accountable for correcting deficiencies in a timely manner?

c. What accountability measures are employed?

10. How are employees trained so that they are able to convey information to consumers about product terms and risks?

11. As products evolve and new products are introduced, does staff receive additional training, as necessary?

12. Are sales and processing personnel monitored to determine whether they are following policies and procedures?

13. How does the institution track and monitor loans originated as an exception to policies and procedures? (including any judgmental overrides)

14. How does the institution track defaults and foreclosures and report on the reasons for borrower inability to satisfy debt payments as contracted?

15. Does oversight of third-parties involve monitoring the quality of originations so that they reflect the institution’s underwriting standards and are in compliance with applicable laws and regulations?

16. Does internal audit regularly assess compliance with appraisal and evaluation policies and procedures?

17. Are variance analyses performed regularly to identify exceptions to policies and prescribed thresholds?

18. Does qualitative analysis occur when actual performance deviates from established policies and thresholds?

19. Does the institution perform Stress Testing on the portfolio?

F. SERVICING AND COLLECTION

1. If selling loans, does the institution retain servicing?

2. What fraud-related controls does the institution have over accruals, customer service and collections?

3. Are policy exceptions made by servicing and collections personnel monitored to confirm that practices such as re-aging, payment deferrals, and loan modifications are not inadvertently increasing risk?

4. Do customer service and collections personnel receive product-specific training on the features and potential customer issues with these products?

5. Does the institution maintain special policies and procedures to modify or work-out loans that enter into delinquency or default shortly after funding or after an increase in payment?

6. What are the institution’s policies concerning prepayment penalty when a borrower refinances a loan shortly before the reset date?

7. What fees does the institution charge to the borrower’s account if the borrower goes into default, and how often does the institution assess the fees?

8. What policies and controls does the servicer have to ensure that borrowers are only charged for insurance products if they are required by the loan and the borrowers do not have adequate insurance in place already?

9. What policies and controls does the servicer have to ensure that delinquent borrowers are only charged attorneys’ fees that are reasonable, appropriate, and for services actually performed?

10. What policies and controls does the servicer have to ensure that it contacts borrowers in an appropriate manner (number of contacts, methods, time of contacts) to attempt to collect debts?

11. What policies and controls does the servicer have to ensure that it adequately verifies debts that were initially imposed by another company (i.e., prior servicer advances)?

12. What policies and controls does the servicer have to ensure that it does not engage in any impermissible or inappropriate contacts to third parties about the debt of the borrower?

13. What policies and controls does the servicer have to ensure that delinquent borrowers are provided in a timely fashion with options to prevent unnecessary foreclosures?

14. What policies and controls does the servicer have to ensure that delinquent borrowers are provided appropriate work-out/modification agreements?

15. What policies and controls does the servicer have to ensure that any foreclosures are proper?

Section IV – Financials and institution background

Date Due: May 5, 20XX

1. Audited financial statements for the years of 2006, 2007 and 2008 (example).

2. Most recent balance sheet.

3. A list of all corporate locations, including branches and net branches in all states.

4. An organization chart listing all officers, departments and department managers.

Attachment 1

Required Data Fields –Mortgage Loan Delinquency Report

Data Requested

Provide loan information for all loans serviced by your company that are secured by real estate and are sixty (60) or more days delinquent.

If requested data is not readily available, enter “N/A” in the respective data field.

File Compression

Compressed and encrypted files must be Winzip compatible.

File Format

Provide the loan information in Excel spreadsheet format using data fields listed below. Each single distinct horizontal row should contain requested data for each loan. Do not wrap data for a single loan into two or more rows or combine data from more than one loan into a single row.

|Col. # |Data Field Name (Column |Data Field Description |

| |Heading) | |

| |Loan Number |Primary key identifier for each note |

| |Borrower Name |Borrower name |

| |Property Address |Collateral property address |

| |Property City |Collateral property city |

| |Property State |Collateral property state |

| |Property Zip Code |Collateral property zip code |

| |Origination Date |Date the loan is originated (e.g. application date or similar) |

| |Funding Date |Date the loan is funded |

| |Loan Source Channel |Field which indicates if loan sourced through retail, wholesale or correspondent lending channel |

| |Branch Identifier |Branch that originated the loan |

| |Loan Source Name |Name of Broker or Correspondent that originated loan |

| |Loan Officer |Name of individual that originated the loan |

| |Exception |Was the loan approved as an exception to written underwriting policies (yes/no)? |

| |Lien Position |The priority lien held (i.e., 1st lien, 2nd lien) |

| |Note Purpose |Description of what the proceeds will be used for (i.e. purchase or refinance) |

| |Loan Term |Number of months from 1st payment till note is contractually due |

| |Original Loan Amount |Principal amount of the loan |

| |Loan Type |FHA, VA, Conventional (Prime), Alt-A (Near Prime), Subprime (Non-Prime) |

| |Program Type |Fixed Rate or ARM |

| |Program Description / Name |Name of program (i.e. 2/28 ARM, 2/28 ARM IO, etc.) |

| |Prepayment Penalty Months |Number of months prepayment penalty covers |

| |Documentation Type |Documentation used to qualify borrower’s capacity to repay the loan (full doc, stated-income, etc.) |

| |Escrowed Funds |Field that indicates if funds are escrowed for taxes and insurance (yes or no) |

| |APR |The APR reflected on the note |

| |Interest Rate |The contractual rate of interest reflected on the note |

| |Fully Indexed Interest Rate |The fully indexed interest rate at origination / settlement |

| |Contractual Payment Amount |Amount of contractual regularly scheduled monthly payment (do not reflect escrow funds) |

| |Fully Indexed P&I Payment |Amount of fully indexed and amortized monthly payment |

| |Total DTI Ratio |Ratio of total monthly obligations (including house expenses) as a percentage of total gross monthly |

| | |income |

| |Total QDTI Ratio |Ratio of total monthly obligations (including house expenses calculated at fully indexed and amortized |

| | |mortgage payment) as a percentage of total gross monthly income |

| |Purchase Price |Contractual sales amount for purchased transactions |

| |Appraised Amount |Collateral valuation |

| |Loan-to-Value (LTV) |Lower of sales price or appraised amount as a percentage of the loan amount |

| |Combo Loan |Indicator if simultaneous / piggyback second mortgage lien (yes or no) |

| |Combo Loan Number |Provide loan number if simultaneous second / piggyback mortgage |

| |Combo Loan Date |Date combo loan originated / settled |

| |Combo Loan Amount |Amount of second mortgage lien |

| |Combined Loan-to-Value (CLTV)|Lower of sales price or appraised amount as a percentage of the aggregate first and second lien loan |

| | |amount |

| |Credit Score |Credit score obtained from a credit bureau that was used in the underwriting decision of the credit |

| |Total Institution Fees |Aggregate Institution Fees paid at settlement |

| |Total Points |Loan discount points paid at settlement |

| |Total Broker / Correspondent |Aggregate Broker / Correspondent Compensation before YSP paid at settlement |

| |Compensation | |

| |Yield Spread Premium |Yield Spread Premium paid by Institution |

| |Days Delinquent |Number of days the loan is delinquent |

| |Foreclosure Date |Date the loan was referred for foreclosure |

| |Loss Mitigation Date |Date the loan was referred for loss mitigation |

Attachment 2

Date Due: May 5, 20XX

ATTESTATION OF CORPORATE OFFICER

The undersigned representative of [LICENSEE] hereby attests to the Joint Examination States identified in this information request that to the best of his/her knowledge, any and all information or data, including electronic loan data, provided in response to this or subsequent requests is complete and correct unless noted otherwise.  He/She understands that any intentional or negligent misrepresentation of information contained in response to this request or subsequent requests, either affirmatively or by omission, may result in administrative or civil liability and/or criminal penalties, including but not limited to fines, imprisonment, or both. In the event that amendment or supplementation of the information contained in this submission is necessary to prevent or correct any misrepresentation, [LICENSEE] shall submit such amended or supplementary information on a timely basis.

The transmission of this file as an "electronic record" containing my "electronic signature," as those terms are defined in applicable federal and/or state laws (excluding audio and video recordings), shall be as effective, enforceable and valid as if a paper version of this submission were delivered containing my original written signature.

I do certify, under the pains and penalties of perjury, that all statements above or attached hereto are true to the best of my knowledge and belief.

|Officer's Name and Title |Company's Name |Location: City and State |

| | | |

|Officer's Signature |Date |

| This is an official document. Signed under the penalties of perjury. |

-----------------------

[1] In general, non-conventional loans are all loans other than 30 year fixed made at conventional rates, and any government insured loans, except reverse mortgage loans (e.g. HECMs).

[2] Risk layering refers to loans that combine nontraditional features, such as interest only loans with reduced documentation or a simultaneous second-lien loan, or other characteristics considered to be higher risk (e.g. high DTI, no reserves for taxes and insurance, etc.).

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