Conventional Conforming Delegated Underwriting Guidelines
& Texas Cash-Out Delegated Guidelines
Underwriter: Linda Breithaupt | Cell: 806-786-7767 | [email protected] |
Linda lives in Lubbock and is our first and currently only underwriter. Resume Attached Here
Delegated Underwriting: Red Diamond has delegated underwriting authority with Village Capital, Planet Home Lending & Amerihome. With these approvals we will be able to sell loans underwritten by Red Diamond & National MI to these investors.
Why: These investors all have different pricing and different overlays. You will now have the ability to shop a delegated file among these investors to find the best fit for your file.
AmeriHome: Conventional and VA Delegated (FHA Coming Soon)
Conventional Conforming - Purchase and Rate/Term refinance Parameters for Delegated Underwriting by Red Diamond:
- Important: Mike Rogers & Mike Porter will make the ultimate decision if a file should be underwritten as a delegated file or if it should be submitted to a non-delegated investor. For various reasons we may feel a loan needs to be submitted to our investors.
- Layered Risk: We do not want to underwrite loans with layered risks: Example: 95% LTV, 660 Fico, 45% DTI is pushing all our limits. These loans should be sent out for non-delegated underwriting.
- Conventional Only-Must be Wells Fargo Eligible and Must Follow Wells Fargo Overlays
- Loans with or without Mortgage Insurance to 95% Loan To Value (We can underwrite loans with Mortgage Insurance)
- For 97% LTV loans we will use our non-delegated investors.
- Minimum credit score must be 660
- Employment: No Self-Employed Borrowers
- LTV: Maximum Loan To Value will be 95%
- Full 2-year W-2 Employment History (New jobs may need to go non-delegated)
- No Loans in a Trust
- Single Family Detached Only-No Condo's | No Manufactured Housing | No Attached Town Homes
- Condos can be submitted to Wells Fargo on a non-delegated basis...they will underwrite Condos for us. That's the only product type they will underwrite.
- Owner Occupied Only-No Second Homes or Investment Properties
- Purchase or Rate Term Refinance Only - No Cash-Out Refinances
- Maximum debt to income ratio must be 45%-we don't want to underwrite loans with layered risk.
- Two Property Max - Primary Residence & 1 Investment REO Property Max
- Minimum loan amount $200,000 (lower upon request)
- All borrowers must be US citizens
- Exceptions possible with strong compensating factors and reduced layered risks.
- Fannie Mae - DU Approved Eligible or Freddie Mac LPA Approved Only
- Linda will be a big help to you so feel free to reach out with questions or for assistance.
- Red Diamond will underwrite the Investor's overlay guidelines.
- If we add another delegated investor our Underwriters will underwrite specifically to the investor that we are committing the loan to so that all investor overlays are taken into consideration when the file is underwritten.
Loans not meeting these requirements can be sent through our non-delegated underwriting channel to any of our non-delegated investors.
Texas Cash-Out Delegated Guidelines:
We have AmeriHome | Planet Home that purchase Texas Cash-Out loans.
Loan Parameters for Delegated Underwriting by Red Diamond:
- Important: Mike Rogers & Mike Porter will make the ultimate decision if a file should be underwritten as a delegated file or if it should be submitted to a non-delegated investor. For various reasons we may feel a loan needs to be submitted to our investors.
- Layered Risk: We do not want to underwrite loans with layered risks: Example: 80% LTV, 680 Fico, 45% DTI is pushing all our limits. These loans should be sent out for non-delegated underwriting.
- Conventional Only-Must meet any investor overlay guidelines and Fannie Mae and Freddie Mac guidelines.
- Minimum credit score must be 680
- Employment: No Self-Employed Borrowers
- LTV: Maximum Loan To Value will be 80%
- Full 2-year W-2 Employment History (New jobs may need to go non-delegated)
- No Loans in a Trust
- Single Family Detached Only-No Condo's | No Manufactured Housing | No Attached Town Homes
- Condos can be submitted to Wells Fargo on a non-delegated basis...they will underwrite Condos for us. That's the only product type they will underwrite.
- Property: Maximum 10 acres per the A-6 guidelines
- Owner Occupied Only-No Second Homes or Investment Properties
- The maximum debt to income ratio must be 43%-we don't want to underwrite loans with layered risk.
- One Property Max - Primary Residence only
- Minimum loan amount $225,000 (lower upon request)
- All borrowers must be US citizens
- Exceptions are possible with strong compensating factors and reduced layered risks.
- Fannie Mae - DU Approved Eligible or Freddie Mac LPA Approved Only
- Linda will be a big help to you so feel free to reach out with questions or for assistance.
- Red Diamond will underwrite to our investor guidelines.
- If we add another delegated investor our Underwriters will underwrite specifically to the investor that we are committing the loan to so that all investor overlays are taken into consideration when the file is underwritten.
Loans not meeting these requirements can be sent through our non-delegated underwriting channel to any of our non-delegated investors.
STEPS TO UNDERWRITE DELEGATED FILES IN ENCOMPASS:
Step 1: Processor Assigns the Underwriter - Wells Fargo Delegated Loans Only
When the Submittal milestone is ready to be completed, the processor assigns the loan to an underwriter.
Step 1: Underwriter Reviews the Loan File and Conditionally Approves or
- At the Conditional Approval milestone, the underwriter completes the following tasks.
- Reviews the loan application and associated borrower and loan information.
- Uses the Underwriting Conditions tab on the eFolder to review attached documents, including the credit, appraisal, and title reports.
- Underwriter updates the Underwriting Summary with key information related to the creditworthiness of the borrower and the property value.
- Creates, reviews, and clears conditions using the Underwriting Conditions tab on the eFolder.
- When analysis of the loan is complete, the underwriter can conditionally approve the loan, or reject the loan and return it to the previous (Submittal) milestone.
- Or, to return the loan to the previous milestone, the underwriter clicks Return File to Sender.
Step 2: Processor Completes Tasks for Resubmittal
- At the Resubmittal milestone, the processor uses the Underwriting Conditions tab on the eFolder to address open conditions.
- On the Underwriting Conditions tab, the processor reviews and addresses the requirements of each condition, marking the conditions as fulfilled.
- When the required conditions are satisfied, the processor resubmits the loan to the underwriter.
- On the Resubmittal worksheet, the processor assigns an underwriter, and then selects the Finished check box.
Step 3: Underwriter Reviews the Loan File and Gives Final Approval
- At the Approval milestone, the underwriter again uses the Underwriting Conditions tab to review and clear conditions.
- When the required conditions are satisfied, the underwriter approves the loan.
- On the Approval worksheet, the underwriter assigns a processor, and then selects the Finished check box.
Risks Of Contract & Delegated Underwriting
With a Non-Delegated Sale the underwriting risk is transferred to the Investor & Underwriter for the file.
On a delegated sale Red Diamond retains some underwriting risk and provides Wells Fargo representations & warranties.
National MI Contract Underwriting Agreement: Click Here
- This document will provide the Definitions;
- Loan Review Services Overview;
- Procedures For Review;
- Fees;
- Duties, Representations and Warranties of Red Diamond;
- Termination Parameters;
- Limitation of Liability;
- Remedy Request;
- Remedies;
- Repurchase;
- Indemnification;
Contract Underwriting is not without risk. We need to ensure a high quality loan is delivered for underwriting to mitigate the risks to Red Diamond.