MPF Announcement 2019-01

MPF Direct Origination and Underwriting Updates

Effective Date: Immediately Unless Otherwise Noted

The Investor for the MPF Direct Product, Redwood Residential Acquisition Corporation, has recently made the following  updates and clarifications which affect the Select QM, Select 90 QM, Choice QM Product Guides and Jumbo Program Eligibility Supplement.

Eligibility Matrix | Second Homes | Cash-Out Refinance

Select QM - Effective for locks on or after 1/02/2019.

• Revised the maximum loan amount for second home cash-out refinances from $1,000,000 at 60% LTV to $1,500,000. All other second home cash-out loan amounts/LTVs remain unaffected.

Eligibility Matrix | Investment | Purchase, Rate and Term and Cash-Out Refinance

Select QM - Effective for locks on or after 1/02/2019

• Revised the minimum loan amount from $453,101 to $484,351 for 1-unit properties with LTVs 80% or below. The minimum loan amount for LTVs over 80% is either $1 over the conforming loan limit or in high cost areas it is $1 over the set agency high balance loan limit. For loans with 2-4 units, the minimum loan amount is $1 over the new conforming loan limits for the applicable number of unit’s set by the FHFA.

Select 90 QM & Choice QM  - Effective for locks on or after 1/02/2019

• The minimum loan amount referenced in these guides is $1 over the current conforming/agency high balance limit set by FHFA. No update is necessary for these guides since a specific loan amount is not referenced.

Underwriting Guidelines | Liabilities

Select QM, Select 90 QM and Choice QM - Effective for locks on or after 1/02/2019.

• Added requirement for divorces on or after 1/01/2019, alimony payments paid by a borrower must be treated as a liability. Borrowers with a divorce prior to this date may have alimony deducted from income rather than treated as a liability. Effective for borrowers with a divorce on or after 1/01/2019.

Underwriting Guidelines | Income/Employment | Retirement Income | Self-Employment

Select QM, Select 90 QM and Choice QM –

• Added the allowance of tax transcripts (personal and business) in lieu of a signature on the corresponding tax return. Effective for loans closed on or after 1/02/2019.

General Borrower Requirements | Tax Return and 4506-T Requirements

Jumbo Program Eligibility Supplement

• Added the allowance of tax transcripts (personal and business) in lieu of a signature on the corresponding tax return. Effective for loans closed on or after 1/02/2019.

The policies described above have been incorporated into the following exhibits:

• MPF Direct Exhibit Q-D: Select QM Program Eligibility Guide
• MPF Direct Exhibit R-D: Select 90 QM Program Eligibility Guide
• MPF Direct Exhibit S-D: Choice QM Program Eligibility Guide
• MPF Direct Exhibit T-D: Jumbo Program Eligibility Supplement