704.02

Underwriting

 Requirements

If an ARM 5/5 Loan is renewed for an additional 5 years, you must:

  • Use the same Guaranty FeeGuaranty FeeFee retained by Fannie Mae for credit enhancing a Mortgage Loan or assuming credit risk on a Mortgage Loan, and which may be expressed as a percentage. and Servicing FeeServicing FeeFee a Servicer receives for collecting payments, managing operational procedures, and assuming your portion of credit risk for a Mortgage Loan, and which may be expressed as a percentage. as the first 5-year adjustable rate term.
  • Adjust the InvestorInvestorMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. spread for the second 5-year adjustable rate term based on current market conditions.
  • Adjust the monthly Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. deposit to include required capital improvements during Loan YearsLoan YearsPeriod beginning on the date of the Note and ending on the last day of the month that is 12 full months after the date of the Note, and each successive 12-month period thereafter. 6 through 10, plus 2 additional years, per the original PCA ReportPCA ReportProperty Condition Assessment Report documenting the findings of a PCA. .
  • Not charge a Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. .