80/17 purchase program for CA public school or community college employees. Borrowers qualify off 80%LTV first only as 2nd is silent for 5 years.

1. February 20, 2009

2. CalSTRS HOME LOAN PROGRAM
The CalSTRS Home Loan Program was created in 1984 and
restructured in July of 2004.
Countrywide is the Program Administrator since July of 2004.
The Program was designed to offer CalSTRS members a great
choice of mortgage loans with competitive rates, along with first-
class service.
Money Works for Pension Fund
- Borrowers can obtain a great loan with a competitive
rate—and their money works for them, since income
derived from mortgage payments goes directly into
the Teachers’ Retirement Fund.
February 20, 2009

3. Agenda
General CalSTRS Home Loan Program Guidelines
Standard Conventional Product
Conforming
Non-Conforming
Second Loan Products
80/17
95/5 (Suspended)
Underwriting Guidelines
Rate Locks and Float Downs
Countrywide Fees
CalSTRS Marketing Guidelines
February 20, 2009

4. CalSTRS Home Loan Products
¾ Standard Conventional
¾ 80/17
February 20, 2009

5. General CalSTRS Guidelines
Eligible Properties
Properties located within the State of California
Owner occupied
Principal residences only
No Manufactured Homes
February 20, 2009

6. General CalSTRS Guidelines
Eligible Borrowers
Employees of a California public school district and/or a member
of the California State Teachers' Retirement System
Employees of a CA Community College
As proof of eligibility, a copy of a CalSTRS benefits statement,
or a pay stub or VOE from a California public school district must
be included in the purchase file sent to Countrywide
Borrowers must have a valid social security number
Qualified inter vivos revocable trusts are permitted
February 20, 2009

7. General CalSTRS Guidelines
Temporary and permanent buydowns are not permitted
All CalSTRS loans require escrow impounds regardless of LTV
Loans are not assumable
No prepayment penalties are allowed
Title Policies are required
Title Policy for 80/17 must cover 1st and 2nd loan amounts,
including recording info of 2nd
Alt docs are permitted, according to Fannie Mae and Freddie Mac
guidelines, Appraisal or property inspection required according to
AUS cert, unless waived by AUS cert (fee assessed)
February 20, 2009

8. Standard Conventional
¾ Purchases
¾ Refinances (including Cash Out Refi’s)
¾ 15 and 30 Year Fixed Rate Conforming
¾ 15 and 30 Year Fixed Rate Non-Conforming
February 20, 2009

9. Standard Conventional Summary
Owner-occupied 2- to 4-units; attached and detached SFRs;
Eligible Properties condos; and PUDs
Term 15 or 30 years
Conforming Loan Amount Up to $417,000
Non-Conforming Loan Amount $417,001 to $834,000
Loan-to-Value (LTV) of 1st Mortgage 95%
Down Payment Standard Fannie Mae Guidelines
Sources of Closing Costs Standard Fannie Mae Guidelines
2nd Mortgage Standard Fannie Mae Guidelines – LIMITED TO 80% CLTV
February 20, 2009

10. Conforming Standard Conventional
Loan Type Units Max Min FICO Loan-Level
Pricing
Adjustment
LTV/CLTV
Conf Purch/Rate and 1 90.01% - 95% 700
Term Refi < = 90% 680
Conf Purch/Rate and 2 90.01% - 95% 700
Term Refi < = 90% 680
Conf Purch/Rate and 3-4 80% 680
Term Refi
Conf Cash-Out Refi 1-2 70% 680
Conf Cash-Out Refi 1-2 70.01% - 80% 720
Conf Cash-Out Refi 1-2 80.01% - 90% 720
Refer to
Conf Cash-Out Refi 3-4 70% 680
Platinum
CalSTRS Price
Conf Cash-Out Refi 3-4 70.01% - 75% 720
Guide.
February 20, 2009

11. Non-Conforming Standard Conventional
Loan Amount $417,001 to $834,000
Non-Conforming Parameters Loan Level Price Adjustment
Loan balances > $650,000 to $834,000 & 0.25%
credit score < 660
Condos 0.375%
2-unit property 0.375%
3-4 unit property 1.00%
LTV > 65% and CLTV 80.01% - 90% 0.25%
LTV > 65% and CLTV 90.01% - 95% 0.375%
February 20, 2009

12. Non-Conforming Standard Conventional
February 20, 2009

13. Standard Conventional Underwriting Guidelines
Homebuyer education is not required
Non-occupant co-borrowers and co-signers are permitted
5% minimum down payment from borrowers own funds (Subject to MI availability)
Closing costs may be paid by third party
Automated underwriting approval required
DU- Approve/Eligible
LP- Accept
Borrowers may own other property, but only one CalSTRS loan at a time
Non-permanent resident aliens are eligible on the Standard Conventional Program
ONLY (LTV is limited to 75%)
Conforming:
Ratios and Reserves:
Standard Fannie/Freddie Guidelines
Non Conforming:
Ratios: 41%
Reserves: 2 months
*Please see Seller’s Guide in Platinum for Countrywide Standard Guidelines
February 20, 2009

14. Mortgage Insurance
Required on all loans exceeding 80% LTV
Any CHL approved MI Co is eligible to insure first mortgage
loans.
If DU allows reduced coverage for Standard Conv loans, it
must be given to the borrower.
Lower Cost MI is an option, if borrower pays for it
LTV Standard MI% Reduced MI% No Cost
80.01% to 85% 12% N/A
85.01% to 90% 25% 17%
90.01% to 95% 30% 25%
February 20, 2009

15. 80/17 Product
80/17
Purchase Only
30 Year Conforming
30 Year Non-Conforming
February 20, 2009

16. 80/17 Summary
Owner-occupied SFRs; approved condos; approved attached and
Eligible Properties detached PUDs
Term 30 years (1st and 2nd mortgages)
Conforming 1st Loan Amount Up to $417,000
Non-Conforming 1st Loan Amount $536,082
Loan-to-Value (LTV) of 1st
Mortgage 80%
Loan-to-Value (LTV) of 2nd
Mortgage 17%
Maximum Combined Loan-to-Value
(CLTV) of 1st and 2nd
Mortgages 97%
Down Payment 3%
Borrower’s own funds, seller contributions up to 3%, gift from
Sources of Closing Costs relative, or unsecured grant from approved government agency
2nd Mortgage Deferred payments on the 17% 2nd mortgage for the first 5 years
Loan Level Price Adjustments Refer to Platinum CalSTRS Price Guide
February 20, 2009

17. Second Mortgage Loans
Interest rates for the second mortgage loan carries the same rate as
the first mortgage
30-year term with a five-year deferred payment structure
Simple interest calculation will be used for years 1 through 5, no
principal or interest payments shall be due during the first 5 years /
60 months.
CalSTRS Note and Deed must be used
Year 6 / payment number 61:
The accrued simple interest balance from the deferral period will be
added to the original loan balance.
The new loan amount will be amortized over the remaining 25 years
/ 300 months, and the borrower will then make monthly payments for
the remaining life of the 2nd loan.
February 20, 2009

18. 80/17
st nd
Loan Type *LTV: 1 *LTV: 2 Max Loan Max Loan Max Max
st nd
Amt: 1 Amt: 2 Combined Purchase
Loan Amt Price
Conforming 80% 17% $417,000 $88,612 $505,612 $521,250
Non- 80% 17% $536,082 $113,918 $650,000 $670,103
Conforming
February 20, 2009

19. 80/17 Underwriting Guidelines
Homebuyer Education is required for 1st Time Homebuyers
Borrower(s) cannot own other property
Non-occupant co-borrowers and co-signers are not permitted
3% down payment is required, a minimum of 1% must come from the
borrower’s own funds. Remainder may come from:
Gift from a relative if repayment is not required
Grant from a government agency or an employer- assisted housing
program, which has been approved Countrywide
A FICO score of 620 is required for all combined loan amounts up to
ƒ
$400,000
A FICO score of 680 for combined loan amounts between $400,001
ƒ
to $650,000.
Conforming:
Ratios and Reserves:
Standard Fannie/Freddie Guidelines
Non Conforming:
Ratios: 38%
Reserves: 2 months
February 20, 2009

20. UNDERWRITING GUIDELINES
Lenders are responsible for underwriting all mortgage loans that they originate.
ƒ
Automated underwriting approval required (DU Approve/Eligible or LP Accept)
The 80/17 Program loans run through DU will have Flex underwriting criteria.
ƒ
Effective August 25, 2008, indicate that the second mortgage is a Community
ƒ
second.
NOTE: If CLOUT is used, the second mortgage cannot be input as a community second.
Therefore, it may not receive as favorable finding; please go to DU directly for this
product.
February 20, 2009

21. UNDERWRITING GUIDELINES
February 20, 2009

22. Second Loan P& I Calculation Example
2) INTEREST
Interest will be charged at the rate of ___________________________________ percent (_______%)
on the unpaid principal until the full amount of principal has been paid. I will pay simple interest until
one month before the first payment date shown in Section 3(B) and then compounded interest
until the earlier of the Maturity Date (as defined below) or the date this Note is repaid in full.
Example:
$59,160 loan amount
x 7% interest rate
_________
$4141.20 accrued interest
x 5 yrs deferral period
________
$20,706.00 total accrued interest for 5yrs
+$59,160.00 original loan balance
__________
$79,866.00
+ $ 147.49 13 days of interest from 7/19/2007(sett date) on 08/01/2007(one month prior to 1st payment)
__________
$80,013.49
$80,013.49 amortized for 25 years = $565.52
February 20, 2009

23. Additional Fees
All CalSTRS conforming conventional loans are subject to the Fannie Mae 0.25% Adverse
Market Delivery Fee and the new loan level pricing adjustments per LTV and FICO.
New Fannie Mae Adverse Market Delivery Fee and Loan Level Pricing Adjustments
Announcements:
Fannie Mae Announcement 08-24
Fannie Mae Announcement 08-18
Fannie Mae Announcement 07-21
Fannie Mae Announcement 07-16
February 20, 2009

24. Rate Locks and Commitment
Locks for 80/17 1st and 2nd mortgages must be made concurrently
Property changes require new lock
No fee for cancellations, all loans that will not be delivered must be
cancelled
Worst Case Extension
Loans that have not closed after all other extensions have been
exhausted:
Rate will be the higher of original lock or current market rate with
a .125% fee
February 20, 2009

25. Fees
Origination Fee: 1.00% Standard Conventional
1.25% 80/17 (only on 1st loan)
Discount Points: not allowed
Other Closing Costs: Normal and customary fees including
an appraisal fee, credit report fee, survey fee, title insurance
premium, and other closing costs as permitted by the respective
agency. Must be fully disclosed on the HUD-1.
February 20, 2009