The document discusses Conforming Expanded Criteria loan programs that offer flexible documentation options for qualifying borrowers. It provides details on three documentation types - SIVA, No Ratio, and NINA - that allow borrowers to qualify with stated but not verified income and assets. Several hypothetical borrower scenarios are presented to illustrate how different borrower types could benefit from the available documentation options.

1. Conforming Expanded Criteria December 3, 2007 Give the gift of home ownership with this dynamic product offering

2. What Is Conforming Expanded Criteria The Conforming Expanded Criteria program provides qualified borrowers with good credit histories a cost-effective loan that enables them to choose alternative documentation options including: Reduced, No Ratio, and No Income/No Assets (NINA)—allowing you to help borrowers who are self-employed or have difficult-to-document income/assets, by offering loans that require minimal documentation which may help to expedite the loan closing. More borrowers qualify for conforming programs Agency-based pricing Diverse documentation options

3. Current Market The market continues to slow down Availability of products in the marketplace continues to shrink, challenging lenders to find alternative financing solutions Non-Agency products continue to experience liquidity issues Purchases, refinances, and new home construction are declining Overall home values are flat or depreciating throughout the country There is a shift in the market to Agency and Government products Agency and Government products may offer a better alternative to increase originations, lessen risk, and grow market share in this turbulent environment

4. Opportunity There are still borrowers who Are self-employed, salaried, or commissioned Have passive or unearned income, such as income from a retirement plan, child support, trust, rental, etc. Have difficult to document income sources Have complex assets Have good credit histories Can document their income and assets, but prefer not to

5. Solution Provide qualified borrowers with a conforming loan program that allows flexible income and asset documentation, by offering SIVA, No Ratio, and NINA documentation types Conventional financing option for borrowers with strong credit histories More favorable rates associated with conventional financing Up to 90% LTV (SIVA documentation only)‏ Purchase, rate/term, and cash-out refinances 1-4 unit primary residences, 1-unit second homes, and 1-4 unit investment properties allowed Current offering adjustable-rate mortgages (ARMs)‏ Interest Only option (SIVA documentation only)‏ Up to 6% interested party contributions Non-occupant co-borrower income allowed

6. Borrower Scenario #1 The owner of a successful dry cleaning business would like a $50,000 cash-out refinance to remodel his kitchen. His home is worth $325,000 and he owes $280,000. He has a 690 credit score and his credit report reflects a 1x30 mortgage late 10 months ago. He inherited the business from his parents and owns the building where it is located. He is able to verify his employment and assets, but prefers to state his income. The SIVA documentation option is a great solution for borrowers whose primary source of income is difficult to verify. The primary source of income must be verified, while the amount of income, although disclosed, is not verified. The presented scenarios are only hypothetical examples of how promoted loan programs might be useful . For illustration purposes only . All borrowers must meet loan program guidelines..

7. SIVA Documentation Employment: stated and verified Income: stated and not verified Assets: stated and verified Target audience: salaried, commissioned, self-employed, passive income borrowers 1-4 units owner-occupied, 1-unit second homes, and 1-4 unit investment properties Purchase, rate/term, and cash-out refinance Fixed period ARMs (currently 7/1 or 10/1) with an Interest Only option Temporary buydowns allowed (owner-occupied only)‏

8. SIVA Documentation Maximum LTV: 90% on purchase, rate/term and cash-out refinance Institutional secondary financing allowed Maximum 80% LTV on owner-occupied 3-4 units Maximum DTI: 38% Higher DTIs may be approved through Investor AUS Minimum credit score 640 for purchase and rate/term at 75% LTV and 660 for 90% LTV 660 for cash-out at 75% LTV and 680 for 90% LTV 3-month reserves required on owner-occupied properties 6 months reserves required on second homes and investment properties Mortgage lates 1x30 in last 12 months 0x60 in last 24 months Bankruptcy, foreclosure, deed-in-lieu, and short sale: 48 months or greater Interested party contributions up to 6% Second homes and investment properties with LTVs > 80% allow for a maximum 3%

9. Borrower Scenario #2 After four years of retirement, a couple is looking to purchase a second home to be near their grandchildren. Their monthly income comes from a variety of sources including his pension plan, their combined Social Security benefits, dividend income, and rental income on a 2-unit duplex they own free-and-clear. In addition, the couple has no mortgage on their primary residence. They have excellent credit scores (his: 720 and hers: 700) and are receiving 3% from the property seller to be used towards closing costs. They are purchasing a $175,000 condominium and putting 20% down to avoid paying mortgage insurance. The No Ratio documentation option is an attractive option for this couple. With excellent credit and no mortgage delinquencies, borrowers with multiple income sources and complicated assets can qualify for a expedited loan process. The presented scenarios are only hypothetical examples of how promoted loan programs might be useful . For illustration purposes only . All borrowers must meet loan program guidelines. .

10. No Ratio Documentation Employment: stated and verified Income: not stated or verified Assets: stated and verified Target audience: salaried, commissioned, self-employed, passive income borrowers 1-4 units owner-occupied, 1-unit second homes, and 1-4 unit investment properties Purchase, rate/term, and cash-out refinance Fixed period ARMs (currently 7/1 or 10/1)‏ Secondary financing not allowed Temporary buydowns not allowed

11. No Ratio Documentation Maximum LTV: 90% on purchase, rate/term, and cash-out refinance Maximum 80% LTV on owner-occupied 3-4 units Maximum DTI: not calculated Minimum credit score 640 for purchase and rate/term at 75% LTV and 660 for 90% LTV 660 for cash-out at 75% LTV and 680 for 90% LTV 3-month reserves required on owner occupied properties 6 months reserves required on second homes and investment properties Mortgage lates 0x30 in last 12 months 0x60 in last 24 months Bankruptcy, foreclosure, deed-in-lieu, and short sale: seven years Interested party contributions up to 6% Second homes and investment properties with LTVs > 80% allow for a maximum 3%

12. Borrower Scenario #3 A husband and wife are both police officers and provide part-time security on their days off and weekends. They have more than five years on the police force and their private security business just passed its three year anniversary. The couple is hoping to start a family and has made an offer on a larger home and have just put their condominium on the market. Both borrowers have good credit, two years remaining on an auto loan, and some credit card debt. The NINA documentation option is a great solution for these law enforcement professionals. Their employment can easily be stated and verified, but they prefer to not state their income or assets.

13. NINA Documentation Employment: stated and verified Income: not stated or verified Assets: not stated or verified Target audience: salaried and self-employed borrowers 1-4 unit owner-occupied, 1-unit second homes, and 1-4 unit investment properties Fixed period ARMs (currently 7/1 or 10/1)‏ Secondary financing not allowed Temporary buydowns not allowed

14. NINA Documentation Maximum LTV: 90% purchase and rate/term refinance 75% LTV on cash-out refinance Maximum DTI: not calculated Minimum credit score 680 for purchase and rate/term at 75% LTV and 700 for 90% LTV 700 for cash-out at 75% LTV and 90% LTV not applicable Reserves: Not applicable Mortgage lates 0x30 in last 12 months 0x60 in last 24 months Bankruptcy, foreclosure, deed-in-lieu, and short sale: seven years Interested party contributions up to 6% Second homes and investment properties with LTVs > 80% allow for a maximum 3%

15. Loan Limits $801,950 4-units $645,300 3-units $533,850 2-units $417,000 1-unit Loan Limits Property Type

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