MTA Program Guidelines

1-,3-,6-,12-Month MTA Option ARMs
Product Information
General Information
Product Features
Pricing
Parameters

Related Programs
Portfolio
Low Doc
Portfolio Features
Sub-Prime

Pricing Adjustments & Qualifying Rates
Portfolio Pricing Adjustments/Option ARM Minimum Start
Portfolio Texas Pricing Adjustments


General Information
Available Index: 12-MTA or COFI

Intro Periods:

1, 3, 6, and 12 month available with 12-MTA index
1 and 3 month available with COFI index
Product Description: The Neg Am product line consists of Option ARMs tied to either the 12-MTA or the 11th District Cost of Funds Index (COFI).

12-MTA index is based on yields published in the release entitled the “Selected Interest Rates-H15” which is published by the Federal Reserve Board on the first Tuesday of each month. Home Loans Group Finance performs a simple calculation of the preceding 12-month annual yield to come up with the current yield number shown on the Bank’s Pricing Guides.

COFI is based on the interest paid by savings & loan institutions within the Federal Home Loan Bank’s 11th District territory (which is comprised of CA, AZ and NV) on their savings Deposits and money borrowed from other sources

Qualifying Rate: See the Portfolio ARM Minimum Start Rate and Qualifying Rates page.

Target Market:

Borrowers wanting flexible portfolio features, lower payments or payment options. This product is good for first-time homebuyers, investors, and move-up buyers.


Product Features

Term:

15- and 30-years.
40-year term available as a Portfolio Feature; Not available on Sub-Prime
Initial Fixed Interest (Intro) Period:

1 month Neg Am Option = 1 month
3 month Neg Am Option = 3 months
6 month Neg Am Option = 6 months
12 month Neg Am Option = 12 months
Fixed Payment Period: Annual

Rate Adjustment Frequency: Monthly after the initial fixed interest period

Payment Adjustment Frequency: Annually from the first payment date

Payment Change Cap: 7.5% maximum annual payment cap increase or decrease except every 5th year of recast or when principal balance exceeds 125% (110% for NY).

Potential Deferred Interest: Yes, after fixed initial period.

Negative Limit: 125% of the original loan amount (110% in NY)

Recast: 5th year and every 5 years thereafter or immediately if the negative limit exceeds the 125% (110% in NY)

Payment Options:
After introductory period, borrowers may have up to four options:

Minimum amount due (may result in deferred interest)
Minimum payment plus any interest owing for the current month (interest only)
Full principal and interest to amortize loan fully within the original loan term
Principal and interest in an amount that would fully amortize the loan over an initial 15-year term
Assumable: Yes, subject to an assumption fee and certain conditions


Pricing
Pricing Guides: Refer to Pricing Guides

Pricing Options: Margin Buydown: Permanent

Lock-In Options: Float to closing. Lock-In for 30-, 45- or 60-day locks with no Lock-In Deposit. Extended Lock-In Options for 90, 120, 150 and 180 days available with a Lock-in Deposit Fee and increase in pricing. Float-down option available.

Prepayment Fee: Refer to the Pricing Guides.

MI Options:

Borrower Paid (mo.)

Required > 90%
Available > 80%
MI Not Available in NY on potential Neg AM ARMs > 80%
Uninsured Sub-Prime (Greater Than 80.00% to 89.90%)
Advantage 90 (Greater Than 80.00% to 89.90%; not available on Sub-Prime)

Parameters
Refer to the Portfolio ARM Product Parameters for more specific information.

Loan Purpose:

Purchase
No Cash Out Refi
Cash Out Refi
Occupancy:

Owner Occupied
Nonowner Occupied
Second Home
Ratios: 30/38 on LTVs of 80% or less, 28/36 on LTVs over 80%.

Eligible Properties:

Detached SFR only on loans > $1 M
1 Unit Co-op (NY Only)
1-4 Units
Condos & PUDs
The parameters below reflect Full Doc, 1-unit owner-occupied primary residence purchase, permanent 1st lien financing. Refer to specific Product Parameters for availability for other types of transactions, occupancy, property type, etc.

Max. Loan Amount: $2.5 million

Max. LTV: 95% LTV to $400,000 (MI required); Maximum 89.9% LTV in NY (MI N/A in NY > 80%)

2nd Financing LTV/CLTV: 80% LTV / 90% CLTV to $650,000.



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