Manual Underwriting

Homium’s underwriting policies include an evaluation of the borrower’s (or spouse’s to the extent required by applicable law) equity investment, credit history, reliable and recurring income, and the cumulative effect that these and other risk factors have on mortgage loan performance. Homium’s underwriting policies enable the underwriter to consider various scenarios in evaluating a borrower’s eligibility for a Homium mortgage loan. The underwriter must confirm that information provided by the borrower during the loan application process is accurate and complete; include documentation in the loan file that supports the underwriter’s assessment of the borrower’s credit history, employment and income, and other financial information used for qualifying; conduct a comprehensive risk assessment of each mortgage loan application; and render a decision to either approve or decline the mortgage loan application.

Homium uses manual underwriting. Underwriters should follow the comprehensive risk assessment approach. Under this approach, underwriters evaluate certain key risk elements to assess the overall level of delinquency risk.

Underwriters are fully responsible for:

• evaluating the delinquency risk of each loan;

• reviewing the credit report, as well as all other credit information, to determine that the credit report meets Homium’s requirements, that the data evaluated was accurate, and that the borrower has the capacity to repay the mortgage loan;

• assessing the adequacy of the property as collateral for the mortgage requested;

• determining whether or not the loan meets Homium’s eligibility requirements as fully described in this Guide;

• fully documenting the assessment and the documentation on which the assessment was based.

Comprehensive Risk Assessment

Underwriters must evaluate the overall level of serious delinquency risk that is present in each mortgage application by taking into consideration any layering of risk factors, the significance of risk factors, and the overall risks present in the mortgage application. These guides provide a solid foundation for assessing the risk of a Homium loan, and identifies the risk elements to evaluate for each transaction type, including:

• LTV, CLTV, and HCLTV ratios (“LTV ratios”);

• credit score;

• occupancy;

• loan purpose;

• property type and number of units;

• product type (if applicable);

The underwriters determination of the mortgage delinquency risk, the assessment of the adequacy of the property as security for the mortgage, the determination of whether the mortgage satisfies Homium’s mortgage eligibility criteria, and the acceptability of the documentation in the mortgage file should all enter into the decision on whether the loan is eligible for a Homium mortgage loan.

The underwriter must fully document the results of its comprehensive risk assessment and final underwriting decision, and ensure that the information used to reach its comprehensive risk assessment is valid, accurate, and substantiated.