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Jumbo and Alt-A Corespondent Banking
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What is ALT A?Alt-A is generally considered to be loans with
underwriting that departs from traditional agency guidelines. Typical
Alt-A underwriting utilizes streamlined or more liberal income and
asset verification processes. These items add additional elements of
uncertainty and credit risk. Frequently this product also incorporates
lesser credit borrowers that fall below what the industry would deem
“A” credit. Many banks are uncomfortable holding these kinds of risk
on their balance sheet.
ALT A product might include loans with the following characteristics:
- Full documentation but utilizing nontraditional verification sources
- Borrower income and/or assets are not verified or not reported at all
- Fast-track re-financings
- Foreign national borrowers
- Credit scores as low as 620
- nvestment properties/multi-family/super jumbos up to $3.5 million in size
How the Process WorksStep One: A loan request is submitted by a customer that you wish to make but do not want to hold on balance sheet
Step Two: Log
onto the site and fill in the required (standard) loan and borrower
information as well as lock-in period (30 or 60 day) and type (“best
efforts” or mandatory • mandatory will be .25% better in price but will
require a .375% pair-off fee if the loan is not delivered). The system
will automatically return a price based on the information submitted.
You will be prompted to submit if the terms are acceptable.
Step Three:
The required information and documentation is gathered from the
borrower by the bank based on the program requirements and the file is
then sent to the investor’s due diligence center. A due diligence
manager assigned to your account will return a response to you with 72
hours from receipt of the file. Approval, exceptions and progress on
the loan will be communicated to you daily by phone or email. Progress
of your pipeline will also be updated on the website.
Step Four:
Once approved, you determine a settlement date (on or before the
commitment deadline). You send the purchaser’s custodian the note, a
blank/unrecorded assignment, the title binder, and certified copy of
mortgage for review (2 business day review period). Funding can occur
7 days from custodial approval.
Step Five: Post settlement, you will be required to forward to the custodian the recorded mortgage and final title policy once received
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