SS Memo 11-06

SELLING GUIDE REVISIONS: CURRENT UNDERWRITING

Date: May 19, 2011

Loan Purchase

(Section 9000 and 9001)

To facilitate our lending partners, AHFC employs a streamline process for the submission of loans for purchase. In January, 2011 we revised our delivery requirements in an attempt to address a growing number of inaccurate and/or incomplete purchase submissions. Unfortunately, we continue to experience an unacceptable level of inaccurate and/or incomplete purchase submissions. Follow-up for these submissions has created an undue burden on AHFC staff resources and is causing delays in funding loans. In order to maintain a goal to turnaround purchases within 48 hours, and to be fair to all AHFC lenders, inaccurate and/or incomplete packages will be returned without prior notice effective June 1, 2011.

Private Transfer Fee Covenants

(Section 2001.04)

AHFC may not originate or purchase a loan for any property encumbered by private transfer fee covenants, unless such covenants are excepted transfer fee covenants. This prohibition will apply to mortgages on properties encumbered by private transfer fee covenants regardless of when the covenants were created, except for Common Interest Communities encumbered by private transfer fee covenants created prior to June 1, 2011.

SERVICING GUIDE REVISIONS: CONTACT SERVICING

Remittance to AHFC of Third Party Sales Proceeds and Presale Proceeds

Effective immediately, all Third Party Sales Proceeds and Presale Proceeds must be remitted to AHFC's Servicing Department via check within 24 hours of receipt by the Servicer. The remittance should be the sum of the unpaid principal balance, interest to the date of liquidation date (3rd party sales) or settlement date (presales), less the servicing fee. If the sales proceeds are less than this sum, the entire amount of the sales proceeds is to be remitted to AHFC. The check must be submitted with a completed Proceeds Remittance Form (Form SER-92).

Previously third party sales proceeds and presale proceeds great enough to satisfy the outstanding principal balance and interest due were remitted and reported as a payoff transaction via the ALCS reporting system. This practice should end immediately and all third party sales proceeds and presale proceeds funds be remitted via check.

This change has been updated to the following sections of the AHFC Servicing Guide:

13000.11 Presales

13001.14 E Third Party Bids

13001.14 F Remitting Third Party Sales Proceeds to AHFC

13001.15 Reporting Closed Presales

Removal of obsolete references

Section 11002.03 has been amended to remove reference to Thomson Bankwatch, Inc. who is no longer in business.

Section 11004 has been amended to remove obsolete reporting requirements and to clarify reconciliation submission months.

The following sections have been amended to remove reference to MGIC Pool Insurance Coverage. There are no remaining AHFC loans with this type of coverage: Sections 12000.01, 12000.08, 12000.10, 12000.11, 12000.12, 16000.01, and 16001.04

The following sections have been amended to remove guidelines for servicing loans with PCI insurance as there are no remaining loans with PCI insurance: 12000.04, 16000.01, 16001.03C

Common Interest Communities Guide Revision

The Common Interest Communities Guide has been revised to reflect current business practices and requirements, including the changes listed below:

General Requirements for Project Acceptance

Effective June 1, 2011, AHFC will not process an application for acceptance of any Common Interest Community encumbered by Private Transfer Fees.

.02.Y Private Transfer Fee Covenants

Documentation

A presale of 70% is required for each subsequent phase. Copies of the recorded amendment, attorney opinion letter, budget and reserve analysis for added phase(s), Recorded BEES (PUR-101), Recorded Summary of Building Inspections (PUR-102) if applicable, and evidence of sales should be forwarded to AHFC.

.07.C Acceptance of Subsequent Phases


Forms Guide Revisions: Contact Servicing

Available in PDF. (Adobe Acrobat or Adobe Reader is required to read and print PDF files.).

Revised Forms

PRJ-1 New Condominium Project Summary

05/11

PRJ-2 New Condominium Acceptance Requirements

05/11

PRJ-4 Condominium Reacceptance Requirements

05/11

PRJ-5 Condominium Subsequent Phase Documentation Requirements

05/11

Attachments

Available in PDF only. (Adobe Acrobat or Adobe Reader is required to read and print PDF files.).

Common Interest Communities Guide

05/11

PRJ-1 New Condominium Project Summary

05/11

PRJ-2 New Condominium Acceptance Requirements

05/11

PRJ-4 Condominium Reacceptance Requirements

05/11

PRJ-5 Condominium Subsequent Phase Documentation Requirements

05/11