Services We Provide
Real Estate & Financing Services
                                                    CONSTRUCTING A LOAN


Step 1 : QUALIFYING  BORROWER
Lenders look at 4 Cs formula
1) Credit Report
      a. Credit Score = 700+            A+ paper
                                      660 – 700    A    paper
                                      620 – 659    A -  paper
                                     Consider as a good Credit if score = 620+

                                     Consider as a not good Credit, Subprime if score = 620-
                                     600 – 619    B    paper
                                     500 – 599    C    paper

           Above is just a general guide line . It varies from lender to lender.
                     
     b. Credit History =  any default in 30, 60, 90-days . If yes then we may need LOE
                                        (Letter Of Explanation)

2) Collateral
      Loan To Value (LTV) = Amount of loan / Appraised value of home            
                                       < = 80%  (70% is preferrable)
                                       If > 80% then we should split into 2 loans to avoid PMI


3) Capacity
a. Total debt/total income (Back End ratio)               < 38% (some lenders accept 50%)
   Back End = (PITI + Debts) / GI
   Where P = Principle (Monthly Mortgage)
               I  = Interest  (Monthly Mortgage)
               T = Property Tax (Monthly) = (Purchased Value x 1.25%) /12
               I  = Hardzare Insurance (Monthly) = (Loan Value x 0.35%) / 12
               GI = Gross Income (Monthly) = ( $perhour x 2080hrspermonth) /12
               Debts = Credit card debts +  Auto loan + etc.

b. Mortgage debt / total income (Front End ratio)     < 28% (some lenders accept 35%)
   Front End = PITI  / GI
   Where P = Principle (Monthly Mortgage)
               I  = Interest  (Monthly Mortgage)
               T = Property Tax (Monthly) = (Purchased Value x 1.25%) /12
               I  = Hardzare Insurance (Monthly) = (Loan Value x 0.35%) / 12
               GI = Gross Income (Monthly) = ( $perhour x 2080hrspermonth) /12
               
Note : some lenders use both Back and Front End Ratios, some lenders use either one. Also,
the ratio can be understood (as higher) if you have better credit score (to waive this ratio if
you don’t meet)


4) Capital (Cash Reserve) : Saving, Checking accounts, 401K, Mutual Funds, Cash ,etc…
  Lenders prefer to see at least 4 (or 6) x monthly mortgage payments in your bank account.


Step 2 : CATEGORIZING BORROWER

                                                          ------------------ we request from borrowers ----------------
                                                          Application   Paystub   Bankstatement   W2     Asset

1) Full Doc                                           yes                   2              2                            2        Optional

2) Stated Doc                                     yes                   na            2                            na      yes
 No Ratio Doc                                          
These 2 categories are the same.
They  have JOB but not enough Income. Their Income needs to be adjusted for meeting
Front/Back End ratio

3) No Income Full Asset                   yes                  na            2                            na      yes

4) No Income No Asset (NINA)        yes                 na            na                           na      na
  No Doc
  No Income No Job No Asset (NINJA)
These 3 categories are the same, depending on what lenders want to call, it’s just a
terminology .

Step 3 : CHOSE LENDERS BASED ON TYPE OF LOAN (this may change since lenders keep
           improving their products).This research is based on June, 2003 – August, 2003 time
           frame.
          You should check with Lenders, Loan Processors, etc. for updated information.
          Different people has different suggestion; hence, this guide line is just provides you a
          general idea.

1)   PURCHASE
Call  CAROLINE TRAN at (408) 595 – 6416 TO SELECT THE BEST PROGRAM FOR YOU.

2)   REFINANCE
Call  CAROLINE TRAN at (408) 595 – 6416 TO SELECT THE BEST PROGRAM FOR YOU.

3)   1st & 2ND  (Piggyback or Concurrent = 1st & 2nd are same lender,  or  2nd = HELOC)
Call  CAROLINE TRAN at (408) 595 – 6416 TO SELECT THE BEST PROGRAM FOR YOU.


Step 4 : CHOSE LENDERS BASED ON BORROWER STATUS (this may change since lenders
            keep improving their products).This research is based on June, 2003 – August, 2003
            time frame.
            You should check with Lenders, Loan Processors, etc. for updated information.
            Different  people has different suggestion; hence, this just provides you a guide line.

Full Doc
Call  CAROLINE TRAN at (408) 595 – 6416 TO SELECT THE BEST PROGRAM FOR YOU.
       
Stated Doc
Call  CAROLINE TRAN at (408) 595 – 6416 TO SELECT THE BEST PROGRAM FOR YOU.

No Doc , NINA , NINJA
Call  CAROLINE TRAN at (408) 595 – 6416 TO SELECT THE BEST PROGRAM FOR YOU.

Sub-Prime (borrower does not have good credit score)
Call  CAROLINE TRAN at (408) 595 – 6416 TO SELECT THE BEST PROGRAM FOR YOU.

Niche Product (self employed)
Call  CAROLINE TRAN at (408) 595 – 6416 TO SELECT THE BEST PROGRAM FOR YOU.

HELOC (Home Equity Line Of Credit)
Call  CAROLINE TRAN at (408) 595 – 6416 TO SELECT THE BEST PROGRAM FOR YOU.

1st  and 2nd
Call  CAROLINE TRAN at (408) 595 – 6416 TO SELECT THE BEST PROGRAM FOR YOU.

Interest Only
Call  CAROLINE TRAN at (408) 595 – 6416 TO SELECT THE BEST PROGRAM FOR YOU.


Step 5 : LOAN PROCESS  - FLOW OF THE LOAN

1)  Enter LEAD then LOAN into PURITY Webloan
2) Construct the loan ( see step 1 above) then fill out loan cover letter and ask customers to
  fill out loan application and obtain customer’s signatures. Make sure to provide your
 customers GFE (Good Faith Estimate)
3) Collect all papers that fit your loan type (refer to step 2 above)
4) Submit loan package to Processor Center (Red for Purchase, Vanilla for Refinance)
  You can lock at this time or wait at a later time, depending on your analysis.
5) Order Pre-Lim  and  Appraisal  as soon as possible since it takes 5-10 business days
6) Follow PURITY Webloan to satisfy conditions, to update Quote, Rate, Point, Cost, anything.
7) Update Loan status (PURITY Webloan)
8) Keep monitoring the loan process by working , cooperating your customers, lender, loan
 processor.     
 Loan processor will call you to confirm :   Lock at what rate,15 or 30-day, Rebate, Adjust,
 Point, Cost, what credit back to Borrower, etc.
9) Get Lock Confirmation
10) Ask loan processor to draw doc
11) When doc goes to escrow office, ask escrow officer to send the Estimated Closing
    Statement
12) Review this Estimated Closing Statement for accuracy.
13) Call Borrowers to sign at escrow office  (at their convenient time)
14) Inform escrow officer about this time.
15) You or Selling agent should attend with borrowers at escrow office to show your support.
16) Funding : follow up with escrow officer and lender.

My summary just gives you an idea, a brief guide line about the loan process. You should NOT
rely on this summary since it may vary from day to day basis because Lenders, Processing
Team, etc. ,  keep improving the products, the procedures.

Best Regards,

Caroline Tran  & The PURITY Group
DRE# 01334109
Vice President, CFO – The PURITY Real Estate Investment and Finance, Inc.
(408) 595 – 6416, (408) 904 - 7030
CarolineTran@thePURITYgroup.com
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