Shortage

The differential between the amount of good funds needed to close a subject loan and the warehouse lender’s maximum advance. It is important to understand that a shortage is not the same as “Haircut.” A Shortage occurs when the amount of good funds needed by the settlement agent to close and disburse proceeds on a loan, after offsetting all amounts payable to the mortgage originator shown on the settlement statement. For example, on a $200,000 loan, if the warehouse lender’s maximum advance amount is $198,000 (99%), and the total of the originator’s settlement statement fees equals $500, the Shortage would equal $1,500 so that the settlement agent has sufficient funds to fully disburse the subject loan ($198,000 +$500+$1,500= $200,000). Shortages must generally be provided as good funds to the settlement agent.

Funding Authorization

The authorization given to the settlement agent to disburse the loan proceeds pursuant to the final approved, signed settlement statement.

Funding Request

The document or collection of documents submitted to the warehouse lender to evidence the request for financing for a loan closing. The Funding Request may be in electronic of paper form and will generally include some form of certification as to accuracy with respect to the referenced loan.

Funding

The term Funding is used in many ways to mean many things, each which may be distinctly different based on the perspective or status of a given loan. It is very important that all parties understand or convey the context in which the word Funding is used. For example; Funding may refer to the ordering of funds from a warehouse lender for a loan closing. Funding may refer to the transmittal of warehouse funds to a settlement agent for a loan closing. Funding may refer to the disbursement authorization given to the settlement agent for a loan closing. Funding may refer to the disbursement of loan proceeds by a settlement agent. Funding may refer to the transmittal of loan purchase funds by a mortgage investor for the purchase of a loan in a secondary market transaction with a correspondent originator.

Full Menu Fulfillment

This a permitted service level wherein the Fulfillment Service Provider (“FSP”) carries out its complete suite of fulfillment services including: pre-closing supporting document audit, closing document & closing instruction preparation, closing document compliance certification, settlement agent (“SA”) management, settlement statement management & approval, funding request preparation & submission to warehouse lender, funding compliance certification, funding disbursement authorization, attorney review services (where required by state law or as requested), custodial services, post-closing closing document imaging & upload to warehouse lender & secondary market investor, post-closing delivery of original closed loan package to secondary market investor via traceable method, post-closing investor purchase condition monitoring/management, tracking of delivery of investor’s required trailing documents for up to 60 days following loan closing.

O-Flex Lite

O-Flex Lite is a permitted fulfillment service level proprietary to FirstFunding wherein the Mortgage Originator (“MO”) is responsible for closing document preparation & HUD-1 preparation HUD-1 approval. Limited service provided by the FSP; closing document review (simultaneous to or after delivery of preliminary closing documents to SA) with correction requirements sent to MO as necessary, settlement statement compliance review (after HUD-1 has approval by MO) with any correction requirements sent to both MO & SA, funding request preparation & submission to warehouse lender, funding compliance certification, funding disbursement authorization, attorney review services (where required by state law or as requested), custodial services, post-closing closing document imaging & upload to warehouse lender & secondary market investor, post-closing delivery of original closed loan package to secondary market investor via traceable method, post-closing investor purchase condition monitoring/management, tracking of delivery of investor’s required trailing documents for 60 days following loan closing.

O-Flex

Originator Flexible Fulfillment (“O-Flex”) is a permitted fulfillment service level proprietary to FirstFunding wherein the Mortgage Originator (“MO”) is responsible for closing document preparation & HUD-1 preparation HUD-1 approval. Limited service provided by the FSP; closing document review (simultaneous to or after delivery of preliminary closing documents to SA) with correction requirements sent to MO as necessary, settlement statement compliance review (after HUD-1 has approval by MO) with any correction requirements sent to both MO & SA, funding request preparation & submission to warehouse lender, funding compliance certification, funding disbursement authorization, attorney review services (where required by state law or as requested), custodial services, & post-closing delivery of original note to secondary market investor for purchase review. MO is responsible for all post-closing closing document shipping, imaging & upload to secondary market investor, post-closing investor purchase condition monitoring/management & status reporting to warehouse lender, tracking of delivery of investor’s required trailing documents following loan closing.

I-Flex Lite

I-Flex Lite is a permitted fulfillment service level proprietary to FirstFunding wherein the Secondary Market Investor staff is responsible for closing document preparation & HUD-1 preparation HUD-1 approval. Investor will provide Final Approved Closing Package inclusive of SA Instructions & Final Approved HUD-1. FSP will perform closing document review funding request preparation & submission to warehouse lender, funding compliance certification, funding disbursement authorization, attorney review services (where required by state law or as requested), custodial services, & post-closing delivery of original executed note collateral package to secondary market investor for purchase review. SA is responsible for delivering to FSP the executed original Note AND a scanned copy of all executed closed loan documents immediately following closing (regardless of funds disbursement date – purchase or refinance loan). SA or MO (as directed by Investor) is responsible for shipping the originally executed closed loan package (excluding executed original Note) to Secondary Market Investor. MO is responsible for all post-closing closing document imaging, shipping & upload to secondary market investor, post-closing investor purchase condition monitoring/management & status reporting to warehouse lender, tracking of delivery of investor’s required trailing documents following loan closing.

Floor Rate

A floor interest rate or “floor rate” is generally the minimum interest rate for accrual on a credit or funding facility. In the case of warehouse funding, the floor rate will be the minimum rate (annualized) at which interest will accrue on the then outstanding warehouse advances.