Purchasing Hints

and Tips
What You Need To Know To Get a Closing Package Purchased
on the First Try
Preparing the Closing Package
• Our bank name should
always appear as
Merchants Bank, National
Association.
• Every closing package
should include the Closed
Loan File Stacking Order
Checklist, all UW At Close
conditions, and all required
closing documents.
• The original note and allonge
should be mailed to 62 W 3rd
St Winona, MN 55987.
• The remainder of the closing
package is uploaded
electronically to the Calyx
Path file.
• Purchasing can be contacted
with questions via email at
purchasing@merchantsbank.
com, 800-732-0115 option
#2, or internal extension
11421.
Miscellaneous Items to Remember
• Please complete the Appraisal screen in Calyx Path
including the individual appraiser information.
• The file in Calyx Path must contain a rate lock agreement
signed and dated by the borrower and lender showing
the interest rate has been locked. This must be dated on
or after the date of the initial application.
• The file in Calyx Path must contain an initial application
that is signed and dated by the lender.
• All loan terms must match between DU or LP, the rate
lock, and the closing documents.
Underwriting At Close Conditions
• All necessary documentation to satisfy the UW At Close
conditions must be included in the closing package.
• Please contact the UW Department PRIOR to loan closing
if there are any questions or concerns regarding the
conditions. This is especially important if the cash to /
from borrower is not going to meet the condition.
Subject Property Address
• Review the submitted DU address and the
standardized DU address for discrepancies!
• If there are no discrepancies, the loan documents
should match both addresses, follow USPS address
requirements including abbreviations, and have
consistent placement of directionals (N/S/E/W).
PIW/HVE can be utilized if AUS returns the option.
• If the submitted and standardized addresses do not
match the submitted address must be the physical
address of the property and all loan documents should
match this address, follow USPS address requirements
including abbreviations, and have consistent
placement of directionals (N/S/E/W). PIW/HVE cannot
be utilized even if AUS returns the option.
SSA-89 / SSA-3288
• The SSA-89 is required for all
borrowers and must be
included in every closing
package.
• A fully completed sample of
this form is available in
Chapter 8 of the manual.
• NO alterations may be made
to the form even with the
borrower’s initials (cross offs,
write overs, etc.).
• The SSA-89 may not be signed
by a POA.
• The SSA-3288 is required for
every borrower that qualifies
using Social Security income
(SSI).
• A fully completed sample of
this form is available in
Chapter 8 of the manual.
• NO alterations may be made
to the form even with the
borrower’s initials (cross offs,
write overs, etc.).
• The SSA-3288 may not be
signed by a POA.
Right of Rescission
• The Right of Rescission may never be re-executed.
• We do not require the borrower to sign after the 3 day
period has ended.
• Any changes/alterations made to the document MUST be
initialed by the borrower.
Power of Attorney
• When a Power of Attorney is • When a Power of Attorney
used by one or both borrowers
to sign the closing documents
we will require the following:
• A fully completed and executed
POA form. A signed certified
copy may be provided in the
closing package however a
recorded copy is required to be
included with your trailing
documents.
• The signature lines must be
typed and signed per one of the
options outlined in the investor
guidelines. Best Practice : John
Doe by Jane Doe as POA
is used by one or both
sellers for a purchase
transaction we will require
the following:
• A fully completed and
executed POA form.
• If the POA is used only for
the HUD a copy is sufficient.
• If the POA is used to sign the
warranty deed a recorded
copy will be required for our
Trailing Documents
Department.
• A POA is NOT required if the
property is being sold by a
company or institution.
Application
The Purchasing Department will review the final application
for the items shown below:

• Date of Birth, Home Phone Number, Marital Status (New

Loan Set Up Sheet)
• First Time Homebuyer information must be consistent
between sections III and VIII. (New Loan Set Up Sheet)
• Signed by the borrower and dated with the closing date.
• Signed by the Loan Originator and dated with the closing
date.
• Government Monitoring must have the race, sex, and
ethnicity completed if application was taken face-to-face.
Note
• The payment address should be that of your bank’s
location.
• The late fee section must reflect 5% charge after 15 days.
• Borrower’s name must be typed exactly the same
between the note, all 3 locations on the mortgage, and
the assignment of mortgage.
• Fannie Mae loans have a P&I tolerance of .01 less than
the DU findings or up to $1.00 over the DU findings.
• Freddie Mac loans have a $0 tolerance for the P&I.*
*For UW Approval P&I see Loan Transmittal (1008)
FKA / AKA Language
• The borrower’s name is one of the most
common reasons a file is pended. Please follow
the guidelines below in order to avoid having the
file suspended.
• When FKA / AKA language is used it must be used on
the signature lines of the note and mortgage, the
preamble of the mortgage, notary section of the
mortgage, and the assignment of mortgage.
• If the borrower’s name is different than how it appears
on title (completely different name; not just a
variation) you must either use the FKA / AKA language
or execute a Quit Claim Deed. You may execute a
name affidavit if there is only a minor variation such as
using a middle initial vs a full middle name.
Title Commitments
• The title commitment must have an effective date within
90 days of closing.
• The Proposed Insured must read either your bank name
plus ISAOA language OR Merchants Bank National
Association plus ISAOA language. Our bank name may
not be abbreviated in any way.
• A purchase transaction must include a copy of the
warranty deed in the closing package with the title
commitment.
Mortgage
• Please include all pages of the mortgage and
provide a signed certified copy. This means the
mortgage must be stamped as certified and also
signed by the person who is certifying the
document.
• The notary section must include the City, State,
date of acknowledgement, and signature of the
notary.
• The preamble must include the marital status
(joint tenants is not sufficient).
• Names must be typed consistently between the
preamble, signature lines, and notary section.
• Names must be typed exactly as they appear on
the note.
Mortgage Riders
• One or more of the riders
listed may be required based
on the DU findings, and these
may not always be listed as
UW At Close condition.
• Please contact UW prior to
close if you are questioning
the need for a rider.
• The mortgage must have the
applicable box checked if any
rider is attached.
• The borrower’s name must be
typed below the signature
line on all riders, and it must
be typed as it appears on the
mortgage.
• Second Home
• Investment Property (1-4
Family & Assignment of
Rents)
• Primary Residence 2-4 Family
(1-4 Family & Assignment of
Rents)
• Condominium (Association
name must be included)
• Planned Unit Development –
PUD (Project name must be
included)
• Adjustable Rate Mortgage -
ARM
Modifications
• These must be completed on Fannie Mae form 3179 for a
fixed rate and form 3161 for an ARM product.
• The original recorded mortgage must be included in the
closing package, as well as any other modifications done
prior to the final modification.
• The modification must include the document number
and date of the original mortgage.
• The borrower’s name must appear as it did on the
original mortgage.
• The modification must be signed by lender and include
their typed name, title, and the date.
Hazard Insurance
• Every closing package must contain a binder, policy, or declarations
page for the subject property that includes the following criteria:
• Mortgagee can appear as your bank name OR Merchants Bank with
ISAOA language included.
• The address of the subject property must exactly match how it appears
on the note (including the placement of any directionals). Watch UNIT
#s.
• The effective date must be on or before the closing date. It is not
acceptable to send the binder for the upcoming policy term. We also
cannot use the “change effective date” if there is one – we only consider
the effective date of the policy.
• All purchase transactions must show the first year’s premium either Paid
At Closing on the HUD or a paid receipt must be provided. This is
required regardless of the borrower’s choice to escrow.
• The premium must be included on the hazard insurance regardless of the
borrower’s choice to escrow.
• Coverage requirements follow investor guidelines.
 HUD Settlement Statement and Initial
Escrow Disclosure
• All pages of the HUD must be provided.
• The settlement and disbursement dates
must be completed and correct.
• The monthly escrow payments (lines
1001-1004) must match the monthly
escrow payment on the Initial Escrow.
• The opening escrow amount collected on
the HUD must match the opening escrow
balance on the Initial Escrow.
• When a principal curtailment is done it
must appear on the HUD and a check for
the curtailment amount must be sent
along with your original note and allonge.
• Files with a LTV greater than 80% must
escrow regardless of the product type.
• Property taxes or hazard insurance
premiums that are due within 6 weeks of
closing must be paid at closing if the
borrower is choosing to escrow.
• If the borrower is waiving escrows for
either hazard insurance, property taxes, or
both the closing package must include a
signed original Escrow Waiver form.
• The amount used for property taxes and
hazard insurance must be supported by
documentation in the closing package.
For hazard insurance, the amount used
should always match the binder/policy
provided. For property taxes, the amount
used must match the title commitment,
appraisal, or documentation from the
county.
• A construction to permanent loan may not
use an estimate for the property taxes
(the 1% used by UW may not be used for
Purchasing).
• The Cushion Selected by Servicer on the
Initial Escrow may equal one or two
months, and the escrow account balance
on the right side must also go down to the
one or two month cushion.
Authorization for Automatic
Payments
• Please encourage ACH as an option for your borrowers.
A fully completed form must include the following:
• Loan number, routing number, account number, bank
name and address.
• The Payment Amount must equal the P&I plus any
applicable escrow amounts, and the Automatic
Payment Amount should be completed with the
amount the borrower would like to pay every month.
• The Automatic Payment Start Date must be
completed, and may be anywhere from the 1st through
the 15th of the month. Please note after 8 days the
borrower will receive a late fee reminder, so it is
important the borrower is aware of that if choosing
the 9th through the 15th of the month.
First Payment Letter
• Payment information is correct and is broken down
accordingly (taxes and insurance must be listed
separately).
• Our bank name must appear as Merchants Bank
National Association and include our address of PO
Box 248 Winona, MN 55987.
• The first payment date must match the note.
I Received a Notice of Suspense…
Now What?
• Please call or email the Purchasing Help Desk
with any questions.
• Please read the suspense conditions carefully
and upload the applicable documents to the
Calyx Path file. Submit the conditions within the
system to notify Purchasing.
• Review the extension fee start date and
deficiency cure deadline date displayed on the
Loan Summary screen.
• Please forward any original documents that have
been requested. Please do not forward originals
if they have not been requested.
Ready to Fund!
• Once all suspense conditions have been cleared
(or there were no conditions to begin with) you
will receive a notice that your Purchase Advice
(PA) is available.
• The PA will reflect all fees and credits and
indicate the final amount and date that you will
be funded.
• Please review your PA as soon as possible so that
any necessary corrections may be processed
prior to us completing the funding.