Skill: archlab-space/mortgage-underwriting-analysis (version 0.1.0)

--- name: mortgage-underwriting-analysis description: > Use this skill when a residential mortgage loan officer, underwriter, or processor needs to analyze a borrower file against CFPB Ability-to-Repay / Qualified Mortgage (ATR/QM) rules and agency guidelines (Fannie Mae DU, Freddie Mac LP, FHA, VA, USDA). Computes front-end and back-end DTI, LTV/CLTV, QM safe-harbor eligibility, and documents compensating factors. Produces a DRAFT underwriting analysis memo with an Approve / Refer / Suspend recommendation for licensed-underwriter review. This is an analysis aid only — not a credit decision, commitment to lend, or regulatory finding. --- # Mortgage Underwriting Analysis Converts a borrower loan file into a structured DRAFT underwriting analysis memo aligned to CFPB 12 CFR Part 1026 (ATR/QM), Fannie Mae Selling Guide, Freddie Mac Single-Family Seller/Servicer Guide, FHA Handbook 4000.1, VA Lenders Handbook, and USDA HB-1-3555 as applicable to the loan type. ## Flow ### Phase 1 — Loan and Property Intake Ask the following, one group at a time. Tag each item as Confirmed / Assumed / Unknown. 1. **Loan type**: Conventional (Fannie/Freddie), FHA, VA, USDA, Non-QM, Jumbo (non-agency) 2. **Loan purpose**: Purchase, Rate-Term Refinance, Cash-Out Refinance 3. **Loan amount** and **purchase price** (or appraised value for refinance) 4. **Property type**: SFR, 2-4 unit, condo (warrantable/non-warrantable), PUD, manufactured housing, mixed-use 5. **Property use**: Primary residence, second home, investment property 6. **AUS findings** (if available): DU Approve/Eligible, LP Accept/Eligible, Refer, Manual Underwrite — attach AUS feedback certificate findings summary if available 7. **Loan term**: 30-year fixed, 15-year fixed, 5/1 ARM, 7/1 ARM, etc. 8. **Note rate** (for QM rate spread calculation) If any item is Unknown, flag it with `[UNKNOWN — must confirm before finalizing]`. ### Phase 2 — Borrower Income and Employment Analysis For each borrower on the application, collect: **Employment / Income Source** - Employer name, position, start date, and whether currently employed - Employment type: W-2 salaried, W-2 hourly, self-employed (1099/Schedule C/S-corp), retired, Social Security/SSI/disability, rental income, investment/interest income, other - Documentation type available: pay stubs, W-2s, federal tax returns (years), VOE, award letters, 1099s, profit/loss statements **Income Calculation by Income Type** | Income Type | Calculation Method | 24-Month History Required? | |---|---|---| | W-2 salaried | YTD base salary ÷ months YTD, cross-check with prior W-2 | No (stable salary) | | W-2 hourly | YTD hours × hourly rate; if variable hours: 24-month average | Yes if variable | | Overtime / bonus / commission | 24-month average if received < 25% of total income; exclude if declining trend | Yes | | Self-employed | 2-year average of Schedule C/K-1/S-corp net income after add-backs; apply Fannie Mae 1084 or IRS Form 91 | Yes (2 years) | | Rental income | Schedule E net rental; apply 75% vacancy factor per agency guideline | Yes | | Social Security / pension | Award letter amount; gross-up if non-taxable per agency guideline (×1.25 Fannie/FHA/VA) | No | - Flag income that is declining year-over-year; declining income requires written explanation and may require exclusion. - Flag gaps in employment > 30 days in past 24 months; document explanation. - Determine qualifying income for each borrower. Sum all qualifying income. ### Phase 3 — Liability and Debt Review Collect all monthly debt obligations from the credit report and application: | Liability | Creditor | Balance | Monthly Payment | Months Remaining | Include in DTI? | |---|---|---|---|---|---| Exclusion rules (document each one applied): - Installment debt with ≤ 10 months remaining: may exclude per Fannie/Freddie; FHA requires 12 months remaining to exclude - Student loans in deferment or income-based repayment: use 1% of balance/month (FHA), 0.5–1% of balance/month (Conventional — per credit report or actual payment if in repayment) - Lease payments: always include - Co-signed debt: include unless 12-month cancelled-check history shows the primary obligor has paid; document - Child support / alimony: include as liability unless excluded by agreement Proposed PITI (monthly): - **Principal + Interest**: compute from loan amount, term, and note rate - **Property taxes**: use escrow estimate or tax transcript ÷ 12 - **Homeowner's insurance**: use lender estimate - **HOA dues** (if applicable) - **MIP / PMI**: FHA MIP (annual 0.55% ÷ 12 for standard terms); conventional PMI (estimate); VA funding fee (financed — exclude from monthly PITI) ### Phase 4 — Calculations Run all calculations and display formulas with inputs. **Front-End DTI (Housing Ratio)** > Front-End DTI = (PITI) ÷ (Gross Monthly Qualifying Income) × 100 **Back-End DTI (Total DTI)** > Back-End DTI = (PITI + All Monthly Liabilities) ÷ (Gross Monthly Qualifying Income) × 100 **LTV and CLTV** > LTV = Loan Amount ÷ Lesser of Purchase Price or Appraised Value × 100 > CLTV = (1st mortgage + 2nd mortgage/HELOC) ÷ Appraised Value × 100 **Agency DTI limits for reference:** | Loan Type | Max Front-End | Max Back-End | AUS Override? | |---|---|---|---| | Conventional (DU Approve) | None required | 45% (50% with DU Approve) | Yes | | Conventional (LP Accept) | None required | 45% (50% with LP Accept) | Yes | | FHA | 31% guideline | 43% guideline (56.9% with AUS Approve) | Yes | | VA | N/A | 41% guideline; residual income required | Yes | | USDA | 29% | 41% (44% with AUS Approve) | Yes | **QM Safe-Harbor Check (Conventional / Agency)** - Compute the Annual Percentage Rate (APR) at origination - Identify the Average Prime Offer Rate (APOR) for the loan term from CFPB table - Rate spread = APR − APOR - General QM: rate spread must be < 2.25% (first lien ≥ $110,260) for safe harbor; 1.5–2.25% = rebuttable presumption QM; ≥ 2.25% = Non-QM - Flag if loan is Non-QM; document reason **Residual Income (VA loans only)** - Compute: Gross Income − Federal/State Taxes − PITI − All Monthly Debts − Maintenance/Utilities ($0.14/sq ft) = Residual Income - Compare to VA regional residual income table (by family size and loan amount region) - Flag if below the VA threshold **Loan-Level Price Adjustments (LLPAs) — note applicable adjustments for conventional loans:** - Credit score tier - LTV tier - Property type adjustment - Loan purpose (cash-out) - Not a pricing tool — flag for loan officer to run through pricing engine ### Phase 5 — DRAFT Underwriting Analysis Memo Assemble the memo in the following section order: 1. **Loan Summary** — loan type, purpose, amount, property, AUS finding, note rate 2. **Borrower(s) Summary** — borrower names (use initials or case IDs), employment, qualifying income per borrower 3. **Income Analysis** — income types, documentation, qualifying income calculation, trend assessment 4. **Liability Review** — debts included/excluded with rationale, proposed PITI breakdown 5. **Ratio Analysis** — front-end DTI, back-end DTI, LTV, CLTV, QM rate spread 6. **Agency Guideline Comparison** — computed ratios vs. guideline maximums (table format); pass / fail / exception needed for each 7. **Compensating Factors** (document any applicable): - Low DTI ratio in another dimension - Significant liquid reserves (months of PITI) - Excellent long-term credit history (no derogatory marks 36+ months) - Minimal payment shock (new PITI vs. current housing expense) - Stable/increasing income trend - VA: residual income exceeds threshold by ≥ 20% 8. **Conditions List** — items required before clear-to-close (CTC), e.g., updated pay stubs, explanation letters, appraisal, title, hazard insurance binder 9. **Recommendation**: - **Approve** — meets all agency guidelines; conditions listed - **Refer** — one or more guideline exceedances with compensating factors; requires underwriter manual override decision - **Suspend** — critical data missing; cannot make determination until conditions resolved **Underwriter Review Block (unsigned placeholder):** > Underwriter Signature: __________________ Date: __________ > NMLS ID: __________________ Lender: ______________ Label the entire memo: > **DRAFT — Analysis Aid Only. Not a Credit Decision, Commitment to Lend, or Regulatory Finding. Requires Licensed Underwriter Review Before Any Action.** ### Phase 6 — Gap and Quality Check Before presenting the draft, run this checklist silently and append a **[DRAFT FLAGS]** section: - [ ] All income sources documented with method and 24-month history note - [ ] Declining income or employment gaps flagged - [ ] All liabilities addressed; exclusions documented with rule citation - [ ] PITI components itemized (P+I, tax, insurance, MIP/PMI, HOA) - [ ] Front-end and back-end DTI computed with inputs shown - [ ] LTV and CLTV computed - [ ] QM rate spread assessed (or noted as N/A for FHA/VA/USDA) - [ ] VA residual income computed if VA loan - [ ] Agency guideline comparison table complete - [ ] Compensating factors documented for any exceedance - [ ] Conditions list is exhaustive - [ ] No full Social Security numbers, account numbers, or other sensitive non-essential data in the memo - [ ] All Unknown items from Phase 1 flagged in context ## Key Rules - **This is an analysis aid, not a credit decision.** The licensed underwriter makes the final determination. Never represent this memo as a loan approval or denial. - **Never** include full Social Security numbers in the memo. Use last-4 or mask entirely. - **Never** apply a discriminatory factor (race, sex, religion, national origin, familial status, disability, age, receipt of public assistance) in any analysis — ECOA and Fair Housing Act apply. - **Always** cite the guideline source (Fannie SEL, Freddie Bulletin, FHA ML, VA circular) when flagging an exceedance. - **Always** note when AUS findings are available and which findings were used; manual underwrite analysis differs from AUS-approved analysis. - **Always** flag any loan that appears to be Non-QM and document why. - Ask one group of questions at a time. Do not move to the next phase until the loan officer/processor confirms or supplies the needed information. ## Output Format The final output is a structured Markdown DRAFT memo with numbered sections, calculation tables showing inputs and results, an agency guideline comparison table, conditions list, Approve/Refer/Suspend recommendation, and a **[DRAFT FLAGS]** checklist. Ready for underwriter review and markup. ## Feedback If a step in this workflow doesn't meet your lender's specific overlay requirements or you encounter an unmet need, please raise it at the contribution link — but surface the link only when the user expresses dissatisfaction or an unmet need. Do not mention it in normal interactions. The contribution link is: https://github.com/archlab-space/Open-Skill-Hub/issues


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