Internal Control Questionnaires and Verification Procedures

Pipeline, Warehouse, and Hedging — Policies and Procedures

1. Has the board of directors or its mortgage banking committee, consistent with its duties and responsibilities, adopted written mortgage banking policies governing pipeline, warehouse, and hedging activities that define:

   1. Position and earnings-at-risk limits?

   2. Permissible hedging activities?

   3. Individuals authorized to engage in hedging activities?

   4. Acceptable hedge instruments?

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