20-10-14 Announcement—October 2020 Program Guidelines Update

10/14/2020

All policy changes and updates are referenced to the appropriate section in the Program Guidelines. These policy changes are effective 10/14/2020 unless otherwise noted.

Additionally, CBCMA has compiled all of its announcements related to COVID-19 into one convenient section in the Program Guidelines. This section can be found immediately after the Recent Updates and Announcements section. To review the program guidelines changes made in September, please follow this link to the archived Program Guidelines.

 

Due to changing industry needs, we retired our FHA Classic product on October 1. CBCMA will no longer accept registrations for this program. The FHA Classic product will remain on our Product Matrix for reference purposes until January 1st, 2021.

 

In 5.12 (Undisclosed Debt Monitoring and Soft-Pull Credit Refreshes), it was clarified that CBCMA highly recommends the use of an Undisclosed Debt Monitoring service for both conventional and FHA loans. In addition, “closing” and “funding” were changed to “disbursement” to more fully clarify the trigger date.

 

Section 5.26 (Loan Amounts [Minimum and Maximum]) was changed to clarify that CBCMA has no minimum or maximum loan amounts; we follow relevant Agency guidelines regarding loan amounts.

 

Section 7.18 (Real Estate Taxes Due the Following Month After Loan Purchase) was reworded to the following:

“All escrow disbursements due the month following the loan purchase must be paid prior to loan purchase with evidence of payment documented (a copy of a check or a paid receipt) and an updated pay history. For example, if a loan is to be purchased in October and taxes are due in November, the November taxes must be paid prior to CBC Mortgage Agency purchasing the loan. An exception to this rule will be granted if a tax bill is not yet released.”

 

Section 11.1 (Early Payment Default) was reworded. The biggest changes involve the loan admin fee the correspondent pays in the case of an early payment default. The changed text is included below:

“An early payment default (for the purpose of the agreement between the correspondent and CBC Mortgage Agency) is defined as the first payment that becomes thirty (30) days or more delinquent, or any of the second through sixth payments that become sixty (60) days or more delinquent, or if the mortgagor becomes a debtor in bankruptcy (or any similar type of proceeding). A payment is considered delinquent if a payment is not received within thirty (30) days of the due date designated on the mortgage note (first or second).

In the event that a borrower goes into an early payment default (EPD), CBCMA will invoice the correspondent lender for any premium pricing paid to the correspondent at the time of loan purchase plus an admin fee. The admin fee will be equal to the admin fee charged by CBCMA’s investor (up to $3500) or, for loans securitized indirectly by CBCMA, the admin fee will be $1500. The correspondent will also be required to purchase the second mortgage.”