20-11-02 Announcement—November 2 2020 Program Guidelines Update

11/02/2020

All policy changes and updates are viewable in the Correspondent Lending Guide. These policy changes are effective 11/02/2020 unless otherwise noted.

Additionally, CBCMA has compiled all of its announcements related to COVID-19 into one convenient section in these guidelines. This section can be found immediately after this Recent Updates and Announcements section. To review the program guidelines changes made in October, 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 5.16 (Alternative Qualification Requirements), we made several clarifications:

  1. Borrowers may not use gift funds to meet reserves requirements.
  2. All borrowers on a loan must meet the alternative qualification requirements if alternative qualification requirements are used to qualify for a Chenoa Fund product.
  3. For borrowers in the FICO band of 640–659, we set a DTI maximum of 55% for borrowers that qualify using Chenoa Fund’s alternative qualification requirements. The DTI maximum is still 50% for borrowers not using alternative qualification requirements. We will not go above 55% DTI for borrowers using these programs and in this FICO range, even if they meet other alternative qualification requirements. This update does not apply to the Rate Advantage program.

Visit section 5.16 in the guidelines to fully review the current requirements for each Chenoa Fund product.

 

In 5.32 (Fees to Originator), we clarified that loan level pricing adjustment charges may be seller-paid. The specific text is included below, additions bolded:

“CBCMA will allow a maximum origination fee of 1.5%. Additionally, the lender may charge for any CBCMA loan level pricing adjustments (LLPAs); charges for loan level pricing adjustments may be seller-paid. Lenders will be required to refund borrowers for any origination fees (including non–bona fide discount points) exceeding 1.5% plus CBCMA LLPAs. Reasonable lender underwriting, administrative, or program fees are not considered in this calculation; however, they are considered in the QM 3% points and fees test.

 

In 5.34.2 (Manual Underwriting), it was clarified that CBCMA strictly follows FHA guidelines for manual underwrites. We do not allow manually underwritten loans to qualify for Chenoa Fund using our alternative qualification requirements. Visit section 5.32.4 in the guidelines to fully review our current policy towards manual underwrites.