02/12/2021
All policy changes and updates are linked to the appropriate section below. These policy changes are effective 02/12/2021 unless otherwise noted.
Additionally, CBCMA has compiled all of its announcements related to COVID-19 into one section immediately following the Recent Updates and Announcements section. To review the program guidelines changes made January 15, 2021, or earlier, please follow this link to the archived Program Guidelines.
Announcement:
Chenoa Fund allows the use of Remote Online Notaries (RON). However, the use of a RON must meet Agency guidelines, as well as State and County restrictions.
QC Reminder:
Correspondents partnering with CBC Mortgage Agency are reminded that cooperation with post-closing QC is mandatory. This coordinated effort is a protection for both correspondents and CBCMA to evaluate risk and is mandated by HUD.
CBCMA also reminds correspondents to review the Mortgage Loan Purchase and Sale Agreement, Section 2(e)(f). This section, along with Section 7, Reps and Warrants, specifically addresses correspondent cooperation with timely delivery of post-closing documents. Please prioritize timely responses upon notification of any open audits requiring correspondent review and response.
Guideline Updates:
Section 4.7.1 (Quality Control Compliance) has been added. The section in its entirety follows:
Quality Control compliance is a cooperative effort to mitigate fraud and risk in our lending environment and is also mandated by governing agencies, such as HUD and Fannie Mae. A correspondent’s prompt cooperation is mandatory when it comes to response and delivery of post-closing documentation.
The Mortgage Loan Purchase and Sale Agreement in Section 2(e) and (f) state the following:
• (e) Failure of Seller to Timely Deliver Mortgage Loan Documents. The Seller shall deliver to the Purchaser, or its designee, for each Mortgage Loan in the related Mortgage Loan Package a complete Mortgage File, and the related Mortgage Loan Schedule. Seller agrees to pay a penalty of $10.00 per day per document for any document that has not been provided to Seller within 90 days from the Closing Date. Seller agrees to correct any documents within 30 days after being notified by Purchaser that any documents are unacceptable.
• (f) Quality Control Review. Purchaser shall have the right at any time to perform a quality control review of any Mortgage Loan that it purchases under this Agreement, including, without limitation, independent credit report verifications, appraisal reports, and property inspections. If Purchaser is required by an investor to conduct or assist in a property inspection of the Mortgage Property, Seller agrees to assist the investor or Purchaser in conducting the inspection.
In section 5.28 (Ineligible Borrowers), the line “DACA recipients not allowed” was removed. CBCMA is pleased with FHA’s policy change that allows access to credit to these borrowers and adopted the policy immediately upon notification.
In section 5.34.9 (Ineligible Features) and 6.2.1 (Specific Details on Manufactured Housing), the following bullet point, identical in the two sections, has been expanded:
- Easements and Deed Restrictions that affect value, marketability, or property accessibility as determined by the appraiser and for which no protective title endorsement is available; deed restrictions specified in FHA 4000.1 are allowed.
In section 7.18 (Real Estate Taxes Due the Following Month After Loan Purchase), a new paragraph was added at the end of the section:
“Correspondents are expected to ensure that real estate tax calculations are reasonable and will not drastically increase following closing; for example, tax exemptions that won’t apply to the new homeowner should not be included in the calculation.”
Section 11.4.1 (Loan Package Contents and Delivery) has been broken into three new sub-sections:
- 11.4.1 (Goodbye Letter: FHA First Mortgages)
- 11.4.2 (Goodbye Letter: Repayable Second Mortgages)
- 11.4.3 (Goodbye Letter: Conventional First Mortgages and Forgivable Second Mortgages)
