05/20/2021
All policy changes and updates are referenced below to the appropriate section of the CLG. These policy changes are effective 05/20/2021 unless otherwise noted.
CBCMA has compiled all of its announcements related to COVID-19 into one section immediately following the Recent Updates and Announcements section of the Correspondent Lending Guide.
To review the program guidelines changes made May 6, 2021, or earlier, please follow this link to the archived Correspondent Lending Guides.
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We have removed all letter of explanation requirements for borrowers with no present housing payment. This affects the following sections of the CLG:
- 5.17 (Present Housing Expense & Verification of Housing Payment): For any borrowers in the 620–639 FICO band not making a present housing payment, a verification of housing payment will be required to be completed by the landlord or homeowner which must document that no rent is past due.
- 5.17.1 (Current Housing Payment [Loan Application]): All applications must contain a “present” housing payment unless the borrower is currently not making a housing payment. The amount “$0.00” should be entered into the “present” housing payment field on the loan application if the borrower is not making a housing payment. The “present” housing payment field may only be left blank if your LOS does not allow an entry of $0.00.
CBCMA’s escrow holdback policy has been updated. To be thorough, the relevant changed sections have been included in their entirety:
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5.34.10 (Escrow Holdbacks)
All Programs: Escrow holdbacks are permitted and must meet the following general guidelines:
- Must be weather-related
- Cost of repairs may not exceed $5,000
- Original appraisal must be completed “subject-to” the repairs required
- Repairs must be required by the appraiser or lender in order to bring the property up to FHA minimum property standards, or Fannie Mae requirements (for conventional loans)
- Contractor must provide an invoice with an estimate of work certifying that the work cannot be completed prior to disbursement (due to inclement weather conditions)
- Inclement weather conditions are generally considered to be between November and March
- All repairs should be completed within six (6) months of the Note date
- The amount of money held in escrow for repairs must be 1.5 times the amount of the invoice plus a sufficient amount required for the FHA appraiser’s final inspection
- For FHA loans: the Mortgagee must complete the “Escrow Closeout Certification” screen, in FHA Connection, within thirty (30) days of escrow closing/completion
- Prior to Purchase: The lender must provide the executed HUD form 92300, Mortgagee’s Assurance of Completion, to indicate the repair escrow has been established
- Post Purchase: The lender must provide HUD form 92051, Compliance Inspection Report, to evidence that repairs have been satisfactorily completed
- All other Fannie Mae™ & FHA guidelines must be adhered to
Prior, written approval by CBC Mortgage Agency is not required unless a true exception to this policy is required. It is preferred that exception requests be submitted through the client site while registering a loan. When this isn’t an option, it is preferred that exception requests be submitted through the Exception Request Form. (The exception hit of 0.25 does not apply to escrow holdbacks.)
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7.21 (Minimum Required Repairs & Escrow Holdbacks)
Minimum required repairs are established by the FHA Roster Appraiser, the FHA DE Lender, or both. CBC Mortgage Agency will accept escrow holdbacks. Exception requests for escrow holdbacks will be considered for weather-related repairs only—that is, repairs that cannot be completed prior to close due to inclement weather. Prior approval is not required if the following conditions are met:
- Must be weather-related
- Cost of repairs may not exceed $5,000
- Original appraisal must be completed “subject-to” the repairs required
- Repairs must be required by the appraiser or lender in order to bring the property up to FHA minimum property standards, or Fannie Mae requirements (for conventional loans)
- Contractor must provide an invoice with an estimate of work certifying that the work cannot be completed prior to disbursement (due to inclement weather conditions)
- Inclement weather conditions are generally considered to be between November and March
- All repairs should be completed within six (6) months of the Note date
- The amount of money held in escrow for repairs should be 1.5 times the amount of the invoice plus a sufficient amount required for the FHA appraiser’s final inspection
- For FHA loans: the Mortgagee must complete the “Escrow Closeout Certification” screen, in FHA Connection, within thirty (30) days of escrow closing/completion
- Prior to Purchase: The lender must provide the executed HUD form 92300, Mortgagee’s Assurance of Completion, to indicate the repair escrow has been established
- Post Purchase: The lender must provide HUD form 92051, Compliance Inspection Report, to evidence that repairs have been satisfactorily completed
- All other Fannie Mae™ & FHA guidelines must be adhered to
- Acceptable evidence of completion is provided by the borrower for minor repair or improvement items
- Note Energy Mortgages (NEM) are not allowed at this time
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7.21.1 (Completion Date)
Improvements or repairs must be completed within six (6) months of the Note date.
Please note: it is the responsibility of the correspondent lender to ensure that all repairs are completed. Notification from CBC Mortgage Agency or the transferring investor is not guaranteed.
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7.21.2 (Escrow Holdback Requirements—Required Form).
When using an Escrow Holdback, please review and complete the Escrow Holdback Requirements document found on the CBCMA Documents and Tools page, and then upload said document with the closed loan package. (The document is under the “CBC Process and Documents” dropdown.)
