20-11-16 Announcement—November 16 2020 Program Guidelines Update

11/16/2020

All policy changes and updates are referenced to the appropriate section of the Correspondent Lending Guide. These policy changes are effective 11/16/2020 unless otherwise noted.

Note: This announcement page has been updated since it was originally posted. The most recent update occurred at 11:33 MST, November 16th.

Additionally, CBCMA has compiled all of its announcements related to COVID-19 into one section immediately following the Recent Updates and Announcements section within the Correspondent Lending Guide. To review the program guidelines changes made November 2 or earlier, please review 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.

 

We clarified COVID-19 Temporary Guidance 20-17. All forbearances, even COVID-related forbearances, reset the 36-month waiting period before a Chenoa Fund second mortgage can be subordinated. This has been updated on the Temporary Guidance page and on the original announcement.

 

In 5.8 (AMI Calculation), the following sentence was added to the beginning of the section: “The area median income (AMI) used to calculate program-specific income limits is valid as of the closing date of a loan.” While this won’t affect most Chenoa Fund second mortgages, in edge cases the AMI may raise enough for a DPA Edge Repayable Second mortgage to qualify as a DPA Edge Soft Second. It is the correspondent’s responsibility in these instances, if desired, to track income limits and request a switch between programs.

 

CBC Mortgage Agency adheres strictly to TRID/ATR guidelines with first mortgages; in addition, first mortgages must adhere to the 3% max points/fees test. To help clarify these details, the following sections have been revised (changes bolded):

1.     5.29 | HPML, High Cost, & QM Compliance

HPML transactions are allowed. Lenders must comply with CFPB & TRID requirements. High Cost loans are not permitted. All first mortgages must adhere to QM/ATR compliance. Mortgage loans exceeding the 3% max points/fees test are not permitted unless cures are applied. Bona fide discount points must adhere to CFPB and any or all state regulations.

2.     7.22 | Documentation—General Requirements

[Required Documentation] … Compliance testing for adherence to QM/ATR, APR, and Points and Fees for the first mortgage

On a related note, CBC Mortgage Agency strictly follows the guidance given in the Buckley-Sandler memo on how and when to exclude lender- or seller-paid costs from points and fees. This memo can be found under Originator Resources on our CBCMA Documents and Tools page of our website. We encourage all of our correspondents to become familiarized with the document.

 

In 10.2 (Mortgage Electronic Registration Systems), we updated the following text (changes bolded):

First mortgage loans sold to CBC Mortgage Agency, and all secondary mortgages, must be registered in Mortgage Electronic Registration Systems (MERS) in accordance with MERS guidelines. In addition, all mortgage loans, first and second liens, must be transferred to CBC Mortgage Agency as Investor (owner/beneficiary) and Servicer through MERS at the same time the first mortgage is transferred, but never before purchase (MERS ORG #1012881). This MERS transfer must be initiated within forty-eight (48) hours to ensure that the MIN will be in CBCMA’s name within seventy-two (72) hours. We remind all correspondents of the following when registering and transferring MINs:

    • Select the correct lien type for the loan
    • Ensure the loan amount is correct
    • Lender organization ID is entered as the Originator for all first mortgages
    • CBCMA organization ID is entered at the Originator for all second mortgages
    • The borrower’s or borrowers’ social security number(s) is correct
    • FHA Case Number is entered and is correct (if applicable)
    • Enter the CBCMA loan number as Investor Loan Number
    • An interim funder should not be added for any Secondary Mortgage MINs