11/03/2021

Version 11.6

All policy changes and updates are referenced below to the appropriate section of the CLG. These policy changes are effective 11/03/2021 unless otherwise noted.

To review the program guidelines changes made October 19, 2021, or earlier, please follow this link to the archived Correspondent Lending Guides.

These updates apply to everyone using the Chenoa Fund program—correspondents and TPO.

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Guidelines Updates

Section 5.30 (Private Mortgage Insurance [MI] Coverage) has been given a new sub-section, 5.30.1 (Transferring Private Mortgage Insurance). The section will contain the following text:

Servicing Transfer address:

Essex Mortgage
2100 SE 17th Street
#112
Ocala, FL 34471

Methods to Notify Radian of a Loan Sale or Transfer of Servicing:

• EDI: Initiate EDI submission
• MI Online:
  • Access MI Online: www.mionline.biz
  • Click the Loan Servicing tab and make the appropriate selections
• Email: Send the appropriate forms (the Activation Notice or Radian’s Notice of Loan Sale and/or Request for Transfer of Servicing) to customercare@radian.com

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Language regarding CBCMA’s Admin Fee has been updated in sections 5.31 (Fees to CBCMA) and 7.10 (Important Notice Regarding CBC Mortgage Agency Investor Delivery Fee and Clarification of Rate Sheets). This language makes it more clear that CBCMA’s Admin Fee is a secondary market cost and not part of the primary transaction; therefore, the charge must be assessed in section A of the LE/CD.

• 5.31 (Fees to CBCMA):
  No lender fees allowed on secondary financing. The only fees chargeable to the borrower in conjunction with the secondary financing are prepaid interest, recording fees for the Deed of Trust, reasonable settlement fees, and a courier fee to return the signed documents to the Lender.
  The Admin fee is charged to the correspondent and is reflected on the Purchase Advice as a deduction from the total loan sale proceeds. This fee is a secondary market cost to the correspondent and is not part of the primary transaction, therefore it is not appropriate to charge this fee in section B or C of the LE/CD. Any addition to the lender’s fees to the borrower to offset this charge must never reflect as a charge payable to CBCMA and must always be listed in Section A, paid to the correspondent (for example, included in the Origination Charges or as a separate line item charge). Any fees added to Section A must be included in the TRID points & fees test.

• 7.10 (Important Notice Regarding CBC Mortgage Agency Investor Delivery Fee and Clarification of Rate Sheets):
  CBC Mortgage Agency requires that a $399 Investor Delivery fee be paid by the correspondent. This is also known as an “Admin Fee.”
  The Admin fee is charged to the correspondent and is reflected on the Purchase Advice as a deduction from the total loan sale proceeds. This fee is a secondary market cost to the correspondent and is not part of the primary transaction, therefore it is not appropriate to charge this fee in section B or C of the LE/CD. Any addition to the lender’s fees to the borrower to offset this charge must never reflect as a charge payable to CBCMA and must always be listed in Section A, paid to the correspondent (for example, included in the Origination Charges or as a separate line item charge). Any fees added to section A must be included in the TRID points & fees test.

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Section 5.34.13 (Additional Properties Owned) had the following sentence added to the All DPA Edge Products section: “As a reminder, FHA guidelines regarding owner occupancy requirements must be met.”

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Section 5.34.15 (Appraisal Overlays) has been updated to clarify that the collateral review for appraisals must come from FNMA:

All Conventional Programs: CBCMA will require the following for all first mortgage appraisals based on the FNMA CU score[…]

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Section 8.11.2 (Loans Cancelled After Closing) had its language updated for clarity:

CBC Mortgage agency has a legal obligation to reimburse down payment funds after closing, due to the Funding Obligation Letter provided at the time of loan registration—this has the potential to create a large expense for CBCMA and the Correspondent on loans with defects that cannot be cured. To avoid this, one of two following cancellation options must be followed:

Option 1: Fulfillment of the Funding Obligation

This option is recommended if the loan must be cancelled but the Correspondent has insured or wants to insure the loan with FHA or if the Correspondent intends to deliver the loan to Fannie Mae™. By choosing this option, the Correspondent is requesting that CBCMA fulfills its obligation to reimburse the funds that the Correspondent advanced at the closing table on behalf of CBCMA. Once CBCMA reimburses the down payment, the Correspondent will become contractually obligated by the loan purchase and sales agreement to pay a loan non-delivery fee. CBCMA will then wire the down payment funds described in the Funding Obligation Letter to the Correspondent and the Correspondent will then be under contractual obligation to pay a loan non-delivery fee of the reimbursement amount plus 1%.

Option 2: Release of the Funding Obligation

Correspondents desiring to negate the contractual obligation to pay a loan non-delivery fee may sign a legal document releasing CBCMA from the obligation to reimburse the borrower’s down payment funds. Once the form is signed, the transaction will be cancelled and the Correspondent will retain full ownership of the first mortgage and receive ownership of the secondary financing. Pursuing this option will result in the loan not meeting FHA insuring requirements or Fannie Mae™ Community Seconds® guidelines.

The post 21-11-03 Announcement—November 3 2021 Program Guidelines Update appeared first on Chenoa Fund - Down Payment Assistance.