Underwriting Guideline Overlays Update March 1, 2017

 

Carrington Mortgage Services, LLC (CMS) is pleased to announce the following Underwriting Guideline changes effective March 1, 2017.

Government Loan Programs

CMS FHA Guideline
Overlays

Guideline Updates

Minimum 550 FICO , CMS to CMS
serviced loans minimum 500 FICO for Government streamlines

Removed overlay.

No minimum FICO required for
all Govt Streamlines (FHA Streamline, VA IRRRL and USDA
Streamlined-Assist). This applies to both Retail and Wholesale. A 12 month
current mortgage only rating is required. A FICO score is not required, but
if one is reflected on the mortgage only credit report, FICO’s less than
500 can be disregarded.

Manual Downgrade for FICO 640
and under and DTI > 43, regardless of AUS decision

CMS will continue to obtain
manual UW conditions for LOE of derogatory credit and VOR current for 12
month rating.

However, CMS will not apply
the downgrade requirements for acceptable credit history and allow
following AUS approve/eligible.

The DTI for manual
underwrites will require a second signature.

Cash out limits: < 620
FICO max cash out is limited to $50,000, > 620 FICO is unlimited up to
the max LTV allowed per the program.

Removed overlay.

Follow HUD at 85% LTV
maximum.

Cash out not eligible with
loans having prior modifications

Removed overlay.

Follow HUD requirements for
acceptable payment history according to the modification agreement.

CMS requires residual income >= to
$800, using VA residual income calculations

Removed overlay.

Handwritten pay stubs require
WVOE and signed payroll ledger

Removed requirement for WVOE.

Maintained signed payroll
ledger requirement.

 

 

CMS FHA Guideline Overlays

Guideline Updates

Items paid outside closing
(POC) cannot be included in borrowers MRI

Removed overlay.

Allow POC for appraisal and
credit report, only if documented with cancelled check or bank statement to
source borrower’s own funds and not a credit card or seller contributions.

Manufactured homes:

No alterations or additions to
the original home

Removed overlay.

Manufactured homes with
acceptable alterations or additions must have marketability,
“like” comparables, gross
living area (GLA) and structural engineer’s certificate required.

Manufactured home with an
additional manufactured home on the property

Removed overlay.

Permitted if the 2nd
manufactured home is being used as a storage building, the kitchen is rendered
inoperable and the utilities are disconnected. Follow HUD requirements.

Mixed use properties require
75% of entire building square footage is for residential use

Removed overlay.

Follow HUD requirements for
residential building use.

Unpermitted addition or conversions greater
than 15% of GLA require permits

Removed overlay.

Appraiser must comment if the
addition or conversion meets all local and county building codes. All
additions/ alterations must be in a workman like manner, market acceptance
and have
“like”
comparables
.

Ineligible properties with
Cisterns, or privately hauled water

Removed overlay.

Requirement for both home inspection and
203k Consultant

Updated overlay. If Consultants are
state-approved home inspectors or members of accredited State or National
Home Inspection Associations, home inspections will not be required.

Currently CMS requires the bid prior to
Underwriting for 203k.

Removed the overlay for the Underwriter to
use the bid. The bid will be sent directly to the Appraiser and will be
conditioned accordingly. The Underwriter will just use the cost breakdown to
calculate the loan amount, instead of the bid.

 

 

CMS VA Guideline Overlays:

Guideline Updates

Max cash out to 90% LTV for FICO 550- 619

Allow up to 100% LTV for FICO
550-619.

Require LOE for purpose of cash
out.

Maximum cash out up to 100% LTV
is $5000

No maximum cash out up to 100%
LTV.

Require LOE for the purpose of
cash out.

Requirement for 100% joint
access letter with a non-borrowing spouse

Removed overlay.

 

CMS All
Govt Guideline Overlays

Guideline
Updates

Revolving accounts paid off through closing
must be closed at the Underwriters discretion.

Removed requirement to close
accounts.

Credit procedure for
Manufactured home Affidavit of Affixation (AofA)

Current process requires CMS
associate to execute and notarize the AofA, FedEx to title the day before
closing and record with docs.

Procedure revised to send AofA
with closing documents and a limited POA.

Title or Closing Agent will
execute the AofA document and ensure document gets recorded (if required in
that State).

 

 

Conventional Loan Programs

CMS
Conventional Guideline Overlays:

Guideline
Updates

Transferred appraisal not permitted

Allow
transferred appraisals with proof that transferred appraisals comply with
Appraiser Independence Requirements (AIR)

Condo minimum square footage requirement is
400 square feet

No restriction for minimum square footage;
however, appraiser must confirm that there is no negative impact on
marketability and provide “like” comparables.

Future employment is not permitted

Permit future employment.

Require contract or employment offer at the prior to documents and a paystub prior to
funding.

Full appraisals are required

Removed overlay.

Follow FHLMC Home Value Explorer (HVE)
and/or FNMA Property Inspection Waiver (PIW) for AUS feedback.

Freddie Mac Open Access and DU Refi Plus limited
to Maximum conforming loan amounts

Removed overlay.

Follow Open Access and DU Refi Plus for AUS
Approve/Eligible findings.

Open Access investment properties are
ineligible

Removed overlay.

Allow investment properties meeting all
FHLMC guide requirements.

95% Maximum LTV

Launch FNMA HomeReady on 3/1 with 97% LTV

Financed Mortgage Insurance (MI) is not
eligible

Removed overlay.

CMS will permit financed MI.

Rent loss insurance is required for 2-4
unit primary properties and all 1-4 unit investment properties when rental
income from the subject property is used to qualify borrower.

Removed overlay.

Rent loss insurance will not be required.

Appraisal updates are not acceptable to CMS

Removed overlay.

Allow for appraisal updates following
guidelines.

 

 

CMS
Conventional Guideline Overlays:

Guideline
Updates

Flip transactions less than 90 days are
ineligible

Removed overlay.

Allow flips less than 90 days with
Underwriter to review for valid transaction, transfer of title and inflation
of value or sales price to be properly supported.

Chipping paint on homes built prior to 1976
will need to be repaired.

Removed overlay.

Follow guidance for health and safety if
appraiser comments or part of sale contract.

Minimum two (2) reported credit scores for
each borrower required (matrix)

Removed overlay.

Allow one (1) minimum score for each
borrower with a tri-merge credit report.

Non-Owner Occupant on Cash – Out Refinance
Not Allowed

Removed overlay.

Follow FNMA.

Max Financed properties 6

Removed overlay.

For FNMA only, allow up to 10 maximum
financed properties with 720 minimum FICO.

 

 

 

President’s Day Lock Desk Hours/Closing Calendar

The Lock Desk will be closed on Monday, February 20, 2017 for Presidents Day, which is a Federal Holiday. Normal lock hours will resume on Tuesday, February 21, 2017.

Locks that expire on the holiday will automatically roll to the next business day. In addition there are some important disclosure considerations associated with the holiday:

  • Monday, February 20, 2017 cannot be included in the rescission period for refinance transactions.
  • Monday, February 20, 2017 cannot be included in the seven (7) business day waiting period between the between the date the initial Loan Estimate (LE) was provided to the borrower and the consummation of the loan
  • When re-disclosure of the LE is required, Monday, February 20, 2017 cannot be included in the three (3) day business waiting period between the date the revised LE was provided to the borrower and the consummation of the loan.

Issues related to locks should be sent via email to lockdesk@carringtonms.com.

Road to Houston Winner Announcment

We want to send a big thank you to everyone who participated in the Road to Houston sweepstakes and helped make it a great success.

And a special congratulations to Joseph G. of Hesperia California! Joseph and a guest have won tickets and travel to Super Bowl LI at NRG Stadium in Houston Texas.

We hope you have a great time at that game Joseph!

Martin Luther King Day Lock Desk Hours

The Lock Desk will be closed on Monday, January 16, 2017 for Martin Luther King Day, which is a Federal Holiday. Normal lock hours will resume on Tuesday, January 17, 2017.

Locks that expire on the holiday will automatically roll to the next business day. In addition there are some important disclosure considerations associated with the holiday:

  • Monday, January 16, 2017 cannot be included in the rescission period for refinance transactions.
  • Monday, January 16, 2017 cannot be included in the seven (7) business day waiting period between the between the date the initial Loan Estimate (LE) was provided to the borrower and the consummation of the loan
  • When re-disclosure of the LE is required, Monday, January 16, 2017 cannot be included in the three (3) day business waiting period between the date the revised LE was provided to the borrower and the consummation of the loan.

Issues related to locks should be sent via email to lockdesk@carringtonms.com.

December Holiday Season – Operations and Lock Desk Hours

During the holiday season Carrington Mortgage Services, LLC (CMS) will observe the following schedule:

  • Friday, December 23, 2016 – MLD open regular business hours
  • Monday, December 26, 2016 – Closed for the Christmas holiday
  • Monday, January 2, 2017 – Closed for New Year’s Day holiday

The Lock Desk will be closed December 26, 2016 and January 2, 2017 which are Federal holidays. Due to the holidays, the Lock Desk will be closing early on Friday, December 23, 2016 and Friday, December 30, 2016 at 10:00 AM PST. Normal Lock Desk hours will resume December 27, 2016 and January 3, 2017.

Rate Locks that expire on the holidays will automatically roll to the next business day. In addition there are some important disclosure considerations associated with the holidays:

  • Monday, December 26, 2016 and Monday January 2, 2017 cannot be included in the rescission period for refinances.
  • Monday, December 26, 2016 and Monday January 2, 2017 cannot be included in the seven (7) business day waiting period between the between the date the initial Loan Estimate (LE) was provided to the borrower and the consummation of the loan.
  • When re-disclosure of the LE is required, Monday, December 26, 2016 and Monday January 2, 2017 cannot be included in the three (3) day business waiting period between the date the revised LE was provided to the borrower and the consummation of the loan.

Issues related to locks should be sent via email to lockdesk@carringtonms.com.

Lock Desk Closed for Columbus Day Holiday

The Lock Desk at Carrington Mortgage Services, Wholesale Lending Division, will be closed Monday, October 12, 2015 in observance of Columbus Day, which is a Federal Holiday.

Normal Lock Desk hours will resume on Tuesday, October 13, 2015. Carrington Mortgage Services (CMS) offices will be open normal business hours on Monday, October 12th, 2015.

As a reminder, pursuant to the Lock Desk Policy all lock extensions need to be requested prior to their expiration.

In addition, there are some important disclosure considerations associated with the holiday:

  • Monday, October 12, 2015 cannot be included in the rescission period for refinance.
  • Monday, October 12, 2015 cannot be included in the seven (7) day business day waiting period between the date the initial TIL was provided to consummation.
  • When re-disclosure of the TIL is required,Monday, October 12, 2015 cannot be included in the three (3) day business waiting period between the date the revised TIL was provided to the borrower and the consummation of the loan.

Issues related to locks should be sent via email to lockdesk@carringtonms.com.

Serving the Underserved Initiative Reaches 10,000 Borrowers

ANAHEIM, Calif., Aug. 4, 2015 /PRNewswire/ — Carrington Mortgage Services, LLC (Carrington) today announced that the company’s “Serving the Underserved” initiative launched in 2014 has now aided over 10,000 borrowers with their home financing. Driven by Carrington’s commitment to create a more transparent and manageable home loan process, the program offers simplified loan offerings for first-time home buyers, many of whom have a FICO credit score below 640. As of July 2015, Carrington has originated over $1.8 billion in home loans for borrowers with credit scores below 640. Fifty-seven percent of the home purchase loan originations were from first-time home buyers.  This growth aligns with a national trend reflected in the percentage of Federal Housing Administration loans originated for borrowers with credit scores below 640, which is up 125% in just two years.

“Our goal is to simplify the path to home ownership wherever feasible and demystify the complexity that often surrounds the loan process,” said Carrington Mortgage Services Mortgage Lending Division Executive Vice President Ray Brousseau. “Our tailored programs help those who do not have sufficient cash on hand or may feel like their credit score isn’t strong enough to fulfill their dream of homeownership.”   … Read More on Yahoo Finance

 

Access to credit still biggest hurdle for millennials to enter real estate market

Check it out:

Just published, Access to credit still biggest hurdle for millennials to enter real estate market by Ray Brousseau, EVP Mortgage Lending, Carrington Mortgage Services, LLC at Inman.com.

This article is part of our ongoing series with Inman.com to provide mortgage content for their realtor audience.

Dispute Removal Policy Change

Effective immediately, Experian has revised their policy related to removing dispute comments from an account.  They will now accept the attached letter signed by the borrower (click here).  Please note that TransUnion will also accept the attached letter signed by the borrower.  Equifax will accept either a creditor letter OR the attached letter signed by the borrower

 

Carrington Launches New On Time Closing Promise

As seen on:

Mortgage Orb [link]  http://www.mortgageorb.com/e107_plugins/content/content.php?content.14982

National Mortgage Professional [link]  http://nationalmortgageprofessional.com/news46712/carrington-launches-new-15-day-closing-program-wholesale-division

Carrington Mortgage Services Launches New On Time Closing Promise Program
Offering 15-Day Loan Closings Through Its Wholesale Lending Division

Program features expedited funding process, wider qualifications and fewer restrictions

 FEBRUARY 4, 2014 – SANTA ANA, CA – The Wholesale Lending Division of Carrington Mortgage Services, LLC (Carrington) today announced that it has expanded its successful Purchase Promise Program to offer 15-day loan closings to borrowers looking to purchase or refinance properties. The new On Time Closing Promise applies to the majority of Carrington’s loan programs and offers expanded guidelines for eligibility with fewer restrictions. Carrington commits to be ready to close any qualifying loan within 15 business days of appraisal receipt or the company will apply a $500 closing cost credit to the loan at the time of closing.

Carrington’s On Time Closing Promise provides consumers, brokers and their real estate partners a shorter, more predictable timeline to secure financing, giving them a competitive edge in a tight market. Having a Carrington loan provides buyers with the peace of mind that their loan can be cleared to close quickly when a seller is ready to move forward with a sale. Expedited processing allows brokers to be compensated faster and helps alleviate concern among real estate agents over sales lost due to a homebuyer’s inability to close in a timely manner.

“In an increasingly service-oriented and purchase-focused lending environment, being able to close quickly or on the buyer’s timeframe is a distinct competitive advantage among agents and brokers,” said Ray Brousseau, executive vice president of Carrington Mortgage Services, LLC’s Mortgage Lending Division. “Carrington’s On Time Closing Promise – the next evolution of Carrington’s service proposition – will allow mortgage brokers to provide a fast and predictable level of service with greater efficiency than any competitive program we’re aware of.”

Certain exclusions apply. For eligibility information and complete details on this and other programs currently offered through Carrington’s Wholesale Lending Division, please contact a Carrington account executive at (866) 453-2400 or visit www.CarringtonWholesale.com/CloseOnTime.

About Carrington Mortgage Services – Mortgage Lending Division

Carrington Mortgage Services, LLC (Carrington) is a residential wholesale and retail loan origination subsidiary of Carrington Mortgage Holdings, LLC. The company is licensed to originate loans in 42 states, the District of Columbia and Puerto Rico, with an experienced team focused on producing high quality loans and error-free transactions. Carrington’s lending products include FHA, conventional, jumbo, VA and USDA loans. Carrington’s advanced technology platform and high-touch customer service provide superior loan origination experiences for retail and wholesale customers alike. Founded in 2007, Carrington is based in Santa Ana, California and is an equal housing opportunity lender. To learn more about Carrington’s wholesale lending division and the company’s current promotions, visit www.CarringtonWholesale.com, or follow us on Facebook, Twitter or LinkedIn.

About Carrington Holding Company

Carrington Holding Company, LLC (CHC) owns and operates multiple businesses that cover virtually every aspect of single family residential real estate transactions – investments in U.S. real estate and mortgage markets, loan origination and servicing, asset management and property preservation, real estate sales and rental, title and escrow services.

Some of CHC’s affiliate companies include Carrington Real Estate Services, LLC, Carrington Capital Management, LLC, Carrington Investment Services, LLC, Carrington Mortgage Services, LLC, Carrington Property Services, LLC, Carrington Home Solutions, L.P., Carrington Escrow, Inc., Carrington Title Services, LLC and Carrington Technology Solutions, LLC. Carrington Mortgage Services, LLC is an equal housing opportunity lender.

To learn more about Carrington Holding Company, visit our website at www.carringtonhc.com.

Media Contacts:       

Michelle Schneider
Office: (949) 517-7197
Mobile: (760) 419-2543
Michelle.Schneider@carringtonmh.com

 Christine Stricker
Office: (949) 517-7313
Mobile: (714) 873-4275
Christine.Stricker@carringtonmh.com

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