Independence Day Holiday – Lock Desk Hours and Key Compliance Dates
Overview
The Carrington Mortgage Services, LLC (CMS) Lock Desk will be closed Friday, July 2, 2021 for a Company Holiday and also Monday, July 5, 2021 for Independence Day, which is the observed Federal Holiday. Normal lock hours will resume on Tuesday, July 6, 2021.
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 “observed” holiday as it is considered a business day for the purposes of rescission:
- Monday, July 5, 2021 may be included in the rescission period for refinance transactions.
- Monday, July 5, 2021 may be included in the seven (7) business day waiting period 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, July 5, 2021 may be included in the four (4) business day waiting period between the date the revised LE was provided to the borrower and the consummation of the loan.
- When re-disclosure of the CD is required, Monday, July 5, 2021 may be included in the three (3) business day waiting period between the date the revised CD was provided to the borrower and the consummation of the loan.
Issues related to locks should be sent via email to lockdesk@carringtonms.com.
Contacts
Please contact your Account Executive or Account Manager with any questions.
Carrington thanks you for your business.
Announcement – FHA Student Loan Payment Calculation
Overview
The U.S. Department of Housing and Urban Development (HUD) has updated the payment calculation of monthly obligation for student loans. The change is effective for all case numbers assigned on or after August 16, 2021; however, Carrington Mortgage Services, LLC (CMS) has elected to begin using the new guidance effective immediately. The change applies to all FHA loan programs except non-credit qualifying streamline refinances, which do not require evaluation of the Borrower’s debts.
Lenders must include all student loans in the Borrower’s liabilities, regardless of the payment type or status of payments.
Required Documentation: If the payment used for the monthly obligation is less than the monthly payment reported on the Borrower’s credit report, the Lender must obtain written documentation of the actual monthly payment, the payment status, and evidence of the outstanding balance and terms from the creditor or student loan servicer. The Lender may exclude the payment from the Borrower’s monthly debt calculation where written documentation from the student loan program, creditor, or student loan servicer indicates that the loan balance has been forgiven, canceled, discharged, or otherwise paid in full.
Calculation of Monthly Obligation: For outstanding Student Loans, regardless of payment status, the Lender must use:
- the payment amount reported on the credit report or the actual documented payment, when the payment amount is above zero; or
- .5 percent of the outstanding loan balance, when the monthly payment reported on the Borrower’s credit report is zero.
Contacts
Please contact your Account Executive or Account Manager with any questions.
Carrington thanks you for your business.
Juneteenth National Independence Day and Key Compliance Dates
Overview
On June 17, 2021, President Biden signed legislation making June 19th a federal holiday to be officially known as Juneteenth National Independence Day. The creation of this new federal holiday will impact mortgage disclosure regulations that are tied to “business day” time periods, in particular the time to close after a consumer’s receipt of the Closing Disclosure (CD), and the rescission period following closing. This year, lenders will not be able to count Saturday, June 19th as a business day for disclosure and rescission purposes. This may affect disclosures and closing documents that have already been delivered to borrowers, or that are in the process of being issued. Scheduled closing dates may need to be pushed out one or two days, and Borrowers will need to be notified of any closing delays or extensions to their rescission period.
CD Signing and Delays in Closing
Juneteenth National Independence Day, is considered a Specific Business Day to be excluded when counting days to determine the proper waiting period prior to consummation.
Under TRID Borrowers must receive a copy of the CD at least three business days before consummation of the transaction. Therefore due to the holiday, scheduled closing dates will need to be pushed out one day as shown in the table below:
| CD Signed On | Earliest Closing Date prior to New Holiday | Earliest Closing Date with New Holiday | Impact |
| 6/16/2021 | 6/19/2021 | 6/19/2021 | No Change |
| 6/17/2021 | 6/21/2021 | 6/22/2021 | Delay 1 day |
| 6/18/2021 | 6/22/2021 | 6/23/2021 | Delay 1 day |
| 6/19/2021 | 6/23/2021 | 6/24/2021 | Delay 1 day |
Listed below are some additional disclosure considerations associated with Juneteenth National Independence Day related to loan closing.
- Saturday, June 19, 2021 may not be included in the seven (7) business day waiting period 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, Saturday, June 19, 2021 may not be included in the four (4) business day waiting period between the date the revised LE was provided to the borrower and the consummation of the loan.
- When re-disclosure of the CD is required, Saturday, June 19, 2021 may not be included in the three (3) business day waiting period between the date the revised CD was provided to the borrower and the consummation of the loan.
Regulation Z – Rescission Timing
Juneteenth National Independence Day, is considered a Specific Business Day to be excluded when counting days to determine the proper rescission period and Saturday, June 19, 2021 may not be included in the rescission period for owner-occupied (primary residence and second homes) refinance transactions.
Under Regulation Z, borrowers are permitted to rescind (cancel) the transaction within three business days after consummation. Therefore rescission and disbursement dates for impacted loans will need to be revised to push out the funding by one or two days as shown in the table below:
| Closing Docs Signed On | Rescission End without New Holiday | Disbursement Date without New Holiday | Rescission End with New Holiday |
Disbursement Date with New Holiday |
Impact |
| 6/16/2021 | 6/19/2021 | 6/20/2021 | 6/21/2021 | 6/22/2021 | Delay 2 days |
| 6/17/2021 | 6/21/2021 | 6/22/2021 | 6/22/2021 | 6/23/2021 | Delay 1 day |
| 6/18/2021 | 6/22/2021 | 6/23/2021 | 6/23/2021 | 6/24/2021 | Delay 1 day |
| 6/19/2021 | 6/23/2021 | 6/24/2021 | 6/23/2021 | 6/24/2021 | No Impact |
For impacted loans with documents already sent or signed, CMS Compliance will notify the borrowers via email of the delay. The rescission notice already provided need not be updated with the revised rescission date, but the borrower(s) will need to be informed of delay to funding their loan. If there are any borrower complaints related to the delay, please refer these to your Account Executive or Account Manager immediately.
Expiring Locks
Rate Locks impacted by the Juneteenth holiday that expire before the revised funding date if delayed are eligible for a free extension to the next business day. Requests to extend rate locks should be sent to your Account Executive or Account Manager.
Contacts
Please contact your Account Executive or Account Manager with any questions.
Carrington thanks you for your business.
HUD Announces New Eligibility Guidelines for Certain Non-Permanent Residents
Overview
HUD recently announced clarifications to their guidelines for certain Non-Permanent Residents applying for FHA-insured mortgages, including:
- Eligibility of borrowers with H1-B non-immigrant visa status without an EAD,
- Eligibility of citizens from the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau without an EAD, and
- Adopting and continuing existing eligibility requirements for Deferred Action for Childhood Arrivals (DACA) recipients previously announced in a temporary waiver.
These changes are effective immediately and apply to new loan submissions as well as pipeline loans.
The following guidelines apply to borrowers who are non-permanent residents:
- Property must be the Borrower’s Principal Residence;
- Borrower has a valid Social Security Number (SSN);
- Borrower is eligible to work in the United States, provided the borrower provides either:
- Employment Authorization Document (USCIS Form I-766) showing that work authorization status is current;
- USCIS Form I-94 evidencing H-1B status, and evidence of employment by the authorized H-1B employer for a minimum of one year;
- Evidence of being granted refugee or asylee status by the USCIS; or
- Evidence of citizenship of the Federated States of Micronesia, the Republic of the Marshall Islands, or the Republic of Palau; and
- Borrower satisfies the same requirements, terms, and conditions as those for U.S. citizens.
If the Employment Authorization Document (USCIS Form I-766) or evidence of H-1B status will expire within one year and a prior history of residency status renewals exists, the lender may assume that continuation will be granted. If there are no prior renewals, the lender must determine the likelihood of renewal based on information from the USCIS.
Borrowers residing in the United States by virtue of refugee or asylee status granted by the USCIS must provide the following documentation:
- Employment Authorization Document (USCIS Form I-766) or USCIS Form I-94 indicating refugee or asylum status, or
- USCIS Form I-797 notice indicating approval of a USCIS Form I- 589, Application for Asylum or Withholding of Removal substantiating the refugee or asylee status.
Contacts
Please contact your Account Executive or Account Manager with any questions.
Carrington thanks you for your business.
Carrington Non-QM Program Underwriting Enhancements
Overview
Carrington Mortgage Services, LLC (CMS) is pleased to announce the following underwriting guideline enhancements for the Non-QM loan programs (Prime Advantage, Flexible Advantage/Advantage Plus and Investor Advantage). All guideline enhancements are effective immediately and may be applied to loans not yet closed.
Please note this is an abbreviated summary of the guideline changes. All updates should be viewed within the context of the full guidelines available on www.carringtonwholesale.com.
Investor Advantage LTV Enhancements
5% expanded LTVs for Investor Advantage shown in the table below with new expanded offering over 80% LTV:
| Investor Advantage | |||
| Loan Amount | FICO | Purchase & R/T | Cash Out |
| ≤ $1,000,000 | 720 | 82.50% | 75% |
| 700 | 80% | 75% | |
| 680 | 80% | 75% | |
| 660 | 75% | 70% | |
| $1,000,001 up to $1,500,000 |
720 | 75% | 70% |
| 700 | 75% | 70% | |
| 680 | 70% | 65% | |
| 660 | 65% | 60% | |
Guideline Enhancements
The Non-QM loan program guideline enhancements are shown below:
| Product | Guideline Enhancements |
| All Products | Age of Loan Documentation: Credit report, credit documentation (assets/income), title report, and closing protection letter (CPL) must be dated within 90 days of closing (was 60 days). All other loan documentation must be dated within 120 days of closing. |
| Determining Loan-to-Value: If the property was purchased ˃ 6 months (was 12 months) and < 12 months from the application date, the current appraised value can be used to determine loan-to-value. Two full appraisals are required and the lower of the two values will determine the loan to value.
If the property was purchased < 6 months (was 12 months) from application date, the lesser of the current appraised value or the previous purchase price plus documented improvements (if any) must be used. The purchase settlement statement and any invoices for materials/labor will be required. |
Guideline Enhancements (continued)
| Product | Guideline Enhancements |
| Prime Advantage | Expanded 50% Debt Ratio: DTI > 43% is now allowed up to 80% LTV with FICO scores greater than or equal to 700 for Primary Residence and Second Homes. Loan reserve requirements as low as 6 months based on the Loan Amount (formerly 12 months reserves were required regardless of loan amount). |
| Investor Advantage | Short Term Rentals: Short term rental properties may not be modified in a way that affects the residential character of the property. For example, parking lots and reception areas are not acceptable. Examples of short term rentals are Air BNB, Vacation Rental By Owner (VRBO), etc.
Short term rentals of less than one month in term will be qualified as an unleased property unless the borrower is able to demonstrate a 12-month history of rents on the subject property. The borrower may provide documentation from their property management service documenting 12 months gross rents. Determining the Loan-to-Value – Refer to the Additional LTV Limits chart on the Investor Advantage Matrix. Short term rentals allowed to exceed 65% LTV (up to 75%) with certain conditions met. The Debt-Coverage Ratio (DCR) must be calculated using the lesser of the documented rents from the property management service or the appraiser’s estimate of market rents. |
| Evidence of Primary Residence: All borrowers must presently own or rent their primary residence. Evidence is required.
Borrowers who own a primary residence and are purchasing a 1-unit Single Family Residence must provide:
Note: Living rent free is not acceptable. For a married borrower whose primary residence is titled or leased to their spouse’s name only, documentation must be provided to support the borrower occupies the spouse’s residence and the mortgage or rent rating on the primary residence complies with Mortgage and Rental Payment Verification. |
Contacts
Please contact your Account Executive or Account Manager with any questions.
Carrington thanks you for your business.
FEMA Disaster Declaration for West Virginia Severe Storms and Flooding
Overview
Due to damage from severe storms and flooding in West Virginia, FEMA has declared the following counties a disaster.
Incident Period: February 27, 2021 – March 4, 2021
| State | FEMA Disaster Declaration | Counties |
| West Virginia | May 20, 2021 | Cabell, Kanawha, Mingo and Wayne |
Re-Inspection by Product Type
| If your loan is … | A re-inspection is required … | Under these circumstances … |
| FHA Full Doc | Yes | If the original appraisal inspection date was prior to the Incident Period End Date of 3/4/21. |
| FHA Streamline | No | Not applicable |
| VA Full Doc and IRRRL | Yes | If the loan was not closed (signed) prior to the Declaration Date of 5/20/21 and submitted prior to 3/4/21. |
| USDA Full Doc | Yes | If the original appraisal inspection date was prior to the Incident Period End Date of 3/4/21. |
| USDA Streamline Assist | Yes | If the original submission date was prior to the Incident Period End Date of 3/4/21. |
| Conventional* and Non-Agency | Yes | If the original appraisal inspection date was prior to the Incident Period End Date of 3/4/21. |
*If an appraisal was not required due to a property inspection waiver (PIW), an inspection report will still be required.
Contacts
Please contact your Account Executive or Account Manager with any questions.
Carrington thanks you for your business.
Memorial Day Holiday – Lock Desk Hours and Key Compliance Dates
Overview
The Lock Desk at Carrington Mortgage Services, LLC (CMS) will be closed on Monday, May 31, 2021 for Memorial Day, which is a Federal Holiday. Normal lock hours will resume on Tuesday, June 1, 2021.
Additionally, the CMS Lock Desk will close early on Friday, May 28, 2021 at 11:00 A.M. PST due to the early close of the financial markets.
Rate 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, May 31, 2021 cannot be included in the rescission period for refinance transactions.
- Monday, May 31, 2021 cannot be included in the seven (7) business day waiting period 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, May 31, 2021 cannot be included in the three (3) business day waiting period between the date the revised LE was provided to the borrower and the consummation of the loan.
- When re-disclosure of the Closing Disclosure (CD) is required, Monday, May 31, 2021 cannot be included in the three (3) business day waiting period between the date the revised CD was provided to the borrower and the consummation of the loan.
Issues related to locks should be sent via email to lockdesk@carringtonms.com.
Contacts
Please contact your Account Executive or Account Manager with any questions.
Carrington thanks you for your business.
FEMA Disaster Declaration for Tennessee Severe Storms, Tornadoes and Flooding
Overview
Due to damage from severe storms, tornadoes and flooding in Tennessee, FEMA has declared the following counties a disaster.
Incident Period: March 25, 2021 – April 03, 2021
| State | FEMA Disaster Declaration | Counties |
| Tennessee | May 08, 2021 | Davidson, Williamson and Wilson |
Re-Inspection by Product Type
| If your loan is … | A re-inspection is required … | Under these circumstances … |
| FHA Full Doc | Yes | If the original appraisal inspection date was prior to the Incident Period End Date of 4/3/21. |
| FHA Streamline | No | Not applicable |
| VA Full Doc and IRRRL | Yes | If the loan was not closed (signed) prior to the Declaration Date of 5/8/21 and submitted prior to 4/3/21. |
| USDA Full Doc | Yes | If the original appraisal inspection date was prior to the Incident Period End Date of 4/3/21. |
| USDA Streamline Assist | Yes | If the original submission date was prior to the Incident Period End Date of 4/3/21. |
| Conventional* and Non-Agency | Yes | If the original appraisal inspection date was prior to the Incident Period End Date of 4/3/21. |
*If an appraisal was not required due to a property inspection waiver (PIW), an inspection report will still be required.
Contacts
Please contact your Account Executive or Account Manager with any questions.
Carrington thanks you for your business.
FEMA Disaster Declaration for Alabama Severe Storms, Straight-Line Winds, and Tornadoes
Overview
Due to damage from severe storms, straight-line winds, and tornadoes in Alabama, FEMA has declared the following counties a disaster.
Incident Period: March 25, 2021 – March 26, 2021
| State | FEMA Disaster Declaration | Counties |
| Alabama | April 26, 2021 | Bibb, Calhoun, Clay, Hale, Jefferson, Perry, Randolph and Shelby |
Re-Inspection by Product Type
| If your loan is … | A re-inspection is required … | Under these circumstances … |
| FHA Full Doc | Yes | If the original appraisal inspection date was prior to the Incident Period End Date of 3/26/21. |
| FHA Streamline | No | Not applicable |
| VA Full Doc and IRRRL | Yes | If the loan was not closed (signed) prior to the Declaration Date of 4/26/21 and submitted prior to 3/26/21. |
| USDA Full Doc | Yes | If the original appraisal inspection date was prior to the Incident Period End Date of 3/26/21. |
| USDA Streamline Assist | Yes | If the original submission date was prior to the Incident Period End Date of 3/26/21. |
| Conventional* and Non-Agency | Yes | If the original appraisal inspection date was prior to the Incident Period End Date of 3/26/21. |
*If an appraisal was not required due to a property inspection waiver (PIW), an inspection report will still be required.
Contacts
Please contact your Account Executive or Account Manager with any questions.
Carrington thanks you for your business.
FEMA Disaster Declaration for Kentucky Severe Storms, Flooding, Landslides and Mudslides
Overview
Due to damage from Severe Storms, Flooding, Landslides and Mudslides in Kentucky, FEMA has declared the following counties a disaster.
Incident Period: February 27, 2021 – March 14, 2021
| State | FEMA Disaster Declaration | Counties |
| Kentucky | April 23, 2021 | Breathitt, Clay, Estill, Floyd, Johnson, Lee, Magoffin, Martin and Powell |
Re-Inspection by Product Type
| If your loan is … | A re-inspection is required … | Under these circumstances … |
| FHA Full Doc | Yes | If the original appraisal inspection date was prior to the Incident Period End Date of 3/14/21. |
| FHA Streamline | No | Not applicable |
| VA Full Doc and IRRRL | Yes | If the loan was not closed (signed) prior to the Declaration Date of 4/23/21 and submitted prior to 3/14/21. |
| USDA Full Doc | Yes | If the original appraisal inspection date was prior to the Incident Period End Date of 3/14/21. |
| USDA Streamline Assist | Yes | If the original submission date was prior to the Incident Period End Date of 3/14/21. |
| Conventional* and Non-Agency | Yes | If the original appraisal inspection date was prior to the Incident Period End Date of 3/14/21. |
*If an appraisal was not required due to a property inspection waiver (PIW), an inspection report will still be required.
Contacts
Please contact your Account Executive or Account Manager with any questions.
Carrington thanks you for your business.
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