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Columbus Day Holiday Lock Desk Hours

October 8, 2021rashtonBulletin

Carrington Mortgage Services, LLC (CMS) offices, including the Lock Desk, will be closed Monday, October 11, 2021 in observance of Columbus Day, which is a Federal Holiday. Normal Lock Desk hours will resume on Tuesday, October 12, 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 holiday:

  • Monday, October 11, 2021 cannot be included in the rescission period for refinance transactions.
  • Monday, October 11, 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, October 11, 2021 cannot 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, October 11, 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.

Updated FHA Product Underwriting Guidelines

October 1, 2021rashtonBulletin

Overview

Carrington Mortgage Services, LLC (CMS) is pleased to announce the following FHA underwriting updates (highlighted in red). Please note this is an abbreviated summary of the guideline changes. All updates should be viewed within the context of the full CMS FHA Underwriting Guidelines. All changes are effective immediately unless otherwise noted.

FHA Underwriting Guidelines
Old Requirements Updated Requirements
Special Flood Hazard Areas

A Property is not eligible for FHA insurance if:

·       a residential building and related improvements to the Property are located within SFHA Zone A, a Special Flood Zone Area, or Zone V, a Coastal Area, and insurance under the National Flood Insurance Program (NFIP) is not available in the community; or

·       the improvements are, or are proposed to be, located within a Coastal Barrier Resources System (CBRS).

Special Flood Hazard Areas

A Property is not eligible for FHA insurance if:

·       a residential building and related improvements to the Property are located within any SFHA Zone beginning with the letter A, a Special Flood Zone Area, or any Zone beginning with the letter V, a Coastal Area, and insurance under the National Flood Insurance Program (NFIP) is not available in the community; or

·       the improvements are, or are proposed to be, located within a Coastal Barrier Resources System (CBRS).

Time Restriction on Transfers of Title

The eligibility of a Property for a Mortgage insured by FHA is determined by the time that has elapsed between the date the seller has acquired title to the Property and the date of execution of the sales contract that will result in the FHA-insured Mortgage.

FHA defines the seller’s date of acquisition as the date the seller acquired legal ownership of that Property. FHA defines the resale date as the date of execution of the sales contract by all parties intending to finance the Property with an FHA-insured Mortgage.

Time Restriction on Transfers of Title

The eligibility of a Property for a Mortgage insured by FHA is determined by the time that has elapsed between the date the seller has acquired title to the Property and the date of execution of the sales contract that will result in the FHA-insured Mortgage.

FHA defines the seller’s date of acquisition as the date the seller acquired legal ownership of that Property. FHA defines the resale date as the date of execution of the sales contract by all parties intending to finance the Property with an FHA-insured Mortgage.

If there is a partial continuity of ownership, a quit claim deed transaction is not a sale and is not subject to the rules prohibiting property flipping. The use of a quit claim will not be deemed a flip as long as at least one of the original owners retains an ownership interest in the property after the quitclaim is recorded.

 

FHA Underwriting Guidelines
Old Requirements Updated Requirements
Accessory Dwelling Unit

An Accessory Dwelling Unit (ADU) refers to a habitable living unit added to, created within, or detached from a primary one-unit Single Family dwelling, which together constitute a single interest in real estate. It is a separate additional living unit, including kitchen, sleeping, and bathroom facilities.

A Single Family residential Property with an ADU remains a one-unit Property. For any Property with two or more units, a separate additional Dwelling Unit must be considered as an additional unit.

Condominium Unit

(a) Standard

A Condominium Unit is a Property contained in a multi-unit project that has individually-owned Dwelling units, which may be either attached in one or more Structures or detached from each other, and is primarily residential in use.

A condominium development is created by state or local law and is characterized by fee-simple ownership of a unit, which is defined in the condominium documents, together with common areas. The property interest in these areas is both common and undivided on the part of all unit owners, each of whom belongs to the HOA that typically maintains the Property and collects assessments or dues from each unit owner.

A Condominium Project must be FHA approved before a Mortgage on an individual condominium unit can be insured.

Condominium Unit

(a) Definitions

Condominium Unit (Unit) refers to real estate consisting of a one-family Dwelling Unit in a Condominium Project.

A Condominium Project refers to a project in which one-family Dwelling Units are attached, semi-detached, detached, or Manufactured Home units, and in which owners hold an undivided interest in Common Elements.

(b) Standard

A Condominium Unit must be either located within an FHA-approved Condominium Project, meet FHA’s definition of a Site Condominium, or have completed the FHA Single Unit Approval process before a Mortgage can be insured.

Site Condominiums

Site Condominiums are Single Family detached dwellings encumbered by a declaration of condominium covenants or condominium form of ownership and do not need to be FHA-approved.

Manufactured Housing condominium units may not be processed as Site Condominiums

Site Condominiums

(a) Definition

A Site Condominium refers to:

·       a Condominium Project that consists entirely of Single Family detached dwellings that have no shared garages, or any other attached buildings; or

·       a Condominium Project that:

o   consists of Single Family detached or horizontally attached (townhouse) dwellings where the Unit consists of the dwelling and land;

o   does not contain any Manufactured Housing Units; and

o   is encumbered by a declaration of condominium covenants or a condominium form of ownership.

Manufactured Housing condominium units may not be processed as Site Condominiums.

(b) Standard

The Unit owner must be responsible for all insurance and maintenance costs, excluding landscaping, of the Site Condominium.

Site Condominiums do not require Condominium Project Approval or Single-Unit Approval.

FHA Underwriting Guidelines
Old Requirements Updated Requirements
Mortgagees

The Borrower’s total Mortgage Payment includes:

·       Principal and Interest (P&I);

·       real estate taxes;

·       hazard insurance;

·       flood insurance as applicable;

·       Mortgage Insurance Premium;

·       HOA or condominium association fees or expenses;

·       Ground Rent;

·       special assessments;

·       payments for any acceptable secondary financing; and

·       any other escrow payments.

Mortgagees

The Borrower’s total Mortgage Payment includes:

·       Principal and Interest (P&I);

·       real estate taxes;

·       hazard insurance;

·       flood insurance as applicable;

·       Mortgage Insurance Premium;

·       HOA or condominium association fees or expenses;

·       Ground Rent;

·       special assessments;

·       payments for any acceptable secondary financing; and

·       any other escrow payments.

CMS may deduct the amount of the Section 8 Homeownership Voucher if it is paid directly to the Servicer. Where real estate taxes are abated, CMS may use the abated amount provided that (1) CMS can document the abated amount with the taxing authority and (2) the abatement will remain in place for at least the first three years of the Mortgage.

Employment Related Income (TOTAL)

(C) Required Documentation

For all Employment related Income, CMS must verify the Borrower’s most recent two (2) years of employment and income, and document using one of the following methods.

(1) Traditional Current Employment Documentation

CMS must obtain one of the following to verify current employment:

·       the most recent pay stub and a written Verification of Employment (VOE) covering two (2) years; or

·       direct electronic verification of employment by a TPV vendor covering two years, subject to the following requirements:

o   the Borrower has authorized CMS to verify income and employment; and

o   the date of the data contained in the completed verification conforms with FHA requirements.

Employment Related Income (TOTAL)

(C) Required Documentation

For all Employment related Income, CMS must verify the Borrower’s most recent two (2) years of employment and income, and document current employment using either the Traditional or Alternative method, and past employment as applicable.

(1) Traditional Current Employment Documentation

CMS must obtain one of the following to verify current employment and income:

·       the most recent pay stub and a written Verification of Employment (VOE) covering two (2) years; or

·       direct electronic verification of employment by a TPV vendor covering two years, subject to the following requirements:

o   the Borrower has authorized CMS to verify income and employment; and

o   the date of the data contained in the completed verification conforms with FHA requirements.

 

FHA Underwriting Guidelines
Old Requirements Updated Requirements
Past Employment Documentation

Direct verification of the Borrower’s employment history for the previous two (2) years is not required if all of the following conditions are met:

·       The current employer confirms a two year employment history, or a paystub reflects a hiring date.

·       Only base pay is used to qualify (no Overtime or Bonus Income).

·       The Borrower executes IRS Form 4506, Request for Copy of Tax Return, IRS Form 4506-C, Request for Transcript of Tax Return, or IRS Form 8821, Tax Information Authorization, for the previous two (2) tax years.

If the applicant has not been employed with the same employer for the previous two (2) years and/or not all conditions immediately above can be met, then CMS must obtain one or a combination of the following for the most recent two (2) years to verify the applicant’s employment history:

·       W-2(s)

·       VOE(s)

·       direct electronic verification by a TPV vendor, subject to the following requirements:

o   the Borrower has authorized CMS to verify income and employment; and

o   the date of the data contained in the completed verification conforms with FHA requirements.

·       evidence supporting enrollment in school or the military during the most recent two (2) full years – Note: High School transcripts are not permitted to complete the two year work history

Past Employment Documentation

Direct verification of the Borrower’s employment and income history for the previous two (2) years is not required if all of the following conditions are met:

·       The current employer confirms a two year employment history, or a paystub reflects a hiring date.

·       Only base pay is used to qualify (no Overtime or Bonus Income).

·       The Borrower executes IRS Form 4506, Request for Copy of Tax Return, IRS Form 4506-C, IVES Request for Transcript of Tax Return, or IRS Form 8821, Tax Information Authorization, for the previous two (2) tax years.

If the applicant has not been employed with the same employer for the previous two (2) years and/or not all conditions immediately above can be met, then CMS must obtain one or a combination of the following for the most recent two (2) years to verify the applicant’s employment history:

·       W-2(s)

·       written VOE(s)

·       direct electronic verification by a TPV vendor, subject to the following requirements:

o   the Borrower has authorized CMS to verify income and employment; and

o   the date of the data contained in the completed verification conforms with FHA requirements.

·       evidence supporting enrollment in school or the military during the most recent two (2) full years – Note: High School transcripts are not permitted to complete the two year work history

Employment Related Income (Total)

Required Documentation

(1) Individual and Business Tax Returns

CMS must obtain complete individual federal income tax returns for the most recent two (2) years, including all schedules.

(2) Profit & Loss Statements and Balance Sheets

CMS must obtain a year-to-date Profit and Loss (P&L) statement and balance sheet if more than a calendar quarter has elapsed since date of most recent calendar or fiscal year-end tax. A balance sheet is not required for self-employed Borrowers filing Schedule C income.

If income used to qualify the Borrower exceeds the two year average of tax returns, an audited P&L or signed quarterly tax return must be obtained from the IRS.

Employment Related Income (Total)

Required Documentation

(1) Individual and Business Tax Returns

CMS must obtain complete individual federal income tax returns for the most recent two (2) years, including all schedules.

CMS must obtain the Borrower’s business tax returns for the most recent two years unless the following criteria are met:

·       individual federal income tax returns show increasing Self-Employment Income over the past two years;

·       funds to close are not coming from business accounts; and

·       the Mortgage to be insured is not a cash-out refinance.

 

 

FHA Underwriting Guidelines
Old Requirements Updated Requirements

(1) Individual and Business Tax Returns (continued)

In lieu of signed individual or business tax returns from the Borrower, CMS may obtain a signed IRS Form 4506, Request for Copy of Tax Return, IRS Form 4506-C, IVES Request for Transcript of Tax Return, or IRS Form 8821, Tax Information Authorization, and tax transcripts directly from the IRS.

(2) Profit & Loss Statements and Balance Sheets

CMS must obtain a year-to-date Profit and Loss (P&L) statement and balance sheet if more than a calendar quarter has elapsed since the date of the most recent calendar or fiscal year-end tax period. A balance sheet is not required for self-employed Borrowers filing Schedule C income.

If income used to qualify the Borrower exceeds the two year average of tax returns, an audited P&L or signed quarterly tax return must be obtained from the IRS.

Foster Care Payment – Changes apply for FHA Case Assignments dated 9/20/2021 and later.

(1) Definition

Foster Care Payment refers to payment received from a state- or county-sponsored organization for providing temporary care for one or more individuals.

(2) Standard

Foster care payment may be considered acceptable and stable income if the Borrower has a two-year history of providing foster care services and receiving foster care payment and that the foster care payment is reasonably likely to continue.

(3) Required Documentation

The Mortgagee must obtain a written verification of foster care payment from the organization providing it, verify and document that the Borrower has a two-year history of providing foster care services and receiving foster care payment, and that the foster care payment is reasonably likely to continue.

(4) Calculation of Effective Income

The Mortgagee must calculate foster care payment by using the lesser of:

·       average foster care payment received over the previous two years; or

·       average foster care payment received over the previous year.

Real Estate Tax Credits

Where real estate taxes are paid in arrears, the seller’s real estate tax credit may be used to meet the Borrower’s Minimum Required Investment (MRI), if CMS documents that the Borrower had sufficient assets to meet the MRI and the Borrower paid closing costs and other prepaid items at the time of underwriting.

This permits the Borrower to bring a portion of their MRI to the closing and combine that portion with the real estate tax credit for their total MRI.

Real Estate Tax Credits

Where real estate taxes are paid in arrears, the seller’s real estate tax credit may be used to meet the Borrower’s Minimum Required Investment (MRI), if CMS documents that the Borrower had sufficient assets to meet the MRI and the Borrower paid closing costs and other prepaid items at the time of underwriting, without consideration of the real estate tax credit.

This permits the Borrower to bring a portion of their MRI to the closing and combine that portion with the real estate tax credit for their total MRI.

 

 

FHA Underwriting Guidelines
Old Requirements Updated Requirements
Employment Related Income (Manual)

(C) Required Documentation

For all Employment related Income, CMS must verify the Borrower’s most recent two (2) years of employment and income, and document using one of the following methods.

(1) Traditional Current Employment Documentation

CMS must obtain one of the following to verify current employment:

·       the most recent pay stubs covering a minimum of 30 consecutive Days (if paid weekly or bi-weekly, pay stubs must cover a minimum of 28 consecutive Days) that show the Borrower’s year-to-date earnings, and a written Verification of Employment (VOE) covering two (2) years; or

·       direct verification by a TPV vendor covering two years, subject to the following requirements:

o   the Borrower has authorized CMS to verify income and employment; and

o   the date of the data contained in the completed verification conforms with FHA requirements

(4) Past Employment Documentation

Direct verification of the Borrower’s employment history for the previous two (2) years is not required if all of the following conditions are met:

·       The current employer confirms a two year employment history, or a paystub reflects a hiring date.

·       Only base pay is used to qualify (no Overtime or Bonus Income).

·       The Borrower executes IRS Form 4506, Request for Copy of Tax Return, IRS Form 4506-C, Request for Transcript of Tax Return, or IRS Form 8821, Tax Information Authorization, for the previous two (2) tax years.

If the applicant has not been employed with the same employer for the previous two (2) years and/or not all conditions immediately above can be met, then CMS must obtain one or a combination of the following for the most recent two (2) years to verify the applicant’s employment history:

·       W-2(s)

·       VOE(s)

·       direct verification of employment by a TPV vendor, subject to the following requirements:

o   the Borrower has authorized CMS to verify income and employment; and

Employment Related Income (Manual)

(C) Required Documentation

For all Employment related Income, CMS must verify the Borrower’s most recent two (2) years of employment and income, and document current employment using either the Traditional or Alternative method, and past employment as applicable.

(1) Traditional Current Employment Documentation

CMS must obtain one of the following to verify current employment and income:

·       the most recent pay stubs covering a minimum of 30 consecutive Days (if paid weekly or bi-weekly, pay stubs must cover a minimum of 28 consecutive Days) that show the Borrower’s year-to-date earnings, and a written Verification of Employment (VOE) covering two (2) years; or

·       direct electronic verification of employment by a TPV vendor covering two years, subject to the following requirements:

o   the Borrower has authorized CMS to verify income and employment; and

o   the date of the data contained in the completed verification conforms with FHA requirements

(4) Past Employment Documentation

Direct verification of the Borrower’s employment and income history for the previous two (2) years is not required if all of the following conditions are met:

·       The current employer confirms a two year employment history, or a paystub reflects a hiring date.

·       Only base pay is used to qualify (no Overtime or Bonus Income).

·       The Borrower executes IRS Form 4506, Request for Copy of Tax Return, IRS Form 4506-C, IVES Request for Transcript of Tax Return, or IRS Form 8821, Tax Information Authorization, for the previous two (2) tax years.

If the applicant has not been employed with the same employer for the previous two (2) years and/or not all conditions immediately above can be met, then CMS must obtain one or a combination of the following for the most recent two (2) years to verify the applicant’s employment history:

·       W-2(s)

·       written VOE(s)

·       direct verification of employment by a TPV vendor, subject to the following requirements:

 

 

FHA Underwriting Guidelines
Old Requirements Updated Requirements
(4) Past Employment Documentation (continued)

o   the date of the data contained in the completed verification conforms with FHA requirements

·       evidence supporting enrollment in school or the military during the most recent two (2) full years – Note: High School transcripts are not permitted to complete the two year work history

(4) Past Employment Documentation (continued)

o   the Borrower has authorized CMS to verify income and employment; and

o   the date of the data contained in the completed verification conforms with FHA requirements

·       evidence supporting enrollment in school or the military during the most recent two (2) full years – Note: High School transcripts are not permitted to complete the two year work history

Self-Employment Income (Manual)

(C) Required Documentation

(1) Individual and Business Tax Returns

CMS must obtain signed, completed individual and business federal income tax returns for the most recent two (2) years, including all schedules.

(2) Profit & Loss Statements and Balance Sheets

CMS must obtain a year-to-date Profit and Loss (P&L) statement and balance sheet if more than a calendar quarter has elapsed since date of most recent calendar or fiscal year-end tax return was filed by the Borrower. A balance sheet is not required for self-employed Borrowers filing Schedule C income.

If income used to qualify the Borrower exceeds the two year average of tax returns, an audited P&L or signed quarterly tax return obtained from the IRS is required.

Self-Employment Income (Manual)

(C) Required Documentation

(1) Individual and Business Tax Returns

CMS must obtain signed, completed individual and business federal income tax returns for the most recent two (2) years, including all schedules.

In lieu of signed individual or business tax returns from the Borrower, CMS may obtain a signed IRS Form 4506, Request for Copy of Tax Return, IRS Form 4506-C, IVES Request for Transcript of Tax Return, or IRS Form 8821, Tax Information Authorization, and tax transcripts directly from the IRS.

(2) Profit & Loss Statements and Balance Sheets

CMS must obtain a year-to-date Profit and Loss (P&L) statement and balance sheet if more than a calendar quarter has elapsed since the date of the most recent calendar or fiscal year-end tax period. A balance sheet is not required for self-employed Borrowers filing Schedule C income.

If income used to qualify the Borrower exceeds the two year average of tax returns, an audited P&L or signed quarterly tax return obtained from the IRS is required.

Mortgage and Note

ii. Standard

CMS must develop or obtain a separate Mortgage and Note that conforms generally to the Freddie Mac and Fannie Mae forms in both form and content, but that includes the specific modification required by FHA set forth in the applicable Model Note and Mortgage.

CMS must ensure that the Mortgage and Note comply with all applicable state and local requirements for creating a recordable and enforceable Mortgage, and an enforceable Note.

Mortgage and Note

ii. Standard

CMS must develop or obtain a separate Mortgage and Note that conforms generally to the Freddie Mac and Fannie Mae forms in both form and content, but that includes the specific modification required by FHA set forth in the applicable Model Note and Mortgage.

CMS must ensure that the Mortgage and Note comply with all applicable state and local requirements for creating a recordable and enforceable Mortgage, and an enforceable Note.

At least one Borrower obligated on the Note must be on the title.

 

FHA Underwriting Guidelines
Old Requirements Updated Requirements
Streamline Refinance Transactions

(h) Funds to Close

CMS must verify Borrower’s funds to close, in excess of the total Mortgage Payment of the new Mortgage, in accordance with Sources of Funds.

Streamline Refinance Transactions
Changes apply for FHA Case Assignments dated 9/20/2021 and later.
(h) Funds to CloseIf the funds to close exceed the total Mortgage Payment (PITI) of the new Mortgage, CMS must verify the full amount of the Borrower’s finds to close in accordance with Sources of Funds.
Condominiums Hazard Insurance

(b) Standard

CMS must verify that the Condominium Association has a master or blanket Hazard Insurance policy in place for the entire Approved Condominium Project in an amount equal to at least 100 percent of the insurable replacement cost of the Approved Condominium Project, including the individual Units in the Approved Condominium Project.

CMS must verify that any policy with a coinsurance clause includes an agreed amount endorsement or selection of the agreed value option.

(c) Required Documentation

CMS must submit the certificate of insurance or complete copy of the insurance policy that meets the requirements.

Condominiums Hazard Insurance

(b) Standard

CMS must verify that the Condominium Association has a master or blanket Hazard Insurance policy in place for the entire Approved Condominium Project in an amount equal to at least 100 percent of the insurable replacement cost of the Approved Condominium Project, including the individual Units in the Approved Condominium Project.

CMS must verify that any policy with a coinsurance clause includes an agreed amount endorsement or selection of the agreed value option, or an amount of coverage equal to at least 100 percent of the insurable replacement cost.

(c) Required Documentation

CMS must submit form HUD-9991, the certificate of insurance or complete copy of the insurance policy, and, if applicable, acceptable evidence of the replacement cost value.

Condominiums Manufactured Housing – Single-Unit Approval

(B) Borrower Eligibility

To be eligible for Single-Unit Approval, CMS must verify that the mortgage application receives an Accept from TOTAL Mortgage Scorecard or has a maximum Loan-to-Value (LTV) of 90 percent.

Condominiums Manufactured Housing – Single-Unit Approval

(B) Borrower Eligibility

To be eligible for Single-Unit Approval, CMS must verify that the mortgage application receives an Accept from TOTAL Mortgage Scorecard or if manually underwritten, has a maximum Loan-to-Value (LTV) of 90 percent.

Condominiums Manufactured Housing – Single-Unit Approval

(b) Hazard Insurance

(ii) Standard

CMS must verify that the Condominium Association has a master or blanket Hazard Insurance policy in place for the entire Condominium Project in an amount equal to at least 100 percent of the insurable replacement cost of the Condominium Project, including the individual Units in the Condominium Project.

CMS must verify that any policy with a coinsurance clause includes an agreed amount endorsement or selection of the agreed value option.

Condominiums Manufactured Housing – Single-Unit Approval

(b) Hazard Insurance

(ii) Standard

CMS must verify that the Condominium Association has a master or blanket Hazard Insurance policy in place for the entire Condominium Project in an amount equal to at least 100 percent of the insurable replacement cost of the Condominium Project, including the individual Units in the Condominium Project.

CMS must verify that any policy with a coinsurance clause includes an agreed amount endorsement or selection of the agreed value option, or an amount of coverage equal to at least 100 percent of the insurable replacement cost.

FHA Underwriting Guidelines
Old Requirements Updated Requirements
(b) Hazard Insurance (continued)

CMS must verify that any pooled insurance policy satisfies the insurance coverage standard for each Condominium Project insured under the policy.

(iii) Required Documentation

CMS must submit a certificate of insurance or complete copy of the insurance policy that meets the requirements.

(b) Hazard Insurance (continued)

CMS must verify that any pooled insurance policy satisfies the insurance coverage standard for each Condominium Project insured under the policy.

(iii) Required Documentation

CMS must submit form HUD-9991, a certificate of insurance or complete copy of the insurance policy, and if applicable, acceptable evidence of the replacement cost value.

Fidelity Insurance

(ii) Standard

CMS must verify that for all Condominium Projects with more than 20 Units, the Condominium Association maintains Fidelity Insurance for all officers, directors, and employees of the Condominium Association and all other persons handling or responsible for funds administered by the Condominium Association.

CMS must verify that the insurance coverage is the greater of:

·       three months of aggregate assessments on all Units plus reserve funds; or

·       the minimum amount required by state law.

If the Condominium Project engages a management company, the policy or policies must demonstrate that they specifically meet the standard for both the Condominium Association and the management company.

Fidelity Insurance

(ii) Standard

CMS must verify that for all Condominium Projects with more than 20 Units, the Condominium Association maintains Fidelity Insurance for all officers, directors, and employees of the Condominium Association and all other persons handling or responsible for funds administered by the Condominium Association.

CMS must verify that the insurance coverage is the greater of:

·       three months of aggregate (12-month) assessments on all Units plus reserve funds (up to the maximum permitted by state law); or

·       the minimum amount required by state law.

If the Condominium Project engages a management company, the policy or policies must demonstrate that they specifically meet the standard for both the Condominium Association and the management company.

Individual Water Supply Systems

(B) Standard

When an Individual Water Supply System is present, water quality must meet the requirements of the health authority with jurisdiction. If there are no local (or state) water quality standards, then must be potable, which may be demonstrated by compliance with the current EPA Manual of Individual and Non-Public Water Supply Systems.

Individual Water Supply Systems

(B) Standard

When an Individual Water Supply System is present, water quality must meet the requirements of the health authority with jurisdiction. If there are no local (or state) water quality standards, then water quality must meet the standards set by the EPA, as presented in the National Primary Drinking Water regulations in 40 CFR § 141 and 142.

Appraisal Conditions – Required Analysis and Reporting

When New Construction is less than 90 percent complete at the time of the appraisal, the Appraiser must document the floor plan, plot plan, and exhibits necessary to determine the size and level of finish.

When New Construction is 90 percent or more complete, the Appraiser must document a list of components to be installed or completed after the date of appraisal.

Contacts

Please contact your Account Executive or Account Manager with any questions.

Carrington thanks you for your business.

USDA Conditional Approvals

September 21, 2021rashtonBulletin

Overview

USDA Rural Development has announced their policy regarding Fiscal Year 2022 funding for Single Family Housing Guaranteed loans. As stated in the announcement, during the brief lapse in funding for the Fiscal Year 2022, Conditional Commitments will be issued with “subject to the availability of commitment authority for purchase and refinance transactions” effective October 1, 2021 until funds become available in their system. During this transition period, Carrington Mortgage Services, LLC (CMS) will close loans with Conditional Commitments (Form RD 3555-18/18E) issued with a “subject to” condition for purchase and refinance transactions.

As a reminder, the USDA Up-Front and Annual Fees for Fiscal Year 2022 for purchase and refinance transactions are as follows:

  • Up-Front Guarantee is 1.00%
  • The Annual Fee is 0.35%

Contacts

Please contact your Account Executive or Account Manager with any questions.

Carrington thanks you for your business.

Ellie Mae System Outage

September 21, 2021rashtonBulletin

Overview

Please be advised Ellie Mae is experiencing multiple system and server issues today impacting production services, eFolder, and Mavent. All issues related to this national outage have been escalated and Ellie Mae is actively working to resolve all three issues. The issues are not isolated to Carrington Mortgage Services, LLC (CMS) and are also impacting most of their clients. At this time, Ellie Mae is expecting to have the issues resolved by 12:00 noon PST.  CMS is monitoring the situation with Ellie Mae and will advise once updates are made available.

Please know the CMS Wholesale team is actively working on all impacted files as the Ellie Mae system comes back online.  If you have any critical loans that you need assistance with please reach out to Account Manager for support.

Contacts

Please contact your Account Executive or Account Manager with any questions.

Carrington appreciated your business and thanks you for your patience and understanding.

Updated FEMA Disaster Declaration for California Wildfires

September 20, 2021rashtonBulletin

Overview

Due to damage from wildfires in California, FEMA has declared the following counties a disaster. Updated counties are listed in bold.

Incident Period: Jul 14, 2021 and Continuing

State FEMA Disaster Declaration Counties
California August 24, 2021 Lassen, Nevada, Placer, Plumas
Tehama and Trinity

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 – Continuing**.
FHA Streamline No Not applicable
VA Full Doc and IRRRL Yes If the loan was not closed (signed) prior to the Declaration Date of 08/24/2021.
USDA Full Doc and Streamline Assist Yes If the original appraisal inspection date was prior to the Incident Period End Date – Continuing**.
Conventional* and Non-Agency Yes If the original appraisal inspection date was prior to the Incident Period End Date – Continuing**.

*If an appraisal was not required due to a property inspection waiver (PIW), an inspection report will still be required.

**In cases where FEMA has not yet issued an Incident End Date and the disaster is “Continuing”, the earliest CMS will permit a re-inspection is a minimum of 14 calendar days from the Incident Period Start Date.

Contacts

Please contact your Account Executive or Account Manager with any questions.

Carrington thanks you for your business.

Updated FEMA Disaster Declaration for New Jersey – Hurricane Ida

September 20, 2021rashtonBulletin

Overview

Due to damage from remnants of Hurricane Ida in New Jersey, FEMA has declared the following counties a disaster. Updated counties are listed in bold.

Incident Period: September 1, 2021 – September 3, 2021

State FEMA Disaster Declaration Counties
New Jersey September 5, 2021 Bergen, Essex, Gloucester, Hunterdon, Hudson, Mercer, Middlesex, Morris, Passaic, Somerset, Union and Warren

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 – 9/3/2021.
FHA Streamline No Not applicable
VA Full Doc and IRRRL Yes If the loan was not closed (signed) prior to the Declaration Date of 9/5/2021.
USDA Full Doc and Streamline Assist Yes If the original appraisal inspection date was prior to the Incident Period End Date – 9/3/2021.
Conventional* and Non-Agency Yes If the original appraisal inspection date was prior to the Incident Period End Date – 9/3/2021.

*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.

Non-QM Program Underwriting Enhancements

September 13, 2021rashtonBulletin

Overview

Carrington Mortgage Services, LLC (CMS) is pleased to announce the following guideline enhancements for the Non-QM loan programs (Prime Advantage, Flexible Advantage Plus and Investor Advantage). These changes are effective September 13, 2021.

Prime Advantage Program

The Prime Advantage program has the following enhancements:

  • Increased Maximum Loan Amount to $3,500,000
  • Increased Maximum Cash-Out from $500,000 to $750,000
  • Escrow Waivers are now permitted when the Borrower’s FICO > 700 and < 80% LTV
  • Increased Loan Amount tier from $2,000,001–$2,500,000 to $2,000,001–$3,000,000
  • Added new loan amount tier from $3,000,001–$3,500,000 with LTVs shown in the table below:
Program Maximum LTVs Primary Residence & Second Homes
Full Doc Alt Doc
Loan Amount Reserves FICO Purchase & R/T Cash Out Purchase & R/T Cash Out
$3,000,001
up to
$3,500,000
12 Months 720+ 75% 65% 75% 65%
700 70% 60% 70% 60%

Investor Advantage

The Investor Advantage program has the following enhancements:

  • Increased Maximum Loan Amount to $2,000,000
  • Increased Maximum Cash-Out from $500,000 to $750,000

Flexible Advantage Plus Program

The Flexible Advantage Plus program has the following enhancement:

  • Escrow Waivers are now permitted when the Borrower’s FICO > 700 and < 80% LTV

Contacts

Please contact your Account Executive or Account Manager with any questions.

Carrington thanks you for your business.

Updated FEMA Disaster Declaration for New York – Hurricane Ida

September 13, 2021rashtonBulletin

Overview

Due to damage from remnants of Hurricane Ida in New York, FEMA has declared the following counties a disaster. Updated counties are listed in bold.

Incident Period: September 1, 2021 September 3, 2021

State FEMA Disaster Declaration Counties
New York September 5, 2021 Bronx, Dutchess, Kings, Nassau, Orange, Putnam, Queens, Richmond, Rockland, Suffolk, Sullivan, Ulster and Westchester

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 – 9/3/2021.
FHA Streamline No Not applicable
VA Full Doc and IRRRL Yes If the loan was not closed (signed) prior to the Declaration Date of 9/5/2021.
USDA Full Doc and Streamline Assist Yes If the original appraisal inspection date was prior to the Incident Period End Date – 9/3/2021.
Conventional* and Non-Agency Yes If the original appraisal inspection date was prior to the Incident Period End Date – 9/3/2021.

*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 Pennsylvania – Hurricane Ida

September 13, 2021rashtonBulletin

Overview

Due to damage from remnants of Hurricane Ida in Pennsylvania, FEMA has declared the following counties a disaster.

Incident Period: August 31, 2021 – September 5, 2021

State FEMA Disaster Declaration Counties
Pennsylvania September 10, 2021 Bucks, Chester, Delaware, Montgomery, Philadelphia and York

Please note:

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 – 9/5/2021.
FHA Streamline No Not applicable
VA Full Doc and IRRRL Yes If the loan was not closed (signed) prior to the Declaration Date of 9/10/2021.
USDA Full Doc and Streamline Assist Yes If the original appraisal inspection date was prior to the Incident Period End Date – 9/5/2021.
Conventional* and Non-Agency Yes If the original appraisal inspection date was prior to the Incident Period End Date – 9/5/2021.

*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.

Updated FEMA Disaster Declaration for New Jersey – Hurricane Ida

September 13, 2021rashtonBulletin

Overview

Due to damage from remnants of Hurricane Ida in New Jersey, FEMA has declared the following counties a disaster. Updated counties are listed in bold.

Incident Period: September 1, 2021 – September 3, 2021

State FEMA Disaster Declaration Counties
New Jersey September 5, 2021 Bergen, Essex, Gloucester, Hunterdon, Hudson, Mercer, Middlesex, Morris, Passaic, Somerset and Union

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 – 9/3/2021.
FHA Streamline No Not applicable
VA Full Doc and IRRRL Yes If the loan was not closed (signed) prior to the Declaration Date of 9/5/2021.
USDA Full Doc and Streamline Assist Yes If the original appraisal inspection date was prior to the Incident Period End Date – 9/3/2021.
Conventional* and Non-Agency Yes If the original appraisal inspection date was prior to the Incident Period End Date – 9/3/2021.

*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.