Carrington Wholesale

HUD Announces New Eligibility Guidelines for Certain Non-Permanent Residents

June 3, 2021rashtonBulletin

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

May 24, 2021rashtonBulletin

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:

  • Proof of ownership of a primary home superior in value and/or appeal to subject Borrowers who rent a primary residence and are purchasing a 1-unit Single Family Residence must provide:
  • Evidence of an active lease in place
  • Primary residence must be supported by one of the following characteristics:
    • Geographically consistent with borrower’s place of employment. If the URLA employment section is blank, the Underwriter must add a condition for the URLA to list the borrower’s Employer name and address; or
    • General appeal and location of primary is superior to subject property

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

May 24, 2021rashtonBulletin

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

May 12, 2021rashtonBulletin

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

May 12, 2021rashtonBulletin

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

April 28, 2021rashtonBulletin

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

April 26, 2021rashtonBulletin

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.

FEMA Disaster Declaration for Louisiana Severe Winter Storm

March 11, 2021rashtonBulletin

Overview

Due to damage from severe winter storms in Louisiana, FEMA has declared the following parishes (counties) a disaster.

Incident Period: February 11, 2021 – February 19, 2021

State FEMA Disaster Declaration Parishes
Louisiana March 9, 2021 Avoyelles, Bienville, Bossier, Caddo, Calcasieu, Catahoula, Claiborne, Concordia, De Soto, East Baton Rouge, Franklin, Grant, La Salle, Madison, Natchitoches, Ouachita, Rapides, Red River, Richland, Sabine, Webster, West Carroll and Winn.

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 2/19/21.
FHA Streamline No Not applicable
VA Full Doc and IRRRL Yes If the loan was not closed (signed) prior to the Declaration Date of 3/9/21 and submitted prior to 2/19/21.
USDA Full Doc Yes If the original appraisal inspection date was prior to the Incident Period End Date of 2/19/21.
USDA Streamline Assist Yes If the original submission date was prior to the Incident Period End Date of 2/19/21.
Conventional* and Non-Agency Yes If the original appraisal inspection date was prior to the Incident Period End Date of 2/19/21.

*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.

Reminder – If you have DU/LP and application dated prior to 3/1/2021 then we can still accept the old URLA.

March 9, 2021rashtonBulletin

Overview

As a reminder, effective Monday, March 1, 2021, applications dated on or after 3/1/2021 require the new Uniform Residential Loan Application (URLA).

For applications dated prior to 3/1/2021, if there is no AUS dated prior to 3/1/2021, then the loan must use the new URLA as well since DU/LP will not issue AUS results using the old URLA format.  The case ID must have been issued prior to 3/1/2021 to allow the old URLA format.  Manually underwritten files only require that the application date be prior to 3/1/2021 to use the old URLA format.

Contacts

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

Carrington thanks you for your business.

Updated FEMA Disaster Declaration for Texas Severe Winter Storms

February 26, 2021rashtonBulletin

Overview

Due to damage from the severe winter storms in Texas, FEMA has declared the following counties a disaster. Additional updated counties are shown in bold.

Incident Period: February 11, 2021 and continuing

State FEMA Disaster Declaration Counties
Texas February 19, 2021 Anderson, Angelina, Aransas, Atascosa, Austin, Bandera, Bastrop, Bee, Bell, Bexar, Blanco, Bosque, Bowie, Brazoria, Brazos, Brooks, Brown, Burleson, Burnet, Caldwell, Calhoun, Cameron, Chambers, Cherokee, Collin, Colorado, Comal, Comanche, Cooke, Coryell, Dallas, DeWitt, Denton, Duval, Eastland, Ector, Ellis, Erath, Falls, Fannin, Fort Bend, Freestone, Galveston, Gillespie, Goliad, Gonzales, Grayson, Gregg, Grimes, Guadalupe, Hardin, Harris, Harrison, Hays, Henderson, Hidalgo, Hill, Hood, Houston, Howard, Hunt, Jackson,  Jasper, Jefferson, Jim Hogg, Jim Wells, Johnson, Jones, Karnes, Kaufman, Kendall, Kleberg, Lavaca, Leon, Liberty, Limestone, Llano, Lubbock, Madison, Matagorda, Maverick, McLennan, Medina, Milam, Montague, Montgomery, Nacogdoches, Navarro, Newton, Nueces, Orange, Palo Pinto, Panola, Parker, Polk, Robertson, Rockwall, Rusk, Sabine, San Jacinto, San Patricio, Scurry, Shelby, Smith, Stephens, Tarrant, Taylor, Tom Green, Travis, Trinity, Tyler, Upshur, Val Verde, Van Zandt, Victoria, Walker, Waller, Washington, Webb, Wharton, Wichita, Willacy, Williamson, Wilson, Wise and Wood.

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 02/19/21.
USDA Full Doc Yes If the original appraisal inspection date was prior to the Incident Period End Date – Continuing*.
USDA Streamline Assist Yes If the original submission date was after 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*.

*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.

**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.