Chenoa

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CBCMA Training Series 2 Underwriting FHA
Product Line
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Show Support for a Withdrawal of Mortgagee Letter
2019-06
1. In the link below, you will find documents
that can be used as a template to reach out to
key appointees and congress people who can
quickly act on this irresponsible use
of government power.  Please share your thoughts
and be heard so we can preserve responsible down
payment assistance.https//chenoafund.org/hud-mo
rtgagee-letter-2019-06/2. We are also asking
for the stories of any borrowers who have been
directly affected by this letter. Please send us
any information you are able to about borrowers
who have been affected by this sudden change,
whether its their story, or their contact
information so we can reach out. We will be using
this to strengthen our case, and show the
negative impact the Mortgagee Letter has had.
 3. If you have suspended our program until the
mortgagee letter is withdrawn, please send that
to us in writing, so we can show the number of
companies and people that this is affecting.  
HUD issued Mortgagee Letter 19-06 without
following the Administrative Procedures Act. This
was unlawful, and has caused confusion and
concern in our industry.  CBC Mortgage Agency
has filed for a restraining order to temporarily
block this new policy and once in place, will
file for injunctive relief.  We are confident
that the mortgagee letter will be removed and
a more responsible policy will be implemented
that follows the proper procedures of public
comment and an implementation period. As we
litigate, we seek your support politically to
ensure that our politicians hold government
appointees accountable.  We encourage you to
please be part of the solution to continue to
help credit worthy Americans purchase their own
home. Here are some ways you can help.
3
Chenoa Fund by CBC Mortgage Agency General
Overview

• Chenoa Fund is the program name for CBC Mortgage
  Agencys suite of down payment assistance
  products. These products are offered to borrowers
  in the form of second mortgages.
• The programs are allowed in all states except New
  York.
• All programs offer 3.5 for the second mortgage.
  Up-front fees are limited only by the 3 points
  and fees rule.
• The first mortgage must be sold to CBC Mortgage
  Agency.
• At the time you sell your first mortgage to CBC
  Mortgage Agency, the down payment funds you
  advanced are reimbursed.
• Your underwriter underwrites the file.
• Approved property types include SFR, PUD,
  Townhome, Condo, Attached, Detached, and Modular
  Homes.
• No Manufactured Homes.
• HPML (Rebuttable Presumption) is allowed, but no
  High Cost Mortgages.

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Chenoa Fund by CBC Mortgage Agency FHA Overview

• Chenoa Fund is the program name for CBC Mortgage
  Agencys suite of down payment assistance
  products, including second mortgages for FHA
  loans.
• There are two FHA programs the Rate Advantage,
  and the DPA Edge.
• The Rate Advantage program has one product. CBCMA
  offers the Rate Advantage Product to provide a
  better first mortgage interest rate for the
  borrower, and better YSP/SRP for the lender.
• The DPA Edge is split into two products, one for
  borrowers whose income is less than 115 AMI, and
  one for borrowers who income is greater than 115
  AMI.
• Only the DPA Edge program includes a forgivable
  second option. That option is available for
  borrowers with an income that is less than 115
  AMI.

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FHA Second MortgagesThe Rate Advantage Program
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Rate Advantage Program

• Qualifying Income lt or 115 AMI
• Requires monthly payment.
• FICO Scores 640 minimum.
• Second mortgage has a 10-Year term at an 8
  Interest rate.
• Non-occupant co-borrowers are not allowed.
• No concurrent homeownership.
• Max DTI 50
• Manual underwrites are not allowed.
• Note Look to this one first to benefit you and
  your client.

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FHA Second MortgagesThe DPA Edge Program
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DPA Edge Soft Second (1/2)

• Qualifying Income lt or 115 AMI.
• No monthly payment.
• FICO Scores 620 minimum.
• 0 Interest Rate and 30-year Term.
• Forgiven after 36 consecutive on-time payments on
  FHA 1st Mortgage.
• Non-occupant co-borrowers are allowed.
• DTI per AUS or FHA manual underwriting guides.
• Only offered for single-family and two unit
  properties.
• Three to four unit properties not allowed.

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DPA Edge Repayable Second (2/2)

• Qualifying Income gt 115 AMI.
• Requires monthly payment.
• FICO Scores 620 minimum.
• 10-Year term 0 interest rate.
• 30-Year term 5 interest rate.
• Non-occupant co-borrowers are allowed.
• DTI per AUS or FHA manual underwriting guides.
• Only offered for single-family and two unit
  properties.
• Three to four unit properties not allowed.

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Quick Comparison Matrix FHA Products
Rate Advantage a.) CBCMA offers 3.5 to cover
down payment. b.) 2nd mortgage repayable. c.) 8
with 10 year term. d.) 640 minimum FICO
score. e.) Qualifying Income less than or equal
to 115 AMI. f.) Max DTI 50. g.) Homebuyer
education not required. h.) Please see HUD
handbook 4000.1 for current upfront MIP rates.
DPA Edge Repayable Second a.) CBCMA offers 3.5
to cover down payment. b.) 2nd mortgage
repayable. c.) 0 interest with 10 year term
or 5 interest with 30 year term. d.) 620 minimum
FICO score. e.) Qualifying Income greater than
115 AMI. f.) DTI restrictions per AUS
guidelines. g.) Homebuyer education required for
borrowers with credit scores between 620-639. h.)
Please see HUD handbook 4000.1 for current
upfront MIP rates.
DPA Edge Soft Second a.) CBCMA offers 3.5 to
cover down payment. b.) 2nd mortgage
forgivable. c.) Forgivable after 36 consecutive
on-time payments on the 1st mortgage. d.) 620
minimum FICO score. e.) Qualifying Income less
than or equal to 115 AMI. f.) DTI restrictions
per AUS guidelines. g.) Homebuyer education
required for borrowers with credit scores between
620-639. h.) Please see HUD handbook 4000.1 for
current upfront MIP rates.
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In regards to Homebuyer Education, Be sure to
visit our Lender FAQs for more information on
this topic. https//chenoafund.org/lender/lender-f
aq/ CBC Mortgage Agency offers pre-purchase
counseling through Hope Loan Port, also known as
Money Management International. This pre-purchase
counseling is provided for borrowers with a FICO
score of 620 to 639, which also means this
counseling is only required for our DPA Edge
products. The aforementioned counseling courses
are paid for by CBC Mortgage Agency. As such,
correspondent-lenders should never direct their
borrowers with FICO scores 640 to go to
https//www.borrowersuccess.org/prepurchase. If
borrowers without the proper FICO score attempt
to access this course, they will be turned away,
which will cause much stress, frustration, and
confusion on many borrowers parts. For your
borrowers that have a FICO score of 620 to 639,
note that they will not be able to access the
course until 1.) they have been registered
and/or locked by their lender in CBC Mortgage
Agencys portal. 2.) they have allowed for 24
hours to pass after the LO receives the relevant
confirmation letter. 3.) they have a CBC loan
number, provided for them by their LO (will start
with 161). Coborrowers outside the 620 to 639
range will not need to take the course. If you
wish for your borrower with a FICO score 640 to
take Homebuyer Education through Hope Loan Port
anyway, please utilize this link instead.
https//www.moneymanagement.org/buying-a-home/onli
ne-homebuyer-courses. Here, the courses range
from 75-99. Feel free to contact
info_at_chenoafund.org for even more information on
Homebuyer Education.
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Check out our Program Guidelines! A more detailed
version of our product matrix can be found on
chenoafund.org.
Next, click on Program Guidelines.
Finally, scroll down to pages 8-16.
First, click on Lenders.
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Calculating Area Median Income

• Go to the HUD Area Median Income Site.
• https//www.huduser.gov/portal/datasets/il.html
• Select the most recent fiscal year.
• Then Click Here for FY most recent year IL
  Documentation

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Calculating Area Median Income

• Select the state.
• Select the county.
• Click View County Calculations.
• Note This is a third party site. CBCMA State
  Restrictions still apply, even if you see the
  option here.

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Calculating Area Median Income Primary Method

• For the primary method, youll want to pull the
  number from the Median Family Income column.
  This is outlined in red.
• You determine the AMI by multiplying the Median
  Family Income by 115.
• Example 69,100 x 115 79,465
• Note Pick the method that will best match your
  borrower to their desired program!

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Calculating Area Median Income Alternative
Method

• There is an alternative calculation method
  allowed within the UW comments on the 1008.
• First, locate the appropriate family size
  underneath the Persons in Family column, in the
  Very Low (50) Income Limits row.
• Find the appropriate income limit, and then
  multiply that number by two.
• Then, multiply that number by 115.
• Example, using a family of 6 40,100 x 2
  80,200 X 115 92,230
• Note Pick the method that will best match your
  borrower to their desired program!

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Pre-RegistrationThe 1003
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1003 Important To Remember

• Both the First and Second Mortgage require a full
  set of TRID compliant disclosures, which should
  include the
• 1003
• LE
• Initial CD
• Final CD
• For a comprehensive list of all the documents we
  require the borrower to sign, please refer to our
  Program Guidelines, which can be found at
  ChenoaFund.org.

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Secondary Financing on 1003 (1st Mortgage)

• Image List secondary financing as follows on the
  1003.

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Declarations Page of 1003 (1st Mortgage)

• Image Where to disclose the DPA.

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Secondary Financing LP (1st Mortgage)

• Image You will see this screen if you are using
  Secondary Financing LP system.

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1st Lien Closing Disclosure (1st Mortgage)

• Image The DPA must be listed as CBC Mortgage
  Agency 2nd Lien under section L04 or under
  Other Credits.

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Important Reminder

• You must deliver disclosures to borrower
  following the TRID guidelines.
• The LE must be mail stamped or signed by borrower
  within 3 days of the 1003.
• Digital signatures are acceptable.

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Underwriting
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Underwriting must follow

• Relevant agency guidelines.
• TRID compliance.
• Industry standards.

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• Secondary Financing closes in the name of your
  company.
• Secondary Financing is transferred to CBC
  Mortgage Agency after close.
• 2nds are required to be registered with MERS.
• You will need to provide a MERS number for the
  2nd mortgage deed and note.

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• Your First Mortgage will NOT BE INSURABLE if you
  do not have a Secondary Financing MERS transfer
  to CBCMA BEFORE you request a MIC.
• Or, if it applies, BEFORE you have an executed
  assignment of the Second Mortgage to CBC Mortgage
  Agency.
•  
• Under the terms of the funding obligation letter,
  your company extends funds at the closing table
  on behalf of CBC Mortgage Agency for the
  borrowers down payment.  These funds are
  reimbursed by CBC Mortgage Agency at the time the
  first mortgage is purchased.  Industry guidelines
  require that the secondary financing be in the
  name of the government agency prior to insuring,
  so it is EXTREMELY important that all second
  mortgage MINS are registered with MERS as soon as
  possible after closing and the TOS/TOB be
  executed immediately.

• The second has to be transferred to CBC Mortgage
  Agency as soon as the file has been closed.

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Show Support for a Withdrawal of Mortgagee Letter
2019-06
1. In the link below, you will find documents
that can be used as a template to reach out to
key appointees and congress people who can
quickly act on this irresponsible use
of government power.  Please share your thoughts
and be heard so we can preserve responsible down
payment assistance.https//chenoafund.org/hud-mo
rtgagee-letter-2019-06/2. We are also asking
for the stories of any borrowers who have been
directly affected by this letter. Please send us
any information you are able to about borrowers
who have been affected by this sudden change,
whether its their story, or their contact
information so we can reach out. We will be using
this to strengthen our case, and show the
negative impact the Mortgagee Letter has had.
 3. If you have suspended our program until the
mortgagee letter is withdrawn, please send that
to us in writing, so we can show the number of
companies and people that this is affecting.  
HUD issued Mortgagee Letter 19-06 without
following the Administrative Procedures Act. This
was unlawful, and has caused confusion and
concern in our industry.  CBC Mortgage Agency
has filed for a restraining order to temporarily
block this new policy and once in place, will
file for injunctive relief.  We are confident
that the mortgagee letter will be removed and
a more responsible policy will be implemented
that follows the proper procedures of public
comment and an implementation period. As we
litigate, we seek your support politically to
ensure that our politicians hold government
appointees accountable.  We encourage you to
please be part of the solution to continue to
help credit worthy Americans purchase their own
home. Here are some ways you can help.
29
Important CBC Mortgage Agency Contacts

•  Purchase Clearing
• Please contact the Purchase Clearing specialist
  for the specific loan youre working on.
• Collateral/Shipping
• finaldocs_at_chenoafund.org
• Servicing
• servicing_at_chenoafund.org

• Information and questions
• info_at_chenoafund.org
•  
• Portal Questions
• submissions_at_chenoafund.org
• Pricing Questions
• locks_at_chenoafund.org
• Underwriting Questions
• scenariodesk_at_chenoafund.org

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Conclusion