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CBC Mortgage Agency (CBCMA)

CBC Mortgage Agency (CBCMA) is a federally chartered, public-purpose government lender. CBC Mortgage Agency (CBCMA) created Chenoa Fund to help lenders to assist their borrowers to obtain the 3.5% minimum required investment on an FHA loan.<br>

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CBC Mortgage Agency (CBCMA)

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  1. CBCMA Training Series #1: For Loan Officers FHA Product Line

  2. 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-mortgagee-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 it’s 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 If you have suspended our program until the mortgagee letter is withdrawn, please send that to us in writing, so we can show the number of companies and people that this is affecting.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 Agency’s 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.

  4. Chenoa Fund by CBC Mortgage Agency: FHA Overview • Chenoa Fund is the program name for CBC Mortgage Agency’s 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.

  5. FHA Second Mortgages:The Rate Advantage Program

  6. Rate Advantage Program • Qualifying Income: < 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.

  7. FHA Second Mortgages:The DPA Edge Program

  8. DPA Edge: Soft Second (1/2) • Qualifying Income: < 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.

  9. DPA Edge: Repayable Second (2/2) • Qualifying Income: > 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.

  10. 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: 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. 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.

  11. In regards to Homebuyer Education, Be sure to visit our Lender FAQs for more information on this topic. https://chenoafund.org/lender/lender-faq/ 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 Agency’s 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/online-homebuyer-courses. Here, the courses range from $75-$99. Feel free to contact info@chenoafund.org for even more information on Homebuyer Education.

  12. 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.

  13. 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”

  14. 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.

  15. Calculating Area Median Income: Primary Method • For the primary method, you’ll 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!

  16. 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!

  17. Pre-Registration:The 1003

  18. 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.

  19. Secondary Financing on 1003 (1st Mortgage) Image: List secondary financing as follows on the 1003.

  20. Declarations Page of 1003 (1st Mortgage) Image: Where to disclose the DPA.

  21. Secondary Financing LP (1st Mortgage) Image: You will see this screen if you are using Secondary Financing LP system.

  22. 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.

  23. 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.

  24. Commonly Missed Documents Make sure you upload these commonly missed files to avoid added conditions. Credit Package • Soft pull credit report within 10 days of close (alternatively, you can provide evidence of credit monitoring). • Case Query to show UFMIP is paid. • Appraisal logging. • Both the 1st and 2nd Mortgage 1003s. Closing Package • MRI Funding Obligation Letter. • First Note and Deed of Trust/Mortgage. • Second Note and Deed of Trust/Mortgage.  • An executed copy of the assignment of a second Deed of Trust/Mortgage or evidence of second Deed of Trust/Mortgage MIN transfer in MERS.

  25. Features and Benefits: FHA CBC Mortgage Agency is a government entity powering Chenoa Fund, a tool designed to help increase home ownership. This is accomplished by offering qualified borrowers down payment assistance in the form of 2nd mortgages, resulting in zero down payments.  “… Renters looking to buy a home in the near future cited the following barrier … saving enough for a down payment.” -Forbes Product DPA Edge DPA Edge DPA Edge/Rate Advantage DPA Edge/Rate Advantage DPA Edge DPA Edge DPA Edge/Rate Advantage Features FICO down to 620. DTI based on AUS findings (no overlay cap). No first-time homebuyer requirement. Any city, any state (NY excluded). Co-borrower assistance with a non-occupant coborrower. No income limits. Stable, continuous, non-bond funding. Benefits Easy for borrowers to qualify. Increased purchasing power. Simplicity. Purchasing where the customer desires. Qualifying options with the family. Streamlined process. A knowledge that funding will always be available. • No matter your current relationship with DPA, now is the time to increase loan volume, qualify more customers, and experience fewer dropped loans. Chenoa Fund is provided by CBC Mortgage Agency, an FHA approved Government Title II Lender. HUD statute allows government entities to provide down payment assistance.   • Chenoa Fund is the premier DPA that offers simplicity, ease, and options that can help you and your customers accomplish great things in home ownership. • All industry guidelines apply.  These marketing ideas can generate interest and phone calls from consumers and real estate agents.

  26. 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-mortgagee-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 it’s 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.

  27. Important CBC Mortgage Agency Contacts Information and questions info@chenoafund.org Portal Questions submissions@chenoafund.org Pricing Questions locks@chenoafund.org Underwriting Questions scenariodesk@chenoafund.org Purchase Clearing Please contact the Purchase Clearing specialist for the specific loan you’re working on. Collateral/Shipping finaldocs@chenoafund.org Servicing servicing@chenoafund.org

  28. Conclusion

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