Update to Chenoa Fund Training #4.

1. CBCMA Training
Series

2. Topics
1 – All Chenoa Fund Programs Overview
Conventional / FHA
2 – How to Calculate AMI
3 – Pre-Registration: The 1003
Conventional / FHA
4 – Underwriting
5 – Lock Desk
6 – How to Lock a Loan
Conventional / FHA
7 – How to Secure DPA Approvals
8 – How to Draw Documents
9 – Purchase Clearing: Uploading
10 – Purchase Clearing: Conditions and
Escalations
11 – Final Documents
12 – Servicing
13 – Why Use Chenoa Fund
Conventional / FHA

3. • Your company is delegated.
• Underwriting must follow:
• Relevant agency guidelines
• TRID compliance
• Industry standards
General

4. • Secondary Financing closes in the name
of your company.
• Secondary Financing is transferred to
CBC Mortgage Agency after closing.
• 2nds are required to be registered with
MERS.
• You will need to provide a MIN number for
the 2nd mortgage deed and note.
• There does need to be a specific,
separate MIN number on the second,
different from the first.
Closing and MERS

5. • Industry Guidelines require secondary
financing to be in the name of a
government agency prior to insuring.
• The second mortgage must be transferred
to CBCMA as soon as the file has been
closed.
• All second mortgage MINs must be
registered with MERS as soon as possible
after closing.
• The first mortgage is not insurable if:
• You request an MIC before you have a
secondary financing MERS transfer to
CBCMA
OR
• You request a MIC before you have an
executed assignment of the second
mortgage to CBCMA
Industry Requirements

6. • 2nd Lien Loan Application
• 2nd Lien Loan Estimate*
• 2nd Lien Closing Disclosure*
• 2nd Lien Notice of Transfer of Servicing
• 2nd Lien First Payment Letter for all REPAYABLE seconds. This
must reflect CBCMA’s servicing address:
Statebridge Company, LLC
6061 South Willow Drive
Suite 300
Greenwood Village, CO 80111
• 2nd Lien Note, which must reflect the servicing address above.
• 2nd Lien Mortgage/Deed of Trust
• CBCMA Secondary Financing Disclosure
• CBCMA Letter from the President
• CBCMA Quality Control Release form
• Addendum regarding seller of lender contributions, if applicable-–
applies to loans with seller-paid borrower origination charges
2nd Lien Documentation Requirements
*Must meet TRID timing & delivery requirements

7. • Ensure that the following commonly missed files
are uploaded (to avoid added conditions)
• Tri-merge/three bureau, soft-pull credit refresh,
dated within 10 days of the note date or evidence of
enrollment in a credit monitoring service through
this time period
• Appraisal logging
• 1st Mortgage 1003 – page 3, section H should
always be marked “yes”
• 2nd Mortgage 1003 – must be signed and dated
within 3 days of choosing program. Make sure your
LOS system does not automatically pick up date
from the 1st lien. Loan will then be out of compliance
with TRID
• 1008/LT – Secondary financing govt. box should be
checked. The source should read CBCMA 46-
2780476 (never Chenoa or Chenoa Fund)
• 92800-5B – On page 3, the expiration date should
be 120 days from the commitment issued and
should match the 92900a
• 92900a – Pages 1 and 4 need to be signed by the
lender; page 3 needs the expiration date, which
should match the 92800-5b
Commonly Missed Documents – Credit Package

8. • Ensure that the following commonly missed
files are uploaded (to avoid added conditions)
• MRI Funding Obligation Letter
• First Note and Deed of Trust/Mortgage
• Second Note and Deed of Trust/Mortgage
• LE 2nd lien – 2nd lien follows TRID guidelines
just like first. It must be issued within 3 days of
second lien 1003
• Closing Disclosures – Never use the word
“Chenoa.” It must read CBCMA. This happens
a lot on the first lien when listing the DPA
funds in section L.
• FHA Settlement Cert – Contract date needs to
be included. Your LOS will not auto populate
this for you.
• An executed copy of the assignment of a
second Deed of Trust/Mortgage or evidence
of a second Deed of Trust/Mortgage MIN
transfer in MERS
Commonly Missed Documents – Closing Package

9. Admin Fee Clarifications
• $399 Admin Fee on first mortgage
• Charged to the correspondent
• Reflected on the PA as a deduction from total loan
sale proceeds
• No lender fees on secondary financing
• Additions to the lender fees to offset the Admin
Fee:
• NEVER reflect as a charge payable to CBCMA
• List fee must always be listed in Section A, in
Origination Charges or as a separate line item
Admin charge
• If passed to the borrower, this fee is subject to the
TRID points & fees test.

10. • No lender fees should be charged on
the second.
• The only fees allowed to be charged on
the second are title fees and recording
fees.
Displaying 2nd Lien Loan Fees on the 2nd CD

11. • If this fee is passed on to the borrower, the
3% points and fees rule applies.
• Review the Buckley Sandler memo on
converting points and fees between
borrower and seller:
https://chenoafund.org/lender/cbc-
documents-and-tools/
• Converting seller credits can pay this fee if
the following is done before closing:
• Borrower has signed an addendum to the
note (found at the above link)
• The fee is itemized in the seller’s column on
the CD
• This allows the charges to not be counted
for the 3% points and fees rule.
Rate Sheet Clarification
• CBCMA:
• Offers one rate for each product and its
FICO band
• Does not charge discount points
• Cannot, in the current market, offer the
alternative par rate necessary for discount
points to be bona fide
• Lower rates are a reduction in the
YSP/SRP paid to the correspondent.
• Fees from corporate margins (from lower
rates) belong in section A of the CD, “points
and fees.”
• Our rate sheets refer to fees from specific
FICO bands as “Fee Paid by Lender.”
• The fee paid by the lender will be deduced
from the base price to reflect the final price.

12. Maximum Origination Fee
• CBCMA will allow a maximum origination
fee of 1.5%.
• Additionally, the lender may charge for any
CBCMA loan level pricing adjustments
(LLPAs).
• Lenders will be required to refund
borrowers for any origination fees (including
non-bona-fide discount points) exceeding
1.5% plus CBCMA LLPAs.
• Reasonable lender underwriting,
administrative, or program fees are not
considered in this calculation; however,
they are considered in the maximum 3%
points and fees test.

13. Follow FHA 4000.1 for guidance.
Overtime, Bonus, or Tip Income refers to income that the Borrower
receives in addition to the Borrower’s normal salary.
The Mortgagee may use Overtime, Bonus or Tip Income as
Effective Income if the Borrower has received this income for the
past two years and it is reasonably likely to continue.
Periods of Overtime, Bonus or Tip Income less than two years may
be considered Effective Income if the Mortgagee documents that
the Overtime, Bonus or Tip Income has been consistently earned
over a period of not less than one year and is reasonably likely to
continue.
For employees with Overtime, Bonus or Tip Income, the Mortgagee
must calculate the Effective Income by using the lesser of:
• The average Overtime, Bonus or Tip Income earned over the
previous two years or, if less than two years, the length of time
Overtime, Bonus or Tip Income has been earned; or
• The average Overtime, Bonus or Tip Income earned over the
previous year.
Overtime and Bonus Income Calculation

14. The DPA must be listed as “CBC Mortgage Agency 2nd Lien” or “CBCMA
2nd Lien” between sections L.04 and L.07.
1st Lien Closing Disclosure (1st Mortgage)

15. • If you take out the net proceeds from
the second lien, make sure you put the
principal balance in parentheses on the
CD for the first mortgage.
• Top screenshot (example): Principal
balance without net proceeds taken
out.
• Bottom screenshot (example): Principal
balance with net proceeds taken out.
• Reminder: If the line doesn’t fit
correctly, you may put “CBCMA 2nd
Lien” instead of “CBC Mortgage
Agency 2nd Lien.”
1st Lien Closing Disclosure (1st Mortgage)

16. • Action Date – The date the appraisal report is reviewed by the underwriter.
This date should be on or after the date the appraiser signs the original
report. The original report should be included in the file along with the
updated report.
92800-5B (part 1)

17. • Commitment Issued – Effective date of the appraisal. That can be
before the date the appraiser signs the report (i.e., the date the
appraiser actually inspects the home.)
• Commitment Expires – 120 days from the Commitment issued date.
92800-5B (part 2)

18. • For the source/EIN, you always have only two options.
• CBC Mortgage Agency 46-2780478
• CBCMA 46-2780478
• You must always select Gov’t. CBCMA is owned by Cedar Band
Corporation, a Native American governmental entity.
92900 LT

19. • Pages 1 and 4 must be signed by the lender and the
borrower.
• Page 3 must be signed by the underwriter.
• If Approve/Eligible DU findings: The “Date Mortgage
Approved” field must be equal to the date of the final
DU (prior to docs) and must also match the
Underwriter Date on the bottom of page 1 of the
92900-LT.
• The “Date Approval Expires” must be equal to the
Commitment expiration date on the 92800.5B form.
• The expiration date of the 92900-A should be the
greater of 90 days from approval or 120 days from the
appraisal expiration date.
• Item 25 (6) should be marked as “Not Applicable” if
the property is dated after 1978.
92900-A