Announcement 20-0010: ARM Documentation Updates

March 3, 2020

Overview

On February 5, 2020, Fannie Mae released Lender Letter LL-2020-01 concerning the upcoming transition from LIBOR to an alternate index for all ARM products. Carrington Mortgage Services, LLC (CMS) will follow the timelines and requirements of the letter particularly with respect to the following:

  • Carrington only purchases Non-QM LIBOR ARM loans requiring Fannie/Freddie compliant closing documents
  • For all ARM loans with note dates on or after June 1, 2020, notes must either use the applicable Fannie 3501 series note or be in a substantially similar form especially with respect to the fallback language
  • All riders must use the applicable 3100 series riders or be in a substantially similar form especially with respect to the fallback language
  • All non-standard instruments such as Interest Only riders must also include the updated fallback language
  • Carrington will update LIBOR ARM notes/riders in support document vendor systems (EllieMae, DocMagic, etc.); however, Sellers should test and confirm that LIBOR ARM notes/rides comply with requirements noted above

Carrington will not purchase loans which do not comply with these requirements.  Carrington expects to transition to the SOFR index for offered ARM loans by the end of 2020 and will provide additional guidance throughout the transition process.

Contacts

Please contact CorrespondentRM@carringtonms.com with any questions.
Carrington thanks you for your business.

Government Agency Approvals

FHA Non-Supervised Mortgagee Approval #:
24751-0000-5
VA Automatic Lender Approval #:
902324-00-00

Mortgagee/Loss Payee Clause

Carrington Mortgage Services LLC
ISAOA/ATIMA
P.O. Box 692408
San Antonio, TX 78269-2408

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This information is provided for your convenience and Carrington Mortgage Services, LLC makes no warranties concerning the accuracy or completeness of any of the information. This is not financial or legal advice and should not be taken as such. This information is for mortgage professionals only and is not intended for distribution to consumers.
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An Equal Housing Opportunity Lender. Copyright 2007 - 2022 . Carrington Mortgage Services, LLC headquartered at 1600 South Douglass Road, Suites 110 & 200-A, Anaheim, CA 92806. NMLS ID # 2600. Toll Free # 800-561-4567. All rights reserved. Restrictions may apply. All loans are subject to credit, underwriting and property approval guidelines. Nationwide Mortgage Licensing System (NMLS) Consumer Access Web Site: www.nmlsconsumeraccess.com.

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Government Agency Approval | FHA Non-Supervised Mortgage Approval #: 24751-0000-5 | VA Automatic Lender Approval #: 902324-00-00

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