Announcement 21-0029: Updated Non-Agency Product Guidelines

August 13, 2021

Overview

Carrington Mortgage Services, LLC (CMS) is pleased to announce the following Carrington Advantage product underwriting updates (highlighted in red). Key updates include:

  • Updated the Desk Review requirement for all Investment Properties to follow same requirements as Primary/Secondary residences
  • For all programs, increased the Loan Amount for 2nd Appraisals from $1.0 MM to $1.5 MM
  • For Investor Advantage transactions with a Debt Coverage Ratio (DCR) of 0.75 to 0.99, increased the maximum LTV from 65% to 70%

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 CarringtonWholesale.com/Loan-Products.

All Advantage Programs
Old Requirements Updated Requirements

Soft Pull Credit Report

A soft pull credit report is required within 10 days of closing.

Soft Pull Credit Report

A soft pull credit report is required within 14 days of closing.

Appraisal Review Process

The Appraisal Review Process requires a secondary due diligence product to support the appraised value for the transaction. Acceptable products, subject to the restrictions below include:

  • Fannie Mae Collateral Underwriter (CU) score of 2.5 or lower
  • Desk Review (must contain a value and comparative sales data to support the valuation result)
  • Field Review
  • Second Full Appraisal (appraisals must be completed by different, independent appraisers and the lower of the two appraised values used to determine value)
  • Review by Carrington Capital Management (CCM)

Appraisal Review Process

The Appraisal Review Process requires a secondary due diligence product to support the appraised value for the transaction. Acceptable products, subject to the restrictions below include:

  • Fannie Mae Collateral Underwriter (CU) score of 2.5 or lower
  • Desk Review (must contain a value and comparative sales data to support the valuation result)
  • Field Review
  • Second Full Appraisal (appraisals must be completed by different, independent appraisers and the lower of the two appraised values used to determine value)
  • Review by Carrington Capital Management (CCM)

Due diligence product restrictions:

    • To utilize the Fannie Mae Collateral Underwriter (CU) score, all of the following must be met:
      • Loan amount < $1,000,000, and
      • CU Score ≤ 2.5
    • The following require a Desk Review (ineligible for CU):
      • Investment Properties
      • Any Loan Amount ≥ $1,000,000, or
      • Any CU Score > 2.5
    • The following require a Second Full Appraisal:
      • Loan amount ≥ $1,000,000
      • Higher Priced Mortgage Loans* (HPML) Property Flip Transactions
      • HPML* New Construction Properties with any title transfer within 180 days prior to the sales contract date, or any title transfer after the sales contract date, including land-only and zero value title transfers, require a Second Full Appraisal.
      • Please note: title transfers from a builder to a wholly owned subsidiary of the builder are considered a “change of ownership” and require a Second Full Appraisal.
      • *Refer to HPML Requirements. Only Principal Dwellings are subject to HPML regulations, and the borrower may not pay for the second appraisal when ordered solely due to HPML flipping rules.
    • The following requires a CCM Review:
      • Appraised value ≥ $1,500,000. When two appraisals are present the lowest value is used.
    • Desk Reviews, Field Reviews, and Second Full Appraisals, when required, must be ordered from a CMS-approved AMC. A Second Full Appraisal must be completed by a different AMC and a different, independent appraiser than the first appraisal. CMS reserves the right to request additional appraisal products at our discretion based on review of the appraisal and loan file.

Due diligence product restrictions:

  • To utilize the Fannie Mae Collateral Underwriter (CU) score, all of the following must be met:
    • Loan amount ≤ $1,500,000, and
    • CU Score ≤ 2.5
  • The following requires a Desk Review (ineligible for CU):
    • Any CU Score > 2.5
  • The following require a Second Full Appraisal:
    • Loan amount > $1,500,000
    • Higher Priced Mortgage Loans* (HPML) Property Flip Transactions
    • HPML* New Construction Properties with any title transfer within 180 days prior to the sales contract date, or any title transfer after the sales contract date, including land-only and zero value title transfers, require a Second Full Appraisal.
    • Please note: title transfers from a builder to a wholly owned subsidiary of the builder are considered a “change of ownership” and require a Second Full Appraisal.
    • *Refer to HPML Requirements. Only Principal Dwellings are subject to HPML regulations, and the borrower may not pay for the second appraisal when ordered solely due to HPML flipping rules.
  • The following requires a CCM Review:
    • Appraised value ≥ $1,500,000. When two appraisals are present the lowest value is used.
  • Desk Reviews, Field Reviews, and Second Full Appraisals, when required, must be ordered from a CMS-approved AMC. A Second Full Appraisal must be completed by a different AMC and a different, independent appraiser than the first appraisal. CMS reserves the right to request additional appraisal products at our discretion based on review of the appraisal and loan file.

First Time Investor

A First-Time Investor is a borrower who has not owned at least one investment property for at least 12 months anytime during the most recent 12-month period. See the Carrington Prime Advantage, Flex Advantage, and Investor Advantage Program Matrix for restrictions for First-Time Investors.

First Time Investor

A First-Time Investor is a borrower who has not owned at least one investment property for at least 12 months anytime during the most recent 12-month period. See the Carrington Prime Advantage, Flex Advantage, and Investor Advantage Program Matrix for restrictions when all borrowers are First-Time Investors.

Investor Advantage Program
Old Requirements Updated Requirements

Debt Coverage Ratio (DCR)

DCR 0.75 – 0.99 - Maximum LTV = 65%

Debt Coverage Ratio (DCR)

DCR 0.75 – 0.99 - Maximum LTV = 70%

Appraisal Review Tolerance

For Investor Advantage loans, a 10% tolerance is permitted for secondary review products. If the review product value is more than 10% below the appraisal value, the lower of the two values must be used.

In the event that two appraisals are obtained and a variance >10% exists, the value closest to the secondary review product value must be used.

Appraisal Review Tolerance

For Investor Advantage loans, a 10% tolerance is permitted for secondary review products. If the review product value is more than 10% below the appraisal value, the lower of the two values must be used.

In the event that two appraisals are obtained, the lowest value must be used.

Appraisal Review Process

The Appraisal Review Process requires a secondary due diligence product to support the appraised value for the transaction. Acceptable products include:

  • Desk Review (must contain a value and comparative sales data to support the valuation result)
  • Second Full Appraisal

Loan amounts ≥ $1,000,000 require a Second Full Appraisal.

Appraised values ≥ $1,500,000 require a Carrington Capital Management (CCM). When two appraisals are present the lowest value is used.

Appraisal Review Process

The Appraisal Review Process requires a secondary due diligence product to support the appraised value for the transaction. Acceptable products, subject to the restrictions below, include:

  • FNMA Collateral Underwriter (CU) score of 2.5 or lower
  • Desk Review (must contain a value and comparative sales data to support the valuation result)
  • Second Full Appraisal (Note: appraisals must be completed by different AMCs and different, independent appraisers and the lower of the two appraised values used to determine value)
  • Review by Carrington Capital Management (CCM)

Desk Reviews and Second Full Appraisals, when required, must be ordered from a CMS-approved AMC. A Second Full Appraisal must be completed by a different appraiser and a different AMC than the first appraisal. CMS reserves the right to request additional appraisal products at our discretion based on review of the appraisal and loan file.

Existing CMS policies must be followed for guidance on ordering discretionary appraisal review products if there are concerns with the original appraisal report.

Due diligence product restrictions:

  • To utilize the Fannie Mae Collateral Underwriter (CU) score, all of the following must be met:
    • LTV ≤ 80%,
    • Loan amount ≤ $1,500,000, and
    • CU Sore ≤ $2.5
  • The following require a Desk Review (ineligible for CU)
    • Any loan where the LTV > 80%, or
    • CU Score > 2.5
    • The following require a Second Full Appraisal: Loan amounts > $1,500,000
  • The following requires a CCM Review:
    • Appraised Value ≥ $1,500,000.  When two appraisals are present the lowest value is used.

Desk Reviews and Second Full Appraisals, when required, must be ordered from a CMS-approved AMC. A Second Full Appraisal must be completed by a different appraiser and a different AMC than the first appraisal. CMS reserves the right to request additional appraisal products at our discretion based on review of the appraisal and loan file.

Existing CMS policies must be followed for guidance on ordering discretionary appraisal review products if there are concerns with the original appraisal report.

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 1500 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)

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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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