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