New York Guideline Addendum - PDF document

New York Guideline Addendum Wholesale
New York Guideline Addendum Wholesale Lending May 7, 2020 www.cmgfi.com Information in these guidelines is for credit policy guidance only and is not a complete representation of CMG Financial (NMLS #1820) Lending Policies. Information is accurate as of the date of publishing and is subject to change without notice. In addition to applying these CMG-specific overlays, all loans must comply with the AUS Findings and agency/investor requirements. To verify our state licenses, please log onto the following website: http://www.cmgfi.com/licensing.php and www.nmlsconsumeracces.org Page | 0 New York Guideline Addendum Supplements CMG’s loan product guidelines with guidance specific to New York, including NY State’s Consolidation, Extension, and Modification Agreement (CEMA) process. Table of Contents New York Guideline Addendum ........................................................................................ 0 A – Overview of New York ................................................................................................ 1 B – Required Documentation - CEMA .................................................................................. 1 C – Fees ....................................................................................................................... 1 D – Loan Eligibility/Underwriting Specific to CEMA Transactions ................................................. 2 E – Closing Attorneys ....................................................................................................... 2 F – Approved Attorney List ................................................................................................ 3 H – CEMA Loan Production Requirements ............................................................................ 4 I – CEMA Terminology Glossary ...................................................................................................................... 5 Recent Updates .............................................................................................................................................. 6 New York Guideline Addendum Wholesale Lending May 7, 2020 www.cmgfi.com Information in these guidelines is for credit policy guidance only and is not a complete representation of CMG Financial (NMLS #18

20) Lending Policies. Information is ac
20) Lending Policies. Information is accurate as of the date of publishing and is subject to change without notice. In addition to applying these CMG-specific overlays, all loans must comply with the AUS Findings and agency/investor requirements. To verify our state licenses, please log onto the following website: http://www.cmgfi.com/licensing.php and www.nmlsconsumeracces.org Page | 1 A – Overview of New York For all transactions in the state of New York the loan files must be disclosed, processed, underwritten and closed in an approved/licensed branch. Files may not be processed/underwritten by remote personnel unless the branch location has received specific approval from CMG Compliance. For Standard Transactions: • 1-4 unit properties allowed; however, 3-4 unit properties subject to 100% prefunding QC audit. For CEMA Transactions: • The state of New York charges a mortgage recording tax whenever a new mortgage or refinance is recorded. To reduce tax liability to the borrower, refinances can be completed by consolidating, extending and modifying the existing loan (CEMA). When completing a transaction in this manner, the borrower only pays the recording tax on any “new money” that is added to the original loan. • A CEMA loan combines into one set of rights and obligations all the promises and agreements stated in existing notes and mortgages secured by the mortgaged property, including any new funds (new money mortgage) advanced to the borrower at the time of consolidation. CEMA activity could encompass multiple loans concurrently, as well as historically. You could be refinancing a first and second lien together into a CEMA; it could be a string of repeat refinances, such that the CEMA is modifying numerous liens. Once a loan becomes a CEMA, it remains a CEMA until such a time as there is a new transaction that does not utilize the CEMA process. • Refer to Part D – Loan Eligibility/Underwriting for specific restrictions to CEMA transactions. B – Required Documentation - CEMA CEMA loans require additional documentation in order to be closed properly. The following documents must be verified on every CEMA mortgage loan: • The CEMA agreement (Form 3172 issued by MERS). This agreement must include notarized signatures of the borrower, lender, and MERS representative. • Original (Money) Note(s) – Or

iginal documents signed by the borrower
iginal documents signed by the borrower • Gap (New Money) Note and Gap Mortgage, if applicable – Original documents signed by the borrower • Consolidated Note – Original documents signed by the borrower • Exhibit A – Listing of all notes & mortgages being consolidated, extended, and modified • Exhibit B – Property legal description • Exhibit C – Copy of the Executed Consolidated Note • Exhibit D – Copy of the Consolidated Mortgage. (Exhibit D does not have to be executed) Note: Copies of Consolidated Notes, Original Old Money and Original New Money (Gap) Notes must be copies of the entire Note, not just the face and back page. C – Fees In addition to standard fees, the following fees apply to all CEMA mortgage loans: • Attorney Fee: Determined by the closing attorney • Assignment Fee: The assignment fee is charged by the lender(s) of the mortgage(s) being consolidated, extended, and modified and is out of the control of CMG. The fee varies by lender and is generally only charged if the loan closes. New York Guideline Addendum Wholesale Lending May 7, 2020 www.cmgfi.com Information in these guidelines is for credit policy guidance only and is not a complete representation of CMG Financial (NMLS #1820) Lending Policies. Information is accurate as of the date of publishing and is subject to change without notice. In addition to applying these CMG-specific overlays, all loans must comply with the AUS Findings and agency/investor requirements. To verify our state licenses, please log onto the following website: http://www.cmgfi.com/licensing.php and www.nmlsconsumeracces.org Page | 2 D – Loan Eligibility/Underwriting Specific to CEMA Transactions Eligible Transaction Types • Refinance transactions on properties located in the state of NY • 1-4 unit properties allowed; however, 3-4 unit properties subject to 100% prefunding QC audit. Ineligible Transaction Types • Purchase transactions • Transactions on properties located outside the state of NY • Transactions on properties which are Co-Ops. Eligible Loan Programs • Agency Fixed and ARM loans • FHA Fixed and ARM loans • Flex Jumbo (6400 Series) with pre-closing investor review and approval • Prime Jumbo (6800 Series) Ineligible Loan Programs • VA loans • USDA loans â€

¢ Non-agency and jumbo loans, excep
¢ Non-agency and jumbo loans, except Flex Jumbo (6400 Series) Eligible Borrowers • Individual borrowers and inter-vivos trusts qualifying under CMG’s program guidelines (See CMG guidelines for details on borrower eligibility) Credit Guidelines • Refer to individual product guidelines for details on eligibility for financing with CMG E – Closing Attorneys • Individual Attorney(s) and/or law firms that conduct business in the State of NY must be prior approved by CMG prior to closing CEMA transactions. (If the attorney is not closing a CEMA transaction, prior approval is not required.) • Attorney(s) listed on the ineligible party list are not acceptable and requires that a new settlement agent be selected • Eligible Attorney(s) must provide CMG with all of the following: o Wire Instructions o Current Resume’ from attorney(s) and or principal of law firm o Fidelity Bond Insurance o E&O Insurance o Liability coverage of at least $1M with a deductible no greater than $5000 per million Law firms that seek approval to be added to CMG’s approved attorney list must meet all of the requirements listed for eligible attorneys. CEMA attorneys that meet CMG’s requirements will be added to the list of approved closing attorneys. New York Guideline Addendum Wholesale Lending May 7, 2020 www.cmgfi.com Information in these guidelines is for credit policy guidance only and is not a complete representation of CMG Financial (NMLS #1820) Lending Policies. Information is accurate as of the date of publishing and is subject to change without notice. In addition to applying these CMG-specific overlays, all loans must comply with the AUS Findings and agency/investor requirements. To verify our state licenses, please log onto the following website: http://www.cmgfi.com/licensing.php and www.nmlsconsumeracces.org Page | 3 F – Approved Attorney List All NY CEMA loans closed through CMG must utilize one of the following approved closing attorneys: • ABRAMS GARFINKEL MARGOLIS BERGSON, LLP 1430 Broadway • 17th Floor New York, NY 10018 Direct: (646)-473-7567 • Dean Mavrides, Esq. Mavrides, Moyal, Packman & Sadkin, LLC 1981 Marcus Avenue, Suite E117 Lake Success, NY 11042 dmavrides@mmps.com • Francesca Annunziata-Asllani, Esq. 982 Montauk Highway, 2nd Floor, Bayport, NY 11705 646-866

-7878 fannunziata@aandalegal.com
-7878 fannunziata@aandalegal.com • Jared Kaplan, Esq. 6901 Jericho Turnpike, Suite 100 Syosset, NY 11791 516-801-6364 jared@closerattorney.com • Kevin Schmitt 500 Old Country Road Suite 110 Garden City, NJ 11530 516-794-0774 kschmitt@ksapc.net • Marc A. Ditomaso, Esq. Registration Number: 3027380 1385 Boston Post Road, 1st Floor Larchmont, NY 10538 914.907.7074 mditomaso@verizon.net • Michael G. Postiglione, Esq. Law Offices of Michael G. Postiglione, P.C. Registration Number: 4272530 11 Clinton Avenue Rockville Centre, New York 11570 516.750.8789 michael@postiglionelaw.com • Seth I. Ben-Ezra, P.C. http://www.sibpc.com/ Melville Office: 425 Broadhollow Road, Suite 220 Melville, NY 11747 Tel: (516)577-9000 New York Office: 405 Park Avenue, Suite 1001 New York, NY 10022 Tel: (212)758-0971 • Thomas Bonfiglio, Esq. and Joseph Asterita, Esq Bonfiglio & Asterita, LLC Thomas Registration Number: 2188571 Joseph Registration Number: 3017472 900 South Ave. Suite 101 New York Guideline Addendum Wholesale Lending May 7, 2020 www.cmgfi.com Information in these guidelines is for credit policy guidance only and is not a complete representation of CMG Financial (NMLS #1820) Lending Policies. Information is accurate as of the date of publishing and is subject to change without notice. In addition to applying these CMG-specific overlays, all loans must comply with the AUS Findings and agency/investor requirements. To verify our state licenses, please log onto the following website: http://www.cmgfi.com/licensing.php and www.nmlsconsumeracces.org Page | 4 Staten Island, NY 10314 718.370.2900 tom@balawllc.com joe@balawllc.com • Voula Viglis, Esq. 788 3rd Avenue Brooklyn, NY 11232 917-560-0504 voulaviglis@gmail.com • William M. Mason, Esq. Mason and Mason 394 Old Country Road Garden City, NY 11530 516-739-3090 lisawenchell@masonandmason.net H – CEMA Loan Production Requirements All disclosing, processing, underwriting and closing of New York transactions must be done in an approved/licensed location. The following basic requirements apply to specific job functions within CMG for NY CEMA loans. Refer to individual channel operational procedures and checklists for detailed guidance. Loan Officer/Broker: • Obtain documentation from

previous lender for mortgage(s) being c
previous lender for mortgage(s) being consolidated, extended, and modified • Communicate with settlement agent/closing attorney to begin process and deliver/address any required documentation • Complete and execute the CEMA document with all exhibits per instruction, the Consolidated Note, the New Money/Gap Note, New Money/Gap Mortgage, and the 255 Affidavits along with instructions. • Aid in resolving any errors & omissions that may arise • Contact CMG operations to schedule closing Registration/Disclosure Desk: • Properly identify loan as CEMA in CMG’s LOS • Verify proper disclosure of required fees Underwriting: • Determine eligibility with both CMG’s New York Guideline Addendum and loan product guidelines • Review required documentation and ensure that transaction includes an approved closing attorney as listed in the most recent version of the CMG’s New York Guideline Addendum Closing: • Review and verify all required documentation for accuracy • Communicate with settlement agent/closing attorney for scheduling of closing and CMG instructions, including swift delivery of closing documents to CMG for lender countersignature New York Guideline Addendum Wholesale Lending May 7, 2020 www.cmgfi.com Information in these guidelines is for credit policy guidance only and is not a complete representation of CMG Financial (NMLS #1820) Lending Policies. Information is accurate as of the date of publishing and is subject to change without notice. In addition to applying these CMG-specific overlays, all loans must comply with the AUS Findings and agency/investor requirements. To verify our state licenses, please log onto the following website: http://www.cmgfi.com/licensing.php and www.nmlsconsumeracces.org Page | 5 Post-Closing: • Verify required documentation and review closing documents upon receipt • Execute lender countersignature for delivery to required parties • Place CEMA agreement in “CEMA Agreement” bucket I – CEMA Terminology Glossary The following terms are used frequently in reference to NY CEMA transactions: Term Definition Assignee A person or entity to whom an assignment is made. Assignor A person or entity that assigns or transfers property to another person or entity. Endorsement A signature on a negotiable instrument that legally transfers the rights of the

instrument to the endorser. The signor
instrument to the endorser. The signor must have the legal right to transfer the instrument if the endorsement is to be valid. Interim Assignment As assignment required if there are gaps in the chain of title for the purposes of expediting the completion of a CEMA. Mortgagee The lender or other party named in the mortgage as the party who is entitled to receive repayment of the loan. Mortgagor The obligated party on the mortgage; the customer. New Money The difference between the outstanding principal balance and the total new loan amount. Note Allonge An attachment to a legal document that can be used to insert language or signatures when the original document does not have sufficient space for the inserted material. It may be, for example, a piece of paper attached to a negotiable instrument or promissory note, on which endorsements can be written because there is not enough room on the instrument. The allonge must be firmly attached so as to become a part of the instrument. Open Endorsement An open endorsement is a stamp that carries the signature of the current lender that signs the note over to the new lender. Unrecorded Assignment An assignment of a mortgage that was not recorded by the county to the new lender at closing. New York Guideline Addendum Wholesale Lending May 7, 2020 www.cmgfi.com Information in these guidelines is for credit policy guidance only and is not a complete representation of CMG Financial (NMLS #1820) Lending Policies. Information is accurate as of the date of publishing and is subject to change without notice. In addition to applying these CMG-specific overlays, all loans must comply with the AUS Findings and agency/investor requirements. To verify our state licenses, please log onto the following website: http://www.cmgfi.com/licensing.php and www.nmlsconsumeracces.org Page | 6 Recent Updates 5-7-2020 Added approved attorneys Thomas Bonfiglio, Esq. and Joseph Asterita, Esq 4-1-2020 Added approved attorney Dean Mavrides, Esq. 3-12-2020 Added approved attorney Michael G Postiglione, Esq. Added clarification that copies of Consolidated Notes, Original Old Money and Original New Money (Gap) Notes must be copies of the entire Note, not just the face and back page. 2-28-2020 Added Prime Jumbo 6800 Series as eligible for CEMA refinance transactions. 1-13-2020 Added Marc A. Ditomaso, Esq. as an approved att