High Cost loans are not permitted. All first mortgages must adhere to QM/ATR Compliance. Mortgage loans exceeding the QM 3% max points/fees test are not permitted unless cures are applied. Bona fide discount points must adhere to CFPB and any/all state regulations. _______________________________________________________________ Escrow Holdbacks – Exception requests for escrow holdbacks will be considered for weather-related repairs only (cannot be completed prior to close due to inclement weather). Prior approval is not required when conditions outlined in Correspondent Lending Guide Section 7.16. _______________________________________________________________ Employment/Employment Gaps – Employment gaps greater than thirty (30) days within the past two (2) years require a borrower LOE to explain the reason for the gap. Self-Employed Borrower Business Verification: Borrowers must have their business verified as open and operating within ten (10) calendar days prior to the Note date. The correspondent must provide ONE of the following to confirm that the business is open and operating: 1) Evidence of current work (executed contracts or signed invoices that indicate the business is operating on the day the correspondent verifies self-employment) 2) Evidence of current business receipts within ten (10) days of the Note date (payment for services performed) 3) Correspondent certification that the business is open and operating (correspondent confirmed through a phone call or other means) 4) Business website demonstrating activity supporting current business operations (timely appointments for estimates or service can be scheduled) __________________________________________________________________ Undisclosed Debt Monitoring and Soft-Pull Credit Refreshes – Must adhere to the Correspondent Lending Guide Section 5.9. The primary objective is to verify there are no new inquiries or additional debt which may require AUS to be rerun. UDM is recommended to be used. _________________________________________________________________ Deed Restrictions – Deed restrictions allowed per FHA 4000.1 are permissible; however, easements and deed restrictions that affect marketability must be reviewed and approved by CBCMA to be eligible for purchase, unless the easement or deed restriction expires upon foreclosure (requests for review should be submitted to email@example.com). ___________________________________________________________ Present Housing Expense & Verification – Must adhere to the Correspondent Lending Guide Section 5.13. This section is intended to ensure that CBCMA can analyze payment shock and its potential impact on future default mitigation overlays that may be implemented.