CBC Mortgage Agency

CBCMA understands the importance of operating its program in a responsible manner. For example, every borrower receives post-closing counseling and education for a period of 12 months after closing. In addition, CBCMA has worked to create a secondary market for second mortgages based on selling these mortgages to banks that need Community Reinvestment Act (“CRA”) credit that will allow governmental entities to rely less on secondary market gains to fund their down payment assistance activities.

CBCMA very recently launched a conventional 97 program, where it provides a 3.5% second mortgage to be used for the down payment, and related closing costs. To date, 21 loans have been registered. CBCMA targets a small spread on the purchase and sale of the conventional first mortgage, but it is nowhere near sufficient to fund the 3.5% lien. Rather the funding for the DPA comes from unrelated funds, such as funds generated from the sale of the second mortgages, or a lending facility that CBCMA received over a year ago that is secured by the retained second mortgages. CBCMA has priced its conventional program somewhat defensively to begin with, as it is not an issuer and is dependent on the bids it receives from investors. Far from making 300 bps, CBCMA has been underwater on some trades.

CBCMA has been very careful to NOT represent that it has Agency approval. Users can search CBCMA’s website, program guidelines, and marketing material and will not find a statement that Fannie Mae® has approved Chenoa Fund. In addition, to ensure that no one assumed this, several weeks ago CBCMA added verbiage to its rate sheets and program guidelines specifically indicating that Fannie Mae® has not approved the program and lenders must review the offering to determine for themselves that it meets Fannie Mae®’s guidelines.

The unnamed source in the Chrisman report falsely claims that CBCMA employees must not be honest actors because of some asserted association with the so-called Rainy Day Foundation. None of the employees of CBCMA has ever been associated with the Rainy Day Foundation in any manner whatsoever. CBCMA has one contractor-consultant who was involved with Rainy Day. His circumstances were carefully reviewed by the Cedar Band Corporation Board prior to his involvement in CBCMA, after determining that no investigations existed which might result in a criminal conviction. He was retained 4 years after his tenure at Rainy Day had ended. This contractor does not have signing authority nor access to funds. The impressions left by the writer are absolutely not correct.

Regarding CBCMA’s earnings, there are no “dozen or so guys” behind Chenoa, nor have they individually or collectively made between $30-$50M. CBCMA is wholly owned by the Cedar Band of the Paiutes, organized to create economic opportunity for the Band and its members. The Band is the beneficiary of 100% of CBCMA’s earnings and employs experienced industry professionals to run the business, who receive fair salaries for their services.

Regarding the alleged FHA concerns with downpayment assistance, the unnamed source assumes that this issue is unique to the Chenoa Fund. But this issue has been widely discussed throughout the industry in recent years, including as it relates to the many state HFAs who offer DPA. The unnamed source in the Chrisman report is making very general assumptions in regards to the disposition of HUD, especially as it relates to us. HUD has long recognized that down payment assistance is an important component in the path to homeownership, despite the opinions of the writer.

In summary, CBCMA seeks constructive dialogue with all industry stakeholders and is committed to serving deserving borrowers by providing DPA in a compliant and responsible way, consistent with agency guidelines and with the intent of ensuring the insurance Fund is not put at risk.

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Chenoa Fund

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CBC Mortgage Agency NMLS: 1186381 - 912 W. Baxter Drive, Suite 150 South Jordan, Utah 84095
Main 866-563-3507 | Servicing 866-563-7572 | Fax 435-237-0022