Suntrust Subordination – Fill Out and Use This PDF

The SunTrust Subordination Form is a guideline document used by SunTrust Bank for the process of subordinating existing SunTrust second mortgage loans, which includes Combo, EZ Two, Equity Lines, and Equity Loans, under certain conditions to facilitate refinancing or other mortgage adjustments. It outlines eligibility, requirements, and procedures to ensure that secondary financing agreements are appropriately positioned in lien hierarchy. With this form, borrowers can navigate the complexities of modifying their loan structures while maintaining their financial obligations to SunTrust. For detailed steps on how to complete and submit this form, click the button below.

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Suntrust Subordination PDF Details

In today's complex financial environment, managing mortgage loans, specifically when dealing with second mortgages, requires an understanding of certain procedures, such as those outlined in the “Subordination of SunTrust Second Mortgage Loans” document. This guide, a crucial part of the Broker Seller Guide updated on October 18, 2013, delves into the intricacies of subordinating existing SunTrust Bank and SunTrust Mortgage, Inc. second mortgage liens. These liens can range from Combo, EZ Two, Equity Lines, and Equity Loans, each subject to specific guidelines under certain loan programs like the DU Refi Plus™ and Freddie Mac Relief Refinance MortgageSM. The document emphasizes that for a second mortgage to qualify for subordination, not only must specific eligibility criteria concerning occupancy, property types, and geographic restrictions be met, but the new first mortgage must also adhere to stringent requirements designed to ensure financial prudence and maintain the second lien’s position. Additionally, it sets forth the procedural steps for requesting subordination, highlighting SunTrust's role in approving these requests, whether it involves an existing Combo or EZ Two second mortgage or equity line and equity loans, detailing the necessity of a subordination agreement to preserve lien positions. Moreover, it acknowledges state-specific processes for automatic subordination in Virginia and Texas, underlining the nuances involved in navigating these financial waters. All told, the document serves as an exhaustive roadmap for brokers and sellers, guiding them through the complexities of maintaining second lien positions while refinancing first mortgages under SunTrust's umbrella.

Question	Answer
Form Name	Suntrust Subordination
Form Length	22 pages
Fillable?	No
Fillable fields	0
Avg. time to fill out	5 min 30 sec
Other names	suntrust subordination request, suntrust heloc subordination requirements, suntrust subordination acknowledgement and agreement, suntrust bank subordination department phone number

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Section 1.21 – Subordination of SunTrust Second Mortgage Loans

In This Section This section contains the following topics.
Overview	2
Summary	2
Related Bulletins	2
Subordination of SunTrust Combo Second and EZ Two Mortgage Loans	3
General	3
Eligible Occupancy/ Property Types	4
Ineligible Occupancy/ Property Types	4
New First Mortgage Requirements	4
Existing Combo and EZ Two Second Mortgage Requirements	5
Geographic Restrictions	5
Maximum TLTV	5
Underwriting Requirements	6
General	6
Declining Markets Guidelines	6
Maximum Number of Financed Properties	6
Appraisal Documentation	6
Procedures for Subordination Request	7
Subordination Agreement Requirements	10
Subordination of SunTrust Equity Line and Equity Loans	11
General	11
Service Levels	11
Ineligible Occupancy/ Property Types	12
Geographic Restrictions	12
Maximum TLTV/HTLTV	12
Underwriting Requirements	13
General	13
Declining Markets	13
Maximum Number of Financed Properties	14
Income Documentation	14
Qualifying Ratio and Payment Guidelines	14
Appraisal Documentation	15
Modifications to Existing Equity Lines and Equity Loans	15
Procedures for Subordination Request	16
Automatic Subordination Process for Virginia Properties	18
General	18
Requirements for the Automated Process	18
Procedures for Subordinations of Virginia Properties	19
Title Insurance Requirements	20
Automatic Subordination Process for Texas Properties	21
General	21
Requirements for the Automated Process	21
Procedures for Subordinations of Texas Properties	22

Section 1.21		October 18, 2013
Subordination of SunTrust Second Mortgages		Page 1 of 22
Broker Seller Guide

Overview

Summary

•The Subordination of SunTrust Second Mortgage Loans document provides guidelines for the subordination of eligible existing SunTrust Bank and SunTrust Mortgage, Inc. second mortgage liens (i.e., Combo, EZ Two, Equity Lines and Equity Loans).

Reference: Subordinations of secondary financing in connection with the DU Refi Plus™ and the Freddie Mac Relief Refinance MortgageSM loan program must follow the subordination guidelines outlined in Section 1.21: Subordination of SunTrust Second Mortgage Loans of the Broker Seller Guide.

•If the existing second is a SunTrust Combo or EZ Two second mortgage, SunTrust Mortgage, Inc. (i.e., SunTrust underwriter or contract MI underwriter on the behalf of SunTrust) must approve the subordination request at the same time the new first mortgage is approved.

•If the existing second is a SunTrust Bank or SunTrust Mortgage, Inc. equity line or equity loan, the subordination request must be processed through the Orlando Consumer Lending Sales Center (CLSC).

Note:

•All subordination requests MUST be approved by SunTrust.

Related Bulletins

General	Related bulletins are provided below in PDF format. To view the list of published bulletins,
	select the applicable year below.
	•	2013
	•	2012
	•	2011
	•	2010
	•	2009

Section 1.21		October 18, 2013
Subordination of SunTrust Second Mortgages		Page 2 of 22
Broker Seller Guide

Subordination of SunTrust Combo Second and EZ Two Mortgage Loans

General	• Existing SunTrust Combo and EZ Two second mortgage loans that are not being paid
	off with the proceeds of the new first mortgage are eligible for subordination in
	accordance with the guidelines outlined in this document.
	Note: In all cases where an existing SunTrust Combo or EZ Two second mortgage lien
	is not being paid off with the proceeds of the new first mortgage, the second lien MUST
	remain in second lien position.
	• The existing SunTrust Combo and EZ Two second mortgage MUST be subordinated
	behind a NEW SunTrust first mortgage. The existing SunTrust Combo and EZ Two
	second mortgage CANNOT be subordinated behind a “non-SunTrust” first mortgage
	loan.
	Notes:
	• SunTrust Combo second mortgage loans are identified by a ten (10) digit loan
	number.
	• The EZ Two second mortgage is also assigned a ten (10) digit loan number.
	• The new first mortgage product must allow for the subordination of an existing SunTrust
	second lien.
	Reference: See the “New First Mortgage Requirements” subtopic subsequently
	presented in this document for additional information regarding new first mortgage
	product restrictions.
	• Additionally, the new LTV/TLTV must meet the more restrictive of the specific new first
	mortgage guidelines or the guidelines outlined in this document.
	Reference: See the applicable first mortgage product description for secondary
	financing guidelines.
	• Any loans subject to a SunTrust Combo or EZ Two Second Mortgage subordination
	must be submitted to SunTrust for underwriting and approval.
	• SunTrust Mortgage, Inc. (i.e., SunTrust underwriter or contract MI underwriter on the
	behalf of SunTrust) must approve the subordination request at the same time the new
	first mortgage is approved.
	• A subordination agreement is required to assure the second lien remains in second lien
	position.
	Notes:
	• For existing SunTrust Combo and EZ Two second mortgages, the subordination
	agreement is drafted by the closing attorney/settlement agent.
	• The subordination agreement is executed at the closing of the new first mortgage
	and is recorded with the first mortgage documents.

	Continued on next page

Section 1.21		October 18, 2013
Subordination of SunTrust Second Mortgages		Page 3 of 22
Broker Seller Guide

Subordination of SunTrust Combo and EZ Two Second Mortgage Loans, Continued

Eligible	The following occupancy/property types are eligible for subordination:
Occupancy/	•
Property Types	•	1-4 unit properties,
	•	primary residences,
	•	second homes,
	•	investment properties,
	• leasehold properties (excluding Georgia Power leaseholds),
	•	modular housing,
	• properties in excess of 10 acres,
	• warrantable condominiums, including condominium conversions, and
	•	warrantable PUDs.

Ineligible	The following occupancy/property types are ineligible for subordination:
Occupancy/	•
Property Types	•	condotels,
	•	cooperatives,
	•	Georgia Power leaseholds,
	•	manufactured housing,

• non-warrantable condominiums,

• non-warrantable PUDs, and

• properties currently listed for sale.

New First

Mortgage

Requirements

•If the new first mortgage product is a short term ARM (i.e., 3/1, 1 year, etc.), the existing SunTrust Combo and EZ Two second mortgage is NOT eligible for subordination.

•The maximum loan term of the new first mortgage is 30 years.

•The new loan must be the same or a more stable product than the current first mortgage when subordination of a Combo or EZ Two second mortgage is required. Fixed rate mortgages are only eligible to be refinanced into a new fixed rate mortgage. ARM loans must be refinanced to either a same term ARM, longer term ARM or a fixed rate mortgage.

•The new first mortgage loan should put the borrower in a more favorable financial position, by either:

•reducing the interest rate; or

•replacing an interest only or balloon reset mortgage with a fixed, fully amortizing mortgage.

•Cash-out refinances are permitted if all funds are being used to reduce the unpaid principal balance of the existing SunTrust Combo or EZ Two second lien.

Continued on next page

Section 1.21		October 18, 2013
Subordination of SunTrust Second Mortgages		Page 4 of 22
Broker Seller Guide

Subordination of SunTrust Combo and EZ Two Second Mortgage Loans, Continued

New First

Mortgage Requirements, (continued)

•The new first mortgage loan may include normal and customary closing costs up to a maximum 5% of the new loan amount or $10,000, whichever is less.

•There is no maximum P&I payment increase; however, when the new P&I payment increases by more than 20% of the existing P&I or interest-only payment, the borrower’s income and employment must be documented and the maximum debt-to- income (DTI) ratio is 55%.

•When calculating the payment increase for existing loans with adjusting payments, the current payment must have been made for at least seven (7) consecutive months; otherwise, the lowest P&I payment or interest-only payment made during the most recent 12 months must be used.

Existing	The existing Combo or EZ Two second must be current and cannot have any 30-day late
Combo and EZ	payments within the last 12 months.
Two Second
Mortgage
Requirements

Geographic	References:
Restrictions	• See the applicable new first mortgage product description and Section 1.11: Geographic
	State Restrictions of the Broker Seller Guide for specific geographic restrictions that may
	apply.
	• If the subject property is located in the state of Virginia, see the “Automatic Subordination
	Process for Virginia Properties” topic subsequently presented in this document for
	information on the state of Virginia’s automatic subordination procedures.
	• If the subject property is located in the state of Texas, see the “Automatic Subordination
	Process for Texas Properties” topic subsequently presented in this document for
	information on the state of Texas’ automatic subordination procedures.

Maximum TLTV • The maximum TLTV may NOT exceed 95% in any case.

•If the subject property is a condominium, the maximum TLTV must be reduced by 5%.

Note: If there are multiple reductions that apply to a single property, then all are applied cumulatively. For example, a condominium in a declining market would be subject to a 10% TLTV reduction.

•If the TLTV exceeds 95%, then the loan must be conditioned for a principal curtailment of the existing Combo or EZ Two second to meet the TLTV guidelines.

•The current unpaid principal balance of the Combo or EZ Two second mortgage must be used in calculating the TLTV.

•There is no maximum LTV requirement on the Combo or EZ Two second mortgage.

•The current payment of the existing Combo or EZ Two second mortgage must be used when calculating the housing and debt-to-income (DTI) ratios on the new first mortgage.

		Continued on next page


Section 1.21		October 18, 2013
Subordination of SunTrust Second Mortgages		Page 5 of 22
Broker Seller Guide

Subordination of SunTrust Combo and EZ Two Second Mortgage Loans, Continued

Underwriting	General
Requirements	• Unless otherwise published in this document, borrowers must meet all of the guidelines
	for secondary financing for the new first mortgage product [including, but not limited to
	minimum credit score, maximum debt-to-income (DTI) ratio, maximum LTV/TLTV, AUS
	requirements, etc.].
	Reference: See the applicable first mortgage product description for secondary
	financing guidelines.
	• Third lien positions are NOT acceptable.

Declining Markets Guidelines

•The following guideline must be followed for all existing SunTrust Combo and EZ Two second mortgage liens being subordinated when the subject property is located in a declining market:

•If the subject property is located in a declining market, the maximum TLTV must be reduced by five percent (5%).

Note: If there are multiple reductions that apply to a single property, then all are applied cumulatively. For example, a condominium in a declining market would be subject to a 10% TLTV reduction.

	Reference: See Section 1.17: SunTrust Mortgage Declining Market Guidelines of the
	Broker Seller Guide for additional information.
	Maximum Number of Financed Properties
	Reference: See Section 1.20: Maximum Number of Financed Properties and Borrower
	Exposure of the Broker Seller Guide for guidelines.
	Note: The maximum total exposure is $2.5 million dollars on all SunTrust balance sheet
	(Portfolio) loan products (INCLUDING any existing SunTrust Bank or SunTrust Mortgage
	seconds being subordinated).

Appraisal	• A full appraisal (i.e. form 1004/70, form 1025/72 etc.) is required.
Documentation	• The new appraisal must be dated within 120 days at the time of underwriting.
	• Fannie Mae’s Property Inspection Waiver (PIW), Freddie Mac’s Property Inspection
	Alternative (PIA), Freddie Mac Form 2070, Freddie Mac Form 2055, and automated
	valuation models (AVMs) are NOT acceptable.
	•

	Continued on next page

Section 1.21		October 18, 2013
Subordination of SunTrust Second Mortgages		Page 6 of 22
Broker Seller Guide

Subordination of SunTrust Combo and EZ Two Second Mortgage Loans, Continued

Procedures for Follow the steps below to complete a subordination request for an existing SunTrust Subordination Combo or EZ Two second mortgage.

Request

Step

Action

1• It is the responsibility of the Broker to advise the closing attorney/settlement agent that a subordination agreement will be required.

•SunTrust Mortgage, Inc will NOT draft or create the subordination agreement. The closing attorney/settlement agent is responsible for preparing the subordination agreement and sending the subordination agreement to the SunTrust Wholesale branch office for review.

Notes:

•A Substitution of Trustee form prepared by the attorney or settlement agent will be required when the Subordination Agreement is submitted to SunTrust for approval and signature if the following applies:

•if the original trustee on the recorded Deed of Trust is no longer serving as trustee, and

•the Subordination Agreement requires the signature of the trustee.

•The Substitution of Trustee form and the Subordination Agreement should list the applicable trustee by state.

•Click here for a list of trustees by state.

•The Subordination Agreement must include in the upper left hand corner of the document the following information:

When Recorded Return To:

SunTrust Mortgage, Inc

1001 Semmes Avenue

3rd Floor

Mail Code RVW-5043

Attn: Final Docs

Richmond, VA 23224

Loan Number

Note: The loan number of the SunTrust Combo or EZ Two Second

Mortgage must be referenced on the Subordination Agreement.

Reference: See the “Subordination Agreement Requirements” subtopic subsequently presented in this topic for additional information.

Continued on next page

Section 1.21		October 18, 2013
Subordination of SunTrust Second Mortgages		Page 7 of 22
Broker Seller Guide

Subordination of SunTrust Combo and EZ Two Second Mortgage Loans, Continued

Procedures for Subordination Request, (continued)

	Step	Action
	1 (cont.)	• If the Combo or EZ Two loan being subordinated is a MERS (Mortgage
		Electronic Registration System) loan, the subordination agreement must
		be prepared in the name of MERS.
		• The settlement agent must insert the following verbiage in the
		Subordination Agreement:
		• "MERS" is Mortgage Electronic Registration Systems, Inc. MERS is a
		separate corporation that is acting solely as a nominee for Lender
		and Lender’s successors and assigns. MERS is organized and
		existing under the laws of Delaware, and has a mailing address of
		P.O. Box 2026, Flint, MI 48501-2026, and/or a street address of 1901
		E. Voorhees Street, Suite C, Danville, IL 61834. The MERS
		telephone number is (888) 679-MERS. FOR PURPOSES OF
		RECORDING THIS DOCUMENT MERS IS THE MORTGAGEE OF
		RECORD.
		Note: SunTrust Mortgage, Inc will NOT subordinate to a 3rd lien position.


		Continued on next page

Section 1.21		October 18, 2013
Subordination of SunTrust Second Mortgages		Page 8 of 22
Broker Seller Guide

Subordination of SunTrust Combo and EZ Two Second Mortgage Loans, Continued

Procedures for Subordination Request, (continued)

Step

Action

2• The COMPLETE loan package must be submitted to SunTrust Mortgage for review and approval.

•The SunTrust Underwriter must review the file and complete the SunTrust Combo and EZ Two Second Subordination Request (BRO 0238) and the SunTrust Second Lien Subordination Request (BRO 1378) forms.

•Once the subordination is approved by the underwriter, the Subordination Agreement along with the SunTrust Second Lien Subordination Request Form (BRO 1378) and a copy of the Good Faith Estimate must be faxed to 804-675-9792, emailed to fnma/fhlmcsubordinations@suntrust.com or mailed to the following address for review and approval.

SunTrust Mortgage

1001 Semmes Avenue

Mail Code RVW-3002

Attn: Subordinations

Richmond, VA 23224

•The signed Subordination Agreement will be sent to the branch or attorney within three (3) business days.

Notes:

•A self addressed overnight package must be submitted with the Subordination Agreement and must be addressed to the person in the branch or the attorney who should receive the signed Subordination Agreement.

•Faxed and e-mailed packages to the SunTrust Subordination Department may provide a faxed or scanned pre-paid overnight shipping label, or provide a shipping address and overnight account number instead of a pre-paid self addressed overnight package.

•The Wholesale branch office is responsible for notifying the Broker that the request for subordination has been approved and whether a principal curtailment and/or a balance reduction on the new first mortgage loan are a condition for approval.

•To request status updates on submitted Subordination Agreements, send an email to fnma/fhlmcsubrodinations@suntrust.com, include the following information:

•Borrower name,

•Address, and

•Second Mortgage Loan Number.

Continued on next page

Section 1.21		October 18, 2013
Subordination of SunTrust Second Mortgages		Page 9 of 22
Broker Seller Guide

Subordination of SunTrust Combo and EZ Two Second Mortgage Loans, Continued

Procedures for Subordination Request, (continued)

	Step			Action
	3			• Once the subordination agreement has been executed at closing, the
				closing attorney/settlement agent should include the recorded
				Subordination Agreement in the closed loan package that is sent back to
				SunTrust at the following address:
				SunTrust Mortgage
				1001 Semmes Avenue
				3rd Floor
				Mail Code RVW-5043
				Attn: Final Docs
				Richmond, VA 23224
				Note: A copy of the executed Subordination Agreement must be retained in
				the first mortgage loan file.


Subordination	• The		subordination agreement must contain the following information when being
Agreement	reviewed by the SunTrust Wholesale Branch for approval:
Requirements	•	Names of the parties
		• Business addresses are currently optional
	• Description of the subject property (legal description is preferred; however, the
		address is acceptable)
	• Identification of the mortgage or trust deed to be subordinated:
		•		Names of parties
		•		Date of execution
		• Reference to book and pages of recordation
	• Identification of encumbrance(s) (legal claim to a property) to be superior in priority
	•	Statement of consideration:
		• Inducement to lender to loan money
		•		Payment of Money
		• Other, but should make clear that some consideration was given
	• Terms of subordination of the loan (optional).
	• Covenant of validity of mortgage or trust deed to be subordinated (optional)
	• Cancellation of subordination provision in mortgage or trust deed (optional)
	• Words indicating binding effect
	•	Date of Agreement
	• Signatures of borrowers and lender
	•	Attestation
	•	Acknowledgements (Notary)
	• The language in the document must clearly indicate that the subordination pertains to

the one loan. “Blanket” subordination agreements for subsequently recorded interests are NOT acceptable by SunTrust.

Section 1.21		October 18, 2013
Subordination of SunTrust Second Mortgages		Page 10 of 22
Broker Seller Guide

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