Suntrust Subordination PDF Details

When it comes to mortgages, there are a few different ways in which the debt can be structured. One of these is through subordination. This is when one lender agrees to let another lender take a higher ranking on the debt, essentially making them more important in terms of payments and possessions in the event of bankruptcy. Suntrust offers subordination forms to help make this process easier for both borrowers and lenders. The form is relatively straightforward, requiring only basic information about the borrower, the mortgage, and the creditor. It's important to note that not all lenders offer subordination, so be sure to check with your specific Mortgage Provider beforehand.

This page includes details about suntrust subordination. It's definitely worth spending some time to study this before starting submitting your form.

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Form NameSuntrust Subordination
Form Length22 pages
Fillable?Yes
Fillable fields91
Avg. time to fill out23 min 42 sec
Other namessuntrust bank subordination department phone number, suntrust subordination acknowledgement and agreement, sun trust subordination acknowledgement and agreement, suntrust bank subordination requirements

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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

1It 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

2The 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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