Fill Out Your Suntrust Subordination Form

What is the purpose of the Suntrust Subordination form?

The Suntrust Subordination form provides guidelines for subordination requests involving eligible existing SunTrust Bank and SunTrust Mortgage, Inc. second mortgage liens. This includes loans such as Combo loans, EZ Two loans, equity lines, and equity loans. It ensures that the second mortgage remains in second lien position when a new first mortgage is being established. Proper compliance with these guidelines is vital for the approval and processing of subordination requests.

Who needs to approve the subordination request?

All subordination requests must be approved by SunTrust. If the existing second mortgage is a SunTrust Combo or EZ Two, approval from SunTrust’s underwriter is necessary at the same time the new first mortgage is approved. For equity lines or equity loans from SunTrust, the request must be processed through the Orlando Consumer Lending Sales Center.

What types of properties and occupancy are eligible for subordination?

Eligible properties for subordination can include 1-4 unit properties, primary residences, second homes, investment properties, leasehold properties (with exceptions), modular housing, properties over 10 acres, warrantable condominiums, and warrantable planned unit developments (PUDs). Each property type must meet specific conditions as outlined in the guidelines.

What property types are ineligible for subordination?

Ineligible property types include condotels, cooperatives, Georgia Power leaseholds, manufactured housing, non-warrantable condominiums, non-warrantable PUDs, and properties currently listed for sale. Understanding these restrictions can help prevent delays in processing subordination requests.

What are the new first mortgage requirements when seeking subordination?

The new first mortgage must generally be a more stable product than the current mortgage and have a maximum loan term of 30 years. If the existing mortgage is an adjustable rate mortgage (ARM), it cannot be refinanced to a short-term ARM. Cash-out refinances are permitted under certain conditions, primarily if funds are utilized to reduce the principal balance of the existing second mortgage.

Are there any geographic restrictions for the subordination process?

Yes, geographic restrictions may apply based on the specific new first mortgage product description. Special procedures exist for properties located in Virginia and Texas, which feature automatic subordination processes. It is essential to consult the relevant sections of the Broker Seller Guide for detailed requirements based on location.

What is the maximum total loan-to-value (TLTV) ratio for subordination?

The maximum TLTV ratio must not exceed 95%. If the property is a condominium, the TLTV limit is further reduced by 5%. Should the TLTV exceed these limits, conditions may be placed on the loan, including potential principal curtailments to meet the guidelines.

What documentation is required to initiate a subordination request?

Documentation requirements include proof that the existing Combo or EZ Two second mortgage is current and does not have any 30-day late payments in the last 12 months. The existing payment amount must also be verified for accurate calculations regarding housing and debt-to-income ratios for the new first mortgage.

Several common mistakes can occur when filling out the SunTrust Subordination form. One frequent error is failing to provide the correct loan numbers for the existing second mortgages. Each SunTrust Combo and EZ Two second mortgage is assigned a unique ten-digit loan number. Without these numbers, processing the subordination request becomes challenging and can lead to delays.

Another common mistake involves misunderstanding the eligibility requirements for existing second mortgages. Some individuals assume that their second mortgage can be subordinated regardless of the type of new first mortgage being secured. In fact, the existing SunTrust Combo and EZ Two second mortgage must be subordinated specifically behind a new SunTrust first mortgage. This requirement is crucial for the approval process.

Additionally, errors in meeting new first mortgage guidelines can result in complications. For instance, if the new first mortgage is a short-term adjustable-rate mortgage (ARM), subordination for the existing second mortgage is not permitted. Therefore, it is essential to ensure that the new first mortgage meets the criteria outlined in the SunTrust guidelines, including restrictions on payment increases and loan terms.

Lastly, many applicants overlook the documentation requirements for income and employment. If the new payment on the first mortgage increases significantly, then proper documentation must be provided. Failure to include this information can lead to disqualification of the subordination request. Ensuring all required documents and information are submitted accurately will help facilitate a smoother process.

The SunTrust Subordination Form is an important document within the mortgage process, used to outline the agreements related to second mortgages when refinancing or obtaining new loans. Several other forms and documents often accompany this form to provide comprehensive guidance and support throughout the subordination process. Here’s a list of commonly associated documents with brief descriptions of each.

• Subordination Agreement: This legal document ensures that the second mortgage remains in its subordinate position behind the new first mortgage. It is typically drafted by a closing attorney or settlement agent.
• First Mortgage Application: This application is necessary for any new first mortgage being obtained. It includes personal financial information to determine eligibility for the loan.
• Credit Report Authorization: A form requiring consent to obtain a borrower’s credit report, which is essential for assessing their creditworthiness during the mortgage application process.
• Loan Estimate: This document outlines the estimated costs associated with the new first mortgage, including interest rates, monthly payment, and closing costs.
• Title Insurance Policy: A document that protects the lender and borrower against any legal claims or issues regarding the property’s title, ensuring the new mortgage can be properly enforced.
• Income Verification Documents: These are typically pay stubs, bank statements, and tax returns that confirm the borrower's income to ensure they can afford the new mortgage payments.
• Debt-to-Income Ratio Calculation: A document showing the calculation of the borrower’s debt-to-income ratio, which is essential for assessing their financial stability.
• Appraisal Report: A report conducted by a licensed appraiser that assesses the current market value of the property, which is crucial in determining loan amounts and conditions.
• Occupancy Affidavit: A form where the borrower affirms their intentions regarding how they will use the property (e.g., primary residence, rental).

Each of these documents plays a distinct role in facilitating the proper handling of the subordination process associated with SunTrust second mortgages. They help ensure that all parties have the necessary information and agreements in place, leading to smoother transactions and compliance with guidelines.

The SunTrust Subordination form shares similarities with several other legal documents that pertain to mortgage loans and financial agreements. Below are four documents that are comparable to the SunTrust Subordination form, along with an explanation of how they are similar:

• Subordination Agreement: This document formally establishes the priority of mortgage liens. It allows a second mortgage to retain its subordinate position behind a new first mortgage, similar to how the SunTrust document outlines the requirements for second mortgages backed by SunTrust to remain subordinate to new financing.
• Loan Modification Agreement: A loan modification agreement alters the terms of an existing loan, often including the subordination of other loans. Like the SunTrust Subordination form, this agreement may involve conditions that ensure specific lien positions are maintained following a modification.
• Refinance Agreement: The refinance agreement captures the terms under which a mortgagor replaces an old loan with a new one. Similar to the SunTrust Subordination guidelines, this type of agreement specifies how subordinate mortgages interact with new first mortgages during the refinancing process.
• Equity Line of Credit Agreement: An equity line agreement establishes terms for accessing home equity. Just like the SunTrust Subordination form, it includes stipulations regarding the subordination of liens and outlines the priority of loans, particularly when multiple loans are involved.

When filling out the SunTrust Subordination form, it is essential to follow specific guidelines to ensure a smooth process. Below is a list of dos and don'ts that can help navigate this important task.

• Do review all related bulletins for any updates or changes in requirements.
• Do ensure that the existing second mortgage is current, with no late payments in the last 12 months.
• Do submit your subordination request at the same time as the new first mortgage application.
• Do include all pertinent information about the existing second mortgage, including loan numbers.
• Do be mindful of the maximum TLTV, ensuring it does not exceed 95%.

• Don't attempt to subordinate a SunTrust second mortgage behind a non-SunTrust first mortgage.
• Don't overlook eligibility requirements, especially regarding property types.
• Don't ignore geographic restrictions that may apply to your property.
• Don't submit incomplete documentation, as this can delay the approval process.
• Don't underestimate the importance of the subordination agreement; ensure it is executed correctly at closing.

Understanding the SunTrust Subordination form is crucial for applicants and mortgage professionals. However, several misconceptions can lead to confusion. Below are common misconceptions outlined and clarified.

• All second mortgages can be subordinated. Not all second mortgages qualify. Only specific loans like SunTrust Combo and EZ Two loans are eligible for subordination.
• Subordination requests can be made anytime. Subordination requests must be made simultaneously with the approval of a new first mortgage.
• Subordination allows any loan type as the first mortgage. The existing second mortgage can only be subordinated behind a new SunTrust first mortgage, not any non-SunTrust mortgage.
• There are no restrictions on property types. Certain properties, such as condotels and manufactured housing, are ineligible for subordination.
• SunTrust does not require documentation for subordination requests. Documentation, including income verification, must be provided to ensure compliance with underwriting standards.
• The maximum TLTV can exceed 95% without consequences. The maximum Total Loan to Value (TLTV) must not exceed 95%, with additional reductions for certain types of properties.
• Any closing costs can be included in a new mortgage. Closing costs are capped at 5% of the new loan amount or $10,000, whichever is less.
• Subordination agreements are optional. A subordination agreement is mandatory to maintain the second lien position, and it must be executed during the closing of the new first mortgage.

Awareness of these misconceptions can facilitate smoother processes for subordination. Accurate understanding ensures compliance with the established guidelines, ultimately benefiting all parties involved.

• The SunTrust Subordination form is crucial for managing second mortgage loans. It provides a structured process for subordination requests, ensuring clarity and compliance for borrowers.

• Only specific types of second mortgages, such as Combo and EZ Two loans, are eligible for subordination. These loans must remain in second lien position while being suborned behind a new SunTrust first mortgage.

• Subordination requests need to be approved simultaneously with the new first mortgage application. This coordination is essential to avoid delays in processing and possible complications during closing.

• Borrowers must ensure that the maximum Total Loan-to-Value (TLTV) does not exceed 95%. If the property is a condominium, adjustments may be necessary, as TLTV requirements can be stricter.

• When seeking subordination, existing loans must be current. No recent late payments (i.e., 30 days late within the last year) are allowed, reinforcing the importance of maintaining good credit standing.

• Lastly, the subordination agreement, which solidifies the new lien order, must be drafted and executed at the closing of the new mortgage. This formalization is significant for legal clarity and protection of all parties involved.