Regulation .12 Loan Purchase Program—Purchasing Loans.
Regulation .12 Loan Purchase Program—Purchasing Loans.LinkCopy Citation
A.
Conditions Related to Particular Bond Issues.
(1)
Conditional Obligation to Purchase.
(a)
From time to time the Administration issues tax-exempt or taxable mortgage revenue bonds to finance mortgage loan purchases.
(b)
Any obligations of the Administration to purchase any mortgage loans financed from the proceeds of its bonds are subject to:
(i)
The successful sale and delivery by the Administration of bonds on terms and in an amount satisfactory to the Administration; and
(ii)
Execution by the lender and the Administration of the participation agreement or other program document applicable to a particular bond issue, or issues, or as otherwise required by the Administration.
(2)
Participation Agreement.
(a)
The participation agreement or other program documents or directives set the specific terms and conditions of the mortgage loans to be made by the lender and purchased by the Administration.
(b)
The participation agreement or other program documents or directives shall state the applicable interest rates that may be charged on the mortgage loans, and the maximum purchase prices of residences to be financed by mortgage loans which the Administration will purchase from the mortgage lender.
(c)
The maximum return to a mortgage lender may be established by the Administration in the form of points, fees, and charges, including amounts which may be retained out of mortgage payments by the mortgage lender for servicing a mortgage loan.
(d)
The participation agreement or other program documents or directives may contain requirements for:
(i)
Allocations of proceeds to be reserved for purchase of mortgage loans for particular local jurisdictions for specified periods of time;
(ii)
Additional requirements for or restrictions upon the terms and conditions of mortgage loans, the eligibility of borrowers, and the number, type, location, and use of eligible residences;
(iii)
Electronic and other reporting, reconciliation, loan reservation, and other processes; and
(iv)
Other terms and conditions that the Administration considers necessary or desirable.
(e)
Other program documents and directives referred to in §A(2) of this regulation may include notices to lenders through electronic means and the Department's internet site.
B.
Purchase Procedure.
(1)
Loan Review. Loans are subject to review by the Administration before purchase.
(2)
Purchase Schedules. The Administration may establish a standard purchase schedule, and also an expedited purchase schedule, as an incentive to encourage efficient submission of loans in proper order for purchase.
(3)
Repurchase. The mortgage purchase agreement may require that a mortgage lender repurchase any loan that the Administration determines was not in compliance with conditions for purchase of mortgage loans by the Administration, was delinquent in making the first payment, or has been inadequately serviced by the mortgage lender.