Md. Code Regs. 05.03.02.12

Current through Register Vol. 51, No. 24, December 2, 2024

Section 05.03.02.12 - Loan Purchase Program-Purchasing Loans

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 with the proceeds of a particular bond issue.

(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; and

(iii) Other terms and conditions that the Administration considers necessary or desirable.

B. Purchase Procedure.

(1) Application Number. In anticipation of issuance of bonds, the Administration may, at a lender's request, assign application numbers for mortgage loans that are in the lender's application process. The Administration is not obligated by the assignment of application numbers either to issue a series of bonds or to purchase loans which have received application numbers.

(2) Loan Tracking Number.

(a) Only after the issuance of a series of bonds will the Administration reserve funds from the proceeds of the bonds by assigning loan tracking numbers to any application number previously assigned and to the request of a lender for a reservation of the funds.

(b) The assignment of a loan-tracking number for a mortgage loan obligates the Administration to purchase a mortgage loan only if:

(i) The loan is eligible, in the Administration's sole determination, under the criteria set forth in Regulations .04-----.08 of this chapter;

(ii) The loan conforms, in the sole discretion of the Administration, to all requirements of the applicable program documents; and

(iii) Proceeds of the series of bonds are available for that purpose at the time the loan is presented for purchase.

(3) Loan Review. Loans are subject to review by the Administration before purchase.

(4) 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.

(5) 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 or which has been inadequately serviced by the mortgage lender.

Md. Code Regs. 05.03.02.12

Regulations .12 adopted as an emergency provision effective April 23, 1980 (7:10 Md. R. 949); adopted permanently effective September 5, 1980 (7:18 Md. R. 1737)
Regulations .12 adopted effective July 30, 1984 (11:15 Md. R. 1329)
Regulations .12 adopted effective September 30, 1991 (18:19 Md. R. 2098)
Regulation .12 amended effective October 14, 2002 (29:20 Md. R. 1586)