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DFI-CU 54.03(2) (2) Equity loans, excluding amounts financed for accident, health and credit life insurance premiums, may not exceed the borrower's equity in the subject real estate, except to the extent the excess is secured by other collateral, the value of which can be supported by authoritative evidence.
DFI-CU 54.03(3) (3) The term of a mortgage loan may not exceed 30 years commencing the latter of:
DFI-CU 54.03(3)(a) (a) The date of closing;
DFI-CU 54.03(3)(b) (b) The date of the first contractual principal and interest payment;
DFI-CU 54.03(3)(c) (c) The date of any additional advance;
DFI-CU 54.03(3)(d) (d) The date of any properly executed loan modification agreement; or
DFI-CU 54.03(3)(e) (e) The date of any interest rate increase under the terms of a note permitting or requiring changes in the interest rate.
DFI-CU 54.03 History History: Cr. Register, June, 1990, No. 414, eff. 7-1-90; r. (1) renum (2) to (4) to be (1) to (3) and am., Register, October, 1997, No. 502, eff. 11-1-97.
DFI-CU 54.04 DFI-CU 54.04 Loan policies. The board of directors shall adopt written policies to direct the real estate lending activities. The loan policies shall be reviewed at least annually. The policies shall address, at a minimum, the following:
DFI-CU 54.04(1) (1) Types of real estate mortgage loans that will be offered.
DFI-CU 54.04(2) (2) Percentage of assets to be invested in real estate loans by category.
DFI-CU 54.04(3) (3) The trade area for real estate mortgage loans.
DFI-CU 54.04(4) (4) Maturities of real estate mortgage loans.
DFI-CU 54.04(5) (5) Appropriate limits and standards of creditworthiness applicable to real estate loan approvals.
DFI-CU 54.04(6) (6) Monitoring and quality control standards.
DFI-CU 54.04(7) (7) Appraisal and valuation standards.
DFI-CU 54.04(8) (8) Loan to value limitations on equity loans.
DFI-CU 54.04(9) (9) Asset liability/funds management issues.
DFI-CU 54.04 History History: Cr. Register, June, 1990, No. 414, eff. 7-1-90; am. (2) (4) (5) cr. (7) to (9), Register, October, 1997, No. 502, eff. 11-1-97.
DFI-CU 54.05 DFI-CU 54.05 Required documentation. Each real estate loan shall be supported by the following documents and information:
DFI-CU 54.05(1) (1) A note properly executed, together with the related mortgage properly executed and recorded.
DFI-CU 54.05(2) (2) Documentation establishing the quality and validity of the credit union's lien position by one of the following:
DFI-CU 54.05(2)(a) (a) For purchase money loans:
DFI-CU 54.05(2)(a)1. 1. A title policy in favor of the credit union covering its interest as mortgagee in the property; or
DFI-CU 54.05(2)(a)2. 2. An abstract showing title in the borrower's name and the credit union's mortgage, together with an attorney's opinion indicating the credit union's lien position.
DFI-CU 54.05(2)(b) (b) For equity loans, one of the following:
DFI-CU 54.05(2)(b)1. 1. An abstract of title and a signed report of title opinion by an attorney;
DFI-CU 54.05(2)(b)2. 2. A title insurance policy; or
DFI-CU 54.05(2)(b)3. 3. A title letter report.
DFI-CU 54.05(2)(c) (c) If the credit union has obtained the supporting documentation in accordance with par. (a) or (b), a subsequent extension of credit secured with the same real estate mortgage may be supported by a letter report from the title or abstract company, or a certified abstract showing the credit union's interest in the property as of the most recent extension of credit. No additional title documentation is required in connection with refinancing a loan on which no additional funds are advanced. Accrued interest debits, refinance charges and costs for insurance premiums are not considered additional advances.
DFI-CU 54.05(3) (3) An appraisal or a valuation if required by NCUA rules and regulations 12 CFR Part 722.
DFI-CU 54.05(4) (4) A copy of insurance policies, with a mortgage clause payable to the credit union, indicating all improvements on the real estate are insured against fire and casualty loss. The required insurance coverage shall be the lesser of the full replacement value of the improvements or the outstanding balance of the loan. Proof of insurance may be maintained through a third party contract.
DFI-CU 54.05(5) (5) Evidence of the status of the payment of real estate taxes acceptable to the board of directors as defined by policy.
DFI-CU 54.05(6) (6) Documentation of types of existing closed-end or open-end mortgages and balances or potential balances outstanding from all other lenders holding liens senior to the credit union mortgage.
DFI-CU 54.05(7) (7) The credit union shall maintain a general ledger accounting system which clearly segregates real estate loans for reporting and statutory calculation purposes.
DFI-CU 54.05 History History: Cr. Register, June, 1990, No. 414, eff. 7-1-90; am. (2) (intro.), (b), (3) to (5), Register, October, 1997, No. 502, eff. 11-1-97.
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