Section 107.102 - Documents Supporting LoansThe provisions of this section do not apply to purchased participating interests in loans or to loans or participating interests in loans which are a part of a pool of loans securing obligations issued or guaranteed by the Federal National Mortgage Association, the Government National Mortgage Association, or similar Federal Government agency, to purchased participating interests in loans, or to loans insured by the Federal Housing Administrator or guaranteed by the Administrator of Veterans' Affairs. (See Sections 7200 through 7206 of the law.) The retention in each loan file of the documentation required by FHA or VA for making FHA or VA loans will satisfy the loan documentation requirements of this Department. Proposed FHA takeout loans shall not be regarded as insured loans during the construction period unless so specified by FHA. Associations should be careful not to treat a loan as being exempt from the following documentation requirements until the insurance or guarantee has been or is certain to be received. When conventional whole loans are purchased by an association, the purchaser's copy of the agreement between buyer and seller must be on file on the premises of the purchasing association, together with evidence of an assignment of title in the security instrument from the seller to buyer or a written statement by counsel for the association that such assignment of security instrument is not required and the lien follows the promissory note. A servicing agreement covering purchased whole loans must also be maintained on the premises of the purchasing association when such loans are serviced by the seller. In addition to any other requirements with respect to the maintenance of records, every association shall file and maintain on its premises, except as otherwise authorized by the Savings and Loan Commissioner, the following documents or information for each whole real estate loan made or purchased (information shall be maintained on the location of any document or record not in a particular loan file):
(a) An application for the loan, signed by the applicant borrower or his agent, in such form and containing such information as will disclose the purpose for which the loan is sought (speculative, construction, purchase, construction for owner, refinancing, other) and the identity of the security;(b) If any loan is made for the purpose of financing the purchase of the real estate security for the loan, a signed statement by the borrower or his agent, as a part of or as an attachment to the application for the loan, disclosing the price at which such real estate security is being purchased by the borrower, and the arrangements made or proposed to finance the amount of the difference between the price and the loan applied for (in the case of a purchased loan, this data should be obtained if available);(c) One or more written appraisal reports, disclosing the current market value of the security offered by the applicant, prepared in accordance with generally accepted standards and procedures. Such reports shall be signed prior to the approval of the loan application, by a person, or persons duly approved as an appraiser by the board of directors of the association. In the case of purchased loans, a statement signed by a person approved as a Class IV association appraiser by the board of directors that he has personally supervised a review by qualified association appraisers of the appraisal report of each purchased loan and that he is satisfied that a proper appraisal method has been employed;(d) A written report evaluating the credit of the applicant, based upon information available to the association or supplied by the applicant or by others. With respect to a purchased loan, a statement (or other evidence) by the seller which evaluates the payment record of the borrower and the status of taxes, assessments, insurance premiums, and other charges on the security for such loan;(e) Except for properties acquired by foreclosure, a title insurance policy or its equivalent insuring the priority and validity of the association's lien on the real estate for such loan;(f) A copy of a loan settlement statement furnished to the borrower upon the closing of the loan made by the association setting forth in detail the charges or fees such borrower has paid or obligated himself to pay through the loan escrow or to such association during the life of such loan or copies of the loan settlement statements furnished to the borrower as required by the Real Estate Settlement Procedures Act of 1974 on loans made after June 20, 1975;(g) Information on all modifications of the original loan contract, including the written document, or a photocopy or conformed copy of the document effecting such modification;(h) Information on all releases of any portion of the collateral securing the loan, showing the part of the property involved and the consideration, if any;(i) The financial statement required by Section 8703.2 of the law shall consist of a statement of financial condition and a statement of income and expenses in the case of any loan subject to the requirements of this section. Such statements shall be as of a date not more than fifteen months prior to the date of the loan, and in the case of borrowers with more than one loan, the statements shall be as of a date not more than fifteen months prior to the date of the latest loan;(j) If the original promissory note is not kept in the loan file for security reasons, each loan file shall contain a copy of the promissory note;(k) If the original deed of trust securing the promissory note is not kept in the loan file for security reasons, each loan file shall contain a copy of the deed of trust or mortgage securing the promissory note;(l) In the case of a construction loan made by the association, the inspection records required by Section 8703.1 of the law;(m) In the case of any loan made by the association which involved an escrow in connection with the distribution of the loan funds, a certified copy of all escrow instructions and amendments thereof received by the association and all escrow instructions prepared by the association including a copy of a demand by the association upon the escrow for such instructions. The association's instructions to the escrow shall provide that the escrow shall not close without the association's consent whenever the escrow officer or escrow officers handling the transaction acquire actual knowledge that there is either a concurrent escrow or an escrow to be opened or closed immediately upon completion of the existing escrow which will transfer the same property and shall further provide that the association shall be furnished with a certified copy of the closing statement to the borrower;(n) In the case of a loan under Section 7152(b) of the law, a written opinion by association counsel stating that the long-term lease security instruments provide at least the following: (1) that a foreclosure will not render the lease invalid nor cause the loss of any rights such as reciprocal parking;(2) that the lease cannot be modified by the lessor or lessee without the express written consent of the lender;(3) that in the event of a default under the lease by the lessor or lessee, the lender will be given at least 30 days' notice to take such action as it deems necessary to protect its loan security.(o) In the case of a wrap-around loan, all of the additional documentation required under Subchapter 7 Article 3 of the regulations.Cal. Code Regs. Tit. 10, § 107.102
1. Change without regulatory effect renumbering former Section 118.3 to Section 107.102 (Register 87, No.14). For prior history, see Register 80, No. 19. Note: Authority cited: Section 5255, Financial Code. Reference: Sections 7102, 8707 and 8708, Financial Code.
1. Change without regulatory effect renumbering former Section 118.3 to Section 107.102 (Register 87, No.14). For prior history, see Register 80, No. 19.