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Mortgage Lending: Introduction

The Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376 (2010) (Dodd-Frank Act), significantly alters the preemptive effect of Office of the Comptroller of the Currency (OCC) regulation of national banks for mortgage loans extended after July 21, 2010. See Appx. E.2, supra.

Mortgage Lending: Post-Dodd-Frank Act

Interpretive Letter No. 1155 (Sept. 17, 2015). Ohio law is not consistent with 12 U.S.C. § 548 (providing that, for purposes of state tax law, national banks shall be treated as a bank organized and existing under the laws of the state within which its principal office is located), because the state provides Ohio-charted state banks with a tax credit for assessments paid to the Ohio Division of Financial Institutions but does not provide a similar credit to national banks.

Mortgage Lending: Pre-Dodd-Frank Act

Interpretative Letter No. 1106 (Oct. 10, 2008). Georgia law permitting out-of-state banks to do trust business in the state so long as they have their deposits insured and requiring reciprocity is preempted. South Carolina law requiring a business presence in the state and written approval to conduct trust business is preempted. Florida law mandating a higher level of pledged securities than the OCC requires is preempted.

Mortgage Lending: Introduction

The Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376 (2010) (Dodd-Frank Act), significantly alters the preemptive effect of Office of the Comptroller of the Currency (OCC) regulation of national banks for mortgage loans extended after July 21, 2010. See Appx. E.2, supra.

Mortgage Lending: Pre-Dodd-Frank Act

Preemption Determination, 68 Fed. Reg. 46,264 (Aug. 5, 2003). Neither national banks nor their operating subsidiaries that are engaging in business in Georgia must abide by any of the provisions of the original or amended Georgia Fair Lending Act.

Preemption Determination, 66 Fed. Reg. 51,502 (Oct. 9, 2001). Certain provisions of the West Virginia Insurance Sales Commission Protection Act are preempted; other provisions are not preempted.

Mortgage Lending: § 206.101 Sale, assignment and pledge of insured mortgages.

(a) Sale of interests in insured mortgages. No mortgagee may sell or otherwise dispose of any mortgage insured under this part, or group of mortgages insured under this part, or any partial interest in such mortgage or mortgages by means of any agreement, arrangement or device except pursuant to this subpart.

Mortgage Lending: § 206.102 Insurance Funds.

Loans endorsed for insurance under this part, prior to October 1, 2008, shall be obligations of the General Insurance Fund. Loans endorsed for insurance under this part, on or after October 1, 2008, shall be obligations of the MMIF.

Mortgage Lending: § 206.103 Payment of MIP.

(a) The payment of any MIP due under this subpart shall be made to the Commissioner by the mortgagee in cash until an event described in paragraph (b) or (c) of this section occurs.

(b) Payment of the mortgage. The MIP shall no longer be remitted if the mortgage is paid in full.

(c) Acquisition of title.

Mortgage Lending: § 206.111 Due date of MIP.

(a) Initial MIP. The mortgagee shall pay the initial MIP to the Commissioner within fifteen days of closing and as a condition to the endorsement of the mortgage for insurance.

(b) Monthly MIP. Each monthly MIP shall be due to the Commissioner on the first business day of each month except the month in which the mortgage is closed.

Mortgage Lending: § 206.113 Late charge and interest.

(a) Late charge. Initial MIP remitted to the Commissioner more than 5 days after the payment date in § 206.111(a) and monthly MIP remitted to the Commissioner more than 5 days after the payment date in § 206.111(b) shall include a late charge of four percent of the amount owed.

Mortgage Lending: § 206.115 Insurance of mortgage.

(a) Mortgages with firm commitments. For applications for insurance involving mortgages not eligible to be originated under the Direct Endorsement program under § 203.5 (any reference to § 203.255 in § 203.5 shall mean § 206.115 for purposes of this section), the Commissioner will endorse the mortgage for insurance by issuing a Mortgage Insurance Certificate.

Mortgage Lending: § 206.117 General.

The Commissioner is required by statute to take any action necessary to provide a borrower with funds to which the borrower is entitled under the mortgage and which the borrower does not receive because of the default of the mortgagee. The Commissioner may hold a second mortgage to secure repayment by the borrower under § 206.27(d). Where the Commissioner does not hold a second mortgage, but makes a payment to the borrower, and such payment is not reimbursed by the mortgagee, the Commissioner shall accept assignment of the first mortgage.

Mortgage Lending: § 206.121 Commissioner authorized to make payments.

(a) Investigation. The Commissioner will investigate all complaints by a borrower concerning late payments. If the Commissioner determines that the mortgagee is unable or unwilling to make all payments required under the mortgage, including late charges, the Commissioner shall pay such payments and late charges to the borrower.

Mortgage Lending: § 206.123 Claim procedures in general.

(a) Claims. Mortgagees may submit claims for the payment of the mortgage insurance benefits if:

(1) The conditions of § 206.107(a)(1) pertaining to the optional assignment of the mortgage by the mortgagee have been met and the mortgagee assigns the mortgage to the Commissioner;

(2) The mortgagee is unable or unwilling to make the payments under the mortgage and assigns the mortgage to the Commissioner pursuant to the Commissioner’s demand, as provided in § 206.121(b);

Mortgage Lending: § 206.127 Application for insurance benefits.

(a) Mortgagee acquires title.

(1) The mortgagee shall apply for the payment of the insurance benefits within 30 days after the sale of the property by the mortgagee or within such additional time as approved by the Commissioner. Application shall be made by notifying the Commissioner of the sale of the property, the sale price, and income and expenses incurred in connection with the acquisition, repair, and sale of the property.

Mortgage Lending: § 206.129 Payment of claim.

(a) General. If the claim for the payment of the insurance benefits is acceptable to the Commissioner, payment shall be made in cash in the amount determined under this section.

(b) Limit on claim amount.

Mortgage Lending: § 206.133 Termination of insurance contract.

(a) Payment of the mortgage. The contract of insurance shall be terminated if the mortgage is paid in full.

(b) Acquisition of title.

(1) If the mortgagee or a party other than the mortgagee acquires title at a foreclosure sale, or the mortgagee acquires title by a deed in lieu of foreclosure, and the mortgagee notifies the Commissioner that a claim for the payment of the insurance benefits will not be presented, the contract of insurance shall be terminated.

Mortgage Lending: § 206.135 Application for insurance benefits and fiscal data.

(a) On the date the application for assignment is filed, the mortgagee shall submit to the Commissioner:

(1) Credit and security instrument. The original credit and security instruments assigned without recourse or warranty, except that no act or omission of the mortgagee shall have impaired the validity and priority of the mortgage.

(2) Proposed assignment instrument. A copy of the proposed assignment of mortgage.

Mortgage Lending: § 206.136 Conditions for assignment.

(a) In order for a HECM to be eligible for assignment, the following must be met:

(1) Priority of mortgage to liens. The mortgage is prior to all mechanics’ and materialmen’s liens, regardless of when such liens attach, and prior to all liens and encumbrances, or defects which may arise based on any act or omission by the mortgagee except such liens or other matters as may have been approved by the Commissioner.

Mortgage Lending: § 206.138 Mortgagee’s liability for certain expenditures.

Where the Commissioner accepts an assignment, acquires a property after accepting an assignment of a mortgage, or otherwise pays a claim for insurance benefits and thereafter it becomes necessary for the Commissioner to either reconvey the property or reassign the mortgage to the mortgagee due to the mortgagee’s noncompliance with these regulations, the mortgagee shall reimburse the Commissioner for all expenses incurred in connection with such acquisition and reconveyance or reassignment.