§ 255.1 Termination of program. ( a ) Effective on November 12, 1990, the authority to coinsure mortgages under this part is terminated, except that the Department: ( 1 ) Will honor legally binding and validly issued commitments issued before November 12, 1990 and
( 2 ) Will accept for review the coinsurance applications described in paragraph (b) of this section. Part 255, as it existed immediately before November 12, 1990, will continue to govern the rights and obligations of coinsured lenders, mortgagors, and the Department of Housing and Urban Development with respect to loans coinsured under this part.
( b ) A precommitment review procedure applies to any application for mortgage coinsurance for which a lender has accepted a non-refundable application fee before November 12, 1990 under this part and for which a legally binding Conditional or Firm Commitment is proposed to be issued. This procedure applies to lenders with preliminary as well as full approval to process coinsurance applications and without regard to whether the lender is under probation. For any coinsurance application for which the lender has accepted an application and a non-refundable application fee before November 12, 1990, the lender shall, prior to commitment, submit to HUD headquarters and to the HUD field office with jurisdiction for the proposed project such exhibits and other information as has been specified in administrative instructions of the Commissioner. The lender shall not issue a commitment without written approval from the Commissioner. Field Offices shall not endorse any case covered by this precommitment review requirement unless the lender submits with the endorsement package evidence of the Commissioner's approval of the processing and evidence of compliance with any conditions imposed by the Commissioner.
( c ) Extensions of commitments for projects which had outstanding legally binding commitments as of November 12, 1990 are limited as follows: ( 1 ) Conditional commitments may be extended not to exceed 180 days from the date of original issuance;
( 2 ) Firm commitments may be granted two 60-day extensions. However, should any underwriting conclusions be altered and reflected in the extension, the project must be submitted for precommitment review in accordance with paragraph (b) of this section. In the event an extension is required beyond those provided for in this paragraph, the case will be subject to the precommitment review process described in paragraph (b) of this section.
( d ) Reopened expired commitments are subject to precommitment review under paragraph (b) of this section.
( e ) HUD considers a commitment to be *legally binding* if: ( 1 ) It conforms to the format prescribed in the appropriate HUD Handbook and contains only such modifications as have been approved by HUD in writing;
( 2 ) All required underwriting, analyses, reviews and approvals have been accomplished prior to issuance of the commitment;
( 3 ) It conforms to HUD requirements pertaining to initial term and extension;
( 4 ) It obligates the lender and HUD to proceed to the next stage (*i.e.,* firm commitment in the case of a conditional commitment, or endorsement in the case of a firm commitment) if the applicant mortgagor complies with all conditions of such commitment;
( 5 ) It does not permit the lender to change unilaterally the conditions or terms of the commitment; and
( 6 ) It is signed by an official of the coinsuring lender who has been designated and authorized in accordance with HUD requirements.
(Information collection requirements in paragraph (b) were approved by the Office of Management and Budget under control number 2502-0437) [55 FR 41320, Oct. 10, 1990, as amended at 56 FR 14642, Apr. 11, 1991]