California Code of Regulations › Title 10 - Investment › Chapter 2 - Savings and Loan Commissioner › Subchapter 7 - Operations-Loans › Article 1 - Supplementary Loan Report and Documentation Requirements › Section 107.102 - Documents Supporting Loans

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The 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.