Jan 13, 2014 14-01

Single-Family Mortgage Program Loan Reservation Policy Revisions

Loan Reservation Policy Revisions

In an effort to make the single-family loan reservation policy consistent among all programs and to more closely align the loan reservation policies with industry standards, Housing NM is implementing the following revised loan reservation policy. The policy applies to all single-family mortgage loan products offered by Housing NM.

A sixty (60) day loan reservation period:

• Housing NM will no longer require that a loan be Compliance Approved within 45 days of loan reservation. The loan may be Compliance Approved at any time prior to loan closing. Although, the loan does still need to be fully Compliance Approved prior to loan closing. (Compliance review times are three business days after receipt of the file with an additional 24 hours for clearing conditions)
• The Participating Lender has 60 days from the date of loan reservation for the loan to be purchased by the Master Servicer.
• If the loan is not purchased by the Master Servicer within 60 days of loan reservation, the loan reservation must be extended or cancelled by the Participating Lender.

Loan Reservations:

• Loan reservations will be accepted from 9:00am-5:00pm MST, Monday through Friday, excluding holidays.  Loan reservations will not be accepted outside of the reservation window.

Loan Reservation Extensions:

• A loan reservation may only be extended once.
• A loan reservation can be extended for either 15 days or 30 days.
• In the event that a loan is not purchased by the Master Servicer within 60 days of loan reservation, a 30 day extension will automatically be applied, unless the Participating Lender requests a 15 day extension from Housing NM prior to the 60 day loan reservation expiration date.

Loan Reservation Extension Fees:

• 15 day Extension:                             0.1875% of the loan amount
• 30 day Extension                              0.375% of the loan amount
• The applicable loan reservation extension fee will be automatically deducted at the time the loan is purchased by the Master Servicer.
• The loan reservation extension fee may be charged to the borrower.

Cancellation Policy:

• A loan reservation can be cancelled without penalty.
• A new loan reservation for the same borrower will not be allowed until 60 days after the cancelation date of the original loan reservation.

Changes between loan programs are not permitted:

• A loan reservation is for a specific loan program
• A loan reservation cannot be transferred between programs. (i.e. $aver to Zero, Zero to Plus, Plus to HERO, etc.)

Expired Loan Purchase Delivery:

• If a loan is not purchased by the Master Servicer within 90 days of loan reservation, the loan will be subject to “mark to market” pricing at the time of loan purchase.

The loan reservation policy revisions will be effective on loans reserved after January 31, 2014.

Thank you for participating in Housing NM’s program.  Should you have any questions, please contact an Housing NM Homeownership Representative at 1(800) 444-6880 or (505) 843-6880