Current through Register Vol. 49, No. 6, March 15, 2024
PURPOSE: This rule authorizes the types of loans
secured by real estate an association may make and prescribes the nature of
security for loans and the terms and conditions of those loans.
(1) An association may originate, invest in,
sell, purchase, participate or otherwise deal in loans secured by residential
real estate as follows:
(A) First mortgage
loans-Loans secured by a first lien on residential real estate, on the terms
set out in this rule;
(B) Second
mortgage loans-Loans secured by a second lien on residential real estate in the
same amount as if the loan were secured by a first lien, less the unpaid
balance of the first lien indebtedness, on the terms set out in this rule;
provided that the total of the unpaid balance of all loans secured by each deed
of trust and the maximum advances authorized under the deed of trust do not
exceed the value of the security; and
(C) Advances-An association may make advances
on an open-ended first deed of trust held by the association, not subject to
any intervening security interest of another, if the total of the unpaid
balance of all loans secured by each deed of trust and the maximum advances
authorized under the deed of trust do not exceed the value of the security or
the advance is made for the purpose of protecting the value of the security
interest of the association.
(2) Terms and Conditions.
(A) All residential real estate loans shall
be repayable within a period not to exceed forty (40) years from the date the
loan is made.
(B) Residential real
estate loans may be fully amortized, partially amortized or non-amortized,
provided that interest is payable at least semiannually. The loan contract may
provide for the deferral and capitalization of all interest on residential real
estate loans. Provisions for full amortization of the loan shall be required in
the loan contract, to begin no later than five (5) years from the date of
origination.
(3) An
association shall comply with the documentation requirements of 4 CSR 260-8.015
prior to funding a loan under this regulation.
*Original authority: 369.144, RSMo 1971, amended 1982,
1983, 1984, 1989, 1994; 369.229, RSMo 1971, amended 1983, 1994; and 369.249 and
369.299, RSMo 1971, amended 1994.
