New Mexico Administrative Code
Title 12 - TRADE, COMMERCE AND BANKING
Chapter 20 - SAVINGS AND LOAN ASSOCIATIONS
Part 36 - REAL ESTATE LOANS
Section 12.20.36.10 - LOAN-TO-VALUE RATIOS
Current through Register Vol. 35, No. 6, March 26, 2024
A. At the time of origination, a real estate loan may not exceed one hundred percent of the market value of the security property. An association shall, by a vote of its board of directors, establish maximum loan-to-value ratios for loans made on the security of real estate, and the resolution adopting such ratios shall be included in the minutes of the directors' meeting. Home loans made on the combined security of real estate and savings accounts may be made in excess of the maximum loan-to-value ratios adopted pursuant to this Section 10 [now 12.20.36.10 NMAC] with such excess secured by the savings account, if the account consists only of funds belonging to the borrower, members of his family or his employer.
B. With respect to home loans originated or refinanced in excess of 90 percent of the appraised value of the security property, that part of the unpaid balance that exceeds 80 percent of the property's value shall be insured or guaranteed by a mortgage insurance company that the federal home loan mortgage corporation has determined to be a "qualified private insurer".
C. With respect to all other loans on the security of real estate originated in excess of 90 percent of the appraised value of the security property, an association's board of directors shall approve each such loan prior to its origination, and such approval shall be recorded in the minutes of its meeting.
D. In determining compliance with maximum loan-to-value ratio limitations for real estate loans, at the time of making a loan an association shall add together the unpaid amount, or in the case of a line-of-credit loan the approved credit limit, of all recorded loans secured by prior mortgages, liens or other encumbrances on the security property that would have priority over the association's lien, and shall not make such a loan unless the total amount of such loans (including the one to be made but excluding loans that will be paid off out of the proceeds of the new loan) does not exceed the applicable maximum loan-to-value ratio limitations prescribed in this Section 10 [now 12.20.36.10 NMAC]. In valuing the real estate security, an association shall use the current appraised value of the security property, which may include any expected value of improvements to be financed.
