Wisconsin Administrative Code
Department of Financial Institutions
DFI-SL 1-22 - Department of Financial Institutions-Savings & Loan
Chapter DFI-SL 13 - Loans
Section DFI-SL 13.03 - Mortgage loans
Universal Citation: WI Admin Code ยง DFI-SL 13.03
Current through February 26, 2024
(1) AUTHORITY. An association may invest in, sell, purchase, participate or otherwise deal in mortgage loans or interests in mortgage loans without geographic restriction including loans made on the security of residential cooperative units.
(2) APPRAISAL. New mortgage loans originated shall be supported by a reasonably current appraisal containing a level of information commensurate to the size and nature of the real estate appraised.
(3) MAXIMUM LOAN TO VALUE RATIOS.
(a)
Definition.
In this subsection, "first lien" includes any mortgage the priority of which is
insured over any other lien or encumbrance by a title insurance policy issued
to the mortgage lender.
(b)
Limitations.
1. `First lien
mortgages'. Except as provided in par. (d), an association may not make a loan
secured by a first lien mortgage in an amount in excess of 90% of the value of
the real estate security.
2.
`Junior liens'. An association may not make a loan secured by a mortgage other
than a first lien mortgage in an amount in excess of:
a. The maximum amount the association would
be authorized to lend on the security of a first lien on the mortgaged
property; minus
b. The face amount
of all other outstanding loans secured by the mortgaged property and any other
unsatisfied liens against that property.
(c)
Calculation. In
calculating the loan to value ratio under this subsection, the value of the
qualifying real estate security is limited to that attributable to the real
estate if used in a manner consistent with its current or intended
use.
(d)
Exceptions: loans
to 100% of value. An association may make a loan in an amount up to
100% of the value of the real estate security if:
1. The part of the loan that exceeds 90% of
the value of the property is insured or guaranteed by a mortgage insurance
company that the federal home loan mortgage corporation has determined to be a
"qualified private insurer:"
2. The
loan or the part of the loan that exceeds 90% of the value of the property is
insured or guaranteed by an agency or instrumentality of a state or the federal
government whose full faith and credit is pledged to support the insurance or
guarantee;
3. Made in conjunction
with a governmental subsidy, insurance or guarantee program approved by the
division; or
4. The loan is fully
secured by: the cash surrender value of an insurance policy on the life of any
person responsible for the loans payment; negotiable securities, the principal
and interest of which is guaranteed by the U.S. government; bonds, notes or
other evidences of indebtedness, constituting the general obligation of a
municipality; or savings accounts or certificates of deposit in an insured
institution.
5. The loan is to
facilitate the sale of real estate owned or real estate in judgment.
6. The loan is to meet the objectives of
12USC 2109 ff. with the prior written approval of the division.
Note: 12 USC 2109 ff. is the citation to the federal community reinvestment act of 1977.
(4) TERM.
(a)
Length. The term of a
mortgage loan may not exceed 30 years or such other term permitted for any
other lender authorized to make first lien real estate loans in this state,
commencing with the latter of:
1. The date of
closing;
2. The date of the first
contractual monthly principal and interest payment;
3. The date of any additional
advance;
4. The date of any
properly executed loan modification agreement; or
5. The date of any interest rate increase
under the terms of a note permitting or requiring changes in the interest
rate.
(b)
Amortization. The rate of amortization on a mortgage loan may
vary during the term of the loan, may be negative, and may result in a lump sum
payment at maturity.
(5) DEVELOPMENT LOANS.
(a)
Maximum
term. The term of a development loan may not exceed 5 years, but may
be extended for periods of one year or less if:
1. The borrower makes a request to the
association for an extension;
2.
All taxes on the property and all contractual payments on the loan are current;
and
3. The borrower and the
association execute a written extension agreement.
(b)
Appraisals and other
documentation. Before making a development loan an association must
obtain:
1. An appraisal.
2. A statement from the borrower indicating
the borrower's intended use of the property. If further improvements must be
made to the land to make it suitable for the construction of a dwelling unit
and loan proceeds are expected to be used in that development, the statement
shall include a development schedule and the estimated cost of those
improvements.
(c)
Release schedule. When a development loan is secured by more
than one lot:
1. The association and the
borrower must enter into a written agreement governing the release of
individual lots from the association's security interest.
2. No portion of the qualifying real estate
security may be released unless:
a. The
association has obtained an appraisal that individually sets forth the value of
each developed lot and of any qualifying security remaining to be developed;
and
b. The ratio of the unpaid
balance of the association's loan to the value of the remaining real estate
security will not exceed the applicable maximum loan to value ratio under sub.
(3).
This section interprets or implements ss. 215.02(18) and 215.135, Stats.
Disclaimer: These regulations may not be the most recent version. Wisconsin may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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