Fraternity-Testvériség, 2003 (81. évfolyam, 1-4. szám)

2003-04-01 / 2. szám

Page 10

TESTVÉRISÉG

From the Office of the Secretary-Treasurer/CFO

HRFA Mortgage Lending Policy and Procedure

1. The HRFA has traditionally offered mortgage loans to our members upon competitive terms. In addition to providing this fraternal benefit to our members, HRFA has also found these mortgages to be excellent investments in terms of rate of return, cash flow and security of investment, thus benefiting the membership at large.

2. Mortgages are considered and granted depending upon the availability of cash funds from our other investments,

i.e., stocks and bonds. Accordingly, from time to time, the HRFA may declare a moratorium on the granting of mortgage loans (however, this has not been done for several years).

3. In order to qualify, a member must (a) have been a member in good standing of the HRFA for a minimum of two (2) years (on a joint application, at least one applicant must meet this requirement); (b) have good credit; (c) remain a member in good standing for the duration of the mortgage; and (d) pay all certificate dues (premiums) in a timely fashion.

4. A letter requesting a mortgage loan must be addressed to the President/CEO at the HRFA’s office at 2001 Massachusetts Avenue, N.W., Washington, D.C. 20036-1011. The President/CEO will in turn forward the letter request to the Secretary-Treasurer/CFO, who will then send an application form and relevant information to the member.

5. Mortgage loans are only granted with respect to residential (1-family or 2-family) properties. No construction mortgage loans will be granted, nor will any loans be granted with respect to any industrial or commercial properties. Mortgage loans may be granted to churches upon such terms and conditions as the Executive Committee may, from time to time, deem appropriate.

6. Any mortgage loan granted by the HRFA must be a first and paramount mortgage and hen upon the mortgaged property.

7. The following maximum limits with respect to mortgage loans have been established by the HRFA Board of Directors:

(a) Maximum term (duration of loan): 25 years

(b) Maximum loan amount: $200,000.00

(c) Maximum loan-to-value ratio: 80% of the property’s appraised value (e.g., if the property is appraised at a value of $ 150,000.00, the maximum mortgage loan amount which may be granted is $120,000.00).

8. The interest rate on mortgage loans is determined from time to time by the HRFA Executive Committee. The interest rate may vary from loan to loan depending upon the Executive Committee’s assessment of the relative risk factors pertaining to the application (borrower’s income, borrower’s relative creditworthiness, loan-to-value ratio, et al.). As of May 1,2003, the following interest rate guidelines have been established by the Executive Committee and ratified by the Board of Directors:

Loan term: 25 years - Interest rate: 7.00%

Loan term: 15 years - Interest rate: 6.75%

Loan term: 10 years - Interest rate: 6.50%

THESE INTEREST RATES ARE SUBJECTTO CHANGE FROM TIME TO TIME WITHOUT PRIOR NOTICE. PLEASE CONFIRM CURRENT INTEREST RATE GUIDELINES IN EFFECT AT THE TIME OF YOUR APPLICATION WITH YOUR BRANCH MANAGER OR WITH THE HOME OFFICE.

9. No “points” (additional finance charges expressed in terms of a percentage of the loan amount, e.g., on a $100,000.00 loan, 2 points would equal $2,000.00) are assessed with respect to HRFA mortgage loans, with the exception of the refinancing of an existing HRFA mortgage loan, in which one (1) point (1% of the new mortgage loan amount) is assessed against the borrower. There are no prepayment penalties with respect to HRFA mortgage loans.

10. The following items are required in connection with seeking an HRFA mortgage loan:

(a) Completed and signed written application (form to be provided by HRFA);

(b) Complete appraisal with photographs and comparables from a licensed appraiser (to be provided by borrower at borrower’s expense);

(c) A non-refundable application fee of $125.00.

(d) Additionally, HRFA reserves the right to obtain a credit report with respect to any and all borrowers (HRFA will obtain at HRFA’s expense).

11. All underwriting decisions regarding the granting or denial of a mortgage loan are within the sole discretion of the HRFA Executive Committee. Applicants will be notified in writing of the decision of the Executive Committee regarding the loan application within fifteen (15) calendar days of receipt of a complete loan application package. If the loan is granted, the borrower must sign and return the loan commitment letter to HRFA within ten (10) calendar days of the mailing of the commitment letter to the borrower. Loan closing instructions, including instructions for the submission of documents for review by HRFA’s Legal Counselor prior to closing, will also be provided to the borrower.