(F) These funds are included in the Borrower's monthly
loan payment to the Department or to the Mortgage Loan servicer; and
(G) The Department will establish and administer the
escrow accounts in accordance with the Real Estate Settlement and
Procedures Act of 1974 (RESPA) under 12 U.S.C. §2601 and its
implementing regulations at 12 CFR Part 1024 (Regulation X), as applicable.
(l) Requirements for Originating Mortgage Loans for
the Department.
(1) Any Administrator or staff member of an Administrator
originating Mortgage Loans for the Department must be properly licensed
and registered as a residential mortgage loan originator in accordance
with Chapters 157 and 180 of the Texas Finance Code and its implementing
regulations at Chapter 81, Part 4 of Title 7 of the TAC, unless exempt
from licensure or registration pursuant to the applicable state and
federal laws and regulations regarding residential mortgage loans.
(A) The Department reserves the right to reject any
Mortgage Loan Application originated by an Administrator or individual
that is not properly licensed or registered.
(B) The Department will not reimburse any expenses
related to a Mortgage Loan Application received from an Administrator
or individual that is not properly licensed or registered.
(2) Only Administrators approved by the Department
may issue initial mortgage disclosures, including the Loan Estimate
and other integrated disclosures for Mortgage Loans made by the Department
as required under RESPA and its implementing Regulation X, the Dodd
Frank Wall Street Reform and Consumer Protection Act (Dodd Frank)
at 124 Stat.1375, the Truth in Lending Act (TILA) at 15 U.S.C. §1601
and its implementing regulations at 12 CFR §1026 (Regulation
Z), and any applicable Texas laws, statutes, and regulations regarding
consumer disclosures for residential mortgage loan transactions.
(A) The Department reserves the right to reject any
Mortgage Loan Application and Loan Estimate submitted by an Administrator
that has not received Department approval because the loan product
as disclosed is not offered or the Borrower does not qualify for that
loan product.
(B) The Department will not reimburse any expenses
related to a Loan Estimate or Application received from an Administrator
that does not have Department approval.
(3) Only an Administrator approved by the Department
may issue final mortgage disclosures, including the Closing Disclosures
and other integrated disclosures, for Mortgage Loans made by the Department
as required under RESPA--Regulation X, Dodd Frank, TILA, Regulation
Z), and any applicable Texas laws, statutes, and regulations regarding
consumer disclosures for residential mortgage loan transactions.
(A) The Department reserves the right to reject any
Closing Disclosure issued by an Administrator or title company without
Department approval.
(B) The Department reserves the right to refuse to
fund a Mortgage Loan with a Closing Disclosure that does not have
Department approval.
(4) The Department will not allow disbursement of any
portion of the Department's Mortgage Loan for acquisition until seller
delivers to the Borrower a fully executed deed to the property. After
execution of the deed, the deed must be recorded in the records of
the county where the property is located.
(5) The first monthly mortgage payment upon closing
of the Mortgage Loan with monthly scheduled payments will be due one
full month after the last day of the month in which the Mortgage Loan
closed.
(m) Principal Residence. Loans are only permitted for
potential Borrowers who will occupy the property as their Principal
Residence. The property must be occupied by the potential Borrower
within the later of 60 days after Mortgage Loan closing or construction
completion, whichever occurs last. It must remain the Household's
Principal Residence as defined in the Mortgage Loan documents or in
the case of Forgivable Loans, until the forgiveness period has concluded
in accordance with the Mortgage documents.
(n) Life-of-Loan Flood Certifications will be required
to monitor for FEMA flood map revisions and community participation
status changes for the term of the Mortgage Loan.
(o) Requirements for Subordinating to a Refinanced
Loan. The Department may consent to the refinancing of the Household's
superior third-party lender mortgage and execute a subordination agreement
when the following conditions are met:
(1) Borrower is not refinancing into an adjustable
rate mortgage;
(2) Combined loan balances do not exceed 100% of appraised
value;
(3) There is no increase in principal or interest payments,
with the exception made for Borrowers refinancing from a 30-year term
to a shorter loan term;
(4) The Borrower will not receive any proceeds from
the transaction unless it is for overpayment of Borrower's costs;
(5) All lienholders have consented to the refinancing;
and
(6) In the case of Reverse Mortgages insured by the
federal government (e.g. Home Equity Conversion Mortgage insured by
the Federal Housing Administration), all other requirements are met.
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