§ 107.202. Blanket Authority, Sale of Loans and Participating Interests in Loans.

(a) Subject to the limitations imposed by this section and Section 105.201 and any other limitation imposed by law blanket authority is hereby granted to any domestic association to sell its loans or participation interests in loans without prior approval of the commissioner to any purchaser.

(b) Sale with recourse. General rule. All loans and participation interests in loans sold by a domestic association may be sold with recourse.

(c) Mortgage transactions with federally-chartered secondary market agencies. To the extent that it has legal power to do so, an association may enter into, perform and carry out any mortgage transaction with the Federal Home Loan Mortgage Association specified in Section 305 of the Federal Home Loan Mortgage Corporation Act, notwithstanding any provision of this Chapter except the net worth requirements of Section 105.201.

(d) No loans, or participating interests in loans, shall be sold to or purchased from, directly or indirectly, any of the persons specified in Section 5613 of the law or to any corporation in which any director, officer or majority stockholder of the selling or buying or participating association is a stockholder.

(e) Participation interests in pools of loans. Where an association sells or purchases a participating interest in a pool of loans, documentation requirements will be satisfied if:

(1) Access to all loan documentation is provided by the originator/servicer upon request and without charge to any trustee of the pool, the commissioner, the Federal Home Loan Bank Board, or the Federal Savings and Loan Insurance Corporation or their examiners or Supervisory Agents and upon request and subject only to reasonable charges incurred in providing such access to any association investing in the he pool;

(2) The originator/servicer warrants as to each loan in the pool to or for the benefit of each association investing in the pool that as of the date participation interests in the pool were first issued:

(A) no loan was 30 or more days delinquent;

(B) each loan met the requirements for investment by the association;

(C) there were no delinquent tax or assessment liens or mechanics' liens on any collateral for the loans and the collateral was free of substantial damage and in good repair; and

(D) each loan complied with all applicable state and federal laws; and

(3) The originator/servicer has agreed to provide each association investing in the pool a monthly report of loan delinquencies separately indicating the number and aggregate principal amount of loans delinquent one month and two or more months, the book value of any collateral acquired by the pool through foreclosure or other exercise of its security interest in the collateral, and the aggregate dollar amount of loans made by the pool, if any, on the security of the collateral if such loans are loans secured by, and contracts for the sale of, real estate as described in Scheduled Items, Section 561.15(c) and (d) of the Insurance Regulations.

HISTORY

1. Change without regulatory effect renumbering former Section 172 to Section 107.202 (Register 87, No. 14). For prior history, see Register 82, No. 24.

Note

Note: Authority cited: Section 5255, Financial Code. Reference: Sections 5613, 6419, 6712, 6718 and 6719, Financial Code.