15 AAC 151.910. Assumptions of mortgage loans

(a) Unless prohibited by financing agreements, federal law or by mortgage insurance requirements, the Corporation will, in its discretion, allow qualified persons other than the mortgagor to assume or provide for the payment of mortgage loans purchased by the Corporation. If a mortgage is assumable by a qualified person, the deed of trust shall include, at the option of the Corporation, a clause which establishes the terms and conditions of a qualified assumption. For purposes of this section, a person is "qualified" to assume a mortgage loan if the person satisfies all underwriting and program criteria applicable to a borrower seeking a new loan under a comparable program and, in the case of a tax-exempt financing, the applicable requirements of federal tax law. All assumptions of a mortgage loan must be approved in writing by the Corporation. The Corporation will establish criteria for approval of assumptions in the sellers' guide. The Corporation will, in its discretion, establish in the sellers' guide the maximum fee that a financial institution may charge to process and close an assumed loan. Among other terms and conditions, a clause in the deed of trust shall require, at the option of the lender, the immediate payment of all sums secured by the deed if the borrower conveys all or part of the property, unless the Corporation or its designee provides written approval of the assumption of the mortgage loan.

(b) The executive director will, in his or her discretion, modify the clause in the deed of trust required under 15 AAC 151.910(a) to prohibit or further restrict assumptions if a clause permitting the assumption of a mortgage loan would jeopardize the financing programs of the Corporation.

(c) The executive director may also formulate a clause for the Corporation's deed of trust for mortgage loans to be financed with the proceeds of qualified mortgage bonds pursuant to Section 103A of the Internal Revenue Code of 1954, as amended, or Section 143 of the Internal Revenue Code of 1986, as amended, as applicable, providing for acceleration of or increase in the loan rate on such mortgages and otherwise as may be necessary in his or her view to cause such mortgage loan to comply with the provision of said applicable section.

History: Eff. 5/7/93, Register 130

Authority: AS 18.56.088

AS 18.56.090 (13)

Editor's note: Before Register 130, July, 1994, the substance of 15 AAC 151.910 was contained in former 15 AAC 118.267. The history note for 15 AAC 151.910 does not reflect the history of the section under its former number.

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