Wyoming Community Development Authority

Mortgage Purchase Program

Chapter 1

  Section 1. Authority.

  These rules andregulations are adopted pursuant toSections 9-7-101 through 9-7-125of the WyomingStatutes, as amended, with respect to the Single Family Mortgage Purchase Program of the Wyoming Community Development Authority (the "Authority"). The Authority is authorized under WS 9-7-105(a)(iv) to adopt rules and regulations for its housing and loan financing programs.

  Section 2. Purpose and Objectives.

  These Rules and Regulations are established to effectuate, and shall be applied so as to accomplish, the general purposes of the Wyoming Community Development Authority Act, as amended (the "Act") and the following specific objectives:

  (a) The expansion of the supply of funds in the state available for new and existing housing at reasonable rates; and

  (b) The provision of the additional housing needed to remedy the shortage of ad- equate housing in this state.

  Section 3. Definitions.

  As used in these Rules and Regulations, terms defined in the Act have the meanings set forth therein and, unless the context otherwise requires:

  "Application" means an application to sell mortgage loans filed by a mortgage lender with the Authority.

  "Eligible Borrower" means persons and families whose total annual family incomes do not exceed the maximum income levels, and who otherwise satisfy the requirements, as authorized or established by the Authority.

  "Family" means a person or a group of persons consisting of, but not limited to, the head of a household, the spouse, if any, and children, if any, who are allowable as personal exemptions for federal income tax purposes.

  "Mortgage" includes a mortgage, mortgage deed or other instrument creating a first lien on a fee interest or leasehold interest in real property located within the state.

  "Mortgage Loan" means a loan secured by a mortgage made to an eligible borrower for the purchase of an owner-occupied single family residence (which may include up to four units, one of which must be owner-occupied) for residential use in the state; provided that loans may be made for home improvements or down payment/closing costs assistance without being secured by a mortgage upon authorization by Authority resolution.

  "Mortgage Purchase Agreement" means an agreement between the Authority and a mortgage lender pursuant to which the Authority agrees to purchase mortgage loans from the mortgage lender from time to time on the terms and conditions set forth in the agreement.

  "Program" means the Authority's program for purchase of notes evidencing mortgage loans and the accompanying security called the "mortgage purchase program."

  "Residential Use" means primary use of a structure as the principal residence of the occupant and does not include use as a vacation or "second" home.

  "Servicing Agreement" means an agreement between the Authority and a mortgage lender, or its designated servicer as approved by the Authority, for the servicing of mortgage loans purchased by the Authority.

  Section 4. Applications to Sell Mortgage Loans.

  (a) The Authority from time to time will invite mortgage lenders to originate mortgage loans to be sold to the Authority.

  (b) An application and related program documents submitted by a mortgage lender must include:

    (i) The types of mortgage loans which the mortgage lender desires to sell to the Authority;

    (ii) Information regarding the mortgage lender's total assets, capital, surplus, undivided earnings and reserves as to its most recent available report, provided that in lieu thereof the Authority may rely upon the approval of a mortgage lender by the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Federal Housing Administration or any other mortgage insurer or purchaser as the Authority may approve by resolution; and

    (iii) The unconditional agreement of the mortgage lender, upon acceptance of the application by the Authority, to sell mortgage loans to the Authority which comply with the terms of the program.

  Section 5. Allocation of Money for Mortgage Purchase.

  (a) Money available to the Authority through the sale of its bonds or otherwise will from time to time be made available to mortgage lenders on such basis and in such manner as the Authority deems appropriate to effectuate its purposes. The Authority's determinations of the allocations of funds for mortgage purchase are conclusive.

  (b) The obligation of the Authority to purchase any mortgage loans with the pro- ceeds of the issuance of its bonds is subject to the issuance and sale of such bonds or other obligations of the Authority within the period prescribed in an amount sufficient to permit such purchase.

  Section 6. Yield on Mortgage Loans.

  (a) Mortgage loans purchased by the Authority must in the aggregate bear interest at such rate or rates and be sold to the Authority at such price or prices as will in the aggregate produce a yield to the Authority sufficient to:

    (i) Pay interest and principal on the Authority's bonds or other obligations;

    (ii) Provide adequate reserves, if any, for the holders of the Authority's bonds or other obligations; and

    (iii) Cover the related operating costs of the Authority.

  (b) The yield on such mortgage loans must not exceed the maximum permitted by application of the arbitrage limitations of the Internal Revenue Code of 1986, as amended, and appli- cable rules and regulations.

  Section 7. Conditions of Mortgage Loans.

  Each mortgage loan purchased under this program must be insured or guaranteed in whole or in part by governmental or private mortgage insurance, including the fund created by Section 9-7-123 of the Wyoming Statutes, or otherwise secured as provided in the resolution or trust indenture authorizing bonds of the Authority, as provided in the mortgage purchase agreement, be secured by a mortgage on a single-family residence in the state (unless otherwise provided by the Authority), and meet the applicable terms and conditions set forth in the mortgage purchase agreement and related program documents.

  Section 8. Servicing of Mortgage Loans.

All mortgage loans purchased by the Authority must be serviced by a qualified servicer pursuant to a servicing agreement, or by the Authority.

  Section 9. Examination of Books and Records.

The Authority may conduct such examinations of the books and records of each mortgage lender which has sold mortgage loans to the Authority as the Authority deems necessary or appropriate to determine compliance with the terms of the Act, these Rules and Regulations, the mortgage purchase agreement and the servicing agreement. The Authority may require each mortgage lender to pay the costs of any such examination.

  Section 10. Consent to Jurisdiction of District Court.

Each mortgage purchase agreement must require the mortgage lender to consent to the jurisdiction of the district courts of the state in any proceeding to enforce compliance with the terms of the Act, these Rules and Regulations, the mortgage purchase agreement and the servicing agreement.

  Section 11. Other Homeownership Programs.

The Authority may from time to time administer federal or state grants or tax credit programs or programs under the Authority's Housing Trust Fund or the Guaranty Fund to finance or facilitate homeownership, consistent with the rules and regulations issued by the federal or state government in conjunction therewith, and such additional criteria as the Authority may authorize or establish to carry out the purpose of the Act.

  Section 12. Purchase of Authority Bonds.

It is the policy of the Authority that no member, officer, employee or agent of the Authority shall require or request that any mortgage lender, who has applied for a mortgage purchase commitment from the Authority, or any person related to any such mortgage lender, purchase bonds or obligations of the Authority. Such policy shall be promptly communicated to all employees of the Authority, and any violation of such policy shall be cause for appropriate disciplinary action by the Authority.

  Section 13. Sale or Securitization of Mortgage Loans.

The Authority may, from time to time, sell or assign Mortgage Loans (with or without servicing released), or may securitize Mortgage Loans (with or without servicing released) into mortgage-backed securities (including those sponsored by the federal Government National Mortgage Association or any other federal, state or privately sponsored entity) and retain, sell or assign such mortgage-backed securities.