Property acquired by foreclosure or developed by association; real-estate-owned accounts; subsidiary ledger records.
1. An association may hold, manage and convey real property, including apartments and other buildings:
(a) Acquired by foreclosure or a conveyance in lieu of foreclosure; or
(b) Developed or built by the association.
Ê Unless the association has received a written waiver from the Commissioner, the total of money which it has advanced or committed for property which it has developed or built may not exceed twice the sum of its capital, surplus, undivided profits, loan reserve, federal insurance reserve and any other reserves specified by the Commissioner.
2. When an association acquires title to any real property pursuant to subsection 1, the document representing the transaction must be recorded immediately. This subsection does not require recordation of the evidences of any transfer of stock resulting from foreclosure of an interest in a cooperative housing corporation.
3. An appropriate real-estate-owned account must be set up for the property acquired and a separate subsidiary ledger or other appropriate record must be maintained therefor. The amount carried in the account must be the sum of the unpaid principal balance of the loan plus foreclosure costs, less any advance payments and any money held in the loans-in-process account at the time of acquisition, together with:
(a) Any amounts paid after acquisition for real property taxes which have accrued before acquisition;
(b) Assessments due or delinquent at the time of acquisition; and
(c) Necessary acquisition costs and costs of insurance premiums.
4. The subsidiary ledger record or other appropriate record on each property acquired must indicate:
(a) The type and character of the property acquired.
(b) All capitalized items of investment with related costs.
(c) Former loan or contract of sale account numbers.
Last modified: February 26, 2006