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To exercise its delivery right under a prior approval
purchase contract, an originator was required to give notice of
conversion to petitioner and enter into a 30-day “mandatory
delivery contract” on Form 64A, Conventional Multifamily
Immediate Delivery Purchase Contract and Prior Approval
Conversion Amendment. An originator could elect to deliver the
multifamily mortgage at petitioner’s maximum required net yield
or at an alternate required net yield.9 Petitioner’s required
net yield was the rate at which originators could contract to
deliver a mortgage under the immediate delivery purchase program.
The maximum required net yield was the fixed rate, or locked-in
interest rate, that petitioner and an originator had previously
agreed upon in Form 6.10 The alternate required net yield was
the rate at which an originator could contract to deliver a
mortgage to petitioner under the immediate delivery purchase
program as quoted by petitioner on any day during the 60-day (or
9 Effective July 1986, upon electing to effectuate delivery
with a mandatory delivery contract with an alternative required
net yield, an originator could request an increase in the maximum
amount of the mortgage to be delivered. The amount of any
increase was at the sole discretion of petitioner. Upon the
request for an increase, an originator was required to remit
$1,000 plus 2 percent of the increased mortgage amount within 24
hours. Of this 2 percent, 0.5 percent was nonrefundable and, if
approved, petitioner was entitled to retain the fee. Upon
purchase of the mortgage, petitioner refunded 1.5 percent of the
total mortgage amount as increased.
10 The maximum required net yield is the maximum interest
rate that petitioner may receive from the mortgage delivered by
an originator.
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Last modified: May 25, 2011