Sec. 05.04.08.09. Loan Terms and Requirements for Secured Loans

A. In addition to the conditions and requirements of Regulations .07 and .08 of this chapter, secured loans shall meet the following requirements in B-----D of this regulation.

B. Deed of Trust. The deed of trust shall secure repayment of the loan by the granting of a valid lien on the property.

C. Escrow Account. If there is no prior mortgage requiring the payment of expenses to a mortgagee, the borrower shall make monthly expense payments, in escrow, to the Department consisting of 1/12 of annual real estate taxes, ground rent, property insurance premiums and, when appropriate, other items for which payments are required by the Department. Interest need not be paid to borrowers on escrowed monies except as required by law.

D. Title Insurance. For all loans in excess of $30,000, the Department, in its discretion, may require the borrower to provide a standard American Land Title Association (ALTA) Loan policy, with the Environmental Endorsement 8.1, or other form of title policy approved by the Department and the Office of the Attorney General for an amount equal to the maximum principal amount of the loan, insuring the Department, evidencing that title to the building on the date of closing is vested in the borrower, and containing only standard exceptions and encumbrances acceptable to the Department and the Office of the Attorney General.