Any charitable or nonprofit organization, including a pension fund or trust, which presents evidence that it is responsible, has permanent funds of not less than $100,000, and has experience in investment, may be approved upon application.

§ 203.4 Approval of other institutions.

(a) General requirements. Any mortgagee not identified in §§ 203.1 to 203.3 may be approved as a mortgagee, if it is a chartered institution; or is a permanent organization having succession; or is a trust. Any such mortgagee shall have sound capital funds properly proportioned to its liabilities and to the character and extent of its operation, and meet the requirements of either paragraph (b), (c) or (d) of this section.

(b) Special requirements applicable to supervised institutions. A mortgagee approved as a supervised institution shall meet these requirements: Amended: March 1, 1962; May 22, 1962

(1) The mortgagee shall be subject to the inspection and supervision of a governmental agency which is required by law to make periodic examinations of the mortgagee's books and accounts. Amended: March 1, 1962; May 22, 1962

(2) The mortgagee shall submit satisfactory evidence of certain sound capital funds or, if it is a mutual company or association without capital funds, it shall show that it has a specified net worth. The required amount of capital funds or net worth shall be determined in the following manner:

Amended: January 31, 1962; March 1, 1962; May 22, 1962

3

(i) With respect to a mortgagee whose application was filed and approved on or before March 1, 1962, capital funds or net worth of a value of not less than $25,000.

Amended: March 1, 1962; May 22, 1962

(ii) With respect to а mortgagee whose application for approval was filed on or before March 1, 1962, but not approved until subsequent to such date, capital funds or net worth of a value of not less than $25,000, provided that such amount shall be increased to a value of not less than $100,000 on or before December 31, 1962.

Amended: March 1, 1962; May 22, 1962

(iii) With respect to a mortgagee filing an application for approval subsequent to March 1, 1962, capital funds or net worth of a value of not less than $100,000. Amended: March 1, 1962; May 22, 1962

non-su

(c) Special requirements pervised institutions. A mortgagee not subject to inspection and supervision of a governmental agency as provided in the preceding paragraph shall have as its principal activity the lending or investment of funds under its own control in real estate mortgages; shall have sound capital funds of a value of not less than $100,000; shall submit a detailed audit of its books made by an accountant satisfactory to the Commissioner, reflecting a condition satisfactory to him; shall file with the Commissioner similar audits at least once in each calendar year so long as its approval as mortgagee continues; shall submit at any time to such examination of its books and affairs as the Commissioner may require; and shall comply with any other conditions that the Commissioner may impose. Prior to the approval of any such mortgagee, it shall submit an agreement in writing.

(1) [Revoked] June 7, 1965

(2) That, except with the prior approval of the Commissioner, it will segregate escrow commitment deposits, work completion deposits, and all periodic payments under mortgages insured by the Commissioner, received by it on account of ground rents, taxes, assessments and insurance premiums, and will deposit such funds in a special account or ac

counts with some banking institution

whose accounts are insured by the Federal Deposit Insurance Corporation and shall use such funds for no purpose other than that for which they were received

(d) Special requirements-loan cor respondent mortgagees. Requirement: for approval as a loan corresponden mortgagee are identical with those for approval of nonsupervised mortgagees except as follows:

(1) It may be approved with sound capital funds (net worth) of not less than $5,000;

(2) It shall be an authorized loan correspondent of, and its approval requested by, an approved mortgagee under governmental supervision, which is investing in insured mortgages for its own portfolio and whose past and future investment commitments are such as to assure the Commissioner enough business will be originated to enable the correspondent to successfully maintain its servicing accounts;

(3) It shall originate or purchase insured loans for sale only to its sponsor or sponsors;

(4) It, and its sponsor or sponsors shall agree to notify the Commissioner promptly upon termination of the loan correspondent agreement;

(5) Termination of the relationship with sponsor or sponsors will be cause for withdrawal of the loan correspondent mortgagee approval.

(e) Special requirements-investing mortgagees. (1) An organization not subject to the inspection and supervision of a government agency as provided in paragraph (b) of this section may be approved as an investing mortgagee.

(2) To be approved as an investing mortgagee, an organization shall establish to the satisfaction of the Commissioner that it meets the following requirements:

(i) It has experience in making investments in mortgages.

(ii) It has a supply of capital funds sufficient to support a projected investment of $1 million in real estate mortgages.