§ 2700.405 - Application for loans.

(a) The agreement to process an application for a direct loan shall constitute an acceptance of the lending institution of the responsibility to act as the servicer of HUD with respect to that particular application. The servicer shall make a loan on behalf of HUD on the terms specified in subpart C of this part if the lending institution is satisfied that the application meets all of the requirements of this part.

(b) The servicer shall prepare a note, loan agreement, if any, and mortgage in the form specified in §2700.201. The servicer shall record the mortgage upon the closing of the loan. The servicer shall make the first advance of the loan, as provided for in §2700.201(d), using its own funds.

(c) On the last working day of the month during which the loan is closed, the servicer shall submit to HUD a copy of the application signed by the agent and the homeowner certifying that: The agent, homeowner, and property qualify under subpart B of this part; circumstances (such as the volume of delinquent loans in the investor's portfolio likely to remain uncured) make it probable that there would be a foreclosure if emergency mortgage relief were not given; the homeowner is in need of such relief; the investor has indicated to the homeowner its intention to foreclose; and the first advance of the emergency loan has been paid or credited to the homeowner's account with the servicing institution.