The status ( The description)MemoTo: Law StudentFrom: Antony, PresidentDate:Re: Loan DocumentationI...

Question

The status ( The description)MemoTo:	Law StudentFrom:	Antony, PresidentDate:Re:	Loan DocumentationI have a loan closing at our office (the title company is sending their representative) in the evening on July 20, 2012 that is a little bit different than my usual loan, so my preprinted Notes need to be changed. FHLMC has agreed to buy the loan so we have to use the basic FNMA/FHLMC note forms and the make the appropriate changes. The borrowers are Brittany Collins and Henry Worrall. I think they are MBA students so we don’t want to make any mistakes with the deal. The property they are purchasing is located at 110 Washington Avenue, Perry, Spartan 48872. The purchase price of the house is $450,000 and they are making a down payment of $65,000. Payments will be due on the first of the month. It will be a 30 year loan. The initial ‘teaser’ rate is 2.50%, which will be good for 4 payments. After that, the rate will change every year. The Index is the so-called “COF Index” which is the monthly weighted average cost of savings, borrowings and advances of members of the Federal Home Loan Bank of San Francisco. The margin is 3.50%. The rate at the first change date will be based on the Index plus the Margin, but no greater than 9% or less than 3.75%. After that, the rate will not change by more than 2% from each change date and the rate can never be greater than 15%. I want the typical late charge. I would like a prepayment penalty to apply as follows: A 1% prepayment penalty should be applied to prepayments in full made within 3 years and to partial prepayments made within 3 years where the total amount prepaid in any 12 month period is more than 25% of the original loan amount. I also want a due-on-sale clause that does not provide for assumability unless I decide otherwise. The loan is being table-funded by Nationwide Mortgage Corporation. Please provide a Note that is complete and can be executed at the closing. You should do so by “marking-up” one of the existing FNMA/FHLMC note forms. You may assume that all rates, charges and fees are permitted under federal and Spartan law and the terms of the Note have been approved by FHLMC for purchase.The requirements:Make completed legally note depending in this description.The note is attached.

Robert · Accepted Answer

Multistate Adjustable Rate Note [1-Year Treasury][Assumable LOL](First Business Day Lookback)
MULTISTATE ADJUSTABLE RATE NOTE--1Year Treasury Index (Assumable during Life of Loan) (First Business Day Lookback)--Single Family--
Freddie Mac UNIFORM INSTRUMENT Form 5547 6/06 (rev. 11/06) (page 1 of 5 pages) 
ADJUSTABLE RATE NOTE 
(1 -Year Treasury Index - Rate Caps) 
(Assumable during Life of Loan) (First Business Day of Preceding Month Lookback) 
 
THIS NOTE CONTAINS PROVISIONS ALLOWING FOR CHANGES IN MY 
INTEREST RATE AND MY MONTHLY PAYMENT.  THIS NOTE LIMITS THE 
AMOUNT MY INTEREST RATE CAN CHANGE AT ANY ONE TIME AND THE 
MAXIMUM RATE I MUST PAY.
August 20, 2012,_ Perry, Spartan ,  Washington Avenue _____________ 
 [Date] [City] [State]
110 Washington Avenue, Perry, Spartan 48872____________________________ 
[Property Address]
1. BORROWER’S PROMISE TO PAY 
In return for a loan that I have received, I promise to pay U.S. $385,000__ (this amount is called 
“Principal”), plus interest, to the order of the Lender.  The Lender is Nationwide Mortgage Corporation. 
  I will make all payments under this Note in the form of cash, check or money order. 
I understand that the Lender may transfer this Note.  The Lender or anyone who takes this Note by 
transfer and who is entitled to receive payments under this Note is called the “Note Holder.” 
2. INTEREST 
Interest will be charged on unpaid principal until the full amount of Principal has been paid.  I will pay 
interest at a yearly rate of 3.75%.  The interest rate I will pay will change in accordance with Section 4 of this 
Note.  
The interest rate required by this Section 2 and Section 4 of this Note is the rate I will pay both before and 
after any default described in Section 7(B) of this Note. 
3. PAYMENTS 
(A) Time and Place of Payments 
I will pay principal and interest by making a payment every month. 
I will make my monthly payment on the first day of each month beginning on September 1, 2012.  I will 
make these payments every month until I have paid all of the principal and interest and any other charges 
described below that I may owe under this Note.  Each monthly payment will be applied as of its scheduled due 
date and will be applied to interest before Principal.  If, on August  1, 2042, I still owe amounts under this Note, I 
will pay those amounts in full on that date, which is called the “Maturity Date.” 
I will make my monthly payments at Nationwide Mortgage Corporation  
or at a different place if required by the Note Holder. 
(B) Amount of My Initial Monthly Payments 
Each of my initial monthly payments will be in the amount of U.S. $1,783.00.  This amount may change. 
(C) Monthly Payment Changes 
Changes in my monthly payment will reflect changes in the unpaid principal of my loan and in the 
interest rate that I must pay.  The Note Holder will determine my new interest rate and the changed amount of my 
monthly payment in accordance with Section 4 of this Note. 
4. INTEREST RATE AND MONTHLY PAYMENT CHANGES 
(A) Change Dates 
The interest rate I will pay may change on the first day of January, 2013, and may change on that day 
every 12th month thereafter. Each date on which my interest rate could change is called a “Change Date.” 
MULTISTATE ADJUSTABLE RATE NOTE--1Year Treasury Index (Assumable during Life of Loan) (First Business Day Lookback)--Single Family--
Freddie Mac UNIFORM INSTRUMENT Form 5547 6/06 (rev. 11/06) (page 2 of 5 pages) 
(B) The Index 
Beginning with the first Change Date, my interest rate will be based on an Index.  The Index is the so-
called “COF Index” which is the monthly weighted average cost of savings, borrowings and 
advances of members of the Federal Home Loan Bank of San Francisco.The most recent Index figure 
available as of the first business day of the month immediately preceding the month in which the Change Date 
occurs is called the “Current Index.” 
If the Index is no longer available, the Note Holder will choose a new index which is based upon 
comparable information.  The Note Holder will give me notice of this choice. 
(C) Calculation of Changes 
Before each Change Date, the Note Holder will calculate my new interest rate by adding THREE AND 
ONE HALF percentage point(s) (3.5000%) to the Current Index.  The Note Holder will then round the result of 
this addition to the nearest one-eighth of one percentage point (0.125%).  Subject to the limits stated in Section 
4(D) below, this rounded amount will be my new interest rate until the next Change Date.

The status ( The description) Memo T o: Law Student From: Antony, President Date: Re: Loan Documentation I have a loan closing at our office (the title company is sending their representative) in the...

Answer To: The status ( The description) Memo T o: Law Student From: Antony, President Date: Re: Loan...

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment