U
U.S. Department of Housing and Urban Development
Originating Organization: Office of Housing
Special Attention of: Interim Notice H 92-3 (HUD)
REGIONAL ADMINISTRATORS
REGIONAL HOUSING DIRECTORS Issued: 4/8/92
REGIONAL AND FIELD COUNSEL Expires: 8/8/92
FIELD OFFICE MANAGERS
DIRECTORS OF HOUSING MANAGEMENT Cross References: H 92-24(HUD)
CHIEFS OF LOAN MANAGEMENT
CHIEF PROPERTY OFFICERS/MULTIFAMILY REALTY SPECIALISTS
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Subject: Section 221(g)(4) Project Mortgage Auction:
Amendment of HUD Notice 92-24
On March 4, 1992, the Department of Housing and Urban
Development (HUD) issued HUD Notice 92-24, Announcement: Section
221(g)(4) Project Mortgage Auction. On the basis of comments
received, the Department would like to offer the following
clarifications. Added or revised language is underlined.
o Page 1, par. 3. "On April 21, 1992, a HUD-approved
mortgagee may submit a bid on a mortgage or pool of
mortgages expressed in basis points (the bid rate) over
or under the 10-year Treasury note yield. The 10-year
Treasury note yield is the semi-annual yield equivalent
of the "on the run" 10-year note at 11:00 a.m. on the
day after the auction to be determined by Chemical
Bank.
o Page 1, add to end of paragraph 3: "If the gross bid
rate is below the note rate for an individual mortgage
or below the weighted average note rate for a pool of
mortgages, the purchasing mortgagee shall pay the
difference between the monthly interest payable on the
mortgage at gross bid rate and the monthly interest
payable on the mortgage at the note rate applied to the
scheduled declining unpaid principal balance to HUD on
a monthly basis."
o Page 2, last par. "Additional information on a project
will be made available by the HUD Field Office
responsible for a project upon request; however, HUD is
prevented by the Trade Secrets Act from releasing a
project's profit and loss report or financial
statement."
o Page 5, last par. "All bids must be submitted by
telephone to an operator at 703-235-9108 or 703-235-9102
on April 21, 1992, between 9:00 a.m. and 12:00
noon eastern time. All telephone calls will be
recorded."
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HMP Distribution: W-3-1, W-2(H), W-3(A)(H)(OGC)(ZAS), W-4(H),R-1,R-2,R-3,
R-3-1,R-3-2,R-3-3,R-6,R-6-1,R-6-2,R-7,R-7-1,R-7-2,R-8
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2
o Page 10. Add "(10) A copy of the Regulatory
Agreement," to the documents required for delivery by
the selling mortgagee to the purchasing mortgagee at
closing.
o Page 11. Revise first sentence to read: "In cases
where the original mortgage note or other loan
documents (including records for Reserve for
Replacements or other escrows) are missing, the selling
mortgagee must furnish to the purchasing mortgagee an
indemnification for the benefit of HUD (and, in the
case of a lost mortgage note, an Affidavit of Lost
Note), in a form that conforms to the samples in
Attachment D."
o Delete second sentence: "If so requested by the
purchasing mortgagee, the selling mortgagee shall also
provide appropriate indemnifications for the benefit of
the purchasing mortgagee with respect to lost or
missing documents or deficiencies in the accounts or
records for Reserve for Replacement or other escrows."
o Page 11. Add to the last paragraph: "HUD will
consider curtailing the selling mortgagee's stipend in
the event that the selling mortgagee fails to deliver
the above-described documents and indemnifications to
the purchasing mortgagee."
___________________________________
Assistant Secretary for
Housing-Federal Housing Commissioner
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