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Prior to the approval of any advance request and disbursement of advance funds,
each member requesting an advance must have a fully executed Corporate Certificate
of Authority, Signature Card for Advances, and a fully executed current borrowing
agreement on file with the EMRC. Only those officers whose names appear on the Corporate
Certificate of Authority and Signature Card for Advances are authorized to request
and sign for commitments and advances. The Primary Mortgage Lender (PML) executes
a Master Refinance Agreement with EMRC before it may avail refinance loans from
EMRC. The Master Refinance Agreement sets out the general terms and conditions governing
the pledge of mortgage loans to EMRC and incorporates a declaration by the PML that
it holds the mortgage loans pledged to EMRC, the mortgage instruments and all monies
received but not paid to EMRC in trust for EMRC. The charges over the property used
to secure the mortgage loans continue to be registered in the name of the PML and
the assignee of the rights to the property is the PML.
Members requesting funding do so by providing written instructions to EMRC. Instructions
for executing advances are recorded, stored and archived to provide for future review
and verification. Members must verify the terms of the transactions to ensure that
they are properly recorded for audit purposes. The EMRC provides members with confirmations
of advances, reflecting the terms of the associated advance and commitments. All
information provided to the EMRC may be reviewed by the EMRC when considering each
request for an advance. Members should be aware of the representations and warranties
in their borrowing agreements regarding the truth and accuracy of information submitted
to the EMRC, and the possible contractual consequences of the breach of such representations
and warranties. The EMRC’s obligation to release funds on advance commitments is
subject to the continued eligibility of the member for advances as determined by
the EMRC under applicable law. Advance proceeds will be credited to the member’s
requested bank account. For each refinance of a group of loans by EMRC, the PML
executes a Contract by which the PML pledges the mortgage loans to EMRC. By virtue
of such agreement the PML conveys, assigns and transfers the mortgage loans to EMRC.
EMRC refinances the mortgage loans at book balance of the mortgage loan after deduction
of (a) 20% and (b) any unearned interest (if any)
Products and services are priced in accordance with applicable regulations, taking
into account the EMRC’s nature, the cost of raising funds in the capital markets,
and its financial objectives. These objectives include preserving the value of our
members’ investment in the EMRC while producing earnings sufficient to pay a dividend
to our members after paying the EMRC’s obligations. The EMRC prices advances at
or above the marginal cost of raising matching maturity funds in the marketplace,
including the administrative and operating costs associated with making advances.
EMRC prices its credit products consistently to all members applying for advances.
EMRC does not price its advances below its marginal cost of matching term and maturity
funds in the marketplace, and the administrative cost associated with making such
advances to members. However, EMRC may price advances on a differential basis, based
on tenor, volume, or other reasonable criteria applied consistently to all members.
The review date represents the last date of the refinance period. On this date the
PML has the option to roll-over the loans at the then prevailing EMRC rate or to
settle the loans.
As the owner of the mortgage loans EMRC has the right to sell at any time these
loans either to the PML for which it had refinanced these loans or to a third party.
Provided that prior to any sale to a third party, EMRC will first offer the mortgage
loans for sale to the PML for which it had refinanced the loans.
Upon the loan becoming defective and /or in default the PML is required to replace
the related refinance loan with qualified collateral.
For mortgage loans refinanced by EMRC the PML is required to collect the monthly
mortgage installments from the borrowers and remit to EMRC the EMRC installment
based on the contracted EMRC rate on a semi annual basis.
The PML shall establish and maintain accounting records in accordance with any applicable
instructions issued by EMRC, the Central Bank of Egypt and the Mortgage Finance
Authority
The PML shall prepare and submit to EMRC defective loans and partial prepayments reports on monthly basis.
EMRC shall have the right to request the PML to appoint authorized agents to examine
and audit all records pertaining to the mortgage loans refinanced by EMRC.
This prepayment policy applies to advances granted or renewed. Prepayments will
be subject to a prepayment fee negotiated in advance. In the event that, for any
reason, such a loan becomes due and payable prior to its originally scheduled maturity
date, the EMRC will charge a prepayment fee sufficient to render the EMRC indifferent
to such prepayment. Members should consult agreements directly to obtain prepayment
policies and fees applicable to advances made. Prepayment fees are due and payable
on the date the advance is prepaid.
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