May 1999

It shall be the policy of this Credit Union to grant loans to its members in accordance with applicable laws and regulations, the provisions contained in the Credit Union's bylaws and any further limitations or guidelines established by the Board of Directors from time to time pursuant to its authority in order to assure that sound loan underwriting practices are followed for the safety and soundness of the credit union.

The following specific policies and guidelines have been established by the board of directors and are to be adhered to by the Credit Committee and all Loan Officers.

Up-to-date employment and income information shall be obtained.

A recent credit report shall be obtained on all applicants.

Loans shall be made in accordance with established credit granting guidelines.

All applications shall be considered equally regardless of race, color, religion, national origin, sex, marital status, age (provided that the applicant has the capacity to enter into a binding contract),income derives from any public assistance program or exercise their good faith right under the Consumer Credit protection Act.

The terms and interest rates shall be set from time to time and shall not exceed the maximum rate allowed by law.

Members should have a minimum of 90 days employment with their current employers, except for contract employees, to be approved for a loan. Loan Officers may use their discretion if members have demonstrated a longer work record in a related field.

Loans may be rewritten provided they meet normal requirements for that type of loan. If a loan is more than 1 payment past due it may be submitted to Credit Committee for rewrite.

Any member who has caused the Credit Union to sustain a monetary loss of any kind, shall not be entitled to Credit Union services and or extension of credit.

The maximum amount of unsecured loans including Visa to any one member shall not exceed $25,000.

Aggregate individual indebtedness shall not exceed 20% of the sum of all reserves and undivided earnings, excluding the Allowance for Loan Losses, of the Credit Union as determined at the most recent year end.

 

 

 

Origination, processing, closing and lien perfection on all secured loans (excluding Share/CD) shall be within the Continental United States (including Hawaii & Alaska).

Secured loan applications (excluding Share/CD) are subject to those States that have been previously approved for Credit Union financing.

Loan Officers may approve secured loans up to $50,000. Applications for larger loans shall be referred to the Credit Committee for approval.

The terms and interest rates for secured loans shall be set from time to time as an addendum to these policies.

Share secured loans may be approved up to the maximum of the regular share balance.

CD Secured Loans may be approved up to the CD amounts and term of CD.

A credit report and financial statement are not required.

The loan limits for open-end loans should be a minimum of $500 and a maximum of $25,000 aggregate.

The repayment schedule for line of credit shall be $3.00 per month for each $100 advanced or a minimum of $20.00 per month.

Unsecured loans may be made for a minimum of $500 and a maximum of $25,000 for up to 42 months.

Single Payment Notes may be written for a maximum term of ninety days.

One (1) extension of ninety days will be permitted, and interest cannot be capitalized.

Loans shall be made in accordance with the rules and regulations of the Michigan Student Loan Program (Stafford) and the U.S. Department of Education.

Loan Officers and authorized staff may issue pre-approved open end loans.

Loan Officers may issue Share Secured Loans and Certificate of Deposit Loans. (Refer to Section: Share Secured and Certificate of Deposit Loans)

All other loans, whether signed as individual or joint, must be referred to the Credit Committee.

 

 

 

Regular member requirements must be met.

All loans, whether signed as individual or joint, (other than Share or CD secured) must be referred to the Credit Committee.

Loans must be approved by a qualified secondary Market Underwriter or Credit Committee. Home Equities or Second Mortgages must be approved by Credit Committee.

First mortgages retained by the Credit Union can be made for 95% of either the appraisal or purchase price, whichever is less. For mortgages in excess of 90% private mortgage insurance shall be required.

Real estate loans shall not exceed $128,000, however. Loans over the FNMA ceiling will be determined by our correspondent for pricing and maybe held.

Will require life of loan flood hazard tracking.

A Mortgage Title Insurance Commitment shall be obtained prior to any mortgage closing.

All real estate must be insured against fire and carry extended coverage with a loss payable to the Credit Union for an amount at least equal to the balance owing.

The maximum term on all First Mortgages shall be 30 years, 360 months.

The title insurance company shall handle the actual closing of a First Mortgage.

Each mortgage loan file must contain, as a minimum, the following documents:

loan application

mortgage

mortgage note

closing statement

appraisal

title insurance policy

truth-in-lending disclosure

right of recision (when needed)

confirmation of no recision (when needed)

any other documents required by Second Market guidelines

J. Home Equity Loans and Second Mortgage Loans

Member must qualify for the maximum payment amount on the line of credit approval.

Home Equity Loans in excess of 90% loan value will require private mortgage insurance and the total loan shall not exceed 100% LTV.

Private Mortgage Insurance (PMI) coverage shall be required on all real estate (Home Equity Loans) which exceed 90% of loan value.

 

 

 

 

K. CONSTRUCTION LOANS