57-15-8.5 — Acceleration -- Conditions authorizing -- Exemption of loans sold to federal agencies.
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57-15-8.5. Acceleration -- Conditions authorizing -- Exemption of loans sold to
federal agencies.
Notwithstanding the provisions of Sections 57-15-2 and 57-15-4, a lender or secured party may accelerate or mature an indebtedness upon assumption of that indebtedness if:
(1) A written agreement with, or a written instrument executed by, the obligor on the indebtedness allows the secured party or lender to accelerate or mature the indebtedness and/or increase the interest rate thereon upon assumption of the indebtedness; and
(2) The secured party or lender has offered to accept the assumption without acceleration and without maturing the indebtedness provided the assumer agree to pay the secured party or lender not more than a 1% assumption fee, a not more than 1% interest rate increase effective as of the date of assumption, whichever is earlier, and a further not more than 1% interest rate increase effective a date five years after the date of assumption, whichever is earlier. Neither of said interest rate increases may cause the total interest rate on the indebtedness to exceed 1% below the weighted average yield of the Federal Home Loan Mortgage Corporation weekly auction for purchases of mortgages secured by residential 1 to 4 family dwellings in effect on the date of the increase; and
(3) The assumer has refused to consent to such assumption fee and interest rate increases.
As used in this section, the term "obligor" shall mean the original borrower or, if the secured party or lender has previously approved, and pursuant to that approval there has been effected, an assumption of the indebtedness, the person last approved as an assumer and who has assumed the indebtedness.
If a determination is made by the Federal National Mortgage Association or by the Federal Home Loan Mortgage Corporation that it will not purchase Utah mortgage loans because of the effects of this act, and such determination is communicated in writing to the Legislature or governor of this state, then this act will not apply, after receipt of such communication, to any mortgages originated after the effective date of this act and sold to the entity making such determination.
Notwithstanding the provisions of Sections 57-15-2 and 57-15-4, a lender or secured party may accelerate or mature an indebtedness upon assumption of that indebtedness if:
(1) A written agreement with, or a written instrument executed by, the obligor on the indebtedness allows the secured party or lender to accelerate or mature the indebtedness and/or increase the interest rate thereon upon assumption of the indebtedness; and
(2) The secured party or lender has offered to accept the assumption without acceleration and without maturing the indebtedness provided the assumer agree to pay the secured party or lender not more than a 1% assumption fee, a not more than 1% interest rate increase effective as of the date of assumption, whichever is earlier, and a further not more than 1% interest rate increase effective a date five years after the date of assumption, whichever is earlier. Neither of said interest rate increases may cause the total interest rate on the indebtedness to exceed 1% below the weighted average yield of the Federal Home Loan Mortgage Corporation weekly auction for purchases of mortgages secured by residential 1 to 4 family dwellings in effect on the date of the increase; and
(3) The assumer has refused to consent to such assumption fee and interest rate increases.
As used in this section, the term "obligor" shall mean the original borrower or, if the secured party or lender has previously approved, and pursuant to that approval there has been effected, an assumption of the indebtedness, the person last approved as an assumer and who has assumed the indebtedness.
If a determination is made by the Federal National Mortgage Association or by the Federal Home Loan Mortgage Corporation that it will not purchase Utah mortgage loans because of the effects of this act, and such determination is communicated in writing to the Legislature or governor of this state, then this act will not apply, after receipt of such communication, to any mortgages originated after the effective date of this act and sold to the entity making such determination.
Enacted by Chapter 224, 1981 General Session