This Eligibility Checklist assists pledgors who have executed the appropriate Advances, Pledge and Security Agreement in determining eligibility of loans for pledging to FHLB Des Moines. A “NO” answer indicates the loan is not eligible under FHLB Des Moines guidelines.
GE / GENERAL ELIGIBILITY / YES / NO
1. / Note Originality: Original physical paper note and original physical modifications/extensions are available for FHLB Des Moines review. Electronic notes meeting the Uniform Electronic Transactions Act definition of “transferable record” are eligible. Electronic signatures are acceptable only on eligible electronic notes.
· Loans with scanned or imaged copies of paper notes are NOT eligible.
· Loans with lost or destroyed notes are NOT eligible.
· Loans with facsimile signatures are NOT eligible.
2. / Note Ownership: Note is payable to member (or institution pledging on behalf of member) or payable via signed endorsement.
3. /
Interest Capitalization: Note does NOT permit and unpaid principal balance does NOT include capitalized interest.
4. / Government Guarantee: Loan is NOT guaranteed by the U.S. Government or its agencies.5. /
Loan Type Limitations: Loan is NOT a reverse mortgage, lease financing receivable, contract/obligation to facilitate sale of REO or a secured bond or similar instrument originated by a political entity for purpose of tax exemption.
6. / Construction: Loan is NOT secured by property under construction.7. /
Payment Status: Loan is NOT more than 90 days past due, on non-accrual, in foreclosure or charged-off.
8. / Participation: Loan is NOT a participation interest (Note: 100% participation purchase is a participation interest).9. / Classification: Loan is NOT classified substandard, doubtful or loss either internally or by a regulator.
10. / Obligor Limitations: Borrowers, Obligors and/or Guarantors are NOT any of the following:
· An employee, officer, director, attorney or agent of FHLB Des Moines or pledging institution.
· Company controlled by an employee, officer, director, attorney or agent of FHLB Des Moines or pledging institution.
· State or Political Subdivision.
· Nondepository financial institution.
11. / Other Creditor: Loan is NOT pledged to other creditor (e.g. Federal Reserve) or to FHLB Des Moines in another collateral category. Loan does NOT share collateral with loan pledged to other creditor.
12. / Intent to Hold/Sell: Loan is NOT temporarily held (warehoused) with intention to sell in the near future.
13. / General Compliance: Loan complies with applicable laws and regulations and FHLB Des Moines policies & procedures.
14. / Transferability: Loan does NOT include restrictions limiting transferability or assignability to potential holders in due course.
15. / Borrowing Authority: Documentation evidencing and related to borrowing authority, existence and good standing has been executed and is included in the pledged loan file. Loan executed on behalf of other person/entity has an executed valid Power of Attorney authorization contained in file documentation.
16. / Self Directed IRAs: Loans to Self Directed IRAs include signed application indicating intent, approved custodian organizational documentation and signed disclosure for acknowledgment and approval by IRA holder.
17. / Active Status: Loan is NOT paid off, sold or matured prior to the Collateral Reporting Date. Loan is NOT originated or acquired after Collateral Reporting Date.
18. / Fraud: Loan is NOT fraudulent and does NOT contain unexplained evidence of fraud.
19. / File Existence: Loan file is available for review by FHLB Des Moines collateral review personnel.
20. / Market Pricing: For loans market priced by FHLB Des Moines, all required FHLB Des Moines data elements are provided.
21. / Private Transfer Fees: Loan is NOT secured by property encumbered by non-excepted private transfer fee created on or after February 8, 2011 (FHFA Reg. 1228).
PN / PROMISSORY NOTE / YES / NO
1. / Note Execution: Note executed as authorized by any applicable borrowing resolution/other authority (signatories and capacity).
2. / Loan Terms: Note matures and requires principal & interest payments to amortize the loan within a 30 year term or less.
· Maturity is measured from later of origination date or last modification date to maturity date.
3. / Disbursement: Loan proceeds are fully disbursed. Note does NOT include a revolving line of credit feature.
SI / SECURITY INSTRUMENT: Mortgage (or Deed of Trust) and/or Security Agreement / YES / NO
1. / Security Instrument Existence: Note is secured with an unexpired mortgage recorded in the proper jurisdiction. Recorded mortgage or a copy of is in file (or in process of recording). Loan disbursements are supported by the security instrument type (e.g. closed end, future advance).
2. / Note Security Description: Mortgage (or collateral property) is linked to/cited as security for subject note.
3. / Secured Party Citation: Mortgage directly cites member (or pledgor on behalf of member) as secured party or via recorded assignment.
4. / Instrument Execution: Mortgage is properly executed and acknowledged:
· By all title holders/owners of record including spouses if required by state law (fractional/undivided interests not acceptable). If title is vested in a former name, affidavit of identity or similar notation on mortgage required.
· Non-natural persons: Executed by, and in proper capacity as authorized by borrowing resolution or other authority.
· 3rd Party Pledge/Secured Guarantee: Executed by, and in proper capacity and acknowledged as security for subject loan.
· Mortgage notarized acknowledging signers in proper capacity.
5. / Secured Debt Amount: Amount of secured debt equals or exceeds loan’s current unpaid principal balance.
6. / Assumptions: For assumed loans, executed assumption agreement is recorded.
AGRICULTURAL REAL ESTATE FIRST MORTGAGE LOANS
This Eligibility Checklist assists pledgors who have executed the appropriate Advances, Pledge and Security Agreement in determining eligibility of loans for pledging to FHLB Des Moines. A “NO” answer indicates the loan is not eligible under FHLB Des Moines guidelines.
LV / LIEN VERIFICATION / YES / NO
1. / Lien Search Existence: File contains a title policy, attorney's opinion, O&E (aka title report) or detailed internal lien search.
2. / Lien Search Date and Quality: Lien search is dated on or after mortgage recording date and cites all title holder(s) of record (matching subject mortgage), legal description of encumbered property, recordation of subject mortgage and lien position of subject mortgage (lien search must assess all potential prior liens including tax, mortgage, judgments and other liens):
· For loans originated within six months of Collateral Reporting Date: File contains at a minimum, a pre-closing title policy, attorney's opinion, O&E or a detailed internal lien search while required post closing lien search is pending.
3. / Lien Position: Lien search cites subject mortgage as first lien:
· If lien search does not cite subject mortgage as first lien, file contains recorded satisfactions, subordinations, releases or title insurance endorsement for prior liens ensuring a first lien position.
· Property taxes and assessments are NOT past due one year or more during life of loan.
· Mortgage is NOT subordinated to any other lien during course of repayment.
· Ground Leases: Mortgages subject to prior ground leases are NOT eligible unless recorded ground lease subordination or Non-Disturbance and Attornment Agreement executed.
· Leasehold Mortgage/Assignments: Leasehold mortgages require lessor consent, leasehold interest property valuation and lease maturity equal to or exceeding note maturity. Assignment of real estate leasehold interests in lieu NOT eligible.
CV / COLLATERAL CONDITION, PURPOSE and VALUATION / YES / NO
1. / Collateral Property Type and Purpose: Mortgage secured by agricultural property located in the U.S. or its territories used for agricultural purposes.
· Mixed Use: Value of the agricultural property is >= 50 percent of total property value for mixed use properties (residential & farm).
· Condition/Use: Loans secured by deteriorated properties, properties with unremediated recognized environmental conditions or property use (including via leasing rights) which imperils property value or encumbrance are NOT eligible.
·
2. / Valuation Existence and Requirements: File contains a property valuation (e.g. appraisal, broker’s opinion, assessed valuation for property taxes, purchase agreement with the member’s documented confirmation of fair market value or a documented internal property evaluation) indicating value of the legally encumbered property.
· For newly constructed properties, verification of completion of construction to original plans and specs required.
· Loans with subsequent partial release of collateral must contain a property valuation (e.g. appraisal, broker’s opinion, assessed valuation for property taxes or documented internal property evaluation) documenting remaining collateral value.
3. / Qualifying LTV: Loan’s unpaid principal balance is less than or equal to 85 percent of the value of the collateral property meeting the above collateral property limitations, security instrument execution and lien verification requirements.
The loan is eligible for pledging as Agricultural Real Estate First Mortgage Loan collateral:
Completed By/Date:
FHLB Des Moines CL-205: Collateral Type 1407 only – Revised July 2012