Securities Lawyer's Deskbook                          published by The University of Cincinnati College of Law

Rule 12-29 -- Mortgage Loans on Real Estate (1)

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Column A   Column B    Column C  Column D  Column E     Column F    Column G    Column H

                                                                                Principal
                                                                                amount of
                                                                    Carrying    loans sub-
                                 Periodic                  Face     amount of   ject to de-
 Descrip-  Interest   Final ma-  payment   Prior liens   amount of   of mort-   linquent
tion 2,3,4  rate     turity date term 5                  mortgages   gages 2,   principal or
                                                                     6,7,8,9    interest 10

1. All money columns shall be totaled.

2. The required information is to be given for each individual mortgage loan which exceeds three percent of the total of column G.

3. If the portfolio includes large numbers of mortgages most of which are less than three percent of column G, the mortgages not required to be reported separately should be grouped by classifications that will indicate the dispersion of the portfolio, i.e., for a portfolio of mortgages on single family residential housing. The description should also include number of loans by original loan amounts (e.g., over $100,000, $50,000-99,999, $20,000-$49,000, under $20,000) and type loan (e.g., VA, FHA, Conventional). Interest rates and maturity dates may be stated in terms of ranges. Data required by columns D, E and F may be omitted for mortgages not required to be reported individually.

4. Loans should be grouped by categories, e.g., first mortgage, second mortgage, construction loans, etc., and for each loan the type of property, e.g., shopping center, high rise apartments, etc., and its geographic location should be stated.

5. State whether principal and interest is payable at level amount over life to maturity or at varying amounts over life to maturity. State amount of balloon payment at maturity, if any. Also state prepayment penalty terms, if any.

6. In a note to this schedule, furnish a reconciliation, in the following form, of the carrying amount of mortgage loans at the beginning of each period for which income statements are required, with the total amount shown in column G:

        Balance at beginning of period...............................$__________
          Additions during period:
            New mortgage loans............................$__________
            Other (describe)...............................__________

            .........................................................$__________

          Deductions during period:
            Collections of principal......................$__________
            Foreclosures...................................__________
            Cost of mortgages sold.........................__________
            Amortization of premium........................__________
            Other (describe)...............................__________

        Balance at close of period...................................$__________

If additions represent other than cash expenditures, explain. If any of the changes during the period result from transactions, directly or indirectly with affiliates, explain the bases of such transactions, and state the amounts involved. State the aggregate mortgages (a) renewed and (b) extended. If the carrying amount of new mortgages is in excess of the unpaid amount of the extended mortgages, explain.

7. If any item of mortgage loans on real estate investments has been written down or reserved against, describe the item and explain the basis for the write-down or reserve.

8. State in a note to column G the aggregate cost for Federal income tax purposes.

9. The amount of all intercompany profits in the total of column G shall be stated, if material.

10.


(a) interest in arrears for less than 3 months may be disregarded in computing the total amount of principal subject to delinquent interest.

(b) Of the total principal amount, state the amount acquired from controlled and other affiliates.

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