- Principal curtailments noted on the closing disclosure (CD) or principal reductions collected at closing MUST be applied as a reduction to the principal balance of the first mortgage loan.
- At the time of purchase, the amount paid to the Lender will be reduced by the curtailment noted on the CD.
: If the first mortgage loan amount is $100,000 and the curtailment noted on the CD is $500, the Purchase Advise will reflect $99,500 as the principal amount “Paid to the Lender.”
- Please retain all checks for the curtailment/reduction amount. Do not send the checks to the Servicer.
- A payment history will be required prior to loan purchase if more than 30 days have elapsed since the Note date. The payment history must include principal curtailments, monthly payments, and any escrow disbursements collected at or after closing.