N.M. Code R. § 12.20.44.8
Current through Register Vol. 35, No. 11, June 11, 2024
Section 12.20.44.8 - ACCOUNTING PROCEDURESA. A premium paid by an association in connection with the acquisition of a mortgage loan may be charged off when paid or may be capitalized; if capitalized, a proportionate amount thereof shall be charged to expense, at least semiannually, over the remaining term of the loan.B. If an association purchases a loan at a discount, such discount shall be deferred and credited to an account descriptive of deferred discount income, and a proportionate amount of such discount shall be credited to income, at least semiannually, over a period of seven years. For the purpose of this sub-part [now part], a loan shall be deemed to have been purchased by an association at a discount if the price paid by such institution for such loan is less than the amount of the loan balance.C. All acquisition charges, as hereinafter, in connection with the making or acquisition of a mortgage loan by an association shall be charged to such association's expense for the accounting period in which such charges are incurred and shall not be deferred beyond the end of such accounting period.D. Any acquisition credits, as hereinafter defined, in connection with the making or acquisition of any mortgage loan by an association, not treated as provided in Subsection 8.5 of this sub-part [now Subsection E of 12.20.44.8 NMAC], shall be deferred and shall be credited to an account descriptive of deferred income, and a proportionate amount of all acquisition credits so deferred shall be credited to income, at least semiannually, over a period of seven years.E. If, during any fiscal year, in connection with the making or acquisition of any mortgage loan, any acquisition credits are not deferred in the manner provided in Subsection 8.4 of this Sub-part [now Subsection D of 12.20.44.8 NMAC], an association shall credit from its net income for such fiscal year, to a reserve account that shall be established for losses and entitled "Reserve for Losses", an amount equal to the amount of acquisition credits applicable to such loan. Credits to such reserve account shall be in addition to and not a part of reserve credits required to be made; and such reserve account shall not be considered a part of such association's reserve account, shall not receive credit from any source other than that provided in this Subsection 8.5 [now Subsection E of 12.20.44.8 NMAC] and shall not receive any charges except as set forth in Subsection 8.6 of this sub-part [ now Subsection F of 12.20.44.8 NMAC].F. In each fiscal year one-seventh part of the credits required to be made during such fiscal year and during past fiscal years to the reserve account provided for in Subsection 8.5 [now Subsection E of 12.20.44.8 NMAC] shall become available for credit from such account to such association's reserve account. Charges for the purpose of absorbing losses may be made in any fiscal year for the reserve account provided for in Subsection 8.5 [now Subsection E of 12.20.44.8 NMAC] shall become available for credit from such account to such association's reserve account. Charges for the purpose of absorbing losses may be made in any fiscal year for the reserve account provided for in Subsection 8.5 [now Subsection E of 12.20.44.8 NMAC], provided the reserve account of such association and all its other reserve accounts established for the purpose of absorbing losses shall first have been exhausted by losses.G. If a mortgage loan owned by an association is sold without recourse at a premium, such premium shall be credited to such association's income for the accounting period in which the loan is sold. If a mortgage loan owned by an association is sold without recourse at a loss or at a discount, such loss or discount shall be charged to the balance of any acquisition credits or purchase discount applicable to such loan that remains deferred at the time of such sale; any loss or discount in excess of such balance shall be charged to such association's expense for the accounting period in which the loan is sold.H. When an association sells real estate owned by it, such association's records shall disclose the book value of such real estate at the time of such sale and the price at which it is sold. If such sale results in a profit, such part of the profit as is proportionate to the part of the sale price not received by the association in cash at the time of sale shall be deferred and credited to an account descriptive of unearned profit on real estate sold; thereafter such unearned profit shall be deemed to have been realized to no greater extent than is proportionate to the reduction of the unpaid balance of the sale contract or purchase money mortgage.I. Every association shall maintain all major income and expense accounts on a full accrual basis.N.M. Code R. § 12.20.44.8
3/31/78; 8/30/97; Recompiled 10/15/01