The Most Frequently Asked Questions of WCDA’s Mortgage Servicing Department
1. Will I receive a coupon book?
No. WCDA no longer sends coupon books. Instead, you will receive a monthly mortgage statement in the mail with a tear off payment slip and return envelope.
2. Will the amount of my payment ever change?
Yes, for those borrowers that have a step-rate mortgage, the principal & interest amount will change on the anniversary date of your closing as described on your loan Note. All WCDA mortgage payments, carrying an escrow account may change annually with the April payment because Real Estate Property Taxes and Homeowner’s Insurance amounts usually change each year. We are required to analyze all escrow accounts annually, therefore, each March we will send you a new coupon book with the adjusted payment amount.
Monthly Escrow Payments are subject to significant increases when financing New Construction. Your initial escrow deposit and monthly payment amounts are generally based on the most recent assessment of your property value by your county assessor. With newly constructed homes, the assessment may be based on unimproved or partially improved property (the construction of your home had not been started or was not fully completed at the time of the assessment). As a result, the amount of property taxes due in the first year may be less than in future years resulting in a significantly higher escrow payment in future years.
3. Does WCDA pay my property taxes and homeowner’s insurance?
Yes, each month WCDA collects 1/12 of the annual amount of your taxes and insurance, which is part of your payment. These funds are put into an account we call escrow. From this account WCDA pays your taxes and insurance.
4. May I sell or rent my home?
You may sell your home at any time. You may be subject to Recapture Tax when you sell your home. A provision of federal law known as “recapture” applies to borrowers who purchase their homes with tax-exempt mortgage revenue bonds (MRBs), like those issued by the WCDA. Borrowers may have to pay recapture tax on their federal income tax returns when they sell their WCDA-financed homes. Owners of homes financed with MRBs receive the benefit of lower-than-market interest rates. Under certain conditions, recapture enables the government to recover some of the subsidy that the borrower enjoyed as the result of obtaining a WCDA single-family mortgage loan. For recapture to apply, a profit or net gain must be made on the home’s sale. If there is no net gain, there is no recapture tax. Secondly, recapture affects only homes sold within nine years of the date of purchase. Homes sold after year nine are not affected. Thirdly, the homeowner’s income and family size in the year the sale is completed affects the recapture due. Fortunately, a homeowner does not always have to pay the Maximum Recapture. The Maximum Recapture tax a homeowner may have to pay will never exceed 6.25% of the original principal amount of the mortgage loan, nor 50% of the net gain from the home’s sale, whichever is less. This is an IRS tax that you may want to discuss with your tax accountant. For more information visit Recapture Tax/Reimbursement Program.
You cannot rent your home without prior written approval from WCDA. WCDA’s single family loan program is regulated by the IRS, which requires us to carefully monitor our homes financed through this program to insure that they remain owner-occupied. In hardship cases such as job transfer to another city, death or illness WCDA may be able to allow you to temporarily rent the home, until the home is sold. This must be requested in writing. During the time the home is rented, it must be on the market for sale and the payments must be kept current. Rental of the property may only be done on a month to month basis. The home must be available for sale at all times. For more information visit Rental Permission.
5. Can I change my insurance carrier?
Yes, you may do this at any time. WCDA would like you to call our office to let us know about the change. The new premium may be paid from your escrow account so that you don’t have to come up with any money up front. Any refunds you receive from the former carrier will need to be returned to WCDA to be re-deposited in your escrow account. Your insurance deductible can be no higher than 1% for the dwelling coverage for all perils.
6. What should I do if I get behind in my payments?
Call our office immediately. We are here to help you in any way we can.
7. Can I make a payment over the phone?
Yes, we now have a service by which we can actually do a check from your checking account. There is a $7.00 fee for this, but that is normally less expensive than overnight mail or the average late fee. We do not, however, accept credit or debit cards.
8. Can I defer a payment?
No, this is not an option we can allow.
9. On what day of the month is my payment considered late?
All mortgage payments are due on the first day of the month and are late on the second day of the month. However, there is a 15-day grace period. As long as your payment is received in our office by 4:00 p.m. on the 16th of the month, no late fee is charged. Payments received on the 17th or after will incur a late fee. As long as a payment is received in our office by the last working day of the month for which it is due, it will not report as 30 days delinquent to the credit bureaus. All payments are posted the day they are received. Please do not send post-dated checks.
10. If I have more questions, who may I call?
11. What does it mean to pay extra to principal?
As long as your account is current, you may send extra money to be applied to the principal balance of your loan at any time. This will enable you to pay off your loan sooner. By bringing down the balance owed you will pay less interest. Any extra funds received by WCDA will automatically be applied to the principal balance of the loan, provided there are no outstanding fees to be paid.
12. Is my loan assumable?
WCDA loans may be assumable if:
- The purchaser is buying the home for his/her principal residence
- The purchaser has not owned a home during the last 3 years
- The sales price does not exceed WCDA’s limit for existing homes at the time of assumption
- The purchaser’s total family income does not exceed WCDA’s income limit at the time of assumption and
- The purchaser meets the credit requirements of the mortgage insurer.
Contact WCDA to find out more about the assumability of your loan.
13. Can I deduct my taxes and interest on my income taxes?
Possibly, this is something you will want to discuss with your tax accountant. WCDA will provide you with an annual 1098 interest statement and loan history for your use in preparing your tax return.
14. Can I make bi-weekly payments?
WCDA mortgages are not set up for bi-weekly payments. You may send your payment in installments, but a payment is not considered made until the full amount has been received in our office.
15. Your right to privacy?
If you are married and you have a loan in your name only, WCDA legally cannot release information to your spouse concerning your loan, unless we have your written permission. A simple note to WCDA that we can keep in your file will suffice as permission.
16. Who do I notify if I have a name change?
If your name changes for any reason, please submit a letter requesting a name change in our loan document system, along with a copy of the marriage certificate or legal court document showing the name change to:
P.O. Box 10100
Casper, WY 82602
Please do not send originals, copies only.