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S <br />time homebuyer products to our buyers if we use the rider. This will help assemble the <br />best loan package possible for each individual buyer's situation. <br />4. The Rider will Enable Land Trust Homeowners to Refinance Their Mortgage <br />Loans: Our lenders will not refinance land trust mortgages unless we use the Rider. <br />This is a major disadvantage to our homeowners, particularly as land trust homes age <br />and require repair and replacement work. <br />5. The Rider Will Enable Some Lenders to Offer Better Interest Rates or Loan Terms <br />to Our Buyers: Currently smaller banks must charge our buyers ahigher-than-market <br />interest rate for 30 year fixed mortgages, because they must hold the loans and <br />therefore face "rate risk", the risk that interest rates will rise. By using the Rider, lenders <br />will be able to offer more competitive mortgage rates. <br />And we foresee that using the Rider will create the following risks: <br />The Rider Will Reduce The Amount Of Notice We Receive Before A Home Goes <br />Into Foreclosure: Currently, banks that have originated and hold land trust loans <br />know that they should call us if a land trust homeowner defaults on their loan. If the <br />loans are sold to Fannie Mae, then we will receive notice of the default much later in the <br />process, when a lender is moving towards foreclosure and discovers the "request for <br />notice of foreclosure sale" that we will record against our properties. <br />2. If a Land Trust Home is Sold At Foreclosure, The Rider will Remove our Lease's <br />Provision that the Home May Not be Used as a Rental Property. Currently, if a <br />land trust home is sold at foreclosure, our lease's restrictions regarding buyer eligibility <br />and the price at which the home may be sold will cease to be in effect. If we use the <br />Rider and a home is sold at foreclosure, then our lease's restrictions against renting the <br />property will also cease to be in effect. <br />3. When Land Trust Mortgage Loans Are Sold Rather Than Shelved By Banks, We <br />Will Lose Our Local Connection To The Loans: We prefer to have a direct <br />relationship with banks that hold land trust mortgages. This will not be possible when, <br />through use of the Rider, loans are sold to lenders based outside our community. <br />Implications of Using the Rider: <br />The above analysis shows that while the Fannie Mae Rider will greatly increase our buyers' <br />access to mortgage lenders and mortgage loan programs, it will also create some additional <br />risks should a Land Trust home ever go into the foreclosure process. <br />The main risk is that we will generally receive less notice of the homeowner's default, and less <br />time and flexibility in working with the lender to prevent a foreclosure or buy back the leasehold <br />to keep it out of foreclosure. However, we will ensure that we receive notice by recording a <br />