Office of Loan Programs
FAQs about existing UC home loans
The collection of payments, verification of the payment of property tax installments and insurance premiums and ongoing customer service is frequently called loan servicing. Over the years, we have answered many questions about MOP loan servicing. The following are the most frequently asked questions.
- General servicing questions
- Interest rate and payment change questions
- Hazard insurance and property tax questions
- Additional payments to principal questions
- Change in employment status questions
If your question is not answered below or you would like additional information, please feel free to contact the Office of Loan Programs.
For mortgage payments or curtailments only, please mail your check (payable to The Regents of The University of California) to our payment processing center address at:
University of California
Office of Loan Programs
P.O. Box 742968
Los Angeles, CA 90074-2968
Please send all other correspondence to our Franklin Street Address.
- Who will be servicing my MOP loan?
The servicing of your loan will be handled by University of California employees in the Office of Loan Programs within The Office of the President in Oakland at our office address above.
- How will payments to my MOP loan be made?
While on active payroll status, your mortgage payments are required to be deducted from your monthly paycheck.
If you are not on active payroll status, you may remit your payment by check to the Office of Loan Programs payment processing center, or you may authorize a monthly payment directly from your bank account using an ACH debit.
The address of the payment processing center is:
University of California
Office of Loan Programs
P.O. Box 742968
Los Angeles, CA 90074-2968
To sign up for ACH payments while off payroll status, please contact Luann Ford, Manager - Loan Servicing at 510-987-9013 or via email at luann.ford@ucop.
- When will I receive my annual mortgage interest statement?
Every January, we will send you a mortgage interest statement showing the total amount of interest paid on your loan for the prior calendar year. This information is for tax reporting purposes and is also reported to the Internal Revenue Service on IRS form 1098.
The IRS requires us to mail these statements by January 31st, however, we usually mail them by mid-January. If you need this information earlier, we can provide it to you verbally.
- Will you mail me a history of payments made?
Twice a year, in June and December, we will mail you a history statement detailing all payments received in the prior six months (June) and full calendar year (December). If, for any reason, you would like other specific information about your loan payments, please contact us at our office address above.
- Do you report to the credit agencies?
Yes. Every month we send an updated data file to a credit reporting agency. Your loan payment history is reported to two credit bureaus: Experian and Equifax.
- Does your office sell my name and address to anyone?
We have taken all possible precautions to keep borrower information confidential. However, as you may be aware, all real estate transactions are a matter of public record. If your loan has been sold to an investor, they have access to your loan information but they will not contact you for marketing purposes or sell your loan information to anyone.
- Do you ever use private collection agencies or outside personnel to contact borrowers?
No*. Please be advised that we do not employ outside collectors (except as noted below) and all contact concerning your mortgage loan will be with University of California employees during normal business hours, 8:00 a.m. to 5:00 p.m. All written correspondence from this office will be on University of California, Office of Loan Programs letterhead. *If your loan goes into foreclosure, we do employ an agency to facilitate the process.
- How can I obtain a copy of my loan documents or appraisal?
- I have a MOP loan and a SHLP loan. Will your office service both loans?
Yes, All MOP and SHLP loans are serviced by the Office of Loan Programs within the Office of the President in Oakland, CA at our office address above.
- When I pay off my loan, when will you cancel my automatic payroll deduction?
After receipt of the payoff funds, the Office of Loan Programs will contact your campus payroll office and advise them to cancel the recurring monthly payroll deduction. If, due to payroll processing deadlines, the cancellation does not occur in time to stop the deduction, we will refund the deduction within two business days of receiving your deposit information once the payroll deduction occurs.
- What happens if the property secured by the MOP loan is no longer my primary residence?
A condition of the MOP program is that you must continue to use the secured property as your primary residence as long as the MOP loan is outstanding. If you are no longer using the property as your primary residence, you are required to repay your loan within 30 days. If there is a delay in the full payment of your loan, you must continue to make your regularly scheduled monthly payments, and you must also keep your property taxes current and adequate hazard insurance in force.
- What happens when I request to pay off my University home loan?
When we receive a request for the payoff balance of a loan, we will issue a payoff demand statement. This statement details the current principal balance, interest (collected from the due date of the most recent payment through the date we receive the funds at the bank) and a recording and reconveyance fee of $55.00. We require remittance of payoff funds by wire transfer. We will provide the actual payoff amount needed once we know the date the funds will be wired. No personal checks will be accepted for payoffs.
Your automatic payroll deduction will be canceled after receipt of the payoff amount. If a refund is due, it will be issued to you within two business days of receipt of your deposit information once your payroll deduction occurs. When we receive the full payoff amount, we will prepare the deed of reconveyance for recording by the county recorder. Upon receipt of the recorded deed of reconveyance, the original documents will be forwarded to you via certified mail to the address we have on file for you. This usually takes a minimum of six (6) weeks. If you are paying off your loan because you have sold the property, you will need to provide the Office of Loan Programs with your new address.
- How do I request a payoff demand statement?
If you are planning to pay off your home loan and are using an escrow or title company, the escrow or title company will submit a request for demand to the Office of Loan Programs at our office address or by e-mail or fax. You will need to keep in touch with the escrow or title officer that is handling your loan payoff. The Office of Loan Programs will prepare the demand statement within 48 hours of receipt and will submit it to the escrow or title company. If you wish to pay off your home loan directly, contact the Office of Loan Programs Payoff Department via e-mail at firstname.lastname@example.org. A loan servicing staff member will provide you with the necessary information.
- Does the University ever sell Program loans in the secondary market?
Yes. In March 2002, the Regents approved a program that allows the periodic sale of Mortgage Origination Program loans to outside investors, on the condition that the University's Office of Loan Programs retain all loan servicing functions. Since July 2002, the University has sold over $1.9 billion in loans to various investors. To ensure privacy, the University has signed confidentiality and non-solicitation agreements with all of its investors. The purpose of the loan sale program is to increase the availability of funds for future loan allocations, so that the University can increase the number of loans available to assist with the recruitment and retention needs of new and existing employees.
As loan servicer, the University will continue to process payments and monitor all aspects of the loans, including hazard insurance compliance, property tax payments, on-going program eligibility, and delinquency situations.
Please feel free to contact our office if you have any questions about your loan.
- When will I receive notice of the annual interest rate changes on my MOP loan?
The new interest rate for your MOP loan is calculated approximately fifteen days before the interest rate change - which is 45 days before any payment change will take effect. A letter detailing the change will be mailed to you after the calculation is completed.
- How is my new interest rate determined?
The interest rate for Standard MOP loans is equal to the most recently available four-quarter average rate of return earned by the University of California's Short-Term Investment Pool plus an administrative fee component of .25 percent*. The annual maximum adjustment, upward or downward, is capped at 1 percent and is adjusted on the anniversary date of the loan. The anniversary date is the date upon which the twelfth payment is due and occurs on the same calendar month and day each year thereafter. For example, if the first payment on your loan was made on July 1, 1995, the anniversary date of your loan will be June 1st of each succeeding year. Loan rates for this program generally fluctuate less than most indices used by other institutional lenders (see the Historical Rate Index and chart (pdf)). *For loans made on or after August 1, 2010 a 3% floor was established. Effective with MOP loans funded on or after January 1, 2014, there will be an interest rate cap of ten percent over the starting interest rate.
- How is my new MOP payment determined?
The outstanding loan balance is amortized over the remaining term based on the new interest rate. As interest is paid in arrears, the payment change will occur one month after the interest rate changes.
How is the 5/1 MOP rate determined?
The Initial Interest Rate is equal to the sum of the 5-year Treasury Bond Yield, plus the J.P. Morgan U.S. Liquid Index (JULI) value, plus a servicing fee of .25%. The minimum Initial Interest Rate is 3.50%. (see the 5/1 MOP Historical Rate Chart (pdf))
When does my 5/1 MOP payment adjust and how is the new rate determined?
The Initial Interest Rate remains fixed until the date that the 60th payment is due, resulting in a fixed payment amount for the first 60 monthly payments. After the Fixed Rate Period, the loan converts to a Standard Rate in effect at that time. The Standard Rate is equal to the four quarter average rate of return of the Short-Term Investment Pool (STIP), plus .25% servicing fee.
The interest rate cannot increase or decrease more than 5 percentage points at the time of the first rate adjustment.
At each subsequent adjustment, the interest rate cannot increase or decrease more than 1% from the interest rate in effect during the preceding period.
After the Fixed Rate Period, the minimum interest rate on the 5/1 MOP loan is 3.00%.
The overall cap on the interest rate over the life of the loan is 10% above the Initial Interest Rate.
- Who is responsible for the payment of hazard insurance premiums and property tax installments?
The University does not impound for hazard insurance premiums or property tax installments. Accordingly, you are responsible for the timely payment of these items. Given that these expenses often total several thousand dollars per year, we suggest that you plan for these expenses by establishing a separate monthly savings plan to accumulate the necessary funds for these expenses.
- What are the hazard insurance requirements for my loan?
Hazard insurance is required on your property in an amount equal to the full replacement value of the improvements on the property as established by your property insurer. In many cases, especially if the home is several years old, it is advisable to also obtain a partial or full building code upgrade endorsement.
For Condominiums we require a Blanket policy which covers the structure and a separate HO-6 policy, considered a "walls-in" policy. The coverage amount of the policy is generally 20% of the Appraised Value of the home.
- Which hazard insurance companies are acceptable for my loan?
You may obtain the required property insurance from any properly licensed insurance company qualified to do business in California and rated by the A.M. Best Company as general policyholder's rating of "B" or better in Best's Insurance Reports. We will also accept coverage from the California FAIR plan if it is the only coverage that can be obtained at a reasonable cost. If the company you would like to do business with is not rated by Best's Insurance Reports, please contact us.
- Why do you sometimes ask for copies of my renewed hazard insurance policy?
We monitor hazard insurance policies to confirm that coverage remains in force. Typically, we will receive a hazard insurance renewal form directly from the insurance company when the annual premium has been paid. Occasionally, however the insurance company will not send us the policy and we need to contact you for a copy.
- Should I send the University a copy of my current Homeowners Insurance policy every year?
The Mortgage Origination and Supplemental Home Loan Programs require that a current homeowner's insurance policy is provided to the Office of Loan Programs at the time of annual renewal as verification that satisfactory hazard insurance is maintained on the property. Generally, these renewals come from the insurance company. If you cancel your homeowner's policy in order to move to a different provider, the University will receive a notice of cancellation. You should instruct the new provider to send a copy of the declarations page to the Office of Loan Programs. If we don't receive a notice from the new company, we will contact you to find out the status of your insurance.
If your homeowner's insurance is paid as part of your Homeowner's Association (HOA) dues, you may not be aware if the HOA changes insurance carriers. In this case, the Office of Loan Programs may contact you for information concerning the new carrier. It is the responsibility of each homeowner to ensure that the Office of Loan Programs is provided with proper evidence of insurance. Just ask your Homeowners Association or your current insurance agent to fax or mail us a copy.
The policy should also have the University of California listed as the Mortgagee.
- Do you require earthquake insurance?
If earthquake insurance is required, we will notify you during the initial processing of your loan. If we do not advise you specifically, earthquake insurance is not required as a condition of your loan.
- How are property taxes assessed in California?
The fiscal year period for the state of California runs from July 1st to June 30th. Property taxes are assessed and collected at the County level. With rare exception, there are no separate tax bills issued by either cities or school districts.
Property taxes are collected in two equal installments. The first installment, representing July 1st through December 31st is due on November 1st and delinquent on December 10th. The second installment, representing January 1st through June 30th, is due on March 1st and delinquent on April 10th. Payments must be received (not postmarked) by 5:00 on the delinquent date or will be assessed a 10 percent penalty. The penalties increase substantially if not paid by June 30th of that tax year.
The amount of the taxes is determined by the value of the property. At minimum, for the first full fiscal year after purchase most homeowners will pay property taxes equal to 1 percent of the sales price. The property value may be adjusted by the assessor each year to account for inflation, but any annual upwards adjustment cannot exceed 2 percent. In many communities, an additional assessment will be levied due to bonds that have been voter approved. These additional assessments typically fund school districts, transportation needs, water supplies, sanitary districts and regional parks. As a general rule, these assessments will add an additional .25 percent to .50 percent to the amount of the tax bill.
After the close of escrow, most borrowers will receive a supplemental tax bill in addition to the regular tax bill. The regular tax bill reflects the value of the property at the time the seller owned it. The supplemental tax bill is based on the difference between the seller's value, as determined by the existing tax rolls, and the new value, established at the time of sale. The amount due is prorated over the remaining months of the fiscal year. All subsequent tax bills will be based on the reassessed value, subject to annual increases as described above.
A Homeowners' Exemption will reduce the assessed value of your home by $7,000. To apply for a Homeowners Exemption, contact your County Tax Assessor.
- How can I make additional payments to reduce the principal balance of my loan?
If you would like to make additional payments to reduce the principal balance of your loan (known as a curtailment), you may do so at any time for any amount. Please make your check payable to the Regents of the University of California, mail it to our payment processing center address above, and include a note with your check referencing your loan number and indicating that this amount is to be applied to reduce your principal balance. A payment history, showing the amount of the additional payment to principal, and the remaining loan balance, will be emailed to you following the processing of this curtailment.
- When will my additional payment to principal reduce my payment amount?
For Standard MOP loans, your payment amount is adjusted once a year (see question 1 in "Interest rate and payment change questions" above). In order to reduce your payment for the upcoming adjustment, the curtailment must be received by our office at least twenty days prior to the date of your interest rate change.
For Interest-Only loans your payment will change on the next scheduled payment.
For 5/1 MOP loans, if a curtailment is made during the Fixed Rate Period of the loan, the monthly payment amount will remain fixed until the loan converts to a Standard MOP loan with an adjustable interest rate.
- Does my additional payment to principal result in a change in the distribution of principal and interest?
Yes. Standard MOP loans are fully amortizing. That is, the loan amount will be fully paid off, without a balloon payment, at the end of a fixed period of time. Each payment is split between principal and interest based upon the interest rate, number of years remaining until maturity, and the unpaid principal balance.
When the principal balance is decreased by an additional curtailment, a greater portion of each succeeding payment is allocated toward principal than if the curtailment had not been received. However, for Standard MOP loans the amount of your monthly payment will not change until the next scheduled payment adjustment (at your anniversary date).
- Is there any disadvantage to making additional payments to principal?
As noted above, more funds will be applied to principal, and less to interest, with each subsequent payment. Accordingly, there will be less interest paid in that particular calendar year, and less interest for the borrower to declare as a deduction on their income tax forms. Please note, as well, that making curtailments will not reduce the term of your MOP loan.
When do I need to send a curtailment if I want it to affect my new payment?
You may send a curtailment at any time but to ensure it affects your new payment, it must be received no later than two months prior to your payment change date. We calculate the new payment on the first of the month prior to your interest change month, so curtailments should be in no later than the last day of the prior month. For example if your loan funded in August, your interest change month is September, and your first payment was on October 1, so a curtailment would need to be received by July 31 since we will calculate the new payment on August 1st.
- How will my payments be made if I go on Leave Without Pay?
If you are on approved leave without pay status for any period of time, please contact this office to make alternative payment arrangements and advise us of your forwarding address (if applicable).
Borrowers have two options:
- ACH debit: we will debit your bank account for your monthly mortgage payment amount (principal and interest payment only) on the fifth (5th) business day of each month, while you are off payroll status.
- Personal check: borrowers can mail a personal check on the first of each month to our payment processing center.
Some borrowers have used "PC banking" or "bank by phone" services. Please note that any payment received after the fifteenth of the month will be assessed a late fee of 4 percent of the amount past due.
If you pay by personal check or bill pay, a billing statement acknowledging receipt of your payment will be mailed to you on approximately the 18th of each month.
- How will my payments be made if I go on Sabbatical Leave?
Typically, faculty are paid their full-time salary while on Sabbatical Leave. As a result, your mortgage payment will continue to be deducted from your monthly paycheck. If this is not the case in your situation, you will need to remit your payment by personal check or sign up for the ACH debit option. For details on this procedure, please see "How will my payments be made if I go on Leave Without Pay."
- What happens if I terminate my employment with the University of California?
The University of California Mortgage Origination Program and Supplemental Home Loan Program provides condition of employment loans to eligible faculty and members of the Senior Management Group.
Once you have terminated your employment with the University, you are no longer eligible to participate in the Mortgage Origination Program or Supplemental Home Loan Program, unless you terminated employment due to retirement or disability. As detailed in the Note and Deed of Trust, you will have six months from the date of separation to pay off your loan via either sale or refinance. Until your loan is paid off, you must continue to make regularly scheduled monthly payments by submitting a personal check to the payment processing center address or utilizing the ACH debit option, as well as keep property taxes current and adequate hazard insurance in force.
- Will I be eligible to continue participating in MOP when I retire from the University of California or will I be required to pay off the existing balance of my loan at that time?
When you retire from the University of California, you may continue to participate in the Program. However, you must continue to make regularly scheduled monthly payments by submitting a personal check to our payment processing center address or utilizing the ACH debit option, as well as keep property taxes current and adequate hazard insurance in force. In addition, you must continue to maintain the property as your primary residence and retain at least a 50 percent ownership interest in the property. Since retirees are no longer paid from the campus payroll, automatic payroll deduction is not possible.
Borrowers who retire due to a disability are also eligible to continue to participate in the Program, but the above payment requirements still apply.