CFNL » Topics » Commitments

This excerpt taken from the CFNL 10-Q filed May 10, 2005.
Commitments.  Agree, commit to or enter into any agreement to take any of the actions prohibited by Sections 4.3(a) through (l).



This excerpt taken from the CFNL 8-K filed Mar 1, 2005.

NOTE H — Commitments


As of December 31, 2003 and 2002, substantially all mortgage loans held for sale and interest rate lock commitments with potential borrowers were identically matched with commitments from outside investors to purchase such loans. These investors are national and regional mortgage bankers and savings and loan institutions whose credit worthiness is evaluated annually. The terms of these commitments are generally 60 to 90 days and are entered into in an effort to minimize the Company’s exposure to interest rate fluctuations. The commitments are not mandatory in nature, thus there is not a specific commitment that must be filled. The fair value of the derivative financial instruments related to the best efforts commitment with the investors was $221,614 and $1,255,279 at December 31, 2003 and 2002, while the fair value of the derivative financial instruments related to the interest rate lock commitments with potential borrowers was $408,066 and $4,570,957 at December 31, 2003 and 2002. The carrying value of loans held for sale was adjusted to market value by $186,452 and $3,315,678 at December 31, 2003 and 2002.


As of December 31, 2003, minimum rental payments under the noncancelable leases were as follows:


Years Ending December 31,







































For the years ended December 31, 2003, 2002, and 2001, rent expense totaled $1,651,434, $1,201,322, and $797,165, respectively.




The Company is a HUD Title II Nonsupervised Mortgagee. As such, the Company is subject to certain minimum net worth requirements as established by HUD. At December 31, 2003 and 2002, the Company’s net worth is $31,860,288 and $25,000,023 in excess of HUD’s minimum net worth requirement of $1,000,000.




May 10, 2005
Mar 1, 2005
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