Circular No. 1393 — Lowering Norms on the Issuance of Mortgage Letters

CIRCULAR NO. 001393

We communicate that the Board of Directors of the Central Bank of Brazil, in a meeting held on this date, having regard to the provisions of Article 5 of Law No. 7,684 of December 2, 1988, has decided to establish the following conditions for the issuance of mortgage letters:

a) it shall be exclusive to institutions that operate in granting financing with resources from the Housing Finance System;

b) the respective guarantee shall be the pledge of mortgage credits of which the institutions referred to in the preceding letter are holders, secured by a first mortgage;

c) the minimum term shall be 180 (one hundred and eighty) days;

d) control shall be exercised by present value;

e) the financial institution must maintain off-book controls that allow the identification of the credits that serve as guarantee for the issued letters.

2. This Circular shall enter into force on the date of its publication, Circular No. 1,367 of October 19, 1988 being revoked.

Brasília-DF, December 7, 1988

Keyler Carvalho Rocha Wadico Waldir Bucchi Director Director