16.20 - LOANS TO MORTGAGE LENDERS.
16.20 LOANS TO MORTGAGE LENDERS.
1. The authority may make, and contract to make, loans to
mortgage lenders on terms and conditions as it determines which are
reasonably related to protecting the security of the authority's
investment and to implementing the purposes of this chapter, and
subject to this section, and all mortgage lenders are authorized to
borrow from the authority in accordance with the provisions of this
section and the rules of the authority.
2. The authority shall require as a condition of each loan to a
mortgage lender that the mortgage lender, within a reasonable period
after receipt of the loan proceeds as the authority prescribes by
rule, shall have entered into written commitments to make, and,
within a reasonable period thereafter as the authority prescribes by
rule, shall have disbursed the loan proceeds in new mortgage loans to
low or moderate income families in an aggregate principal amount
equal to the amount of the loan. New mortgage loans shall have terms
and conditions as the authority prescribes by rules which are
reasonably related to implementing the purposes of this chapter.
3. The authority shall require the submission to it by each
mortgage lender to which the authority has made a loan, of evidence
satisfactory to the authority of the making of new mortgage loans to
low or moderate income families as required by this section, and in
that connection may, through its members, employees or agents,
inspect the books and records of a mortgage lender.
4. Compliance by a mortgage lender with the terms of its
agreement with the authority with respect to the making of new
mortgage loans to low or moderate income families may be enforced by
decree of any district court of this state. The authority may require
as a condition of a loan to a national banking association or a
federally chartered savings and loan association, the consent of the
association to the jurisdiction of courts of this state over any such
proceeding. The authority may also require, as a condition of a loan
to a mortgage lender, agreement by the mortgage lender to the payment
of penalties to the authority for violation by the mortgage lender of
its agreement with the authority, and the penalties shall be
recoverable at the suit of the authority.
5. The authority shall require that each mortgage lender
receiving a loan pursuant to this section shall issue and deliver to
the authority an evidence of its indebtedness to the authority which
shall constitute a general obligation of the mortgage lender and
shall bear a date, mature at a time, be subject to prepayment, and
contain other provisions consistent with this section and reasonably
related to protecting the security of the authority's investment, as
the authority determines.
6. Notwithstanding any other provision of this section to the
contrary, the interest rate and other terms of loans to mortgage
lenders made from the proceeds of an issue of bonds or notes of the
authority shall be at least sufficient to assure the payment of the
bonds or notes and the interest on them as they become due.
7. The authority shall require that loans to mortgage lenders are
additionally secured as to payment of both principal and interest by
a pledge of and lien upon collateral security by special escrow funds
or other forms of guarantee and in such amounts and forms as the
authority shall by resolution determine to be necessary to assure the
payment of the loans and the interest thereon as they become due.
Collateral security shall consist of direct obligations of, or
obligations guaranteed by, the United States or one of its agencies,
obligations satisfactory to the authority which are issued by other
federal agencies, direct obligations of or obligations guaranteed by
a state or a political subdivision of a state, or investment quality
obligations approved by the authority.
8. The authority may require that collateral for loans be
deposited with a bank, trust company or other financial institution
acceptable to the authority located in this state and designated by
the authority as custodian. In the absence of such a requirement,
each mortgage lender shall enter into an agreement with the authority
containing provisions as the authority deems necessary to adequately
identify and maintain the collateral, service the collateral, and
require the mortgage lender to hold the collateral as an agent for
the authority and be accountable to the authority as the trustee of
an express trust for the application and disposition of the
collateral and the income from it. The authority may also establish
additional requirements as it deems necessary with respect to the
pledging, assigning, setting aside, or holding of collateral and the
making of substitutions for it or additions to it and the disposition
of income and receipts from it.
9. The authority may require as a condition of loans to mortgage
lenders, any representations and warranties it determines are
necessary to secure the loans and carry out the purposes of this
section.
10. If a provision of this section is inconsistent with a
provision of law of this state governing mortgage lenders, the
provision of this section controls for the purposes of this section.
Section History: Early Form
[C77, 79, 81, § 220.20] Section History: Recent Form
C93, § 16.20
Referred to in § 16.37