175.14 - LOANS TO MORTGAGE LENDERS.
175.14 LOANS TO MORTGAGE LENDERS.
1. The authority may make and contract to make loans to mortgage
lenders on terms and conditions it determines are reasonably related
to protecting the security of the authority's investment and to
implementing the purposes of this chapter. 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 or secured
loans to beginning farmers in an aggregate principal amount of not
less than the amount of the loan. New mortgage or secured 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 or
secured loans to beginning farmers 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 or secured loans to beginning farmers 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
enforcement 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 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, 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 may 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 amounts and forms as the authority
by resolution determines to be necessary to assure the payment of the
loans and the interest 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 that requirement, each
mortgage lender shall enter into an agreement with the authority
containing provisions 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 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. The authority may require the beginning farmer to satisfy
conditions and requirements normally imposed by mortgage lenders in
making similar loans, including but not limited to, the purchase of
capital stock in the federal land bank.
11. 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
[C81, § 175.14]
Referred to in § 175.27, 175.34