Section 4-239 - Loans to eligible mortgage lenders.
§ 4-239. Loans to eligible mortgage lenders.
(a) Loan requirement.-
(1) A loan from the Administration to an eligible mortgage lender shall require the eligible mortgage lender to make mortgage loans in principal amounts that add up to at least the amount of the loan from the Administration to:
(i) families of limited income; or
(ii) sponsors of community development projects.
(2) After receiving the loan from the Administration, the eligible mortgage lender shall commit the amount of the mortgage loans required by paragraph (1) of this subsection within the time the Administration sets.
(b) Repayment.-
(1) A loan from the Administration to a mortgage lender is a general obligation of the mortgage lender as to repayment of principal and interest.
(2) Repayment of principal and interest shall be secured by a pledge of and lien on collateral security in an amount that the Administration by regulation determines to be necessary to secure the loan.
(c) Collateral security.-
(1) The collateral security shall consist of:
(i) obligations of or guaranteed by the United States, the State, or a political subdivision;
(ii) obligations issued by a unit of the federal government that are satisfactory to the Administration;
(iii) certificates of deposit, time deposits, or similar banking arrangements secured by obligations of or guaranteed by the United States or the State;
(iv) mortgages insured or guaranteed entirely or partly by the Maryland Housing Fund, a unit of the federal government, or a private insurer that the Administration approves; or
(v) other mortgages that the Administration finds to be of reasonably comparable security.
(2) The Administration shall require that:
(i) the collateral be held by a bank or trust company as independent custodian; or
(ii) the mortgage lender enter into a security agreement containing provisions that the Administration considers necessary to identify, maintain, and service the collateral.
(d) Security agreement.-
(1) The security agreement shall:
(i) provide that the mortgage lender:
1. holds the collateral as an agent for the Administration; and
2. is accountable as the trustee of an express trust for the application and disposition of the collateral; and
(ii) require that the income from the collateral be applied only in accordance with the agreement.
(2) A copy of each security agreement shall be filed with the Secretary of State.
(3) Further filing or other action under the Commercial Law Article or any other law of the State is not required to perfect the security interest of the Administration in the collateral or its proceeds or in any addition to or substitution for the collateral or its proceeds.
(4) Once filed, liens and trusts created for the benefit of the Administration under this subsection are binding against each person with a claim against the mortgage lender.
(5) The Administration may establish additional requirements for pledging, assigning, setting aside, or holding the collateral, and making substitutions for or additions to it, and disposing of interest and income from it.
(6) Notwithstanding any other law, a loan to a mortgage lender and the collateral for it are not subject to Article 95, § 22 of the Code or to § 6-202, § 6-205, § 6-206, § 6-209, or § 6-210 of the State Finance and Procurement Article.
[An. Code 1957, art. 83B, § 2-208(e), (f); 2005, ch. 26, § 2.]