2010 Mississippi Code
TITLE 43 - PUBLIC WELFARE
Chapter 33 - Housing and Housing Authorities.
43-33-719 - Loan requirements; purchase of loans.

§ 43-33-719. Loan requirements; purchase of loans.
 

(1)  In connection with the making of any of the types of loans authorized by this article to any entity the corporation: 

(a) May require that the borrower issue and deliver to the corporation an evidence of its indebtedness to the corporation (which evidence shall constitute a general obligation of the borrower as the corporation shall determine) which shall contain such provisions consistent with this section as the corporation shall determine, including but not limited to, date, time of maturing and prepayment clause; 

(b) May require that the interest rate or rates and other terms of such loans or any collection of such loans made from the proceeds of any issue of bonds or notes of the corporation shall, together with any other monies available therefor, including reserve funds, be at least sufficient to assure the payment of such bonds or notes and the interest thereon as the same become due; 

(c) May require that loans made pursuant to this section be secured as to payment of both principal and interest by a pledge of collateral security of such type and in such amounts as the corporation shall determine to be useful to assure the payment of such loans and the interest thereon as the same become due, and in the case of loans to institutional lenders, such collateral security shall consist of: 

(i) Direct or guaranteed obligations of the United States of America; 

(ii) Obligations of any municipality or the state or any state agency; 

(iii) Mortgage loans insured by the Federal Housing Administration or guaranteed by the Veterans Administration and such other mortgages insured or guaranteed by the federal government or by a private insurer as to payment of principal and interest as shall be approved by the corporation; or 

(iv) Conventional mortgage loans approved by the corporation; 

(d) May require that any collateral for loans be deposited with a bank or trust company or other financial institution acceptable to the corporation located in the state and designated by the corporation as custodian therefor. The corporation may also require the entity receiving such loan to enter into an agreement with the corporation containing such provisions as the corporation shall deem necessary to: (i) adequately identify and maintain such collateral; (ii) service such collateral, if appropriate; and (iii) require such entity to hold such collateral as an agent for the corporation and be accountable to the corporation as the trustee of an express trust for the application and disposition thereof and the income therefrom. In the case of loans to institutional lenders, the corporation shall require the lender to enter into such an agreement; 

(e) May also establish such additional requirements as it shall deem necessary with respect to the pledging, assigning, setting aside or holding of such collateral and the making of substitutions therefor or additions thereto and the disposition of income and receipts therefrom; 

(f) Shall require as a condition of each loan that the borrower, within a prescribed period after receipt, shall have disbursed or applied the loan proceeds for the purposes for which the loan was made in an aggregate principal amount equal to the amount of such loan; 

(g) May require the submission to it by each borrower of evidence satisfactory to the corporation of compliance with the terms of such loan, and in connection therewith may, through its members, employees or agents, inspect any books and records of any such entity; 

(h) May require, as a condition of any loans, representations and warranties deemed necessary to secure the loans and carry out the purpose of this section; 

(i) May enforce compliance with the terms of its agreement with any entity by decree of any court of competent jurisdiction. The corporation may require, as a condition of any loan to any national banking association, the consent of such association to the jurisdiction of courts of this state over any proceeding. The corporation may also require, as a condition of any such loan, agreement by such entity to the payment of penalties to the corporation for violation of its undertakings to the corporation, and such penalties shall be recoverable at the suit of the corporation; and 

(j) To the extent that any provisions of this section may be inconsistent with any provision of law of the state governing the affairs of mortgage lenders, the provisions hereof shall control. 

(2)  In connection with the purchase from any lender of any of the types of loans authorized by this article, or any portion thereof or any participation therein, the corporation: 

(a) May require as a condition of purchase of such loans either: 

(i) That such loans be mortgage loans owned by the mortgage lenders and that such mortgage lenders, within a prescribed period after receipt of the purchase price, shall enter into written commitments to loan and, within a prescribed period thereafter, may loan an amount not to exceed the entire purchase price of such purchased loans on new loans, which new loans shall have such terms and conditions as the corporation may prescribe by regulation; or 

(ii) That such purchased loans qualify as new loans and were originated by the lenders for the purpose of selling them to the corporation; 

(b) Shall require the submission to it, by each mortgage lender from which the corporation has purchased existing loans, evidence satisfactory to the corporation of the making of new loans as required by the corporation, and in connection therewith may, through its members, employees or agents, inspect the books and records of any such mortgage lender; 

(c) May enforce compliance by any mortgage lender with the terms of its agreement with or undertaking to the corporation with respect to the making of any new loans by decree of any court of competent jurisdiction. The corporation may require as a condition of purchase of loans from any national banking association the consent of such association to the jurisdiction of courts of this state over any such proceeding. The corporation may also require, as a condition of the corporation's purchase of loans, agreement by any mortgage lender to the payment of penalties to the corporation for violation by the mortgage lender of its undertakings to the corporation, and such penalties shall be recoverable at the suit of the corporation; 

(d) May require as a condition of purchase of any loan from a mortgage lender that the mortgage lender represent and warrant to the corporation that: (i) the unpaid principal balance of such loan and this interest rate thereon have been accurately stated to the corporation; (ii) the amount of the unpaid balance is justly due and owing in accordance with the terms thereof; (iii) the mortgage lender has no notice of the existence of any counterclaim, offset or defense asserted by the maker or his successor in interest; (iv) such loan is evidenced by a bond or promissory note and a mortgage which has been properly recorded with the appropriate public official; (v) the mortgage constitutes a valid lien on the real property described to the corporation subject only to such liens, reservations, exceptions or encumbrances as may be permitted by the rules or regulations of the corporation; (vi) the maker is not now in default in the payment of any installment of principal or interest, escrow funds, taxes or otherwise in the performance of his obligations under the mortgage or loan documents and has not, to the knowledge of the mortgage lender, been in default in the performance of any such obligations for a period of longer than sixty (60) days during the life thereof; (vii) the improvements to mortgaged real property are permanently affixed thereto and the real property together with improvements thereon are covered by a valid and subsisting policy of insurance issued by a company authorized to issue such policies in this state and providing fire and extended coverage in such amounts as the corporation may prescribe by regulation; and (viii), in the case of mortgage loans, the mortgage loan meets the prevailing investment quality standards for mortgage loans of that type in the state; 

(e) May require that each mortgage lender be liable to the corporation for any damages suffered by the corporation by reason of any misrepresentation or the breach of any warranty, and in the event that any representation shall prove to be untrue when made or in the event of any breach of warranty, the mortgage lender shall, at the option of the corporation, repurchase the loan for the original purchase price adjusted for amounts subsequently paid thereon, as the corporation may determine; 

(f) Shall not be required to inspect or take possession of the loan mortgage or documents if the mortgage lender from which the loan is purchased by the corporation shall enter into a contract to service such loan and account to the corporation therefor. 
 

Sources: Laws,  1989, ch. 525, § 11, eff from and after July 1, 1989.