Current through Register Vol. 48, No. 12, March 22, 2024
a) The Authority shall purchase Loans on the
terms and conditions and in the manner prescribed in the Mortgage Purchase
Agreement. The Mortgage Purchase Agreement shall contain such warranties of the
Lender in connection with the Loans to be sold thereunder as the Authority
shall require, and shall include, among others, the following warranties:
1) The mortgagor is an Eligible
Borrower;
2) The Loan is evidenced
by a properly executed promissory note made payable or assigned to the order of
the Lender, endorsed by the Lender to the Authority and is secured by a
Mortgage on the Qualified Dwelling; both the note and the Mortgage are the
legal, valid, and binding obligations of their makers and mortgagors and are
enforceable in accordance with their terms, except only as such enforcement may
be limited by laws affecting the enforcement of creditors' rights generally;
and all parties to each Loan had full legal capacity to execute all Loan
documents at the time of execution;
3) The Mortgage and any other document
required to be filed in a public office to perfect the mortgage lien against
third parties have been duly and timely filed, registered, or recorded by the
Lender in the proper public office in order to give constructive notice of such
mortgage lien to all subsequent purchasers or encumbrancers;
4) The Lender, as the sole owner and holder
of the Loan, has full right to sell and assign the Loan to the Authority and
such assignment conveys a good and marketable mortgagee's title to the
Authority free and clear of all liens and encumbrances and subject only to real
property taxes and assessments not yet due and encumbrances customarily
accepted in accordance with applicable title standards and disclosed to the
Authority prior to purchase of the Loan;
5) The Mortgage creates a valid and existing
first mortgage lien on the Qualified Dwelling to secure the Loan, subject to
easements and other matters affecting title generally acceptable to lenders
making mortgage loans in the State;
6) The Lender has not modified in any respect
and has not satisfied, canceled, subordinated, or compromised in whole or in
part the Loan indebtedness and has not released the mortgaged property in whole
or in part from the lien of the indebtedness evidenced by the note and secured
by the Mortgage, and the terms, covenants, and conditions of the note
evidencing the Loan and the Mortgage securing the Loan have not been waived,
altered, or modified in any respect that would materially affect the validity
or enforceability of the Loan or the security of the lien of the
Mortgage;
7) The real property
securing the Loan is a Qualified Dwelling;
8) The Qualified Dwelling is covered by a
valid and existing policy of hazard insurance meeting the requirements of the
Authority;
9) The Lender has
complied as follows:
A) as to each FHA-insured
Loan, with the National Housing Act, 12 U.S.C. Section 1701 et seq., as amended
and supplemented, all rules and regulations issued thereunder and all
administrative publications. The FHA insurance shall be in full force and
effect and, upon purchase by the Authority of the Loan, shall inure to the
benefit of the Authority;
B) as to
each Loan guaranteed by the USVA or RECD, with the Servicemen's Readjustment
Act, 38 U.S.C. Section 1803 et seq., the Consolidated Farm and Rural
Development Act, 7 U.S.C. Section 1921 et seq., Title V of the Housing Act of
1949, 42 U.S.C. Sections 1471 - 1482, or other applicable federal law as
amended and supplemented, all rules and regulations issued thereunder and all
administrative publications. Any such guaranty shall be in full force and
effect and, upon purchase by the Authority of the Loan, shall inure to the
benefit of the Authority; and
C) as
to each Loan insured by a private mortgage insurance company, with all rules
and requirements of such company. Any such insurance shall be in full force and
effect and, upon purchase by the Authority of the Loan, shall inure to the
benefit of the Authority;
10) The Loan is covered by a fully paid
mortgagee's title insurance policy in such form as the Authority may require;
and
11) To the best of Lender's
information, knowledge and belief, no condition exists that would prohibit the
purchase of the Loan by the Authority under all applicable rules, regulations
and contractual provisions.
b) The Mortgage Purchase Agreement shall
provide that the Authority shall have the right to require the Lender to
repurchase Loans sold to the Authority by the Lender if the Director, Deputy
Director or Assistant Director determines that the Lender has failed to comply
with the requirements of either this Part or its contracts and agreements with
the Authority under the Program.