Current through Register Vol. 50, No. 9, September 20, 2024
A. LAFA may terminate a loan purchase
agreement with any lender in any of the following circumstances:
1. lenders failure to pay loan note
repayments over to the trustee if such failure continues for a period of five
days;
2. lenders failure to observe
or perform in any material respect any other covenant or condition of a loan
purchase agreement for more than 30 days after receipt of written notice
thereof from LAFA or the trustee. Prior to the expiration of such period, LAFA
may extend the period by written authorization. If the failure stated in the
notice cannot be corrected within 30 days, LAFA will not unreasonably withhold
its consent to an extension of such time if corrective action is instituted by
the lender within the applicable period;
3. if any representation of or warranty by
lender to LAFA is false in any material respect and LAFA has notice
thereof;
4. the issuance of an
order against the lender by any court or other supervisory authority having
jurisdiction in the premises for the appointment of a conservator, receiver, or
liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities, or liquidation of lender's affairs which remains in force
undischarged or unstated for a period of 60 days;
5. lender's consent to the appointment of a
conservator, receiver, or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities, or similar proceedings relating to lender
or all or substantially all of its property;
6. lender's admission, in writing, of its
inability to pay its debts generally as they become due, filing of a petition
to take advantage of any applicable insolvency or reorganization statute,
making an assignment for the benefit of its creditors, or voluntarily
suspending payment of its obligations.
B. In any of the circumstances enumerated in
§125 A, LAFA or the trustee, on LAFA's
behalf, may take one or both of the following steps:
1. make written demand on the lender for
lender's repurchase of the unpaid portion of the loan note at a price equal to
the unpaid principal plus any interest which has accrued and is unpaid as of
the date of repurchase. Such demand shall be made when the lender fails for
more than five days to pay over to the trustee the proceeds of loan note
repayments;
2. take whatever other
action at law or in equity may appear necessary or desirable to collect any
amounts due or to become due under the loan purchase agreement or to enforce
performance and observance of a loan purchase agreement, including actions for
costs of legal fees and other expenses incurred in such actions. Any amounts
collected pursuant to action taken under this rule shall be deposited in the
bond fund.
C. No delay
or omission in exercising the remedies set forth above shall impair any right
or be construed to be a waiver thereof; such remedies may be exercised from
time to time, as often as may be deemed expedient, without any notice other
than the notice required by this rule.
AUTHORITY NOTE:
Promulgated in accordance with
R.S.
3:266,
R.S.
3:270 and
Section
103(b)(6) of
the Internal Revenue Code of 1954, as
amended.
