Code of Maine Rules
94 - INDEPENDENT AGENCIES
457 - FINANCE AUTHORITY OF MAINE (FAME)
Chapter 204 - SECONDARY MARKET PROGRAM
Section 457-204-9 - Faith and Credit

Each Loan Note Guarantee will constitute an obligation supported by the faith and credit of the State of Maine pursuant to the Act and be incontestable except for fraud or misrepresentation of which Lender or any Holder has actual knowledge at the time it became such Lender or Holder or which Lender or any Holder participates in or condones. If any note to which the insurance relates provides for payment of interest on interest, then the Loan Note Guarantee will be void. In addition, a Loan Note Guarantee will be unenforceable by Lender (but not the Holder) if Lender fails to collect from Borrower and remit to the Authority the insurance premiums as and when payable or to the extent any loss is occasioned by the violation of usury laws, negligent servicing, or failure to obtain the required security regardless of the time at which the Authority acquires knowledge of the foregoing. Any claim by Lender for losses occasioned will be unenforceable to the extent that loan funds are used for purposes other than those specifically approved by the Authority in its Loan Insurance Authorization. Negligent servicing is defined as the failure to perform those obligations more fully set forth in the Loan Insurance Agreement and related Loan Insurance Authorization, and by way of illustration and not of limitation includes services which a reasonably prudent lender would perform in servicing its own portfolio of loans that are not insured or guaranteed. The term includes not only the concept of a failure to act but also not acting in a timely manner or acting in a manner contrary to the manner in which a reasonably prudent lender would act up to the time of Eligible Loan maturity or until a final loss is paid. A Loan Note Guarantee will be executed solely for the purpose of the Program and for the information and use of a Holder, as defined herein. As between the Lender and the Authority, the Loan Insurance Agreement will be controlling.