§600.93. Loans to lending institutions

A.(1) The corporation may make, or contract to make, secured loans to lending institutions at such interest rates, terms, and conditions as it shall determine by rules or regulations adopted by the board of directors.

(2) All lending institutions are authorized to borrow funds from the corporation in accordance with the provisions of this Chapter and the rules and regulations of the corporation.

(3) The corporation shall require that the proceeds of its loans to lending institutions or an equivalent amount shall be used by such lending institutions to make mortgage loans with respect to residential housing located within the state, subject to such terms and conditions as the corporation may prescribe.

B. The corporation shall require that each lending institution which is the recipient of a loan pursuant to this Section shall issue and deliver to the corporation an evidence of its indebtedness to the corporation, which shall constitute a general obligation of such lending institution and shall bear such date or dates, shall mature at such time or times, shall be subject to such prepayment, and shall contain such other provisions consistent with this Section as the corporation shall determine.

C. Notwithstanding any other provisions of this Section to the contrary, the interest rate or rates and other terms of such loans to lending institutions made from the proceeds of any issue of bonds of the corporation shall be at least sufficient to assure the payment of said bonds and the interest thereon as the bonds become due.

D. The corporation shall require that loans made to lending institutions pursuant to this Section shall be additionally secured as to payment of both principal and interest by a pledge of collateral security in such amounts and consisting of such obligations, securities, or mortgages as the corporation shall determine to be necessary to assure the payment of such loans and the interest thereon as the same become due.

E.(1) The corporation may require that collateral for loans to lending institutions be deposited with a bank, trust company, or other financial institution acceptable to the corporation located either within or outside the state as designated by the corporation.

(2) In the absence of such requirement, a lending institution that is the recipient of a loan from the corporation shall enter into an agreement with the corporation containing such provisions as the corporation shall deem necessary or desirable to adequately identify and maintain such collateral, to service such collateral, and to require that the lending institution shall hold such collateral as agent for the corporation and shall be accountable to the corporation as the trustee of an express trust for the application and disposition thereof and the income therefrom solely to the uses and purposes in accordance with the provisions of such agreement.

(3) A copy of each such agreement and any revisions or supplements thereto shall be filed with the secretary of state, and no further filing or other action under any other law of the state shall be required to perfect the security interest of the corporation in such collateral or any additions thereto or substitutions therefor, and the lien and trust for the benefit of the corporation so created shall be binding from and after the time made against all parties having claims of any kind in tort, contract, or otherwise against such lending institution.

(4) The corporation 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. The corporation shall require lending institutions that are the recipients of loans from the corporation to submit evidence satisfactory to the corporation that the lending institution has used the proceeds of such loans by the corporation, or any equivalent amount, to make mortgage loans with respect to residential housing and that the lending institution has complied with the terms and conditions of such loans as prescribed by the corporation. In connection therewith, the corporation, through its employees or agents, may inspect the books and records of such lending institution.

G. The corporation may require as a condition of any loans to lending institutions such representations and warranties as it shall determine to be necessary or desirable to service such loans and implement the provisions of this Section.

H. Subject to the rights of holders of bonds of the corporation, the corporation may collect, enforce the collection of, and foreclose on any collateral securing its loans to lending institutions and acquire or take possession of such collateral and sell the same at private or public sale, with or without public bidding, and otherwise deal with such collateral as may be necessary to protect the interest of the corporation therein.

I. To the extent that any provisions of this Section may be inconsistent with any provision of the law of the state governing lending institutions, the provisions of this Section shall control.

Acts 2011, No. 408, §1, eff. July 5, 2011.