(a) Maximum loss amount. The maximum loss amount due to nonpayment by the buyer covered by the guarantee is based on the type of guarantee initially selected by the seller as follows:
(1) The prompt payment guarantee will cover:
(i) Three amortized annual installments; or
(ii) An amount equal to three annual installments (including an amount equal to the total cost of any tax and insurance incurred during the period covered by the annual installments).
(2) The standard guarantee will cover an amount equal to 90 percent of the outstanding principal balance.
(b) Guarantee period. The period of the guarantee will be 10 years from the effective date of the guarantee unless terminated earlier under § 763.23.
(c) Conditions. The seller will select an escrow agent to service a Land Contract Agreement if selecting the prompt payment guarantee plan, and a servicing agent to service a Land Contract Agreement if selecting the standard guarantee plan.
(1) An escrow agent must provide the Agency evidence of being a bonded title insurance company, attorney, financial institution or fiscally responsible institution.
(2) A servicing agent must provide the Agency evidence of being a bonded commercial lending institution or similar entity, registered and authorized to provide escrow and collection services in the State in which the real estate is located.