Servicing of guaranteed loans.

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(a) The financial institution that holds a loan guaranteed by the authority under AS 44.88.700 - 44.88.799 shall

(1) service the loan;

(2) exercise diligence in collecting amounts due under the loan; and

(3) comply with all requirements of the loan guarantee agreement.

(b) Amounts received toward satisfaction of a default on a loan guaranteed under AS 44.88.700 - 44.88.799 shall be allocated between the lender and the revolving fund according to the guaranteed percentage of the loan until the principal balance and accrued interest have been repaid.


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