(1) Upon the approval by the board of a plan pursuant to section 29-4-711 and upon or prior to the authorization of bonds or other financial arrangement to implement the plan, the board shall authorize the executive director to:
(a) Invest in, purchase, participate in the purchase, make commitments for the purchase or participation in the purchase, and take assignments from lenders of mortgage loans; (b) Make loans and commitments therefor to lenders.
No mortgage loan or interest therein purchased from a lender shall be eligible forpurchase or commitment to purchase by the authority under this section unless, at or before the time of transfer thereof to the authority, such lender certifies that in its judgment the mortgage loan would in all respects be a prudent investment at the purchase price paid.
The authority shall require, as a condition of a loan to a lender, that the lender investthe proceeds of such loan in mortgage loans to families or sponsors upon such terms and conditions as the authority may require.
(3.5) The authority shall require, as a condition of purchase or commitment to purchase mortgage loans or interests therein, the following:
That such mortgage loans shall have been made upon such terms and conditions asthe authority may require; or
That the proceeds of such purchase, or their equivalent, shall be invested in mortgageloans upon such terms and conditions as the authority may require.
(4) (a) Mortgage loans made by lenders to families with the proceeds of a loan as provided for in subsection (3) of this section, pursuant to a commitment to purchase as provided for in paragraph (a) of subsection (3.5) of this section, or with the proceeds of the purchase of a mortgage loan as provided for in paragraph (b) of subsection (3.5) of this section, shall be to families who qualify as low-income or low- or moderate-income families.
(b) Mortgage loans made by lenders to sponsors with the proceeds of a loan under subsection (3) of this section shall be made on such terms and conditions as the board may determine periodically.
In conjunction with the purchase of such mortgage loans or interests therein fromlenders, the authority may require the lender to furnish collateral security in such amounts as the authority shall determine to be necessary to assure the payment of such mortgage loans and the interest thereon as the same become due. Such collateral security shall consist of any obligations or mortgages satisfactory to the authority.
(a) Each loan to a lender shall be a general obligation of the lender and shall be additionally secured as to payment of both principal and interest by a pledge of and lien upon collateral security in such amounts and of such types as the board, by regulation, determines to be necessary to assure the payment of such loans and the interest thereon as the same become due and payable.
(b) The authority may require in the case of any or all lenders that any required collateral be lodged with a bank or trust company, located either within or outside the state, designated by the authority as custodian therefor. In the absence of such requirement, each lender shall enter into an agreement with the authority referring to this subsection (6); containing such provisions as the authority deems necessary to identify, maintain, and service such collateral; and providing that the lender shall hold such collateral as trustee for the benefit of the authority and shall be held accountable as the trustee of an express trust for the application and disposition of such collateral, including the income and proceeds therefrom, solely for the uses and purposes as provided in the agreement. A copy of each such agreement and any revisions or supplements thereto, which revisions or supplements may, among other things, add to, delete from, or substitute items of collateral pledged by such agreement, shall be filed with the secretary of state to perfect the security interest of the authority in the collateral. No filing, recording, possession, or other action under article 9 of title 4, C.R.S., or any other law of this state shall be required to perfect the security interest of the authority in such collateral. The security interest of the authority in such collateral shall be deemed perfected, and the trust for the benefit of the authority so created shall be binding on and after the time of such filing with the secretary of state against all parties having prior unperfected or subsequent security interests or claims of any kind in tort, in contract, or otherwise against such lender. The authority may also establish such additional requirements as it deems 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.
Subject to any agreement with holders of bonds, the authority may collect, enforcethe collection of, and foreclose on any collateral required by subsections (5) and (6) of this section and acquire or take possession of such collateral and sell the same at public or private sale, with or without public bidding, and otherwise deal with such collateral as may be necessary to protect the interest of the authority therein.
In addition to the other powers granted by this part 7, the authority shall have thepower, with respect to mortgage purchases and loans to lenders as provided under this section and section 29-4-711, to collect and pay reasonable fees and charges, to exercise the powers enumerated in section 29-4-710 (1)(c) to (1)(m), and to establish the terms and conditions of such mortgage purchases and loans to lenders by rules and regulations, including, without limitation, rules and regulations as to:
Reinvestment and commitments to reinvest by lenders of the proceeds of mortgagepurchases or loans;
Requirements as to the location, number of units, and other characteristics of thehousing facilities to be financed through such reinvestment by lenders;
The type, term, interest rate, purchase price, and condition of mortgages to be acquired by the authority and of mortgage loans to be made by lenders;
The warranties, representations, and services of lenders;
Restrictions as to the interest rates on housing facility loans or the return realizedtherefrom in order to protect against the realization by lenders of excessive financial returns or benefits as determined by prevailing market conditions;
Such other matters related to such mortgage purchases and loans to lenders as shallbe deemed necessary by the authority to accomplish the purposes of this part 7.
(9) Repealed.
Source: L. 75: Entire section added, p. 975, § 7, effective April 9. L. 77: (3) and (6)(b)
R&RE and (3.5) added, pp. 1418, 1419, §§ 6, 7, effective May 14. L. 79: (9) repealed, p. 1129, § 1, effective May 1. L. 82: (3) amended and (4) R&RE, p. 472, §§ 4, 5, effective April 15. L. 2007: (4)(a) amended, p. 706, § 7, effective May 3.
Editor's note: This section was enacted as § 29-4-710.5 in House Bill 75-1026 but was renumbered on revision in the 1977 replacement volume for ease of location.