RS 600.92 - Purchase of mortgage loans
A. The corporation may purchase, or contract to purchase, insured mortgage loans with respect to residential housing from lending institutions, at such prices and upon such terms and conditions as it shall determine by rules or regulations adopted by the board of directors. All lending institutions are authorized to sell insured mortgage loans to the corporation in accordance with the provisions of this Chapter and the rules and regulations of the corporation.
B. The corporation may require as a condition of purchase of any insured mortgage loan from a lending institution that the lending institution represent and warrant to the corporation all of the following:
(1) The unpaid balance of the mortgage loan and the interest rate thereon have been accurately stated to the corporation and that the interest rate is not usurious.
(2) The amount of the unpaid principal balance of the mortgage loan is justly due and owing in accordance with the terms thereof.
(3) The lending institution has no notice of the existence of any counterclaim, offset, or defense asserted by the mortgagor or his successor in interest.
(4) The mortgage loan is evidenced by a note and a mortgage which has been properly recorded in the parish in which the immovable property is situated.
(5) The mortgage constitutes a valid first lien on the immovable property described to the corporation, subject to property taxes not yet due, installments of assessments not yet due, and such servitudes, encumbrances, or restrictions which do not adversely affect to a material degree the use or value of the immovable property or the improvements thereon.
(6) The mortgage loan when made was lawful under federal or state law, or both, whichever governed the making of the loan, and would be lawful on the date of purchase by the corporation if made by the lending institution on that date in the amount of the unpaid principal balance.
(7) The mortgagor is not now in default in the payment of any installment of principal or interest, escrow funds, property taxes or otherwise in the performance of his obligations under the mortgage loan documents and has not to the knowledge of the lending institution been in default in the performance of any such obligation for a period of longer than sixty days during the life of the mortgage.
(8) The improvements to the mortgaged property are covered by a valid and current policy of insurance, in full force and effect, issued by an insurance company authorized to issue such policies in the state and providing fire and extended coverage in an amount not less than the outstanding principal balance of the mortgage loan or the maximum insurable value of the mortgaged property, whichever is greater.
(9) The mortgage loan meets the prevailing investment quality standards for mortgage loans of that type in the state and is an insured mortgage loan.
C. A lending institution shall be liable to the corporation for any damages suffered by the corporation by reason of the untruth of any representation or the breach of any warranty and, in the event that any representation shall prove to be untrue when made or in the event of any breach of warranty, the lending institution at the option of the corporation shall repurchase the mortgage loan for the original purchase price, adjusted for amounts subsequently paid thereon and for damages incurred by the corporation, as the corporation may determine.
D. The corporation may require the recording of an assignment of any mortgage loan or mortgage purchased by it from a lending institution. The corporation shall not be required to inspect or take possession of the mortgage loan documents if the lending institution from which the mortgage loan is purchased by the corporation enters into a contract with the corporation to service such mortgage loan and to account to the corporation regarding such mortgage loan.
E. If the corporation purchases a mortgage loan from a lending institution, the corporation may contract with that or another lending institution to act as servicing agent for the corporation for the collection of mortgage loan payments from the mortgagor and for the exercise of the rights and the discharge of the responsibilities provided for in the mortgage loan documents and federal and state law.
F. To the extent that any provisions of this Section may be inconsistent with any provision of law of the state governing lending institutions, the provisions of this Section shall control.
G. Notwithstanding any provision of this Chapter or of any other law to the contrary, the corporation may directly fund insured mortgage loans in connection with a federal program if benefits provided by such program would not otherwise be made available within the state.
Acts 2011, No. 408, §1, eff. July 5, 2011.