§ 361. Supervision and regulation. 1. The department may from time to time make, alter, amend and repeal rules and regulations for the supervision, examination, regulation and audit of companies and for carrying into effect the provisions and purposes of this article, and each company shall submit an annual report of its operations to the department and the New York state housing finance agency which may examine and audit the books and records of the company at any time. 2. The department shall have power to act for and in behalf of the agency in servicing the mortgage loans of the agency, and to perform such functions and services in connection with the making, servicing and collection of such loans as shall be requested by the agency. 3. (a) The department may, with respect to any project of which the New York state housing finance agency has acquired the fee or otherwise, enter into an agreement with said agency subject to the approval of the director of the budget, for the department, as provided in paragraph (b) hereof, to operate the said project in a manner consistent with the purposes of this article. In such event, the department shall have the power to use any available funds to pay all operating expenses and to comply with all the terms and provisions of the mortgage, as though the mortgage had not been foreclosed, and to comply with the provisions of this article.

(b) Subject to the provisions of the agreement with said agency, the department may contract with any person, firm or corporation which it deems qualified to operate and manage such project and to perform such duties and functions as it may deem necessary.