Guarantee contract (Repealed)

Each loan guarantee issued shall be evidenced by a guarantee contract executed by the Commissioner, the borrower and the financial institution and shall contain such provisions, clauses and covenants as the Authority, in its sole discretion may require, including without limitation, provisions: (1) Providing for a guarantee fee of either (A) up to six percent (6%) of the initial principal balance guaranteed or (B) up to six percent (6%) per year of the principal balance guaranteed from time to time; (2) Conditions and procedures precedent to the honoring of the loan guarantee; (3) That the lender shall service the loan and receive all payment of principal and interest. In the event of default, the lender shall continue to service the loan if requested by the Authority to do so; (4) That if the borrower fails to make any payment of principal or interest on the due date, the lender shall immediately notify the borrower of the payments due. If the borrower fails to cure the nonpayment within 30 days, the lender shall notify the Authority; (5) Conditions under which the loan guarantee may be terminated by the Department including without limitation: (A) Any misrepresentation or, with respect only to breaches by the financial institution, any breach of any agreement or covenant contained in the loan agreement or guarantee contract; (B) Failure of the borrower or financial institution to pay guarantee fees when due; (C) Any changes made without the prior written consent of the Department in the terms and conditions of, or security for, the loan being guaranteed; (D) Failure by the financial institution to administer the loan being guaranteed in accordance with the guarantee agreement.