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Exceptions to this Policy may be made only by the Board or by management of the
EMRC under properly delegated authority from the Board.
The borrower must repay to the EMRC independent of the actual performance of underlying
mortgage loans. If the borrower fails to honor its obligations, EMRC, as the full
owner of the mortgage portfolio, cashes all related repayments with priority above
any other depositor or lender to the defaulting PML.
In the event of a default on the payment of interest or principal on any advance,
or in the event of any other default as defined in the EMRC’s borrowing agreements,
the EMRC is authorized to declare all debts owed to the EMRC immediately due and
payable, and subject to any and all prepayment fees and charges. PML default will
occur upon:
- Failure to make prompt payment on interest or principal
- Representations and warranties (made by PML) are misleading
or incorrect
- PML is facing liquidation or winding up
- PML becomes insolvent
- PML fails to comply with any of the terms and conditions of the Agreement.
If any of the above occurs EMRC at its sole discretion can require PML's to either:
- settle all the mortgage loans outstanding or any mortgage
loan outstanding.
- transfer all rights and interest in the mortgage to
EMRC or a third party
- a combination of 1 and 2
Any member that has submitted a letter of intent to withdraw from membership in
the EMRC may not borrow under any advances program with a maturity date beyond the
effective date of the member's withdrawal. When a member has submitted a letter
of intent to withdraw from EMRC, any outstanding advances with maturities extending
beyond the date of withdrawal are subject to immediate prepayment of principal and
interest, as well as appropriate prepayment fees, either on or before the withdrawal
date. In the event of an involuntary termination of membership, whether by merger,
acquisition, regulatory action, or otherwise, EMRC may allow a nonmember to assume
the outstanding advances of the former member. If EMRC allows the nonmember to assume
the outstanding advances, these advances must be fully secured by qualified collateral
delivered to EMRC.
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