(a) The authority may contract with a mortgage lender to purchase, in whole or in part, existing loans, whether or not eligible loans. The contract may contain provisions as determined by the authority to be necessary or appropriate to provide security for its revenue bonds, including but not limited to provisions requiring the:

Terms Used In Hawaii Revised Statutes 206E-117

  • Authority: means the Hawaii community development authority. See Hawaii Revised Statutes 206E-101
  • Contract: A legal written agreement that becomes binding when signed.
  • Escrow: Money given to a third party to be held for payment until certain conditions are met.
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • Mortgage lender: means any bank, trust company, savings bank, national banking association, savings and loan association, building and loan association, mortgage banker, credit union, insurance company, or any other financial institution, or a holding company for any of the foregoing, which:

    (1) Is authorized to do business in the State;

    (2) Customarily provides service or otherwise aids in the financing of mortgages on single family or multi-family residential property; and

    (3) Is a financial institution whose accounts are federally insured, or is an institution which is an approved mortgagee for the Federal Housing Administration, or is an approved lender for the Department of Veterans Affairs or the United States Department of Agriculture, or is an approved mortgage loan servicer for the Federal National Mortgage Association or the Federal Home Mortgage Corporation. See Hawaii Revised Statutes 206E-101

  • Recourse: An arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank's claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. Source: FDIC
  • Revenue bonds: means bonds, notes, or other evidence of indebtedness of the authority issued to finance any of the reserved housing loan programs under this part. See Hawaii Revised Statutes 206E-101
(1) Repurchase of the loans, in whole or in part, by mortgage lenders at the option of the authority;
(2) Payments of premiums, fees, charges, or other amounts by mortgage lenders to provide a reserve or escrow fund for the purposes of protecting against loan defaults; and
(3) Guarantee by, or for recourse against, mortgage lenders, with respect to defaults on these loans of the authority.
(b) The authority shall require as a condition of each purchase of existing loans from a mortgage lender that the mortgage lender proceed to make and disburse eligible loans in an aggregate principal amount substantially equal to the amount of the proceeds from the purchase by the authority of loans therefrom.

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