100.287. Default procedure--subrogation to rights of lender upon payment from fund, amount. - Missouri Statutes

Default procedure--subrogation to rights of lender upon paymentfrom fund, amount.

100.287. 1. The development and reserve fund shall be usedto prevent a default in payment of principal or interest or todefray losses which may be incurred in connection with bonds,notes or loans secured by the development and reserve fund inaccordance with the terms and provisions of the resolution ortrust indenture of the board authorizing such bonds, notes orloans.

2. Upon certification by a participating lender that a loansecured by the development and reserve fund is in default andnoncollectible, and that the property which secured the loan hasbeen liquidated and applied against the debt, and after a reviewby the board and its determination of the same, the board shalldistribute, from funds available in the development and reservefund, an amount not to exceed ninety percent of the balanceremaining to be paid by the borrower to the participating lender.Upon payment to a participating lender to repay any loan, theboard shall become subrogated to the extent of such payment toall rights which the participating lender had against theborrower.

3. A loan or issue of bonds or notes secured by thedevelopment and reserve fund shall in no case constitute or beconstrued as an obligation or an indebtedness of this state or ofthe board, and neither the state nor the board shall be liable torepay any such loan, bonds or notes upon any condition.

(L. 1985 H.B. 416, A.L. 1986 S.B. 731)