§ 627 - Mortgage purchases - Vermont Statutes

§ 627. Mortgage purchases

(a) In addition to other powers granted in this chapter, the agency shall have the power to participate with mortgage lenders in a program whereby mortgage loans, rehabilitation loans, and eligible securities are purchased from mortgage lenders by the agency or by others. Before participating in any such program, the agency shall determine that its participation will tend to expand the supply of funds in the state available for mortgage loans for residential housing generally and particularly for occupancy by persons and families of low and moderate income. The agency may enter into contracts or other instruments for the administration and implementation of such programs. The agency shall adopt rules and regulations in respect of such program as provided in subsections (d) and (e) of section 623 of this title but such program shall not otherwise be subject to the requirements of sections 622 and 623. If the purchaser of such loans and securities pursuant to this section is the agency or a trust established under subsection (c) of this section, such purchase may be financed through the issue of bonds, notes or other obligations by the agency under subsection (b) of this section or through the issue of eligible securities by the agency or a trust under subsections (c), (d) and (e) of this section. Such purchase may be refinanced by any of such methods whether previously financed or refinanced under any of such methods or otherwise. If the purchaser of such loans and securities pursuant to this section is not the agency or such a trust, or if a purchase by the agency or trust is for purposes of resale to others and does not involve the issue of bonds, notes or other obligations or eligible securities by the agency or trust, the agency and trust shall each have power:

(1) to cooperate with such other purchasers, with mortgage lenders, and others;

(2) to provide and agree to provide services in pooling and servicing such loans and securities;

(3) to agree to bear risk of loss subject to such limitations as the agency may prescribe; and

(4) to do anything necessary or appropriate to participate in programs of other government agencies, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, their successors, or other financial institutions or intermediaries involved in the residential mortgage market which are not inconsistent with the purposes of this chapter.

(b) Bonds, notes and other obligations issued by the agency pursuant to this section shall not be general obligations of the agency, shall not be secured in whole or in part by a debt service reserve fund to which state funds may be appropriated pursuant to subsection (d) of section 632 of this title, shall not be subject to section 631(b)(1) of this title, and shall not be taken into account for purposes of the limitation on indebtedness of the agency contained in the last sentence of section 631(a)(1). Such bonds, notes and other obligations shall be payable solely from the receipts, revenues, or other income derived in respect of loans and securities purchased pursuant to this section or from the proceeds of such bonds, notes and other obligations, or from receipts, revenues or other income derived in respect of such proceeds or reserves established therefrom. Any official statement or other prospectus used by the agency in offering such obligations for sale shall clearly indicate that such obligations are not the debt or obligation of the state or of the agency except to the extent provided in this section.

(c) Eligible securities issued pursuant to this section may be issued by the agency itself. The agency, by indenture or otherwise, may also establish a trust as the issuer of eligible securities under this section. The agency may but need not be trustee of such a trust. Such a trust shall be established in such manner and subject to such provisions as the agency deems necessary or appropriate to carry out the purposes of this section. A trust so established shall be a public instrumentality of the state acting on behalf of the state to the same extent as the agency itself.

(d) In issuing eligible securities pursuant to this section, the agency and any trust established by it shall have, in addition to its other powers under this chapter or general law, all the powers the agency has in issuing bonds, notes and other obligations pursuant to subsection (b) of this section, subject to the special provisions of subsection (b) of this section, including without limitation the following powers:

(1) to authorize such securities, to issue them as negotiable investment securities, to execute them through appropriate present or former officers, and to sell them at public or private sale;

(2) to make agreements and contracts with and valid and effective pledges of property to, securities holders by resolution or otherwise;

(3) to issue taxable securities, cause them to be registered and grant appropriate indemnification;

(4) to purchase and deal in such securities;

(5) to secure such securities by appropriate trust instruments and agree that its contracts with securities holders will not be impaired by the state; and

(6) to use and invest proceeds of securities and refunding securities.

All of the foregoing shall be in the manner more fully provided in this chapter for bonds, notes and other obligations, or in a manner the agency determines is reasonably comparable thereto taking into account the different characteristics of eligible securities, or of the issuer thereof, and other matters the agency considers necessary or appropriate to effectively issue such securities.

(e) Without limiting the generality of subsection (d) of this section:

(1) eligible securities issued by the agency or a public instrumentality pursuant to this section shall be legal investments to the same extent as bonds and notes issued under this chapter;

(2) the holders of such securities shall be entitled to the same remedies, so far as apt, as are provided to holders of bonds and notes under section 635 of this title; and

(3) if such securities evidence the issuer's interest in mortgages otherwise than by the issuer's promise to pay principal and interest in fixed amounts and at stated times, they shall not be subject to the provisions of this chapter governing amounts and times of payment of principal and interest on bonds, notes and other obligations, and no finding under section 631(b)(2) of this title as to sufficiency of receipts, revenues or other income to pay such securities shall be required with respect to them. (Added 1981, No. 23, § 2, eff. April 14, 1981; amended 1983, No. 52, § 3, eff. April 23, 1983.)