Minnesota Administrative Rules

1655.0081 LOAN CLOSING, PURCHASE OF PARTICIPATION, AND LOAN MANAGEMENT.

Subpart 1.

Closing.

Upon receiving notification of RFA acceptance, the lender shall close the mortgage loan. The lender must record security documents relating to the loan. The lender must notify the RFA that the loan is closed and recorded by completing the lender certification section and returning the original RFA application, a copy of the note and loan agreement, and copies of the recorded documents and final title opinion to the RFA.

Subp. 2.

Payment.

Within ten business days of receipt of written notice under subpart 1 that the mortgage loan is closed and recorded and receipt of all required documents, the RFA shall initiate payment to the lender for the RFA's participation interest in the loan.

Subp. 3.

Participation certificate.

Within five working days after the receipt of finally collected funds, the lender shall complete and return a participation certificate as provided by the RFA witnessing the RFA's undivided pro rata interest in the livestock expansion mortgage loan.

Subp. 4.

Loan management.

The lender shall manage the loan, including the RFA participation interest, with the degree of care and diligence usually maintained by agricultural real estate lenders. The lender shall have custody and control of all loan documents except the original application, which must be kept by the RFA. The lender shall manage, administer, and enforce the loan documents in its own name and also on behalf of itself and the RFA, including, without limitation, the right to accelerate a mortgage loan on default and to foreclose or otherwise enforce remedies against the borrower.

Subp. 5.

Lender notification.

The lender shall promptly notify the RFA of occurrences that substantially affect the security, collection, or enforcement of any mortgage loan.

Subp. 6.

Prior written consent.

The lender shall obtain the prior written consent of the borrower and the RFA before:

A.

making or consenting to a release, substitution, or exchange of collateral that reduces the aggregate value of the collateral;

B.

waiving a claim against the borrower or a guarantor, surety, or obligor in connection with the indebtedness; or

C.

modifying or waiving a term of the notes or related instruments evidencing or securing the first mortgage loan.

Statutory Authority:

MS s 41B.07; 41C.13

History:

20 SR 2427; 30 SR 372

Published Electronically:

September 10, 2007