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PROTECT LOAN COLLATERAL
The contractor may be required to monitor the status of
real property or other loan collateral and shall act promptly
to protect the Government’s interest in that collateral. Agencies
may issue task orders that may require, but are not limited
to the following types of tasks:
- Pay when due from the Escrow account, all taxes, insurance
premiums and other escrow expenses required to be paid by
the terms of the Mortgage loans. In the event there are insufficient
monies on deposit in the Escrow account with respect to a
Mortgage Loan when due, the contractor may apply to the Agency
for reimbursement of such advances, without interest, with
respect to any Mortgage Loan at the time such advances have
accumulated to a set aggregate amount of providing that such
Mortgage Loan is foreclosure serviced in accordance with the
task order. After the Agency has authorized foreclosure proceedings,
no advances will be reimbursed until there is a final disposition
of the Mortgage Loan. Any advances which have not been reimbursed
by the Agency or by the Mortgagor shall be reimbursed by the
Agency out of the proceeds of foreclosure, assignment or other
final disposition of the Mortgage Loan.
- Assure that all buildings and improvements securing each
Mortgage Loan are insured against fire and other hazards as
required by and under the conditions set forth in the task
order. The contractor's obligation to cause such insurance
to be maintained shall be absolute, regardless of any failure
or future by any Mortgagor to pay in a timely fashion the
premiums therefore, and the contractor agrees to indemnity
the Agency for any loss suffered by the Agency because hazard
insurance as required by the task order is not in effect with
respect to any mortgaged property, except as provided in the
task order.
- Make proper and timely application (including the filing
of all necessary notices) for all fire and other causality
insurance payments upon acquiring actual knowledge of damage
to any mortgaged property by fire or casualty and shall collect
and apply all proceeds thereof in accordance with the task
order.
- Take all steps necessary and proper to enforce the rights
of the agency under any mortgage which is in default. Keep
the Agency fully informed of such steps. Pending completion
of these steps, the Contractor may be required to protect
the mortgaged property against strip and waste. At the option
of the Agency, the Agency may assign such mortgage to the
Contractor which shall at the direction of the Agency conduct
all foreclosure or similar proceedings in its own name and
thereafter assign or convey any title, equity, right or funds
acquired by such foreclosure or proceedings as directed by
the Agency. The Contractor may be required to assist the Agency
in marketing such properties upon the Agency's request. The
Contractor may be reimbursed by the Agency out of the proceeds
of foreclosure, assignment or other final disposition of the
mortgage Loan. If the Agency shall so direct, the Contractor
may be required to relinquish servicing of a Mortgage Loan
in default, and resume servicing when requested by the Agency.
- Notify the agency upon discovery of any representation of
warranty made in obtaining a Mortgage Loan which is found
to be false.
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