Purchase of mortgages or security interests or participations therein

(a) With respect to the power to purchase mortgages or security interests or participations therein from lending institutions as set forth in subsection (a) of Code Section 36-41-5, each authority may purchase mortgages or security interests from lending institutions, which shall in turn reinvest the proceeds in new mortgage loans made as rapidly as possible on residential housing. A mortgage or security interest or participation therein shall not be acquired under this chapter unless the rate of interest on such mortgage meets the rates of interest established by the authority. The authority shall establish such rates of interest, taking into consideration all of the following: (1) The cost to the authority in obtaining funds; (2) Allowances to be made to a lending institution as a service fee in acting as a servicing agent in the administration and collection of the mortgage; (3) Administrative costs of the authority; (4) Allowances for any necessary reserves of the authority; and (5) Regulations of the Internal Revenue Service of the United States. (b) The authority may purchase participations in mortgages or security interests and shall make such rules as will adequately secure the authority and its bondholders with respect to the purchase of participations in mortgages or security interests. (c) If the authority purchases a mortgage or a security interest or a participation therein from a lending institution, the lending institution may act as servicing agent for the authority in the collection and administration of the mortgage or security interest, subject to the rules established by the authority under this chapter. (d) Subject to the rights of bondholders, the authority shall fix the amount of the fee to be paid a servicing agent, in such amount as shall reasonably compensate the servicing agent for performing such services. The amount of such fee may be deductible from any interest payable and collected under the mortgage or security interest. (e) The authority may make commitments to lending institutions to purchase a mortgage or security interest or participation therein prior to the date of its execution, and a mortgage which is made by a lending institution under a prior commitment from the authority to purchase the mortgage or security interest or a participation therein shall satisfy the requirement to reinvest the proceeds from the sale as quickly as 785 36-41-7 possible in mortgage loans for residential housing. The authority shall establish such fees as are necessary to reimburse the authority for the administrative costs incurred in connection with making commitments to purchase and in purchasing mortgages or security interests or participations therein. (f ) The authority may require as a condition of a purchase of any mortgage or security interest from a lending institution that the lending institution represent and warrant to the authority any or all of the following: (1) The unpaid principal balance and the interest rate thereon have been accurately stated to the authority and that the interest rate and all service charges in connection therewith are not usurious under the laws of the state; (2) The amount of the unpaid principal balance is legally and validly due and owing; (3) The lending institution has no notice of the existence of any counterclaim, offset, or defense asserted by the mortgagor or his successor in interest; (4) Necessary documents have been properly recorded in the county in which the real estate lies; (5) The mortgage or security interest constitutes a valid lien on the property described in the mortgage or security interest, subject only to such matters which do not adversely affect to a material degree the use or value of the property; (6) The loan when made was lawful under the laws of the state or under federal law or both, whichever governed the making of the loan, and would be lawful on the date of purchase by the authority if made by the lending institution on that date in the amount of the unpaid principal balance; (7) The mortgagor is not now in default in the payment of any installment of principal or interest, escrow funds, real property taxes, or otherwise in the performance of the mortgagor’s obligations under the mortgage or security interest and has not, to the knowledge of the lending institution, been in default in the performance of any such obligation for a period of longer than 60 days; (8) The mortgage or security interest requires that the property described therein be covered by a valid and subsisting policy of insurance issued by a responsible insurance company legally licensed and authorized to conduct and transact business in the state and providing fire and extended coverage to an amount not less than 80 percent of the insurable value of the property or in the amount of the 786 36-41-8 mortgage or security interest, whichever the authority may determine; (9) The insurance coverage referred to in paragraph (8) of this subsection is in full force and effect; and (10) Subject to subsection (e) of this Code section, moneys received from the authority will be utilized for the financing, acquisition, or rehabilitation of residential housing within the geographic boundaries of the municipality activating the authority, and that certification by the lending institution to the effect that moneys have been reloaned as set forth in this chapter will be filed with the authority pursuant to the rules of the authority and will be available to the members of the public and to members of the General Assembly. (g) Each lending institution shall be liable to the authority for any damages suffered by the authority by reason of the untruth of any representation or the breach of any warranty and, in the event that any representation shall prove to be untrue when made or in the event of any breach of warranty, the lending institution shall, at the option of the authority, repurchase the mortgage or security interest or participation for the original purchase price adjusted for amounts subsequently paid thereon, as the authority may determine. (h) The authority may require the recording of an assignment of any mortgage purchased by it from a lending institution. History. — Ga. L. 1979, p. 4662, § 7; Ga. L. 1980, p. 556, § 8; Ga. L. 1985, p. 391, § 6; Ga. L. 1987, p. 150, § 7. 36-41-8. Issuance of revenue bonds; use and commitment of funds; form and contents of bonds; execution; sale; temporary bonds; refunding bonds; trust indenture; validation of bonds; bonds as authorized investments. (a) Each authority shall have the power and is authorized, at one time or from time to time, to issue its revenue bonds in such principal amounts as, in the opinion of the authority, shall be necessary to provide sufficient funds for achieving the corporate purposes thereof, including the making and purchasing of loans for the acquisition, financing, construction, and rehabilitation of residential housing as provided in this chapter; the payment of interest on bonds of the authority; the establishment of reserves to secure such bonds; and all other expenditures of the authority incident to and necessary or convenient to carry out its corporate purposes and powers. (b) The authority may retain the services of a qualified, independent financial advisor. The financial advisor shall not in any manner be involved in the underwriting of the revenue bonds or in the origination, 787 36-41-8 sale, or servicing of mortgage loans for residential housing and shall serve only to advise the authority. (c) The bonds of each issue shall be dated; shall bear interest at such rate or rates as shall be set by the authority (which may include the use of any formula or market-pricing mechanism determined by the authority to be reasonable), without limitation by any existing law of the state, payable at such times as the authority may determine; shall mature at such time or times as the authority may determine; shall be payable in such medium of payment as to both principal and interest as may be determined by the authority; and, at the option of the authority, may be made redeemable before maturity or exchangeable for other bonds of the same series at such price or prices and under such terms and conditions as may be fixed by the authority in the resolution or financing documents providing for the issuance of such bonds or both redeemable and exchangeable. The bonds may be issued as serial bonds or as term bonds with or without mandatory sinking fund provisions or as a combination thereof. (d) The authority shall determine the form of the bonds, including any interest or principal coupons to be attached thereto, and shall fix the denomination or denominations of the bonds and the place or places of payment of principal and interest thereof, which may be at any bank or trust company inside or outside the state. (e) All such bonds shall be executed in the name of the authority by the chairman or vice-chairman and secretary-treasurer of the authority and shall be sealed with the official seal of the authority or a facsimile thereof. Coupons shall be executed in the name of the authority by the chairman or vice-chairman of the authority. The facsimile signature of both the chairman or vice-chairman and the secretary-treasurer of the authority may be imprinted in lieu of the manual signatures if the authority so directs, and the facsimile of the chairman’s or vice-chairman’s signature shall be used on such coupons. Bonds and interest coupons appurtenant thereto bearing the manual or facsimile signature of a person in office at the time such signature was signed or imprinted shall be fully valid notwithstanding the fact that before or after the delivery thereof such person ceased to hold such office. In addition to the foregoing, the bonds shall bear the manual or facsimile signature of the clerk of the superior court of each county wherein is located a municipality activating an authority. (f ) The bonds may be issued in coupon or in registered form, or both, as the authority may determine, and provision may be made for the registration of any coupon bond as to principal alone and also as to both principal and interest. The authority may sell such bonds at public or private sale in such manner and for such price as it may determine to be for the best interest of the authority. 788 36-41-8 (g) Prior to the preparation of definitive bonds, the authority may issue interim receipts, interim certificates, or temporary bonds exchangeable for definitive bonds upon the issuance of the latter. The authority may also provide for the replacement of any bond which shall become mutilated or be destroyed or lost. Such revenue bonds may be issued without any other proceedings or the happening of any other conditions or things than those proceedings, conditions, and things which are specified or required by this chapter. (h) Each authority is authorized to provide by resolution for the issue of refunding bonds of the authority for the purpose of refunding any bonds issued under this chapter and then outstanding, together with accrued interest thereon. The issuance of such refunding bonds, the maturities and all other details thereof, the rights of the holders thereof, and the duties of the authority in respect to the same shall be governed by this chapter insofar as the same may be applicable. (i) If the authority so determines, the bonds may be issued pursuant to a trust indenture between the authority and a trustee, which trust indenture shall have such terms and provisions as may be determined by the authority. (j) Except as provided in this Code section, all revenue bonds issued by the authority under this chapter shall be executed, confirmed, and validated under, and in accordance with, Article 3 of Chapter 82 of this title, except that, in lieu of specifying the maturities or the rate or rates of interest which revenue bonds to be issued by an authority are to bear, the petition and complaint filed in the validation proceeding may state that the bonds, when issued, will mature no later than 40 years from their issuance and bear interest at a rate not exceeding a maximum per annum rate of interest specified in such notices or that, in the event that bonds are to bear different rates of interest for different maturity dates, none of such rates will exceed the maximum rate specified in the notices; provided, however, that nothing contained in this subsection shall be construed as prohibiting or restricting the right of the authority to sell such bonds at a discount, even if in so doing the effective interest cost resulting therefrom would exceed the maximum per annum interest rate specified in such notices. (k) In the event that no appeal is filed within the time prescribed by law or, if an appeal is filed, that the judgment is affirmed on appeal, the judgment of the superior court so confirming and validating the issuance of the bonds and the security therefor shall be forever conclusive upon the validity of the bonds and the security therefor against the authority and all other persons. (l) The bonds are made securities in which all public officers and bodies of the state and all municipalities; all insurance companies and 789 36-41-10 associations and other persons carrying on an insurance business; all banks, bankers, trust companies, savings banks, and savings associations, including savings and loan associations, building and loan associations, investment companies, and other persons carrying on a banking business; all administrators, guardians, executors, trustees, and other fiduciaries, and all other persons whatsoever who are now or may hereafter be authorized to invest in bonds or other obligations of the state may properly and legally invest funds, including capital in their control or belonging to them. The bonds are also made securities which may be deposited with and shall be received by all public officers and bodies of the state and all municipalities for any purposes of which the deposit of the bonds or other obligations of the state is now or may hereafter be authorized. History. — Ga. L. 1979, p. 4662, § 8; Ga. L. 1980, p. 556, §§ 9, 10; Ga. L. 1982, p. 3, § 36; Ga. L. 1985, p. 391, § 7; Ga. L. 1986, p. 10, § 36; Ga. L. 1986, p. 947, § 5; Ga. L. 1987, p. 3, § 36; Ga. L. 1987, p. 150, § 8.