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S1442.......................................by COMMERCE AND HUMAN RESOURCES IDAHO HOUSING AND FINANCE ASSOCIATION - Amends existing law to provide that the Idaho Housing and Finance Association shall not have the power to require a mortgage lender to release the servicing of a qualified mortgage loan in favor of the association as a condition of the association's purchase if the association would otherwise be required to purchase that loan; and to provide an exception. 02/16 Senate intro - 1st rdg - to printing 02/17 Rpt prt - to Com/HuRes
|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fifth Legislature Second Regular Session - 2000 IN THE SENATE SENATE BILL NO. 1442 BY COMMERCE AND HUMAN RESOURCES COMMITTEE 1 AN ACT 2 RELATING TO POWERS OF THE IDAHO HOUSING AND FINANCE ASSOCIATION; AMENDING SEC- 3 TION 67-6206, IDAHO CODE, TO PROVIDE THAT THE ASSOCIATION SHALL NOT HAVE 4 THE POWER TO REQUIRE A MORTGAGE LENDER TO RELEASE THE SERVICING OF A QUAL- 5 IFIED MORTGAGE LOAN IN FAVOR OF THE ASSOCIATION AS A CONDITION OF THE 6 ASSOCIATION'S PURCHASE IF THE ASSOCIATION WOULD OTHERWISE BE REQUIRED TO 7 PURCHASE THAT LOAN AND TO PROVIDE AN EXCEPTION. 8 Be It Enacted by the Legislature of the State of Idaho: 9 SECTION 1. That Section 67-6206, Idaho Code, be, and the same is hereby 10 amended to read as follows: 11 67-6206. POWERS OF ASSOCIATION. The housing and finance association is an 12 independent public body corporate and politic, exercising public and essential 13 governmental functions, and having all the powers which are hereby declared to 14 be public purposes necessary or convenient to carry out and effectuate the 15 purposes and provisions of this act, including the following powers in addi- 16 tion to others herein granted: 17 (a) To sue and to be sued; to have a seal and to alter the same at pleas- 18 ure; to have perpetual succession; to make and execute contracts and other 19 instruments necessary or convenient to the exercise of the powers of the asso- 20 ciation; and to make and from time to time amend and repeal bylaws, rules, not 21 inconsistent with this act, to carry into effect the powers and purposes of 22 the association. 23 (b) To conduct its operations within any or all of the counties of the 24 state. 25 (c) To cooperate with housing authorities throughout Idaho in the devel- 26 opment of housing projects. 27 (d) To assign priorities for action and revise or modify said priorities 28 from time to time. 29 (e) To make and execute agreements, contracts and other instruments nec- 30 essary or convenient in the exercise of the powers and functions of the asso- 31 ciation under this act, including contracts with any housing sponsor, mortgage 32 lender, person, firm, corporation, governmental agency, or other entity; and 33 to include in any contract let in connection with a project, stipulations 34 requiring that the contractor and any subcontractors comply with requirements 35 as to minimum wages and maximum hours of labor, and comply with any conditions 36 which the federal government may have attached to its financial aid of the 37 project and to designate mortgage lenders to act for and in behalf of the 38 association, with respect to originating or servicing and processing mortgage 39 loans of the association, and to pay the reasonable value of service rendered 40 to the association by such mortgage lenders pursuant to contracts with mort- 41 gage lenders. 42 (f) To lease, sell, construct, finance, reconstruct, restore, rehabili- 43 tate, operate or rent any housing projects, nonprofit facilities or any dwell- 2 1 ings, houses, accommodations, lands, buildings, structures or facilities 2 embraced in any housing project or nonprofit facilities and, subject to the 3 limitations contained in this act, to establish and revise the rents or 4 charges therefor. 5 (g) To own, hold and improve real or personal property; to purchase, 6 lease, obtain options upon, acquire by gift, grant, bequest, devise, eminent 7 domain or otherwise, any real or personal property or any interest therein. 8 (h) To acquire any real property; to sell, lease, exchange, transfer, 9 assign, pledge or dispose of any real or personal property or any interest 10 therein. 11 (i) To insure or provide for the insurance of any real or personal prop- 12 erty or operation of the association against any risks or hazards, and to pro- 13 cure or agree to the procurement of insurance or guarantees from the federal 14 government or other source for the payment or purchase of any bonds or parts 15 thereof issued by the association, including the power to pay for any such 16 insurance or guarantees. 17 (j) To invest any funds held in reserves or sinking funds, or any funds 18 not required for immediate disbursement, in property or securities in which a 19 bank, as defined in the "bank act," title 26, Idaho Code, may legally invest 20 funds including without limitation, to agree to purchase the obligations of 21 any federal, state or local government upon such conditions as the association 22 may determine to be prudent and in its best interest. 23 (k) Within its area of operation: to investigate into living, dwelling 24 and housing conditions and into the means and methods of improving such condi- 25 tions; to determine where slum areas exist or where there is a shortage of 26 adequate, safe and sanitary dwelling accommodations for persons of low-income; 27 to make studies and recommendations relating to the problem of clearing, 28 replanning and reconstruction of slum areas and the problem of providing 29 dwelling accommodations for persons of low-income, and to cooperate with the 30 city, the county, the state or any political subdivision thereof in action 31 taken in connection with such problems; and to engage in research, studies and 32 experimentation on the subject of housing. 33 (l) To participate in cooperative ventures with any agencies, organiza- 34 tions and individuals in order to undertake the provision of housing for per- 35 sons of low-income or to undertake the provision of nonprofit facilities. 36 (m) To provide research and technical assistance to eligible agencies, 37 organizations and individuals eligible to develop low cost housing and to 38 research new low cost housing development and construction methods. 39 (n) To make and undertake commitments to make or participate in the mak- 40 ing of mortgage loans to persons of low-income and to housing sponsors, 41 including without limitation federally insured mortgage loans, and to make 42 temporary loans and advances in anticipation of permanent loans to housing 43 sponsors; said mortgage loans to housing sponsors shall be made to finance the 44 construction, improvement, or rehabilitation of housing projects for persons 45 of low-income, and/or mixed income housing projects upon the terms and condi- 46 tions set forth in this act; provided, however, that such loans shall be made 47 only upon the determination by the association that mortgage loans are not 48 otherwise available, wholly or in part, from private lenders upon reasonably 49 equivalent terms and conditions. 50 (o) To purchase, or make commitments to purchase or participate in the 51 purchase of mortgage loans from mortgage lenders which loans have been made 52 for the construction, improvement, or rehabilitation of housing projects for 53 persons of low-income and/or mixed income housing projects or loans which have 54 been made to persons of low-income for residential housing, upon terms set 55 forth in this act; provided, however, that any such purchase shall be made 3 1 only upon the determination by the association that the mortgage loans to be 2 made are not otherwise being made by mortgage lenders upon reasonably equiva- 3 lent terms and conditions. Also, to purchase, or make commitments to purchase 4 or participate in the purchase of mortgage loans from mortgage lenders whether 5 or not said loans were made to persons of low-income, upon terms set forth in 6 this act; provided, however, that the proceeds from such purchase or the 7 equivalent thereof shall be reinvested in obligations of the association, in 8 mortgage loans to persons of low-income or in mortgage loans for housing proj- 9 ects for persons of low-income and/or mixed income housing projects, and pro- 10 vided that any such purchase shall be made only upon the determination by the 11 association that the mortgage loans to be made are not otherwise being made by 12 mortgage lenders upon reasonably equivalent terms and conditions. 13 (p) To provide interim financing for housing projects including mixed 14 income housing projects approved by the association, provided that the associ- 15 ation has determined that such financing is not otherwise available from mort- 16 gage lenders upon reasonably equivalent terms and conditions. 17 (q) To prescribe rules and policies in connection with the performance of 18 its functions and duties. 19 (r) To do all other things deemed necessary and desirable to accomplish 20 the objectives of this act. 21 (s) To borrow money and issue bonds and notes or other obligations, to 22 invest the proceeds thereof in any lawful manner and to fund or refund the 23 same, and to provide for the rights of the holders of its obligations as pro- 24 vided in this act and in connection therewith, to waive, by resolution or 25 other document of the association, the exemption from federal income taxation 26 of interest on any of the association's obligations under existing or future 27 federal law and to establish, maintain and preserve the association's general 28 obligation rating and any rating on its bonds, notes or other obligations. 29 (t) To receive and accept aid or contributions from any source. 30 (u) To employ architects, engineers, attorneys, accountants, housing con- 31 struction and financial experts and such other advisors, consultants and 32 agents as may be necessary in its judgment and to fix their compensation. 33 (v) To insure mortgage payments of any mortgage loan made for the purpose 34 of constructing, rehabilitating, purchasing, leasing, or refinancing housing 35 projects upon such terms and conditions as the association may prescribe. 36 (w) To fix and revise from time to time and charge and collect fees and 37 charges in connection with loans made or other services provided by the asso- 38 ciation pursuant to this act, and to make and publish rules respecting the 39 making and purchase of mortgage loans. 40 (x) To organize a nonprofit corporation to assist the association in pro- 41 viding for housing projects. 42 (y) To enter upon and inspect any housing project, including housing 43 projects undertaken by housing sponsors, for the purpose of investigating the 44 physical and financial condition thereof, and its construction, rehabilita- 45 tion, operation, management and maintenance, and to examine all books and 46 records with respect to capitalization, income and other matters relating 47 thereto. 48 (z) To order such alterations, changes or repairs as may be necessary to 49 protect the security of its investment in a housing project or the health, 50 safety, and welfare of the occupants thereof. 51 (aa) To make secured loans for the purpose of providing temporary or per- 52 manent financing or refinancing of all or part of the project costs of any 53 nonprofit facility, including the refunding of any outstanding obligations, 54 mortgages or advances issued, made or given by any person for the project 55 costs of a nonprofit facility; and to charge and collect interest on the loans 4 1 for the loan payments upon such terms and conditions, including without limi- 2 tation bond rating and issuance conditions, as the board of commissioners con- 3 siders advisable which are not in conflict with this chapter. 4 (bb) As security for the payment of the principal of and interest on any 5 revenue bonds issued and any agreements made in connection therewith, to mort- 6 gage, pledge, or otherwise encumber any or all of nonprofit facilities or any 7 part or parts thereof, whether then owned or thereafter acquired, and to 8 assign any mortgage and repledge any security conveyed to the association, to 9 secure any loan made by the association and to pledge the revenues and 10 receipts therefrom. 11 (cc) To issue bonds for the purpose of financing all or part of the proj- 12 ect cost on any nonprofit facility and to secure the payment of the bonds as 13 provided in this chapter. 14 (dd) To purchase or sell by installment contract or otherwise, and convey 15 all or any part of any nonprofit facility for such purchase price and upon 16 such terms and conditions as this board of commissioners considers advisable 17 which are not in conflict with this chapter. 18 (ee) To lease all or any part of any nonprofit facility for such rentals 19 and upon such terms and conditions, including options to purchase, as the 20 board of commissioners considers advisable and not in conflict with this chap- 21 ter. 22 (ff) To construct and maintain one (1) or more nonprofit facilities that 23 the association shall not operate any nonprofit facility as a business other 24 than as lessor, seller or lender. The purchase, holding and enforcing of mort- 25 gages, deeds of trust, or other security interests and contracting for any 26 servicing thereof is not considered the operation of a nonprofit facility as a 27 business. 28 (gg) To act as the designated housing resource clearinghouse in the state 29 for matters relating to affordable housing. 30 (hh) To coordinate the development and maintenance of a housing policy for 31 the state. 32 (ii) Notwithstanding any of the foregoing enumerated powers in this sec- 33 tion or in section 67-6207A, Idaho Code, or section 67-6207B, Idaho Code, the 34 association shall not have the power to require a mortgage lender to release 35 the servicing of a qualified mortgage loan in favor of the association or to a 36 division of the association as a condition of the association's purchase, if 37 the association would otherwise be required to purchase that qualified mort- 38 gage loan from the mortgage lender, unless the association has established, by 39 administrative due process, that the mortgage lender is not capable of provid- 40 ing servicing of that qualified mortgage loan.
STATEMENT OF PURPOSE RS 09983 The Idaho housing and finance association requires a mortgage lender to release all servicing rights to any residential loan sold to them. With buyer income limits as high as $67,900 in Canyon county for example, coupled with the waiver of the first time ownership mortgage lending firms are losing customary borrowers to a political subdivision of the state of Idaho. This legislation would allow a qualified mortgage lender to retain the servicing rights on loans they make and subsequently sell to the Idaho housing and finance association. FISCAL IMPACT None Contact Name: Rod Beck Phone: (208) 376-9797 STATEMENT OF PURPOSE/FISCAL NOTE S 1442