N.Y. Public Authorities Law § 2429-a: Payment of insurance and development corporation credit support

§ 2429-a. Payment of insurance and development corporation credit

support. 1. The agency shall establish procedures to be followed by a

mortgagee in the event of a default under the terms of any mortgage

insured by the agency. The agency may require that prior to submitting a

claim to the agency for payment of insurance the mortgagee shall take

such actions with respect to the property securing the defaulted

mortgage as may be specified by the agency to be satisfactory evidence

of a continuing default, including but not limited to the following: (i)

becoming lawfully the mortgagee in possession thereof; (ii) causing a

receiver to be appointed of such property; (iii) obtaining voluntary

conveyance of the mortgagor's right and title to such property; or (iv)

obtaining by foreclosure clear and unencumbered title to such property,

all in such manner as the agency may require. Following submission of a

valid claim the agency shall pay an amount which shall not exceed the

lesser of (1) the then outstanding insured principal amount of the

mortgage multiplied by the per centum of such outstanding amount insured

by the agency and a per centum of the mortgagee's cost arising from the

default, inclusive of public liens and delinquent and unpaid interest,

all as the agency may from time to time allow, which per centum shall

not exceed the per centum of the outstanding principal indebtedness

insured by the agency or (2) the insured amount of the mortgage at the

date of execution of the insurance contract or its latest amendment, if

any, except that the agency shall pay the greater of the two amounts on

claims by a public employee pension fund, or by a public benefit

corporation derived from the sale of notes or bonds issued by said

corporation, provided that no more than the actual loss suffered by such

public employee pension fund or public benefit corporation shall be

paid. Such payment may be made by the agency in a lump sum, or in

partial payments made within such period of time as may be agreed to

between the agency and the mortgagee, all in accordance with procedures

to be established by the agency.

2. The agency shall establish, by contract or otherwise, procedures to

be followed with respect to development corporation credit support for

which the development corporation credit support account has been

determined by the agency to be a source or potential source of payment.