SECTION 330:10-11-2. Program receipts reporting requirements

(a)   On or before the 13th day of each month each participant will report to the Trustee, and the Agency (either in writing or by telephone) as to the balance of the Receipts Account on the 10th day of each month. This report establishes the amount to be drawn by the Trustee on the next succeeding 15th day of the month.

(b)   On or before the 26th day of each month, the participant shall deliver to the Trustee and Agency a report specifying:

(1)   the amount of funds in the Receipts Account,

(2)   the number and amount of mortgage loans delinquent for twenty-three (23) days or more, as of the date of the report,

(3)   the identify of each mortgage loan delinquent or in default,

(4)   current information in respect to the filing, processing and prosecuting, and

(5)   if applicable, the status of foreclosure proceedings if instituted; such report shall be complete as to receipts on the mortgage loans as of the 23rd day of each month.

(c)   The participant shall direct requisitions with appropriate documentation to the Trustee to effect payment for the general fund (subject to restrictions in the Indenture) to:

(1)   Reimburse the participant from insurance proceeds and liquidation proceeds for amounts expended by it with respect to the related mortgage loan in good faith in connection with the restoration of property damaged by an uninsured cause;

(2)   Reimburse the participant from insurance proceeds for insurance expenses and pay itself from insurance proceeds any unpaid service fee on the related mortgage loan, such payment being limited to the amount, if any, by which the aggregate of the liquidation proceeds, if any, and insurance proceeds received in connection with the liquidation of the defaulted mortgage loan is after the deduction of insurance expenses and any amounts deducted for the purposes described in (1) of this subsection, in excess of the principal balance of such mortgage loan, together with accrued unpaid interest thereon;

(3)   Reimburse the participant from liquidation proceeds for liquidation expenses and, to the extent that liquidation proceeds after such reimbursement and any other reimbursement pursuant to (1) of this subsection are in excess of the principal balance on the related mortgage loan together with accrued and unpaid interest thereon, to pay to itself such excess as servicing compensation on the related mortgage loan; and

(4)   Disburse to the participant or reimburse the participant for approved lost claims in excess of $2,000, made under the provisions of any Standard Hazard Insurance Policy maintained with respect to any mortgage loan pursuant to the Agreement. Proceeds of approved loss claims not in excess of $2,000 shall be deposited in the mortgage service account.

(d)   The participant may reimburse itself from the mortgage service account for late recoveries of all real estate taxes advanced by the participant and premiums for insurance policies required by the Agreement.

(e)   In connection with its activities as servicer of the mortgage loans, each participant agrees to comply with any requirements imposed by any insurers of mortgage loans and with all relevant state and federal laws and to present, on behalf of the parties in interest, claims against all insurers, and to take such reasonable action as shall be necessary to permit recovery under all insurance policies.

(f)   Each participant shall foreclose upon or otherwise comparably convert the ownership of properties securing such of the mortgage loans as come into and continue in default and as to which no satisfactory arrangements can be made for the collection of delinquent payments. In connection with such foreclosure or other conversion, a participant will follow such practices and procedures as it deems necessary or advisable and as are normal in its general mortgage servicing activities as otherwise specified by the Surety or the Trustee. The foregoing is subject to the provision that in the case of damage to mortgaged property from an uninsured cause, a participant may expend its own funds towards the restoration of the property if it shall determine:

(1)   that such restoration will increase the proceeds of liquidation of the mortgage loan to the Agency, after reimbursement to itself for such expenses, and

(2)   that such expenses will be recoverable by it either through liquidation proceeds (respecting which it shall have priority for purposes of reimbursement from the receipts account) or through insurance proceeds (respecting which it shall have similar priority).

(g)   A participant shall be responsible for all other costs and expenses incurred by it in any such proceedings or in connection with the preservation of all insurance policies respecting the mortgage loans provided, however, that it shall be entitled to withdrawal thereof (as well as its normal service fee) to the extent, but only to the extent, that reimbursements from the receipts account with respect thereto are permitted under the Agreement.