40 Tex. Admin. Code § 177.11 - Servicing Loans
(a) Payments of
principal and interest on the board's loan will be made on a monthly basis
directly to the participating lending institution agreeing to service the
veteran's loan. The board's portion of this loan will be forwarded to the board
in accordance with the contract between the board and the participating lending
institution. The installment payments collected by the participating lending
institution may include installments on taxes and insurance and other fees and
expenses approved by the board.
(b)
In the event that a veteran becomes delinquent and defaults, it shall be the
responsibility of the administrator and the participating lending institution
servicing the loan to determine if foreclosure on the loan is necessary. If
foreclosure is necessary, the participating lending institution shall initiate
foreclosure actions under the provisions of the deed of trust.
(c) The participating lending institution
shall verify that during the course of the loan the hazard insurance and
mortgage repayment insurance are current. In the event of default or occurrence
of any condition covered by the insurance, the participating lending
institution will notify the insurer and file a claim under the provisions of
the applicable policies. The board's portion of the proceeds shall be computed
as a percentage of the board's principal balance to the total principal
balance. The participating lending institution shall forward to the board its
portion of the proceeds under the policy.
(d) The veteran may prepay his loan in
accordance with the loan documents and in compliance with the requirements of
the participating lending institution or the board at any time in whole or in
part with no penalty. The veteran must contact the participating lending
institution to make arrangements for partial prepayment.
(e) The administrator shall incorporate into
the guidelines for participating lending institutions and the contracts between
the board and the participating lending institutions provisions governing
servicing of loans, including procedures for determining default and
foreclosure.
Notes
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