Sec. 05.06.08.07. Mortgage Insurance

A. Application. If required by the Fund, a lender shall submit an application, in the form prescribed by the Fund, which shall contain a complete credit package and any other documentation required by the Fund. If documentation is incomplete, the credit evaluation may be delayed and may result in the rejection of the application.

B. Underwriting and Appraisal. An application for mortgage insurance received from an approved lender may be subject to underwriting and appraisal review in accordance with the requirements of the Fund.

C. Scope of Insurance Coverage.

(1) Mortgage insurance coverage is limited to economic loss due to a monetary default and does not include loss due to casualty or title risk.

(2) Expenses incurred for property repair resulting from casualty loss, including losses due to negligence, flood, fire, termites, vandalism, and defective construction, are not eligible for coverage.

(3) Expenses incurred by the lender in the preservation and normal maintenance of an insured property may be covered in accordance with the terms and conditions of the applicable insurance policy governing the insured mortgage.

D. To maintain insurance coverage, the following transactions require prior approval of the Fund on terms and conditions acceptable to the Fund:

(1) A transfer of any interest in the secured property;

(2) An assignment of the insured mortgage loan;

(3) An assumption of an insured mortgage loan; or

(4) Any change or modification of the terms of the insured mortgage.