§ 4 — Development Finance Insurance Fund

Section 4. There is hereby established a Development Finance Insurance Fund to which shall be credited all premiums received by the Agency for insurance or reinsurance provided by it under this section and section 5 and not payable for reinsurance or insurance provided by other insurers, any other sums realized by the Agency pursuant to its industrial mortgage loan insurance agreements or related financing documents related to said fund, whether by way of subrogation or otherwise, any state appropriations or other monies made available to the fund and funds from the Industrial Mortgage Insurance Fund established under the provisions of section 33 of chapter 23A. The fund shall be held in the custody of one or more banks or trust companies having a principal place of business in the commonwealth. The fund shall be held for the security of the holders of industrial mortgage loans or reserves or portions thereof insured under section 34, either as a single fund for all such holders or, subject to the rights of the holders of such loans so insured on November 15, 1983, in such separate funds for the holders of such loans, reserves or portions thereof as the Agency may determine. If any fund is established which is separate from that in existence on November 15, 1983, the holders of insured loans secured by such existing fund on November 15, 1983 and the holders of insured loans, reserves or portions thereof secured by such separate fund shall be secured by such existing fund and such separate fund pro-rata, without preference or priority; but the holders of insured loans, reserves or portions thereof secured by a separate fund established after November 15, 1983 shall not be secured by any other such separate fund unless the documents governing such separate fund otherwise provide. The Development Finance Insurance Fund or funds shall be governed by one or more trust agreements entered into by the Agency with the trustees. Each trust agreement may contain provisions and limitations, which need not be uniform, as to the investment and disbursement of monies in the fund or funds to which it applies, the payment of expenses of such funds, the appointment, resignation and discharge of trustees, the delegation of enforcement and collection powers under the insurance agreements to the trustees, the duties of the trustees, amendments of the trust agreement and such other lawful provisions and limitations as may be deemed appropriate. Unless otherwise provided in the trust agreement applicable to any such fund, income earned by such funds may be used for the purposes of the Agency. Without limiting the foregoing but subject to the pro-rata rights of holders of loans insured on November 15, 1983, such trust agreement may require Agency findings and loan criteria in addition to or stricter than those required by section 5; may limit the amount and characteristics of insured loans, reserves or portions thereof to be secured by a fund or funds; may authorize, restrict or prohibit disbursement of monies in the fund or funds for costs of enforcing or preserving the mortgage security under the applicable financing documents, for costs of stop-loss or similar insurance to protect the fund or funds, or for other costs the Agency considers appropriate to maintain the integrity of the fund or funds; may require income earned by the fund or funds to be retained for the benefit of the fund; may provide additional security for holders of particular loans, reserves or portions thereof; and may determine the order in which claims, costs and expenses or categories thereof will be paid from the fund or funds. The trust agreement may pledge premiums and other monies which are to be deposited in the fund or funds. Such pledge shall be valid and binding from the time when the pledge is made. The premiums and other monies so pledged and thereafter received by the fund or funds or on its or their behalf by the trustees shall immediately be subject to the lien of such pledge and shall be valid and binding as against all parties having claims of any kind against the fund or funds, irrespective of whether such parties have notice thereof. No filing need be made under the provisions of chapter 106. Whenever the Agency issues bonds any part of the proceeds of which are used to finance insured loans, reserves or portions thereof, all provisions and limitations which may be contained in a trust agreement governing the Development Finance Insurance Fund or funds may instead or in addition be contained in the resolution or trust agreement securing such bonds, without the need for any filing under the provisions of said chapter 106. Subject to the provisions of the trust agreement securing the same, any holder of the bonds of the Agency the proceeds of which were used to finance the insured loans, and the trustee under any trust agreement securing such bonds shall have the right to bring suit to require the application of any amounts in the Development Finance Insurance Fund in accordance with the provisions of this section or of the trust agreement, including, but not limited to, appointment of a receiver for said Development Finance Insurance Fund or any fund held thereunder.