| (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. |
