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Alaska Statutes.

Title 18. Health, Safety, Housing, Human Rights, and Public Defender

Chapter 56. Alaska Housing Finance Corporation

Section 95. Mortgage Insurance.

AS 18.56.095. Mortgage Insurance.

   (a) There is a special fund of the state to be known as the "state mortgage insurance fund" (called the "mortgage insurance fund") which shall be completely segregated and set apart from all other funds of the state, and which is a trust fund for the uses and purposes of this section and into and from which money shall be paid as provided in this section. The mortgage insurance fund shall be held by the commissioner of revenue, subject to the power of the commissioner of commerce, community, and economic development to enter into and perform agreements with respect to the use of money in the mortgage insurance fund and to pledge, assign, or grant interests in the mortgage insurance fund as provided in this section. The commissioner of commerce, community, and economic development may enter into agreements with the corporation with respect to the exercise of any power or approval relating to the mortgage insurance fund under this section, including, without limitation, agreements as to the use of money in the mortgage insurance fund, agreements with respect to the terms and conditions upon which payments from the mortgage insurance fund shall be made to the corporation with respect to mortgage loans insured under this section, and agreements regarding the payment of and security for mortgage insurance bonds, and in connection with these agreements the commissioner of commerce, community, and economic development may pledge, assign, or grant other interests in the mortgage insurance fund to the corporation as may be necessary or appropriate in connection with the insurance of mortgage loans and to provide for the payment of and security for mortgage insurance bonds. Any such agreement or any of the rights of the corporation under the agreement and payments received or to be received under the agreement may be pledged or assigned by the corporation for the benefit of the holders of mortgage insurance bonds.
   (b) In addition to any other fees and charges that the corporation may charge on mortgage loans, it may collect or cause to be collected on all mortgage loans made or purchased with the proceeds of the sale of mortgage insurance bonds, either or both a special mortgage loan insurance commitment fee or a mortgage loan insurance premium. The special mortgage loan insurance commitment fees and special mortgage loan insurance premiums when received shall be deposited in the mortgage insurance fund by the corporation, or by any mortgage loan servicer, trustee, or agent designated by the corporation to receive them, and shall be held, invested and, together with all investment income derived from them, reinvested by the commissioner of revenue as set out in AS 37.10.071, subject to any agreement with the corporation under (a) of this section.
   (c) If, at any time after receipt by the corporation of a payment from the mortgage insurance fund with respect to a mortgage loan or any portion of the principal and interest and other amounts payable on a mortgage loan, the corporation recovers an amount on the mortgage loan or portion of it from any source other than the mortgage insurance fund, it shall apply the amount recovered in the following order: first to repay the general fund of the state to the extent of appropriations made pursuant to requests made under (f) of this section, and second, to repay the mortgage insurance fund.
   (d) A mortgage loan may be insured if the loan-to-value ratio at the time of the insurance loan does not exceed 80 percent or, if the loan-to-value ratio does exceed that percentage, if it is federally insured or guaranteed or insured by a qualified mortgage insurance company to the extent of the excess. The endorsement of the corporation on the mortgage at the time of purchase or acquisition of the mortgage loan is conclusive evidence that the mortgage loan is insured under the provisions of this section. The insurance is payable solely from the mortgage insurance fund.
   (e) Mortgage loans may only be insured when the amount in the mortgage insurance fund as a percentage of the sum of all mortgage loans to be insured and all unpaid principal on mortgage loans insured by the corporation equals or exceeds the fund requirement. As used in this section, the fund requirement is calculated as follows as to the following mortgage loans insured by the corporation:
        (1) in the case of federally insured or guaranteed mortgage loans, or mortgage loans insured by a qualified mortgage insurance company or, if not so insured or guaranteed, with a loan-to-value ratio at the time of the mortgage insurance application less than 80 percent, the greater of (A) two percent of the unpaid principal amount of those mortgage loans, or (B) a percentage that the corporation with the approval of the commissioner of commerce, community, and economic development determines is actuarially sound for operation of the mortgage insurance fund;
        (2) [Repealed, § 77 ch 106 SLA 1980].
   (f) On December 1 of each year the commissioner of commerce, community, and economic development shall determine the amount on deposit in the mortgage insurance fund. If the amount in the fund is less than the fund requirement, the commissioner of commerce, community, and economic development shall request the corporation to transfer from any available funds the amount necessary to restore the mortgage insurance fund to the fund requirement and the corporation shall promptly comply with the request from any funds available subject to agreements with holders of any of its obligations. If sufficient funds are not provided as the result of the requests, the commissioner of commerce, community, and economic development shall, no later than January 2 of the following year, make and deliver to the governor and to the chairmen of the house and senate finance committees a certificate stating the sum required to restore the fund to the fund requirement and the sum so certified may be appropriated and paid to the fund during the then current state fiscal year. Nothing in this subsection creates a debt or liability of the state.
   (g) [Repealed, § 77 ch 106 SLA 1980].
   (h) In this section, unless the context clearly indicates a different meaning,
        (1) the determination of what is "actuarially sound" with respect to the operation of the mortgage insurance fund shall be based on a consideration of the factors that will provide sufficient revenue for the operation of the fund, without regard to amounts that may have been or may, after the date of determination of actuarial soundness, be appropriated pursuant to (f) of this section, including, without limitation, estimates of future defaults and losses on mortgage loans insured under this section based on actual default and loss experience on those mortgage loans or on similar mortgage loans in this state or elsewhere, estimates of recoveries on defaulted or foreclosed mortgage loans based on that experience, the terms and conditions of the mortgage loans insured under this section, estimates of earnings and income of amounts on deposit in the mortgage insurance fund, and any other appropriate factors;
        (2) "loan-to-value ratio" means the ratio between the principal amount of a mortgage loan and the appraised value, as determined by the corporation, of the residential housing financed by the mortgage loan;
        (3) "mortgage insurance bond" means a bond, note, or other obligation of the corporation, the proceeds of which are authorized to be expended to purchase or make a mortgage loan insured under this section;
        (4) "qualified mortgage insurance company" means a mortgage insurance company satisfactory to the corporation;
        (5) "special mortgage loan insurance commitment fee" and "special mortgage loan insurance premium" mean, respectively, a fee of a percent of the principal amount of a mortgage loan to be insured under this section, and an annual insurance premium of a percent of the portion of the unpaid principal amount of a mortgage loan insured under this section that is not federally insured or guaranteed or insured by a private mortgage insurance company, that the corporation with the approval of the commissioner of commerce, community, and economic development determines is actuarially sound for the operation of the mortgage insurance fund.