1. A. Preclaim Payments.

   1. (1) The provisions of this section apply to all public agency insured lenders, and to private insured lenders only at the sole discretion of the Fund.
   2. (2) After receipt of notice of default, the Fund, upon request of an insured lender, shall make the periodic payments to the lender that are due under the terms of the insured mortgage, except late charges and mortgage insurance premiums.
   3. (3) The periodic payments shall be made for all missed debt service payments beginning with the default for which the Fund is given notice in accordance with Regulation .19A of this chapter. The periodic payments shall continue until the default is cured or the insured loan is foreclosed upon by the lender or assigned to the Fund.
   4. (4) If the default is cured, the amount of periodic payments made shall be reimbursed by the lender to the Fund. If the insured loan is foreclosed upon by the lender, the amount of periodic payments shall be excluded from the loss computed to the lender. If the loan is assigned to the Fund, the amount of periodic payments shall be included in the claim paid by the Fund in accordance with Regulation .21C(4) of this chapter.
   5. (5) If the Fund makes periodic payments under this section, then it shall be considered to obtain from the lender the right to recover from the property or the borrower, as may be permitted under the loan documents, the total of all periodic payments plus that amount which equals the mortgage insurance premiums not paid to the Fund by the lender on behalf of the borrower. This right of recovery of payments is additional to and cumulative with all other rights arising from an assignment of an insured mortgage to the Fund.
   6. (6) Periodic payments made to the lender by the Fund may not be considered a remedy of the borrower's default under the terms of the insured loan or any collateral agreements.

2. B. Insurance Coverage.

   1. (1) Inclusions. The Fund insures only monetary losses, as computed in accordance with Regulation .21C or D of this chapter.
   2. (2) Exclusions. The Fund does not insure property losses, including without limitation title risk, the risk of loss from defective construction, casualty risk, or any other reduction in project value due to insurable risk or force majeure.

   3. (3) Preclaim Property Loss. If any reduction in value due to casualty, title loss, act of God, or other damage to or destruction of the property occurs before the assignment of a loan to the Fund, the Fund has the option, at its sole discretion, to:

      1. (a) Reduce the claim by the amount of the reduction in property value or anticipated loss and permit the lender to enforce its rights under any applicable insurance policies or at law or in equity; or
      2. (b) Require the lender to assign to the Fund its rights, whether under insurance policies or at law or in equity, to be compensated for the loss, without reduction in the claim by reason of the reduced property value or anticipated loss.

Authority: Housing and Community Development Article, Title 3, Subtitle 2, Annotated Code of Maryland

Effective date: November 15, 1972

Regulations .07A, .09A, B, and .17A amended as an emergency provision effective January 20, 1977 (4:4 Md. R. 276); emergency status expired June 14, 1977

Regulation .07A, B amended effective June 25, 1977 (4:13 Md. R. 1027)

Regulation .07D amended effective August 4, 1976 (3:16 Md. R. 848)

Regulation .07F amended effective October 27, 1976 (3:3 Md. R. 1249)

Regulation .07 amended effective October 29, 1975 (2:27 Md. R. 1626)

Regulation .09 amended effective June 25, 1977 (4:13 Md. R. 1027)

Regulation .09A amended effective April 13, 1977 (4:8 Md. R. 632)

Regulations .10—.20 amended effective August 20, 1975 (2:18 Md. R. 123)

Regulations .10 and .16 amended effective October 29, 1975 (2:27 Md. R. 16)

Regulations .10, .11C, .14—.16 amended effective August 30, 1974 (1:1 Md. R. 13)

Regulation .17 amended effective January 31, 1976 (3:4 Md. R. 214) and June 25, 1977 (4:13 Md. R. 1027)

Chapter revised as an emergency provision effective November 9, 1977 (4:22 Md. R. 1666); adopted permanently effective November 18, 1977 (4:24 Md. R. 1804)

Regulation .01C amended effective December 5, 1983 (10:24 Md. R. 2184)

Regulation .03E amended effective June 29, 1979 (6:13 Md. R. 1124)

Regulations .06A, .07A, and .09A amended effective October 20, 1978 (5:21 Md. R. 1585)

Regulations .06B, .09C, .10 adopted effective March 24, 1978 (5:6 Md. R. 464)

Regulation .06C adopted effective October 20, 1978 (5:21 Md. R. 1585)

Regulation .09A amended effective June 29, 1979 (6:13 Md. R. 1124); September 5, 1980 (7:18 Md. R. 1735)

Regulation .10 amended effective June 29, 1979 (6:13 Md. R. 1124)

Regulations .11K and .15N adopted as an emergency provision effective October 15, 1983 (10:22 Md. R. 1962); adopted permanently effective March 26, 1984 (11:6 Md. R. 548)

Regulation .15B amended effective September 5, 1980 (7:18 Md. R. 1735)

Regulation .15B amended as an emergency provision effective April 25, 1983 (10:15 Md. R. 1341); emergency status expired October 25, 1983

Regulation .17C repealed effective October 8, 1984 (11:20 Md. R. 1741)

Regulation .18 adopted as an emergency provision effective March 22, 1979 (6:7 Md. R. 574); emergency status expired October 3, 1979

Regulation .18 adopted effective June 29, 1979 (6:13 Md. R. 1124)

Regulation .18C adopted effective December 12, 1980 (7:25 Md. R. 2332)

Regulation .18D adopted as an emergency provision effective April 25, 1983 (10:15 Md. R. 1341); emergency status expired October 25, 1983; adopted permanently effective November 7, 1983 (10:22 Md. R. 1965)

Regulation .19 adopted as an emergency provision effective June 1, 1983 (10:12 Md. R. 1063); emergency status extended at 10:25 Md. R. 2262; adopted permanently effective December 5, 1983 (10:24 Md. R. 2184)

Chapter recodified from COMAR 05.01.02 to COMAR 05.06.01

Regulation .01C amended effective March 4, 1991 (18:4 Md. R. 446)

Regulation .02 amended effective November 14, 1988 (15:23 Md. R. 2657)

Regulations .02, .07, and .18 amended as an emergency provision effective April 30, 1991 (18:10 Md. R. 1114)

Regulation .02B amended effective September 16, 1991 (18:18 Md. R. 2003)

Regulations .03—.08 repealed effective May 23, 1994 (21:10 Md. R. 841)

Regulation .06 amended effective January 8, 1990 (16:26 Md. R. 2786)

Regulation .06D amended effective March 4, 1991 (18:4 Md. R. 446)

Regulation .07 amended effective September 16, 1991 (18:18 Md. R. 2003)

Regulation .09 repealed and new Regulation .09 adopted effective March 4, 1991 (18:4 Md. R. 446)

Regulation .10A amended effective March 4, 1991 (18:4 Md. R. 446)

Regulation .11C amended effective November 14, 1988 (15:23 Md. R. 2657)

Regulation .11L adopted effective November 14, 1988 (15:23 Md. R. 2657)

Regulation .15B and E amended effective November 14, 1988 (15:23 Md. R. 2657)

Regulation .16A amended effective April 30, 1990 (17:8 Md. R. 975)

Regulation .16F amended and G adopted effective October 28, 1991 (18:21 Md. R. 2304)

Regulation .16G amended effective June 22, 1992 (19:12 Md. R. 1132)

Regulation .18A amended as an emergency provision effective June 28, 1989 (16:14 Md. R. 1562); adopted permanently effective October 30, 1989 (16:21 Md. R. 2260)

Regulation .18 repealed and new Regulation .18 adopted effective September 16, 1991 (18:18 Md. R. 2003)

Regulation .18 repealed effective May 23, 1994 (21:10 Md. R. 841)

Chapter, Maryland Housing Fund, repealed and Regulations .01—.24, Maryland Housing Fund—Multifamily Program, adopted effective December 5, 1994 (21:24 Md. R. 1987)

Regulation .02B amended effective September 29, 2014 (41:19 Md. R. 1076)

Regulation .04A amended effective November 3, 2008 (35:22 Md. R. 1956)

Regulation .04A, C amended effective March 26, 2018 (45:6 Md. R. 317)

Regulation .05 amended effective April 5, 1999 (26:7 Md. R. 539)

Regulation .10C amended effective April 19, 2010 (37:8 Md. R. 614)