1. (a) The lender shall notify the Authority in writing within 15 days of default by borrower. Default by the borrower will be deemed to have occurred on the date of the lender's knowledge of default. The lender shall be deemed to have knowledge of a default in payment of money by a borrower on the 31st day after such payment is due. The lender shall be deemed to have knowledge of a default, other than a default in payment, on the date of the lender's actual knowledge of such default.
2. (b) The lender and the Authority may take reasonable steps to ensure fulfillment of the loan obligation. The lender and the Authority may agree to an extension of time or any amount of payment of money, or agree to extend the period during which any other default may be cured. Such extension of time must be agreed upon by the lender, borrower, and the Authority in writing.
3. (c) Should the lender and the Authority determine that an extension of time will not cure the default, then lender must notify borrower in writing, complying with all proper notification and foreclosure procedures in accordance with applicable law.
4. (d) Lender and the Authority shall agree to the strategy to be used during the foreclosure proceedings.
5. (e) If at the foreclosure sale the lender should acquire the property, the lender and the Authority representative will mutually agree on a procedure for the sale of the acquired property.
6. (f) Should a deficiency occur through the foreclosure sale, then the lender shall proceed with the all actions necessary and proper under applicable law to secure a deficiency judgment, with the expenses for such proceedings to be shared on a pro-rata basis between the lender and the Authority based upon the percentage of ownership as identified in subsection (g) of this section.
7. (g) Net proceeds from the foreclosure sale or the ultimate final sale of the property by the lender, whichever is greater, and any net proceeds resulting from the collection under a deficiency judgment, shall be shared by the lender and the Authority in the ratio of 56% to the lender, and 44% to the Authority. Net proceeds shall mean that amount received from the foreclosure sale less expenses attributable to the foreclosure. All expenses must be approved by the lender and the Authority.
8. (h) Upon receipt of any net proceeds which the lender and the Authority mutually agree are the final net proceeds to be realized, the lender shall prepare a final accounting as to the loan so that the transaction may be closed out on the records of the lender and the Authority. Such final accounting shall be filed with and approved by the Authority.

Source Note:The provisions of this §24.15 adopted to be effective June 16, 1995, 20 TexReg 4047; amended to be effective November 28, 1999, 24 TexReg 10319.