The Lender is responsible for monitoring the FARM loan in the same manner that it would service its portfolio of conventional loans.
In the event of delinquency/default, the Lender is responsible for notifying WHEDA, using the Monthly Default Loan Status Report (FARM Form 4) within 30 days. Failure by the Lender to provide WHEDA notice on a timely basis may result in termination of WHEDA's guarantee. The Lender is responsible for taking all steps necessary in protecting collateral, rights or other interest of WHEDA's portion of the FARM loan. This includes, but is not limited to, declaring defaults, commencing foreclosure or pursuing other legal action on the collateral and otherwise taking prompt action to ensure maximum recovery from the disposition of the collateral.
In the event that Lender's actions or inactions (including, but not limited to, Lender's negligence) are responsible for, or contribute to, an impairment of the collateral, or in the event that the Lender had actual knowledge of such impairment of collateral and failed to take reasonable steps to prevent or correct it, then WHEDA may be entitled to terminate or refuse to pay the guarantee. It is the Lender's responsibility to keep WHEDA informed of any action, pending or future, necessary to protect the interest of the Lender and WHEDA.
