0001|                            HOUSE BILL 214
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0002|     43rd legislature - STATE OF NEW MEXICO - first session, 1997
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0003|                            INTRODUCED BY
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0004|                              FRANK BIRD
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0005|     
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0006|                                   
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0007|     
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0008|     
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0009|     
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0010|                                AN ACT
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0011|     RELATING TO THE MORTGAGE FINANCE AUTHORITY; REPEALING THE
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0012|     MORTGAGE FINANCE AUTHORITY ACT OVERSIGHT COMMITTEE.
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0013|     
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0014|     BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0015|          Section 1.  Section 58-18-4 NMSA 1978 (being Laws 1975,
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0016|     Chapter 303, Section 4, as amended) is amended to read:
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0017|          "58-18-4.  AUTHORITY CREATED.--
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0018|               A.  There is created a public body politic and
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0019|     corporate, separate and apart from the state, constituting a
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0020|     governmental instrumentality, to be known as the "New Mexico
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0021|     mortgage finance authority", for the performance of essential
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0022|     public functions.  The authority shall be composed of seven
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0023|     members.  The director of the financial institutions division
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0024|     of the regulation and licensing department, state treasurer and
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0025|     attorney general shall be ex-officio members of the authority
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0001|     with voting privileges.  The governor, with the advice and
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0002|     consent of the senate, shall appoint the other four members of
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0003|     the authority, who shall be residents of the state and shall
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0004|     not hold other public office.  The four members of the
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0005|     authority appointed by the governor shall be appointed for
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0006|     terms of four years or less staggered so that the term of one
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0007|     member expires on January 1 of each year.  Vacancies shall be
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0008|     filled by the governor for the remainder of the unexpired term. 
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0009|     Any member of the authority shall be eligible for
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0010|     reappointment.  Each member of the authority appointed by the
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0011|     governor may be removed by the governor for misfeasance,
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0012|     malfeasance or willful neglect of duty after reasonable notice
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0013|     and a public hearing, unless the notice and hearing are, in
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0014|     writing, expressly waived.  Each member of the authority ap-
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0015|     
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0016|     pointed by the governor, before entering upon his duty, shall
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0017|     take an oath of office to administer the duties of his office
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0018|     faithfully and impartially, and a record of the oath shall be
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0019|     filed in the office of the secretary of state.  The governor
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0020|     shall designate a member of the authority to serve as chairman
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0021|     for a term which shall be coterminous with his then current
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0022|     term as a member of the authority.  The authority shall
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0023|     annually elect one of its members as vice chairman.  The
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0024|     authority shall also elect or appoint and prescribe the duties
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0025|     of <s>[such]</s> other officers, who need not be members, <s>[as]</s> the
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0001|     authority deems necessary or advisable, including an executive
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0002|     director and a secretary, who may be the same person, and the
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0003|     authority shall fix the compensation of officers.  Officers and
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0004|     employees of the authority are not subject to the Personnel
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0005|     Act.  The authority may delegate to one or more of its members,
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0006|     officers, employees or agents such powers and duties as it
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0007|     <s>[may deem]</s> <u>deems</u> proper.
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0008|               B.  All members, officers, employees or agents
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0009|     exercising any voting power or discretionary authority shall be
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0010|     required to have a fiduciary bond in the amount of one million
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0011|     dollars ($1,000,000) for the faithful performance of their
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0012|     duties, the cost of which shall be proper expense of the
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0013|     authority.
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0014|               C.  The executive director shall administer, manage
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0015|     and direct the affairs and business of the authority, subject
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0016|     to the policies, control and direction of the members of the
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0017|     authority.  The secretary of the authority shall keep a record
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0018|     of the proceedings of the authority and shall be custodian of
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0019|     all books, documents and papers filed with the authority, the
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0020|     minute book or journal of the authority and its official seal. 
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0021|     He shall have authority to cause copies to be made of all
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0022|     minutes and other records and documents of the authority and to
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0023|     give certificates under the official seal of the authority to
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0024|     the effect that the copies are true copies and all persons
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0025|     dealing with the authority may rely upon the certificates.
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0001|               D.  Meetings of the authority shall be held at the
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0002|     call of the chairman or whenever three members so request in
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0003|     writing.  A majority of members then in office shall constitute
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0004|     a quorum for the transaction of any business and for the
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0005|     exercise of any power or function of the authority.  No vacancy
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0006|     in the membership of the authority shall impair the rights of a
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0007|     quorum to exercise all the rights and to perform all the duties
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0008|     of the authority.  An ex-officio member from time to time may
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0009|     designate in writing another person to attend meetings of the
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0010|     authority and, to the same extent and with the same effect, act
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0011|     in his stead.
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0012|               E.  The authority is not created or organized, and
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0013|     its operations shall not be conducted, for the purpose of
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0014|     making a profit.  No part of the revenues or assets of the
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0015|     authority shall inure to the benefit of or be distributable to
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0016|     its members or officers or other private persons.  The members
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0017|     of the authority shall receive no compensation for their
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0018|     services, but the members of the authority, its officers and
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0019|     employees shall be paid allowed expenses if approved by the
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0020|     authority in accordance with policies adopted by the authority
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0021|     <s>[and approved by the Mortgage Finance Authority Act oversight
</s>    |
<s></s>0022| <s>    committee]</s>.
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0023|               F.  The authority shall be separate and apart from
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0024|     the state and shall not be subject to the supervision or
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0025|     control of any board, bureau, department or agency of the state
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0001|     except as specifically provided in the Mortgage Finance
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0002|     Authority Act.  In order to effectuate the separation of the
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0003|     state from the authority, no use of the terms "state agency" or
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0004|     "instrumentality" in any other law of the state shall be deemed
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0005|     to refer to the authority unless the authority is specifically
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0006|     referred to therein."
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0007|          Section 2.  Section 58-18-5 NMSA 1978 (being Laws 1975,
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0008|     Chapter 303, Section 5, as amended) is amended to read:
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0009|          "58-18-5.  POWERS OF THE AUTHORITY.--The authority shall
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0010|     have all the powers necessary or convenient to carry out and
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0011|     effectuate the purposes and provisions of the Mortgage Finance
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0012|     Authority Act, including but without limiting the generality of
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0013|     the foregoing, the power:

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0014|               A.  to sue and be sued;
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0015|               B.  to have a seal and alter it at pleasure;
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0016|               C.  to make and alter bylaws for its organization
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0017|     and internal management;
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0018|               D.  to appoint other officers, agents and employees,
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0019|     prescribe their duties and qualifications and fix their
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0020|     compensation;
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0021|               E.  to acquire, hold, improve, mortgage, lease and
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0022|     dispose of real and personal property for its public purposes;
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0023|               F.  subject to the provisions of Section 58-18-6
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0024|     NMSA 1978, to make loans, and contract to make loans, to
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0025|     mortgage lenders;
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0001|               G.  subject to the provisions of Section 58-18-7
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0002|     NMSA 1978, to purchase, and contract to purchase, mortgage
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0003|     loans from mortgage lenders;
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0004|               H.  to procure or require the procurement of a
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0005|     policy of group or individual life insurance or disability
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0006|     insurance or both to insure repayment of mortgage loans in
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0007|     event of the death or disability of the borrower and to pay any
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0008|     premiums <s>[therefor]</s> <u>for the policy</u>;
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0009|               I.  to procure insurance against any loss in
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0010|     connection with its operations, including without limitation
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0011|     the repayment of any mortgage loan, in <s>[such]</s> amounts and
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0012|     from <s>[such]</s> insurers, including the federal government, <s>[as
</s>    |
<s></s>0013| <s>    it may deem]</s> <u>that the authority deems</u> necessary or
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0014|     desirable; to procure liability insurance covering its members,
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0015|     officers and employees for acts performed within the scope of
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0016|     their authority as members, officers or employees; and to pay
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0017|     any premiums <s>[therefor]</s> <u>for insurance procured</u>;
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0018|               J.  subject to any agreement with bondholders or
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0019|     noteholders:
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0020|                    (1)  to renegotiate any mortgage loan or any
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0021|     loan to a mortgage lender in default;
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0022|                    (2)  to waive any default or consent to the
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0023|     modification of the terms of any mortgage loan or any loan to a
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0024|     mortgage lender and otherwise exercise all powers with respect
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0025|     to its mortgage loans and loans to mortgage lenders that any
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0001|     private creditor may exercise under applicable law; and
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0002|                    (3)  to commence, prosecute and enforce a
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0003|     judgment in any action or proceeding, including without
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0004|     limitation a foreclosure proceeding, to protect or enforce any
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0005|     right conferred upon it by law, mortgage loan agreement,
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0006|     contract or other agreement; and in connection with any such
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0007|     proceeding, to bid for and purchase the property or acquire or
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0008|     take possession of it and, in such event, complete, administer,
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0009|     pay the principal of and interest on any obligations incurred
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0010|     in connection with the property and operate or dispose of and
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0011|     otherwise deal with the property in such manner as the
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0012|     authority may deem advisable to protect its interests therein;
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0013|               K.  to make and execute contracts for the
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0014|     administration, servicing or collection of any mortgage loan
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0015|     and pay the reasonable value of services rendered to the
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0016|     authority pursuant to such contracts;
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0017|               L.  to fix, revise from time to time, charge and
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0018|     collect fees and other charges in connection with the making of
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0019|     mortgage loans, the purchasing of mortgage loans and any other
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0020|     services rendered by the authority;
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0021|               M.  subject to any agreement with bondholders or
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0022|     noteholders, to sell any mortgage loans at public or private
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0023|     sale at such prices and on such terms as the authority shall
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0024|     determine;
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0025|               N.  to borrow money and to issue bonds and notes
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0001|     that may be negotiable and to provide for the rights of the
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0002|     holders thereof;
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0003|               O.  to arrange for guarantees or other security,
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0004|     liquidity or credit enhancements in connection with its bonds,
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0005|     notes or other obligations by the federal government or by any
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0006|     private insurer or other provider and to pay any premiums
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0007|     therefor;
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0008|               P.  subject to any agreement with bondholders or
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0009|     noteholders, to invest money of the authority not required for
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0010|     immediate use, including proceeds from the sale of any bonds or
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0011|     notes:
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0012|                    (1)  in obligations of any municipality or the
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0013|     state or the United States of America;
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0014|                    (2)  in obligations the principal and interest
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0015|     of which are guaranteed by the state or the United States of
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0016|     America;
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0017|                    (3)  in obligations of any corporation wholly
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0018|     owned by the United States of America;
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0019|                    (4)  in obligations of any corporation
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0020|     sponsored by the United States of America that are or may
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0021|     become eligible as collateral for advances to member banks as
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0022|     determined by the board of governors of the federal reserve
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0023|     system;
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0024|                    (5)  in certificates of deposit or time
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0025|     deposits in banks qualified to do business in New Mexico,
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0001|     secured in the manner, if any, as the authority shall
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0002|     determine; 
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0003|                    (6)  in contracts for the purchase and sale of
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0004|     obligations of the types specified in this subsection; or
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0005|                    (7)  as otherwise provided in any trust
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0006|     indenture or a resolution authorizing the issuance of the bonds
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0007|     or notes;
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0008|               Q.  subject to any agreement with bondholders or
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0009|     noteholders, to purchase bonds or notes of the authority at the
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0010|     price as may be determined by the authority or to authorize
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0011|     third persons to purchase bonds or notes of the authority;
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0012|     bonds or notes so purchased shall be canceled or resold, as
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0013|     determined by the authority;
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0014|               R.  to make surveys and to monitor on a continuing
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0015|     basis the adequacy of the supply of:
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0016|                    (1)  funds available in the private banking
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0017|     system in the state for affordable residential mortgages; and
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0018|                    (2)  adequate, safe and sanitary housing
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0019|     available to persons of low or moderate income in the state and
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0020|     various sections of the state;
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0021|               S.  to make and execute agreements, contracts and
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0022|     other instruments necessary or convenient in the exercise of
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0023|     the powers and functions of the authority under the Mortgage
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0024|     Finance Authority Act;
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0025|               T.  to employ architects, engineers, attorneys
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0001|     (other than and in addition to the attorney general of the
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0002|     state), accountants, housing, construction and financial
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0003|     experts and such other advisors, consultants and agents as may
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0004|     be necessary in its judgment and to fix and pay their
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0005|     compensation;
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0006|               U.  to contract for and to accept any gifts or
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0007|     grants or loans of funds or property or financial or other aid
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0008|     in any form from the federal government or from any other
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0009|     source and to comply, subject to the provisions of the Mortgage
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0010|     Finance Authority Act, with the terms and conditions thereof;
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0011|               V.  to maintain an office at such place in the state
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0012|     as it may determine;
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0013|               W.  subject to any agreement with bondholders and
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0014|     noteholders, to make, alter or repeal <s>[subject to prior
</s>    |
<s></s>0015| <s>    approval by the Mortgage Finance Authority Act oversight
</s>    |
<s></s>0016| <s>    committee, hereby created, to be composed of four members
</s>    |
<s></s>0017| <s>    appointed by the president pro tempore of the senate and four
</s>    |
<s></s>0018| <s>    members appointed by the speaker of the house of
</s>    |
<s></s>0019| <s>    representatives]</s> such rules and regulations with respect to
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0020|     its operations, properties and facilities as are necessary to
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0021|     carry out its functions and duties in the administration of the
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0022|     Mortgage Finance Authority Act;
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0023|               X.  to make, purchase, guarantee, service and
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0024|     administer mortgage loans for residential housing for the
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0025|     purposes set forth in the Mortgage Finance Authority Act where
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0001|     private banking channels and private enterprise, unaided, have
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0002|     not, cannot or are unwilling to make, purchase, guarantee,
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0003|     service or administer the loans; and
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0004|               Y.  to do any and all things necessary or convenient
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0005|     to carry out its purposes and exercise the powers given and
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0006|     granted in the Mortgage Finance Authority Act."
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0007|          Section 3.  Section 58-18-8 NMSA 1978 (being Laws 1975,
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0008|     Chapter 303, Section 8, as amended) is amended to read:
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0009|          "58-18-8.  RULES AND REGULATIONS OF THE AUTHORITY.--
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0010|               A.  The authority shall adopt and may from time to
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0011|     time modify or repeal <s>[subject to prior approval by the
</s>    |
<s></s>0012| <s>    Mortgage Finance Authority Act oversight committee]</s> rules and
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0013|     regulations:
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0014|                    (1)  for determining income levels for the
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0015|     classification of persons of low or moderate income, which may
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0016|     vary between different areas in the state and in accordance
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0017|     with the size of family unit; and
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0018|                    (2)  for governing:
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0019|                         (a)  the making of loans to mortgage
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0020|     lenders; and
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0021|                         (b)  the purchase of mortgage loans, to
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0022|     implement the powers authorized and to achieve the purposes set
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0023|     forth in the Mortgage Finance Authority Act.
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0024|               B.  The rules and regulations of the authority
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0025|     relating to the making of loans to mortgage lenders pursuant to
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0001|     Section 58-18-6 NMSA 1978 or the purchase of mortgage loans
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0002|     pursuant to Section 58-18-7 NMSA 1978 shall provide at least
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0003|     for the following:
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0004|                    (1)  procedures for the submission by mortgage
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0005|     lenders to the authority of:
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0006|                         (a)  requests for loans; and
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0007|                         (b)  offers to sell mortgage loans;
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0008|                    (2)  standards for allocating bond proceeds
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0009|     among mortgage lenders requesting loans from or offering to
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0010|     sell mortgage loans to the authority;
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0011|                    (3)  standards for determining the principal
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0012|     amount to be loaned to each mortgage lender and the interest
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0013|     rate thereon;
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0014|                    (4)  standards for determining the aggregate
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0015|     principal amount of mortgage loans to be purchased from each
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0016|     mortgage lender and the purchase price thereof;
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0017|                    (5)  qualifications or characteristics of:
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0018|                         (a)  residential housing; and
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0019|                         (b)  the purchasers of residential
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0020|     housing to be financed by new mortgage loans made in
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0021|     satisfaction of the requirements of Subsection F of Section
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0022|     58-18-6 NMSA 1978 or Subsection B of Section 58-18-7 NMSA 1978,
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0023|     as the case may be;
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0024|                    (6)  restrictions as to the interest rates to
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0025|     be allowed on new mortgage loans and the return to be realized
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0001|     therefrom by mortgage lenders;
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0002|                    (7)  requirements as to commitments and
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0003|     disbursements by mortgage lenders with respect to new mortgage
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0004|     loans; and
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0005|                    (8)  standards for mobile homes eligible for
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0006|     use as security.
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0007|               C.  The rules and regulations of the authority shall
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0008|     also provide for:
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0009|                    (1)  schedules of any fees and charges to be
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0010|     imposed by the authority; and
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0011|                    (2)  any other matters related to the duties
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0012|     and the exercise of the powers of the authority under the
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0013|     Mortgage Finance Authority Act."
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0014|          Section 4.  Section 58-18-8.1 NMSA 1978 (being Laws 1982,
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0015|     Chapter 86, Section 7, as amended) is amended to read:
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0016|          "58-18-8.1.  RULES AND REGULATIONS OF THE AUTHORITY--
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0017|     MULTIPLE-FAMILY DWELLINGS <u>OR</u> TRANSITIONAL <s>[AND]</s> <u>OR</u>
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0018|     CONGREGATE HOUSING FACILITIES.--Prior to financing a
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0019|     multiple-family dwelling project or transitional or congregate
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0020|     housing facility, the authority shall adopt <s>[subject to prior
</s>    |
<s></s>0021| <s>    approval by the Mortgage Finance Authority Act oversight
</s>    |
<s></s>0022| <s>    committee]</s> rules and regulations governing the purchase of
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0023|     project mortgage loans and the making of loans to finance
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0024|     project mortgage loans, which shall provide at least for the
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0025|     following:
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0001|               A.  procedures for the submission by mortgage
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0002|     lenders to the authority of:
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0003|                    (1)  offers to sell project mortgage loans; or
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0004|                    (2)  requests for loans;
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0005|               B.  standards for approving qualifications of
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0006|     sponsors and mortgage lenders;
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0007|               C.  standards for determining minimum equity
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0008|     requirements for sponsors and acceptable debt-to-equity ratios
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0009|     for sponsors;
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0010|               D.  methods for establishing uniform accounting
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0011|     systems for sponsors;
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0012|               E.  standards for approving costs of such projects;
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0013|     and
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0014|               F.  guidelines establishing reasonable geographic
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0015|     allocation procedures for project mortgage loans."
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0016|          Section 5.  Section 58-18-8.2 NMSA 1978 (being Laws 1983,
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0017|     Chapter 285, Section 3) is amended to read:
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0018|          "58-18-8.2.  RULES AND REGULATIONS OF THE AUTHORITY--
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0019|     SECONDARY MARKET FACILITY.--Prior to establishing a secondary
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0020|     market facility or issuing any pass-through security, the
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0021|     authority shall adopt <s>[subject to prior approval by the
</s>    |
<s></s>0022| <s>    Mortgage Finance Authority Act oversight committee]</s> rules and
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0023|     regulations governing the operations of the secondary market
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0024|     facility and the issuance of pass-through securities, which
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0025|     shall provide for the following, to the extent that the
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0001|     secondary market facility proposes to engage in such
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0002|     activities:
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0003|               A.  procedures for submission by mortgage lenders to
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0004|     the authority of offers to sell:
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0005|                    (1)  mortgage loans;
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0006|                    (2)  pass-through securities; or
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0007|                    (3)  obligations secured by mortgage loans or
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0008|     pledges of mortgage loan revenues;
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0009|               B.  standards for allocating available funds or
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0010|     guarantees among mortgage lenders through the secondary market
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0011|     facility;
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0012|               C.  qualifications or conditions relating to the
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0013|     reinvestment by mortgage lenders of the funds made available to
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0014|     mortgage lenders by the secondary market facility; and
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0015|               D.  characteristics of pass-through securities to be
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0016|     issued by the secondary market facility."
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0017|          Section 6.  Section 58-18-8.3 NMSA 1978 (being Laws 1984,
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0018|     Chapter 62, Section 3, as amended) is amended to read:
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0019|          "58-18-8.3.  RULES AND REGULATIONS OF THE AUTHORITY--HOME
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0020|     IMPROVEMENT LOAN PROGRAM.--Prior to implementing the home
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0021|     improvement loan program referred to in <s>[Subsection B of]</s>
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0022|     Section 58-18-7.3 NMSA 1978, the authority shall adopt
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0023|     <s>[subject to prior approval by the Mortgage Finance Authority
</s>    |
<s></s>0024| <s>    Act oversight committee]</s> rules and regulations governing the
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0025|     purchase of home improvement loans or loans to mortgage lenders
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0001|     to fund home improvement loans under the program, which shall
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0002|     provide at least for the following:
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0003|               A.  procedures for submission by mortgage lenders to
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0004|     the authority of offers to sell home improvement loans;
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0005|               B.  standards for approving qualifications of
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0006|     mortgage lenders;
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0007|               C.  standards for allocating bond proceeds or other
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0008|     authority funds among mortgage lenders offering to sell home
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0009|     improvement loans to the authority and among mortgage lenders
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0010|     receiving loans from the authority to fund home improvement
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0011|     loans;
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0012|               D.  qualifications or characteristics of:
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0013|                    (1)  residential housing upon which a home
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0014|     improvement loan may be made;
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0015|                    (2)  the types of home improvements that may be
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0016|     made with the proceeds of home improvement loans, except that
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0017|     the authority shall not permit the proceeds to be used for
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0018|     landscaping, lawn sprinkling systems, swimming pools, tennis
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0019|     courts, saunas or other recreational facilities; and
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0020|                    (3)  the persons of low or moderate income who
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0021|     may apply for home improvement loans;
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0022|               E.  restrictions as to the interest rates to be
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0023|     allowed on home improvement loans and the fees and other profit
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0024|     to be realized by mortgage lenders; and
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0025|               F.  procedures for determining eligibility for any
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0001|     subsidies to be provided to persons of low or moderate income."
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0002|          Section 7.  REPEAL.--Sections 2-12-5 and 58-18-5.2 NMSA
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0003|     1978 (being Laws 1981, Chapter 173, Sections 1 and 2, as
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0004|     amended) are repealed.
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0005|                                       
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