Laserfiche WebLink
, <br /> Section 508. Application of Proceeds of Insurance. (a) Paragraph 7 of the Mortgage <br /> provides that amounts paid by any insurance company in pursuance of a contract of insurance <br /> shall be paid to the mortgagee under the Mortgage, and, at its option, may be applied to the debt <br /> or released for the repairing or rebuilding of the Project. The Trustee (as mortgagee under the <br /> Mortgage) shall recover and hold all proceeds of hazard insurance payable to the Trustee; <br /> provided that the Developer shall have the sole right to settle any insurance claim. Pending the <br /> application of such insurance proceeds pursuant to paragraph (B) below, such insurance proceeds <br /> shall be held by the Trustee (as mortgagee under the Mortgage) in a separate account (the <br /> "Insurance Account"). No such amounts may be so applied or released without the prior <br /> approval of FHA. In the event of any damage to any property covered by insurance as required <br /> by Section of the Loan Agreement, the Loan Agreement provides that the Developer shall <br /> immediately notify the Trustee and the Mortgage Banker and prepare an estimate of the costs <br /> of repairing or replacing the damaged property and prepare plans and specifications therefor. <br /> If the fire and extended coverage insurance proceeds exceed $50,000, the estimate of costs of <br /> repair or replacement and a copy of any such plans and specifications shall be filed with the <br /> Trustee, the Mortgage Banker and FHA. <br /> (b) If, within ninety (90) days from the occurrence of such damage or destruction, <br /> the Developer and the Trustee agree in writing that the efficient utilization of the Project has not <br /> been impaired to such extent that the ability of the Developer, taking into account all fmancial <br /> resources of the Developer, to make the payments required under the Note, Mortgage and <br /> Regulatory Agreement will have been materially adversely affected prior to the completion of <br /> the replacement or restoration of such part of the Project so damaged or destroyed, the proceeds <br /> of insurance received by reason of such occurrence (after deducting any reasonable expenses <br /> incurred by the Trustee or the Developer in collecting the same) shall, subject to any applicable <br /> FHA requirements, be applied to the repair or replacement of the property damaged or <br /> destroyed, or at the written option of the Developer, shall be credited as a prepayment of the <br /> last installments of principal becoming due under the Note, shall be deposited in the Bond Fund <br /> and applied to the purchase of Bonds. If no such agreement shall be reached within such ninety <br /> (90) day period, all respective insurance proceeds (after such deduction) shall, subject to any <br /> applicable FHA requirements, be credited to prepayment of the last installments of principal <br /> becoming due under the Note and Mortgage. <br /> (c) If the insurance proceeds are to be credited to prepayment of the Note and <br /> Mortgage, such proceeds and any income earned on the investment thereof shall then become <br /> part of the Trust Estate and shall be deposited in the Bond Fund and applied to the Extraordinary <br /> Mandatory Redemption of Bonds. <br /> (d) If the insurance proceeds are to be applied to the repair or replacement of the <br /> property damaged or destroyed, and if such proceeds exceed $50,000, the insurance proceeds <br /> and any income earned in the investment thereof shall be disbursed by the Trustee from the <br /> Insurance Account in accordance with the requisition procedures established under the Servicing <br /> 3152.1 31 <br />