N.M. Admin. Code § 5.7.24.8 - REINVESTMENT OF LOAN PURCHASE PROCEEDS

A. For eligible loans originated prior to the date of a loan purchase agreement and which are to be sold to the foundation pursuant to such loan purchase agreement, the lender must certify and agree, as an inducement and a condition of the purchase of such eligible loans by the foundation, that the lender, within a reasonable time from receipt of the proceeds of such purchase by the foundation shall originate new student loans in a manner and subject to the conditions specified in these regulations.

B. For eligible loans originated after the date of a loan purchase agreement, and which are to be sold to the foundation pursuant to such loan purchase agreement, the requirements of paragraph 2.01 [now Subsection A of 5.7.24.8 NMAC] shall not apply.

C. If the lender shall fail to satisfy its reinvestment obligation under paragraph 2.01 [now Subsection A of 5.7.24.8 NMAC], the foundation may assert such rights and take such other action, in law or equity, as it may deem appropriate to insure that interest payable on the notes or bonds or other obligations issued by the foundation to capitalize the purchase of eligible loans or meet other expenses of the foundation does not, if such notes or bonds or other obligations were issued with the intention that they be federally tax-exempt, become taxable, including requiring that the lender repurchase, eligible loans from the foundation in an aggregate principal amount equal to the amount of the reinvestment obligation not satisfied.

D. In fulfilling its obligations under paragraph 2.01 [now Subsection A of 5.7.24.8 NMAC] a lender shall:

(1) make available loan applications and other documentation, together with qualified loan personnel, at locations reasonably accessible to eligible borrowers, and

(2) undertake promotional activities to publicize the availability of student loans.

Notes

N.M. Admin. Code § 5.7.24.8

Recompiled 10/31/01