Copyright and Disclaimer Print


AR 351/83 LOAN INSURANCE REGULATION

(Consolidated up to 109/2003)

ALBERTA REGULATION 351/83

Alberta Housing Act

LOAN INSURANCE REGULATION

1   In this Regulation,

                                 (a)    “amortization period” means the time basis used to calculate the payments of principal and interest required to fully repay the loan;


                                 (b)    “borrower” means a person, organization, or corporate body to whom a loan is made by an approved lender;

                                 (c)    “builder” means a person who, or a partnership or corporate body which, builds housing accommodation for sale or for rent;

                                 (d)    “economic life” means the period of time, in the opinion of the Corporation, that a property can be expected to continue to function as it was originally intended;

                                 (e)    “gross annual income” means the verifiable annual income of the borrower from all sources;

                                  (f)    “gross debt service ratio” means the ratio of the annual charges for property taxes and licensing fees and lot rental, and for principal and interest in respect of a loan to the estimated gross annual income of the borrower;

                                 (g)    “housing unit” means a self‑contained dwelling unit that includes living, sleeping, eating, food preparation and sanitary facilities for 1 family;

                                 (h)    “interest adjustment date” means the date from which the principal amount of the loan together with interest thereon becomes due and payable by regular monthly installments;

                                  (i)    “lending value” means the estimated value for insurance purposes as determined by the Corporation;

                                  (j)    “loan insurance fee” means the fee payable to the Corporation for the insurance of a loan;

                                 (k)    “maturity date” means the date on which the balance of a mortgage or loan is due and payable;

                                  (l)    “mortgage” means the charge against real property that an approved lender receives as security for a loan and includes an assignment of the leasehold interest of a lessee;

                                (m)    “multiple family dwelling” means a building containing 2 or more housing units;

                                 (n)    “owner” includes the lessee under a lease having a term extending beyond the maturity date of a mortgage thereon for a number of years sufficient in the opinion of the Corporation to provide adequate security;

                                 (o)    “progress advances” means the installments of an approved loan advanced by an approved lender as the building construction progresses;

                                 (p)    “project” means

                                           (i)    a building or group of buildings consisting of 1 or more housing units, together with any public space, recreational facilities, commercial space and other space appropriate to the complex, or

                                          (ii)    an area of land that is being developed for predominantly residential purposes;

                                 (q)    “term” means the interval between the interest adjustment date and the maturity date of a loan;

                                  (r)    “title” in relation to a loan secured by a mortgage of an assignment of leasehold title, means the entire interest of the lessee;

                                 (s)    “undertaking to insure” means an undertaking under section 30(1) of the Alberta Home Mortgage Corporation Act.

AR 351/83 s1

Part 1
General

2   This Part applies to loan insurance pursuant to section 30 of the Alberta Home Mortgage Corporation Act.

AR 351/83 s2

3(1)  A request for an undertaking to insure shall be made by an approved lender in a form prescribed by the Corporation and shall be accompanied by an application fee in an amount prescribed by the Corporation.

(2)  The approved lender shall indicate and provide the details of the loan that are still under negotiation when making a request under subsection (1).

AR 351/83 s3

4   On receipt of a request for an undertaking to insure, the Corporation shall advise the approved lender whether it will insure the loans, and if it will, of the terms and conditions on which it will insure the loan.

AR 351/83 s4

5   The amount in respect of which the Corporation has given an undertaking to insure may be increased if

                                 (a)    the increase is acceptable to the approved lender and the Corporation,

                                 (b)    the amount of the loan as increased will not exceed the maximum loan permissible under this Regulation,

                                 (c)    the application for the increased loan amount is received before the loan is fully advanced, and

                                 (d)    the applicant pays an additional application fee as prescribed by the Corporation.

AR 351/83 s5

6   The Corporation may, if requested by the borrower, advise him of the terms and conditions of any undertaking to insure issued to an approved lender with respect to the borrower’s loan.

AR 351/83 s6

7   The plans and specifications of any housing unit or project must conform to the standards prescribed by the Corporation and the Corporation may prescribe standards to which an existing housing unit or project must conform in order to qualify for loan insurance under this Regulation.

AR 351/83 s7

8   A major change to any plans or specifications that is acceptable to the approved lender may be approved by the Corporation on payment by the applicant of an additional fee as prescribed by the Corporation.

AR 351/83 s8

9   The Corporation shall not issue an undertaking to insure a loan if, in the case of new construction, work has been carried out beyond the first floor joist or sub‑floor stage of construction or other stage of construction as considered by the Corporation to be equivalent to the first floor stage of construction prior to the undertaking to insure being issued.

AR 351/83 s9

10   During the period of construction of a new housing unit or project, the Corporation may inspect or cause to be inspected the housing unit or project to ensure that construction reasonably conforms to the standards prescribed by the Corporation.

AR 351/83 s10

11(1)  When an inspection is made, the Corporation shall send to the approved lender a report listing in detail any departures from the approved plans and specifications or the applicable standards prescribed by the Corporation.

(2)  On receipt of the report, the approved lender shall forthwith inform the borrower of any departures listed in the report.

(3)  If the progress advances are insured, the Corporation may direct that no further progress advances be made until the departures listed in the report have been corrected to the satisfaction of the Corporation.

(4)  If the progress advances are not insured, the loan shall not be insured until the departures listed in the report have been corrected to the satisfaction of the Corporation or the loan reduced pursuant to section 12.

AR 351/83 s11

12   If any departure from the plans, specifications or standards is not corrected as required by the Corporation, the Corporation may direct that the approved lender reduce the loan by an amount that the Corporation determines, and the maximum permissible loan shall be the amount of the loan so reduced.

AR 351/83 s12

13   The approved lender shall, in accordance with normal and prudent lending practice, attend to all matters related to the approving and making of the loan, including

                                 (a)    the assessment of the financial capability of the borrower to carry out the purposes of the loan and, if the loan is made to a borrower who is a builder, an assessment of the borrower’s ability to construct, market and manage the housing project,

                                 (b)    the searching of title,

                                 (c)    the obtaining of a surveyor’s certificate or sketch or a certificate obtained pursuant to section 14 stating the distances of the housing unit from the lot lines and any apparent encroachments thereon,

                                 (d)    the advancing of the proceeds of the loan,

                                 (e)    all matters connected with the arranging of the loan and the taking of security with respect to it, and

                                  (f)    all things reasonably necessary to protect the security and the priority of advances made.

AR 351/83 s13

14   The Corporation may, at the request of an approved lender, accept, in lieu of a surveyor’s certificate, a similar certificate from another person considered competent by the Corporation.

AR 351/83 s14

15   If, prior to making an advance on an approved loan, an approved lender discovers a defect in title, it may request the approval of the Corporation of the defect and any defect so approved by the Corporation shall be listed in the policy of loan insurance issued in respect of the loan.

AR 351/83 s15

16   The borrower may be entitled to progress advances on any installment loan, and, if progress advances are insured, the Corporation shall inform the approved lender in writing of the amounts that may be advanced.

AR 351/83 s16

17(1)  The approved lender shall only charge to the approved borrower

                                 (a)    the actual progress advances made to the borrower,

                                 (b)    disbursements made on behalf of the borrower,

                                 (c)    the insurance fee specified by the Corporation, and

                                 (d)    interest on advances.

(2)  If progress advances on a loan are insured, the approved lender shall pay or cause to be paid to the Corporation at the time the advances are remitted to the borrower the amount of insurance fee charged to the loan account of the borrower.

(3)  If progress advances on the loan are not insured, the approved lender shall pay to the Corporation,

                                 (a)    with the Request for Insurance Policy form referred to in section 19, or

                                 (b)    if the loan is repaid prior to the issuance of a policy of loan insurance, on the repayment,

the full amount of the insurance fee payable to the Corporation in respect of the total amount of the advances made and charged to the loan account of the borrower.

AR 351/83 s17

18   When an approved lender has made progress advances approved by the Corporation under section 16, and has charged to the loan account of the borrower as a loan advance the insurance fee in respect of those progress advances, the aggregate of those advances are deemed to be an insured loan.

AR 351/83 s18

19(1)  An approved lender shall, when the construction of a housing unit has been completed and the loan has been fully advanced, forward to the Corporation a Request for Insurance Policy form as prescribed by the Corporation.

(2)  On receipt of a Request for Insurance Policy form under subsection (1), the Corporation shall issue to the lender an insurance policy in the form prescribed by the Corporation, if construction has been completed to the satisfaction of the Corporation.

AR 351/83 s19

20(1)  When an approved loan has not been fully advanced, an approved lender may request from the Corporation a policy of loan insurance to cover the full amount if

                                 (a)    the construction of the housing unit or project has been substantially completed,

                                 (b)    the housing unit or project is occupied,

                                 (c)    the estimated cost of completion of the housing unit or project does not exceed $500 per housing unit,

                                 (d)    the completion of the exterior of the housing unit or project is delayed by seasonal weather conditions, and

                                 (e)    the unadvanced portion of the loan is at least twice the estimated cost of completing the housing unit or project as determined by the Corporation.

(2)  The Corporation may issue a policy of loan insurance pursuant to subsection (1) if the approved lender undertakes

                                 (a)    to complete the housing unit or project to the satisfaction of the Corporation within the time stipulated by the Corporation, unless the Corporation has approved a reduction in the loan pursuant to section 21,

                                 (b)    to return the policy to the Corporation if the loan is reduced pursuant to section 21 so that it may be replaced by a policy covering the loan so reduced,

                                 (c)    to save the Corporation harmless from any claim against the secured premises arising prior to the completion of the housing unit or project, or the reduction of the loan, and

                                 (d)    to pay to the Corporation, when the loan is fully advanced, the balance of the insurance fee applicable to the loan.

AR 351/83 s20

21   If an approved lender has requested a policy of loan insurance under section 20 and the builder has not completed construction within the time required by the Corporation, the approved lender, with the approval of the Corporation, may reduce the loan by the amount not at that time advanced and the loan so reduced shall be the maximum loan permissible.

AR 351/83 s21

22(1)  In every loan agreement or mortgage, an interest adjustment date shall be fixed.

(2)  The date referred to in subsection (1) shall be fixed, as nearly as may be estimated, but not later than 2 months after

                                 (a)    substantial completion of construction, or

                                 (b)    occupation of the premises,

whichever occurs first.

(3)  The date of commencement of combined payments of principal and interest shall be:

                                 (a)    in the case of a loan repayable on a monthly basis, 1 month after the interest adjustment date;

                                 (b)    in the case of a loan repayable on a quarterly, semi‑annual or annual basis, 3 months, 6 months or 1 year, as the case may be, after the interest adjustment date.

(4)  If substantial completion of construction of the mortgaged premises or their occupation occurs prior to the date estimated or if substantial completion or occupation has not occurred or is unlikely to occur by the date estimated, the approved lender may, from time to time, agree with the borrower that the dates for repayment of the money and adjustment and computation of interest be amended, but the date for adjustment of interest finally agreed on shall be not later than 2 months after

                                 (a)    the last estimated date for substantial completion of construction of the premises, or

                                 (b)    their occupation,

whichever is the earlier.

(5)  When part of a loan is repaid before the full amount of the loan is advanced, or when an approved loan is not fully advanced, the approved lender may agree with the borrower to reduce the amount of any of the monthly payments if the reduced payments would be sufficient to amortize the loan over the amortization period established for the loan as approved.

AR 351/83 s22

23(1)  Subject to sections 21 and 22, an approved lender shall not, except with the approval of the Corporation,

                                 (a)    alter the terms of repayment, or

                                 (b)    permit any derogation from the rights of the lender against the secured premises by way of postponement, partial discharge or otherwise.

(2)  Notwithstanding subsection (1), an approved lender may, without the approval of the Corporation,

                                 (a)    consent to the creation of any easement, restriction or encroachment to which the Corporation pursuant to section 40, is not entitled to object, and

                                 (b)    agree with the borrower to renew or extend a mortgage or loan made in respect of the loan and to vary the rate of interest and the amount of the subsequent payments on the loan, if the amortization period of any renewal or extension of the mortgage or loan does not exceed the original amortization period less the time elapsed.

AR 351/83 s23

24(1)  An approved lender shall not without the approval of the Corporation release any collateral security or personal covenant taken as further security to a loan that was insured subject to the taking of that further security.

(2)  Subject to subsection (1), an approved lender may take any further collateral security that it may require for the repayment of an approved loan, and may release, dispose of or deal with that security as it may see fit if the borrower is not in default under any of the terms of the mortgage at the time of the release, disposal or dealing.

AR 351/83 s24

25(1)  During the advancing of an approved loan and the period of repayment thereof, an approved lender shall cause the interests of the lender to be protected by fire insurance and insurance against other standard insurable perils in accordance with normal practice, and if, before the loan has been repaid in full the secured premises are damaged by fire or by other standard insurable perils in an amount exceeding $5000 the approved lender shall notify the Corporation immediately after learning of the damage, and after the notification all repairs shall be subject to inspection by the Corporation and shall be completed to its satisfaction.

(2)  A claim by an approved lender under the policy of loan insurance shall be reduced by an amount equal to the amount by which the cost of repairing or replacing damage or loss to the secured premises caused by fire or other standard insurable perils exceeds amounts paid under insurance policies respecting the damage or loss to the premises.

AR 351/83 s25

26(1)  An approved lender shall exercise reasonable care and prudence in the placement and administration of an insured loan, in collection of its repayment, and in the protecton of the loan security, and the Corporation shall consider that the approved lender was not negligent if in the opinion of the Corporation, the approved lender follows normal and prudent lending practice.

(2)  If an approved lender, in the opinion of the Corporation, is negligent in the administration of the insured loan or in the protection of the loan security, either before or after repossession or foreclosure, the Corporation may deduct from any sum payable under the loan insurance policy in respect of the property secured by the mortgage the amount of the damage or loss resulting from the negligence.

(3)  If the Corporation and the approved lender referred to in subsection (2) are unable to agree on the extent of the negligence or of the damages arising therefrom, the matter shall be referred for arbitration to a sole arbitrator acceptable to both parties or, if no sole arbitrator is acceptable to both parties, to 3 arbitrators, 1 of whom to be chosen by each party and the 3rd to be chosen by the other 2 arbitrators, and the arbitration shall be made pursuant to the Arbitration Act.

(4)  The costs of the arbitration referred to in subsection (3) shall be borne in the manner agreed on by the parties or there is no agreement, as determined in the arbitration award.

AR 351/83 s26

27(1)  An approved lender shall make and administer approved loans at arms’ length.

(2)  An approved lender and a borrower are considered by the Corporation, to be not at arms’ length if the lender and borrower are related persons within the meaning of section 251(2) of the Income Tax Act of Canada, and any provision hereafter passed in lieu thereof or in amendment thereto, or if the borrower

                                 (a)    owns shares in excess of 10% of the issued shares of any class of the capital stock of the lender or otherwise has a financial interest other than a nominal interest therein,

                                 (b)    is, or any officer or shareholder thereof is, associated with the lender by reason of the holding of office or membership in the board of directors of the lender,

                                 (c)    is participating as a principal with any shareholder of the lender where the objectives of that shareholder include lending on the security of real estate or the development of real estate,

                                 (d)    is developing land in respect of which an application for an approved loan is made which was conveyed to the borrower by a shareholder of the lender, or

                                 (e)    is associated with the lender, any shareholder of the lender, or any partnership, joint venture or other arrangement established or entered into for the purpose of real estate development.

AR 351/83 s27

28   Every approved lender shall, at the request of an authorized representative of the Corporation, make its books, records and accounts relating to loans made pursuant to the Act available for inspection by representatives of the Corporation authorized in writing, during the business hours of the approved lender.

AR 351/83 s28

29   The Corporation may require an approved lender to submit reports to the Corporation in a form and within time prescribed by the Corporation.

AR 351/83 s29

30   Within 30 days after March 31 of each year, an approved lender shall mail to the Corporation in a form acceptable to the Corporation, a statement showing the number of and the aggregate principal amount outstanding for all insured loans administered by that approved lender as of March 31 of that year.

AR 351/83 s30

31(1)  When the Corporation insures a loan it shall collect through the approved lender an insurance fee as fixed under section 9 of the Alberta Home Mortgage Corporation Act.

(2)  The Corporation shall establish an insurance fund and shall pay all insurance fees into that fund.

(3)  The Corporation may borrow to meet any temporary deficiency in the insurance fund and the cost of that borrowing shall be a charge against the future receipts of the fund.

(4)  If the amount of the insurance fund at any time exceeds the losses that the Corporation considers it can reasonably anticipate to be charged against the fund in respect of loans at that time outstanding, the Corporation may transfer the amount of the excess to its income account.

AR 351/83 s31

32(1)  When a borrower is in default or advises the lender that any of the terms of his agreement in connection with his loan are such that he will have to default, and if the lender is of opinion that a revision of any of the terms of the agreement will enable the borrower to meet his obligation, the approved lender may, with the Corporation’s approval, alter or revise the agreement

                                 (a)    by extending the time for repayment of the loan, but in no case shall the total repayment period be extended to exceed the period for which the loan could have originally been granted under this Regulation,

                                 (b)    by reducing the amount of periodic installments or, if they are to be paid less frequently, by increasing their amount, or

                                 (c)    by increasing or decreasing the periods between installments, but in no case shall the periods between installments exceed 3 months except with the written approval of the Corporation.

(2)  Any alteration or revision under subsection (1) shall be made in accordance with normal and prudent lending practice.

AR 351/83 s32

33   When a borrower is in default in respect of any payment for more than 30 days, the approved lender may, at any time, declare the loan due and payable and, if the amount in arrears is equal to or is in excess of 6 monthly installments of principal and interest, the approved lender shall declare the loan due and payable.

AR 351/83 s33

34   After the balance of the loan outstanding has become due and payable, pursuant to section 33, the approved lender shall, following normal and prudent lending practice, and without in any way discharging the liability of the Corporation to the approved lender to any extent,

                                 (a)    effect collection of the loan, by legal proceedings or by other lawful means it considers advisable,

                                 (b)    obtain whatever security it considers advisable in the circumstances, or

                                 (c)    realize on its security to the extent it considers advisable.

AR 351/83 s34

35   Subject to the borrower’s right to stipulate how a payment is to be applied, the approved lender shall apply all payments from or on behalf of the borrower in payment to the approved lender first towards interest on overdue installments, then to the disbursements made by the approved lender to protect the security, and then to the principal balance outstanding on the loan.

AR 351/83 s35

36(1)  A claim for a loss sustained by the approved lender in respect of any loan may be made to the Corporation at any time after the balance of the loan outstanding becomes due and payable, pursuant to section 33 and if in the opinion of the approved lender the loan is not recoverable from the borrower.

(2)  If the approved lender makes a claim under subsection (1), he shall continue to make efforts to collect the balance of the loan outstanding.

(3)  A claim for loss shall not be payable by the Corporation unless the approved lender has met the requirements for the payment as set out in this Regulation.

AR 351/83 s36

37   An approved lender shall make a claim for any loss sustained in respect of his loan no later than the date that arrears equal 6 monthly installments of principal and interest.

AR 351/83 s37

38(1)  If foreclosure or repossession proceedings have been instituted, an approved lender shall apply for sale of the property or a final order of foreclosure and for possession of the property at the earliest date that the lender is entitled in law so to do or at a later date as approved by the Corporation.

(2)  Notwithstanding subsection (1), an approved lender may, after repossession or foreclosure proceedings have been instituted but before possession or a final order of foreclosure has been obtained,

                                 (a)    discontinue the action if costs and all payments in arrears are paid, or

                                 (b)    with the approval of the Corporation, postpone or discontinue the action if the borrower has made satisfactory arrangements to remedy the default.

AR 351/83 s38

39   A claim in respect of an insured loan shall be submitted by the approved lender to the Corporation in the form prescribed by the Corporation and shall be accompanied by all title papers concerning the property then in the possession of the approved lender and copies of every judgement for deficiency claims in respect of the loan.

AR 351/83 s39

40(1)  The Corporation may, at its own expense, cause a search to be made of the title to property in respect of which a claim is made under a loan insurance policy in respect of a loan and shall notify the approved lender whether or not it objects to the adequacy of title to the property or other details of the claim.

(2)  An approved lender shall either satisfy the Corporation in respect of the objection referred to in subsection (1) or withdraw the claim.

(3)  The Corporation shall not object to

                                 (a)    any title that, in the general opinion of solicitors of lenders, is marketable in the community where the property is situated, or

                                 (b)    defects in title specified in the Loan Insurance Policy or arising out of any change in law after the making of the loan.

AR 351/83 s40

41   A property conveyed to the Corporation may be occupied by any person who was not the owner of the property at the time of its acquisition by the approved lender and is not related by blood or marriage or by virtue of an adult interdependent relationship to that owner, as long as the unexpired term of any lease at the time of the conveyance to the Corporation, does not exceed 1 year or a longer time as approved by the Corporation.

AR 351/83 s41;109/2003

42(1)  When the Corporation has approved the title to a property, the approved lender shall,

                                 (a)    if the property is in the possession of the approved lender or of a person who is authorized by section 41 to occupy the property, forthwith tender to the Corporation a conveyance or transfer of the property containing the covenants and warranties as to the acts of the grantor as the Corporation may require and, subject to section 41 possession of the property, or

                                 (b)    if the property is not in the possession of the approved lender or of a person who is authorized by section 41 to occupy the property, forthwith enter into an agreement with the Corporation to convey the property to the Corporation by conveyance or transfer, containing the convenants and warranties as to the acts of the grantor as the Corporation may require, when the approved lender has obtained possession of the property.

(2)  The Corporation shall, within 15 days from the reciept by it of a conveyance or transfer referred to in subsection (1), pay to the approved lender the amount payable under the insurance policy in respect of the insured property.

AR 351/83 s42

43   On payment of the loss in respect of a loan being made by the Corporation, the approved lender shall forward a receipt in favour of the Corporation and the approved lender shall deal with any security held by it for the loan as the Corporation may direct and at the Corporation’s expense.

AR 351/83 s43

44   The Corporation may cancel the insurance policy on a loan if the approved lender does not offer to renew the loan on the expiration of the term of the loan.

AR 351/83 s44

45   On payment of the loss in respect of a loan being made by the Corporation, the approved lender shall forward a receipt in favour of the Corporation and the approved lender shall deal with any security held by it for the loan at the Corporation’s expense, as the Corporation directs.

AR 351/83 s45

46   The Corporation may cancel the insurance policy on a loan if the approved lender

                                 (a)    does not offer to renew the loan upon the expiration of the term of the loan,

                                 (b)    sells the loan to another lender without the expressed written approval of the Corporation, or

                                 (c)    can be shown not to have

                                           (i)    exercised normal and prudent lending practice in granting the loan,

                                          (ii)    conducted normal and prudent collection activity, or

                                         (iii)    secured and protected the security where the possession of the security has come into the hands of the approved lender.

AR 351/83 s46

Part 2
Loan Insurance on
Mobile Home Loans

47   In this part “mobile home” means a housing unit designed and built in a factory and certified to a recognized mobile home standard for use as a principal residence.

AR 351/83 s47

48   This Part applies to loan insurance provided pursuant to section 30 of the Act to approved lenders on loans financing the purchase of mobile homes.

AR 351/83 s48

49   Part 1, except sections 9, 13(c), 14 and 42, applies to loan insurance under this Part.

AR 351/83 s49

50   An approved lender may only request loan insurance on a mobile home if

                                 (a)    the loan applicant intends to occupy the mobile home as his principal residence, and

                                 (b)    the mobile home is to be located in Alberta.

AR 351/83 s50

51   The approved lender shall, before making a loan, use its best efforts to ensure that the gross debt service ratio of the applicant does not exceed the ratio established by the Corporation.

AR 351/83 s51;89/89

52   The maximum insurable loan on a mobile home shall not exceed the percentage of the lending value of the mobile home as established by the Corporation.

AR 351/83 s52;89/89

53   The Corporation shall establish a maximum amortization period of a loan insured under this Part for the remaining economic life of a mobile home.

AR 351/83 s53;89/89

54   The approved lender shall obtain a promissory note in the amount of the loan from the borrower and shall obtain and register a first mortgage on the mobile home by way of a chattel mortgage.

AR 351/83 s54

55(1)  An approved lender shall advise the Corporation in writing of an impending claim

                                 (a)    if the balance of the loan outstanding becomes due and payable, or

                                 (b)    when a loan is 120 days in arrears,

whichever occurs first.

(2)  Within 15 days of receipt of the approved lender’s advice of an impending claim, the Corporation shall advise the approved lender of the method of transfer of the security required with the claim.

(3)  The Corporation shall require the approved lender, when submitting a claim,

                                 (a)    to tender to the Corporation a conveyance or transfer of the property and, subject to section 41, possession of the property, an assignment of the promissory note and all judgments for deficiencies on the loan, and all other security documents specified in the insurance policy, or

                                 (b)    to tender to the Corporation an assignment of the chattel mortgage, the promissory note and all judgments for deficiences on the loan, and all other security documents specified in the insurance policy.

AR 351/83 s55

56   The Corporation shall, within 15 days after the transfer of the property or the security referred to in section 55(3) or both, pay to the approved lender the amount payable under the insurance policy in respect of the insured property.

AR 351/83 s56

57   The amount payable by the Corporation to an approved lender on an insurance policy issued under this Part is the aggregate of

                                 (a)    the principal amount owing on the loan as of the due date of the last installment received,

                                 (b)    interest at the loan interest rate on the outstanding principal amount of the loan from the due date of the last installment received

                                           (i)    to the date of the assignment of the security to the Corporation, or

                                          (ii)    180 days,

                                          whichever is the shorter time period,

                                 (c)    the money disbursed by the approved lender

                                           (i)    in order to obtain possession and protect, or realize the security, or

                                          (ii)    in protecting the interest of the Corporation

                                          but only to the extent that the Corporation may allow,

                                 (d)    interest at the loan interest rate on the money disbursed by the approved lender and approved by the Corporation for

                                           (i)    the date of the disbursement of the money to the date of the assignment of the security to the Corporation, or

                                          (ii)    180 days,

                                          whichever is the shorter time period less the amount recovered by the lender through sale of the property or otherwise.

AR 351/83 s57

58   Notwithstanding that all money owing by the borrower on account of a loan has been recovered, the Corporation may pay to the approved lender amounts in respect of losses incurred by it for disbursements specified in section 57(c) that cannot be recovered from the borrower.

AR 351/83 s58