Page:United States Statutes at Large Volume 101 Part 3.djvu/398

 101 STAT. 1696

PUBLIC LAW 100-233—JAN. 6, 1988

,., equitable, legal, or other right, title, or interest of the facility in any mortgage or mortgages constituting the pool against which the guaranteed securities are issued. With respect to any issue of guaranteed securities, in the event of default and pursuant .,, otherwise to the terms of the contract, the mortgages that constitute such pool shall become the absolute property of the Corporation subject only to the unsatisfied rights of the holders of the securities based on and backed by such pool. "(b) RESERVE OR SUBORDINATED PARTICIPATION REQUIREMENTS.—In

the case of any pool referred to in subsection (a), the Corporation shall— "(1) provide a guarantee only with respect to an individual pool of qualified loans on application of a certified facility; "(2) provide a guarantee only if a reserve, or retained subordinated participating interests, in an amount equal to at least 10 percent of the outstanding principal amount of the loans constituting the pool has been established in accordance with this ' title; "(3) require that full recourse be taken against reserves and retained subordinated participating interests before any demand be made by the certified facility with respect to the guarantee of the Corporation; and "(4) ensure the timely receipt of principal and interest due to security or obligation holders only after full recourse has been taken against such reserves and retained subordinated participating interests. "(c) STANDARDS REQUIRING DIVERSIFIED POOLS.—

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"(1) IN GENERAL.—To reduce the risks incurred by the Corporation in providing guarantees under this section and to further the purposes of this title, the Board shall establish standards governing the composition of each pool of qualified loans (in connection with which such guarantees are provided) over the period during which the commitment to provide guarantees is effective. "(2) MINIMUM CRITERIA.—The standards established by the Board pursuant to paragraph (1) for pools of qualified loans shall, at a minimum— "(A) require that each pool consist of loans that— "(i) are secured by agricultural real estate that is widely distributed geographically; "(ii) vary widely in terms of amounts of principal; and "(iii) in the case of land used in the production of agricultural commodities, are secured by agricultural ,^ real estate that, in the Eiggregate, is used to produce a wide range of agricultural commodities; "(B) prohibit the inclusion in any such pool of— (i) any loan the principal amount of which exceeds 3.5 percent of the aggregate amount of principal of all loans in such pool; and "(ii) 2 or more loans to related borrowers; and "(C) require that each pool consist of not less than 50 loans. "(3) SMALL FARMS AND FAMILY FARMERS.—In establishing the standards described in paragraph (2)(A)(ii), the Board shall in. elude provisions that promote and encourage the inclusion of

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