Page:United States Statutes at Large Volume 101 Part 3.djvu/401

 PUBLIC LAW 100-233—JAN. 6, 1988

101 STAT. 1699

the earnings accruing on such amounts) to ensure the repayment of principal of, and the payment of interest on, the securities representing an interest in, or obligations backed by, the pool of qualified loans with respect to which such reserve is established. "(b) RETENTION OF SUBORDINATED PARTICIPATION INTERESTS.—

"(1) IN GENERAL.—A certified facility may meet the requirements of section 8.6(b)(2) with respect to any pool of qualified loans by retaining a subordinated participation interest in each loan included in each such pool in an amount not less than the amount that is equal to 10 percent of the principal amount of such loan. "(2) RETENTION OF SUCH INTERESTS BY LOAN ORIGINATORS.—

Under the terms of the sale of any qualified loan by the originator of such loan to a certified facility, the originator of such loan may agree to retain a subordinated participation interest in such loan and the amount of the subordinated interest so retained by such loan originator shall be attributed to the facility for purposes of determining whether the requirements of paragraph (1) have been met. "(3) DISTRIBUTION RIGHTS OF HOLDERS OF SUBORDINATED IN-

TERESTS.—The rights of the holders of the subordinated participation interests to receive distributions with respect to the loans constituting the pool shall be subordinated as prescribed by the Corporation to enhance the likelihood of regular receipt by the other holders of interests in such pool of the full amount of scheduled payments of principal and interest on loans constituting the pool. "(c) ADDITIONAL REQUIREMENTS RELATING TO SECTION 8.6(b)(2) RESERVES.— "(1) DISTRIBUTION OF EARNINGS ACCRUING IN SECTION 8.6(b)(2)

RESERVES.—In the case of each applicable loan pool, a certified facility shall distribute to originators, at lesist semiannually, any earnings on the contributions of the originators to the reserve. "(2) EXCEPTION FOR WITHDRAWALS THAT WOULD DECREASE RESERVE LEVELS BELOW RESERVE REQUIREMENT.—No withdrawal

and distribution authorized under paragraph (1) may be made to the extent such withdrawal would cause the reserve to fall below the amount required to be held in such reserve under section 8.6(b)(2). "(3) SEPARATE LOAN LOSS ACCOUNTING.—Any certified facility

that maintains a reserve (pursuant to section 8.6(b)(2)) to which any originator has contributed shall maintain separate loan loss accounting for each loan for which a contribution was made by such originator to such reserve. "(4) LOAN LOSS ATTRIBUTION RULE.—Except for that portion of losses absorbed by a contribution of a certified facility to the reserve as provided in subsection (a)(D, each originator participating in the pool shall absorb any losses on loans originated up to the total amount the originator has contributed to the reserve before the losses are absorbed by the contributions of other originators who are participating in the pool. "(d) AUTHORITY OF BOARD TO ESTABLISH OTHER POLICIES AND

PROCEDURES.—The Board may establish such other policies and procedures with respect to—

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