Section 2429-A. Payment of insurance and development corporation credit support

1. The agency shall establish procedures to be  followed  by  a  mortgagee  in  the  event  of  a default under the terms of any mortgage
  insured by the agency. The agency may require that prior to submitting a
  claim to the agency for payment of insurance the  mortgagee  shall  take
  such  actions  with  respect  to  the  property  securing  the defaulted
  mortgage as may be specified by the agency to be  satisfactory  evidence
  of a continuing default, including but not limited to the following: (i)
  becoming  lawfully  the  mortgagee in possession thereof; (ii) causing a
  receiver to be appointed of such  property;  (iii)  obtaining  voluntary
  conveyance  of the mortgagor's right and title to such property; or (iv)
  obtaining by foreclosure clear and unencumbered title to such  property,
  all  in such manner as the agency may require. Following submission of a
  valid claim the agency shall pay an amount which shall  not  exceed  the
  lesser  of  (1)  the  then  outstanding  insured principal amount of the
  mortgage multiplied by the per centum of such outstanding amount insured
  by the agency and a per centum of the mortgagee's cost arising from  the
  default,  inclusive  of public liens and delinquent and unpaid interest,
  all as the agency may from time to time allow, which  per  centum  shall
  not  exceed  the  per  centum  of the outstanding principal indebtedness
  insured by the agency or (2) the insured amount of the mortgage  at  the
  date  of execution of the insurance contract or its latest amendment, if
  any, except that the agency shall pay the greater of the two amounts  on
  claims  by  a  public  employee  pension  fund,  or  by a public benefit
  corporation derived from the sale of  notes  or  bonds  issued  by  said
  corporation, provided that no more than the actual loss suffered by such
  public  employee  pension  fund  or  public benefit corporation shall be
  paid. Such payment may be made by the  agency  in  a  lump  sum,  or  in
  partial  payments  made  within  such period of time as may be agreed to
  between the agency and the mortgagee, all in accordance with  procedures
  to be established by the agency.
    2. The agency shall establish, by contract or otherwise, procedures to
  be  followed  with respect to development corporation credit support for
  which the  development  corporation  credit  support  account  has  been
  determined by the agency to be a source or potential source of payment.