Duty of a Guaranty Agency To Enforce Its Standards Sample Clauses

Duty of a Guaranty Agency To Enforce Its Standards. As noted above, a lender’s violation of a guaranty agency’s requirement that affects the agency’s guarantee coverage also affects reinsurance coverage. Thus, as a general rule, an agency that fails to enforce such a requirement and pays a default claim involv- ing a violation is not eligible to receive rein- surance on the underlying loan. However, in light of the waiver policy outlined below, which provides more stringent cure proce- dures for violations occurring on or after May 1, 1988 than for pre-May 1, 1988 xxxxx- tions, some guaranty agencies with more stringent policies than the policy outlined below for the pre-May 1 violations have indi- cated that they wish to relax their own poli- cies for violations of agency rules during that period. While the Secretary does not en- courage any agency to do so, the Secretary will permit an agency to take either of the following approaches to its enforcement of its own due diligence and timely filing rules for violations occurring before May 1, 1988.