The debtor will provide the secured party with a contract to control the deposit account, duly executed on behalf of any financial institution with a deposit account of the debtor, as defined in this guarantee agreement. A new requirement introduced by the LEAN program, but not necessary in the context of POPs, is the use of account contracts. These agreements, specifically known as deposit account control agreements (“DACA”) and service agreements for deposit accounts (“DAISA”), are used to enhance and control a lender`s security interest in an operator`s deposit accounts. This requirement has delayed some LEAN closures, as these agreements must be agreed in advance by the bank concerned. Some Community banks have not been or, in some cases, have not been willing to enter into these agreements because they do not believe they are able to facilitate blocked account agreements. In practice, some borrowers find themselves in an undesirable situation of having to change banks to comply with this new requirement, which always delays closure. In addition, in practice, we consider that a misunderstanding on the DACA and DAISA form provided by HUD is inflexible if these forms may indeed vary as long as the elements required by the HUD are in place. The Fund has entered into an agreement to control the charge accounts (“the agreement”) with each swap8. Prior to opening or replacing a deposit account, the debtor has: (a) the written authorization of the majority creditors for the opening of such a deposit account and (b) has encouraged each bank or financial institution in which it wishes to open a deposit account to enter into a deposit account control agreement with the secured party in order to give the insured party control of that deposit account. With great fanfare, HUD adopted its new LEAN program on March 1, 2009, replacing the HUD-approved program for the Multi-Family Accelerated Process (“MAP”) for Section 232 applications. However, the number of leAN funding last year was lower than expected due to traps that delayed or halted LEAN closures. This alert examines some of these pitfalls that lenders should consider when participating in the HUD LEAN approval process. The tenant is authorized, in accordance with the Constitution and the laws of the State, to enter into this master lease agreement, any lease agreement and the acquisition fund and the account control agreement and the proposed transactions, and thus to fulfill all obligations under this contract and under each leasing and acquisition and account control fund.
HUD`s website states: “HUD immediately begins legal review when the business application is filed.” This review process is different from POPs. Previously, HUD began auditing before the company`s application was filed, the evaluations duplicated by lender consultants and HUD employees. The two audits must now be separated, which increases the duration of the loan. Despite the objectives of the program, LEAN currently lacks consistency in its application. HUD states on its website that it has developed: “Standard checklists, work statements for third-party work, certifications, and models for lenders to use in their application package assembly.