The insured lender shall follow the procedures contained in the mortgage insurance policy upon default of an insured mortgage. Mortgage Assignment. The Fund may require a lender at any time to assign a delinquent mortgage to the Fund and file a claim in the full amount of the insurance. The right of the Fund to pursue a borrower for deficiency or loss exists in every case to the extent allowed by law and may be enforced at the discretion of the Fund. The Fund may refuse payment of a claim on the basis of fraud, misrepresentation, or material error or omission with respect to any claim.