It shall be the duty of curators to invest and keep invested their pensioner's surplus money and only in the securities hereinafter indicated, and in which the curator has no interest. Such investments, except those provided in paragraph (A) hereof, shall be made only upon the prior approval of the court, after notice to the veterans' administration as provided in K.S.A. 73-523.
Before making any such investment a signed application therefor shall be procured from the borrower, which shall contain such information as may be required by the lender, and in every case shall contain a complete description of the real estate, including improvements thereon, and an affirmative statement that such proposed borrower is the owner of the entire fee-simple title to such real estate and improvements, that same are free of every encumbrance or lien of any character, or if not, a statement of any existing encumbrance or other liens thereon and specific authorization to the lender to withhold from the proposed loan the necessary sum to discharge and procure the release of any such encumbrances or other liens, and such release shall in all cases be procured and filed for record prior to or contemporaneously with the making of such loan. The proposed borrower shall also furnish with such application an abstract or certificate of title and same shall be completed to the time of closing the loan. The curator proposing to make any such loan or to purchase any notes secured by first mortgage or deed of trust shall exhibit to the court with his application for approval thereof the opinion of a qualified attorney-at-law satisfactory to the court, which opinion shall show that such attorney has examined said title or certificate of title and the papers evidencing the proposed debt and encumbrance to secure same, and based thereon it is the opinion of such attorney that the proposed borrower has good title to the property to be encumbered and that such proposed encumbrance will constitute a valid first lien thereon. In addition thereto the curator shall file with the court satisfactory written evidence that the reasonable cash value of the property to be encumbered is in accordance with the requirements of this paragraph.
If the curator purchases previously issued notes secured by first mortgage or deed of trust, the attorney's examination and opinion shall also disclose whether the proposed transferor has and will pass to the curator good title thereto together with the liens securing same as hereinbefore provided. In such case the curator shall file with the court satisfactory written evidence of value of the encumbered property as is hereinabove required, as of the time of acquiring such notes.
K.S.A. 73-512