Collapse to view only § 1735f-10. Change of mortgagee status
- § 1731. Repealed.
- § 1731a. Penalties
- § 1731b. Prohibition against transient housing
- § 1732. Separability
- § 1733. Application of other laws
- § 1734. Amendment, extension, or increase of commitment amounts
- § 1735. Payment of certain funds to Treasury
- § 1735a. Prepayment of mortgages by nonprofit educational institutions; refunds
- § 1735b. Expenditures to correct or reimburse for structural or other major defects in mortgaged homes
- § 1735c. General Insurance Fund
- § 1735d. Payment of insurance benefits in cash or debentures; borrowing money from Treasury to make payments
- § 1735e. Acceptance of materials or products used in structures
- § 1735e-1. Use of American materials and products
- § 1735f. Water and sewerage facilities
- § 1735f-1. Waiver of deduction on assignment of property to Secretary in lieu of foreclosure
- § 1735f-2. Uniform rehabilitation standards for housing within and without urban renewal areas
- § 1735f-3. Insurance of mortgage proceeds advanced during construction or rehabilitation or prior to final endorsement of project mortgage
- § 1735f-4. Minimum property standards
- § 1735f-5. Prohibition against discrimination on account of sex in extension of mortgage assistance; consideration of combined income of husband and wife for purpose of extending mortgage credit; definitions
- § 1735f-6. Secondary mortgages held by State or local governmental agency on insured properties
- § 1735f-7. Exemption from State usury laws; applicability
- § 1735f-7a. State constitution or laws limiting mortgage interest, discount points, and finance or other charges; exemption for obligations made after
- § 1735f-8. Time of payment of premium charges
- § 1735f-9. Limitation on commitments to insure loans and mortgages
- § 1735f-10. Change of mortgagee status
- § 1735f-11. Review of mortgagee performance and authority to terminate
- § 1735f-12. Assurance of adequate processing of applications for loan and mortgage insurance
- § 1735f-13. Prohibition of requirement of minimum principal loan amount
- § 1735f-14. Civil money penalties against mortgagees, lenders, and other participants in FHA programs
- § 1735f-15. Civil money penalties against multifamily mortgagors
- § 1735f-16. Annual audited financial statements
- § 1735f-17. Examinations and sanctions for certain violations
- § 1735f-18. Information regarding early defaults and foreclosures on insured mortgages
- § 1735f-19. Partial payment of claims on defaulted mortgages and in connection with mortgage restructuring
- § 1735f-20. Authorization of appropriations for General and Special Risk Insurance Funds
- § 1735g. Mortgage relief for homeowners who are unemployed as result of closing of Federal installation
- § 1735h. Repealed.
§ 1731. Repealed. June 25, 1948, ch. 645, § 21, 62 Stat. 862, eff. Sept. 1, 1948
§ 1731a. Penalties
Notwithstanding any other provision of law, the Secretary is authorized to refuse the benefits of participation (either directly as an insured lender or as a borrower, or indirectly as a builder, contractor, or dealer, or salesman or sales agent for a builder, contractor or dealer) under subchapter I, II, VI, VII, VIII, IX–B, or X of this chapter to any person or firm (including but not limited to any individual, partnership, association, trust, or corporation) if the Secretary has determined that such person or firm (1) has knowingly or willfully violated any provision of this chapter or of title III of the Servicemen’s Readjustment Act of 1944, as amended, or of chapter 37 of title 38, or of any regulation issued by the Secretary under this chapter or by the Secretary of Veterans Affairs under said title III, or chapter 37, or (2) has, in connection with any construction, alteration, repair or improvement work financed with assistance under this chapter or under said title III, or chapter 37, or in connection with contracts or financing relating to such work, violated any Federal or State penal statute, or (3) has failed materially to properly carry out contractual obligations with respect to the completion of construction, alteration, repair, or improvement work financed with assistance under this chapter or under title III of the Servicemen’s Readjustment Act of 1944, as amended, or of chapter 37 of title 38. Before any such determination is made any person or firm with respect to whom such a determination is proposed shall be notified in writing by the Secretary and shall be entitled, upon making a written request to the Secretary, to a written notice specifying charges in reasonable detail and an opportunity to be heard and to be represented by counsel. Determinations made by the Secretary under this section shall be based on the preponderance of the evidence. For the purposes of compliance with this section the Secretary’s notice of a proposed determination under this section shall be considered to have been received by the interested person or firm if the notice is properly mailed to the last known address of such person or firm.
(June 27, 1934, ch. 847, title V, § 512, as added Aug. 2, 1954, ch. 649, title I, § 132, 68 Stat. 610; amended Pub. L. 85–857, § 13(h), Sept. 2, 1958, 72 Stat. 1265; Pub. L. 86–372, title I, § 119, Sept. 23, 1959, 73 Stat. 665; Pub. L. 89–754, title X, § 1020(e), Nov. 3, 1966, 80 Stat. 1296; Pub. L. 90–19, § 1(a)(3), (4), May 25, 1967, 81 Stat. 17; Pub. L. 98–479, title II, § 204(a)(17), Oct. 17, 1984, 98 Stat. 2232; Pub. L. 101–235, title I, § 133(d)(3), Dec. 15, 1989, 103 Stat. 2027; Pub. L. 102–54, § 13(d)(2)(B), June 13, 1991, 105 Stat. 274.)
§ 1731b. Prohibition against transient housing
(a) Intent of Congress
(b) Exceptions to prohibition
(c) Certification as to use as requisite for insurance; exceptions to prohibition against insuring
(d) Enforcement by Secretary
(e) Definitions
(f) Investigation after notice of violation; cease order
(g) Prosecution by Attorney General for continued violation
(h) Judicial procedure for injunction or other order
(i) Injunctive relief for hotel owners
(j) Jurisdiction of district courts
(June 27, 1934, ch. 847, title V, § 513, as added Aug. 2, 1954, ch. 649, title I, § 132, 68 Stat. 610; amended Pub. L. 90–19, § 1(a)(3), May 25, 1967, 81 Stat. 17; Pub. L. 98–479, title II, § 204(a)(18), Oct. 17, 1984, 98 Stat. 2232.)
§ 1732. Separability
If any provision of this chapter, or the application thereof to any person or circumstances, is held invalid, the remainder of the chapter, and the application of such provision to other persons or circumstances, shall not be affected thereby.
(June 27, 1934, ch. 847, title V, § 513A, formerly § 513, 48 Stat. 1265; renumbered Pub. L. 98–479, title II, § 204(a)(19), Oct. 17, 1984, 98 Stat. 2232.)
§ 1733. Application of other laws
The provisions of section 1430(a)(1) 1
1 See References in Text note below.
and 1430b of this title; the seventh paragraph of section 24 of this title; section 371 of this title; subsection (n) of section 77B of the Bankruptcy Act, as amended (49 Stat. 664); section 606i of title 15, continuing and extending the functions of the Reconstruction Finance Corporation; and all other provisions of law establishing rights under mortgages insured in accordance with the provisions of this chapter, shall be held to apply to such chapter, as amended.(June 27, 1934, ch. 847, title V, § 514, as added Feb. 3, 1938, ch. 13, § 11, 52 Stat. 26.)
§ 1734. Amendment, extension, or increase of commitment amounts
At any time prior to final endorsement for insurance, the Secretary, in his discretion, may amend, extend, or increase the amount of any commitment, provided the mortgage, as finally endorsed for insurance is eligible for insurance under the provisions of this chapter and the rules and regulations thereunder, in effect at the time the original commitment to insure was issued.
(June 27, 1934, ch. 847, title V, § 515 as added Oct. 25, 1949, ch. 729, § 3, 63 Stat. 906; amended Pub. L. 90–19, § 1(a)(3), May 25, 1967, 81 Stat. 17; Pub. L. 98–479, title II, § 204(a)(20), Oct. 17, 1984, 98 Stat. 2232.)
§ 1735. Payment of certain funds to Treasury
The following funds shall be deemed an indebtedness to the United States of the particular insurance fund involved, and the Secretary is authorized and directed to pay the amount of such indebtedness to the Secretary of the Treasury, with simple interest thereon from the date the funds were advanced to the date of final payment at a rate determined by the Secretary of the Treasury, taking into consideration the average rate on outstanding marketable obligations of the United States from the date the funds were advanced until the date of final payment—
(1) funds made available to the Secretary pursuant to the provisions of sections 1705 and 1708 of this title, exclusive of amounts heretofore refunded, (a) for carrying out this subchapter and section 484d of title 48 with respect to mortgages insured under section 1709 of this title where such funds were credited to the general reinsurance account in the Mutual Mortgage Insurance Fund, and (b) for the payment of salaries and expenses with respect to mortgage insurance under sections 1713 and 1715a of this title where such funds were credited to the Housing Insurance Fund;
(2) funds made available to the Secretary pursuant to sections 1737 and 1748a 1
1 See References in Text note below.
of this title; and(3) funds made available to the Secretary by the Secretary of the Treasury pursuant to section 1747i 1 of this title.
Payments to the Secretary of the Treasury under this section shall be made in such amounts and at such times as the Secretary determines, after consultations with the Secretary of the Treasury, that funds are available for that purpose, taking into consideration the continued solvency of the funds involved. All payments made pursuant to this section shall be covered into the Treasury as miscellaneous receipts.
(June 27, 1934, ch. 847, title V, § 516, as added June 30, 1953, ch. 170, § 9, 67 Stat. 123; amended Pub. L. 90–19, § 1(a)(3), May 25, 1967, 81 Stat. 17; Pub. L. 98–479, title II, § 204(a)(21), Oct. 17, 1984, 98 Stat. 2232.)
§ 1735a. Prepayment of mortgages by nonprofit educational institutions; refunds
(a) Notwithstanding any other provision of this chapter, no adjusted premium charge shall be collected in connection with the payment in full, prior to maturity, of any mortgage insured under this chapter, if the mortgagor certifies to the Secretary that the loan was paid in full by or on behalf of a nonprofit educational institution which intends to use the property for educational purposes.
(b) The Secretary shall refund any adjusted premium charge collected subsequent to July 1, 1962, and prior to September 2, 1964, in connection with the payment in full, prior to maturity, of any mortgage insured under this chapter, if the mortgagor under such mortgage makes the certification prescribed by subsection (a).
(June 27, 1934, ch. 847, title V, § 517, as added Pub. L. 88–560, title I, § 120, Sept. 2, 1964, 78 Stat. 782; amended Pub. L. 90–19, § 1(a)(3), May 25, 1967, 81 Stat. 17.)
§ 1735b. Expenditures to correct or reimburse for structural or other major defects in mortgaged homes
(a) Prior to beginning of construction
(1) The Secretary is authorized to make expenditures under this subsection with respect to any property that—
(A) is a condominium unit (including common areas) or is improved by a one-to-four family dwelling;
(B) was approved, before the beginning of construction, for mortgage insurance under this chapter or for guaranty, insurance, or direct loan under chapter 37 of title 38 or was less than a year old at the time of insurance of the mortgage and was covered by a consumer protection or warranty plan acceptable to the Secretary; and
(C) the Secretary finds to have structural defects.
(2) Expenditures under this subsection may be made for (A) correcting such defects, (B) paying the claims of the owner of the property arising from such defects, or (C) acquiring title to the property: Provided, That such authority of the Secretary shall exist only (A) if the owner has requested assistance from the Secretary not later than four years (or such shorter time as the Secretary may prescribe) after insurance of the mortgage, and (B) if the property is encumbered by a mortgage which is insured under this chapter after September 2, 1964.
(b) Mortgages insured on or after August 1, 1968, but prior to January 1, 1973; requirements; reimbursement from seller; insurance fund chargeable
(c) Regulations; finality of decision
(d) Mortgages insured on or after January 1, 1973, but prior to August 1, 1976; requirements; reimbursement from seller; insurance fund chargeable
(e) Report to Congress on effective program for protecting home buyers
(June 27, 1934, ch. 847, title V, § 518, as added Pub. L. 88–560, title I, § 121, Sept. 2, 1964, 78 Stat. 783; amended Pub. L. 90–19, § 1(a)(3), May 25, 1967, 81 Stat. 17; Pub. L. 91–609, title I, § 104, Dec. 31, 1970, 84 Stat. 1771; Pub. L. 93–383, title III, § 306, Aug. 22, 1974, 88 Stat. 678; Pub. L. 94–50, title III, § 302, July 2, 1975, 89 Stat. 256; Pub. L. 94–375, § 9, Aug. 3, 1976, 90 Stat. 1072; Pub. L. 98–181, title I [title IV, § 427], Nov. 30, 1983, 97 Stat. 1218; Pub. L. 102–550, title V, § 515, Oct. 28, 1992, 106 Stat. 3789.)
§ 1735c. General Insurance Fund
(a) Establishment; purpose; mortgages or loans insurable; transfers to
There is hereby created a General Insurance Fund which shall be used by the Secretary, on and after August 10, 1965, as a revolving fund for carrying out all the insurance provisions of this chapter with the exception of those specified in subsection (e). All mortgages or loans insured under this chapter pursuant to commitments issued on or after August 10, 1965, except those specified in subsection (e), and all loans reported for insurance under section 1703 of this title on or after August 10, 1965, shall be insured under the General Insurance Fund. The Secretary shall transfer to the General Insurance Fund—
(1) the assets and liabilities of all insurance accounts and funds, except the Mutual Mortgage Insurance Fund, existing under this chapter immediately prior to August 10, 1965;
(2) all outstanding commitments for insurance issued prior to August 10, 1965, except those specified in subsection (e);
(3) the insurance on all mortgages and loans insured prior to August 10, 1965, except insurance specified in subsection (e); and
(4) the insurance of all loans made by approved financial institutions pursuant to section 1703 of this title prior to August 10, 1965.
(b) Expenses chargeable to Fund
(c) Deposit or investment of moneys; purchase of debentures
(d) Credits and charges to Fund
(e) Restrictions on use of Fund
(f) Risk assessment
(June 27, 1934, ch. 847, title V, § 519, as added Pub. L. 89–117, title II, § 214, Aug. 10, 1965, 79 Stat. 471; amended Pub. L. 90–19, § 1(a)(1), (3), May 25, 1967, 81 Stat. 17; Pub. L. 90–448, title I, § 104(c), Aug. 1, 1968, 82 Stat. 488; Pub. L. 91–609, title I, § 117(e), Dec. 31, 1970, 84 Stat. 1775; Pub. L. 94–375, § 10, Aug. 3, 1976, 90 Stat. 1073; Pub. L. 95–24, title I, § 102, Apr. 30, 1977, 91 Stat. 55; Pub. L. 95–557, title III, § 310, Oct. 31, 1978, 92 Stat. 2098; Pub. L. 96–153, title III, § 305, Dec. 21, 1979, 93 Stat. 1112; Pub. L. 96–399, title III, § 305, Oct. 8, 1980, 94 Stat. 1639; Pub. L. 97–35, title III, § 334, Aug. 13, 1981, 95 Stat. 414; Pub. L. 98–181, title I [title IV, § 403], Nov. 30, 1983, 97 Stat. 1208; Pub. L. 102–550, title I, § 185(c)(2), Oct. 28, 1992, 106 Stat. 3748; Pub. L. 103–233, title I, §§ 103(g)(2), 105(b), Apr. 11, 1994, 108 Stat. 362, 363; Pub. L. 110–289, div. B, title I, § 2118(c)(2), July 30, 2008, 122 Stat. 2835.)
§ 1735d. Payment of insurance benefits in cash or debentures; borrowing money from Treasury to make payments
(a) Notwithstanding any other provisions of this chapter with respect to the payment of insurance benefits, the Secretary is authorized, in his discretion, to pay in cash or in debentures any insurance claim or part thereof which is paid on or after August 10, 1965, on a mortgage or a loan which was insured under any section of this chapter either before or after such date. If payment is made in cash, it shall be in an amount equivalent to the face amount of the debentures that would otherwise be issued plus an amount equivalent to the interest which the debentures would have earned, computed to a date to be established pursuant to regulations issued by the Secretary.
(b) The Secretary is authorized to borrow from the Treasury from time to time such amounts as the Secretary shall determine are necessary (1) to make payments in cash (in lieu of issuing debentures guaranteed by the United States, as provided in this chapter) pursuant to the provisions of this section, and (2) to make payments for reinsured and directly insured losses under subchapter IX–C 1
1 See References in Text note below.
of this chapter: Provided, however, That borrowings to make payments for reinsured and directly insured losses under subchapter IX–C 1 shall be limited to $250,000,000 or such further sum as the Congress, by joint resolution, may from time to time determine. Notes or other obligations issued by the Secretary in borrowing under this subsection shall be subject to such terms and conditions as the secretary of the Treasury may prescribe. Each sum borrowed pursuant to this subsection shall bear interest at a rate determined by the Secretary of the Treasury, taking into consideration the average market yield on outstanding marketable obligations of the United States of comparable maturities during the month preceding the issuance of such notes or other obligations.(June 27, 1934, ch. 847, title V, § 520, as added Pub. L. 89–117, title II, § 215, Aug. 10, 1965, 79 Stat. 472; amended Pub. L. 90–19, § 1(a)(3), May 25, 1967, 81 Stat. 17; Pub. L. 90–448, title XI, § 1104, Aug. 1, 1968, 82 Stat. 566; Pub. L. 91–609, title VI, § 604, Dec. 31, 1970, 84 Stat. 1791.)
§ 1735e. Acceptance of materials or products used in structures
The Secretary shall adopt a uniform procedure for the acceptance of materials and products to be used in structures approved for mortgages or loans insured under this chapter. Under such procedure any material or product which the Secretary finds is technically suitable for the use proposed shall be accepted. Acceptance of a material or product as technically suitable shall not be deemed to restrict the discretion of the Secretary to determine that a structure, with respect to which a mortgage is executed, is economically sound or an acceptable risk.
(June 27, 1934, ch. 847, title V, § 521, as added Pub. L. 89–117, title II, § 216, Aug. 10, 1965, 79 Stat. 473; amended Pub. L. 90–19, § 1(a)(3), May 25, 1967, 81 Stat. 17.)
§ 1735e–1. Use of American materials and products
In the administration of housing assistance programs, the Secretary of Housing and Urban Development shall encourage the use of materials and products mined and produced in the United States.
(Pub. L. 100–242, title V, § 571, Feb. 5, 1988, 101 Stat. 1950.)
§ 1735f. Water and sewerage facilities
Notwithstanding any other provision of this chapter, no mortgage which covers new construction shall be approved for insurance under this chapter (except pursuant to a commitment made prior to August 10, 1965) if the mortgaged property includes housing which is not served by a public or adequate community water and sewerage system: Provided, That this limitation shall be applicable only to property which is not served by a system approved by the Secretary pursuant to subchapter IX–A of this chapter, as such subchapter existed immediately before December 15, 1989, and which is situated in an area certified by appropriate local officials to be an area where the establishment of public or adequate community water and sewerage systems is economically feasible: Provided further, That for purposes of this section the economic feasibility of establishing such public or adequate community water and sewerage systems shall be determined without regard to whether such establishment is authorized by law or is subject to approval by one or more local governments or public bodies.
(June 27, 1934, ch. 847, title V, § 522, as added Pub. L. 89–117, title II, § 217(a), Aug. 10, 1965, 79 Stat. 473; amended Pub. L. 90–19, § 1(a)(3), May 25, 1967, 81 Stat. 17; Pub. L. 101–235, title I, § 133(d)(4), Dec. 15, 1989, 103 Stat. 2027.)
§ 1735f–1. Waiver of deduction on assignment of property to Secretary in lieu of foreclosure
Notwithstanding any other provision of this chapter, from and after November 3, 1966, the Secretary, under such terms and conditions as he may approve, may waive all or a part of the 1 per centum deduction otherwise made from insurance benefits with respect to multifamily housing or land development mortgages assigned to him, where the assignment is made at his request in lieu of foreclosure of the mortgage.
(June 27, 1934, ch. 847, title V, § 523, as added Pub. L. 89–754, title III, § 312, Nov. 3, 1966, 80 Stat. 1271.)
§ 1735f–2. Uniform rehabilitation standards for housing within and without urban renewal areas
In determining whether properties should be approved by the Secretary prior to rehabilitation and covered by mortgages insured under subchapter II of this chapter, the Secretary shall apply uniform property standards as between properties located outside urban renewal areas and those located within urban renewal areas.
(June 27, 1934, ch. 847, title V, § 524, as added Pub. L. 91–609, title I, § 116, Dec. 31, 1970, 84 Stat. 1774.)
§ 1735f–3. Insurance of mortgage proceeds advanced during construction or rehabilitation or prior to final endorsement of project mortgage
The Secretary is authorized to insure mortgage proceeds advanced during construction or rehabilitation or otherwise prior to final endorsement of a project mortgage for the purpose of (1) financing improvements to the property and the purchase of materials and building components delivered to the property, and (2) providing funds to cover the cost of building components where such components have been assembled and specifically identified for incorporation into the property but are located at a site other than the mortgaged property, with such security as the Secretary may require.
(June 27, 1934, ch. 847, title V, § 525, as added Pub. L. 93–383, title III, § 301, Aug. 22, 1974, 88 Stat. 676.)
§ 1735f–4. Minimum property standards
(a) To the maximum extent feasible, the Secretary of Housing and Urban Development shall promote the use of energy saving techniques through minimum property standards established by him for newly constructed residential housing, other than manufactured homes, subject to mortgages insured under this chapter. Such standards shall establish energy performance requirements that will achieve a significant increase in the energy efficiency of new construction. Such requirements shall be implemented as soon as practicable after
(b) The Secretary may require that each property, other than a manufactured home, subject to a mortgage insured under this chapter shall, with respect to health and safety, comply with one of the nationally recognized model building codes, or with a State or local building code based on one of the nationally recognized model building codes or their equivalent. The Secretary shall be responsible for determining the comparability of the State and local codes to such model codes and for selecting for compliance purposes an appropriate nationally recognized model building code where no such model code has been duly adopted or where the Secretary determines the adopted code is not comparable.
(c) The Secretary may establish an exception to any minimum property standard established under this section in order to address alternative water systems, including cisterns, which meet requirements of State and local building codes that ensure health and safety standards.
(June 27, 1934, ch. 847, title V, § 526, as added Pub. L. 93–383, title III, § 305, Aug. 22, 1974, 88 Stat. 678; amended Pub. L. 95–619, title II, § 252(a), Nov. 9, 1978, 92 Stat. 3236; Pub. L. 96–399, title III, § 326(e), Oct. 8, 1980, 94 Stat. 1650; Pub. L. 98–181, title I [title IV, § 405], Nov. 30, 1983, 97 Stat. 1210; Pub. L. 98–479, title I, § 104(a)(6), Oct. 17, 1984, 98 Stat. 2225; Pub. L. 114–113, div. L, title II, § 238, Dec. 18, 2015, 129 Stat. 2897.)
§ 1735f–5. Prohibition against discrimination on account of sex in extension of mortgage assistance; consideration of combined income of husband and wife for purpose of extending mortgage credit; definitions
(a) No federally related mortgage loan, or Federal insurance, guaranty, or other assistance in connection therewith (under this chapter or any other Act), shall be denied to any person on account of sex; and every person engaged in making mortgage loans secured by residential real property shall consider without prejudice the combined income of both husband and wife for the purpose of extending mortgage credit in the form of a federally related mortgage loan to a married couple or either member thereof.
(b) For purposes of subsection (a), the term “federally related mortgage loan” means any loan which—
(1) is secured by residential real property designed principally for the occupancy of from one to four families; and
(2)
(A) is made in whole or in part by any lender the deposits or accounts of which are insured by any agency of the Federal Government, or is made in whole or in part by any lender which is itself regulated by any agency of the Federal Government; or
(B) is made in whole or in part, or insured, guaranteed, supplemented, or assisted in any way, by the Secretary of Housing and Urban Development or any other officer or agency of the Federal Government or under or in connection with a housing or urban development program administered by the Secretary of Housing and Urban Development or a housing or related program administered by any other such officer or agency; or
(C) is eligible for purchase by the Federal National Mortgage Association, the Government National Mortgage Association, or the Federal Home Loan Mortgage Corporation, or from any financial institution from which it could be purchased by the Federal Home Loan Mortgage Corporation; or
(D) is made in whole or in part by any “creditor”, as defined in section 1602(f) 1
1 See References in Text note below.
of title 15, who makes or invests in residential real estate loans aggregating more than $1,000,000 per year.(June 27, 1934, ch. 847, title V, § 527, as added Pub. L. 93–383, title VIII, § 808(a), Aug. 22, 1974, 88 Stat. 728; amended Pub. L. 98–479, title II, § 204(a)(22), Oct. 17, 1984, 98 Stat. 2233.)
§ 1735f–6. Secondary mortgages held by State or local governmental agency on insured properties
In carrying out the provisions of subchapter II of this chapter with respect to insuring mortgages secured by a one- to four-family dwelling unit, the Secretary may not deny such insurance for any such mortgage solely because the dwelling unit which secures such mortgage will be subject to a secondary mortgage or loan made or insured, or other secondary lien held, by any State or local governmental agency or instrumentality under terms and conditions approved by the Secretary.
(June 27, 1934, ch. 847, title V, § 528, as added Pub. L. 95–557, title III, § 323, Oct. 31, 1978, 92 Stat. 2102.)
§ 1735f–7. Exemption from State usury laws; applicability
(a) The provisions of the constitution of any State expressly limiting the rate or amount of interest, discount points, or other charges which may be charged, taken, received, or reserved by lenders and the provisions of any State law expressly limiting the rate or amount of interest, discount points, or other charges which may be charged, taken, received, or reserved shall not apply to any loan, mortgage, or advance which is insured under subchapter I or II of this chapter.
(b) The provisions of subsection (a) shall apply to loans, mortgages, or advances made or executed in any State until the effective date (after December 21, 1979) of a provision of law of that State limiting the rate or amount of interest, discount points, or other charges on any such loan, mortgage, or advance.
(June 27, 1934, ch. 847, title V, § 529, as added Pub. L. 96–153, title III, § 308, Dec. 21, 1979, 93 Stat. 1113.)
§ 1735f–7a. State constitution or laws limiting mortgage interest, discount points, and finance or other charges; exemption for obligations made after March 31, 1980
(a) Applicability to loan, mortgage, credit sale, or advance; applicability to deposit, account, or obligation
(1) The provisions of the constitution or the laws of any State expressly limiting the rate or amount of interest, discount points, finance charges, or other charges which may be charged, taken, received, or reserved shall not apply to any loan, mortgage, credit sale, or advance which is—
(A) secured by a first lien on residential real property, by a first lien on all stock allocated to a dwelling unit in a residential cooperative housing corporation, or by a first lien on a residential manufactured home;
(B) made after March 31, 1980; and
(C) described in section 527(b) of the National Housing Act (12 U.S.C. 1735f–5(b)), except that for the purpose of this section—
(i) the limitation described in section 527(b)(1) of such Act that the property must be designed principally for the occupancy of from one to four families shall not apply;
(ii) the requirement contained in section 527(b)(1) of such Act that the loan be secured by residential real property shall not apply to a loan secured by stock in a residential cooperative housing corporation or to a loan or credit sale secured by a first lien on a residential manufactured home;
(iii) the term “federally related mortgage loan” in section 527(b) of such Act shall include a credit sale which is secured by a first lien on a residential manufactured home and which otherwise meets the definitional requirements of section 527(b) of such Act, as those requirements are modified by this section;
(iv) the term “residential loans” in section 527(b)(2)(D) of such Act shall also include loans or credit sales secured by a first lien on a residential manufactured home;
(v) the requirement contained in section 527(b)(2)(D) of such Act that a creditor make or invest in loans aggregating more than $1,000,000 per year shall not apply to a creditor selling residential manufactured homes financed by loans or credit sales secured by first liens on residential manufactured homes if the creditor has an arrangement to sell such loans or credit sales in whole or in part, or if such loans or credit sales are sold in whole or in part to a lender, institution, or creditor described in section 527(b) of such Act or in this section or a creditor, as defined in section 103(f) 1
1 See References in Text note below.
of the Truth in Lending Act, as such section was in effect on the day preceding March 31, 1980, if such creditor makes or invests in residential real estate loans or loans or credit sales secured by first liens on residential manufactured homes aggregating more than $1,000,000 per year; and(vi) the term “lender” in section 527(b)(2)(A) of such Act shall also be deemed to include any lender approved by the Secretary of Housing and Urban Development for participation in any mortgage insurance program under the National Housing Act [12 U.S.C. 1701 et seq.], and any individual who finances the sale or exchange of residential real property or a residential manufactured home which such individual owns and which such individual occupies or has occupied as his principal residence.
(2) The provisions of the constitution or law of any State expressly limiting the rate or amount of interest which may be charged, taken, received, or reserved shall not apply to any deposit or account held by, or other obligation of a depository institution. For purposes of this paragraph, the term “depository institution” means—
(i) any insured bank as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813);
(ii) any mutual savings bank as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813);
(iii) any savings bank as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813);
(iv) any insured credit union as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752);
(v) any member as defined in section 2 of the Federal Home Loan Bank Act (12 U.S.C. 1422); and
(vi) any insured institution as defined in section 408 1 of the National Housing Act (12 U.S.C. 1730a).
(b) Applicability to loan, mortgage, credit sale, or advance made in any State after April 1, 1980
(1) Except as provided in paragraphs (2) and (3), the provisions of subsection (a)(1) shall apply to any loan, mortgage, credit sale, or advance made in any State on or after April 1, 1980.
(2) Except as provided in paragraph (3), the provisions of subsection (a)(1) shall not apply to any loan, mortgage, credit sale, or advance made in any State after the date (on or after April 1, 1980, and before April 1, 1983) on which such State adopts a law or certifies that the voters of such State have voted in favor of any provision, constitutional or otherwise, which states explicitly and by its terms that such State does not want the provisions of subsection (a)(1) to apply with respect to loans, mortgages, credit sales, and advances made in such State.
(3) In any case in which a State takes an action described in paragraph (2), the provisions of subsection (a)(1) shall continue to apply to—
(A) any loan, mortgage, credit sale, or advance which is made after the date such action was taken pursuant to a commitment therefor which was entered during the period beginning on April 1, 1980, and ending on the date on which such State takes such action; and
(B) any loan, mortgage, or advance which is a rollover of a loan, mortgage, or advance, as described in regulations of the Federal Home Loan Bank Board, which was made or committed to be made during the period beginning on April 1, 1980, and ending on the date on which such State takes any action described in paragraph (2).
(4) At any time after March 31, 1980, any State may adopt a provision of law placing limitations on discount points or such other charges on any loan, mortgage, credit sale, or advance described in subsection (a)(1).
(c) Applicability to loan, mortgage, credit sale, or advance secured by first lien on residential manufactured homeThe provisions of subsection (a)(1) shall not apply to a loan, mortgage, credit sale, or advance which is secured by a first lien on a residential manufactured home unless the terms and conditions relating to such loan, mortgage, credit sale, or advance comply with consumer protection provisions specified in regulations prescribed by the Federal Home Loan Bank Board. Such regulations shall—
(1) include consumer protection provisions with respect to balloon payments, prepayment penalties, late charges, and deferral fees;
(2) require a 30-day notice prior to instituting any action leading to repossession or foreclosure (except in the case of abandonment or other extreme circumstances);
(3) require that upon prepayment in full, the debtor shall be entitled to a refund of the unearned portion of the precomputed finance charge in an amount not less than the amount which would be calculated by the actuarial method, except that the debtor shall not be entitled to a refund which is less than $1; and
(4) include such other provisions as the Federal Home Loan Bank Board may prescribe after a finding that additional protections are required.
(d) Implementation of provisions applicable to residential manufactured home
(e) DefinitionsFor the purpose of this section—
(1) a “prepayment” occurs upon—
(A) the refinancing or consolidation of the indebtedness;
(B) the actual prepayment of the indebtedness by the consumer whether voluntarily or following acceleration of the payment obligation by the creditor; or
(C) the entry of a judgment for the indebtedness in favor of the creditor;
(2) the term “actuarial method” means the method of allocating payments made on a debt between the outstanding balance of the obligation and the precomputed finance charge pursuant to which a payment is applied first to the accrued precomputed finance charge and any remainder is subtracted from, or any deficiency is added to, the outstanding balance of the obligation;
(3) the term “precomputed finance charge” means interest or a time price differential within the meaning of sections 106(a)(1) and (2) of the Truth in Lending Act (15 U.S.C. 1605(a)(1) and (2)) as computed by an add-on or discount method; and
(4) the term “residential manufactured home” means a manufactured home as defined in section 603(6) of the National Mobile Home Construction and Safety Standards Act of 1974 [42 U.S.C. 5402(6)] which is used as a residence.
(f) Rules, regulations, and interpretations
(g) Effective date
(Pub. L. 96–221, title II, § 207(b)(11), title V, § 501, Mar. 31, 1980, 94 Stat. 144, 161; Pub. L. 96–399, title III, §§ 308(c)(6), 324(a), (e), Oct. 8, 1980, 94 Stat. 1641, 1647, 1648; Pub. L. 97–35, title III, § 384, Aug. 13, 1981, 95 Stat. 432.)
§ 1735f–8. Time of payment of premium charges
In carrying out the provisions of subchapters I, II, IV,1
1 See References in Text note below.
VII, VIII, IX–B, and X pertaining to the payment of loan or mortgage insurance premium charges by a financial institution, other mortgagees, or agent thereof to the Federal Government in connection with a loan or mortgage insurance program established pursuant to any of these subchapters, the Secretary shall require that payment of such premiums be made (1) in the case of loans or mortgages respecting one- to four-family residences, promptly upon their receipt from the borrower, and (2) in any other case, promptly when due to the Secretary; except that the Secretary may approve payment of such premiums within twenty-four months of such receipt or due date, as appropriate, if the financial institution, mortgagee, or agent thereof pays interest, at a rate specified by the Secretary, to the insurance fund for the period beginning twenty days after receipt from the borrower or after the due date, as appropriate, and ending upon payment of the premiums to the Federal Government.(June 27, 1934, ch. 847, title V, § 530, as added Pub. L. 96–399, title III, § 320, Oct. 8, 1980, 94 Stat. 1646; amended Pub. L. 98–181, title I [title IV, § 406], Nov. 30, 1983, 97 Stat. 1210; Pub. L. 101–235, title I, § 133(d)(5), Dec. 15, 1989, 103 Stat. 2027.)
§ 1735f–9. Limitation on commitments to insure loans and mortgages
(a) The authority of the Secretary to enter into commitments to insure loans and mortgages under this chapter shall be effective for any fiscal year only to such extent or in such amounts as are or have been provided in appropriation Acts for such fiscal year.
(b) Notwithstanding any other provision of law and subject only to the absence of qualified requests for insurance, to the authority provided in this chapter, and to the limitation in subsection (a), the Secretary shall enter into commitments to insure mortgages under this chapter with an aggregate principal amount of $110,165,000,000 during fiscal year 1993 and $68,673,868,600 during fiscal year 1994.
(June 27, 1934, ch. 847, title V, § 531, as added Pub. L. 97–35, title III, § 335, Aug. 13, 1981, 95 Stat. 414; amended Pub. L. 98–181, title I [title IV, § 402], Nov. 30, 1983, 97 Stat. 1208; Pub. L. 98–479, title I, § 104(a)(7), Oct. 17, 1984, 98 Stat. 2225; Pub. L. 99–267, § 1(h), Mar. 27, 1986, 100 Stat. 73; Pub. L. 100–122, § 2(c), Sept. 30, 1987, 101 Stat. 793; Pub. L. 100–242, title IV, § 402, Feb. 5, 1988, 101 Stat. 1899; Pub. L. 101–625, title III, § 321, Nov. 28, 1990, 104 Stat. 4134; Pub. L. 102–550, title V, § 501, Oct. 28, 1992, 106 Stat. 3778; Pub. L. 103–120, § 9, Oct. 27, 1993, 107 Stat. 1151.)
§ 1735f–10. Change of mortgagee status
(a) Notification
(b) Actions
The actions described in this subsection are as follows:
(1) The debarment, suspension or a Limited Denial of Participation (LDP), or application of other sanctions, other exclusions, fines, or penalties applied to the mortgagee or to any officer, partner, director, principal, manager, supervisor, loan processor, loan underwriter, or loan originator of the mortgagee pursuant to applicable provisions of State or Federal law.
(2) The revocation of a State-issued mortgage loan originator license issued pursuant to the S.A.F.E. Mortgage Licensing Act of 2008 (12 U.S.C. 5101 et seq.) or any other similar declaration of ineligibility pursuant to State law.
(June 27, 1934, ch. 847, title V, § 532, as added Pub. L. 111–22, div. A, title II, § 203(e), May 20, 2009, 123 Stat. 1647.)
§ 1735f–11. Review of mortgagee performance and authority to terminate
(a) Periodic review of mortgagee performance
(b) Comparison with other mortgagees
(c) Termination of mortgagee origination approval
(1) Notwithstanding section 1708(c) of this title, the Secretary may terminate the approval of a mortgagee to originate or underwrite single family mortgages if the Secretary determines that the mortgage loans originated or underwritten by the mortgagee present an unacceptable risk to the insurance funds. The determination shall be based on the comparison required under subsection (b) and shall be made in accordance with regulations of the Secretary. The Secretary may rely on existing regulations published before this section takes effect.
(2) The Secretary shall give a mortgagee at least 60 days prior written notice of any termination under this subsection. The termination shall take effect at the end of the notice period, unless the Secretary withdraws the termination notice or extends the notice period. If requested in writing by the mortgagee within 30 days of the date of the notice, the mortgagee shall be entitled to an informal conference with the official authorized to issue termination notices on behalf of the Secretary (or a designee of that official). At the informal conference, the mortgagee may present for consideration specific factors that it believes were beyond its control and that caused the excessive default and claim rate.
(June 27, 1934, ch. 847, title V, § 533, as added Pub. L. 100–242, title IV, § 407(b), Feb. 5, 1988, 101 Stat. 1902; amended Pub. L. 107–73, title II, § 209, Nov. 26, 2001, 115 Stat. 675.)
§ 1735f–12. Assurance of adequate processing of applications for loan and mortgage insurance
(a) State offices
(b) Expedited procedure for RTC properties
(June 27, 1934, ch. 847, title V, § 534, as added Pub. L. 100–242, title IV, § 418, Feb. 5, 1988, 101 Stat. 1912; amended Pub. L. 102–550, title V, § 512(a), Oct. 28, 1992, 106 Stat. 3786.)
§ 1735f–13. Prohibition of requirement of minimum principal loan amount
A mortgagee or lender may not require, as a condition of providing a loan insured under this chapter or secured by a mortgage insured under this chapter, that the principal amount of the loan exceed a minimum amount established by the mortgagee or lender.
(June 27, 1934, ch. 847, title V, § 535, as added Pub. L. 100–242, title IV, § 419(a), Feb. 5, 1988, 101 Stat. 1913.)
§ 1735f–14. Civil money penalties against mortgagees, lenders, and other participants in FHA programs
(a) In general
(1) Authority
(2) Amount of penalty
(b) Violations for which a penalty may be imposed
(1) ViolationsThe Secretary may impose a civil money penalty under subsection (a) for any knowing and material violation by a mortgagee or lender or any of its owners, officers, or directors, as follows:
(A) Except where expressly permitted by statute, regulation, or contract approved by the Secretary, transfer of a mortgage insured under this chapter to a mortgagee not approved by the Secretary, or transfer of a loan to a transferee that is not holding a contract of insurance under subchapter I of this chapter.
(B) Failure of a nonsupervised mortgagee, as defined by the Secretary—
(i) to segregate all escrow funds received from a mortgagor for ground rents, taxes, assessments, and insurance premiums; or
(ii) to deposit these funds in a special account with a depository institution whose accounts are insured by the Federal Deposit Insurance Corporation through the Deposit Insurance Fund, or by the National Credit Union Administration.
(C) Use of escrow funds for any purpose other than that for which they were received.
(D) Submission to the Secretary of information that was false, in connection with any mortgage insured under this chapter, or any loan that is covered by a contract of insurance under subchapter I of this chapter.
(E) With respect to an officer, director, principal, or employee—
(i) hiring such an individual whose duties will involve, directly or indirectly, programs administered by the Secretary, while that person was under suspension or withdrawal by the Secretary; or
(ii) retaining in employment such an individual who continues to be involved, directly or indirectly, in programs administered by the Secretary, while that person was under suspension or withdrawal by the Secretary.
(F) Falsely certifying to the Secretary or submitting to the Secretary a false certification by another person or entity.
(G) Failure to comply with an agreement, certification, or condition of approval set forth on, or applicable to—
(i) the application of a mortgagee or lender for approval by the Secretary; or
(ii) the notification by a mortgagee or lender to the Secretary concerning establishment of a branch office.
(H) Violation of any provisions of subchapter I or II of this chapter, or any implementing regulation, handbook, or mortgagee letter that is issued under this chapter.
(I) Failure to engage in loss mitigation actions as provided in section 1715u(a) of this title.
(J) Failure to perform a required physical inspection of the mortgaged property.
(K) Violation of section 1708(d) of this title.
(L) Use of “Federal Housing Administration”, “Department of Housing and Urban Development”, “Government National Mortgage Association”, “Ginnie Mae”, the acronyms “HUD”, “FHA”, or “GNMA”, or any official seal or logo of the Department of Housing and Urban Development, except as authorized by the Secretary.
(2) Additional violationsThe Secretary may impose a civil money penalty under subsection (a) for any knowing and material violation by a principal, officer, or employee of a mortgagee or lender, or other participants in either an insured mortgage or subchapter I loan transaction under this chapter or provision of assistance to the borrower in connection with any such loan, including sellers of the real estate involved, borrowers, closing agents, title companies, real estate agents, mortgage brokers, appraisers, loan correspondents, and dealers for—
(A) submission to the Secretary of information that was false, in connection with any mortgage insured under this chapter, or any loan that is covered by a contract of insurance under subchapter I of this chapter;
(B) falsely certifying to the Secretary or submitting to the Secretary a false certification by another person or entity;
(C) failure by a loan correspondent or dealer to submit to the Secretary information which is required by regulations or directives in connection with any loan that is covered by a contract of insurance under subchapter I; or
(D) causing or participating in any of the violations set forth in paragraph (1) of this subsection.
(3) Prohibition against misleading use of Federal entity designation
(c) Agency procedures
(1) EstablishmentThe Secretary shall establish standards and procedures governing the imposition of civil money penalties under subsection (a). These standards and procedures—
(A) shall provide for the Secretary to make the determination to impose the penalty or to use an administrative entity (such as the Mortgagee Review Board, established pursuant to section 1708(c) of this title) to make the determination;
(B) shall provide for the imposition of a penalty only after the mortgagee or lender or such other person or entity has been given an opportunity for a hearing on the record; and
(C) may provide for review by the Secretary of any determination or order, or interlocutory ruling, arising from a hearing.
(2) Final orders
(3) Factors in determining amount of penalty
(4) Reviewability of imposition of penalty
(d) Judicial review of agency determination
(1) In general
(2) Objections not raised in hearing
(3) Scope of review
(4) Order to pay penalty
(e) Action to collect penalty
(f) Settlement by Secretary
(g) “Knowingly” defined
(h) Regulations
(i) Deposit of penalties in insurance funds
(June 27, 1934, ch. 847, title V, § 536, as added Pub. L. 101–235, title I, § 107(a), Dec. 15, 1989, 103 Stat. 2000; amended Pub. L. 104–208, div. A, title II, § 2704(d)(13)(B), Sept. 30, 1996, 110 Stat. 3009–490; Pub. L. 105–65, title V, § 553, Oct. 27, 1997, 111 Stat. 1413; Pub. L. 105–276, title VI, § 601(g), (h), Oct. 21, 1998, 112 Stat. 2674; Pub. L. 108–447, div. I, title II, § 219(a), Dec. 8, 2004, 118 Stat. 3319; Pub. L. 109–171, title II, § 2102(b), Feb. 8, 2006, 120 Stat. 9; Pub. L. 109–173, § 9(f)(2), Feb. 15, 2006, 119 Stat. 3618; Pub. L. 111–22, div. A, title II, § 203(f), May 20, 2009, 123 Stat. 1647.)
§ 1735f–15. Civil money penalties against multifamily mortgagors
(a) In general
(b) Penalty for violation of agreement as condition of transfer of physical assets, flexible subsidy loan, capital improvement loan, modification of mortgage terms, or workout agreement
(1) Authority
(2) Amount of penalty
(c) Other violations
(1)
(A) Liable partiesThe Secretary may also impose a civil money penalty under this section on—
(i) any mortgagor of a property that includes 5 or more living units and that has a mortgage insured, coinsured, or held pursuant to this chapter;
(ii) any general partner of a partnership mortgagor of such property;
(iii) any officer or director of a corporate mortgagor;
(iv) any agent employed to manage the property that has an identity of interest with the mortgagor, with the general partner of a partnership mortgagor, or with any officer or director of a corporate mortgagor of such property; or
(v) any member of a limited liability company that is the mortgagor of such property or is the general partner of a limited partnership mortgagor or is a partner of a general partnership mortgagor.
(B) ViolationsA penalty may be imposed under this section upon any liable party under subparagraph (A) that knowingly and materially takes any of the following actions:
(i) Conveyance, transfer, or encumbrance of any of the mortgaged property, or permitting the conveyance, transfer, or encumbrance of such property, without the prior written approval of the Secretary.
(ii) Assignment, transfer, disposition, or encumbrance of any personal property of the project, including rents, other revenues, or contract rights, or paying out any funds, except for reasonable operating expenses and necessary repairs, without the prior written approval of the Secretary.
(iii) Conveyance, assignment, or transfer of any beneficial interest in any trust holding title to the property, or the interest of any general partner in a partnership owning the property, or any right to manage or receive the rents and profits from the mortgaged property, without the prior written approval of the Secretary.
(iv) Remodeling, adding to, reconstructing, or demolishing any part of the mortgaged property or subtracting from any real or personal property of the project, without the prior written approval of the Secretary.
(v) Requiring, as a condition of the occupancy or leasing of any unit in the project, any consideration or deposit other than the prepayment of the first month’s rent, plus a security deposit in an amount not in excess of 1 month’s rent, to guarantee the performance of the covenants of the lease.
(vi) Not holding any funds collected as security deposits separate and apart from all other funds of the project in a trust account, the amount of which at all times equals or exceeds the aggregate of all outstanding obligations under the account.
(vii) Payment for services, supplies, or materials which exceeds $500 and substantially exceeds the amount ordinarily paid for such services, supplies, or materials in the area where the services are rendered or the supplies or materials furnished.
(viii) Failure to maintain at any time the mortgaged property, equipment, buildings, plans, offices, apparatus, devices, books, contracts, records, documents, and other related papers (including failure to keep copies of all written contracts or other instruments which affect the mortgaged property) in reasonable condition for proper audit and for examination and inspection at any reasonable time by the Secretary or any duly authorized agents of the Secretary.
(ix) Failure to maintain the books and accounts of the operations of the mortgaged property and of the project in accordance with requirements prescribed by the Secretary.
(x) Failure to furnish the Secretary, by the expiration of the 90-day period beginning on the first day after the completion of each fiscal year (unless the Secretary has approved an extension of the 90-day period in writing), with a complete annual financial report, in accordance with requirements prescribed by the Secretary, including requirements that the report be—(I) based upon an examination of the books and records of the mortgagor;(II) prepared and certified to by an independent public accountant or a certified public accountant (unless the Secretary has waived this requirement in writing); and(III) certified to by the mortgagor or an authorized representative of the mortgagor.
The Secretary shall approve an extension where the mortgagor demonstrates that failure to comply with this clause is due to events beyond the control of the mortgagor.
(xi) At the request of the Secretary, the agents of the Secretary, the employees of the Secretary, or the attorneys of the Secretary, failure to furnish monthly occupancy reports or failure to provide specific answers to questions upon which information is sought relative to income, assets, liabilities, contracts, the operation and condition of the property, or the status of the mortgage.
(xii) Failure to make promptly all payments due under the note and mortgage, including mortgage insurance premiums, tax and insurance escrow payments, and payments to the reserve for replacements when there is adequate project income available to make such payments.
(xiii) Failure to maintain the premises, accommodations, any living unit in the project, and the grounds and equipment appurtenant thereto in good repair and condition in accordance with regulations and requirements of the Secretary, except that nothing in this clause shall have the effect of altering the provisions of an existing regulatory agreement or federally insured mortgage on the property.
(xiv) Failure, by a mortgagor, a general partner of a partnership mortgagor, or an officer or director of a corporate mortgagor, to provide management for the project that is acceptable to the Secretary pursuant to regulations and requirements of the Secretary.
(xv) Failure to provide access to the books, records, and accounts related to the operations of the mortgaged property and of the project.
The pay out of surplus cash, as defined by and provided for in the regulatory agreement, shall not constitute a violation of this subsection.
(2) Amount of penalty
(d) Agency procedures
(1) EstablishmentThe Secretary shall establish standards and procedures governing the imposition of civil money penalties under subsections (b) and (c). These standards and procedures—
(A) shall provide for the Secretary or other department official (such as the Assistant Secretary for Housing) to make the determination to impose a penalty;
(B) shall provide for the imposition of a penalty only after the mortgagor, general partner of a partnership mortgagor, officer or director of a corporate mortgagor, or identity of interest agent employed to manage the property has been given an opportunity for a hearing on the record; and
(C) may provide for review by the Secretary of any determination or order, or interlocutory ruling, arising from a hearing.
(2) Final orders
(3) Factors in determining amount of penalty
(4) Reviewability of imposition of penalty
(5) Payment of penalty
(e) Judicial review of agency determination
(1) In general
(2) Objections not raised in hearing
(3) Scope of review
(4) Order to pay penalty
(f) Civil money penalties against multifamily mortgagors, general partners of partnership mortgagors, officers and directors of corporate mortgagors, and certain managing agents
(g) Settlement by Secretary
(h) “Knowingly” defined
(i) Regulations
(j) Deposit of penalties in insurance funds
(k) Identity of interest managing agentIn this section, the terms “agent employed to manage the property that has an identity of interest” and “identity of interest agent” mean an entity—
(1) that has management responsibility for a project;
(2) in which the ownership entity, including its general partner or partners (if applicable) and its officers or directors (if applicable), has an ownership interest; and
(3) over which the ownership entity exerts effective control.
(June 27, 1934, ch. 847, title V, § 537, as added Pub. L. 101–235, title I, § 108(a), Dec. 15, 1989, 103 Stat. 2003; amended Pub. L. 105–65, title V, § 561(a), Oct. 27, 1997, 111 Stat. 1414; Pub. L. 108–447, div. I, title II, § 219(b), (c), Dec. 8, 2004, 118 Stat. 3319.)
§ 1735f–16. Annual audited financial statements
With respect to fiscal year 1989 and for every fiscal year thereafter, the Secretary shall make available to the public a financial statement of the insurance funds established under this chapter that will present their financial condition on a cash and accrual basis, consistent with generally accepted accounting principles. Each financial statement shall be audited by an independent accounting firm selected by the Secretary and the results of such audit shall be made available to the public.
(June 27, 1934, ch. 847, title V, § 538, as added Pub. L. 101–235, title I, § 131, Dec. 15, 1989, 103 Stat. 2026.)
§ 1735f–17. Examinations and sanctions for certain violations
(a) Examinations and sanctions
(1) In connection with any examination of a mortgagee approved by the Secretary pursuant to this chapter, the Secretary shall assess the performance of the mortgagee in meeting the requirements of sections 1709(t),1
1 See References in Text note below.
1715n(a)(7)(B),1 and 1735f–13 of this title. Where the Secretary determines that a mortgagee is not in compliance with these requirements, the Secretary shall refer the matter to the Mortgagee Review Board for investigation and appropriate action.(2) Not later than 180 days after November 28, 1990, the Secretary shall by notice establish a procedure under which (A) any person may file a request that the Secretary determine whether a mortgagee is in compliance with sections 1709(t),1 1715n(a)(7)(B),1 and 1735f–13 of this title, (B) the Secretary shall inform the person of the disposition of the request, and (C) the Secretary shall publish in the Federal Register the disposition of any case referred by the Secretary to the Mortgagee Review Board. Such procedures shall be established by regulation under section 553 of title 5. The Secretary shall issue regulations based on the initial notice before the expiration of the 8-month period beginning on the date of the notice.
(3) Omitted.
(b) Monitoring and review
(June 27, 1934, ch. 847, title V, § 539, as added Pub. L. 101–625, title III, § 330(b), Nov. 28, 1990, 104 Stat. 4139.)
§ 1735f–18. Information regarding early defaults and foreclosures on insured mortgages
(a) In general
(b) Contents
(1) Mortgage lender analysis
Information collected under this section shall include, for each lender originating mortgages during the applicable collection period that are insured pursuant to section 1709 of this title and secured by property in a designated census tract, the following information with respect to such mortgages:
(A) The name of the lender and the number of each designated census tract in which the lender originated 1 or more such mortgages during the applicable collection period.
(B) The total number of such mortgages originated by such lender during the applicable collection period in each designated census tract and the number of mortgages originated each year in each designated census tract.
(C) The total number of defaults and foreclosures on such mortgages during the applicable collection period in each designated census tract and the number of defaults and foreclosures in each designated census tract in each year of the period.
(D) For each designated census tract, the percentage of such lender’s total insured mortgages originated during each year of the applicable collection period (with respect to properties within such census tract) on which defaults or foreclosures have occurred during the applicable collection period.
(E) The total of all such originations, defaults, and foreclosures on insured mortgages originated by such lender during the applicable collection period for all designated census tracts and the percentage of the total number of such lender’s insured mortgage originations on which defaults or foreclosures have occurred during the applicable collection period.
(2) Other information
Information collected under this section shall also include the following:
(A) For each lender referred to under paragraph (1), the total number of insured mortgages originated by the lender secured by properties not located in a designated census tract, the total number of defaults and foreclosures on such mortgages, and the percentage of such mortgages originated on which defaults or foreclosures occurred during the applicable collection period.
(B) For each designated census tract, the total number of mortgages originated during the applicable collection period that are insured pursuant to section 1709 of this title, the number of defaults and foreclosures occurring on such mortgages during such period, and the percentage of the total insured mortgage originations during the period on which defaults or foreclosures occurred.
(c) Annual reports
(d) Definitions
For purposes of this section:
(1)
(2) Designated census tract
(June 27, 1934, ch. 847, title V, § 540, as added Pub. L. 101–625, title III, § 335(a), Nov. 28, 1990, 104 Stat. 4142.)
§ 1735f–19. Partial payment of claims on defaulted mortgages and in connection with mortgage restructuring
(a) Defaulted mortgages
Notwithstanding any other provision of law, if the Secretary is requested to accept assignment of a mortgage insured by the Secretary that covers a multifamily housing project (as such term is defined in section 1701z–11(b) of this title) or a health care facility (including a nursing home, intermediate care facility, or board and care home (as those terms are defined in section 1715w of this title), a hospital (as that term is defined in section 1715z–7 of this title), or a group practice facility (as that term is defined in section 1749aaa–5 of this title)) and the Secretary determines that partial payment would be less costly to the Federal Government than other reasonable alternatives for maintaining the low-income character of the project, or for keeping the health care facility operational to serve community needs, the Secretary may request the mortgagee, in lieu of assignment, to—
(1) accept partial payment of the claim under the mortgage insurance contract; and
(2) recast the mortgage, under such terms and conditions as the Secretary may determine.
(b) Existing mortgages
(c) Repayment
(June 27, 1934, ch. 847, title V, § 541, as added Pub. L. 103–233, title I, § 101(e), Apr. 11, 1994, 108 Stat. 357; amended Pub. L. 105–65, title II, § 210, title V, § 523(b), Oct. 27, 1997, 111 Stat. 1366, 1406; Pub. L. 106–74, title II, § 213(a), Oct. 20, 1999, 113 Stat. 1073.)
§ 1735f–20. Authorization of appropriations for General and Special Risk Insurance Funds
There are authorized to be appropriated such sums as may be necessary for each of fiscal years 1994 and 1995, to be allocated in any manner that the Secretary determines appropriate, for the following costs incurred in conjunction with programs authorized under the General Insurance Fund, as provided by section 1735c of this title, and the Special Risk Insurance Fund, as provided by section 1715z–3 of this title:
(1) The cost to the Government, as defined in section 661a 1
1 See References in Text note below.
of title 2, of new insurance commitments.(2) The cost to the Government, as defined in section 661a 1 of title 2, of modifications to existing loans, loan guarantees, or insurance commitments.
(3) The cost to the Government, as defined in section 661a 1 of title 2, of loans provided under section 1701z–11(f) of this title.
(4) The costs of the rehabilitation of multifamily housing projects (as defined in section 1701z–11(b) of this title) upon disposition by the Secretary.
(June 27, 1934, ch. 847, title V, § 542, as added Pub. L. 103–233, title I, § 105(c), Apr. 11, 1994, 108 Stat. 363.)
§ 1735g. Mortgage relief for homeowners who are unemployed as result of closing of Federal installation
(a) DefinitionsFor the purposes of this section—
(1) The term “mortgage” means a mortgage which (A) is insured under the National Housing Act [12 U.S.C. 1701 et seq.], or (B) secures a home loan guaranteed or insured under the Servicemen’s Readjustment Act of 1944 or chapter 37 of title 38.
(2) The term “Federal mortgage agency” means—
(A) The Secretary of Housing and Urban Development when used in connection with mortgages insured under the National Housing Act, and
(B) the Secretary of Veterans Affairs when used in connection with mortgages securing home loans guaranteed or insured under the Servicemen’s Readjustment Act of 1944 or chapter 37 of title 38.
(3) The term “distressed mortgagor” means an individual who—
(A) was employed by the Federal Government at, or was assigned as a serviceman to, a military base or other Federal installation and whose employment or service at such base or installation was terminated subsequent to November 1, 1964, as the result of the closing (in whole or in part) of such base or installation; and
(B) is the owner-occupant of a dwelling situated at or near such base or installation and upon which there is a mortgage securing a loan which is in default because of the inability of such individual to make payments due under such mortgage.
(b) Application for, issuance and expiration of certificate of moratorium
(1) Any distressed mortgagor, for the purpose of avoiding foreclosure of his mortgage, may apply to the appropriate Federal mortgage agency for a determination that suspension of his obligation to make payments due under such mortgage during a temporary period is necessary in order to avoid such foreclosure.
(2) Upon receipt of an application made under this subsection by a distressed mortgagor, the Federal mortgage agency shall issue to such mortgagor a certificate of moratorium if it determines, after consultation with the interested mortgagee, that such action is necessary to avoid foreclosure.
(3) Prior to the issuance to any distressed mortgagor of a certificate of moratorium under paragraph (2), the Federal mortgage agency, the mortgagor, and the mortgagee shall enter into a binding agreement under which—
(A) the mortgagor will be required to make payments to such agency, after the expiration of such certificate, in an aggregate amount equal to the amount paid by such agency on behalf of such mortgagor as provided in subsection (c), together with interest thereon at a rate not to exceed the rate provided in the mortgage; the manner and time in which such payments shall be made to be determined by the Federal mortgage agency having due regard for the purposes sought to be achieved by this section; and
(B) the Federal mortgage agency will be subrogated to the rights of the mortgagee to the extent of payments made pursuant to such certificate, which rights, however, shall be subject to the prior right of the mortgagee to receive the full amount payable under the mortgage.
(4) Any certificate of moratorium issued under this subsection shall expire on whichever of the following dates is the earliest—
(A) two years from the date on which such certificate was issued;
(B) thirty days after the date on which the mortgagor gives notice in writing to the Federal mortgage agency that he is able to resume his obligation to make payments due under his mortgage; or
(C) thirty days after the date on which the Federal mortgage agency determines that the mortgagor to whom such certificate was issued has ceased to be a distressed mortgagor as defined in subsection (a)(3).
(c) Notice to mortgagee of assumption of mortgagor’s obligation by agency; amount of payments; suspension of payments by mortgagor; prohibition against further action to enforce or collect payments; liability of mortgagor upon expiration of certificate; notice of expiration of certificate
(1) Whenever a Federal mortgage agency issues a certificate of moratorium to any distressed mortgagor with respect to any mortgage, it shall transmit to the mortgagee a copy of such certificate, together with a notice stating that, while such certificate is in effect, such agency will assume the obligation of such mortgagor to make payments due under the mortgage.
(2) Payments made by any Federal mortgage agency pursuant to a certificate of moratorium issued under this section with respect to the mortgage of any distressed mortgagor may include, in addition to the payments referred to in paragraph (1), an amount equal to the unpaid payments under such mortgage prior to the issuance of such certificate, plus a reasonable allowance for foreclosure costs actually paid by the mortgagee if a foreclosure action was dismissed as a result of the issuance of a moratorium certificate. Payments by the Federal mortgage agency may also include payments of taxes and insurance premiums on the mortgaged property as deemed necessary when these items are not provided for through payments to a tax and insurance account held by the interested mortgagee.
(3) While any certificate of moratorium issued under this section is in effect with respect to the mortgage of any distressed mortgagor, no further payments due under the mortgage shall be required of such mortgagor, and no action (legal or otherwise) shall be taken or maintained by the mortgagee to enforce or collect such payments. Upon the expiration of such certificate, the mortgagor shall again be liable for the payment of all amounts due under the mortgage in accordance with its terms.
(4) Each Federal mortgage agency shall give prompt notice in writing to the interested mortgagor and mortgagee of the expiration of any certificate of moratorium issued by it under this section.
(d) Regulations
(e) Fund for extending financial assistance to distressed mortgagors
(Pub. L. 89–117, title I, § 107(a)–(e), Aug. 10, 1965, 79 Stat. 458, 459; Pub. L. 89–754, title X, § 1012, Nov. 3, 1966, 80 Stat. 1288; Pub. L. 102–54, § 13(d)(3), June 13, 1991, 105 Stat. 275.)
§ 1735h. Repealed. Pub. L. 89–754, title X, § 1013(j), Nov. 3, 1966, 80 Stat. 1292