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United States Code (Last Updated: May 24, 2014) |
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Title 12. BANKS AND BANKING |
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Chapter 13. NATIONAL HOUSING |
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SubChapter II. MORTGAGE INSURANCE |
§ 1708. Federal Housing Administration operations
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(a) Mutual Mortgage Insurance Fund (1) Establishment Subject to the provisions of the Federal Credit Reform Act of 1990 [2 U.S.C. 661 et seq.], there is hereby created a Mutual Mortgage Insurance Fund (in this subchapter referred to as the “Fund”), which shall be used by the Secretary to carry out the provisions of this subchapter with respect to mortgages insured under section 1709 of this title. The Secretary may enter into commitments to guarantee, and may guarantee, such insured mortgages.
(2) Limit on loan guarantees The authority of the Secretary to enter into commitments to guarantee such insured mortgages shall be effective for any fiscal year only to the extent that the aggregate original principal loan amount under such mortgages, any part of which is guaranteed, does not exceed the amount specified in appropriations Acts for such fiscal year.
(3) Fiduciary responsibility The Secretary has a responsibility to ensure that the Mutual Mortgage Insurance Fund remains financially sound.
(4) Annual independent actuarial study The Secretary shall provide for an independent actuarial study of the Fund to be conducted annually, which shall analyze the financial position of the Fund. The Secretary shall submit a report annually to the Congress describing the results of such study and assessing the financial status of the Fund. The report shall recommend adjustments to underwriting standards, program participation, or premiums, if necessary, to ensure that the Fund remains financially sound. The report shall also include an evaluation of the quality control procedures and accuracy of information utilized in the process of underwriting loans guaranteed by the Fund. Such evaluation shall include a review of the risk characteristics of loans based not only on borrower information and performance, but on risks associated with loans originated or funded by various entities or financial institutions.
(5) Quarterly reports During each fiscal year, the Secretary shall submit a report to the Congress for each calendar quarter, which shall specify for mortgages that are obligations of the Fund— (A) the cumulative volume of loan guarantee commitments that have been made during such fiscal year through the end of the quarter for which the report is submitted; (B) the types of loans insured, categorized by risk; (C) any significant changes between actual and projected claim and prepayment activity; (D) projected versus actual loss rates; and (E) updated projections of the annual subsidy rates to ensure that increases in risk to the Fund are identified and mitigated by adjustments to underwriting standards, program participation, or premiums, and the financial soundness of the Fund is maintained. The first quarterly report under this paragraph shall be submitted on the last day of the first quarter of fiscal year 2008, or on the last day of the first full calendar quarter following July 30, 2008 , whichever is later.(6) Adjustment of premiums If, pursuant to the independent actuarial study of the Fund required under paragraph (4), the Secretary determines that the Fund is not meeting the operational goals established under paragraph (7) or there is a substantial probability that the Fund will not maintain its established target subsidy rate, the Secretary may either make programmatic adjustments under this subchapter as necessary to reduce the risk to the Fund, or make appropriate premium adjustments.
(7) Operational goals The operational goals for the Fund are— (A) to minimize the default risk to the Fund and to homeowners by among other actions instituting fraud prevention quality control screening not later than 18 months after July 30, 2008 ; and(B) to meet the housing needs of the borrowers that the single family mortgage insurance program under this subchapter is designed to serve. (b) Advisory Board There is created a Federal Housing Administration Advisory Board (“Board”) that shall review operation of the Federal Housing Administration, including the activities of the Mortgagee Review Board, and shall provide advice to the Federal Housing Commissioner with respect to the formulation of general policies of the Federal Housing Administration and such other matters as the Federal Housing Commissioner may deem appropriate. The Advisory Board shall, in all other respects, be subject to the provisions of the Federal Advisory Committee Act. (1) The Advisory Board shall be composed of 15 members to be appointed from among individuals who have substantial expertise and broad experience in housing and mortgage lending of whom— (A) 9 shall be appointed by the Secretary; (B) 3 shall be appointed by the Chairman and Ranking Minority Member of the Subcommittee on Housing and Urban Affairs of the Committee on Banking, Housing, and Urban Affairs of the Senate; and (C) 3 shall be appointed by the Chairman and Ranking Minority Member of the Subcommittee on Housing and Community Development of the Committee on Banking, Finance and Urban Affairs of the House of Representatives. (2) Membership on the Advisory Board shall include— (A) not less than 4 persons with distinguished private sector careers in housing finance, lending, management, development or insurance; (B) not less than 4 persons with outstanding reputations as licensed actuaries, experts in actuarial science, or economics related to housing; (C) not less than 4 persons with backgrounds of leadership in representing the interests of housing consumers; (D) not less than 1 person with significant experience and a distinguished reputation for work in the enforcement, advocacy, or development of fair housing or civil rights legislation; and (E) not less than 1 person with a background of leadership representing rural housing interests. (3) Members of the Advisory Board shall be selected to ensure, to the greatest extent practicable, geographical representation or every region of the country. (4) Not more than 8 members of the Advisory Board may be from any one political party. (5) Membership of the Advisory Board shall not include any person who, during the previous 24-month period, was required to register with the Secretary under section 3537b(c) impartially prepared by a licensed or certified appraiser setting forth an opinion of defined value of an adequately described property as of a specific date, supported by presentation and analysis of relevant market information. (2) The Appraisal Subcommittee of the Federal Financial Institutions Examination Council shall include the Secretary or his designee. (3) Direct Endorsement Program.— (A) Any mortgagee that is authorized by the Secretary to process mortgages as a direct endorsement mortgagee (pursuant to the single-family home mortgage direct endorsement program established by the Secretary) may contract with an appraiser chosen at the discretion of the mortgagee for the performance of appraisals in connection with such mortgages. Such appraisers may include appraisal companies organized as corporations, partnerships, or sole proprietorships. (B) Any appraisal conducted pursuant to subparagraph (A) shall be conducted by an individual who complies with the qualifications or standards for appraisers established by the Secretary pursuant to this subsection. (C) In conducting an appraisal, such individual may utilize the assistance of others, who shall be under the direct supervision of the individual responsible for the appraisal. The individual responsible for the appraisal shall personally approve and sign any appraisal report. (4) Fee Panel Appraisers.— (A) Any individual who is an employee of an appraisal company (including any company organized as a corporation, partnership, or sole proprietorship) and who meets the qualifications or standards for appraisers and inclusion on appraiser fee panels established by the Secretary, shall be eligible for assignment to conduct appraisals for mortgages under this subchapter in the same manner and on the same basis as other approved appraisers. (B) With respect to any employee of an appraisal company described in subparagraph (A) who is offered an appraisal assignment in connection with a mortgage under this subchapter, the person utilizing the appraiser may contract directly with the appraisal company employing the appraiser for the furnishing of the appraisal services. (5) Additional appraiser standards.— Beginning on July 30, 2008 , any appraiser chosen or approved to conduct appraisals for mortgages under this subchapter shall—(A) be certified— (i) by the State in which the property to be appraised is located; or (ii) by a nationally recognized professional appraisal organization; and (B) have demonstrated verifiable education in the appraisal requirements established by the Federal Housing Administration under this subsection. (h) Use of name The Secretary shall, by regulation, require each mortgagee approved by the Secretary for participation in the FHA mortgage insurance programs of the Secretary— (1) to use the business name of the mortgagee that is registered with the Secretary in connection with such approval in all advertisements and promotional materials, as such terms are defined by the Secretary, relating to the business of such mortgagee in such mortgage insurance programs; and (2) to maintain copies of all such advertisements and promotional materials, in such form and for such period as the Secretary requires.
References In Text
The Federal Credit Reform Act of 1990, referred to in subsec. (a)(1), is title V of Pub. L. 93–344, as added by Pub. L. 101–508, title XIII, § 13201(a),
The Federal Advisory Committee Act, referred to in subsec. (b), is Pub. L. 92–463,
Section 3537b(c) of title 42, referred to in subsec. (b)(5), was in the original “section 112(c) of the Department of Housing and Urban Development Reform Act of 1989”, meaning section 112 of Pub. L. 101–235, which does not contain a subsec. (c), but enacted section 13 of the Department of Housing and Urban Development Act, which was classified to section 3537b of title 42 prior to repeal by Pub. L. 104–65, § 11(b)(1),
The Equal Credit Opportunity Act, referred to in subsec. (c)(1), (3)(B), is title VII of Pub. L. 90–321, as added by Pub. L. 93–495, title V, § 503,
The Fair Housing Act, referred to in subsec. (c)(1), (3)(B), is title VIII of Pub. L. 90–284,
Executive Order 11063, referred to in subsec. (c)(1), (3)(B), is set out as a note under section 1982 of Title 42.
This chapter, referred to in subsec. (c)(7)(A), was in the original “this Act”, meaning act June 27, 1934, ch. 847, 48 Stat. 1246, which is classified principally to this chapter (§ 1701 et seq.). For complete classification of this Act to the Code, see Tables.
The effective date of this sentence, referred to in subsec. (c)(9), is the date of enactment of Pub. L. 111–22, which enacted par. (9) and was approved
The S.A.F.E. Mortgage Licensing Act of 2008, referred to in subsec. (d)(2)(F), is title V of div. A of Pub. L. 110–289,
Codification
Section 1709(s) of this title, which was transferred and redesignated as subsec. (e) of this section by Pub. L. 110–289, div. B, title I, § 2116(3),
Amendments
2010—Subsec. (f)(5). Pub. L. 111–203, § 373(1), added par. (5) and struck out former par. (5) which read as follows: “if the mortgagee is a national bank, or a subsidiary or affiliate of such a bank, the Comptroller of the Currency;”.
Subsec. (f)(6). Pub. L. 111–203, § 373(2), inserted “and” at end.
Subsec. (f)(7). Pub. L. 111–203, § 373(3), inserted “or State savings association” after “State bank” and substituted period for “; and” at end.
Subsec. (f)(8). Pub. L. 111–203, § 373(4), struck out par. (8) which read as follows: “if the mortgagee is a Federal or State savings association or a subsidiary or affiliate of a savings association, the Director of the Office of Thrift Supervision.”
2009—Subsec. (c)(2)(E). Pub. L. 111–22, § 203(a)(1)(A), inserted “and” after semicolon at end.
Subsec. (c)(2)(F). Pub. L. 111–22, § 203(a)(1)(B), substituted “or their designees.” for “; and”.
Subsec. (c)(2)(G). Pub. L. 111–22, § 203(a)(1)(C), struck out subpar. (G), which read as follows: “the Director of the Enforcement Center; or their designees.”
Subsec. (c)(9). Pub. L. 111–22, § 203(a)(2), added par. (9).
Subsecs. (d) to (g). Pub. L. 111–22, § 203(b)(1), (2), added subsec. (d) and redesignated former subsecs. (d) to (f) as (e) to (g), respectively.
Subsec. (h). Pub. L. 111–22, § 203(b)(3), added subsec. (h).
2008—Subsec. (a). Pub. L. 110–289, § 2118(a), amended subsec. (a) generally. Prior to amendment, text read as follows: “There is created a Mutual Mortgage Insurance Fund (hereinafter referred to as the ‘Fund’), which shall be used by the Secretary as a revolving fund for carrying out the provisions of this subchapter with respect to mortgages insured under section 1709 of this title as hereinafter provided, and there shall be allocated immediately to such Fund the sum of $10,000,000 out of funds made available to the Secretary for the purposes of this subchapter.”
Subsec. (e). Pub. L. 110–289, § 2116(3), transferred subsec. (s) of section 1709 of this title and redesignated it as subsec. (e) of this section. See Codification note above. Former subsec. (e) redesignated (f).
Subsec. (e)(3)(B). Pub. L. 110–289, § 2116(1)(A), made technical amendment to reference in original act which appears in text as reference to “this subsection”.
Subsec. (e)(5). Pub. L. 110–289, § 1404, added par. (5).
Subsec. (f). Pub. L. 110–289, § 2116(1)(B), redesignated subsec. (e) as (f).
2000—Subsec. (c)(2)(E). Pub. L. 106–377, § 1(a)(1) [title II, § 209(c)(1)], struck out “and” at end.
Subsec. (c)(2)(F). Pub. L. 106–377, § 1(a)(1) [title II, § 209(c)(2)], which directed substitution of “and” for “or their designees.”, was executed by inserting “and” after semicolon to reflect the probable intent of Congress, because the phrase “or their designees.” appeared at end of par. (2) and did not appear in subpar. (F).
Subsec. (c)(2)(G). Pub. L. 106–377, § 1(a)(1) [title II, § 209(c)(3)], added subpar. (G).
1997—Subsec. (c)(3)(C). Pub. L. 105–65 inserted after first sentence “Notwithstanding paragraph (4)(A), a suspension shall be effective upon issuance by the Board if the Board determines that there exists adequate evidence that immediate action is required to protect the financial interests of the Department or the public.”
1992—Subsec. (b)(11). Pub. L. 102–550, § 502, added par. (11).
Subsec. (c)(3)(C). Pub. L. 102–550, § 518, inserted “temporarily” after “order”, “(i)” after “Administration if”, “(ii)” after “violations and”, and “, and for not longer than 1 year. The Board may extend the suspension for an additional 6 months if it determines the extension is in the public interest. If the Board and the mortgagee agree, these time limits may be extended” after “6 months”.
Subsec. (c)(6)(D). Pub. L. 102–550, § 519(1), struck out subpar. (D) which read as follows: “For purposes of this paragraph, the term ‘mortgagee’ means a mortgagee, a branch office or subsidiary of a mortgagee, or a director, officer, employee, agent, or other person participating in the conduct of the affairs of such mortgagee.”
Subsec. (c)(7), (8). Pub. L. 102–550, § 519(2), added par. (7) and redesignated former par. (7) as (8).
1990—Subsec. (e)(3), (4). Pub. L. 101–625 added pars. (3) and (4).
1989—Pub. L. 101–235 substituted “Federal Housing Administration operations” for “Mutual Mortgage Insurance Fund” in section catchline, designated existing provisions as subsec. (a) and inserted heading, and added subsecs. (b) to (e).
1967—Pub. L. 90–19 substituted “Secretary” for “Commissioner” wherever appearing.
1950—Act
1939—Act
1938—Act
Change Of Name
Committee on Banking, Finance and Urban Affairs of House of Representatives treated as referring to Committee on Banking and Financial Services of House of Representatives by section 1(a) of Pub. L. 104–14, set out as a note preceding section 21 of Title 2, The Congress. Committee on Banking and Financial Services of House of Representatives abolished and replaced by Committee on Financial Services of House of Representatives, and jurisdiction over matters relating to securities and exchanges and insurance generally transferred from Committee on Energy and Commerce of House of Representatives by House Resolution No. 5, One Hundred Seventh Congress,
Effective Date Of Amendment
Amendment by Pub. L. 111–203 effective on the transfer date, see section 351 of Pub. L. 111–203, set out as a note under section 906 of Title 2, The Congress.
Miscellaneous
Pub. L. 111–22, div. A, title II, § 203(g),