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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 |
§ 1710. Payment of insurance
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(a) In general (1) Authorized claims procedures The Secretary may, in accordance with this subsection and terms and conditions prescribed by the Secretary, pay insurance benefits to a mortgagee for any mortgage insured under section 1709 of this title through any of the following methods: (A) Assignment of mortgage The Secretary may pay insurance benefits whenever a mortgage has been in a monetary default for not less than 3 full monthly installments or whenever the mortgagee is entitled to foreclosure for a nonmonetary default. Insurance benefits shall be paid pursuant to this subparagraph only upon the assignment, transfer, and delivery to the Secretary of— (i) all rights and interests arising under the mortgage; (ii) all claims of the mortgagee against the mortgagor or others arising out of the mortgage transaction; (iii) title evidence satisfactory to the Secretary; and (iv) such records relating to the mortgage transaction as the Secretary may require. (B) Conveyance of title to property The Secretary may pay insurance benefits if the mortgagee has acquired title to the mortgaged property through foreclosure or has otherwise acquired such property from the mortgagor after a default upon— (i) the prompt conveyance to the Secretary of title to the property which meets the standards of the Secretary in force at the time the mortgage was insured and which is evidenced in the manner provided by such standards; and (ii) the assignment to the Secretary of all claims of the mortgagee against the mortgagor or others, arising out of mortgage transaction or foreclosure proceedings, except such claims as may have been released with the consent of the Secretary. The Secretary may permit the mortgagee to tender to the Secretary a satisfactory conveyance of title and transfer of possession directly from the mortgagor or other appropriate grantor, and may pay to the mortgagee the insurance benefits to which it would otherwise be entitled if such conveyance had been made to the mortgagee and from the mortgagee to the Secretary. (C) Claim without conveyance of title The Secretary may pay insurance benefits upon sale of the mortgaged property at foreclosure where such sale is for at least the fair market value of the property (with appropriate adjustments), as determined by the Secretary, and upon assignment to the Secretary of all claims referred to in clause (ii) of subparagraph (B).
(D) Preforeclosure sale The Secretary may pay insurance benefits upon the sale of the mortgaged property by the mortgagor after default and the assignment to the Secretary of all claims referred to in clause (ii) of subparagraph (B), if— (i) the sale of the mortgaged property has been approved by the Secretary; (ii) the mortgagee receives an amount at least equal to the fair market value of the property (with appropriate adjustments), as determined by the Secretary; and (iii) the mortgagor has received an appropriate disclosure, as determined by the Secretary. (2) Payment for loss mitigation The Secretary may pay insurance benefits to the mortgagee to recompense the mortgagee for all or part of any costs of the mortgagee for taking loss mitigation actions that provide an alternative to foreclosure of a mortgage that is in default or faces imminent default, as defined by the Secretary (including but not limited to actions such as special forbearance, loan modification, support for borrower housing counseling, partial claims, borrower incentives, preforeclosure sale, and deeds in lieu of foreclosure, but not including assignment of mortgages to the Secretary under section subsection term “mortgage” means a deed of trust, mortgage, deed to secure debt, security agreement, or any other form of instrument under which any interest in property, real, personal, or mixed, or any interest in property, including leaseholds, life estates, reversionary interests, and any other estates under applicable State law, is conveyed in trust, mortgaged, encumbered, pledged, or otherwise rendered subject to a lien, for the purpose of securing the payment of money or the performance of an obligation.
(C) The term “Secretary-held single family mortgage” means a single-family mortgage held by the Secretary or by a contract mortgagee at the time of initiation of foreclosure that— (i) was formerly insured by the Secretary under any section of this subchapter; or (ii) was taken by the Secretary as a purchase money mortgage in connection with the sale or other transfer of Secretary-owned property under any section of this subchapter. (D) the term “single-family mortgage” means a mortgage that covers property on which is located a 1-to-4 family residence.
References In Text
The Housing Amendments of 1955, referred to in subsec. (f)(2), is act Aug. 11, 1955, ch. 783, 69 Stat. 635, as amended. For complete classification of this Act to the Code, see Short Title of 1955 Amendments note set out under section 1701 of this title and Tables.
This chapter, referred to in subsecs. (g) and (h), 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.
Codification
In subsec. (g), “section 6101 of title 41” substituted for “section 3709 of the Revised Statutes” on authority of Pub. L. 111–350, § 6(c),
Amendments
2009—Subsec. (a)(2). Pub. L. 111–22, § 203(c)(3), substituted “subsection (a)(1)(A) or section 1715u(c) of this title” for “paragraph (1)(A)”.
Pub. L. 111–22, § 203(c)(1), (2), inserted “or faces imminent default, as defined by the Secretary” after “default” and “support for borrower housing counseling, partial claims, borrower incentives, preforeclosure sale,” after “loan modification,”.
2004—Subsec. (h)(2). Pub. L. 108–447, § 221(1)(A), substituted “following categories of assets of the Secretary, unless the Secretary determines at any time that the asset property is economically or otherwise infeasible to rehabilitate or that the best use of the asset property is as open space (including park land)” for “following assets of the Secretary” in introductory provisions.
Subsec. (h)(2)(B)(ii). Pub. L. 108–447, § 221(1)(B), inserted “except for mortgages insured under or made pursuant to sections 1715z, 1715z–12, or 1715z–20 of this title” after “chapter”.
Subsec. (h)(2)(C). Pub. L. 108–447, § 221(1)(C), struck out heading and text of subpar. (C). Text read as follows: “Any contingent future interest of the Secretary in an asset described in subparagraph (A) or (B).”
Subsec. (h)(3). Pub. L. 108–447, § 221(2), inserted “, States, and Indian tribes” after “government” in second sentence.
Subsec. (h)(4)(A)(i). Pub. L. 108–447, § 221(3)(A), inserted “, State, or Indian tribe” after “government”.
Subsec. (h)(4)(B)(ii). Pub. L. 108–447, § 221(3)(B), amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “purchases all interests of the Secretary in all assets of the Secretary that, at any time during the period which shall be set forth in the sale agreement required under paragraph (7)—
“(I) are or become eligible assets; and
“(II) are located in the asset control area of the purchaser; and”.
Subsec. (h)(4)(C). Pub. L. 108–447, § 221(3)(C), substituted “purchase of the category or categories of eligible assets set forth in the sale agreement under” for “purchase of eligible assets under”.
Subsec. (h)(6)(C). Pub. L. 108–447, § 221(4)(A), amended heading and text of subpar. (C) generally. Prior to amendment, subpar. (C) set out discount classes, including standard, deep, and minimal discounts.
Subsec. (h)(6)(D). Pub. L. 108–447, § 221(4)(B), struck out heading and text of subpar. (D). Text read as follows: “The Secretary shall, in the sole discretion of the Secretary, establish a method for determining which discount under clause (i) or (ii) subparagraph (C) shall be provided for an eligible asset that is described in such clause (i) and sold to a preferred purchaser. The method may result in the assignment of discounts on any basis consistent with subparagraph (C) that the Secretary considers appropriate to carry out the purposes of this subsection.”
Subsec. (h)(7)(A). Pub. L. 108–447, § 221(5), substituted “category or categories of eligible assets to be purchased and, based on the purchaser’s capacity to manage and dispose of assets, the maximum number of assets owned by the Secretary at the time the sale agreement is executed that shall be sold to the purchaser” for “eligible assets to be purchased and the interests sold”.
Subsec. (h)(8)(F). Pub. L. 108–447, § 221(6)(A), inserted “, and any agency or instrumentality thereof that is established pursuant to legislation and designated by the chief executive officer to act on behalf of the jurisdiction with regard to the provisions of this subsection” after “State”.
Subsec. (h)(8)(G), (H). Pub. L. 108–447, § 221(6)(B), added subpars. (G) and (H).
1998—Subsec. (a). Pub. L. 105–276, § 601(a), inserted heading and amended text generally, substituting present provisions for provisions which authorized mortgagee of foreclosed property to receive insurance benefit upon conveyance to Secretary of title and assignment of claims, or upon foreclosure sale or approved sale after default where at least fair market value was received, set maintenance of property as condition of receipt of benefit, provided that obligation to pay premium would cease upon conveyance and assignment and debentures would issue having par value equal to value of mortgage, and set forth provisions detailing amounts to be included in debentures or cash payment and provisions authorizing extension or modification of mortgage where default was due to circumstances beyond control of mortgagor.
Subsec. (g). Pub. L. 105–276, § 601(d), inserted at end “The Secretary may sell real and personal property acquired by the Secretary pursuant to the provisions of this chapter on such terms and conditions as the Secretary may prescribe.”
Subsecs. (h), (i). Pub. L. 105–276, § 602, added subsec. (h) and redesignated former subsec. (h) as (i).
Subsec. (k). Pub. L. 105–276, § 601(c), struck out subsec. (k) which read as follows: “Notwithstanding any other provision of this section or of section 1739 or 1750c of this title and with respect to any debentures issued in exchange for properties conveyed to and accepted by the Secretary after
1996—Subsec. (a). Pub. L. 104–134, in penultimate proviso of last sentence, substituted “special forebearance” for “special foreclosure”.
Pub. L. 104–99 inserted “: And provided further, That the Secretary may pay insurance benefits to the mortgagee to recompense the mortgagee for its actions to provide an alternative to the foreclosure of a mortgage that is in default, which actions may include special foreclosure, loan modification, and deeds in lieu of foreclosure, all upon terms and conditions as the mortgagee shall determine in the mortgagee’s sole discretion, within guidelines provided by the Secretary, but which may not include assignment of a mortgage to the Secretary: And provided further, That for purposes of the preceding proviso, no action authorized by the Secretary and no action taken, nor any failure to act, by the Secretary or the mortgagee shall be subject to judicial review.” before period at end of last sentence.
1992—Subsec. (a). Pub. L. 102–550, § 516(a)(1), in fifth sentence, substituted “issue to the mortgagee debentures having a par value” for “, subject to the cash adjustment hereinafter provided, issue to the mortgagee debentures having a total face value”.
Subsec. (c). Pub. L. 102–550, § 516(a)(2), added subsec. (c) and struck out former subsec. (c) which read as follows: “Debentures issued under this section shall be in such form and denominations in multiples of $50, shall be subject to such terms and conditions, and shall include such provisions for redemption, if any, as may be prescribed by the Secretary with the approval of the Secretary of the Treasury, and may be in coupon or registered form. Any difference between the value of the mortgage determined as herein provided and the aggregate face value of the debentures issued, not to exceed $350, shall be adjusted by the payment of cash by the Secretary to the mortgagee from the Mutual Mortgage Insurance Fund.”
Subsec. (d). Pub. L. 102–550, § 516(a)(3), (4), in first sentence, substituted “issued in the name of” for “executed in the name of” and “and shall be negotiable, and, if in book entry form, transferable, in the manner described by the Secretary in regulations” for “, shall be signed by the Secretary by either his written or engraved signature, and shall be negotiable” and in fifth sentence, substituted “and, in the case of debentures issued in certificated registered form, such guaranty” for “and such guaranty”.
1989—Subsec. (a). Pub. L. 101–235, § 136(a), inserted after third sentence “As a condition of the receipt of such benefits, the mortgagee shall maintain or assure the maintenance of the mortgaged property (in such manner as the Secretary shall by regulation provide) during the period beginning on the taking of the possession or other acquisition of the mortgaged property by the mortgagee and ending on conveyance to the Secretary or other disposition of the mortgaged property in accordance with this section, and funds expended by the mortgagee in meeting such obligation shall be included, to the extent provided in this subsection or in subsection (k) of this section, in debentures or other insurance payment pursuant to this section.”
Subsec. (g). Pub. L. 101–235, § 136(b), inserted after first sentence “The Secretary shall, by regulation, carry out a program of sales of such properties and shall develop and implement appropriate credit terms and standards to be used in carrying out the program.”
1988—Subsec. (a). Pub. L. 100–628, § 1064(a)(1), (2), in second sentence, substituted “(1)(A) upon sale” for “(1) upon sale”, inserted cl. (B), and substituted “; and (2)” for “, and (2)”.
Pub. L. 100–628, § 1064(b)(1), in third sentence, substituted “
Pub. L. 100–628, § 1064(b)(2)(A), in fifth sentence, struck out “foreclosure” before “sale of the property: Provided”.
Subsec. (j). Pub. L. 100–628, § 1064(b)(2)(B), inserted “clause (1)(A) of” before “the second sentence”.
Subsec. (l). Pub. L. 100–242 added subsec. (l).
1983—Subsec. (a). Pub. L. 98–181, § 426(a), inserted provision authorizing the Secretary to make the benefit of the insurance available to the mortgagee upon sale of the insured property at foreclosure and assignment of all claims to the Secretary and provision relating to payment of benefits pursuant to a commitment to insure issued on or after the effective date of this sentence [
Subsec. (j). Pub. L. 98–181, § 426(b), inserted “(other than a mortgagee receiving insurance benefits under the second sentence of subsection (a) of this section)” after “section 1709 of this title”.
1967—Pub. L. 90–19, § 1(a)(2), substituted “Secretary of Housing and Urban Development” for “Federal Housing Commissioner” in subsec. (g).
Pub. L. 90–19, § 1(a)(3), substituted “Secretary” for “Commissioner” wherever appearing in subsecs. (a) to (d), (e)(1), (f)(1), (f)(1)(i), (ii), (f)(2), (3), (g), (h), (j), and (k).
Subsec. (f)(3). Pub. L. 90–19, § 1(a)(4), substituted “Secretary’s” for “Commissioner’s” wherever appearing.
Subsec. (g). Pub. L. 90–19, § 1(d), substituted “an officer” for “the Commissioner or by any Assistant Commissioner”.
1965—Subsec. (a). Pub. L. 89–117, § 1108(d)(1), struck out reference to section 1715a of this title after reference to section 1709 of this title in first sentence.
Subsec. (c). Pub. L. 89–117, § 1108(d)(2), substituted “Mutual Mortgage Insurance Fund” for “Fund as to mortgages insured under section 1709 of this title and from the Housing Fund as to mortgages insured under section 1715a of this title”.
Subsec. (d). Pub. L. 89–117, § 1108(d)(3)–(6), removed all references to debentures issued with respect to mortgages insured under section 1715a of this title and to the Housing Insurance Fund and substituted Mutual Mortgage Insurance Fund for Fund wherever appearing.
Subsec. (f). Pub. L. 89–117, § 1108(d)(7), struck out provision of subpar. (1)(i) calling for retention of excess by Commissioner and credit to the Housing Insurance Fund in the case of mortgages insured under section 1713 of this title.
1964—Subsec. (a). Pub. L. 88–560, §§ 104(a), 105(a)(1)–(3), (6)(B), amended provisions as follows; section 104(a), in proviso reading “And provided further, That with respect to any mortgage covering a one-, two-, three-, or four-family residence”, struck out “and it is probable that the mortgage will be restored to good standing within a reasonable period of time” after “control of the mortgagor”, substituted “upon such terms and conditions” for “under such regulations and conditions”, incorporated authority of Commissioner to “extend the time for curing default and enter into an agreement with the mortgage providing that if the mortgage is subsequently foreclosed, any interest accruing after the date of the agreement which is not paid by the mortgagor may be included in the debentures” in cl. (1), and provided for remainder of cl. (1), cl. (2) and consideration of the principal amount of the mortgage, as modified, as the “original principal obligation of the mortgage” for purpose of computing total face value of debentures to be issued or cash payment to be made by Commissioner to a mortgagee; section 105(a)(1) substituted in third sentence “charges for the administration, operation, maintenance and repair of community-owned property or the maintenance and repair of the mortgaged property, the obligation for which arises out of a covenant filed for record and approved by the Commissioner prior to the insurance of the mortgage, insurance on the mortgaged property, and any mortgage insurance premiums” for “insurance on the mortgaged property, and any mortgage insurance premiums paid after either of such dates”; section 105(a)(2) inserted provisos reading “And provided further, That with respect to a mortgage accepted for insurance pursuant to a commitment issued on or after
Subsec. (c). Pub. L. 88–560, § 105(a)(4), increased limitation on the difference between the value of the mortgage and the aggregate face value of the debentures issued from $50 to $350.
Subsec. (d). Pub. L. 88–560, § 105(a)(5), substituted “: Provided, That debentures issued pursuant to claims for insurance filed on or after
Subsec. (e). Pub. L. 88–560, § 105(a)(6)(A), designated existing provisions as par. (1), substituted “Subject to paragraph (2), the certificate” for “The certificate”, and added par. (2).
Subsec. (f). Pub. L. 88–560, § 105(a)(7)–(11), designated introductory par. as par. (1) and substituted “If, after deducting (in such manner and amount as the Commissioner shall determine to be equitable and in accordance with sound accounting practice) the expenses incurred by the Commissioner, the net amount realized from any property conveyed to the Commissioner under this section and the claims assigned therewith exceed the face value” for “If the net amount realized from any property conveyed to the Commissioner under this section and the claims assigned therewith, after deducting all expenses incurred by the Commissioner in handling, dealing with, and disposing of such property and in collecting such claims, exceeds the face value”; redesignated former par. (1) as (i) and inserted proviso; redesignated former par. (2) as (ii); designated concluding par. as par. (2) and inserted proviso; and added par. (3), respectively.
1961—Subsec. (d). Pub. L. 87–70, § 612(b), permitted debentures issued pursuant to provisions of section 1715k(f), 1715l(g), and 1715x of this title to be dated as of the date the mortgage is assigned (or the property is conveyed) to the Commissioner.
Subsec. (g). Pub. L. 87–70, § 612(c), included instruments relating to personal property, and inserted proviso requiring that a conveyance or transfer of title to real or personal property or an interest therein to the Federal Housing Commissioner, his successors and assigns, without identifying the Commissioner therein, shall be deemed a proper conveyance or transfer.
1959—Subsec. (a). Pub. L. 86–372, § 114(b), authorized the Commissioner, with respect to any mortgage covering a one-, two-, three-, or four-family residence insured under this chapter, if he finds after notice of default, that the default was due to circumstances beyond the control of the mortgagor and it is probable that the mortgage will be restored to good standing within a reasonable period of time, to extend the time for curing default and to enter into an agreement with the mortgagee providing that if the mortgage is subsequently foreclosed, any interest accruing after the date of the agreement which is not paid by the mortgagor may be included in the debentures.
Subsec. (k). Pub. L. 86–372, § 117, substituted “and with respect to any debentures issued in exchange for properties conveyed to and accepted by the Commissioner after
1957—Subsec. (d). Pub. L. 85–104, § 108(a), substituted “established by the Commissioner pursuant to section 1715o of this title” for “determined by the Commissioner, with the approval of the Secretary of the Treasury, at the time the mortgage was offered for insurance, but not to exceed 3 per centum per annum” in second sentence.
Subsec. (k). Pub. L. 85–104, § 107, added subsec. (k).
1955—Subsec. (f). Act
1954—Subsec. (a). Act
Subsec. (d). Act
Subsec. (j). Act
1951—Subsec. (d).
1950—Act
Subsec. (a). Act
1948—Subsec. (a). Act
Subsec. (f). Act
1943—Subsec. (a). Act
1941—Subsec. (a). Act
1939—Subsec. (a). Act
Subsec. (g). Act
1938—Subsecs. (a) to (f). Act
Subsecs. (g), (h). Act
1937—Subsec. (b). Act Joint Res.
1935—Subsec. (a). Act
Effective Date Of Amendment
Pub. L. 105–276, title VI, § 601(b),
Pub. L. 104–99, title IV, § 407(c),
Act Aug. 2, 1954, ch. 649, title I, § 112(e), 68 Stat. 593, provided that:
Miscellaneous
Pub. L. 104–134, title I, § 101(e) [title II, § 221(c)(1)],
Pub. L. 104–99, title IV, § 407(d),
Pub. L. 100–628, title X, § 1064(c),
Pub. L. 110–289, div. B, title I, § 2125,
Pub. L. 107–206, title I, § 1303,
Pub. L. 106–554, § 1(a)(7) [title I, § 142],
Pub. L. 91–351, title VII, § 701,