§ 1715z-21. — Delegation of insuring authority to direct endorsement mortgagees.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1715z-21]
TITLE 12--BANKS AND BANKING
CHAPTER 13--NATIONAL HOUSING
SUBCHAPTER II--MORTGAGE INSURANCE
Sec. 1715z-21. Delegation of insuring authority to direct
endorsement mortgagees
(a) Authority
The Secretary may delegate, to one or more mortgagees approved by
the Secretary under the direct endorsement program, the authority of the
Secretary under this chapter to insure mortgages involving property upon
which there is located a dwelling designed principally for occupancy by
1 to 4 families.
(b) Considerations
In determining whether to delegate authority to a mortgagee under
this section, the Secretary shall consider the experience and
performance of the mortgagee compared to the default rate of all insured
mortgages in comparable markets, and such other factors as the Secretary
determines appropriate to minimize risk of loss to the insurance funds
under this chapter.
(c) Enforcement of insurance requirements
(1) In general
If the Secretary determines that a mortgage insured by a
mortgagee pursuant to delegation of authority under this section was
not originated in accordance with the requirements established by
the Secretary, and the Secretary pays an insurance claim with
respect to the mortgage within a reasonable period specified by the
Secretary, the Secretary may require the mortgagee approved under
this section to indemnify the Secretary for the loss.
(2) Fraud or misrepresentation
If fraud or misrepresentation was involved in connection with
the origination, the Secretary may require the mortgagee approved
under this section to indemnify the Secretary for the loss
regardless of when an insurance claim is paid.
(d) Termination of mortgagee's authority
If a mortgagee to which the Secretary has made a delegation under
this section violates the requirements and procedures established by the
Secretary or the Secretary determines that other good cause exists, the
Secretary may cancel a delegation of authority under this section to the
mortgagee by giving notice to the mortgagee. Such a cancellation shall
be effective upon receipt of the notice by the mortgagee or at a later
date specified by the Secretary. A decision by the Secretary to cancel a
delegation shall be final and conclusive and shall not be subject to
judicial review.
(e) Requirements and procedures
Before approving a delegation under this section, the Secretary
shall issue regulations establishing appropriate requirements and
procedures, including requirements and procedures governing the
indemnification of the Secretary by the mortgagee.
(June 27, 1934, ch. 847, title II, Sec. 256, as added Pub. L. 104-204,
title IV, Sec. 427, Sept. 26, 1996, 110 Stat. 2928.)
