§ 1750c. — Mortgage insurance benefits.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1750c]
TITLE 12--BANKS AND BANKING
CHAPTER 13--NATIONAL HOUSING
SUBCHAPTER X--NATIONAL DEFENSE HOUSING INSURANCE
Sec. 1750c. Mortgage insurance benefits
(a) Conveyance and assignment by mortgagee after foreclosure; debentures
and certificates of claim; cost of foreclosure
In any case in which the mortgagee under a mortgage insured under
section 1750b of this title shall have foreclosed and taken possession
of the mortgaged property, in accordance with regulations of, and within
a period to be determined by, the Secretary, or shall, with the consent
of the Secretary, have otherwise acquired such property from the
mortgagor after default, the mortgagee shall be entitled to receive the
benefit of the insurance as hereinafter provided, upon (1) the prompt
conveyance to the Secretary of title to the property which meets the
requirements of rules and regulations of the Secretary in force at the
time the mortgage was insured, and which is evidenced in the manner
prescribed by such rules and regulations; and (2) the assignment to him
of all claims of the mortgagee against the mortgagor or others, arising
out of the mortgage transaction or foreclosure proceedings, except such
claims as may have been released with the consent of the Secretary. Upon
such conveyance and assignment the obligation of the mortgagee to pay
the premium charges for insurance shall cease and the Secretary shall,
subject to the cash adjustment hereinafter provided, issue to the
mortgagee debentures having a total face value equal to the value of the
mortgage and a certificate of claim, as hereinafter provided. For the
purposes of this subsection, the value of the mortgage shall be
determined, in accordance with rules and regulations prescribed by the
Secretary, by adding to the amount of the original principal obligation
of the mortgage which was unpaid on the date of the institution of
foreclosure proceedings, or on the date of the acquisition of the
property after default other than by foreclosure, the amount of all
payments which have been made by the mortgagee for taxes, ground rents,
and water rates, which are liens prior to the mortgage, special
assessments which are noted on the application for insurance or which
become liens after the insurance of the mortgage, insurance of the
mortgaged property, and any mortgage insurance premiums and by deducting
from such total amount any amount received on account of the mortgage
after either of such dates and any amount received as rent or other
income from the property, less reasonable expenses incurred in handling
the property, after either of such dates: Provided, That with respect to
mortgages which are foreclosed before there shall have been paid on
account of the principal obligation of the mortgage a sum equal to 10
per centum of the appraised value of the property as of the date the
mortgage was accepted for insurance, there may be included in the
debentures issued by the Secretary, on account of the cost of
foreclosure (or of acquiring the property by other means) actually paid
by the mortgagee and approved by the Secretary an amount--
(1) not in excess of 2 per centum of the unpaid principal of the
mortgage as of the date of the institution of foreclosure
proceedings and not in excess of $75; or
(2) not in excess of two-thirds of such cost, whichever is the
greater: Provided further, That with respect to any debentures
issued on or after September 2, 1964, the Secretary may, with the
consent of the mortgagee (in lieu of issuing a certificate of claim
as provided in subsection (e) of this section), include in
debentures, in addition to amounts otherwise allowed for such costs,
an amount not to exceed one-third of the total foreclosure,
acquisition, and conveyance costs actually paid by the mortgagee and
approved by the Secretary, but in no event may the total allowance
for such costs exceed the amount actually paid by the mortgagee: And
provided further, That with respect to mortgages to which the
provisions of sections 532 and 536 of the Appendix to title 50,
apply and which are insured under section 1750b of this title, and
subject to such regulations and conditions as the Secretary may
prescribe, there shall be included in the debentures an amount which
the Secretary finds to be sufficient to compensate the mortgagee for
any loss which it may have sustained on account of interest on
debentures and the payment of insurance premiums by reason of its
having postponed the institution of foreclosure proceedings or the
acquisition of the property by other means during any part or all of
the period of such military service and three months thereafter.
(b) Consent to release of mortgagee or property
The Secretary may at any time, under such terms and conditions as he
may prescribe, consent to the release of the mortgagor from his
liability under the mortgage or the credit instrument secured thereby,
or consent to the release of parts of the mortgaged property from the
lien of the mortgage.
(c) Debentures; form and denomination
Debentures issued under this subchapter 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 amount of debentures to which the mortgagee is entitled
under this section or section 1750g of this title 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 General
Insurance Fund.
(d) Debentures; execution; negotiability; terms; tax exemptions
The debentures issued under this section to any mortgagee shall be
executed in the name of the General Insurance Fund as obligor, shall be
signed by the Secretary by either his written or engraved signature, and
shall be negotiable. All such debentures shall be dated as of the date
foreclosure proceedings were instituted, or the property was otherwise
acquired by the mortgagee after default, except that debentures issued
pursuant to claims for insurance filed on or after September 2, 1964
shall be dated as of the date of default or as of such later date as the
Secretary, in his discretion, may establish by regulation. The
debentures shall bear interest from such date at a rate determined by
the Secretary, with the approval of the Secretary of the Treasury, at
the time the mortgage was accepted for insurance, but not to exceed 3
per centum per annum, payable semiannually on the 1st day of January and
the 1st day of July of each year. Such debentures shall mature twenty
years after the date thereof. Such debentures shall be exempt, both as
to principal and interest, from all taxation (except surtaxes, estate,
inheritance, or gift taxes) now or hereafter imposed by any Territory,
dependency, or possession of the United States, or by the District of
Columbia, or by any State, county, municipality, or local taxing
authority, and shall be paid out of the General Insurance Fund, which
shall be primarily liable therefor, and they shall be fully and
unconditionally guaranteed as to principal and interest by the United
States, and such guaranty shall be expressed on the face of the
debentures. In the event that the General Insurance Fund fails to pay
upon demand, when due, the principal of or interest on any debentures
issued under this subchapter, the Secretary of the Treasury shall pay to
the holders the amount thereof which is authorized to be appropriated,
out of any money in the Treasury not otherwise appropriated, and
thereupon to the extent of the amount so paid the Secretary of the
Treasury shall succeed to all the rights of the holders of such
debentures.
(e) Certificate of claim; division of excess proceeds
The certificate of claim issued by the Secretary to any mortgagee
under this section shall be for an amount determined in accordance with,
and shall contain provisions and shall be paid in accordance with, the
provisions of section 1710(e) and section 1710(f) of this title.
(f) Handling and disposal of property; settlement of claims
Notwithstanding any other provision of law relating to the
acquisition, handling, or disposal of real property by the United
States, the Secretary shall have power to deal with, complete, rent,
renovate, modernize, insure, make contracts or establish suitable
agencies for the management of, or sell for cash or credit, in his
discretion, any properties conveyed to him in exchange for debentures
and certificates of claim as provided in this section; and,
notwithstanding any other provision of law, the Secretary shall also
have power to pursue to final collection, by way of compromise or
otherwise, all claims against mortgagors assigned by mortgagees to the
Secretary as provided in this subchapter: Provided, That section 5 of
title 41 shall not be construed to apply to any purchase or contract for
services or supplies on account of such property if the amount thereof
does not exceed $1,000. The power to convey and to execute in the name
of the Secretary deeds of conveyances, deeds of release, assignments,
and satisfactions of mortgages, and any other written instrument
relating to real property or any interest therein heretofore or
hereafter acquired by the Secretary pursuant to the provisions of this
chapter, may be exercised by an officer appointed by him, without the
execution of any express delegation of power or power of attorney:
Provided, That nothing in this subsection shall be construed to prevent
the Secretary from delegating such power by order or by power of
attorney in his discretion, to any officer, agent, or employee he may
appoint.
(g) Mortgagor's or mortgagee's interest in property or claim conveyed
No mortgagee or mortgagor shall have, and no certification of claim
shall be construed to give to any mortgagee or mortgagor, any right or
interest in any property conveyed to the Secretary or in any claim
assigned to him; nor shall the Secretary owe any duty to any mortgagee
or mortgagor with respect to the handling or disposal of any such
property or the collection of any such claim.
(June 27, 1934, ch. 847, title IX, Sec. 904, as added Sept. 1, 1951, ch.
378, title II, Sec. 201, 65 Stat. 298; amended Aug. 2, 1954, ch. 649,
title I, Sec. 112(d), 68 Stat. 593; Pub. L. 88-560, title I,
Sec. 105(e), (f), Sept. 2, 1964, 78 Stat. 773, 774; Pub. L. 89-117,
title XI, Sec. 1108(y), Aug. 10, 1965, 79 Stat. 507; Pub. L. 90-19,
Sec. 1(a)(3), (d), May 25, 1967, 81 Stat. 17, 18; Pub. L. 98-479, title
II, Sec. 204(a)(23), Oct. 17, 1984, 98 Stat. 2233.)
References in Text
The General Insurance Fund, referred to in text, was established by
section 1735c of this title.
Amendments
1984--Subsec. (d). Pub. L. 98-479 substituted ``authorized'' for
``auhorized'' in last sentence.
1967--Pub. L. 90-19 substituted ``Secretary'' for ``Commissioner''
wherever appearing in subsecs. (a), (a)(2), and (b) to (g).
Subsec. (f). Pub. L. 90-19, Sec. 1(d), substituted ``an officer''
for ``the Commissioner or by any Assistant Commissioner''.
1965--Subsecs. (c), (d). Pub. L. 89-117, Sec. 1108(y)(1),
substituted ``General Insurance Fund'' for ``National Defense Housing
Insurance Fund''.
Subsec. (e). Pub. L. 89-117, Sec. 1108(y)(2), removed limitation
which had rendered applicable to certificates of claim only those
provisions of sections 1710(e) and 1710(f) of this title which were
applicable to mortgages insured under section 1713 of this title and
struck out provision that reference in section 1710(f) of this title to
the ``Housing Insurance Fund'' shall be deemed for the purpose of this
section to be reference to the ``National Defense Housing Insurance
Fund''.
1964--Subsec. (a). Pub. L. 88-560, Sec. 105(e)(1), (f), inserted
``Provided further, That with respect to any debentures issued on or
after September 2, 1964, the Commissioner may, with the consent of the
mortgagee (in lieu of issuing a certificate of claim as provided in
subsection (e)), include in debentures, in addition to amounts otherwise
allowed for such costs, an amount not to exceed one-third of the total
foreclosure, acquisition, and conveyance costs actually paid by the
mortgagee and approved by the Commissioner, but in no event may the
total allowance for such costs exceed the amount actually paid by the
mortgagee:'' and struck out ``paid after either of such dates'' after
``mortgage insurance premiums'' in third sentence, respectively.
Subsec. (c). Pub. L. 88-560, Sec. 105(e)(2), increased limitation on
difference between amount of debentures to which the mortgagee is
entitled under this section or section 1750g of this title and aggregate
face value of debentures issued from $50 to $350.
Subsec. (d). Pub. L. 88-560, Sec. 105(e)(3), substituted in second
sentence ``default, except that debentures issued pursuant to claims for
insurance filed on or after September 2, 1964 shall be dated as of the
date of default or as of such later date as the Commissioner, in his
discretion, may establish by regulation. The debentures'' for ``default,
and''.
1954--Subsec. (d). Act Aug. 2, 1954, in third sentence, substituted
a twenty-year period for the ten-year period, with respect to the
maturity of debentures.
Effective Date of 1954 Amendment
Amendment by act Aug. 2, 1954, as not applicable in any case where
the mortgage involved was insured or the commitment for such insurance
was issued prior to Aug. 2, 1954, see section 112(e) of that act, set
out as a note under section 1710 of this title.
Section Referred to in Other Sections
This section is referred to in section 1750g of this title.
