12 U.S.C. § 1716–1, 1716a — Payment of insurance

**(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](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1709&num=0&edition=prelim) 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 11 So in original. (a)(1)(A) or [section 1715u(c) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1715u/c&num=0&edition=prelim)). No actions taken under this paragraph, nor any failure to act under this paragraph, by the Secretary or by a mortgagee shall be subject to judicial review. (3) **Determination of claims procedure** — The Secretary shall publish guidelines for determining which of the procedures for payment of insurance under paragraph (1) are available to a mortgagee when it claims insurance benefits. At least one of the procedures for payment of insurance benefits specified in paragraph (1)(A) or (1)(B) shall be available to a mortgagee with respect to a mortgage, but the same procedure shall not be required to be available for all of the mortgages held by a mortgagee. (4) **Servicing of assigned mortgages** — If a mortgage is assigned to the Secretary under paragraph (1)(A), the Secretary may permit the assigning mortgagee or its servicer to continue to service the mortgage for reasonable compensation and on terms and conditions determined by the Secretary. Neither the Secretary nor any servicer of the mortgage shall be required to forbear from collection of amounts due under the mortgage or otherwise pursue loss mitigation measures. (5) **Calculation of insurance benefits** — Insurance benefits shall be paid in accordance with [section 1735d of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1735d&num=0&edition=prelim) and shall be equal to the original principal obligation of the mortgage (with such additions and deductions as the Secretary determines are appropriate) which was unpaid upon the date of— (A) assignment of the mortgage to the Secretary; (B) the institution of foreclosure proceedings; (C) the acquisition of the property after default other than by foreclosure; or (D) sale of the mortgaged property by the mortgagor. (6) **Forbearance and recasting after default** — The mortgagee may, upon such terms and conditions as the Secretary may prescribe— (A) extend the time for the curing of the default and the time for commencing foreclosure proceedings or for otherwise acquiring title to the mortgaged property, to such time as the mortgagee determines is necessary and desirable to enable the mortgagor to complete the mortgage payments, including an extension of time beyond the stated maturity of the mortgage, and in the event of a subsequent foreclosure or acquisition of the property by other means the Secretary may include in the amount of insurance benefits an amount equal to any unpaid mortgage interest; or (B) provide for a modification of the terms of the mortgage for the purpose of recasting, over the remaining term of the mortgage or over such longer period pursuant to guidelines as may be prescribed by the Secretary, the total unpaid amount then due, with the modification to become effective currently or to become effective upon the termination of an agreed-upon extension of the period for curing the default; and the principal amount of the mortgage, as modified, shall be considered the “original principal obligation of the mortgage” for purposes of paragraph (5). (7) **Termination of premium obligation** — The obligation of the mortgagee to pay the premium charges for insurance shall cease upon fulfillment of the appropriate requirements under which the Secretary may pay insurance benefits, as described in paragraph (1). The Secretary may also terminate the mortgagee’s obligation to pay mortgage insurance premiums upon receipt of an application filed by the mortgagee for insurance benefits under paragraph (1), or in the event the contract of insurance is terminated pursuant to [section 1715t of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1715t&num=0&edition=prelim). (8) **Effect on payment of insurance benefits under section 1715u** — Nothing in this section shall limit the authority of the Secretary to pay insurance benefits under [section 1715u of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1715u&num=0&edition=prelim). (9) **Treatment of mortgage assignment program** — Notwithstanding any other provision of law, or the Amended Stipulation entered as a consent decree on November 8, 1979, in Ferrell v. Cuomo, No. 73 C 334 (N.D. Ill.), or any other order intended to require the Secretary to operate the program of mortgage assignment and forbearance that was operated by the Secretary pursuant to the Amended Stipulation and under the authority of [section 1715u of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1715u&num=0&edition=prelim), prior to its amendment by section 407(b) of The Balanced Budget Downpayment Act, I (Public Law 104–99; 110 Stat. 45), no mortgage assigned under this section may be included in any mortgage foreclosure avoidance program that is the same or substantially equivalent to such a program of mortgage assignment and forbearance. **(b) Consent to release of mortgagor 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 amounts** Debentures issued under this section— (1) shall be in such form and amounts; (2) shall be subject to such terms and conditions; (3) shall include such provisions for redemption, if any, as may be prescribed by the Secretary of Housing and Urban Development, with the approval of the Secretary of the Treasury; and (4) may be in book entry or certificated registered form, or such other form as the Secretary of Housing and Urban Development may prescribe in regulations. **(d) Debentures; issuance; negotiability; terms; tax exemptions** The debentures issued under this section to any mortagee 22 So in original. Probably should be “mortgagee”. with respect to mortgages insured under [section 1709 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1709&num=0&edition=prelim) shall be issued in the name of the Mutual Mortgage Insurance Fund as obligor and shall be negotiable, and, if in book entry form, transferable, in the manner described by the Secretary in regulations. 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: Provided, 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 established by the Secretary pursuant to section 1715o of this title, payable semiannually on the 1st day of January and the 1st day of July of each year, and shall mature twenty years after the date thereof. Such debentures as are issued in exchange for property covered by mortgages insured under section 1709 or [section 1713 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1713&num=0&edition=prelim) prior to February 3, 1938 shall be subject only to such Federal, State, and local taxes as the mortgages in exchange for which they are issued would be subject to in the hands of the holder of the debentures and shall be a liability of the Mutual Mortgage Insurance Fund, but such debentures shall be fully and unconditionally guaranteed as to principal and interest by the United States; but any mortgagee entitled to receive any such debentures may elect to receive in lieu thereof a cash adjustment and debentures issued as hereinafter provided and bearing the current rate of interest. Such debentures as are issued in exchange for property covered by the mortgages insured after February 3, 1938, shall be exempt, both as to principal and interest, from all taxation (except surtaxes, estate, inheritance, and gift taxes) now or hereafter imposed by the United States, by any Territory, dependency, or possession thereof, or by any State, county, municipality, or local taxing authority; and such debentures shall be paid out of the Mutual Mortgage 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, in the case of debentures issued in certificated registered form, such guaranty shall be expressed on the face of the debentures. In the event that the Mutual Mortgage Insurance Fund fails to pay upon demand, when due, the principal of or interest on any debentures issued under this section, 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** (1) Subject to paragraph (2), the certificate of claim issued by the Secretary to any mortgagee shall be for an amount which the Secretary determines to be sufficient, when added to the face value of the debentures issued and the cash adjustment paid to the mortgagee, to equal the amount which the mortgagee would have received if, at the time of the conveyance to the Secretary of the property covered by the mortgage, the mortgagor had redeemed the property and paid in full all obligations under the mortgage and a reasonable amount for necessary expenses incurred by the mortgagee in connection with the foreclosure proceedings, or the acquisition of the mortgaged property otherwise, and the conveyance thereof to the Secretary. Each such certificate of claim shall provide that there shall accrue to the holder of such certificate with respect to the face amount of such certificate, an increment at the rate of 3 per centum per annum which shall not be compounded. The amount to which the holder of any such certificate shall be entitled shall be determined as provided in subsection (f). (2) A certificate of claim shall not be issued and the provisions of paragraph (1) of this subsection shall not be applicable in the case of a mortgage accepted for insurance pursuant to a commitment issued on or after September 2, 1964. **(f) Division of excess proceeds; settlement of certificates of claims and refunds to mortgagors** (1) If, after deducting (in such manner and amount as the Secretary shall determine to be equitable and in accordance with sound accounting practice) the expenses incurred by the Secretary, the net amount realized from any property conveyed to the Secretary under this section and the claims assigned therewith exceed the face value of the debentures issued and the cash paid in exchange for such property plus all interest paid on such debentures, such excess shall be divided as follows: (i) If such excess is greater than the total amount payable under the certificate of claim issued in connection with such property, the Secretary shall pay to the holder of such certificate the full amount so payable, and any excess remaining thereafter shall be paid to the mortgagor of such property if the mortgage was insured under [section 1709 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1709&num=0&edition=prelim): Provided, That on and after September 2, 1964, any excess remaining after payment to the holder of the full amount of the certificate of claim, together with the accrued interest increment thereon, shall be retained by the Secretary and credited to the applicable insurance fund; and (ii) If such excess is equal to or less than the total amount payable under such certificate of claim, the Secretary shall pay to the holder of such certificate the full amount of such excess. (2) Notwithstanding any other provisions of this section, the Secretary is authorized, with respect to mortgages insured pursuant to commitments for insurance issued after August 11, 1955, and, with the consent of the mortgagee or mortgagor, as the case may be, with respect to mortgages insured pursuant to commitments issued prior to such date, to effect the settlement of certificates of claim and refunds to mortgagors at any time after the sale or transfer of title to the property conveyed to the Secretary under this section and without awaiting the final liquidation of such property for the purpose of determining the net amount to be realized therefrom: Provided, That the settlement authority created by the Housing Amendments of 1955 shall be terminated with respect to any certificates of claim outstanding as of September 2, 1964. (3) With the consent of the holder thereof, the Secretary is authorized, without awaiting the final liquidation of the Secretary’s interest in the property, to settle any certificate of claim issued pursuant to subsection (e), with respect to which settlement had not been effected prior to September 2, 1964, by making payment in cash to the holder thereof of such amount not exceeding the face amount of the certificate of claim, together with the accrued interest thereon, as the Secretary may consider appropriate: Provided, That in any case where the certificate of claim is settled in accordance with the provisions of this paragraph, any amounts realized after September 2, 1964, in the liquidation of the Secretary’s interest in the property, shall be retained by the Secretary and credited to the applicable insurance fund. **(g) 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, 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 section: Provided, That [section 6101 of title 41](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title41-section6101&num=0&edition=prelim) shall not be construed to apply to any contract for hazard insurance, or to any purchase or contract for services or supplies on account of such property if the amount thereof does not exceed $1,000. 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. The power to convey and to execute in the name of the Secretary deeds of conveyance, deeds of release, assignments and satisfactions of mortgages, and any other written instrument relating to real or personal 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: And provided further, That a conveyance or transfer of title to real or personal property or an interest therein to the Secretary of Housing and Urban Development, his successors and assigns, without identifying the Secretary therein, shall be deemed a proper conveyance or transfer to the same extent and of like effect as if the Secretary were personally named in such conveyance or transfer. 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. **(h) Disposition of assets in revitalization areas** (1) **In general** — The purpose of this subsection is to require the Secretary to carry out a program under which eligible assets (as such term is defined in paragraph (2)) shall be made available for sale in a manner that promotes the revitalization, through expanded homeownership opportunities, of revitalization areas. Notwithstanding the authority under the last sentence of subsection (g), the Secretary shall dispose of all eligible assets under the program and shall establish the program in accordance with the requirements under this subsection. (2) **Eligible assets** — For purposes of this subsection, the term “eligible asset” means any of the 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): (A) *Properties* — Any property that— (i) is designed as a dwelling for occupancy by 1 to 4 families; (ii) is located in a revitalization area; (iii) was previously subject to a mortgage insured under the provisions of this chapter; and (iv) is owned by the Secretary pursuant to the payment of insurance benefits under this chapter. (B) *Mortgages* — Any mortgage that— (i) is an interest in a property that meets the requirements of clauses (i) and (ii) of subparagraph (A); (ii) was previously insured under the provisions of this chapter except for mortgages insured under or made pursuant to sections 1715z, 1715z–12, or 1715z–20 of this title; and (iii) is held by the Secretary pursuant to the payment of insurance benefits under this chapter. For purposes of this subsection, an asset under this subparagraph shall be considered to be located in a revitalization area, or in the asset control area of a preferred purchaser, if the property described in clause (i) is located in such area. (3) **Revitalization areas** — The Secretary shall designate areas as revitalization areas for purposes of this subsection. Before designation of an area as a revitalization area, the Secretary shall consult with affected units of general local government, States, and Indian tribes and interested nonprofit organizations. The Secretary may designate as revitalization areas only areas that meet one of the following requirements: (A) *Very-low income area* — The median household income for the area is less than 60 percent of the median household income for— (i) in the case of any area located within a metropolitan area, such metropolitan area; or (ii) in the case of any area not located within a metropolitan area, the State in which the area is located. (B) *High concentration of eligible assets* — A high rate of default or foreclosure for single family mortgages insured under this chapter has resulted, or may result, in the area— (i) having a disproportionately high concentration of eligible assets, in comparison with the concentration of such assets in surrounding areas; or (ii) being detrimentally impacted by eligible assets in the vicinity of the area. (C) *Low home ownership rate* — The rate for home ownership of single family homes in the area is substantially below the rate for homeownership in the metropolitan area. (4) **Preference for sale to preferred purchasers** — The Secretary shall provide a preference, among prospective purchasers of eligible assets, for sale of such assets to any purchaser who— (A) is— (i) the unit of general local government, State, or Indian tribe having jurisdiction with respect to the area in which are located the eligible assets to be sold; or (ii) a nonprofit organization; (B) in making a purchase under the program under this subsection— (i) establishes an asset control area, which shall be an area that consists of part or all of a revitalization area; and (ii) purchases all assets of the Secretary in the category or categories of eligible assets set forth in the sale agreement required under paragraph (7) that, at any time during the period which shall be set forth in the sale agreement— (I) are or become eligible for purchase under this subsection; and (II) are located in the asset control area of the purchaser; and (C) has the capacity to carry out the purchase of the category or categories of eligible assets set forth in the sale agreement under the program under this subsection and under the provisions of this paragraph. (5) **Agreements required for purchase** (A) *Preferred purchasers* — Under the program under this subsection, the Secretary may sell an eligible asset as provided in paragraph (4) to a preferred purchaser only pursuant to a binding agreement by the preferred purchaser that the eligible asset will be used in conjunction with a home ownership plan that provides as follows: (i) The plan has as its primary purpose the expansion of home ownership in, and the revitalization of, the asset control area, established pursuant to paragraph (4)(B)(i) by the purchaser, in which the eligible asset is located. (ii) Under the plan, the preferred purchaser has established, and agreed to meet, specific performance goals for increasing the rate of home ownership for eligible assets in the asset control area that are under the purchaser’s control. The plan shall provide that the Secretary may waive or modify such goals or deadlines only upon a determination by the Secretary that a good faith effort has been made in complying with the goals through the homeownership plan and that exceptional neighborhood conditions prevented attainment of the goal. (iii) Under the plan, the preferred purchaser has established rehabilitation standards that meet or exceed the standards for housing quality established under subparagraph (B)(iii) by the Secretary, and has agreed that each asset property for an eligible asset purchased will be rehabilitated in accordance with such standards. (B) *Non-preferred purchasers* — Under the program under this subsection, the Secretary may sell an eligible asset to a purchaser who is not a preferred purchaser only pursuant to a binding agreement by the purchaser that complies with the following requirements: (i) The purchaser has agreed to meet specific performance goals established by the Secretary for home ownership of the asset properties for the eligible assets purchased by the purchaser, except that the Secretary may, by including a provision in the sale agreement required under paragraph (7), provide for a lower rate of home ownership in sales involving exceptional circumstances. (ii) The purchaser has agreed that each asset property for an eligible asset purchased will be rehabilitated to comply with minimum standards for housing quality established by the Secretary for purposes of the program under this subsection. (6) **Discount for preferred purchasers** (A) *In general* — For the purpose of providing a public purpose discount for the bulk sales of eligible assets made under the program under this subsection by preferred purchasers, each eligible asset sold through the program under this subsection to a preferred purchaser shall be sold at a price that is discounted from the value of the asset, as based on the appraised value of the asset property (as such term is defined in paragraph (8)). (B) *Appraisals* — The Secretary shall require that each appraisal of an eligible asset under this paragraph is based upon— (i) the market value of the asset property in its “as is” physical condition, which shall take into consideration age and condition of major mechanical and structural systems; and (ii) the value of the property appraised for home ownership. (C) *Discounts* — The Secretary, in the sole discretion of the Secretary, shall establish the discount under this paragraph for an eligible asset. In determining the discount, the Secretary may consider the condition of the asset property, the extent of resources available to the preferred purchaser, the comprehensive revitalization plan undertaken by such purchaser, the financial safety and soundness of the Mutual Mortgage Insurance Fund, and any other circumstances the Secretary considers appropriate 33 So in original. There probably should be a period. (7) **Sale agreement** — The Secretary may sell an eligible asset under this subsection only pursuant to a sale agreement entered into under this paragraph with the purchaser, which shall include the following provisions: (A) *Assets* — The sale agreement shall identify the 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. (B) *Revitalization area and asset control area* — The sale agreement shall identify— (i) the boundaries of the specific revitalization areas (or portions thereof) in which are located the eligible assets that are covered by the agreement; and (ii) in the case of a preferred purchaser, the asset control area established pursuant to paragraph (4)(B)(i) that is covered by the agreement. (C) *Financing* — The sale agreement shall identify the sources of financing for the purchase of the eligible assets. (D) *Binding agreements* — The sale agreement shall contain binding agreements by the purchaser sufficient to comply with— (i) in the case of a preferred purchaser, the requirements under paragraph (5)(A), which agreements shall provide that the eligible assets purchased will be used in conjunction with a home ownership plan meeting the requirements of such paragraph, and shall set forth the terms of the homeownership plan, including— (I) the goals of the plan for the eligible assets purchased and for the asset control area subject to the plan; (II) the revitalization areas (or portions thereof) in which the homeownership plan is operating or will operate; (III) the specific use or disposition of the eligible assets under the plan; and (IV) any activities to be conducted and services to be provided under the plan; or (ii) in the case of a purchaser who is not a preferred purchaser, the requirements under paragraph (5)(B). (E) *Purchase price and discount* — The sale agreement shall establish the purchase price of the eligible assets, which in the case of a preferred purchaser shall provide for a discount in accordance with paragraph (6). (F) *Housing quality* — The sale agreement shall provide for compliance of the eligible assets purchased with the rehabilitation standards established under paragraph (5)(A)(iii) or the minimum standards for housing quality established under paragraph (5)(B)(ii), as applicable, and shall specify such standards. (G) *Performance goals and sanctions* — The sale agreement shall set forth the specific performance goals applicable to the purchaser, in accordance with paragraph (5), shall set forth any sanctions for failure to meet such goals and deadlines, and shall require the purchaser to certify compliance with such goals. (H) *Period covered* — The sale agreement shall establish— (i) in the case of a preferred purchaser, the time period referred to in paragraph (4)(B)(ii); and (ii) in the case of a purchaser who is not a preferred purchaser, the time period for purchase of eligible assets that may be covered by the purchase. (I) *Other terms* — The agreement shall contain such other terms and conditions as may be necessary to require that eligible assets purchased under the agreement are used in accordance with the program under this subsection. (8) **Definitions** — For purposes of this subsection, the following definitions shall apply: (A) *Asset control area* — The term “asset control area” means the area established by a preferred purchaser pursuant to paragraph (4)(B)(i). (B) *Asset property* — The term “asset property” means— (i) with respect to an eligible asset that is a property, such property; and (ii) with respect to an eligible asset that is a mortgage, the property that is subject to the mortgage. (C) *Eligible asset* — The term “eligible asset” means an asset described in paragraph (2). (D) *Nonprofit organization* — The term “nonprofit organization” means a private organization that— (i) is organized under State or local laws; (ii) has no part of its net earnings inuring to the benefit of any member, shareholder, founder, contributor, or individual; and (iii) complies with standards of financial responsibility that the Secretary may require. (E) *Preferred purchaser* — The term “preferred purchaser” means a purchaser described in paragraph (4). (F) *Unit of general local government* — The term “unit of general local government” means any city, town, township, county, parish, village, or other general purpose political subdivision of a State, 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. (G) *State* — The term “State” means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the Virgin Islands, the Northern Mariana Islands, or any agency or instrumentality thereof that is established pursuant to legislation and designated by the chief executive officer to act on behalf of the State with regard to provisions of this subjection.44 So in original. Probably should be “subsection.” (H) *Indian tribe* — The term “Indian tribe” has the same meaning as in section 1715z–13(i)(I) 55 So in original. Probably should be section “1715z–13(i)(1)”. of this title. (9) **Secretary’s discretion** — The Secretary shall have the authority to implement and administer the program under this subsection in such manner as the Secretary may determine. The Secretary may, in the sole discretion of the Secretary, enter into contracts to provide for the proper administration of the program with such public or nonprofit entities as the Secretary determines are qualified. (10) **Regulations** — The Secretary shall issue regulations to implement the program under this subsection through rulemaking in accordance with the procedures established under [section 553 of title 5](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title5-section553&num=0&edition=prelim) regarding substantive rules. Such regulations shall take effect not later than the expiration of the 2-year period beginning on October 21, 1998. **(i) Mortgagor’s or mortgagee’s interest in property or claim conveyed** No mortgagee or mortgagor shall have, and no certificate 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. **(j) Foreclosure; payment and cessation of obligation** In the event that any mortgagee under a mortgage insured under [section 1709 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1709&num=0&edition=prelim) (other than a mortgagee receiving insurance benefits under clause (1)(A) of the second sentence of subsection (a)) forecloses on the mortgaged property but does not convey such property to the Secretary in accordance with this section, and the Secretary is given written notice thereof, or in the event that the mortgagor pays the obligation under the mortgage in full prior to the maturity thereof, and the mortgagee pays any adjusted premium charge required under the provisions of [section 1709(c) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1709/c&num=0&edition=prelim), and the Secretary is given written notice by the mortgagee of the payment of such obligation, the obligation to pay any subsequent premium charge for insurance shall cease, and all rights of the mortgagee and the mortgagor under this section shall terminate as of the date of such notice. **(k) Repealed. Pub. L. 105–276, title VI, § 601(c), Oct. 21, 1998, 112 Stat. 2673** **(l) Nullification of right of redemption of single family mortgagors** (1) Whenever the Secretary or a contract mortgagee (pursuant to its contract with the Secretary) forecloses on a Secretary-held single family mortgage in any Federal or State court or pursuant to a power of sale in a mortgage, the purchaser at the foreclosure sale shall be entitled to receive a conveyance of title to, and possession of, the property, subject to the interests senior to the interests of the Secretary or the contract mortgagee, as the case may be. Notwithstanding any State law to the contrary, there shall be no right of redemption (including in all instances any right to possession based upon any right of redemption) in the mortgagor or any other person subsequent to the foreclosure sale in connection with a Secretary-held single family mortgage. The appropriate State official or the trustee, as the case may be, shall execute and deliver a deed or other appropriate instrument conveying title to the purchaser at the foreclosure sale, consistent with applicable procedures in the jurisdiction and without regard to any such right of redemption. (2) The following actions shall be taken in order to verify title in the purchaser at the foreclosure sale: (A) In the case of a judicial foreclosure in any Federal or State court, there shall be included in the petition and in the judgment of foreclosure a statement that the foreclosure is in accordance with this subsection and that there is no right of redemption in the mortgagor or any other person. (B) In the case of a foreclosure pursuant to a power of sale provision in the mortgage, the statement required in subparagraph (A) shall be included in the advertisement of the sale and either in the recitals of the deed or other appropriate instrument conveying title to the purchaser at the foreclosure sale or in an affidavit or addendum to the deed. (3) For purposes of this subsection: (A) The term “contract mortgagee” means a person or entity under a contract with the Secretary that provides for the assignment of a single-family mortgage from the Secretary to the person or entity for the purpose of pursuing foreclosure. (B) the 66 So in original. Probably should be capitalized. 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.