12 U.S.C. § 2704 — Insurance for emergency mortgage loans

Page 1459 TITLE 12—BANKS AND BANKING § 2704 cept that (1) the rate of interest on any loan or advance of credit insured under this chapter shall be fixed for the life of the loan or advance of credit and shall not exceed the rate of inter- est that is generally charged for mortgages on single-family housing insured by the Secretary of Housing and Urban Development under title II of the National Housing Act [12 U.S.C. 1707 et seq.] at the time such loan or advance of credit is made, and (2) no interest shall be charged on interest which is deferred on a loan or advance of credit made under this chapter. In estab- lishing rates, terms and conditions for loans or advances of credit made under this chapter, the Secretary shall take into account a home- owner’s ability to repay such loan or advance of credit. (e) Deferral of commencement of repayment; se- curity for repayment The Secretary may provide for the deferral of the commencement of the repayment of a loan or advance insured under section 2704 of this title or emergency mortgage relief payments made under section 2705 of this title until one year following the date of the last disbursement of the proceeds of the loan or advance or pay- ments or for such longer period as the Secretary determines would further the purpose of this chapter. Any eligible homeowner who receives a grant or an advance of credit under this chapter may repay the loan in full, without penalty, by lump sum or by installment payments at any time before the loan becomes due and payable. The Secretary shall by regulation require such security for the repayment of insured loans or advances of credit or emergency mortgage relief payments as he deems appropriate and may re- quire that such repayment be secured by a lien on the mortgaged property. (Pub. L. 94–50, title I, § 104, July 2, 1975, 89 Stat. 250; Pub. L. 111–203, title XIV, § 1496(b)(2), July 21, 2010, 124 Stat. 2208.) Editorial Notes REFERENCES IN TEXT The National Housing Act, referred to in subsec. (d)(1), is act June 27, 1934, ch. 847, 48 Stat. 1246. Title II of the Act is classified generally to subchapter II (§ 1707 et seq.) of chapter 13 of this title. For complete classi- fication of this Act to the Code, see section 1701 of this title and Tables. AMENDMENTS 2010—Subsec. (b). Pub. L. 111–203, § 1496(b)(2)(A), sub- stituted ‘‘. The amount of assistance provided to a homeowner under this chapter shall be an amount that the Secretary determines is reasonably necessary to supplement such amount as the homeowner is capable of contributing toward such mortgage payment, except that the aggregate amount of such assistance provided for any homeowner shall not exceed $50,000.’’ for ‘‘, but such assistance shall not exceed the lesser of $250 per month or the amount determined to be reasonably nec- essary to supplement such amount as the homeowner is capable of contributing toward such mortgage pay- ment.’’ Subsec. (d). Pub. L. 111–203, § 1496(b)(2)(B), substituted ‘‘(1) the rate of interest on any loan or advance of cred- it insured under this chapter shall be fixed for the life of the loan or advance of credit and shall not exceed the rate of interest that is generally charged for mort- gages on single-family housing insured by the Sec- retary of Housing and Urban Development under title II of the National Housing Act at the time such loan or advance of credit is made, and (2) no interest shall be charged on interest which is deferred on a loan or ad- vance of credit made under this chapter. In establishing rates, terms and conditions for loans or advances of credit made under this chapter, the Secretary shall take into account a homeowner’s ability to repay such loan or advance of credit.’’ for ‘‘interest on a loan or advance of credit insured under section 2704 of this title or emergency mortgage relief payments made under section 2705 of this title shall not be charged at a rate which exceeds the maximum interest rate applicable with respect to mortgages insured pursuant to section 1709(b) of this title.’’ Subsec. (e). Pub. L. 111–203, § 1496(b)(2)(C), inserted ‘‘Any eligible homeowner who receives a grant or an advance of credit under this chapter may repay the loan in full, without penalty, by lump sum or by in- stallment payments at any time before the loan be- comes due and payable.’’ after ‘‘purpose of this chap- ter.’’ Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111–203 effective on the date on which final regulations implementing that amend- ment take effect, or on the date that is 18 months after the designated transfer date if such regulations have not been issued by that date, see section 1400(c) of Pub. L. 111–203, set out as a note under section 1601 of Title 15, Commerce and Trade. § 2704. Insurance for emergency mortgage loans and advances (a) Institutions eligible The Secretary is authorized, upon such terms and conditions as the Secretary may prescribe, to insure banks, trust companies, finance com- panies, mortgage companies, savings and loan associations, insurance companies, credit unions, and such other financial institutions, which the Secretary finds to be qualified by ex- perience and facilities and approves as eligible for insurance, against losses which they may sustain as a result of emergency loans or ad- vances of credit made in accordance with the provisions of section 2703 of this title and this section with respect to mortgages eligible for assistance under this chapter. (b) Premium charge; amount The Secretary is authorized to fix a premium charge or charges for the insurance granted under this section, but in the case of any loan or advance of credit, such charge or charges shall not exceed an amount equivalent to one-half of 1 per centum per annum of the principal obliga- tion of such loan or advance of credit out- standing at any time. (c) Waiver of compliance with rules and regula- tions; finality and incontestability of pay- ment for loss; transfer of insurance The Secretary is authorized and empowered to waive compliance with any rule or regulation prescribed by the Secretary for the purposes of this section if, in the Secretary’s judgment, the enforcement of such rule or regulation would impose an injustice upon an insured lending in- stitution which has substantially complied with such regulations in good faith. Any payment for loss made to an insured financial institution Page 1460 TITLE 12—BANKS AND BANKING § 2705 1 See References in Text note below. under this section shall be final and incontest- able after two years from the date the claim was certified for payment by the Secretary, in the absence of fraud or misrepresentation on the part of such institution unless a demand for re- purchase of the obligation shall have been made on behalf of the United States prior to the expi- ration of such two-year period. The Secretary is authorized to transfer to any financial institu- tion approved for insurance under this chapter any insurance in connection with any loan which may be sold to it by another insured fi- nancial institution. (d) Maximum aggregate amount of loans and ad- vances insured The aggregate amount of loans and advances insured under this section and emergency mort- gage relief payments made under section 2705 of this title shall not exceed $3,000,000,000. (e) Underwriting guidelines and procedures The Secretary shall establish underwriting guidelines or procedures to allocate amounts made available for loans and advances insured under this section and for emergency relief pay- ments made under section 2705 of this title based on the likelihood that a mortgagor will be able to resume mortgage payments, pursuant to the requirement under section 2702(5) of this title. (Pub. L. 94–50, title I, § 105, July 2, 1975, 89 Stat. 251; Pub. L. 111–203, title XIV, § 1496(b)(3), July 21, 2010, 124 Stat. 2208.) Editorial Notes AMENDMENTS 2010—Subsecs. (b) to (d). Pub. L. 111–203, § 1496(b)(3)(A), (C), redesignated subsecs. (c) to (e) as (b) to (d), respectively, and struck out former subsec. (b). Prior to amendment, text of subsec. (b) read as follows: ‘‘In no case shall the insurance granted by the Sec- retary under this section to any financial institution on loans and advances made by such financial institu- tion for the purposes of this chapter exceed 40 per cen- tum of the total amount of such loans and advances made by the institution, except that, with respect to any individual loan or advance of credit, the amount of any claim for loss on such individual loan or advance of credit paid by the Secretary under the provision of this section shall not exceed 90 per centum of such loss.’’ Subsec. (e). Pub. L. 111–203, § 1496(b)(3)(D), added sub- sec. (e). Former subsec. (e) redesignated (d). Pub. L. 111–203, § 1496(b)(3)(B), inserted ‘‘and emer- gency mortgage relief payments made under section 2705 of this title’’ after ‘‘insured under this section’’ and substituted ‘‘$3,000,000,000’’ for ‘‘$1,500,000,000 at any one time’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111–203 effective on the date on which final regulations implementing that amend- ment take effect, or on the date that is 18 months after the designated transfer date if such regulations have not been issued by that date, see section 1400(c) of Pub. L. 111–203, set out as a note under section 1601 of Title 15, Commerce and Trade. § 2705. Emergency mortgage relief payments (a) Direct payments to mortgagee In the case of any mortgagee which would oth- erwise be eligible to participate in the program authorized under section 2704 of this title but does not qualify for an advance or advances as authorized by section 2712 1 of this title or under section 1430, 1430b, or 1431 of this title or other- wise elects not to participate in the program au- thorized under section 2704 of this title, the Sec- retary is authorized to make repayable emer- gency mortgage relief payments directly to such mortgagee on behalf of homeowners whose mort- gages are held by such financial institution and who are delinquent in their mortgage payments. (b) Mortgages eligible; terms and conditions Emergency mortgage relief payments shall be made under this section only with respect to a mortgage which meets the requirements of sec- tion 2702 of this title and only on such terms and conditions as the Secretary may prescribe, sub- ject to the provisions of section 2703 of this title. (c) Processing of relief payments; power of Sec- retary The Secretary may make such delegations and accept such certifications with respect to the processing of mortgage relief payments provided under this section as he deems appropriate to fa- cilitate the prompt and efficient implementa- tion of the assistance authorized under this sec- tion. (Pub. L. 94–50, title I, § 106, July 2, 1975, 89 Stat. 251.) Editorial Notes REFERENCES IN TEXT Section 2712 of this title, referred to in subsec. (a), was repealed by Pub. L. 111–203, title XIV, § 1496(b)(7), July 21, 2010, 124 Stat. 2209. § 2706. Emergency Homeowners’ Relief Fund To carry out the purposes of this chapter, the Secretary is authorized to establish in the Treasury of the United States an Emergency Homeowners’ Relief Fund (hereinafter in this chapter referred to as the ‘‘fund’’) which shall be available to the Secretary without fiscal year limitation— (1) for making payments in connection with defaulted loans or advances of credit insured under section 2704 of this title; (2) for making emergency mortgage relief payments under section 2705 of this title; (3) to pay such administrative expenses (or portion of such expenses) of carrying out the provisions of this chapter as the Secretary may deem necessary. (Pub. L. 94–50, title I, § 107, July 2, 1975, 89 Stat. 252; Pub. L. 98–479, title II, § 204(m)(1), Oct. 17, 1984, 98 Stat. 2234; Pub. L. 111–203, title XIV, § 1496(b)(4), July 21, 2010, 124 Stat. 2208.) Editorial Notes AMENDMENTS 2010—Pub. L. 111–203 struck out subsec. (a) designa- tion before ‘‘To carry out’’ and subsec. (b) which read as follows: ‘‘The fund shall be credited with— ‘‘(1) all amounts received by the Secretary as pre- mium charges for insurance or as repayment for