12USC1735f-10

§ 1735f–9

TITLE 12—BANKS AND BANKING

pertaining to the payment of loan or mortgage
insurance premium charges by a financial institution, other mortgagees, or agent thereof to
the Federal Government in connection with a
loan or mortgage insurance program established
pursuant to any of these titles, the Secretary
shall require that payment of such premiums be
made (1) in the case of loans or mortgages respecting one- to four-family residences, promptly upon their receipt from the borrower, and (2)
in any other case, promptly when due to the
Secretary; except that the Secretary may approve payment of such premiums within twentyfour months of such receipt or due date, as appropriate, if the financial institution, mortgagee, or agent thereof pays interest, at a rate
specified by the Secretary, to the insurance fund
for the period beginning twenty days after receipt from the borrower or after the due date, as
appropriate, and ending upon payment of the
premiums to the Federal Government.
(June 27, 1934, ch. 847, title V, § 530, as added Pub.
L. 96–399, title III, § 320, Oct. 8, 1980, 94 Stat. 1646;
amended Pub. L. 98–181, title IV, § 406, Nov. 30,
1983, 97 Stat. 1210; Pub. L. 101–235, title I,
§ 133(d)(5), Dec. 15, 1989, 103 Stat. 2027.)
REFERENCES IN TEXT
Subchapter IV of this chapter, referred to in text, was
repealed by Pub. L. 101–73, title IV, § 407, Aug. 9, 1989,
103 Stat. 363.
AMENDMENTS
1989—Pub. L. 101–235 struck out reference to subchapter IX–A after reference to subchapter VIII.
1983—Pub. L. 98–181 substituted ‘‘(1) in the case of
loans or mortgages respecting one- to four-family residences, promptly upon their receipt from the borrower,
and (2) in any other case, promptly when due to the
Secretary’’ for ‘‘promptly upon their receipt from the
borrower’’, inserted ‘‘or due date, as appropriate,’’ after
‘‘such receipt’’, and inserted ‘‘or after the due date, as
appropriate,’’ before ‘‘and ending’’.

§ 1735f–9. Limitation on commitments to insure
loans and mortgages
(a) The authority of the Secretary to enter
into commitments to insure loans and mortgages under this chapter shall be effective for
any fiscal year only to such extent or in such
amounts as are or have been provided in appropriation Acts for such fiscal year.
(b) Notwithstanding any other provision of law
and subject only to the absence of qualified requests for insurance, to the authority provided
in this chapter, and to the limitation in subsection (a) of this section, the Secretary shall
enter into commitments to insure mortgages
under this chapter with an aggregate principal
amount of $110,165,000,000 during fiscal year 1993
and $68,673,868,600 during fiscal year 1994.
(June 27, 1934, ch. 847, title V, § 531, as added Pub.
L. 97–35, title III, § 335, Aug. 13, 1981, 95 Stat. 414;
amended Pub. L. 98–181, title IV, § 402, Nov. 30,
1983, 97 Stat. 1208; Pub. L. 98–479, title I,
§ 104(a)(7), Oct. 17, 1984, 98 Stat. 2225; Pub. L.
99–267, § 1(h), Mar. 27, 1986, 100 Stat. 73; Pub. L.
100–122, § 2(c), Sept. 30, 1987, 101 Stat. 793; Pub. L.
100–242, title IV, § 402, Feb. 5, 1988, 101 Stat. 1899;
Pub. L. 101–625, title III, § 321, Nov. 28, 1990, 104
Stat. 4134; Pub. L. 102–550, title V, § 501, Oct. 28,

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1992, 106 Stat. 3778; Pub. L. 103–120, § 9, Oct. 27,
1993, 107 Stat. 1151.)
AMENDMENTS
1993—Subsec. (b). Pub. L. 103–120 substituted
‘‘$110,165,000,000’’ for ‘‘$65,905,824,960’’.
1992—Subsec. (b). Pub. L. 102–550 amended subsec. (b)
generally. Prior to amendment, subsec. (b) read as follows: ‘‘Notwithstanding any other provision of law and
subject only to the absence of qualified requests for insurance, to the authority provided in this chapter, and
to the limitation in subsection (a) of this section, the
Secretary shall enter into commitments to insure
mortgages under this chapter with an aggregate principal amount of $76,791,000,000 during fiscal year 1991
and $79,818,000,000 during fiscal year 1992.’’
1990—Subsec. (b). Pub. L. 101–625 amended subsec. (b)
generally. Prior to amendment, subsec. (b) read as follows: ‘‘Notwithstanding any other provision of law and
subject only to the absence of qualified requests for insurance, to the authority provided in this chapter, and
to the limitation in subsection (a) of this section, the
Secretary shall enter into commitments to insure
mortgages under this chapter with an aggregate principal amount of $100,000,000,000 during fiscal year 1988,
and $104,000,000,000 during fiscal year 1989.’’
1988—Pub. L. 100–242 designated existing provisions as
subsec. (a) and added subsec. (b).
1987—Pub. L. 100–122 substituted ‘‘for any fiscal year’’
for ‘‘for fiscal year 1986’’.
1986—Pub. L. 99–267 amended section generally. Prior
to amendment, section read as follows: ‘‘Notwithstanding any other provision of law and subject only to the
absence of qualified requests for insurance, to the authority provided in this chapter, and to any funding
limitation approved in appropriation Acts, the Secretary shall enter into commitments during each of the
fiscal years 1984 and 1985 to insure mortgages under this
chapter with an aggregate principal amount of
$50,900,000,000.’’
1984—Pub. L. 98–479 substituted ‘‘this chapter’’ for
‘‘subchapter II of this chapter’’ in two places.
1983—Pub. L. 98–181 substituted provision authorizing
the Secretary, subject to certain qualifications, to
enter into commitments during fiscal years 1984 and
1985 to insure mortgages under subchapter II of this
chapter with an aggregate principal amount of
$50,900,000,000 for provision which directed the Secretary, during fiscal year 1982, not to enter into commitments under this chapter to insure loans and mortgages with an aggregate principal amount in excess of
$41,000,000,000.
EFFECTIVE DATE
Section effective Oct. 1, 1981, see section 371 of Pub.
L. 97–35, set out as a note under section 3701 of this
title.
AUTHORIZATION TO ENTER INTO ADDITIONAL COMMITMENTS TO INSURE LOANS AND MORTGAGES DURING
FISCAL YEAR 1986
For increase in the applicable limitation on additional commitments to insure mortgages and loans to
carry out this chapter during fiscal year 1986, see Pub.
L. 99–349, title I, July 2, 1986, 100 Stat. 728; Pub. L.
99–345, § 2, June 24, 1986, 100 Stat. 673; and Pub. L. 99–289,
May 2, 1986, 100 Stat. 412, set out as notes under section
1721 of this title.

§ 1735f–10. Change of mortgagee status
(a) Notification
Upon the occurrence of any action described in
subsection (b), an approved mortgagee shall immediately submit to the Secretary, in writing,
notification of such occurrence.
(b) Actions
The actions described in this subsection are as
follows:

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§ 1735f–12

TITLE 12—BANKS AND BANKING

(1) The debarment, suspension or a Limited
Denial of Participation (LDP), or application
of other sanctions, other exclusions, fines, or
penalties applied to the mortgagee or to any
officer, partner, director, principal, manager,
supervisor, loan processor, loan underwriter,
or loan originator of the mortgagee pursuant
to applicable provisions of State or Federal
law.
(2) The revocation of a State-issued mortgage loan originator license issued pursuant to
the S.A.F.E. Mortgage Licensing Act of 2008
(12 U.S.C. 5101 et seq.) or any other similar
declaration of ineligibility pursuant to State
law.
(June 27, 1934, ch. 847, title V, § 532, as added Pub.
L. 111–22, div. A, title II, § 203(e), May 20, 2009, 123
Stat. 1647.)
REFERENCES IN TEXT
The S.A.F.E. Mortgage Licensing Act of 2008, referred
to in subsec. (b)(2), is title V of div. A of Pub. L. 110–289,
July 30, 2008, 122 Stat. 2810, also known as the Secure
and Fair Enforcement for Mortgage Licensing Act of
2008, which is classified generally to chapter 51 (§ 5101 et
seq.) of this title. For complete classification of this
Act to the Code, see Short Title note set out under section 5101 of this title and Tables.
PRIOR PROVISIONS
A prior section 1735f–10, act June 27, 1934, ch. 847, title
V, § 532, as added Pub. L. 97–35, title III, § 339G, Aug. 13,
1981, 95 Stat. 418, which related to purchaser-broker arrangement payments for insurance purposes, was repealed by section 203(e) of Pub. L. 111–22.

§ 1735f–11. Review of mortgagee performance
and authority to terminate
(a) Periodic review of mortgagee performance
To reduce losses in connection with single
family mortgage insurance programs under this
chapter, at least once a year the Secretary shall
review the rate of early defaults and claims for
insured single family mortgages originated or
underwritten by each mortgagee.
(b) Comparison with other mortgagees
For each mortgagee, the Secretary shall compare the rate of early defaults and claims for insured single family mortgage loans originated or
underwritten by the mortgagee in an area with
the rate of early defaults and claims for other
mortgagees originating or underwriting insured
single family mortgage loans in the area. For
purposes of this section, the term ‘‘area’’ means
each geographic area in which the mortgagee is
authorized by the Secretary to originate insured
single family mortgages.
(c) Termination of mortgagee origination approval
(1) Notwithstanding section 1708(c) of this
title, the Secretary may terminate the approval
of a mortgagee to originate or underwrite single
family mortgages if the Secretary determines
that the mortgage loans originated or underwritten by the mortgagee present an unacceptable risk to the insurance funds. The determination shall be based on the comparison required
under subsection (b) of this section and shall be
made in accordance with regulations of the Secretary. The Secretary may rely on existing reg-

ulations published before this section takes effect.
(2) The Secretary shall give a mortgagee at
least 60 days prior written notice of any termination under this subsection. The termination
shall take effect at the end of the notice period,
unless the Secretary withdraws the termination
notice or extends the notice period. If requested
in writing by the mortgagee within 30 days of
the date of the notice, the mortgagee shall be
entitled to an informal conference with the official authorized to issue termination notices on
behalf of the Secretary (or a designee of that official). At the informal conference, the mortgagee may present for consideration specific factors that it believes were beyond its control and
that caused the excessive default and claim rate.
(June 27, 1934, ch. 847, title V, § 533, as added Pub.
L. 100–242, title IV, § 407(b), Feb. 5, 1988, 101 Stat.
1902; amended Pub. L. 107–73, title II, § 209, Nov.
26, 2001, 115 Stat. 675.)
AMENDMENTS
2001—Pub. L. 107–73 amended section catchline and
text generally. Prior to amendment, text read as follows:
‘‘(a) To reduce losses in connection with mortgage insurance programs under this chapter, the Secretary
shall review, at least once a year, the rate of early serious defaults and claims involving mortgagees approved
under this chapter. On the basis of this review, the Secretary shall notify each mortgagee which, as determined by the Secretary, had a rate of early serious defaults and claims during the preceding year which was
higher than the normal rate for the geographic area or
areas in which that mortgagee does business. In the notification, the Secretary shall require each mortgagee
to submit a report, within a time determined by the
Secretary, containing the mortgagee’s (1) explanation
for the above normal rate of early serious defaults and
claims; (2) plan for corrective action, if applicable, both
with regard to (A) mortgages in default; and (B) its
mortgage-processing system in general; and (3) a timeframe within which this corrective action will be begun
and completed. If the Secretary does not agree with
this timeframe or plan, a mutually agreeable timeframe and plan will be determined.
‘‘(b) Failure of the mortgagee to submit a report required under subsection (a) of this section within the
time determined by the Secretary or to commence or
complete the plan for corrective action within the
timeframe agreed upon by the Secretary may be cause
for suspension of the mortgagee from participation in
programs under this chapter.’’

§ 1735f–12. Assurance of adequate processing of
applications for loan and mortgage insurance
(a) State offices
In order to ensure the adequate processing of
applications for insurance of loans and mortgages under this chapter, the Secretary shall
maintain not less than one office in each State
to carry out the provisions of this chapter.
(b) Expedited procedure for RTC properties
To assist the Resolution Trust Corporation in
disposing of the property to which it acquires
title and to ensure the timely processing of applications for insurance of loans and mortgages
under this chapter that will be used to purchase
multifamily residential property from the Resolution Trust Corporation, the Secretary shall establish an expedited procedure for considering
such applications.