Page:United States Statutes at Large Volume 101 Part 3.djvu/604

 101 STAT. 1902

PUBLIC LAW 100-242—FEB. 5, 1988 (c) REPEAL OF VACATION AND SEASONAL HOME INSURANCE PRO-

12 USC 1709. 12 USC 1709 note.

12 USC 1709 note.

GRAM.—Section 203 of the National Housing Act is amended by striking subsection (m). (d) APPLICABILITY.—The amendments made by this section shall apply only with respect to— (1) mortgages insured— (A) pursuant to a conditional commitment issued on or after the date of the enactment of this Act; or (B) in accordance with the direct endorsement program (24 CFR 200.163), if the approved underwriter of the mortgagee signs the appraisal report for the property on or after the date of the enactment of this Act; and (2) the approval of substitute mortgagors, referred to in the amendment made by subsection (a), if the original mortgagor was subject to such amendment. (e) TRANSITION PROVISIONS.—Any mortgage insurance provided

under title II of the National Housing Act, as it existed immediately before the date of the enactment of this Act, shall continue to be governed (to the extent applicable) by the provisions specified in subsections (a) through (c), as such provisions existed immediately before such date. SEC. 407. ACTIONS TO REDUCE LOSSES UNDER SINGLE FAMILY MORTGAGE INSURANCE PROGRAM. (a) IN GENERAL.— (1) AMENDMENT TO SECTION 203.—Section 203 of the National

12 USC 1709 note.

12 USC 1709 note.

Housing Act is amended by adding at the end the following new subsection: "(r) The Secretary shall take appropriate actions to reduce losses under the mortgage insurance program carried out under this section. Such actions shall include— "(1) an annual review by the Secretary of the rate of early serious defaults and claims, in accordance with section 533; "(2) requiring reviews of the credit standing of each person seeking to assume a mortgage insured under this section (A) during the 12-month period following the date on which the mortgage is endorsed for insurance, or (B) during the 24-month period following the date on which the mortgage is endorsed for insurance in the case of an investor originated mortgage; and "(3) in any case where a mortgage is assumed after the period specified in paragraph (2), requiring that the original mortgagor be advised of the procedures by which he or she may be released from liability. In any case where the homeowner does not request a release from liability, the purchaser and the homeowner shall have joint and several liability for any default for a period of 5 years following the date of the assumption. After the close of such 5-year period, only the purchaser shall be liable for any default on the mortgage unless the mortgage is in default at the time of the expiration of the 5-year period.". (2) EFFECTIVE DATE.—The amendment made by paragraph (1) shall apply to mortgages endorsed for issuance on or after December 1, 1986. (b) REPORTS BY MORTGAGEES.—Title V of the National Housing Act

is amended by adding at the end thereof the following new section:

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