Page:United States Statutes at Large Volume 114 Part 5.djvu/884

 114 STAT. 2898 PUBLIC LAW 106-568—DEC. 27, 2000 "(A) IN GENERAL.— Before the Secretary approves any loan for guarantee under this section, the lender shall submit the application for the loan to the Secretary for examination. "(B) APPROVAL. —If the Secretary approves the application submitted under subparagraph (A), the Secretary shall issue a certificate under this subsection as evidence of the loan guarantee approved. "(2) STANDARD FOR APPROVAL.— The Secretary may approve a loan for guarantee under this section and issue a certificate under this subsection only if the Secretary determines that there is a reasonable prospect of repayment of the loan. " (3) EFFECT. — "(A) IN GENERAL.—^A certificate of guarantee issued under this subsection by the Secretary shall be conclusive evidence of the eligibility of the loan for guarantee under this section and the amount of that guarantee. "(B) EVIDENCE. —The evidence referred to in subparagraph (A) shall be incontestable in the hands of the bearer. "(C) FULL FAITH AND CREDIT. —The full faith and credit of the United States is pledged to the payment of all amounts agreed to be paid by the Secretary as security for the obligations made by the Secretary under this section. "(4) FRAUD AND MISREPRESENTATION. — This subsection may not be construed— "(A) to preclude the Secretary from establishing defenses against the original lender based on fraud or material misrepresentation; or "(B) to bar the Secretary from establishing by regulations that are on the date of issuance or disbursement, whichever is earlier, partial defenses to the amount payable on the guarantee. "(e) GUARANTEE FEE.— "(1) IN GENERAL.—The Secretary shall fix and collect a guarantee fee for the guarantee of a loan under this section, which may not exceed the amount equal to 1 percent of the principal obligation of the loan. "(2) PAYMENT. — The fee under this subsection shall— "(A) be paid by the lender at time of issuance of the guarantee; and "(B) be adequate, in the determination of the Secretary, to cover expenses and probable losses. "(3) DEPOSIT.— The Secretary shall deposit any fees collected under this subsection in the Native Hawaiian Housing Loan Guarantee Fund established under subsection (j). "(f) LIABILITY UNDER GUARANTEE.— The liability under a guarantee provided under this section shall decrease or increase on a pro rata basis according to any decrease or increase in the amount of the unpaid obligation under the provisions of the loan agreement involved. "(g) TRANSFER AND ASSUMPTION.— Notwithstanding any other provision of law, any loan guaranteed under this section, including the security given for the loan, may be sold or assigned by the lender to any financial institution subject to examination and supervision by an agency of the Federal Government or of any State or the District of Columbia.

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