Page:United States Statutes at Large Volume 56 Part 1.djvu/332

 PUBLIC LAWS-CH. 319-MAY 26, 1942 Termination of ob- ligation to pay premi- um charges. 55 Stat. 59; ante, p. 302. 12 U. S.C., Supp. I, § 1739 (c). Determination of mortgage value. Proviso. Right to foreclose in event of default. Termination of obligation to pay pre- mium charges. Certificate of claim. 55 Stat. 60. 12U. S. C., Supp.I, 5 1739 (e), (f). Debentures. 55 Stat. 59. 12 U. 8.C., Bupp. I, 1739 (d). provided, upon assignment, transfer, and delivery to the Adminis- trator, within a period and in accordance with rules and regulations to be prescribed by the Administrator of (1) all rights and interest arising under the mortgage so in default; (2) all claims of the mort- gagee against the mortgagors or others, arising out of the mortgage transaction; (3) all policies of title or other insurance or surety bonds or other guaranties and any and all claims thereunder; (4) any bal- ance of the mortgage loan not advanced to the mortgagor; (5) any cash or property held by the mortgagee, or to which it is entitled, as deposits made for the account of the mortgagor and which have not been applied in reduction of the principal of the mortgage indebted- ness; and (6) all records, documents, books, papers, and accounts relating to the mortgage transaction. Upon such assignment, trans- fer, and delivery the obligation of the mortgagee to pay the premium charges for mortgage insurance shall cease, and the Administrator shall, subject to the cash adjustment provided for in section 604 (c), issue to the mortgagee debentures having a total face value equal to the value of the mortgage, and a certificate of claim as hereinafter provided. For the purposes of this subsection, the value of the mort- gage shall be determined in accordance with rules and regulations prescribed by the Administrator, by adding to the amount of the original principal obligation of the mortgage which was unpaid on the date of default, the amount the mortgagee may have paid for (A) taxes, special assessments, and water rates, which are liens prior to the mortgage; (B) insurance on the property; and (C) reasonable expenses for the completion and preservation of the property; less the sum of (i) an amount equivalent to 1 per centum of the unpaid amount of such principal obligation on the date of default; (ii) any amount received on account of the mortgage after such date; and (iii) any net income received by the mortgagee from the property after such date: Provided, That the mortgagee in the event of a default under the mortgage may, at its option and in accordance with regulations of, and in a period to be determined by the Adminis- trator, proceed to foreclose on and obtain possession of or otherwise acquire such property from the mortgagor after default, and receive the benefits of the insurance as herein provided, upon (1) the prompt conveyance to the Administrator of title to the property which meets the requirements of the rules and regulations of the Adminis- trator in force at the time the mortgage was insured, and which is evidenced in the manner prescribed by such rules and regulations; and (2) the assignment to him of all claims of the mortgagee against the mortgagor or others, arising out of the mortgage transaction or foreclosure proceedings, except such claims that may have been released with the consent of the Administrator. Upon such convey- ance and assignment, the obligation of the mortgagee to pay the pre- mium charges for insurance shall cease and the mortgagee shall be entitled to receive the benefits of the insurance as provided in this subsection, except that in such event the 1 per centum deduction, set out in (i) hereof, shall not apply. "(d) The certificate of claim issued by the Administrator to any mortgagee in connection with the insurance of mortgages under this section shall be for an amount determined in accordance with subsec- tions (e) and (f) of section 604 of this title, except that any amount remaining after the payment of the full amount under the certificate of claim shall be retained by the Administrator and credited to the War Housing Insurance Fund. "(e) Debentures issued under this section shall be issued in accord- ance with the provisions of section 604 (d) except that such deben- tures shall be dated as of the date of default as determined in subsection (c) of this section, and shall bear interest from such date. 304 [56 STAT.

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