Page:United States Statutes at Large Volume 97.djvu/1251

 PUBLIC LAW 98-181—NOV. 30, 1983 97 STAT. 1219 REINSURANCE DEMONSTRATION PROGRAM SEC. 428. (a) Title II of the National Housing Act is amended by adding at the end thereof the following: "REINSURANCE CONTRACTS "SEC. 249. (a) The purpose of this section is to authorize a demon- stration mortgage reinsurance program designed to test the feasibil- ity of entering into reinsurance contracts with private mortgage insurers in order to reduce Government risk and administrative costs, and to speed mortgage processing. The Secretary shall limit the demonstration under this section to not more than two adminis- trative regions of the Department of Housing and Urban Develop- ment, and shall assure that the program is in the financial interest of the Government and will not result in loss of employment by any employees of the Department of Housing and Urban Development before September 30, 1985. The aggregate number of mortgages insured under this section in any administrative region of the Department of Housing and Urban Development in any fiscal year may not exceed 10 percent of the aggregate number of mortgages and loans insured by the Secretary under this title in such region during the preceding fiscal year. "(b) Notwithstanding any other provision of this Act inconsistent with this section, the Secretary is authorized to provide mortgsige insurance with respect to one- to four-family dwellings under sec- tions 203(b), 234, and 245 through reinsurance contracts with private mortgage insurance companies which have been determined to be qualified insurers under section 302(b)(2)(C). Such contracts shall require private mortgage insurance companies to— "(1) assume a percentage of loss on any mortgage insured pursuant to section 203(b), 234, or 245 covering a one- to four- family dwelling, which percentage of loss shall be set forth in the reinsurance contract; and "(2) carry out (under appropriate delegation) such credit ap- proval, appraisal, inspection, commitment, claims processing, property disposition, or other function as the Secretary pursu- ant to regulations, shall approve as consistent with the purposes of this section. "(c) Any contract of reinsurance under this section shall contain such provisions relating to the sharing of premiums on a sound actuarial basis, establishment of insurance reserves, manner of calculating claims on such insurance, conditions with respect to foreclosure, handling and disposition of property prior to claim or settlement, right of assignees, and other similar matters as the Secretary may prescribe pursuant to regulations. Pursuant to a contract under this section, a private mortgage insurance company shall endorse loans for insurance and take such other actions on behalf of the Secretary and in the Secretary's name as the Secretary may authorize. "(d) The Secretary shall require any private mortgage insurance company participating in the program under this section to provide reinsurance for those mortgages offered by the Secretary for inclu- sion in the program.". (b) The Secretary of Housing and Urban Development shall evalu- ate the reinsurance program under section 249 of the National Housing Act and, not later than March 1, 1985, submit to the 12 USC 1715Z-14. 12 USC 1709, 1715y, 1715Z-10. 12 USC 1717. Report to Congress. 12 USC 1715Z-14 note. Supra.

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