Page:United States Statutes at Large Volume 60 Part 1.djvu/1104

This page needs to be proofread.

60 STAT.] 79TH CONG. , 2D SESS.-CH. 964-AUG. 14, 1946 such installment is paid, without taking into account delinquent pay- ments or prepayments. If the principal obligation of the mortgage is paid in full in less than five years after the time when the mortgage was entered into, the Secretary may require payment by the mortgagor of a charge equal to the amount of the last annual charge required of the mortgagor. "(2) One-half of the amount paid as charges in pursuance of this subsection shall be the premium for insurance and shall be deposited in the fund and may be used only for purposes to which the fund may be devoted. The other half of the amounts so paid shall be deposited in the Treasury to the credit of the Secretary and shall be available only for administrative expenses to carry out the provisions of this title, relating to mortgage insurance. " (f) (1) The Secretary shall promptly remit to the mortgagee under any mortgage insured under this title any sums collected by it as agent for the mortgagee. The Secretary shall promptly advise any such mortgagee of any default by the mortgagor. "(2) If within thirty days after the due date of any installment the mortgagor under an insured mortgage has failed to pay to the Secretary the amount due, the Secretary shall notwithstanding the amount paid is less than the interest and principal due, pay the amount of such principal and interest to the mortgagee, less the amount of any previous prepayments. "(3) Payments to mortgagees under paragraph (2) shall be advanced out of the fund for the account of the mortgagor. Such advances shall be repaid to the fund out of the first available collec- tions received from the mortgagor, with interest thereon at the rate fixed in the insured mortgage, and shall be added to subsequent installments. "(g) Any contract of insurance executed by the Secretary under this section shall be conclusive evidence of the eligibility of the mort- gage for insurance, and the validity of any contract of insurance so executed shall be incontestable in the hands of any holder thereof from the date of the execution of such contract, except for fraud or mis- representation of which such holder has actual knowledge. '(h) The Secretary may, at any time, for good cause shown and under such terms and conditions as he may prescribe, consent to the release of the mortgagor from his liability under the mortgage or the credit instruments secured thereby, or consent to the release of parts of the mortgaged property from the lien of the mortgage. "(i) The holder of any mortgage insured under this title may, upon notice to the Secretary, assign such mortgage together with the accom- panying note and contract of insurance and the assignee thereof shall thereupon become entitled to all the benefits of such contract of insur- ance: Provided, That no such assignment shall be binding upon the Secretary until notice thereof has been given the Secretary and the Secretary has acknowledged receipt of such notice. " P A Y MENT OF INSUBRANCE "SEc. 13. (a) In any case in which the mortgagor under a mortgage insured under section 12 is in default for more than twelve months, the mortgagee shall be entitled to receive the benefit of the insurance as hereinafter provided, upon assignment to the Secretary of (1) all the mortgagee's rights and interests arising under the mortgage so in default; (2) all claims of the mortgagee against the mortgagor or others, arising out of the mortgage transaction, (3) all policies of title or other insurance and all surety bonds and other guaranties and any and all claims thereunder relating to the mortgage or the mortgaged 1077 Insurance premium. Administrative ex- penses. Remission of col- lections to mortgagee, etc. Failure of mortgagor to pay amount due. Advances to mort- gagees. Validity, etc., of contract. Release of mortga- gor from liability, etc. Assignment ofmort. gage, etc. Notice. Default. Ante, p. 1076