12 U.S.C. § 1715z–21 — Delegation of insuring authority to direct endorsement mortgagees
submitted 92 years ago by Pub. L. 104-204 to r/title-12-BANKS-AND-BANKING · 359 words · no verdicts yet
This section permits the Secretary to delegate certain mortgage-insurance authority to approved direct-endorsement mortgagees. It sets rules for delegation, indemnification, cancellation, and procedures.
(a) Authority. The Secretary may delegate chapter mortgage-insurance authority to approved direct-endorsement mortgagees for mortgages on property containing a dwelling principally designed for one to four families.
(b) Considerations. The Secretary must consider the mortgagee's experience and performance compared with default rates in comparable markets and other factors that reduce insurance-fund loss.
(c) Enforcement. (1) If a delegated mortgagee did not originate an insured mortgage as required and the Secretary pays the claim within the specified reasonable period, the Secretary may require indemnification for the loss. (2) Fraud or misrepresentation permits indemnification regardless of when the claim is paid.
(d) Termination. For a violation of requirements or procedures, or other good cause, the Secretary may cancel the delegation by notice. It takes effect on receipt or a later specified date. The decision is final and conclusive and not subject to judicial review.
(e) Requirements. Before approving a delegation, the Secretary must issue regulations establishing requirements and procedures, including indemnification procedures.
The Secretary may delegate, to one or more mortgagees approved by the Secretary under the direct endorsement program, the authority of the Secretary under this chapter to insure mortgages involving property upon which there is located a dwelling designed principally for occupancy by 1 to 4 families.
In determining whether to delegate authority to a mortgagee under this section, the Secretary shall consider the experience and performance of the mortgagee compared to the default rate of all insured mortgages in comparable markets, and such other factors as the Secretary determines appropriate to minimize risk of loss to the insurance funds under this chapter.
If the Secretary determines that a mortgage insured by a mortgagee pursuant to delegation of authority under this section was not originated in accordance with the requirements established by the Secretary, and the Secretary pays an insurance claim with respect to the mortgage within a reasonable period specified by the Secretary, the Secretary may require the mortgagee approved under this section to indemnify the Secretary for the loss.
If fraud or misrepresentation was involved in connection with the origination, the Secretary may require the mortgagee approved under this section to indemnify the Secretary for the loss regardless of when an insurance claim is paid.
If a mortgagee to which the Secretary has made a delegation under this section violates the requirements and procedures established by the Secretary or the Secretary determines that other good cause exists, the Secretary may cancel a delegation of authority under this section to the mortgagee by giving notice to the mortgagee. Such a cancellation shall be effective upon receipt of the notice by the mortgagee or at a later date specified by the Secretary. A decision by the Secretary to cancel a delegation shall be final and conclusive and shall not be subject to judicial review.
Before approving a delegation under this section, the Secretary shall issue regulations establishing appropriate requirements and procedures, including requirements and procedures governing the indemnification of the Secretary by the mortgagee.
Source credit: (June 27, 1934, ch. 847, title II, § 256, as added Pub. L. 104–204, title IV, § 427, Sept. 26, 1996, 110 Stat. 2928.)
- 1934Enacted · Pub. L. 104-204 · 110 Stat. 2928
A history note hasn’t been published yet. The record shows enactment by Pub. L. 104-204 on 1934-06-27.
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