federal national mortgage association lending authority

federal national mortgage association lending authority Sec. 603. (a) Section 302(b) of the National Housing Act is amended by striking out “to make commitments” and all that follows down through the first colon and inserting in lieu thereof the following: “, pursuant to commitments or otherwise, to purchase, lend (under section 304) on the security of, service, sell, or otherwise deal in any mortgages which are insured under the National Housing Act, or which are insured or guaranteed under the Servicemen’s Readjustment Act of 1944 or chapter 37 of title 38, United States Code:”. (b) The first sentence of section 303(b) of such Act is amended by inserting immediately before the period at the end thereof the following: “; and by requiring each borrower to make such payments, equal to not more than one-half of 1 per centum of the amount lent by the Association to such borrower under section 304”. (c) Section 303(c) of such Act is amended by striking out the first sentence and by inserting in lieu thereof the following: “The Association shall issue from time to time, to each mortgage seller or borrower, its common stock (only in denominations of $100 or multiples thereof) evidencing any capital contributions (adjusted by reason of any payments into surplus required by the Association) made by such seller or borrower pursuant to subsection (b) of this section.” (d) Section 304(a) of such Act is amended by inserting “(1)” before “To carry out”, and by adding at the end thereof the following new paragraph: “(2) In the further interest of assuring sound operation, any loan made by the Association in its secondary market operations under 75 Stat. 177 this section, and any extension or renewal thereof, shall not exceed 80 per centum of the unpaid principal balances of the mortgages securing the loan, and shall bear interest at a rate consistent with general loan policies established from time to time by the Association’s board of directors. Any such loan shall mature in not more than twelve months and the term of any extension or renewal shall not exceed twelve months. The volume of the Association’s lending activities and the establishment of its loan ratios, interest rates, maturities, and charges or fees, in its secondary market operations under this section, should be determined by the Association from time to time; and such determinations, in conjunction with determinations made under paragraph (1), should be consistent with the objectives that the lending activities should be conducted on such terms as will reasonably prevent excessive use of the Association’s facilities, and that the operations of the Association under this section should be within its income derived from such operations and that such operations should be fully self-supporting. Notwithstanding any Federal, State, or other law to the contrary, the Association is hereby empowered, in connection with any loan under this section, whether before or after any default, to provide by contract with the borrower for the settlement or extinguishment, upon default, of any redemption, equitable, legal, or other right, title, or interest of the borrower in any mortgage or mortgages that constitute the security for the loan; and with respect to any such loan, in the event of default and pursuant otherwise to the terms of the contract, the mortgages that constitute such security shall become the absolute property of the Association.” (e) Section 304(b), section 309(c) and section 310 of such Act are each amended by inserting “or other security holdings” after “mortgages”.