changes in fha insurance benefits and simplification of payment procedures

changes in fha insurance benefits and simplification of payment procedures Sec. 105. (a) Section 204 of the National Housing Act is amended by— (1) striking out in the third sentence of subsection (a) the words “insurance on the mortgaged property, and any mortgage insurance premiums paid after either of such dates” and inserting in lieu thereof the following: “charges for the administration, operation, maintenance and repair of comm unity-owned property or the maintenance and repair of the mortgaged property, the obligation for which arises out of a covenant filed for record and approved by the Commissioner prior to the insurance of the mortgage, insurance on the mortgaged property, and any mortgage insurance premiums”; (2) inserting after the colon following the second proviso of subsection (a) two additional provisos as follows: “And provided further, That with respect to a mortgage accepted for insurance pursuant to a commitment issued on or after the date of enactment of the Housing Act of 1964, the Commissioner may include in debentures or in the cash payment an amount not to exceed the foreclosure, acquisition, and conveyance costs actually paid by the mortgagee and approved by the Commissioner: And provided, further, That with respect to a mortgage accepted for insurance pursuant to a commitment issued prior to the date of enactment 78 Stat. 771of the Housing Act of 1964, the Commissioner may, with the consent of the mortgagee (in lieu of issuing a certificate of claim as provided in subsection (e)), include in debentures or in the cash payment, in addition to amounts otherwise allowed for such costs? an amount not to exceed one-third of the total foreclosure, acquisition, and conveyance costs actually paid by the mortgagee and approved by the Commissioner, but in no event may the total allowance for such costs exceed the amount actually paid by the mortgagee;” (3) striking out “and the payment of insurance premiums” in the third proviso in subsection (a) (as numbered prior to the amendment made by paragraph (2)), and by inserting before the colon at the end of such proviso the following: “: And provided further, That where the claim is paid in cash there shall be included in the cash payment an amount equivalent to the compensation for loss of debenture interest that would be included in computing debentures if such claim were being paid in debentures”; (4) striking out “$50” in the second sentence of subsection (c) and inserting m lieu thereof “$350”; (5) striking out in the second sentence of subsection (d) “, except that debentures issued pursuant to the provisions of section 220(f), section 221(g), and section 233 may be dated as of the date the mortgage is assigned (or the property is conveyed) to the Commissioner, and” and inserting in lieu thereof “Provided, That debentures issued pursuant to claims for insurance filed on or after the date of enactment of the Housing Act of 1964 shall be dated as of the date of default or as of such later date as the Commissioner, in his discretion, may establish by regulation. The debentures”; (6) (A) inserting “(1)” after “(e)” in subsection (e); striking out “The certificate” in such subsection and inserting in lieu thereof “Subject to paragraph (2), the certificate”; and adding at the end of such subsection a new paragraph as follows: “(2) A certificate of claim shall not be issued and the provisions of paragraph (1) of this subsection shall not be applicable in the case of a mortgage accepted for insurance pursuant to a commitment issued on or after the date of enactment of the Housing Act of 1964.”; (B) striking out “and a certificate of claim” in the second sentence of subsection (a) and inserting in lieu thereof “and (subject to subsection (e) (2)) a certificate of claim”: (7) striking out the first paragraph of subsection (f) and inserting in lieu thereof the following: “(f) (1) If, after deducting (in such manner and amount as the Commissioner shall determine to be equitable and in accordance with sound accounting practice) the expenses incurred by the Commissioner, the net amount realized from any property conveyed to the Commissioner under this section and the claims assigned therewith exceed the face value of the debentures issued and the cash paid in exchange for such property plus all interest paid on such debentures, such excess shall be divided as follows:”; (8) redesignating the second paragraph of subsection (f) as paragraph (i), and striking out “207; and” at the end of the paragraph and inserting in lieu thereof the following: “207: Provided, That on and after the date of enactment of the Housing Act of 1964, any excess remaining after payment to the holder of the full amount of the certificate of claim, together with the accrued interest increment thereon, shall be retained by 78 Stat. 772 the Commissioner and credited to the applicable insurance fund; and”; (9) redesignating the third paragraph of subsection (f) as paragraph (ii); (10) designating the last paragraph of subsection (f) as paragraph (2) and inserting the following before the period at the end thereof: “: Provided, That the settlement authority created by the Housing Amendments of 1955 shall be terminated with respect to any certificates of claim outstanding as of the date of enactment of the Housing Act of 1964”; and (11) inserting at the end of subsection (f) a new paragraph as follows: “(3) With the consent of the holder thereof, the Commissioner is authorized, without awaiting the final liquidation of the Commissioner’s interest in the property, to settle any certificate of claim issued pursuant to subsection (e), with respect to which settlement had not been effected prior to the date of enactment of the Housing Act of 1964, by making payment in cash to the holder thereof of such amount not exceeding the face amount of the certificate of claim, together with the accrued interest thereon, as the Commissioner may consider appropriate: Provided, That in any case where the certificate of claim is settled in accordance with the provisions of this paragraph, any amounts realized after the date of enactment of the Housing Act of 1964, in the liquidation of the Commissioner’s interest in the property, shall be retained by the Commissioner and credited to the applicable insurance fund.” (b) Section 207(g) of such Act is amended by adding at the end thereof the following: “Notwithstanding any other provision of this Act, upon receipt, after the date of enactment of the Housing Act of 1964, of an application for insurance benefits on a mortgage insured under this Act, the Commissioner may terminate the mortgagee’s obligation to pay premium charges on the mortgage.” (c) (1) Sections 203(k), 220(f) (3), 220(h) (6), and 233(g) of such Act are each amended by adding at the end thereof the following: “If the insurance payment is made in cash, there shall be added to such payment an amount equivalent to the interest which the debentures would have earned, computed to a date to be established pursuant to regulations issued by the Commissioner.” (2) Section 221(g)(3) of such Act is amended by striking out “; or” at the end thereof and inserting in lieu thereof a period and the following: “If the insurance is paid in cash, there shall be added to such payment an amount equivalent to the interest which the debentures would have earned, computed to a date to be established pursuant to regulations issued by the Commissioner.” (d) Section 604 of the National Housing Act is amended by— (1) inserting after the colon following the first proviso in subsection (a) an additional proviso as follows: “Provided further, That with respect to any debentures issued on or after the date of enactment of the Housing Act of 1964, the Commissioner may, with the consent of the mortgagee (in lieu of issuing a certificate of claim as provided in subsection (e)), include in debentures, in addition to amounts otherwise allowed for such costs, an amount not to exceed one-third of the total foreclosure, acquisition, and conveyance costs actually paid by the mortgagee and approved by the Commissioner, but in no event may the total allowance for such costs exceed the amount actually paid by the mortgagee:”; (2) striking out “$50” in the. second sentence of subsection (c) and inserting in lieu thereof “$350”; 78 Stat. 773 (3) striking out “default, and” in the second sentence of subsection (d) and inserting in lieu thereof the following: “default, except that debentures issued pursuant to claims for insurance filed on or after the date of enactment of the Housing Act of 1964, shall be dated as of the date of default or as of such later date as the Commissioner, in his discretion, may establish by regulation. The debentures”; (4) striking out the first paragraph of subsection (f) and inserting in lieu thereof the following: “(f) (1) If, after deducting (in such manner and amount as the Commissioner shall determine to be equitable and in accordance with sound accounting practice.) the expenses incurred by the Commissioner, the net amount realized from any property conveyed to the Commissioner under this section and the claims assigned therewith exceed the face value of the debentures issued and the cash paid in exchange for such property plus all interest paid on such debentures, such excess shall be divided as follows:”; (5) redesignating the second paragraph of subsection (f) as paragraph (i), and striking out “property; and” at the end of the paragraph and inserting in lieu thereof the following: “property: Provided, That on and after the date of enactment of the Housing Act of 1964, any excess remaining after payment to the holder of the full amount of the certificate of claim shall be retained by the Commissioner and credited to the War Housing Insurance Fund; and”; (6) redesignating the third paragraph of subsection (f) as paragraph (ii); (7) designating the last paragraph of subsection (f) as paragraph (2) and inserting the following before the period at the end thereof: “: Provided, That the settlement authority created by the Housing Amendments of 1955 shall be terminated with respect to any certificate of claim outstanding as of the date of enactment of the Housing Act of 1964”: and (8) inserting at the end of subsection (f) a new paragraph as follows: “(3) With the consent of the holder thereof, the Commissioner is authorized to settle, without awaiting the final liquidation of the Commissioner’s interest in the property, any certificate of claim issued pursuant to subsection (e), with respect to which a settlement had not been effected prior to the date of enactment of the Housing Act of 1964, by making payment in cash to the holder thereof of such amount, not exceeding the face amount of the certificate of claim, together with the accrued interest increment thereon, as the Commissioner may consider appropriate: Provided, That in any case where the certificate of claim is settled in accordance with the provisions of this paragraph, any amounts realized after the date of enactment of the Housing Act of 1964, in the liquidation of the Commissioner’s interest in the property, shall be retained by the Commissioner and credited to the applicable insurance fund.” (e) Section 904 of such Act is amended by— (1) inserting after the colon following the first proviso in subsection (a) an additional proviso as follows: “Provided further, That with respect to any debentures issued on or after the date of enactment of the Housing Act of 1964, the Commissioner may, with the consent of the mortgagee ( in lieu of issuing a certificate of claim as provided in subsection (e)), include in debentures, in addition to amounts otherwise allowed for such costs, an amount not to exceed one-third of the total foreclosure, acquisition, and conveyance costs actually paid by the mortgagee and approved 78 Stat. 774by the Commissioner, but in no event may the total allowance for such costs exceed the amount, actually paid by the mortgagee:”; (2) striking out “$50” in the second sentence of subsection (c) and inserting in lieu thereof “$350”; and (3) striking out “default, and” in the second sentence of subsection (d) and inserting in lieu thereof the following: “default, except that debentures issued pursuant to claims for insurance tiled on or after the date of enactment of the Housing Act of 1964 shall be dated as of the date of default or as of such later date as the Commissioner, in his discretion, may establish by regulation. The debentures”. (f) Sections 604 and 904 of such Act are each amended by striking out in the third sentence of subsection (a) “paid after either of such dates”.