special risk insurance fund

special risk insurance fund Sec. 104. (a) Title II of the National Housing Act is amended by adding after section 237 (as added by section 102 of this Act) the following new section: 82 Stat. 487 “payment of insurance—special risk insurance fund “Sec. 238. (a) (1) Any mortgagee under a mortgage insured under section 235 (i), 235 (j) (4), or 237 shall be entitled to receive the benefits of the insurance as provided in section 204(a) with respect to mortgage insured, under section 203. The provisions of subsections (b), (c), (d), (g), (j), and (k) of section 204 shall be applicable to mortgages insured under section 235(i), 235(j) (4), or 237, except that all references therein to the ‘Mutual Mortgage Insurance Fund’ shall be construed to refer to the ‘Special Risk Insurance Fund’, and all references therein to section 203 shall be construed to refer to section 235(i),285(j) (4), or 237, as may be appropriate. “(2) Any mortgagee under a mortgage insured under section 235 (j) (1) or 236 shall be entitled to receive the benefits of insurance as provided in section 207(g) with respect to mortgages insured under section 207. The provisions of subsections (d), (e), (h), (i), (j), (k), (1), and (n) of section 207 shall be applicable to mortgages insured under section 235 (j) (1) or 236, except that all references therein to the ‘General Insurance Fund’ shall be construed to refer to the ‘Special Risk Insurance Fund’ and the premium charge provided in section 207(d) shall be payable only in cash or debentures of the Special Risk Insurance Fund. “(3) In lieu of the amount of insurance benefits computed pursuant to paragraph (1) or (2) of this subsection the Secretary, in his discretion and in accordance with such regulations as he may prescribe, may (with respect to any mortgage loan acquired by him) compute and pay insurance benefits to the mortgagee in a total amount equal to the unpaid principal balance of the loan plus any accrued interest and any advances approved by the Secretary and made previously by the mortgagee under the provisions of the mortgage. “(b) There is hereby created a Special Risk Insurance Fund (hereinafter referred to as the ‘fund’) which shall be used by the Secretary as a revolving fund for carrying out the mortgage insurance obligations of sections 223(e), 233(a) (2), 235, 236, and 237, and the Secretary is hereby authorized to advance to the fund the sum of $5,000,000 from the General Insurance Fund established pursuant to the provisions of section 519. Such advance shall be repayable at such times and at such rates of interest as the Secretary deems appropriate. Premium charges, adjusted premium charges, inspection and other fees, service charges, and any other income received by the Secretary under sections 223(e), 233(a) (2), 235, 236, and 237, together with all earnings on the assets of the fund, shall be credited to the fund. All payments made pursuant to claims of mortgagees with respect to mortgages insured under sections 233(a) (2), 235, 236, and 237 or pursuant to section 223(e), cash adjustments, the principal of and interest paid on debentures which are the obligation of the fund, expenses incurred in connection with or as a consequence of the acquisition and disposal of property acquired under such sections, and all administrative expenses in connection with the mortgage insurance, operations under such sections shall be paid out of the fund. There is authorized to be appropriated such sums as may be needed from time to time to cover losses sustained by the fund in carrying out the mortgage insurance obligations of sections 223(e), 233(a) (2), 235, 236, and 237. Moneys in the fund not needed for current operations of the fund shall be deposited with the Treasurer of the United States to the credit of the fund or invested in bonds or other obligations of, or in bonds or other obligations guaranteed by, the United States. The Secretary, with the approval of the Secretary of the Treasury, may purchase in the open 82 Stat. 488market debentures which are the obligation of the fund. Such purchases shall be made at a price which will provide an investment yield of not less than the yield obtained from other investments authorized by this section. Debentures so purchased shall be canceled and not reissued.” (b) Section 224 of such Act is amended by striking out, “or section 233” and inserting in lieu thereof “section 233, or section 238”. (c) Section 519(e) of such Act is amended by inserting after “section 213(k)” the following: “, or the provisions of sections 223(e), 233(a) (2), 235, 236 and 237”.