PAYMENT OF CLAIMS ON LOSSES FROM PREFORECLOSURE SALES.

SEC. 1064. PAYMENT OF CLAIMS ON LOSSES FROM PREFORECLOSURE SALES. (a) In General.— The second sentence of section 204(a) of the National Housing Act (12 U.S.C. 1710(a)) is amended— (1) by inserting “(A)” after “(1)”; and (2) by striking “, and (2)” and inserting the following: “, or (B) upon the sale of the insured property by the mortgagor after default, if (i) the sale has been approved by the Secretary,.(ii) the mortgagee receives an amount at least equal to the fair market value of the property (with appropriate adjustments), as determined by the Secretary, and (iii) the mortgagor has received appropriate homeownership counseling, as determined by the Secretary; and (2)”. (b) Conforming Amendments.— (1) Applicability.— Section 204(a) of the National Housing Act (12 U.S.C. 1710(a)) is amended in the third sentence by striking “the effective date of this sentence” and inserting the following: “November 30, 1983 (on or after the date of the enactment of the Stewart B. McKinney Homeless Assistance Amendments Act of 1988, with respect to the payment of benefits under clause (1)(B) of the preceding sentence)”. (2) Cross-references.— (A) Section 204(a) of the National Housing Act (12 U.S.C. 1710(a)) is amended immediately before the first proviso in the fifth sentence by striking “foreclosure”. (B) Section 204(j) of the National Housing Act (12 U.S.C. 1710(j)) is amended by inserting “clause (1)(A) of” before “the second sentence”. (c) Regulations.— In developing regulations to carry out the amendments made by this section, the Secretary of Housing and Urban Development may delegate to mortgagees the authority to make determinations on behalf of the Secretary, and the Secretary shall rely on certifications and post audit reviews to the greatest extent possible.