24 1 sioner if the mortgagor is also the contractor as defined by 2 the Commissioner, and other items of expense incidental to 3 development which may be approved by the Commissioner." 4 CONFORMING AMENDMENTS 5 SEC. 202. (a) Section 219 of the National Housing 6 Act is amended by inserting "the Land Development Insur7 ance Fund," after "the Apartment Unit Insurance Fund,". (b) Section 212 of the National Housing Act is 9 amended by inserting after the third sentence of subsection 8 10 11 12 13 14 15 16 17 18 19 20 21 222 23 (a) of such section the following new sentence: "The pro visions of this section shall also apply to insurance under title X with respect to laborers or mechanics employed in land development financed with the proceeds of any mortgage insured under that title." (c) Section 302 (b) of the Federal National Mortgage Association Charter Act is amended by (1) inserting “, section 1004,” after "section 220” in the first proviso; and (2) striking out "the term 'mortgages'" in the last sentence and substituting "the terms 'mortgages' and 'home mortgages'". (d) The first paragraph of section 24 of the Federal Reserve Act is amended by inserting before the last sentence the following new sentence: "Notwithstanding the limita25 tions and restrictions in this section, any national banking as 25 1 sociation may make loans for land development which are 2 secured by mortgages insured under title X of the National 3 Housing Act." 4 (e) Section 5 (c) of the Home Owners Loan Act of 5 1933 is amended by adding at the end thereof the following 6 7 new paragraph: "Without regard to any other provision of this subsec8 tion, any such association may, to such extent as the Federal 9 Home Loan Bank Board may by regulation permit, invest in 10 loans, and interests in loans, secured by mortgages as to 11 which the association has the benefit of insurance under 12 title X of the National Housing Act or of a commitment or 13 agreement for such insurance, and investments under this 14 sentence shall not be included in any percentage of assets re15 ferred to in this subsection." 16 ADDITIONAL RELIEF FOR HOME MORTGAGORS IN DEFAULT 17 18 DUE TO CIRCUMSTANCES BEYOND THEIR CONTROL SEC. 203. (a) Section 204 of the National Housing Act 19 is amended by striking out the fourth proviso in subsection 20 (a) and inserting in lieu thereof the following: “And pro21 vided further, That with respect to any mortgage covering a 22 one-, two-, three-, or four-family residence insured under this 23 Act, if the Commissioner finds, after notice of default, that 24 the default was due to circumstances beyond the control of 26 1 the mortgagor, he may, upon such terms and conditions as 2 he may prescribe, (1) approve the request of the mortgagee 3 for an extension of the time for the curing of the default and 4 of the time for commencing foreclosure proceedings or for 5 otherwise acquiring title to the mortgaged property to such 6 time as the Commissioner may determine is necessary and 7 desirable to enable the mortgagor to complete the mortgage payments, including an extension of time beyond the stated 9 maturity of the mortgage, and in the event of a subsequent 10 foreclosure or acquisition of the property by other means, 11 the Commissioner is authorized to include in debentures an 12 amount equal to any unpaid mortgage interest, or (2) approve a modification of the terms of the mortgage for the 13 14 purpose of changing the amortization provisions by recast15 ing, over the remaining term of the mortgage or over such 16 longer period as may be approved by the Commissioner, the 17 total unpaid amount then due, as determined by the Com18 missioner, with the modification to become effective currently 19 or to be come effective upon the termination of an agreedupon extension of the period for curing the default; and 21 the principal amount of the mortgage, as modified, shall be 22 considered to be the 'original principal obligation of the 23 mortgage' as that term is used in this Act for the purpose 24 of computing the total face value of the debentures to be 20 27 1 issued or the cash payment to be made by the Commissioner 2 3 to a mortgagee". (b) Section 230 of said Act is amended by striking out 4 the first sentence and inserting in lieu thereof the following: 5 "Upon receiving notice of the default of any mortgage cover6 ing a one-, two-, three-, or four-family residence heretofore 7 or hereafter insured under this Act, the Commissioner, in his 8 discretion, and for the purpose of avoiding foreclosure of the 9 mortgage, and notwithstanding the fact that he has previ10 ously approved a request of the mortgagee for an extension 11 of the time for curing the defaulted mortgage and of the time 12 for commencing foreclosure proceedings or for otherwise acquiring title to the mortgaged property, or has approved 14 a modification of the mortgage for the purpose of changing 15 the amortization provisions by recasting the unpaid balance, 13 may acquire the loan and security therefor upon payment of 17 the insurance benefits (by issuance to the mortgagee of 18 debentures, or by payment of cash or issuance of debentures 19 if the loan is insured under section 220, 221, or 233) in an 20 amount equal to the unpaid principal balance of the loan 21 plus any unpaid mortgage interest plus reimbursement for 22 such costs and attorney's fees as the Commissioner finds were 23 properly incurred in connection with the defaulted mortgage 24 and its assignment to the Commissioner, and for any proper 28 1 advances theretofore made by the mortgagee under the pro 2 visions of the mortgage. After the acquisition of such mort 3 gage by the Commissioner, the mortgagee shall have no fur 4 ther rights, liabilities, or obligations with respect thereto." 5 6 CORRECTION OF SUBSTANTIAL DEFECTS IN MORTGAGED HOMES 7 SEC. 204. Title V of the National Housing Act is 8 amended by adding at the end thereof the following new 9 section: 10 11 "EXPENDITURES TO CORRECT OR COMPENSATE FOR SUBSTANTIAL DEFECTS IN MORTGAGED HOMES 12 "SEC. 517. (a) The Commissioner is authorized, with 13 respect to any property improved by a one- to four-family 14 dwelling approved for mortgage insurance prior to the begin 15 16 17 18 19 920 ning of construction which he finds to have structural or other major defects affecting the livability of the property, to make expenditures for (1) correcting such defects; (2) paying the claims of the owner of the property arising from such defects; or (3) acquiring title to the property: Provided, That such authority of the Commissioner shall exist only (A) if the 21 owner has requested assistance from the Commissioner not 22 later than four years (or such shorter time as the Commis23 sioner may prescribe) after insurance of the mortgage, and 24 (B) with respect to property encumbered by a mortgage |