payable clause substituting the Commissioner as the holder of the security instrument; (5) The assignment to the Commissioner of all rights and interests arising under the note and security instrument or instruments so in default, and all claims of the lender against the borrower or others arising out of the loan transaction; (6) All policies of title or other insurance or surety bonds, or other guarantees and any and all claims thereunder; including evidence satisfactory to the Commissioner that the original title coverage has been extended to include the assignment of the note and the security instrument or instruments to the Commissioner; (7) Any balance of the loan not advanced to the borrower; (8) Any cash or property held by the lender or its agents or to which it is entitled; including deposits made for the account of the borrower and which have not been applied in reduction of the principal obligation under the note and security instrument or instruments; (9) All records, ledger cards, documents, books, papers and accounts relating to the loan transaction; (10) Any additional information or data which the Commissioner may require. (d) Claim computation. Upon an acceptable assignment of the note and security instrument, the Commissioner shall pay the claim of the lender in cash, in debentures or in a combination of both, as determined by the Commissioner at the time of payment. The payment shall be in an amount equal to the unpaid principal balance of the supplementary loan plus: (1) Any accrued interest due on the supplementary loan as of the date of execution of its assignment to the Commissioner; (2) Any advance made previously under the provisions of the loan instrument and approved by the Commissioner; (3) Reimbursement for such reasonable collection costs, court costs, and attorney's fees as may be approved by the Commissioner; (4) An amount equivalent to the debenture interest which would have been earned on the portion of the insurance benefits paid in cash, as of the date such cash payment is made, except that when the lender fails to meet any one of the applicable requirements of paragraphs (b) and (c) of this section within the specified time and in a manner satisfactory to the Commissioner (or within such further time as the Commissioner may approve in writing), the interest allowance in such cash payment shall be computed only to the date on which the particular required action should have been taken or to which it was extended. (e) Debenture interest. The debentures shall bear interest as provided in § 207.259(e)(6) of this chapter. (f) Maturity of debentures. Debentures shall mature 20 years from the date of issue. (g) Registration of debentures. Debentures shall be registered as to principal and interest. (h) Denomination of debentures. Debentures shall be issued in multiples of $50 and any difference not in excess of $50 between the amount of debentures to which the lender is otherwise entitled hereunder and the aggregate face value of the debentures issued shall be paid in cash by the Commissioner to the lender. (i) Redemption of debentures. Debentures shall, at the option of the Commissioner and with the approval of the Secretary of the Treasury, be redeemable at par plus accrued interest on any semiannual interest payment date on 3 months' notice of redemption given in such manner as the Commissioner shall prescribe. The debenture interest on the debentures called for redemption shall cease on the semiannual interest payment date designated in the call notice. The Commissioner may include with the notice of redemption an offer to purchase the debentures at par plus accrued interest at any time during the period between the notice of redemption and the redemption date. If the debentures are purchased by the Commissioner after such call and prior to the named redemption date, the debenture interest shall cease on the date of purchase. (j) Issue date of debentures. The debentures shall be issued as of the date of the execution of the assignment of the supplementary loan in accordance with the requirements of paragraph (c)(3) of this section. COOPERATIVE MANAGEMENT HOUSING INSURANCE AND DISTRIBUTIVE SHARES § 213.275 Nature of the Cooperative The Cooperative Management Housing Insurance Fund shall consist of the General Surplus Account and the Participating Reserve Account. § 213.276 Allocation of Cooperative Management Housing Insurance Fund income or losses. For any semiannual period in which Cooperative Management Housing Insurance Fund operations shall result in a net income, or loss, the Commissioner shall allocate such net income or such loss to the General Surplus Account, to the Participating Reserve Account, or to both, as he may determine to be in accordance with sound actuarial and accounting practice. In determining net income or loss, the Commissioner shall take into consideration all income received from fees, premiums, and earnings on investments of the Fund, operating expenses, and provision for losses of the Fund. § 213.277 Right and liability under the Cooperative Management Housing Insurance Fund. No mortgagor or mortgagee shall have any vested right in a credit balance in either the General Surplus Account or the Participating Reserve Account. No mortgagor or mortgagee shall be subject to any liability arising under the mutuality of the Cooperative Management Housing Insurance Fund. § 213.278 Distribution of distributive share. When the contract of insurance is terminated by reason of payment in full of the mortgage or by voluntary termination approved by the Commissioner, and at such time or times prior to such termination as the Commissioner may approve, the Commissioner may distribute to a mortgagor under a mortgage that is the obligation of the Cooperative Management Housing Insurance Fund a share of the Participat ing Reserve Account in such manner and amount as he shall determine to be equitable and in accordance with sound actuarial and accounting practice. § 213.279 Maximum amount of distributive share. In no event shall a distributive share of the Participating Reserve Account exceed the aggregate paid scheduled annual premiums of the mortgagor paid to the year of termination of the insurance or to the year of payment of the share, if paid prior to termination. § 213.280 Finality of determination. The determination of the Commissioner as to the amount to be paid to any mortgagor from the Cooperative Management Housing Insurance Fund shall be final and conclusive. Subpart C-Individual Properties Released From Project Mortgage; Expiring Program § 213.501 Savings clause. No new loans are being insured under the Cooperative Housing Mortgage Insurance Program for individual properties released from a project mortgage. Any existing insured loans on individual properties released from a project mortgage under this program will continue to be governed by the regulations on eligibility requirements, contract rights and obligations, and servicing responsibilities in effect as they existed immediately before December 26, 1996. [61 FR 60160, Nov. 26, 1996] PART 219-FLEXIBLE SUBSIDY PROGRAM FOR TROUBLED PROJECTS Sec. 219.1 Program operations. 219.2 Savings provision. AUTHORITY: 12 U.S.C. 1715z-la; 42 U.S.C. 3535(d). SOURCE: 61 FR 14405, Apr. 1, 1996, unless otherwise noted. § 219.1 Program operations. Effective May 1, 1996, the Flexible Subsidy Program for Troubled Projects will be governed and operate under the statutory provisions codified at 12 U.S.C. 1715z-la, under the administrative policies and procedures contained in any applicable HUD Handbooks, and other administrative bulletins and notices as the Department may issue from time to time. § 219.2 Savings provision. Part 219, as it existed immediately before May 1, 1996, (contained in the April 1, 1995 edition of 24 CFR, parts 200 to 219) will continue to govern the rights and obligations of housing owners, tenants, and the Department of Housing and Urban Development with respect to units and projects assisted under the Flexible Subsidy Program for Troubled Projects prior to May 1, 1996. A list of any amendments to this part published after the CFR revision date is available from the Office of the Rules Docket Clerk, Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410.3 220.834 220.836 Form and amounts of debentures. 220.838 Redemption of debentures. 220.840 Issue date of debentures. 220.842 Cash adjustment. (a) All of the provisions of subpart B, part 203 of this chapter covering mortgages insured under section 203 of the National Housing Act apply to mortgages covering 1- to 11-family dwellings insured under section 220 of the National Housing Act, except the following: 220.501 Eligibility requirements. Subpart D-Contract Rights and Obligations-Projects Sec. 203.258 PROJECT MORTGAGE INSURANCE Substitute mortgagors. One-time MIP. Calculation of one-time MIP. 203.282 Mortgagee's late charge and interest. 203.283 Refund of one-time MIP. 203.340 Conditions of special forbearance relief. 203.342 Recasting of mortgage. 203.343 Partial release, addition or substitution of security. 203.350 Assignment of defaulted mortgage ingeneral. 203.350a Assignment of defaulted mortgage. 203.351 Application for insurance benefits and fiscal data. 203.353 Certification by mortgagee. 203.400 Method of payment. 203.402a Reimbursement for uncollected in terest. 203.420 Nature of Mutual Mortgage Insurance Fund. 203.421 Allocation of Mutual Mortgage Insurance Fund income or loss. 203.422 Right and liability under Mutual Mortgage Insurance Fund. 203.423 Distribution of distributive shares 203.424 Maximum amount of distributive shares. 203.425 Finality of determination. 203.438 Mortgages on Indian land insured pursuant to section 248 of the National Housing Act. 203.439 Mortgages on Hawaiian home lands insured pursuant to section 247 of the National Housing Act. 203.439a Mortgages on property in Allegany Reservation of Seneca Nation of Indians authorized by section 203(q) of the National Housing Act. (b) For the purposes of this subpart, all references in part 203 of this chapter to section 203 of the act shall be construed to refer to section 220 of the act, and all references to the Mutual Mortgage Insurance Fund shall be construed to refer to the General Insurance Fund. [36 FR 24573, Dec. 22, 1971, as amended at 42 FR 29304, June 8, 1977; 48 FR 28807, June 23, 1983; 51 FR 21874, June 16, 1986; 52 FR 8069, Mar. 16, 1987; 52 FR 28470, July 30, 1987; 52 FR 48203, Dec. 21, 1987; 53 FR 9869, Mar. 28, 1988; 55 FR 34808, Aug. 24, 1990] § 220.252 Forbearance of foreclosure and assignment of mortgage. All of the provisions of §§ 203.340 through 203.342, 203.350, 203.352 and 203.353 of this chapter shall apply to mortgages insured under this subpart, except that the provisions relating to forbearance of foreclosure, recasting of the mortgage and assignment of a defaulted mortgage, shall be applicable only to a mortgage covering a property having not more than four dwelling units. § 220.253 Substitute mortgagors. (a) Selling mortgagor. The mortgagee may effect the release of a mortgagor from personal liability on the mortgage note only if it obtains the Commissioner's approval of a substitute mortgagor, as provided by this section. (b) Purchasing mortgagor. (1) The Commissioner may approve a substitute mortgagor with respect to any mortgage insured under subpart A of this part, if the substitute mortgagor is to occupy the dwelling as a principal residence or a secondary residence (as these terms are defined in § 220.30(d)). (2) The Commissioner may approve as a substitute mortgagor an eligible nonoccupant mortgagor (as defined in § 220.30(d)) with respect to any mortgage insured under this part, only if the outstanding balance of the mortgage does not exceed the Commissioner's estimate of: (i) The replacement cost of the property as of the date the mortgage was originally accepted for insurance, or the date the substitute mortgagor is approved by the Commissioner, which ever is greater, in the case of a dwelling described in §220.30(a) (1) or (2); or (ii) The cost of repair or rehabilitation, plus the Commissioner's estimate of the replacement cost of the property as of either the date the mortgage was originally accepted for insurance, or the date the substitute mortgagor is approved by the Commissioner, whichever is greater, in the case of a dwelling described in § 220.30(a) (3) or (4). (c) Applicability—current mortgagor. Paragraph (b) of this section applies to the Commissioner's approval of a substitute mortgagor, only if the mortgage executed by the original mortgagor met the conditions of § 203.258(c) of this chapter. (d) Applicability-earlier mortgagor. The occupancy and similar requirements set forth in § 203.258(d) of this chapter apply to mortgages insured under subpart A of this part. (e) Mortgagees approved for participation in the Direct Endorsement program under §203.3 may, subject to limitations established by the Commissioner, themselves approve an appropriate substitute mortgagor under this section for mortgages which they own or service, and need not obtain further specific approval from the Commissioner. (f) Definition. As used in this section, the term substitute mortgagor includes: (1) Persons who, upon the release by a mortgagee of a previous mortgagor from personal liability on the mortgage note, assume this liability and agree to pay the mortgage debts; and (2) persons who purchase without assuming liability on the mortgage note, or purchase where no release is given by the mortgagee to the previous mortgagor. [55 FR 34808, Aug. 24, 1990, as amended at 57 FR 58351, Dec. 9, 1992] (a) All of the provisions of §§ 203.440 through 203.495 of this chapter covering insured home improvement loans under section 203(k) of the Act shall apply to home improvement loans on one-tofour family dwellings under section 220(h) of the Act, except as set out in paragraph (b). (b) The provisions of §§ 203.473(a) shall not be applicable to home improvement loans on one-to-four family dwellings under section 220(h) of the Act. [52 FR 1330, Jan. 13, 1987] Subpart C-Eligibility $ 220.501 Eligibility requirements. The requirements set forth in 24 CFR part 200, subpart A, apply to multifamily project mortgages insured under section 220 of the National Housing Act (12 U.S.C. 1715k), as amended. [61 FR 14405, Apr. 1, 1996] Subpart D-Contract Rights and Obligations-Projects PROJECT MORTGAGE INSURANCE § 220.751 Cross-reference. (a) All of the provisions of subpart B, part 207 of this chapter, covering mortgages insured under section 207 of the National Housing Act, apply with full force and effect to multifamily project mortgages insured under section 220 of the National Housing Act, except the following provisions: Sec. 207.259 Insurance benefits. 207.256b Modification of mortgage terms. (b) For the purposes of the portion of this subpart, covering multifamily project mortgages, all references in part 207 of this chapter to section 207 of the National Housing Act shall be deemed to refer to section 220 of the National Housing Act. $ 220.753 Forbearance relief. (a) In a case where the mortgage is in default, the mortgagor and the mortgagee may enter into a forbearance agreement for the reduction or suspension of regular mortgage payments for a specified period of time, if the following requirements are met: (1) The mortgage was endorsed for insurance on or after July 7, 1961. (2) The Commissioner determines that the default was due to circumstances beyond the mortgagor's control and that the mortgage probably will be restored to good standing within a reasonable period of time and evidences such determination by written approval of the forbearance agreement. (b) The time specified in § 207.258(a) of this chapter, within which a mortgagee shall give the Commissioner written notice of its intention to file an insurance claim, shall be suspended for the period of time specified in the forbearance agreement as long as the mortgagor complies with the requirements of such agreement. |