124 1 2 determined by the Secretary to be acceptable and reasonable. 3 Where a factory-manufactured house or major housing com4 ponent is furnished by a subcontractor or supplier having 5 an identity of interest with the mortgagor or builder, an 6 amount representing the Secretary's estimate of the market 7 value of such factory-manufactured house or major housing 8 component shall be included for purposes of clause (1) of 9 this subsection in lieu of the actual cost of such factory10 manufactured house or major component. 11 (b) The Secretary shall require that the mortgagor 12 certify as to the actual cost to the mortgagor of construction 13 or rehabilitation, and may require such additional certifica14 tions of actual cost by such other parties as he may consider 15 necessary to carry out the intent of this section. The Secre16 tary may exempt from the requirements of this section 17 mortgagors under a mortgage on a property or project 18 designed principally for residential use for twelve or fewer 19 families or where the mortgage amount to be insured is less 20 than $250,000. Certifications required pursuant to this sec21 tion shall be accompanied by such data and records as the 22 Secretary shall prescribe. Upon approval by the Secretary, 23 the certification required by this section shall be final and 24 incontestable, except for fraud or material misrepresentation 25 on the part of the mortgagor. 125 1 2 3 4 5 6 co 7 8 9 10 11 12 (c) As used in this section (1) The term "approved percentage" means the percentage figure which, under applicable provisions of this Act, the Secretary applies to his estimate of value, cost, or replacement cost, as the case may be, of the property or project to determine the maximum insurable mortgage amount. (2) The term "actual cost" means the costs (exclusive of rebates or discounts) to the mortgagor of the improvements involved. These costs may include amounts paid for labor, materials, construction contracts, engineer's and architect's fees, off-site public utilities, 13 streets, organizational and legal expenses, taxes and 23 17 SEC. 507. (a) The Secretary shall not insure any mort18 gage or loan under this title involving new or rehabili19 tated property, except a mortgage covering multifamily 20 housing designed for use by less than eight families, unless 21 the principal contractor provides adequate assurances to the 22 Secretary that all laborers and mechanics employed by con23 tractors or subcontractors in the construction of the project or 24 facility have been paid wages at not less than those pre25 vailing on similar construction in the locality as determined 126 1 by the Secretary of Labor in accordance with the Davis2 Bacon Act, as amended (40 U.S.C. 276a-276a-5). The 3 Secretary of Labor shall have, with respect to the labor 4 standards specified in this section, the authority and functions 5 set forth in Reorganization Plan Numbered 14 of 1950 (64 6 Stat. 1267), and section 2 of the Act of June 13, 1934 (40 7 U.S.C. 276c). 8 (b) The Secretary may waive compliance with this 9 section in any case where prospective owners of the dwell10 ings involved, or other persons, voluntarily donate their 11 services without compensation or where laborers or mechan12 ics, not otherwise employed at any time on the project, 13. voluntarily donate their services without full compensation 14 for the purpose of lowering the costs of construction or re15 habilitation, and the Secretary determines that any amounts 16 thereby saved are fully credited to the mortgagor undertak17 ing the construction or rehabilitation. 18 TITLE VI-INSURANCE CLAIMS 19 HOME MORTGAGE INSURANCE CLAIM SETTLEMENT 225 20 SEC. 601. (a) To be entitled to receive the benefits of the 21 insurance, where there has been a default in mortgage pay 22 ments by the mortgagor, a mortgagee holding a home mort23 gage insured under one of the sections of title IV shall either 24 foreclose the mortgage and take possession of the property 25 within a period of time prescribed by the Secretary and in 6 127 1 accordance with regulations issued by the Secretary or (with 2 the consent of the Secretary) otherwise acquire title and 3 possession of such property. Upon acquisition of the property, 4 the mortgagee shall (1) promptly convey to the Secretary 5 title to the property which meets the requirements of rules and regulations of the Secretary in force at the time the 7 mortgage was insured, and which is evidenced in the manner 8 prescribed by such rules and regulations, and (2) assign to 9 him all claims of the mortgagee against the mortgagor or 10 others, arising out of the mortgage transaction or foreclosure 11 proceedings, except such claims as may have been released 12 with the consent of the Secretary. In lieu of obtaining title 13 and conveying title to the Secretary, the mortgagee may 14 (with the approval of the Secretary) tender title and trans15 fer possession directly from the mortgagor or other ap16 propriate grantor. The Secretary shall pay the mortgagee's 17 insurance claim in an amount equal to the value of the mortgage. 18 19 (b) For the purposes of this section, the value of the 20 mortgage shall be determined (in accordance with rules and 21 regulations prescribed by the Secretary) by adding to and 22 deducting from the original principal obligation of the mort23 gage which was unpaid on the date of the institution of 24 foreclosure proceedings, or on the date of the acquisition of 128 1 the property after default other than by foreclosure, certain 2 items specified in subsections (c) through (e). 3 (c) There shall be added to such unpaid principal all 4 payments which have been made by the mortgagee for— (1) taxes, ground rents, and water rates, which are 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 liens prior to the mortgage; (2) special assessments which are noted on the application for commitment or which become liens after the insurance of the mortgage; (3) charges for the administration, operation, maintenance, and repair of community-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 Secretary prior to the insurance of the mortgage; (4) insurance on the property; (5) mortgage insurance premium; (6) the protection, operation, or preservation of the property (and the Secretary has approved such payments); and (7) any taxes imposed upon any deed or any instrument by which the property was acquired by the mortgagee and transferred or conveyed to the Secretary. 24 In addition to the foregoing, there may be added an amount 25 not to exceed the foreclosure, acquisition, and conveyance |