129 1 costs approved by the Secretary, including payments made 2 by the mortgagee for the cost of acquiring the property and 3 conveying and evidencing title to the property to the 4 Secretary. 5 (d) There shall be deducted from such unpaid principal 6 any amounts received by the mortgagee, after the institution 7 of foreclosure (or after the acquisition of the property by 8 means other than foreclosure) which 9 10 11 12 17 (1) were paid on account of the mortgage; or (2) were collected as rental or other income from the property, less reasonable expenses incurred in handling the property; 13 plus 2 per centum of the unpaid balance of the original 14 principal obligation if the mortgagee failed to request an 15 extension of the time for the curing of the default and, where 16 appropriate, a modification of the terms of the mortgage. (e) With respect to mortgages to which the provisions 18 of sections 302 and 306 of the Soldiers' and Sailors' Civil 19 Relief Act of 1940 apply, there shall be included in the 20 insurance settlement an amount which the Secretary finds 21 to be sufficient to compensate the mortgagee for any loss 22 which it may have sustained on account of interest on 23 debentures by reason of its having postponed the institution 24 of foreclosure proceedings or the acquisition of the property 130 1 by other means during any part or all of the period of mili2 tary service and three months thereafter. 3 (f) Insurance claims shall be paid by the Secretary, in 4 his discretion, with cash or debentures or by a combination. 5 of cash and debentures. 6 (g) Where the claim is paid in cash, it shall be in an 7 amount equivalent to the face value of the debentures that 8 would otherwise be issued plus an amount equivalent to the 9 interest which the debentures would have earned, computed 10 to the date to be established pursuant to regulations issued 11 by the Secretary. 12 13 FORBEARANCE OF PAYMENTS SEC. 602. With respect to a home mortgage, if the Sec14 retary finds, after notice of default, that the default was due 15 to circumstances beyond the control of the mortgagor, he 16 may 17 18 19 20 21 22 23 24 25 (1) approve the request of the mortgagee for an extension of the time for the curing of the default and of the time for commencing foreclosure proceedings or for otherwise acquiring title to the mortgaged property to such time as the Secretary may determine is necessary and desirable to enable the mortgagor to complete the mortgage payments. Such extension of time may be beyond the stated maturity of the mortgage. Where there has been an extension of time and there is a sub 24-038 0-74 pt. 1 - 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 22 21 131 sequent foreclosure (or acquisition of the property by other means), the Secretary is authorized to include in the insurance settlement an amount equal to any unpaid mortgage interest; or (2) approve a modification of the terms of the mortgage for the purpose of changing the amortization provisions by recasting, over the remaining term of the mortgage or over such longer period as may be approved by the Secretary; the total unpaid amount then due, as determined by the Secretary. Such modification may become effective currently or become effective upon the termination of an agreed-upon extension of the period for curing the default. The principal amount of the mortgage, as modified, shall be considered to be the "original principal obligation of the mortgage" as that term is used in section 601 for the purpose of computing the total face value of the debentures to be issued or the cash payment to be made by the Secretary to a mortgagee. ACQUISITION OF HOME MORTGAGES TO AVOID FORECLOSURE SEC. 603. (a) Upon receiving notice of the default of a home mortgage, the Secretary (in his discretion and for the 23 purpose of avoiding foreclosure of the mortgage) may con24 sent to the assignment of the defaulted mortgage. Where 25 such an assignment occurs, the mortgagee shall be entitled 132 1 to receive (in lieu of the insurance benefits prescribed in 2 section 601) an insurance payment in an amount equal 3 to the unpaid principal balance of the mortgage plus— 4 5 6 7 8 9 10 11 (1) any unpaid mortgage interest; (2) reimbursement for such costs and attorney's fees as the Secretary finds were properly incurred in connection with the defaulted mortgage and its assignment to the Secretary; and (3) any proper advances of funds made by the mortgagee under the provisions of the mortgage. (b) After acquisition of the mortgage by the Secretary, 12 the mortgagee shall have no further rights, liabilities, or 13 obligations with respect to the mortgage. 14 15 PROJECT MORTGAGE INSURANCE CLAIM SETTLEMENT SEC. 604. (a) The failure of the mortgagor to make any 16 payment due under or provided to be paid by the terms of a 17 project mortgage or loan insured under any section of title 18 V shall be considered a default under such mortgage and, 19 if such default continues for a period of thirty days, the mort20 gagee shall be entitled to receive the benefits of the insurance 21 as hereinafter provided upon assignment, transfer, and deliv22 ery to the Secretary within a period and in accordance with 23 rules and regulations to be prescribed by the Secretary of— 24 (1) all rights and interests arising under the mort 25 gage so in default; 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 133 (2) all claims of the mortgagee against the mortgagor or others, arising out of the mortgage transaction; (3) all policies of title or other insurance or surety bonds or other guaranties and any and all claims thereunder; (4) any balance of the mortgage loan not advanced to or for the account of the mortgagor; (5) any cash or property held by the mortgagee, or to which it is entitled, as deposits made for the account of the mortgagor and which have not been applied in reduction of the principal of the mortgage indebtedness; and (6) all records, documents, books, papers, and accounts relating to the mortgage transaction. (b) Insurance claims shall be settled by the Secretary 16 (1) by a payment to the mortgagee which, at the option of 17 the Secretary, shall be in cash or debentures or a combination 18 of cash and debentures having a total face value equal to the 19 value of the mortgage and (2) by the issuance to the mort20 gagee of a certificate of claim as provided in subsection (e). 21 Where the claim is paid in cash, it shall be in an amount 22 equivalent to the face value of the debentures that would 23 otherwise be issued plus an amount equivalent to the in24 -terest which the debentures would have earned, computed to a date to be established pursuant to regulations issued by the 25 |