139 1 of the rents or other funds derived from property covered by 2 such mortgage in violation of a regulation prescribed by the 3 Secretary under subsection (a), or (2) if such mortgage is 4 determined, as provided in subsection (a), to be exempt from 5 the requirement of any such regulation or is not otherwise 6 covered by such regulation, willfully uses or authorizes the 7 use, while such mortgage is in default, of any part of the 8 rents or other funds derived from the property covered by 9 such mortgage for any purpose other than to meet actual and 10 necessary expenses arising in connection with such property 11 (including amortization charges under the mortgage), shall 12 be fined not more than $5,000 or imprisoned not more than 13 three years, or both. 14 SETTLEMENT OF INSURANCE CLAIMS WITH DEBENTURES 15 SEC. 606. (a) The debentures issued by the Secretary 16 in settlement of insurance claims shall be in registered form 17 and in denominations which are multiples of $50, shall be 18 subject to such terms and conditions, and shall include such 19 provisions for redemption, as may be prescribed by the Sec20 retary with the approval of the Secretary of the Treasury. (b) The debentures shall be issued in the name of the applicable insurance fund carrying the insurance obligations 21 228 23 with respect to the mortgage or loan. They shall be signed 24 by the Secretary using either his written or engraved signa25 ture, and shall be negotiable. 140 1 (c) The debentures shall be dated as of the date of 2 default or as of such later date as the Secretary, in his discre 3 tion, may establish by regulation. 4 (d) Debentures shall bear interest at the rate in effect 5 on the date the commitment to insure the mortgage or loan 6 was issued, or the date the mortgage or loan was endorsed 7 for insurance, or (when there are two or more insurance 8 endorsements) the date the mortgage or loan was initially 9 endorsed for insurance, whichever rate is the highest. 10 (e) The interest rate to be used in debentures shall be 11 established by the Secretary, from time to time, in an amount 12 not in excess of an annual rate determined by the Secretary 13 of the Treasury taking into consideration the current average 14 market yield on outstanding marketable obligations of the 15 United States with remaining periods to maturity comparable 16 to the average maturities of such debentures. 17 (f) The interest on debentures shall be payable semi18 annually on the 1st day of January and the 1st day of July 19 of each year. They shall mature twenty years after the issu20 ance date, except that debentures issued to pay claims under 21 section 505 may, in the discretion of the Secretary, mature 22 ten years after the issuance date. 23 (g) The principal and interest of the debentures shall 24 be exempt from all taxation (except surtaxes, estate, inher25 itance, and gift taxes) now or hereafter imposed by any 141 1 territory, dependency, or possession of the United States, 2 or by any State, county, municipality, or local taxing 3 authority. 7 4 (h) The debentures shall be redeemed and paid out 5 of the insurance fund under which they are issued and such 6 fund shall be primarily liable for such payment. They shall be fully and unconditionally guaranteed as to principal and 8 interest by the United States, and such guaranty shall be 9 expressed on the face of the debentures. In the event pay10 ment of principal or interest due on any debenture is not 11 made, upon demand, from the obligated insurance fund, the 12 Secretary of the Treasury shall pay the holders the amount 13 thereof. Such amount is hereby authorized to be appropri14 ated out of any money in the Treasury not otherwise appro15 priated, and thereupon, to the extent of the amount so paid, 16 the Secretary of the Treasury shall succeed to all the rights 17 of the holders of such debentures. 18 19 20 2223 21 TITLE VII-MISCELLANEOUS GENERAL AUTHORIZATION FOR DEALING WITH AND DISPOSING OF PROPERTY SEC. 701. (a) The Secretary shall have the power, 22 under regulations to be precribed by him and approved by 23 the Secretary of the Treasury— 24 25 (1) to assign or sell at public or private sale, or otherwise dispose of, any evidence of debt, contract, 1 2 3 4 5 6 7 8 142 claim, personal property, or security held by him pursuant to the provisions of this Act; and (2) to collect or compromise all obligations assigned to or held by him and all legal or equitable rights accruing to him pursuant to the provisions of this Act until such time as such obligations may be referred to the Attorney General for suit or collection. (b) The Secretary shall have the power to deal with, 9 complete, rent, renovate, modernize, insure, or sell for cash 10 or credit, in his discretion, any properties conveyed to him 11 under the provisions of this Act. Section 3709 of the Revised 12 Statutes shall not be construed to apply to any contract for 13 hazard insurance, or to any purchase or contract for services 14 or supplies on account of such property if the amount thereof 15 does not exceed $2,500. 16 (c) The power to convey and to execute in the name 17 of the Secretary deeds of conveyance, deeds of release, assign18 ments and satisfactions of mortgages, and any other written 19 instrument relating to real or personal property or any inter20 est therein acquired by the Secretary pursuant to the pro21 visions of this Act, may be exercised by an officer appointed 22 by the Secretary, without the execution of any express dele23 gation of power or power of attorney. The Secretary may 24 delegate such power by order or by power of attorney, in his discretion, to any officer, agent, or employee he may ap 25 26 point. A conveyance or transfer of title to real or personal 143 1 property or an interest therein to the Secretary, his successors 2 and assigns (without identifying the Secretary therein) shall 3 be deemed a proper conveyance or transfer to the same extent 4 and of like effect as if the Secretary were personally named 5 in such conveyance or transfer. 6 (d) Nothing contained in this Act shall be construed to 7 exempt any real property acquired and held by the Secretary 8 under this Act from taxation by any State or political sub9 division thereof, to the same extent, according to its value, as other real property is taxed. 10 11 12 ACQUISITION OF TITLE BY THE SECRETARY SEC. 702. The Secretary is authorized, with respect to 13 any property covered by a mortgage held by him or security 14 for a loan held by him, either (1) to acquire possession and 15 title by voluntary conveyance in extinguishment of loan 16 indebtedness, or (2) to institute proceedings for foreclosure 17 and prosecute such proceedings to conclusion. The Secretary 18 at any sale under foreclosure may, in his discretion for the 19 protection of the appropriate insurance fund, bid any sum up to but not in excess of the total unpaid indebtedness secured by the mortgage or security, plus taxes, insurance, become 20 21 228 22 foreclosure costs, fees, and other expenses, and may 23 the purchaser of the property at such sale. Pending such 24 acquisition by voluntary conveyance or by foreclosure, the 25 Secretary is authorized, with respect to any mortgage or security assigned to him to exercise all the rights of a mort 26 |