1 127 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 6 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 18 nortgage. 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 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 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 means other than foreclosure) which 8 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 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 21 ས 130 1 by other means during any part or all of the period of mili 2 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 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 to the date to be established pursuant to regulations issued 11 by the Secretary. 10 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 (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 74 pt. 1 10 223 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 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 22 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 |