137 1 realized from the final liquidation of the mortgage, and all 2 claims in connection therewith, so assigned, transferred, and 3 delivered, and from the property covered by such mortgage 4 and all claims in connection with such property and from any 5 mortgage taken in the sale of such property (after deducting 6 all expenses incurred by the Secretary in handling, dealing 7 with, acquiring title to, and disposing of such mortgage and 8 property and in collecting such claims) exceeds the face 9 value of the debentures issued and the cash adjustment paid 10 to the mortgagee plus all interest paid on such debentures, 11 such excess shall be divided as follows: 12 13 14 15 16 17 18 19 21 22 23 2203 222 24 (1) If such excess is greater than the total amount payable under the certificate of claim issued in connection with such property, the Secretary shall pay to the holder of such certificate the full amount so payable, and any excess remaining thereafter shall be retained by the Secretary and credited to the appropriate insurance fund. (2) If such excess is equal to or less than the total amount payable under such certficate of claim, the Secretary shall pay to the holder of such certificate the full amount of such excess. MODIFICATIONS IN TERMS OF PROJECT MORTGAGES SEC. 605. (a) The Secretary shall not consent to any 25 request for an extension of the time for curing a default under 138 1 any insured project mortgage or project mortgage held by 2 3 4 him or for a modification of the terms of such mortgage, ex cept in conformity with regulations prescribed by the Secre tary in accordance with the provisions of this section. Such 5 regulations shall require, as a condition to the granting of any such request, that, during the period of such extension 6 7 8 9 or modification, any part of the rents or other funds derived by the mortgagor from the property covered by the mortgage which is not required to meet actual and necessary expenses 10 arising in connection with the operation of such property, including amortization charges under the mortgage, be held 11 12 14 in trust by the mortgagor and distributed only with the con 13 sent of the Secretary; except that the Secretary may provide for the granting of consent to any request for an extension of 15 the time for curing a default under any project mortgage or 16 for a modification of the terms of such mortgage, without 17 regard to the foregoing requirement, where an exemption 18 from such requirement does not (as determined by the 19 Secretary) jeopardize the interest of the United States. 20 (b) Whoever, as an owner of a property which is secu21 rity for a mortgage described in subsection (a), or as a stock22 holder of a corporation owning such property, or as a bene23 ficial owner under any business organization owning such 24 property, or as an officer, director, or agent of any such 25 owner, (1) willfully uses or authorizes the use of any part 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. 21 (b) The debentures shall be issued in the name of the 22 applicable insurance fund carrying the insurance obligations 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 5 6 (d) Debentures shall bear interest at the rate in effect on the date the commitment to insure the mortgage or loan 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. 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 7 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. TITLE VII-MISCELLANEOUS 18 19 GENERAL AUTHORIZATION FOR DEALING WITH AND 20 DISPOSING OF PROPERTY 21 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, |