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1 determined, as provided in subsection (a), to be exempt from 2 the requirement of any such regulation or is not otherwise

3 covered by such regulation, willfully uses or authorizes the

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use, while such mortgage is in default, of any part of the 5 rents or other funds derived from the property covered by 6 such mortgage for any purpose other than to meet actual and 7 necessary expenses arising in connection with such property 8 (including amortization charges under the mortgage), shall 9 be fined not more than $5,000 or imprisoned not more than 10 three years, or both.

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SETTLEMENT OF INSURANCE CLAIMS WITH DEBENTURES

SEC. 606. (a) The debentures issued by the Secretary 13 in settlement of insurance claims shall be in registered form 14 and in denominations which are multiples of $50, shall be

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subject to such terms and conditions, and shall include such provisions for redemption, as may be prescribed by the Secretary 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 with respect to the mortgage or loan. They shall be signed

by the Secretary using either his written or engraved signa

ture, and shall be negotiable.

(c) The debentures shall be dated as of the date of

default or as of such later date as the Secretary, in his discre

tion, may establish by regulation.

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1 (d) Debentures shall bear interest at the rate in effect 2 on the date the commitment to insure the mortgage or loan 3 was issued, or the date the mortgage or loan was endorsed 4 for insurance, or (when there are two or more insurance 5 endorsements) the date the mortgage or loan was initially 6 endorsed for insurance, whichever rate is the highest. 7 (e) The interest rate to be used in debentures shall be 8 established by the Secretary, from time to time, in an amount 9 not in excess of an annual rate determined by the Secretary 10 of the Treasury taking into consideration the current average 11 market yield on outstanding marketable obligations of the 12 United States with remaining periods to maturity comparable 13 to the average maturities of such debentures.

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(f) The interest on debentures shall be payable semi15 annually on the 1st day of January and the 1st day of July 16 of each year. They shall mature twenty years after the issu17 anco date, except that debentures issued to pay claims under 18 section 505 may, in the discretion of the Secretary, mature 19 ten years after the issuance date.

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(g) The principal and interest of the debentures shall 21 be exempt from all taxation (except surtaxes, estate, inher22 itance, and gift taxes) now or hereafter imposed by any 23 territory, dependency, or possession of the United States, 24 or by any State, county, municipality, or local taxing 25 authority.

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(h) The debentures shall be redeemed and paid out of

2 the insurance fund under which they are issued and such 3 fund shall be primarily liable for such payment. They shall 4 be fully and unconditionally guaranteed as to principal and 5 interest by the United States, and such guaranty shall be 6 expressed on the face of the debentures. In the event pay7 ment of principal or interest due on any debenture is not 8 made, upon demand, from the obligated insurance fund, the 9 Secretary of the Treasury shall pay the holders the amount 10 thereof. Such amount is hereby authorized to be appropri11 ated out of any money in the Treasury not otherwise appro12 priated, and thereupon, to the extent of the amount so paid, 13 the Secretary of the Treasury shall succeed to all the rights 14 of the holders of such debentures.

TITLE VII-MISCELLANEOUS

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GENERAL AUTHORIZATION FOR DEALING WITH AND

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DISPOSING OF PROPERTY

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SEC. 701. (a) The Secretary shall have the power,

19 under regulations to be prescribed by him and approved by

20 the Secretary of the Treasury

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(1) to assign or sell at public or private sale, or

otherwise dispose of, any evidence of debt, contract, claim, personal property, or security held by him pursuant to the provisions of this Act; and

(2) to collect or compromise all obligations assigned

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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 At

4 torney General for suit or collection.

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(b) The Secretary shall have the power to deal with,

6 complete, rent, renovate, modernize, insure, or sell for cash

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or credit, in his discretion, any properties conveyed to him 8 under the provisions of this Act. Section 3709 of the Revised 9 Statutes shall not be construed to apply to any contract for 10 hazard insurance, or to any purchase or contract for services 11 or supplies on account of such property if the amount thereof 12 does not exceed $2,500.

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(c) The power to convey and to execute in the name 14 of the Secretary deeds of conveyance, deeds of release, assign15 ments and satisfactions of mortgages, and any other written 16 instrument relating to real or personal property or any inter17 est therein acquired by the Secretary pursuant to the pro18 visions of this Act, may be exercised by an officer appointed 19 by the Secretary, without the execution of any express delegation of power or power of attorney. The Secretary may 21 delegate such power by order or by power of attorney, in 22 his discretion, to any officer, agent, or employee he may ap23 point. A conveyance or transfer of title to real or personal property or an interest therein to the Secretary, his successors 25 and assigns (without identifying the Secretary therein) shall

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be deemed a proper conveyance or transfer to the same extent

and of like effect as if the Secretary were personally named in such conveyance or transfer.

(d) Nothing contained in this Act shall be construed to

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under this Act from taxation by any State or political sub

division thereof, to the same extent, according to its value,

as other real property is taxed.

ACQUISITION OF TITLE BY THE SECRETARY

SEC. 702. The Secretary is authorized, with respect to

any property covered by a mortgage held by him or security for a loan held by him, either (1) to acquire possession and title by voluntary conveyance in extinguishment of loan indebtedness, or (2) to institute proceedings for foreclosure

and prosecute such proceedings to conclusion. The Secretary at any sale under foreclosure may, in his discretion for the 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, foreclosure costs, fees, and other expenses, and may become the purchaser of the property at. such sale. Pending such acquisition by voluntary conveyance or by foreclosure, the 23 Secretary is authorized, with respect to any mortgage or

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security assigned to him to exercise all the rights of a mort

gagee or lender under such mortgage or security, including

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