12 U.S.C. § 1707 — Definitions

Page 532 TITLE 12—BANKS AND BANKING § 1706f new grants or loans to be made after Oct. 1, 1991, under this section, see section 12839(a)(5), (b)(1) of Title 42, The Public Health and Welfare. § 1706f. Prohibition against kickbacks and un- earned fees (a) In general Except as provided in subsection (b), the provi- sions of sections 2602, 2607, 2614, 2615, 2616, and 2617 of this title shall apply to each sale of a manufactured home financed with an FHA-in- sured loan or extension of credit, as well as to services rendered in connection with such trans- actions. (b) Authority of the Secretary The Secretary is authorized to determine the manner and extent to which the provisions of sections 2602, 2607, 2614, 2615, 2616, and 2617 of this title may reasonably be applied to the transactions described in subsection (a), and to grant such exemptions as may be necessary to achieve the purposes of this section. (c) Definitions For purposes of this section— (1) the term ‘‘federally related mortgage loan’’ as used in sections 2602, 2607, 2614, 2615, 2616, and 2617 of this title shall include an FHA-insured loan or extension of credit made to a borrower for the purpose of purchasing a manufactured home that the borrower intends to occupy as a personal residence; and (2) the term ‘‘real estate settlement service’’ as used in sections 2602, 2607, 2614, 2615, 2616, and 2617 of this title shall include any service rendered in connection with a loan or exten- sion of credit insured by the Federal Housing Administration for the purchase of a manufac- tured home. (d) Unfair and deceptive practices In connection with the purchase of a manufac- tured home financed with a loan or extension of credit insured by the Federal Housing Adminis- tration under this subchapter, the Secretary shall prohibit acts or practices in connection with loans or extensions of credit that the Sec- retary finds to be unfair, deceptive, or otherwise not in the interests of the borrower. (June 27, 1934, ch. 847, title I, § 10, as added Pub. L. 110–289, div. B, title I, § 2149, July 30, 2008, 122 Stat. 2847.) SUBCHAPTER II—MORTGAGE INSURANCE § 1707. Definitions As used in section 1709 of this title— (a) The term ‘‘mortgage’’ means (A) a first mortgage on real estate, in fee simple, (B) a first mortgage on a leasehold on real estate (i) under a lease for not less than ninety-nine years which is renewable, or (ii) under a lease having a pe- riod of not less than ten years to run beyond the maturity date of the mortgage, or (C) a first mortgage given to secure the unpaid purchase price of a fee interest in, or long-term leasehold interest in, real estate consisting of a one-fam- ily unit in a multifamily project, including a project in which the dwelling units are attached, or are manufactured housing units, semi-de- tached, or detached, and an undivided interest in the common areas and facilities which serve the project; and the term ‘‘first mortgage’’ means such classes of first liens as are com- monly given to secure advances on, or the un- paid purchase price of, real estate, under the laws of the State, in which the real estate is lo- cated, together with the credit instruments, if any, secured thereby. (b) The term ‘‘mortgagee’’ includes the origi- nal lender under a mortgage, and his successors and assigns approved by the Secretary; and the term ‘‘mortgagor’’ includes the original bor- rower under a mortgage and his successors and assigns. (c) The term ‘‘maturity date’’ means the date on which the mortgage indebtedness would be extinguished if paid in accordance with periodic payments provided for in the mortgage. (d) The term ‘‘State’’ includes the several States, and Puerto Rico, the District of Colum- bia, Guam, the Commonwealth of the Northern Mariana Islands, American Samoa, and the Vir- gin Islands. (e) The term ‘‘family member’’ means, with re- spect to a mortgagor under such section, a child, parent, or grandparent of the mortgagor (or the mortgagor’s spouse). In determining whether any of the relationships referred to in the pre- ceding sentence exist, a legally adopted son or daughter of an individual (and a child who is a member of an individual’s household, if placed with such individual by an authorized placement agency for legal adoption by such individual), and a foster child of an individual, shall be treated as a child of such individual by blood. (f) The term ‘‘child’’ means, with respect to a mortgagor under such section, a son, stepson, daughter, or stepdaughter of such mortgagor. (g) The term ‘‘real estate’’ means land and all natural resources and structures permanently affixed to the land, including residential build- ings and stationary manufactured housing. The Secretary may not require, for treatment of any land or other property as real estate for pur- poses of this subchapter, that such land or prop- erty be treated as real estate for purposes of State taxation. (June 27, 1934, ch. 847, title II, § 201, 48 Stat. 1247; Feb. 3, 1938, ch. 13, § 3, 52 Stat. 9; Mar. 28, 1941, ch. 31, § 4(a), 55 Stat. 61; Apr. 20, 1950, ch. 94, title I, § 122, 64 Stat. 59; July 14, 1952, ch. 723, § 10(a)(2), 66 Stat. 603; Pub. L. 86–70, § 10(a), June 25, 1959, 73 Stat. 142; Pub. L. 86–624, § 6, July 12, 1960, 74 Stat. 411; Pub. L. 90–19, § 1(a)(3), May 25, 1967, 81 Stat. 17; Pub. L. 91–152, title IV, § 403(c)(1), Dec. 24, 1969, 83 Stat. 395; Pub. L. 96–399, title III, § 306, Oct. 8, 1980, 94 Stat. 1640; Pub. L. 98–181, title I [title IV, § 407(b)], Nov. 30, 1983, 97 Stat. 1211; Pub. L. 104–204, title IV, § 425(b), Sept. 26, 1996, 110 Stat. 2928; Pub. L. 110–289, div. B, title I, §§ 2117(b), (c), 2120(c), July 30, 2008, 122 Stat. 2833, 2835.) Editorial Notes AMENDMENTS 2008—Subsec. (a). Pub. L. 110–289, § 2117(b), inserted ‘‘(A)’’ before ‘‘a first mortgage’’, substituted ‘‘(B) a first mortgage on a leasehold on real estate (i)’’ for ‘‘or on a leasehold (1)’’ and ‘‘, or (ii)’’ for ‘‘or (2)’’, and in- Page 533 TITLE 12—BANKS AND BANKING § 1708 serted ‘‘, or (C) a first mortgage given to secure the un- paid purchase price of a fee interest in, or long-term leasehold interest in, real estate consisting of a one- family unit in a multifamily project, including a project in which the dwelling units are attached, or are manufactured housing units, semi-detached, or de- tached, and an undivided interest in the common areas and facilities which serve the project’’ before semi- colon. Subsec. (d). Pub. L. 110–289, § 2120(c), substituted ‘‘the Commonwealth of the Northern Mariana Islands’’ for ‘‘the Trust Territory of the Pacific Islands’’. Subsec. (g). Pub. L. 110–289, § 2117(c), added subsec. (g). 1996—Subsecs. (e), (f). Pub. L. 104–204 added subsecs. (e) and (f). 1983—Subsec. (d). Pub. L. 98–181 inserted ‘‘American Samoa,’’ after ‘‘Pacific Islands,’’. 1980—Subsec. (a). Pub. L. 96–399 substituted ‘‘ten years to run beyond the maturity date of the mort- gage’’ for ‘‘fifty years to run from the date the mort- gage was executed’’. 1969—Subsec. (d). Pub. L. 91–152 inserted ‘‘the Trust Territory of the Pacific Islands’’ after ‘‘Guam’’. 1967—Subsec. (b). Pub. L. 90–19 substituted ‘‘Sec- retary’’ for ‘‘Commissioner’’. 1960—Subsec. (d). Pub. L. 86–624 struck out ‘‘Hawaii,’’ before ‘‘Puerto Rico’’. 1959—Subsec. (d). Pub. L. 86–70 struck out ‘‘Alaska,’’ before ‘‘Hawaii’’. 1952—Subsec. (d). Act July 14, 1952, inserted ‘‘Guam,’’ after ‘‘District of Columbia’’. 1950—Act Apr. 20, 1950, substituted ‘‘Commissioner’’ for ‘‘Administrator’’. 1941—Subsec. (a). Act Mar. 28, 1941, § 4(a)(1), struck out ‘‘district, or Territory’’. Subsec. (d). Act Mar. 28, 1941, § 4(a)(2), added subsec. (d). 1938—Subsec. (a)(2). Act Feb. 3, 1938, struck out ‘‘upon which there is located a dwelling for not more than four families which is used in whole or in part for resi- dential purposes, irrespective of whether such dwelling has a party wall or is otherwise physically connected with another dwelling’’ after ‘‘executed’’. Subsec. (c). Act Feb. 3, 1938, added subsec. (c). Statutory Notes and Related Subsidiaries IMPROVEMENT OF FINANCING FOR MULTIFAMILY HOUSING Pub. L. 102–550, title V, subtitle C, Oct. 28, 1992, 106 Stat. 3794, which related to improvement of financing for multifamily housing and was formerly set out as a note under this section, was transferred or omitted as follows: Section 541 of Pub. L. 102–550 was transferred and is set out as a note under section 1701 of this title; Section 542 of Pub. L. 102–550 was transferred to sec- tion 1715z–22 of this title; Section 543 of Pub. L. 102–550, as amended by Pub. L. 111–203, title III, § 371, July 21, 2010, 124 Stat. 1565, was omitted from the Code; Section 544 of Pub. L. 102–550 was transferred to sec- tion 1715z–22a of this title. § 1708. Federal Housing Administration oper- ations (a) Mutual Mortgage Insurance Fund (1) Establishment Subject to the provisions of the Federal Credit Reform Act of 1990 [2 U.S.C. 661 et seq.], there is hereby created a Mutual Mortgage In- surance Fund (in this subchapter referred to as the ‘‘Fund’’), which shall be used by the Sec- retary to carry out the provisions of this sub- chapter with respect to mortgages insured under section 1709 of this title. The Secretary may enter into commitments to guarantee, and may guarantee, such insured mortgages. (2) Limit on loan guarantees The authority of the Secretary to enter into commitments to guarantee such insured mort- gages shall be effective for any fiscal year only to the extent that the aggregate original prin- cipal loan amount under such mortgages, any part of which is guaranteed, does not exceed the amount specified in appropriations Acts for such fiscal year. (3) Fiduciary responsibility The Secretary has a responsibility to ensure that the Mutual Mortgage Insurance Fund re- mains financially sound. (4) Annual independent actuarial study The Secretary shall provide for an inde- pendent actuarial study of the Fund to be con- ducted annually, which shall analyze the fi- nancial position of the Fund. The Secretary shall submit a report annually to the Congress describing the results of such study and as- sessing the financial status of the Fund. The report shall recommend adjustments to under- writing standards, program participation, or premiums, if necessary, to ensure that the Fund remains financially sound. The report shall also include an evaluation of the quality control procedures and accuracy of informa- tion utilized in the process of underwriting loans guaranteed by the Fund. Such evalua- tion shall include a review of the risk charac- teristics of loans based not only on borrower information and performance, but on risks as- sociated with loans originated or funded by various entities or financial institutions. (5) Quarterly reports During each fiscal year, the Secretary shall submit a report to the Congress for each cal- endar quarter, which shall specify for mort- gages that are obligations of the Fund— (A) the cumulative volume of loan guar- antee commitments that have been made during such fiscal year through the end of the quarter for which the report is sub- mitted; (B) the types of loans insured, categorized by risk; (C) any significant changes between actual and projected claim and prepayment activ- ity; (D) projected versus actual loss rates; and (E) updated projections of the annual sub- sidy rates to ensure that increases in risk to the Fund are identified and mitigated by ad- justments to underwriting standards, pro- gram participation, or premiums, and the fi- nancial soundness of the Fund is main- tained. The first quarterly report under this para- graph shall be submitted on the last day of the first quarter of fiscal year 2008, or on the last day of the first full calendar quarter following July 30, 2008, whichever is later. (6) Adjustment of premiums If, pursuant to the independent actuarial study of the Fund required under paragraph (4), the Secretary determines that the Fund is not meeting the operational goals established under paragraph (7) or there is a substantial