-CITE-

12 USC CHAPTER 38 - MULTIFAMILY MORTGAGE FORECLOSURE 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 38 - MULTIFAMILY MORTGAGE FORECLOSURE

.

-HEAD-

CHAPTER 38 - MULTIFAMILY MORTGAGE FORECLOSURE

-MISC1-

Sec.

3701. Findings and purpose.

3702. Definitions.

3703. Applicability.

3704. Foreclosure commissioner; designation, duties, etc.

3705. Prerequisites to foreclosure.

3706. Notice of default and foreclosure sale; condition and term of

sale.

3707. Commencement of foreclosure; powers and duties of foreclosure

commissioner or substitute.

3708. Service of notice of default and foreclosure sale.

3709. Presale reinstatement.

(a) Grounds.

(b) Views of Secretary.

(c) Mortgage subsequent to reinstatement.

(d) Subsequent foreclosures.

3710. Foreclosure sale.

(a) Time of sale; public auction; location.

(b) Conduct of sale.

(c) Adjournment or cancellation.

3711. Foreclosure costs.

3712. Disposition of sale proceeds.

3713. Transfer of title and possession.

(a) Payment and delivery of deeds.

(b) Quit claim deed.

(c) Possession by purchaser; continuing interests.

(d) Right of redemption; right of possession.

(e) Imposition of tax on conveyance to the Secretary.

3714. Record of foreclosure and sale.

3715. Computation of time.

3716. Separability.

3717. Regulations.

-CITE-

12 USC Sec. 3701 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 38 - MULTIFAMILY MORTGAGE FORECLOSURE

-HEAD-

Sec. 3701. Findings and purpose

-STATUTE-

(a) The Congress finds that -

(1) disparate State laws under which the Secretary of Housing

and Urban Development forecloses multifamily mortgages burden the

programs administered by the Secretary pursuant to these

authorities, and cause detriment to the residents of the affected

projects and the community generally;

(2) long periods to complete the foreclosure of these mortgages

under certain State laws lead to deterioration in the condition

of the properties involved; necessitate substantial Federal

management and holding expenditures; increase the risk of

vandalism, fire loss, depreciation, damage, and waste with

respect to the properties; and adversely affect the residents of

the projects and the neighborhoods in which the properties are

located;

(3) these conditions seriously impair the Secretary's ability

to protect the Federal financial interest in the affected

properties and frustrate attainment of the objectives of the

underlying Federal program authorities, as well as the national

housing goal of ''a decent home and a suitable living environment

for every American family'';

(4) application of State redemption periods to these mortgages

following their foreclosure would impair the salability of the

properties involved and discourage their rehabilitation and

improvement, thereby compounding the problems referred to in

clause (3);

(5) the availability of a uniform and more expeditious

procedure for the foreclosure of these mortgages by the Secretary

and continuation of the practice of not applying postsale

redemption periods to such mortgages will tend to ameliorate

these conditions; and

(6) providing the Secretary with a nonjudicial foreclosure

procedure will reduce unnecessary litigation by removing many

foreclosures from the courts where they contribute to overcrowded

calendars.

(b) The purpose of this chapter is to create a uniform Federal

foreclosure remedy for multifamily mortgages.

-SOURCE-

(Pub. L. 97-35, title III, Sec. 362, Aug. 13, 1981, 95 Stat. 422;

Pub. L. 102-550, title V, Sec. 517(a), Oct. 28, 1992, 106 Stat.

3791.)

-MISC1-

AMENDMENTS

1992 - Subsec. (a)(1). Pub. L. 102-550, Sec. 517(a)(1),

substituted ''multifamily mortgages'' for ''real estate mortgages

which the Secretary holds pursuant to title II of the National

Housing Act or section 312 of the Housing Act of 1964 covering

multiunit residential and nonresidential properties''.

Subsec. (b). Pub. L. 102-550, Sec. 517(a)(2), substituted

''multifamily mortgages'' for ''multiunit residential and

nonresidential mortgages held by the Secretary of Housing and Urban

Development pursuant to title II of the National Housing Act or

section 312 of the Housing Act of 1964''.

EFFECTIVE DATE

Section 371 of subtitle A of title III of Pub. L. 97-35 provided

that:

''(a) Except as otherwise provided in this subtitle, the

provisions of this subtitle (for classification of subtitle A (Sec.

300-371) of title III of Pub. L. 97-35, see Tables) shall take

effect on October 1, 1981.

''(b) The amendments made by sections 324, 325, and 326(a)

(amending section 1437f of Title 42, The Public Health and Welfare)

shall apply only with respect to contracts entered into on and

after October 1, 1981.''

SHORT TITLE

Section 361 of part 6 of subtitle A of title III of Pub. L. 97-35

provided that: ''This part (enacting this chapter) may be cited as

the 'Multifamily Mortgage Foreclosure Act of 1981'.''

-CITE-

12 USC Sec. 3702 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 38 - MULTIFAMILY MORTGAGE FORECLOSURE

-HEAD-

Sec. 3702. Definitions

-STATUTE-

As used in this chapter -

(1) ''mortgage'' means a deed of trust, mortgage, deed to

secure debt, security agreement, or any other form of instrument

under which any interest in property, real, personal or mixed, or

any interest in property including leaseholds, life estates,

reversionary interests, and any other estates under applicable

State law, is conveyed in trust, mortgaged, encumbered, pledged,

or otherwise rendered subject to a lien, for the purpose of

securing the payment of money or the performance of an

obligation;

(2) ''multifamily mortgage'' means a mortgage held by the

Secretary pursuant to -

(A) section 608 or 801, or title II or X, of the National

Housing Act (12 U.S.C. 1743, 1748, 1707 et seq., 1749aa et

seq.);

(B) section 312 of the Housing Act of 1964 (42 U.S.C. 1452b),

as it existed immediately before its repeal by section 289 of

the Cranston-Gonzalez National Affordable Housing Act;

(C) section 202 of the Housing Act of 1959 (12 U.S.C. 1701q),

as it existed immediately before its amendment by section 801

of the Cranston-Gonzalez National Affordable Housing Act;

(D) section 202 of the Housing Act of 1959 (12 U.S.C. 1701q),

as amended by section 801 of the Cranston-Gonzalez National

Affordable Housing Act; and

(E) section 811 of the Cranston-Gonzalez National Affordable

Housing Act (42 U.S.C. 8013).

(3) ''mortgage agreement'' means the note or debt instrument

and the mortgage instrument, deed of trust instrument, trust

deed, or instrument or instruments creating the mortgage,

including any instrument incorporated by reference therein

(including any applicable regulatory agreement), and any

instrument or agreement amending or modifying any of the

foregoing;

(4) ''mortgagor'' means the obligor, grantor, or trustor named

in the mortgage agreement and, unless the context otherwise

indicates, includes the current owner of record of the security

property whether or not personally liable on the mortgage debt;

(5) ''person'' includes any individual, group of individuals,

association, partnership, corporation, or organization;

(6) ''record'' and ''recorded'' included ''register'' and

''registered'' in the instance of registered land;

(7) ''security property'' means the property, real, personal or

mixed, or an interest in property, including leaseholds, life

estate, reversionary interests, and any other estates under

applicable State law, together with fixtures and other interests

subject to the lien of the mortgage under applicable State law;

(8) ''State'' means the several States, the District of

Columbia, the Commonwealth of Puerto Rico, the territories and

possessions of the United States, and the Trust Territory of the

Pacific Islands, and Indian tribes as defined by the Secretary;

(9) ''county'' means county as defined in section 2 of title 1;

and

(10) ''Secretary'' means the Secretary of Housing and Urban

Development.

-SOURCE-

(Pub. L. 97-35, title III, Sec. 363, Aug. 13, 1981, 95 Stat. 422;

Pub. L. 102-550, title V, Sec. 517(b), Oct. 28, 1992, 106 Stat.

3792.)

-REFTEXT-

REFERENCES IN TEXT

The National Housing Act, referred to in par. (2)(A), is act June

27, 1934, ch. 847, 48 Stat. 1246, as amended. Title II of the Act

is classified principally to subchapter II (Sec. 1707 et seq.) of

chapter 13 of this title. Title X of the Act, which was classified

principally to subchapter IX-A (Sec. 1749aa et seq.) of chapter 13

of this title, was repealed by Pub. L. 101-235, title I, Sec.

133(a), Dec. 15, 1989, 103 Stat. 2027. For complete classification

of this Act to the Code, see section 1701 of this title and Tables.

Section 312 of the Housing Act of 1964, referred to in par.

(2)(B), is section 312 of Pub. L. 88-560, which was classified to

section 1452b of Title 42, The Public Health and Welfare, and was

repealed by Pub. L. 101-625, title II, Sec. 289(b)(1), Nov. 28,

1990, 104 Stat. 4128.

Section 801 of the Cranston-Gonzalez National Affordable Housing

Act, referred to in par. (2)(C), (D), is section 801 of Pub. L.

101-625.

-MISC2-

AMENDMENTS

1992 - Par. (2). Pub. L. 102-550 amended par. (2) generally.

Prior to amendment, par. (2) read as follows: '' 'multifamily

mortgage' means a mortgage held by the Secretary pursuant to title

II of the National Housing Act or section 312 of the House Act of

1964 covering any property, except a property on which there is

located a one- to four-family residence;''.

-TRANS-

TERMINATION OF TRUST TERRITORY OF THE PACIFIC ISLANDS

For termination of Trust Territory of the Pacific Islands, see

note set out preceding section 1681 of Title 48, Territories and

Insular Possessions.

-CITE-

12 USC Sec. 3703 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 38 - MULTIFAMILY MORTGAGE FORECLOSURE

-HEAD-

Sec. 3703. Applicability

-STATUTE-

Multifamily mortgages held by the Secretary encumbering real

estate located in any State may be foreclosed by the Secretary in

accordance with this chapter, or pursuant to other foreclosure

procedures available, at the option of the Secretary. If the

Secretary forecloses on any such mortgage pursuant to such other

foreclosure procedures available, the provisions of section 3706(b)

of this title may be applied at the discretion of the Secretary.

-SOURCE-

(Pub. L. 97-35, title III, Sec. 364, Aug. 13, 1981, 95 Stat. 423;

Pub. L. 98-181, title IV, Sec. 471, Nov. 30, 1983, 97 Stat. 1237.)

-MISC1-

AMENDMENTS

1983 - Pub. L. 98-181 inserted provision relating to application

of section 3706(b) of this title in event of foreclosure under

other foreclosure procedures.

-CITE-

12 USC Sec. 3704 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 38 - MULTIFAMILY MORTGAGE FORECLOSURE

-HEAD-

Sec. 3704. Foreclosure commissioner; designation, duties, etc.

-STATUTE-

A foreclosure commissioner or commissioners designated pursuant

to this chapter shall have a nonjudicial power of sale as provided

in this chapter. Where the Secretary is the holder of a

multifamily mortgage, the Secretary may designate a foreclosure

commissioner and, with or without cause, may designate a substitute

foreclosure commissioner to replace a previously designated

foreclosure commissioner, by executing a duly acknowledged, written

designation stating the name and business or residential address of

the commissioner or substitute commissioner. The designation shall

be effective upon execution. Except as provided in section 3707(b)

of this title, a copy of the designation shall be mailed with each

copy of the notice of default and foreclosure sale served by mail

in accordance with section 3708(1) of this title. The foreclosure

commissioner, if a natural person, shall be a resident of the State

in which the security property is located and, if not a natural

person, the foreclosure commissioner must be duly authorized to

transact business under the laws of the State in which the security

property is located. The foreclosure commissioner shall be a

person who is responsible, financially sound and competent to

conduct the foreclosure. More than one foreclosure commissioner

may be designated. If a natural person is designated as

foreclosure commissioner or substitute foreclosure commissioner,

such person shall be designated by name, except that where such

person is designated in his or her capacity as an official or

employee of the government of the State or subdivision thereof in

which the security property is located, such person may be

designated by his or her unique title or position instead of by

name. The Secretary shall be a guarantor of payment of any

judgment against the foreclosure commissioner for damages based

upon the commissioner's failure properly to perform the

commissioner's duties. As between the Secretary and the mortgagor,

the Secretary shall bear the risk of any financial default by the

foreclosure commissioner. In the event that the Secretary makes

any payment pursuant to the preceding two sentences, the Secretary

shall be fully subrogated to the rights satisfied by such payment.

-SOURCE-

(Pub. L. 97-35, title III, Sec. 365, Aug. 13, 1981, 95 Stat. 423.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3707, 3708 of this title.

-CITE-

12 USC Sec. 3705 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 38 - MULTIFAMILY MORTGAGE FORECLOSURE

-HEAD-

Sec. 3705. Prerequisites to foreclosure

-STATUTE-

Foreclosure by the Secretary under this chapter of a multifamily

mortgage may be commenced, as provided in section 3707 of this

title, upon the breach of a covenant or condition in the mortgage

agreement for which foreclosure is authorized under the mortgage,

except that no such foreclosure may be commenced unless any

previously pending proceeding, judicial or nonjudicial, separately

instituted by the Secretary to foreclose the mortgage other than

under this chapter has been withdrawn, dismissed, or otherwise

terminated. No such separately instituted foreclosure proceeding

on the mortgage shall be instituted by the Secretary during the

pendency of foreclosure pursuant to this chapter. Nothing in this

chapter shall preclude the Secretary from enforcing any right,

other than foreclosure, under applicable State law, including any

right to obtain a monetary judgment. Nothing in this chapter shall

preclude the Secretary from foreclosing under this chapter where

the Secretary has obtained or is seeking any other remedy available

pursuant to Federal or State law or under the mortgage agreement,

including, but not limited to, the appointment of a receiver,

mortgagee-in-possession status, relief under an assignment of

rents, or transfer to a nonprofit entity pursuant to section 1701q

of this title or section 8013 of title 42.

-SOURCE-

(Pub. L. 97-35, title III, Sec. 366, Aug. 13, 1981, 95 Stat. 424;

Pub. L. 102-550, title V, Sec. 517(c), Oct. 28, 1992, 106 Stat.

3792.)

-MISC1-

AMENDMENTS

1992 - Pub. L. 102-550 substituted ''status, relief under an

assignment of rents, or transfer to a nonprofit entity pursuant to

section 1701q of this title or section 8013 of title 42'' for

''status or relief under an assignment of rents'' in last sentence.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 3707 of this title.

-CITE-

12 USC Sec. 3706 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 38 - MULTIFAMILY MORTGAGE FORECLOSURE

-HEAD-

Sec. 3706. Notice of default and foreclosure sale; condition and

term of sale

-STATUTE-

(a) The notice of default and foreclosure sale to be served in

accordance with this chapter shall be subscribed with the name and

address of the foreclosure commissioner and the date on which

subscribed, and shall set forth the following information:

(1) the names of the Secretary, the original mortgagee and the

original mortgagor;

(2) the street address or a description of the location of the

security property, and a description of the security property, or

so much thereof as is to be offered for sale, sufficient to

identify the property to be sold;

(3) the date of the mortgage, the office in which the mortgage

is recorded, and the liber and folio or other description of the

location of recordation of the mortgage;

(4) the failure to make payment, including the due date of the

earliest installment payment remaining wholly unpaid as of the

date the notice is subscribed, or the description of other

default or defaults upon which foreclosure is based, and the

acceleration of the secured indebtedness;

(5) the date, time, and place of the foreclosure sale;

(6) a statement that the foreclosure is being conducted

pursuant to this chapter;

(7) the types of costs, if any, to be paid by the purchaser

upon transfer of title; and

(8) the amount and method of deposit to be required at the

foreclosure sale (except that no deposit shall be required of the

Secretary), the time and method of payment of the balance of the

foreclosure purchase price and other appropriate terms of sale.

(b)(1) Except as provided in paragraph (2)(A), the Secretary may

require, as a condition and term of sale, that the purchaser at a

foreclosure sale under this chapter agree to continue to operate

the security property in accordance with the terms of the program

under which the mortgage insurance or assistance was provided, or

any applicable regulatory or other agreement in effect with respect

to such property immediately prior to the time of foreclosure sale.

(2)(A) In any case where the majority of the residential units in

a property subject to such a sale are occupied by residential

tenants at the time of the sale, the Secretary shall require, as a

condition and term of sale, any purchaser (other than the

Secretary) to operate the property in accordance with such terms,

as appropriate, of the programs referred to in paragraph (1).

(B) In any case where the Secretary is the purchaser of a

multifamily project, the Secretary shall manage and dispose of such

project in accordance with the provisions of section 203 of the

Housing and Community Development Amendments of 1978 (12 U.S.C.

1701z-11).

-SOURCE-

(Pub. L. 97-35, title III, Sec. 367, Aug. 13, 1981, 95 Stat. 424;

Pub. L. 102-550, title V, Sec. 517(d), Oct. 28, 1992, 106 Stat.

3792.)

-MISC1-

AMENDMENTS

1992 - Subsec. (b)(1). Pub. L. 102-550 amended par. (1)

generally. Prior to amendment, par. (1) read as follows: ''Except

as provided in paragraph (2)(A), the Secretary may require, as a

condition and term of sale, that the purchaser at a foreclosure

sale under this chapter agree to continue to operate the security

property in accordance with the terms, as appropriate, of the loan

program under section 312 of the Housing Act of 1964, the program

under which insurance under title II of the National Housing Act

was originally provided with respect to such property, or any

applicable regulatory or other agreement in effect with respect to

such property immediately prior to the time of foreclosure sale.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3703, 3708 of this title.

-CITE-

12 USC Sec. 3707 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 38 - MULTIFAMILY MORTGAGE FORECLOSURE

-HEAD-

Sec. 3707. Commencement of foreclosure; powers and duties of

foreclosure commissioner or substitute

-STATUTE-

(a) If the Secretary as holder of a multifamily mortgage

determines that the prerequisites to foreclosure set forth in

section 3705 of this title are satisfied, the Secretary may request

the foreclosure commissioner to commence foreclosure of the

mortgage. Upon such request, the foreclosure commissioner shall

commence foreclosure of the mortgage, by commencing service of a

notice of default and foreclosure sale in accordance with section

3708 of this title.

(b) Subsequent to commencement of a foreclosure under this

chapter, the Secretary may designate a substitute foreclosure

commissioner at any time up to forty-eight hours prior to the time

of foreclosure sale, and the foreclosure shall continue without

prejudice, unless the substitute commissioner, in his or her sole

discretion, finds that continuation of the foreclosure sale will

unfairly affect the interests of the mortgagor. In the event that

the substitute commissioner makes such a finding, the substitute

commissioner shall cancel the foreclosure sale, or adjourn such

sale in the manner provided in section 3710(c) of this title. Upon

designation of a substitute foreclosure commissioner, a copy of the

written notice of such designation referred to in section 3704 of

this title shall be served upon the persons set forth in section

3708(1) of this title (1) by mail as provided in such section 3708

of this title (except that the minimum time periods between mailing

and the date of foreclosure sale prescribed in such section shall

not apply to notice by mail pursuant to this subsection), or (2) in

any other manner, which in the substitute commissioner's sole

discretion, is conducive to achieving timely notice of such

substitution. In the event a substitute foreclosure commissioner

is designated less than forty-eight hours prior to the time of the

foreclosure sale, the pending foreclosure shall be terminated and a

new foreclosure shall be commenced by commencing service of a new

notice of default and foreclosure sale.

-SOURCE-

(Pub. L. 97-35, title III, Sec. 368, Aug. 13, 1981, 95 Stat. 425.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3704, 3705, 3708, 3709 of

this title.

-CITE-

12 USC Sec. 3708 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 38 - MULTIFAMILY MORTGAGE FORECLOSURE

-HEAD-

Sec. 3708. Service of notice of default and foreclosure sale

-STATUTE-

The foreclosure commissioner shall serve the notice of default

and foreclosure sale provided for in section 3706 of this title

upon the following persons and in the following manner, and no

additional notice shall be required to be served notwithstanding

any notice requirements of any State or local law -

(1) The notice of default and foreclosure sale, together with

the designation required by section 3704 of this title, shall be

sent by certified or registered mail, postage prepaid and return

receipt requested, to the following persons:

(A) the current security property owner of record, as the

record exists forty-five days prior to the date originally set

for foreclosure sale, whether or not the notice describes a

sale adjourned as provided in this chapter;

(B) the original mortgagor and all subsequent mortgagors of

record or other persons who appear of record or in the mortgage

agreement to be liable for part or all of the mortgage debt, as

the record exists forty-five days prior to the date originally

set for foreclosure sale, whether or not the notice describes a

sale adjourned as provided in this chapter, except any such

mortgagors or persons who have been released; and

(C) all persons holding liens of record upon the security

property, as the record exists forty-five days prior to the

date originally set for foreclosure sale, whether or not the

notice describes a sale adjourned as provided in this chapter.

Notice under clauses (A) and (B) of this paragraph shall be

mailed at least twenty-one days prior to the date of foreclosure

sale, and shall be mailed to the owner or mortgagor at the

address stated in the mortgage agreement, or, if none, to the

address of the security property, or, at the discretion of the

foreclosure commissioner, to any other address believed to be

that of such owner or mortgagor. Notice under clause (C) of this

paragraph shall be mailed at least ten days prior to the date of

foreclosure sale, and shall be mailed to each such lienholder's

address as stated of record or, at the discretion of the

foreclosure commissioner, to any other address believed to be

that of such lienholder. Notice by mail pursuant to this

subsection or section 3707(b) of this title shall be deemed duly

given upon mailing, whether or not received by the addressee and

whether or not a return receipt is received or the letter is

returned.

(2) A copy of the notice of default and foreclosure sale shall

be published, as provided herein, once a week during three

successive calendar weeks, and the date of last publication shall

be not less than four nor more than twelve days prior to the sale

date. The information included in the notice of default and

foreclosure sale pursuant to section 3706(a)(4) of this title may

be omitted, in the foreclosure commissioner's discretion, from

the published notice. Such publication shall be in a newspaper

or newspapers having general circulation in the county or

counties in which the security property being sold is located.

To the extent practicable, the newspaper or newspapers chosen

shall be a newspaper or newspapers, if any is available, having

circulation conducive to achieving notice of foreclosure by

publication. Should there be no newspaper published at least

weekly which has a general circulation in one of the counties in

which the security property being sold is located, copies of the

notice of default and foreclosure sale shall be posted in at

least three public places in each such county at least twenty-one

days prior to the date of sale.

(3) A copy of the notice of default and foreclosure sale shall

be posted in a prominent place at or on the real property to be

sold at least seven days prior to the foreclosure sale, and entry

upon the premises for this purpose shall be privileged as against

all persons. If the property consists of two or more

noncontiguous parcels of land, a copy of the notice of default

and foreclosure sale shall be posted in a prominent place on each

such parcel. If the security property consists of two or more

separate buildings, a copy of the notice of default and

foreclosure sale shall be posted in a prominent place on each

such building. Posting at or on the premises shall not be

required where the foreclosure commissioner, in the

commissioner's sole discretion, finds that the act of posting

will likely cause a breach of the peace or that posting may

result in an increased risk of vandalism or damage to the

property.

-SOURCE-

(Pub. L. 97-35, title III, Sec. 369, Aug. 13, 1981, 95 Stat. 426.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3704, 3707, 3710, 3711,

3714 of this title.

-CITE-

12 USC Sec. 3709 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 38 - MULTIFAMILY MORTGAGE FORECLOSURE

-HEAD-

Sec. 3709. Presale reinstatement

-STATUTE-

(a) Grounds

Except as provided in sections 3707(b) and 3710(c) of this title,

the foreclosure commissioner shall withdraw the security property

from foreclosure and cancel the foreclosure sale only if -

(1) the Secretary so directs the commissioner prior to or at

the time of sale;

(2) the commissioner finds, upon application of the mortgagor

at least three days prior to the date of sale, that the default

or defaults upon which the foreclosure is based did not exist at

the time of service of the notice of default and foreclosure

sale; or

(3)(A) in the case of a foreclosure involving a monetary

default, there is tendered to the foreclosure commissioner before

public auction is completed the entire amount of principal and

interest which would be due if payments under the mortgage had

not been accelerated; (B) in the case of a foreclosure involving

a nonmonetary default, the foreclosure commissioner, upon

application of the mortgagor before the date of foreclosure sale,

finds that such default is cured; and (C) there is tendered to

the foreclosure commissioner before public auction is completed

all amounts due under the mortgage agreement (excluding

additional amounts which would have been due if mortgage payments

had been accelerated), all amounts of expenditures secured by the

mortgage and all costs of foreclosure incurred for which payment

from the proceeds of foreclosure is provided in section 3711 of

this title, except that the Secretary shall have discretion to

refuse to cancel a foreclosure pursuant to this paragraph (3) if

the current mortgagor or owner of record has on one or more

previous occasions caused a foreclosure of the mortgage,

commenced pursuant to this part or otherwise, to be canceled by

curing a default.

(b) Views of Secretary

Prior to withdrawing the security property from foreclosure in

the circumstances described in subsection (a)(2) or (a)(3) of this

section, the foreclosure commissioner shall afford the Secretary a

reasonable opportunity to demonstrate why the security property

should not be so withdrawn.

(c) Mortgage subsequent to reinstatement

In any case in which a foreclosure commenced under this chapter

is canceled, the mortgage shall continue in effect as though

acceleration had not occurred.

(d) Subsequent foreclosures

If the foreclosure commissioner cancels a foreclosure sale under

this chapter a new foreclosure may be subsequently commenced as

provided in this chapter.

-SOURCE-

(Pub. L. 97-35, title III, Sec. 369A, Aug. 13, 1981, 95 Stat. 427.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 3710 of this title.

-CITE-

12 USC Sec. 3710 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 38 - MULTIFAMILY MORTGAGE FORECLOSURE

-HEAD-

Sec. 3710. Foreclosure sale

-STATUTE-

(a) Time of sale; public auction; location

The date of foreclosure sale set forth in the notice of default

and foreclosure sale shall not be prior to thirty days after the

due date of the earliest installment wholly unpaid or the earliest

occurrence of any uncured nonmonetary default upon which

foreclosure is based. Foreclosure sale pursuant to this chapter

shall be at public auction, and shall be scheduled to begin between

the hours of 9 o'clock ante meridian and 4 o'clock post meridian

local time on a day other than Sunday or a public holiday as

defined by section 6103(a) of title 5 or State law. The

foreclosure sale shall be held at a location specified in the

notice of default and foreclosure sale, which shall be a location

where foreclosure real estate auctions are customarily held in the

county or one of the counties in which the property to be sold is

located, or at a courthouse therein, or at or on the property to be

sold. Sale of security property situated in two or more counties

may be held in any one of the counties in which any part of the

security property is situated.

(b) Conduct of sale

The foreclosure commissioner shall conduct the foreclosure sale

in accordance with the provisions of this chapter and in a manner

fair to both the mortgagor and the Secretary. The foreclosure

commissioner shall attend the foreclosure sale in person, or, if

there are two or more commissioners, at least one shall attend the

foreclosure sale. In the event that no foreclosure commissioner is

a natural person, the foreclosure commissioner shall cause its duly

authorized employee to attend the foreclosure sale to act on its

behalf. Written one-price sealed bids shall be accepted by the

foreclosure commissioner from the Secretary and other persons for

entry by announcement by the commissioner at the sale. The

Secretary and any other person may bid at the foreclosure sale,

including the Secretary or any other person who has submitted a

written one-price bid, except that the foreclosure commissioner or

any relative, related business entity or employee of such

commissioner or entity shall not be permitted to bid in any manner

on the security property subject to foreclosure sale. The

foreclosure commissioner may serve as auctioneer, or, in accordance

with regulations of the Secretary, may employ an auctioneer to be

paid from the commission provided for in section 3711(5) of this

title.

(c) Adjournment or cancellation

The foreclosure commissioner shall have discretion, prior to or

at the time of sale, to adjourn or cancel the foreclosure sale if

the commissioner determines, in the commissioner's sole discretion,

that circumstances are not conducive to a sale which is fair to the

mortgagor and the Secretary or that additional time is necessary to

determine whether the security property should be withdrawn from

foreclosure as provided in section 3709 of this title. The

foreclosure commissioner may adjourn a sale to a later hour the

same day without the giving of further notice, or may adjourn the

foreclosure sale for not less than nine nor more than twenty-four

days, in which case the commissioner shall serve a notice of

default and foreclosure sale revised to recite that the foreclosure

sale has been adjourned to a specified date and to include any

corrections the foreclosure commissioner deems appropriate. Such

notice shall be served by publication, mailing and posting in

accordance with section 3708 of this title, except that publication

may be made on any of three separate days prior to the revised date

of foreclosure sale, and mailing may be made at any time at least

seven days prior to the date to which the foreclosure sale has been

adjourned.

-SOURCE-

(Pub. L. 97-35, title III, Sec. 369B, Aug. 13, 1981, 95 Stat. 428.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3707, 3709, 3711, 3714 of

this title.

-CITE-

12 USC Sec. 3711 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 38 - MULTIFAMILY MORTGAGE FORECLOSURE

-HEAD-

Sec. 3711. Foreclosure costs

-STATUTE-

The following foreclosure costs shall be paid from the sale

proceeds prior to satisfaction of any other claim to such sale

proceeds:

(1) necessary advertising costs and postage incurred in giving

notice pursuant to sections 3708 and 3710 of this title;

(2) mileage for posting notices and for the foreclosure

commissioner's attendance at the sale at the rate provided in

section 1921 of title 28 for mileage by the most reasonable road

distance;

(3) reasonable and necessary costs actually incurred in

connection with any necessary search of title and lien records;

(4) necessary out-of-pocket costs incurred by the foreclosure

commissioner to record documents; and

(5) a commission for the foreclosure commissioner for the

conduct of the foreclosure to the extent authorized by

regulations issued by the Secretary.

-SOURCE-

(Pub. L. 97-35, title III, Sec. 369C, Aug. 13, 1981, 95 Stat. 429.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3709, 3710, 3712, 3714 of

this title.

-CITE-

12 USC Sec. 3712 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 38 - MULTIFAMILY MORTGAGE FORECLOSURE

-HEAD-

Sec. 3712. Disposition of sale proceeds

-STATUTE-

Money realized from a foreclosure sale shall be made available

for obligation and expenditure -

(1) first to cover the costs of foreclosure provided for in

section 3711 of this title;

(2) then to pay valid tax liens or assessments prior to the

mortgage;

(3) then to pay any liens recorded prior to the recording of

the mortgage which are required to be paid in conformity with the

terms of sale in the notice of default and foreclosure sale;

(4) then to service charges and advancements for taxes,

assessments, and property insurance premiums;

(5) then to the interest;

(6) then to the principal balance secured by the mortgage

(including expenditures for the necessary protection,

preservation, and repair of the security property as authorized

under the mortgage agreement and interest thereon if provided for

in the mortgage agreement); and

(7) then to late charges.

Any surplus after payment of the foregoing shall be paid to holders

of liens recorded after the mortgage and then to the appropriate

mortgagor. If the person to whom such surplus is to be paid cannot

be located, or if the surplus available is insufficient to pay all

claimants and the claimants cannot agree on the allocation of the

surplus, or if any person claiming an interest in the mortgage

proceeds does not agree that some or all of the sale proceeds

should be paid to a claimant as provided in this section, that part

of the sale proceeds in question may be deposited by the

foreclosure commissioner with an appropriate official or court

authorized under law to receive disputed funds in such

circumstances. If such a procedure for the deposit of disputed

funds is not available, and the foreclosure commissioner files a

bill of interpleader or is sued as a stakeholder to determine

entitlement to such funds, the foreclosure commissioner's necessary

costs in taking or defending such action shall be deductible from

the disputed funds.

-SOURCE-

(Pub. L. 97-35, title III, Sec. 369D, Aug. 13, 1981, 95 Stat. 429.)

-CITE-

12 USC Sec. 3713 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 38 - MULTIFAMILY MORTGAGE FORECLOSURE

-HEAD-

Sec. 3713. Transfer of title and possession

-STATUTE-

(a) Payment and delivery of deeds

The foreclosure commissioner shall deliver a deed or deeds to the

purchaser or purchasers and obtain the balance of the purchase

price in accordance with the terms of sale provided in the notice

of default and foreclosure sale.

(b) Quit claim deed

Subject to subsection (c) of this section, the foreclosure deed

or deeds shall convey all of the right, title, and interest in the

security property covered by the deed which the Secretary as

holder, the foreclosure commissioner, the mortgagor, and any other

persons claiming by, through, or under them, had on the date of

execution of the mortgage, together with all of the right, title,

and interest thereafter acquired by any of them in such property up

to the hour of sale, and no judicial proceeding shall be required

ancillary or supplementary to the procedures provided in this

chapter to assure the validity of the conveyance or confirmation of

such conveyance.

(c) Possession by purchaser; continuing interests

A purchaser at a foreclosure sale held pursuant to this chapter

shall be entitled to possession upon passage of title to the

mortgaged property, subject to an interest or interests senior to

that of the mortgage and subject to the terms of any lease of a

residential tenant for the remaining term of the lease or for one

year, whichever period is shorter. Any other person remaining in

possession after the sale and any residential tenant remaining in

possession after the applicable period shall be deemed a tenant at

sufferance.

(d) Right of redemption; right of possession

There shall be no right of redemption, or right of possession

based upon right of redemption, in the mortgagor or others

subsequent to a foreclosure pursuant to this chapter.

(e) Imposition of tax on conveyance to the Secretary

When conveyance is made to the Secretary, no tax shall be imposed

or collected with respect to the foreclosure commissioner's deed,

whether as a tax upon the instrument or upon the privilege of

conveying or transferring title to the property. Failure to

collect or pay a tax of the type and under the circumstances stated

in the preceding sentence shall not be grounds for refusing to

record such a deed, for failing to recognize such recordation as

imparting notice or for denying the enforcement of such a deed and

its provisions in any State or Federal court.

-SOURCE-

(Pub. L. 97-35, title III, Sec. 369E, Aug. 13, 1981, 95 Stat. 430.)

-CITE-

12 USC Sec. 3714 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 38 - MULTIFAMILY MORTGAGE FORECLOSURE

-HEAD-

Sec. 3714. Record of foreclosure and sale

-STATUTE-

(a) To establish a sufficient record of foreclosure and sale, the

foreclosure commissioner shall include in the recitals of the deed

to the purchaser or prepare an affidavit or addendum to the deed

stating -

(1) that the mortgage was held by the Secretary;

(2) the particulars of the foreclosure commissioner's service

of notice of default and foreclosure sale in accordance with

sections 3708 and 3710 of this title;

(3) that the foreclosure was conducted in accordance with the

provisions of this chapter and with the terms of the notice of

default and foreclosure sale;

(4) a correct statement of the costs of foreclosure, calculated

in accordance with section 3711 of this title; and

(5) the name of the successful bidder and the amount of the

successful bid.

(b) The deed executed by the foreclosure commissioner, the

foreclosure commissioner's affidavit and any other instruments

submitted for recordation in relation to the foreclosure of the

security property under this chapter shall be accepted for

recordation by the registrar of deeds or other appropriate official

of the county or counties in which the security property is located

upon tendering of payment of the usual recording fees for such

instruments.

-SOURCE-

(Pub. L. 97-35, title III, Sec. 369F, Aug. 13, 1981, 95 Stat. 430.)

-CITE-

12 USC Sec. 3715 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 38 - MULTIFAMILY MORTGAGE FORECLOSURE

-HEAD-

Sec. 3715. Computation of time

-STATUTE-

Periods of time provided for in this chapter shall be calculated

in consecutive calendar days including the day or days on which the

actions or events occur or are to occur for which the period of

time is provided and including the day on which an event occurs or

is to occur from which the period is to be calculated.

-SOURCE-

(Pub. L. 97-35, title III, Sec. 369G, Aug. 13, 1981, 95 Stat. 431.)

-CITE-

12 USC Sec. 3716 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 38 - MULTIFAMILY MORTGAGE FORECLOSURE

-HEAD-

Sec. 3716. Separability

-STATUTE-

If any clause, sentence, paragraph or part of this chapter shall,

for any reason, be adjudged by a court of competent jurisdiction to

be invalid or invalid as applied to a class of cases, such judgment

shall not affect, impair, or invalidate the remainder thereof and

of this chapter, but shall be confined in its operation to the

clause, sentence, paragraph, or part thereof directly involved in

the controversy in which such judgment shall have been rendered.

-SOURCE-

(Pub. L. 97-35, title III, Sec. 369H, Aug. 13, 1981, 95 Stat. 431.)

-CITE-

12 USC Sec. 3717 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 38 - MULTIFAMILY MORTGAGE FORECLOSURE

-HEAD-

Sec. 3717. Regulations

-STATUTE-

The Secretary is authorized to issue such regulations as may be

necessary to carry out the provisions of this chapter.

-SOURCE-

(Pub. L. 97-35, title III, Sec. 369I, Aug. 13, 1981, 95 Stat. 431.)

-CITE-