(a) Periodic review of mortgagee performanceTo reduce losses in connection with single family mortgage insurance programs under this chapter, at least once a year the Secretary shall review the rate of early defaults and claims for insured single family mortgages originated or underwritten by each mortgagee.
(b) Comparison with other mortgageesFor each mortgagee, the Secretary shall compare the rate of early defaults and claims for insured single family mortgage loans originated or underwritten by the mortgagee in an area with the rate of early defaults and claims for other mortgagees originating or underwriting insured single family mortgage loans in the area. For purposes of this section, the term “area” means each geographic area in which the mortgagee is authorized by the Secretary to originate insured single family mortgages.
(c) Termination of mortgagee origination approval(1) Notwithstanding section 1708(c) of this title, the Secretary may terminate the approval of a mortgagee to originate or underwrite single family mortgages if the Secretary determines that the mortgage loans originated or underwritten by the mortgagee present an unacceptable risk to the insurance funds. The determination shall be based on the comparison required under subsection (b) and shall be made in accordance with regulations of the Secretary. The Secretary may rely on existing regulations published before this section takes effect.
(2) The Secretary shall give a mortgagee at least 60 days prior written notice of any termination under this subsection. The termination shall take effect at the end of the notice period, unless the Secretary withdraws the termination notice or extends the notice period. If requested in writing by the mortgagee within 30 days of the date of the notice, the mortgagee shall be entitled to an informal conference with the official authorized to issue termination notices on behalf of the Secretary (or a designee of that official). At the informal conference, the mortgagee may present for consideration specific factors that it believes were beyond its control and that caused the excessive default and claim rate.
Structure US Code
§ 1731b. Prohibition against transient housing
§ 1733. Application of other laws
§ 1734. Amendment, extension, or increase of commitment amounts
§ 1735. Payment of certain funds to Treasury
§ 1735a. Prepayment of mortgages by nonprofit educational institutions; refunds
§ 1735c. General Insurance Fund
§ 1735e. Acceptance of materials or products used in structures
§ 1735e–1. Use of American materials and products
§ 1735f. Water and sewerage facilities
§ 1735f–1. Waiver of deduction on assignment of property to Secretary in lieu of foreclosure
§ 1735f–2. Uniform rehabilitation standards for housing within and without urban renewal areas
§ 1735f–4. Minimum property standards
§ 1735f–6. Secondary mortgages held by State or local governmental agency on insured properties
§ 1735f–7. Exemption from State usury laws; applicability
§ 1735f–8. Time of payment of premium charges
§ 1735f–9. Limitation on commitments to insure loans and mortgages
§ 1735f–10. Change of mortgagee status
§ 1735f–11. Review of mortgagee performance and authority to terminate
§ 1735f–12. Assurance of adequate processing of applications for loan and mortgage insurance
§ 1735f–13. Prohibition of requirement of minimum principal loan amount
§ 1735f–15. Civil money penalties against multifamily mortgagors
§ 1735f–16. Annual audited financial statements
§ 1735f–17. Examinations and sanctions for certain violations
§ 1735f–18. Information regarding early defaults and foreclosures on insured mortgages
§ 1735f–20. Authorization of appropriations for General and Special Risk Insurance Funds