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(2) the term ‘‘private mortgage lender’’ means
any lender that is not subject to the supervision, ap-
proval, regulation, or insuring of the Board of Gov-
ernors of the Federal Reserve System, the Federal
Deposit Insurance Corporation, the Comptroller of
the Currency, the Office of Thrift Supervision, the
National Credit Union Administration, or any other
Federal agency that regulates lending activity. The
term does not include institutions engage primarily
in the purchase of mortgage loans.
Subtitle B—Secondary Mortgage
Market Programs
SEC. 441. LIMITATION ON GNMA GUARANTEES OF MORT-
GAGE-BACKED SECURITIES.
Section 306(g)(2) of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1721(g)(2)) is amend-
ed to read as follows:
‘‘(2) Notwithstanding any other provision of law and
subject only to the absence of qualified requests for guar-
antees, to the authority provided in this subsection, and
to the extent of or in such amounts as any funding limita-
tion approved in appropriation Acts, the Association shall
enter into commitments to issue guarantees under this
subsection in an aggregate amount of $130,000,000,000
during fiscal year 1995 and $130,000,000,000 during fis-
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cal year 1996. There are authorized to be appropriated
to cover the costs (as such term is defined in section 502
of the Congressional Budget Act of 1974) of guarantees
issued under this Act by the Association such sums as may
be necessary for each of fiscal years 1995 and 1996.’’.
SEC. 442. ASSESSMENT COLLECTION DATES FOR OFFICE
OF FEDERAL HOUSING ENTERPRISE OVER-
SIGHT.
Section 1316(b) of the Housing and Community De-
velopment Act of 1992 (12 U.S.C. 4516(b)) is amended
by striking paragraph (2) and inserting the following new
paragraph:
‘‘(2) TIMING OF PAYMENT.—The annual assess-
ment shall be payable semiannually for each fiscal
year, on October 1st and April 1st.’’.
Subtitle C—Emergency Mortgage
Relief
SEC. 461. AMENDMENTS TO EMERGENCY HOMEOWNERS’
RELIEF ACT.
(a) FINDINGS.—Section 102(a) of the Emergency
Homeowners’ Relief Act (12 U.S.C. 2701(a)) is amend-
ed—
(1) by striking paragraph (1) and inserting the
following new paragraph:
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‘‘(1) certain homeowners in the United States
are encountering severe economic hardships as a re-
sult of unemployment or a reduction in income;’’;
(2) in paragraph (2), by striking ‘‘adverse eco-
nomic conditions’’ and inserting ‘‘economic hard-
ships’’; and
(3) in paragraph (3), by striking ‘‘economic
conditions’’ and inserting ‘‘their economic condi-
tions’’.
(b) MORTGAGES ELIGIBLE FOR ASSISTANCE.—Sec-
tion 103 of the Emergency Homeowners’ Relief Act (12
U.S.C. 2702) is amended—
(1) in paragraph (5), by striking ‘‘and’’ at the
end;
(2) in paragraph (6)—
(A) by inserting ‘‘a 1- to 4-family resi-
dence that is’’ after ‘‘is’’; and
(B) by striking the period at the end and
inserting ‘‘; and’’; and
(3) by adding at the end the following new
paragraph:
‘‘(7) the delinquency for which the holder of the
mortgage intends to foreclose commenced after the
date of the enactment of the Housing and Commu-
nity Development Act of 1994.’’.
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(c) AUTHORIZATION OF APPROPRIATIONS.—Section
109(a) of the Emergency Homeowners’ Relief Act (12
U.S.C. 2708(a)) is amended by striking ‘‘, except that’’
and all that follows through ‘‘$500,000,000’’ and inserting
‘‘for fiscal years 1995 and 1996’’.
(d) EXPIRATION
DATE.—Section 109(b) of the
Emergency Homeowners’ Relief Act (12 U.S.C. 2708(b))
is amended by striking ‘‘September 30, 1977’’ and insert-
ing ‘‘September 30, 1996’’.
(e) NOTIFICATION.—Section 110 of the Emergency
Homeowners’ Relief Act (12 U.S.C. 2709) is amended—
(1) in paragraph (1) of the 1st sentence—
(A) by striking ‘‘October 1, 1977’’ and in-
serting ‘‘September 30, 1996’’; and
(B) by inserting ‘‘single family’’ before
‘‘residential’’;
(2) in paragraph (2) of the 1st sentence, by
striking ‘‘until one year from the date of the enact-
ment of this title’’ and inserting ‘‘during fiscal years
1995 and 1996’’; and
(3) in the 2d sentence, by striking ‘‘Federal
Home Loan Bank Board, the Federal Savings and
Loan Insurance Corporation’’ and inserting ‘‘Office
of Thrift Supervision’’.
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(f) REPORTS.—Section 111 of the Emergency Home-
owners’ Relief Act (12 U.S.C. 2710) is amended—
(1) by striking ‘‘Within’’ and all that follows
through ‘‘Congress on’’ and inserting the following:
‘‘For fiscal year 1995 and each fiscal year thereafter
that begins before the date in section 109(b), the
Secretary shall submit a report under this section to
the Congress. The report for a fiscal year shall be
submitted not later than 60 days after the end of
the fiscal year and shall describe’’;
(2) by striking ‘‘purposes’’ and inserting ‘‘pur-
pose’’;
(3) by inserting ‘‘and’’ before ‘‘(4)’’; and
(4) by striking ‘‘; and (5)’’ and all that follows
and inserting a period.
Subtitle 
D—Nonjudicial 
Fore-
closure 
of 
Defaulted 
Single
Family Mortgages
SEC. 481. SHORT TITLE.
This subtitle may be cited as the ‘‘Single Family
Mortgage Foreclosure Act of 1994’’.
SEC. 482. FINDINGS AND PURPOSE.
(a) FINDINGS.—The Congress finds that—
(1) disparate State laws under which mortgages
are foreclosed on behalf of the Secretary of Housing
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and Urban Development covering one- to four-family
residential properties burden certain programs ad-
ministered by the Secretary, increase the costs of
collecting these obligations, and cause detriment to
the community generally;
(2) long periods to complete the foreclosure of
these mortgages under certain State laws lead to de-
terioration in the condition of the properties in-
volved; necessitate substantial Federal holding ex-
penditures; increase the risk of vandalism, fire loss,
depreciation, damage, and waste with respect to the
properties; and adversely affect the neighborhoods in
which the properties are located;
(3) these conditions seriously impair the Sec-
retary’s ability to protect the Federal financial inter-
est in the affected properties and frustrate attain-
ment of the objectives of the underlying Federal pro-
gram authority;
(4) the availability of a uniform and more expe-
ditious procedure, with no right of redemption in the
mortgagor or others, for the foreclosure of these
mortgages by the Secretary will tend to ameliorate
these conditions; and
(5) providing the Secretary with a nonjudicial
foreclosure procedure will reduce unnecessary litiga-
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tion by removing many foreclosures from the courts
where they contribute to overcrowded calendars.
(b) PURPOSE.—The purpose of this subtitle is to cre-
ate a uniform Federal foreclosure remedy for single family
mortgages that (1) are held by the Secretary of Housing
and Urban Development pursuant to title I or title II of
the National Housing Act or (2) secure loans obligated
by the Secretary under section 312 of the Housing Act
of 1964.
SEC. 483. DEFINITIONS.
As used in this subtitle—
(1) the term ‘‘bona fide purchaser’’ means a
purchaser for value in good faith and without notice
of any adverse claim, who will, therefore, acquire the
security property free of any adverse claim;
(2) the term ‘‘mortgage’’ means a deed of trust,
mortgage, deed to secure debt, security agreement,
or any other form of instrument under which any in-
terest in property, real, personal or mixed, or any in-
terest in property including leaseholds, life estates,
reversionary interests, and any other estates under
applicable State law, is conveyed in trust, mort-
gaged, encumbered, pledged, or otherwise rendered
subject to a lien for the purpose of securing the pay-
ment of money or the performance of an obligation;
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(3) the term ‘‘single family mortgage’’ means a
mortgage that covers property on which there is lo-
cated a one- to four-family residence, which mort-
gage—
(A) is held by the Secretary pursuant to
title I or title II of the National Housing Act,
or
(B) secures a loan obligated by the Sec-
retary under section 312 of the Housing Act of
1964, as it existed before its repeal by section
289 of the Cranston-Gonzalez National Afford-
able Housing Act (except that a mortgage se-
curing such a loan that covers property contain-
ing non-residential space and a one- to four-
family dwelling shall not be subject to this Act);
(4) the term ‘‘mortgage agreement’’ means the
note or debt instrument and the mortgage instru-
ment, deed of trust instrument, trust deed, or in-
strument or instruments creating the mortgage, in-
cluding any instrument incorporated by reference
therein and any instrument or agreement amending
or modifying any of the foregoing;
(5) the term ‘‘mortgagor’’ means the obligor,
grantor, or trustor named in the mortgage agree-
ment and, unless the context otherwise indicates, in-
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cludes the current owner of record of the security
property whether or not personally liable on the
mortgage debt;
(6) the term ‘‘owner’’ means any person who
has an ownership interest in property and includes
heirs, devisees, executors, administrators, and other
personal representatives, and trustees of testa-
mentary trusts if the owner of record is deceased;
(7) the term ‘‘person’’ includes any individual,
group of individuals, association, partnership, cor-
poration, or organization;
(8) the terms ‘‘record’’ and ‘‘recorded’’ include
‘‘register’’ and ‘‘registered’’ in the instance of reg-
istered land;
(9) the term ‘‘security property’’ means the
property (real, personal or mixed) or an interest in
property (including leaseholds, life estates, reversion-
ary 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;
(10) the term ‘‘State’’ means the several States,
the District of Columbia, the Commonwealth of
Puerto Rico, the United States Virgin Islands,
Guam, American Samoa, the Northern Mariana Is-
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lands, the Trust Territory of the Pacific Islands, and
Indian tribes as defined by the Secretary;
(11) the term ‘‘county’’ means county as de-
fined in section 2 of title I, United States Code; and
(12) the term ‘‘Secretary’’ means the Secretary
of Housing and Urban Development.
SEC. 484. APPLICABILITY.
Single family mortgages encumbering real estate lo-
cated in any State may be foreclosed by the Secretary in
accordance with this subtitle, or pursuant to other fore-
closure procedures available, at the option of the Sec-
retary.
SEC. 485. DESIGNATION OF FORECLOSURE COMMISSIONER.
A foreclosure commissioner or commissioners des-
ignated pursuant to this subtitle shall have a nonjudicial
power of sale as provided in this subtitle. Where the Sec-
retary wishes to foreclose upon a single family mortgage,
the Secretary may designate a foreclosure commissioner
and, with or without cause, may designate a substitute
foreclosure commissioner to replace a previously des-
ignated foreclosure commissioner, by executing a duly ac-
knowledged, written designation stating the name and
business or residential address of the commissioner or sub-
stitute commissioner. The designation shall be effective
upon execution. The foreclosure commissioner, if a natural
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person, shall be a resident of the State in which the secu-
rity 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 commis-
sioner 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 a government or corporate entity, such person may be
designated by his or her unique title or position instead
of by name.
SEC. 486. PREREQUISITES TO FORECLOSURE.
Foreclosure by the Secretary under this subtitle of
a single family mortgage may be commenced, as provided
in section 488, upon the breach of a covenant or condition
in the mortgage agreement for which foreclosure is au-
thorized under the mortgage, except that no such fore-
closure may be commenced unless any previously pending
proceeding, judicial or nonjudicial, separately instituted by
the Secretary to foreclose the mortgage other than under
this subtitle has been withdrawn, dismissed, or otherwise
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terminated. No such separately instituted foreclosure pro-
ceeding on the mortgage shall be instituted by the Sec-
retary during the pendency of foreclosure pursuant to this
subtitle. Nothing in this subtitle shall preclude the Sec-
retary from enforcing any right, other than foreclosure,
under applicable Federal or State law, including any right
to obtain a monetary judgment. Nothing in this subtitle
shall preclude the Secretary from foreclosing under this
subtitle 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 lim-
ited to, the appointment of a receiver, mortgagee-in-pos-
session status, or relief under an assignment of rents.
SEC. 487. NOTICE OF FORECLOSURE SALE.
The notice of foreclosure sale to be served in accord-
ance with this subtitle shall be subscribed with the name
and address of the foreclosure commissioner and the date
on which subscribed, and shall set forth the following in-
formation:
(1) The names of the Secretary, the original
mortgagee (if other than the Secretary), and the
original mortgagor.
(2) The street address or a description of the
location of the security property, and a description
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of the security property, 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 recorda-
tion of the mortgage.
(4) The failure to make payment, including the
due date of the earliest installment payment remain-
ing wholly unpaid as of the date the notice is sub-
scribed, or the description of other default or de-
faults upon which foreclosure is based, and the ac-
celeration 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 subtitle.
(7) The types of costs, if any, to be paid by the
purchaser upon transfer of title.
(8) The amount and method of deposit to be re-
quired 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.
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SEC. 488. COMMENCEMENT OF FORECLOSURE.
(a) REQUEST.—If the Secretary as holder of a single
family mortgage determines that the prerequisites to fore-
closure set forth in section 486 are satisfied, the Secretary
may request the foreclosure commissioner to commence
foreclosure of a single family mortgage. Upon such re-
quest, the foreclosure commissioner shall commence fore-
closure of the mortgage, by commencing service of a notice
of default and foreclosure sale in accordance with section
489.
(b) SUBSTITUTE COMMISSIONER.—After commence-
ment of a foreclosure under this subtitle, the Secretary
may designate a substitute foreclosure commissioner at
any time before the time of foreclosure sale, and the fore-
closure shall continue without prejudice, unless the sub-
stitute commissioner, in his or her sole discretion, finds
that continuation of the foreclosure sale will unfairly affect
the interests of the mortgagor. If the substitute commis-
sioner makes such a finding, the substitute commissioner
shall cancel the foreclosure sale, or adjourn such sale in
the manner provided in section 491(c). Upon designation
of a substitute foreclosure commissioner, a copy of the
written notice of such designation referred to in section
485 shall be served (1) by mail, as provided in such section
489 (except that the minimum time periods between mail-
ing and the date of foreclosure sale prescribed in such sec-
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tion shall not apply), or (2) in any other manner which,
in the substitute commissioner’s sole discretion, is condu-
cive to achieving timely notice of such substitution.
SEC. 489. SERVICE OF NOTICE OF FORECLOSURE.
The foreclosure commissioner shall serve the notice
of foreclosure sale provided for in section 487 upon the
following persons and in the following manner, and no ad-
ditional notice shall be required to be served, notwith-
standing any notice requirements of any State or local law:
(1) TIMING.—At least 45 days prior to the date
of the foreclosure sale, the notice of foreclosure sale
required by section 488 of this subtitle shall be filed
in the manner authorized for filing a notice of an ac-
tion concerning real property according to the law of
the State where the security property is located or,
if none, in the manner authorized by section 3201
of title 28, United States Code.
(2) NOTICE
BY
MAIL.—The notice of fore-
closure sale shall be sent by certified or registered
mail, postage prepaid and return receipt requested
to the following:
(A) The current security property owner of
record, as the record exists 60 days before the
date originally set for foreclosure sale, whether
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or not the notice describes a sale adjourned as
provided in this subtitle.
(B) All mortgagors of record or other per-
sons who appear of record or in the mortgage
agreement to be liable for part or all of the
mortgage debt, as the record exists 60 days be-
fore the date originally set for foreclosure sale,
whether or not the notice describes a sale ad-
journed as provided in this subtitle, except any
such mortgagors or persons who have been re-
leased.
(C) All dwelling units in the security prop-
erty, whether or not the notice describes a sale
adjourned as provided in this subtitle.
(D) All persons holding liens of record
upon the security property, as the record exists
60 days before the date originally set for fore-
closure sale, whether or not the notice describes
a sale adjourned as provided in this subtitle.
Notice under subparagraphs (A) and (B) of this
paragraph shall be mailed at least 45 days before
the date of foreclosure sale, and shall be mailed to
the owner or mortgagor at the last known address
of the owner or mortgagor, or, if none, to the ad-
dress of the security property, or, at the discretion
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of the foreclosure commissioner, to any other ad-
dress believed to be that of such owner or mortga-
gor. Notice under subparagraph (C) of this para-
graph shall be mailed at least 45 days before the
date of foreclosure sale. If the names of the occu-
pants of the security property are not known to the
Secretary, or the security property has more than
one dwelling, the notice shall be posted at the secu-
rity property at least 45 days prior to the fore-
closure sale. Notice under subparagraph (D) of this
paragraph shall be mailed at least 45 days before
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 sub-
section or section 488(b) shall be deemed duly given
upon mailing, whether or not received by the ad-
dressee and whether or not a return receipt is re-
ceived or the letter is returned.
(3) PUBLICATION.—A copy of the notice of de-
fault and foreclosure sale shall be published, as pro-
vided herein, once a week during three successive
calendar weeks before the sale date. Such publica-
tion shall be in a newspaper or newspapers having
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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 achiev-
ing notice of foreclosure by publication. A legal
newspaper that is accepted as a newspaper of legal
record in the county or counties in which the secu-
rity property being sold is located shall be considered
a newspaper having general circulation for the pur-
poses of this paragraph. Should there be no news-
paper published at least weekly which has a general
circulation in one of the counties in which the secu-
rity property being sold is located, copies of the no-
tice of default and foreclosure sale shall be posted at
the courthouse of any county or counties in which
the security property is located and at the place
where the sale is to be held at least 21 days before
the date of sale.
SEC. 490. PRESALE REINSTATEMENT.
(a) IN GENERAL.—Except as provided in sections
488(b) and 491(c), the foreclosure commissioner shall
withdraw the security property from foreclosure and can-
cel the foreclosure sale only if—
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except that the Secretary shall have discretion to
refuse to cancel a foreclosure pursuant to this para-
graph if the current mortgagor or owner of record
has on one or more previous occasions caused a fore-
closure of the mortgage, commenced pursuant to
this subtitle or otherwise, to be canceled by curing
a default.
(b) OPPORTUNITY
TO SECRETARY.—Before with-
drawing the security property from foreclosure in the cir-
cumstances described in subsection (a)(2) or (a)(3), the
foreclosure commissioner shall afford the Secretary a rea-
sonable opportunity to demonstrate why the security prop-
erty should not be so withdrawn.
(c) EFFECT ON MORTGAGE.—In any case in which
a foreclosure commenced under this subtitle is canceled,
the mortgage shall continue in effect as though accelera-
tion had not occurred.
(d) EFFECT
ON SUBSEQUENT FORECLOSURE.—If
the foreclosure commissioner cancels a foreclosure sale
under this subtitle a new foreclosure may be subsequently
commenced as provided in this subtitle.
(e) NOTICE
OF CANCELLATION.—The foreclosure
commissioner shall file a notice of cancellation in the same
place and manner provided for filing the notice of fore-
closure sale in section 489.
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SEC. 491. CONDUCT OF SALE AND ADJOURNMENT.
(a) TIME AND LOCATION.—Foreclosure sale pursu-
ant to this subtitle shall be at public auction, and shall
be scheduled to begin between the hours of 9 a.m. and
4 p.m. local time. 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. The fore-
closure commissioner may designate the order in which
multiple tracts of security are sold.
(b) SALE PROCEDURES.—The foreclosure commis-
sioner shall conduct the foreclosure sale in accordance
with the provisions of this subtitle and in a manner fair
to both the mortgagor and the Secretary. Written one-
price sealed bids shall be accepted by the foreclosure com-
missioner 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. The foreclosure com-
missioner or any relative, related business entity, or em-
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ployee of such commissioner or entity shall not be per-
mitted to bid in any manner on the security property sub-
ject to foreclosure sale, except that the foreclosure com-
missioner or an auctioneer may be directed by the Sec-
retary to enter a bid on the Secretary’s behalf. The fore-
closure commissioner may serve as auctioneer, or, in ac-
cordance with regulations of the Secretary, may employ
an auctioneer to be paid from the commission provided
for in section 492(5).
(c) ADJOURNMENT OR CANCELLATION.—The fore-
closure 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 dis-
cretion, 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 se-
curity property should be withdrawn from foreclosure as
provided in section 490. The foreclosure commissioner
may adjourn a sale to a later hour the same day by an-
nouncing or posting the new time and place of the fore-
closure sale, or may adjourn the foreclosure sale for not
less than 9 nor more than 31 days, in which case the com-
missioner 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 correc-
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tions the foreclosure commissioner deems appropriate.
Such notice shall be served by publication and mailing in
accordance with section 489, except that publication may
be made on any of 3 separate days before the revised date
of foreclosure sale, and mailing may be made at any time
at least 7 days before the date to which the foreclosure
sale has been adjourned.
(d) DEPOSIT.—The foreclosure commissioner may re-
quire a bidder to make a cash deposit in an amount or
percentage set by him and stated in the notice of fore-
closure sale before the bid is accepted. A successful bidder
at the foreclosure sale who fails to comply with the terms
of the sale may be required to forfeit the cash deposit or,
at the election of the foreclosure commissioner after con-
sultation with the Secretary, shall be liable to the agency
for any costs incurred by the agency as a result of such
failure.
(e) PRESUMPTION.—Any foreclosure sale held in ac-
cordance with this subtitle shall be conclusively presumed
to have been conducted in a legal, fair, and reasonable
manner. The sale price shall be conclusively presumed to
be reasonable and equal to the fair market value of the
property.
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SEC. 492. FORECLOSURE COSTS.
The following foreclosure costs shall be paid from the
sale proceeds before satisfaction of any other claim to such
sale proceeds:
(1) Necessary advertising costs and postage in-
curred in giving notice pursuant to sections 489 and
491.
(2) Mileage for posting notices and for the fore-
closure commissioner’s or auctioneer’s attendance at
the sale as provided in section 1921 of title 28,
United States Code, for mileage by the most reason-
able road distance.
(3) Reasonable and necessary costs actually in-
curred 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.
(5) A commission for the foreclosure commis-
sioner other than an employee of the United States
for the conduct of the foreclosure to the extent au-
thorized by the Secretary.
SEC. 493. DISPOSITION OF SALE PROCEEDS.
Money realized from a foreclosure sale shall be made
available for obligation and expenditure—
(1) first, to cover the costs of foreclosure pro-
vided for in section 492;
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(2) then, to pay valid tax liens or assessments
if required by the notice of foreclosure sale;
(3) then, to pay any liens recorded before the
recording of the mortgage which are required to be
paid in conformity with the terms of sale in the no-
tice of foreclosure sale;
(4) then, to service charges and advances for
taxes, assessments, and property insurance pre-
miums;
(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 agree-
ment 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 in the order
of priority under Federal law or the law of the State where
the security property is located and then to the appro-
priate 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 can-
not agree on the allocation of the surplus, or if any person
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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 fore-
closure commissioner with an appropriate official or court
authorized under law to receive disputed funds in such cir-
cumstances. If such a procedure for the deposit of dis-
puted funds is not available, and the foreclosure commis-
sioner 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.
SEC. 494. TRANSFER OF TITLE AND POSSESSION.
(a) DELIVERY OF DEED.—The foreclosure commis-
sioner shall deliver a deed or deeds to the purchaser or
purchasers without warranty or covenants to the pur-
chaser or purchasers and obtain the balance of the pur-
chase price in accordance with the terms of sale provided
in the notice of default and foreclosure sale. Notwithstand-
ing State law to the contrary, the commissioner’s deed
shall be a conveyance of property, and no judicial proceed-
ing shall be required ancillary or supplementary to the
procedures provided in this subtitle to assure the validity
of the conveyance or confirmation of such conveyance.
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(b) POSSESSION.—A purchaser at a foreclosure sale
held pursuant to this subtitle shall be entitled to posses-
sion upon passage of title to the mortgaged property, sub-
ject to an interest or interests not barred under section
496. Any person remaining in possession after the passage
of title shall be deemed a tenant at sufferance subject to
eviction under local law.
(c) DEATH OF PURCHASER.—If a purchaser dies be-
fore execution and delivery of the deed conveying the prop-
erty to the purchaser, the foreclosure commissioner shall
execute and deliver the deed to the representative of the
purchaser’s estate upon payment of the purchase price in
accordance with the terms of sale. Such delivery to the
representative of the purchaser’s estate shall have the
same effect as if accomplished during the lifetime of the
purchaser.
(d) BONA FIDE PURCHASER.—The purchaser of
property under this subtitle shall be presumed to be a
bona fide purchaser without notice of defects, if any, in
the title conveyed to said purchaser if the purchaser would
have been considered a bona fide purchaser without notice
had the sale been made voluntarily and in person by the
debtor.
(e) NULLIFICATION OF RIGHT OF REDEMPTION.—
There shall be no right of redemption, or right of posses-
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sion based upon right of redemption, in the mortgagor or
others subsequent to a foreclosure pursuant to this sub-
title. Section 204(l) of the National Housing Act and sec-
tion 701 of the Department of Housing and Urban Devel-
opment Reform Act of 1989 shall not apply to mortgages
foreclosed under this subtitle.
(f) TAX.—When conveyance is made to the Secretary,
no tax of any State, county, municipality, or local taxing
authority 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 trans-
ferring 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 recorda-
tion as imparting notice, or for denying the enforcement
of such a deed and its provisions in any State or Federal
court.
SEC. 495. RECORD OF FORECLOSURE AND SALE.
(a) RECORD.—To establish a sufficient record of
foreclosure and sale, the foreclosure commissioner shall in-
clude in the recitals of the deed to the purchaser or pre-
pare an affidavit or addendum to the deed stating—
(1) the date, time and place of sale;
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(2) that the mortgage was held by the Sec-
retary, the date of the mortgage, the office in which
the mortgage was recorded, and the liber and folio
or other description of the recordation of the mort-
gage;
(3) the particulars of the foreclosure commis-
sioner’s service of notice of default and foreclosure
sale in accordance with sections 489 and 491;
(4) the date and place of filing the notice of
foreclosure sale;
(5) that the foreclosure was conducted in ac-
cordance with the provisions of this subtitle and with
the terms of the notice of default and foreclosure
sale; and
(6) the sale amount.
(b) EFFECT OF STATEMENTS.—The statements set
forth in subsection (a) shall be prima facie evidence of the
truth of such recitals and statement of facts in any Fed-
eral or State court; and shall be a conclusive presumption
in favor of bona fide purchasers and encumbrancers for
value without notice. Encumbrancers for value include
liens placed by lenders who provide the purchaser with
purchase money in exchange for a security interest in the
newly-conveyed property.
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(c) RECORDATION.—The deed executed by the fore-
closure commissioner, the foreclosure commissioner’s affi-
davit and any other instruments submitted for recordation
in relation to the foreclosure of the security property
under this subtitle shall be accepted for recordation by the
registrar of deeds or other appropriate official of the coun-
ty or counties in which the security property is located
upon tendering of payment of the usual recording fees for
such instruments without regard to the compliance of
those instruments with local filing requirements.
SEC. 496. EFFECT OF SALE.
A sale, made and conducted as prescribed in this sub-
title to a bona fide purchaser, shall be an entire bar of
all claims upon, or with respect to, the property sold, of
each of the following persons:
(1) Any person to whom the notice of fore-
closure sale was mailed as provided in this subtitle,
and the heir, devisee, executor, administrator, suc-
cessor or assignee claiming under any such person.
(2) Any person claiming any interest in the
property subordinate to that of the mortgage, if such
person had actual knowledge of the sale.
(3) Each person, claiming any interest in the
property, whose assignment, mortgage, or other con-
veyance was not duly recorded or filed in the proper
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place for recording or filing, or whose judgment or
decree was not duly docketed or filed in the proper
place for docketing or filing, prior to the date on
which the notice of sale was first served by publica-
tion, as required by section 489(2); and the execu-
tor, administrator, or assignee of such a person.
(4) Every other person claiming under a statu-
tory lien or encumbrance created subsequent to the
recording or filing of the mortgage being foreclosed,
attaching to the title or interest of any person des-
ignated in any of the foregoing subsections of this
section.
SEC. 497. COMPUTATION OF TIME.
Periods of time provided for in this subtitle 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 includ-
ing the day on which an event occurs or is to occur from
which the period is to be calculated.
SEC. 498. SEPARABILITY.
If any clause, sentence, paragraph, or part of this
subtitle 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 subtitle,
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but shall be confined in its operation to the clause, sen-
tence, paragraph, or part thereof directly involved in the
controversy in which such judgment shall have been
rendered.
SEC. 499. DEFICIENCY JUDGMENT.
(a) IN GENERAL.—If after deducting the disburse-
ments provided for in section 493 of this subtitle, the price
at which the security property is sold at a foreclosure sale
is less than the unpaid balance of the debt secured by the
security property, resulting in a deficiency, the Secretary
may refer the matter to the Attorney General who may
commence an action or actions against any or all debtors
to recover the deficiency, unless specifically prohibited by
the mortgage. The United States is also entitled to recover
any amount authorized by section 3011 of title 28, United
States Code, and costs of the action.
(b) LIMITATION.—Any action commenced to recover
the deficiency must be brought within 6 years of the last
sale of the security property.
TITLE V—RURAL HOUSING
SEC. 501. PROGRAM AUTHORIZATIONS.
(a) INSURANCE AND GUARANTEE AUTHORITY.—Sec-
tion 513(a) of the Housing Act of 1949 (42 U.S.C.
1483(a)) is amended to read as follows:
‘‘(a) INSURANCE AND GUARANTEE AUTHORITY.—
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‘‘(1) IN GENERAL.—The Secretary may, to the
extent approved in appropriation Acts, insure and
guarantee loans under this title during fiscal years
1995 and 1996, in aggregate amounts not to exceed
$3,231,103,950 and $3,360,037,069, respectively, as
follows:
‘‘(A) For insured or guaranteed loans
under section 502 on behalf of low-income bor-
rowers 
receiving 
assistance 
under 
section
521(a)(1), $1,802,500,000 for fiscal year 1995
and $1,856,575,000 for fiscal year 1996.
‘‘(B) For guaranteed loans under section
502(h) on behalf of low- and moderate-income
borrowers, $772,500,000 for fiscal year 1995
and $795,675,000 for fiscal year 1996.
‘‘(C) 
For 
loans 
under 
section 
504,
$36,050,000 
for 
fiscal 
year 
1995 
and
$37,131,500 for fiscal year 1996.
‘‘(D) For insured loans under section 514,
$18,053,950 
for 
fiscal 
year 
1995 
and
$18,595,569 for fiscal year 1996.
‘‘(E) For insured loans under section 515,
$600,000,000 
for 
fiscal 
year 
1995 
and
$650,000,000 for fiscal year 1996.
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‘‘(F) 
For 
loans 
under 
section
523(b)(1)(B), $1,000,000 for fiscal year 1995
and $1,030,000 for fiscal year 1996.
‘‘(G) For site loans under section 524,
$1,000,000 for fiscal year 1995 and $1,030,000
for fiscal year 1996.
‘‘(2) LIMITATION
ON
USE.—Notwithstanding
any other provision of law, insured or guaranteed
loan authority in this title for any fiscal year shall
not be transferred or used for any purpose not speci-
fied in this title.’’.
(b) AUTHORIZATION OF APPROPRIATIONS.—Section
513(b) of the Housing Act of 1949 (42 U.S.C. 1483(b))
is amended to read as follows:
‘‘(b) AUTHORIZATION OF APPROPRIATIONS.—There
are authorized to be appropriated for fiscal years 1995
and 1996, and to remain available until expended, the fol-
lowing amounts:
‘‘(1) For grants under section 502(c)(5)(C)(i),
$10,000,000 for fiscal year 1995, and $10,000,000
for fiscal year 1996.
‘‘(2) 
For 
grants 
under 
section 
504,
$31,000,000 for fiscal year 1995 and $31,930,000
for fiscal year 1996.
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‘‘(3) 
For 
purposes 
of 
section 
509(c),
$1,000,000 for fiscal year 1995 and $1,030,000 for
fiscal year 1996.
‘‘(4) For project preparation grants under sec-
tion 509(f)(6), $5,688,278 for fiscal year 1995 and
$5,858,926 for fiscal year 1996.
‘‘(5) In fiscal years 1995 and 1996, such sums
as may be necessary to meet payments on notes or
other obligations issued by the Secretary under sec-
tion 511 equal to—
‘‘(A) the aggregate of the contributions
made by the Secretary in the form of credits on
principal due on loans made pursuant to section
503; and
‘‘(B) the interest due on a similar sum
represented by notes or other obligations issued
by the Secretary.
‘‘(6) For grants for service coordinators under
section 515(y), $1,073,260 for fiscal year 1995 and
$1,105,458 for fiscal year 1996.
‘‘(7) For financial assistance under section
516—
‘‘(A) for low-rent housing and related fa-
cilities for domestic farm labor under sub-
sections (a) through (j) of such section,
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$15,000,000 
for 
fiscal 
year 
1995 
and
$18,000,000 for fiscal year 1996; and
‘‘(B) for housing for rural homeless and
migrant farmworkers under subsection (k) of
such section, $10,269,230 for fiscal year 1995
and $11,407,307 for fiscal year 1996.
‘‘(8) 
For 
grants 
under 
section 
523(f),
$14,918,314 for fiscal year 1995 and $15,365,863
for fiscal year 1996.
‘‘(9) 
For 
grants 
under 
section 
533,
$33,056,408 for fiscal year 1993 and $34,048,100
for fiscal year 1994.
‘‘(10) 
For 
grants 
under 
section 
538,
$10,000,000 for fiscal year 1995, which shall remain
available until the end of fiscal year 1997.
‘‘(11) For assistance under section 539,
$10,000,000 for fiscal year 1995 and $12,000,000
for fiscal year 1996.’’.
(c) RENTAL ASSISTANCE PAYMENT CONTRACTS.—
Section 513(c) of the Housing Act of 1949 (42 U.S.C.
1483(c)(1)) is amended by striking ‘‘(c)’’ and all that fol-
lows through the end of paragraph (1) and inserting the
following:
‘‘(c) RENTAL
AND OPERATING ASSISTANCE.—(1)
The Secretary, to the extent approved in appropriations
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Acts for fiscal years 1995 and 1996, may enter into rental
assistance payment contracts under section 521(a)(2)(A)
and contracts for operating assistance under section
521(a)(5), aggregating $454,079,620 for fiscal year 1995
and $467,702,009 for fiscal year 1996.’’.
(d) SUPPLEMENTAL RENTAL ASSISTANCE PAYMENT
CONTRACTS.—Section 513(d) of the Housing Act of 1949
(42 U.S.C. 1483(d)) is amended to read as follows:
‘‘(d) SUPPLEMENTAL RENTAL ASSISTANCE CON-
TRACTS.—The Secretary, to the extent approved in appro-
priations Acts for fiscal years 1995 and 1996, may enter
into 5-year supplemental rental assistance contracts under
section 502(c)(5)(D) aggregating $13,070,160 for fiscal
year 1995 and $13,462,265 for fiscal year 1996.’’.
(e) RURAL HOUSING VOUCHER AUTHORITY.—Sec-
tion 513(e) of the Housing Act of 1949 (42 U.S.C.
1483(e)) is amended to read as follows:
‘‘(e) RURAL HOUSING VOUCHERS.—There are au-
thorized to be appropriated for rural housing vouchers
under section 542, $30,000,000 for fiscal year 1995 and
$40,000,000 for fiscal year 1996.’’.
(f) RENTAL HOUSING LOAN AUTHORITY.—Section
515(b) of the Housing Act of 1949 (42 U.S.C. 1485(b))
is amended—
(1) by striking paragraph (4); and
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(2) by redesignating paragraphs (5) and (6) as
paragraphs (4) and (5), respectively.
SEC. 502. ELIGIBILITY OF NATIVE AMERICANS FOR RURAL
HOUSING PROGRAMS.
Section 501(b)(6) of the Housing Act of 1949 (42
U.S.C. 1471(b)(6)) is amended by adding at the end the
following new sentence: ‘‘In any case in which assistance
made available under this title may be provided to a State
or State agency or in which a State or State agency is
eligible to participate in a program or activity under this
title, such assistance may also be provided to Indian tribes
and tribal agencies and Indian tribes and tribal agencies
shall be eligible to participate, respectively.’’.
SEC. 503. ESCROW FUND.
Section 501(e) of the Housing Act of 1949 (42
U.S.C. 1471(e)) is amended by striking the third and
fourth sentences and inserting the following: ‘‘The Sec-
retary may establish in the Treasury of the United States
an escrow fund for the deposit of such periodic payments.
The Secretary may direct the Secretary of the Treasury
to invest and reinvest amounts in the escrow fund in pub-
lic debt securities with maturities suitable for the needs
of the escrow fund and bearing interest at rates deter-
mined by the Secretary of the Treasury, taking into con-
sideration the current average market yield on outstand-
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ing marketable obligations of the United States of com-
parable maturities. Any interest earned shall be credited
to the escrow fund. The Secretary shall disburse amounts
at the appropriate time or times for the purposes for which
the amounts were escrowed in the fund. The Secretary
shall pay a uniform rate of interest on escrowed amounts.
The interest rate to be paid on such amounts shall be de-
termined by the Secretary based on the interest earned
less an amount not to exceed 1 percent to be used to offset
expenses in carrying out the provisions of this title.’’.
SEC. 504. SECTION 502 HOMEOWNERSHIP LOANS.
(a) REMOTE RURAL AREAS.—Section 502(f) of the
Housing Act of 1949 (42 U.S.C. 1472(f)) is amended—
(1) by striking paragraph (1);
(2) by redesignating paragraph (2) as para-
graph (1); and
(3) by adding at the end the following new
paragraph:
‘‘(2) SECURITY.—In making a loan under this
section for housing located in a rural area that is a
remote rural area (which shall include tribal allotted
or Indian trust land) where the borrower resides or
is employed, the Secretary shall consider the actual
replacement cost of the property and structure for
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which the loan is made as adequate security for the
loan required under subsection (b).’’.
(b) PERMANENT
DEFERRED
MORTGAGE
PRO-
GRAM.—Section 502(g) of the Housing Act of 1949 (42
U.S.C. 1472(g)) is amended to read as follows:
‘‘(g) DEFERRED MORTGAGE PROGRAM.—With re-
spect to families or persons otherwise eligible for assist-
ance under subsection (d) but having incomes below the
amount determined to qualify for a loan under this sec-
tion, the Secretary may defer mortgage payments beyond
the amount affordable at 1 percent interest, taking into
consideration income, taxes and insurance. Deferred
amounts shall not exceed 25 percent of the amount of the
payment due at 1 percent interest and shall be subject
to recapture.’’.
(c) REAMORTIZATION.—Section 505 of the Housing
Act of 1949 (42 U.S.C. 1475) is amended—
(1) in the section heading, by inserting ‘‘,
REAMORTIZATION,’’ after ‘‘MORATORIUM’’;
(2) in subsection (a), by inserting before the
last sentence the following: ‘‘The Secretary may not
foreclose such a mortgage securing such a loan upon
which a moratorium has been granted solely because
the borrower does not have the ability to repay the
loan. Upon the expiration of a moratorium, the Sec-
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retary shall, subject to the availability of amounts
for assistance under this title, enter into an agree-
ment with the borrower providing to the borrower
such assistance as the Secretary is authorized to
provide under this title and may foreclose with re-
spect to the loan only if the borrower fails to make
3 monthly payments required under such agree-
ment.’’;
(3) by redesignating subsection (b) as sub-
section (c); and
(4) by inserting after subsection (a) the follow-
ing new subsection:
‘‘(b) REAMORTIZATION.—
‘‘(1) AUTHORITY.—With respect to a loan made
under section 502, after a moratorium under sub-
section (a) of this section for the loan or at any
other time the Secretary considers appropriate, the
Secretary may reamortize the outstanding indebted-
ness, including principal and interest, under the loan
for a period not to exceed 38 years from the date
of the making of the loan, subject to the provisions
of paragraph (2). The authority of the Secretary
under this subsection to modify loans shall be effec-
tive for any fiscal year only to such extent or in such
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amounts as are or have been provided for such costs
in appropriation Acts for such fiscal year.
‘‘(2) GRADUATED REPAYMENT AGREEMENT.—
In reamortizing a loan pursuant to paragraph (1),
the Secretary may lower the interest rate to the ex-
isting lending rate for loans under section 502 or es-
tablish a schedule of payments under the loan that
provides, after the application of interest credit, for
payments in an amount less than the amount of the
payments originally provided for under the loan
agreement for a period not exceeding that required
to amortize the loan over its term, except that such
period may not exceed 3 years.’’.
(d) ELIGIBILITY
OF AREA.—Section 502 of the
Housing Act of 1949 (42 U.S.C. 1472) is amended by
adding at the end the following new subsection:
‘‘(i) Notwithstanding section 520, the Secretary may
make loans under this section for properties in the Pine
View West Subdivision, located in Gibsonville, North Caro-
lina, in the same manner as provided under this section
for properties in rural areas.’’.
SEC. 505. LOAN GUARANTEES.
Section 502(h)(11) of the Housing Act of 1949 (42
U.S.C. 1472(h)(11)) is amended by adding at the end the
following new sentence: ‘‘The Secretary may not pool or
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reallocate any authority to guarantee loans under this sec-
tion that was allocated for use in any State before August
1 of the fiscal year in which such authority was allo-
cated.’’.
SEC. 506. PREPAYMENT OF RURAL RENTAL HOUSING
LOANS.
(a) TECHNICAL ASSISTANCE GRANTS AND LOANS
FOR NONPROFIT AND PUBLIC AGENCY PURCHASERS OF
PREPAYMENT PROPERTIES.—Section 502(c)(5)(C)(i) of
the Housing Act of 1949 (42 U.S.C. 1472(c)(5)(C)(i)) is
amended to read as follows:
‘‘(i) to the extent provided in appropriation
Acts, make a grant or predevelopment loan in an
amount not exceeding $50,000 to the nonprofit or-
ganization or public agency whose offer to purchase
is accepted under this paragraph to cover reasonable
costs, as determined by the Secretary and not in-
cluding the purchase price, incurred by the organiza-
tion or agency in purchasing and assuming respon-
sibilities for the housing and related facilities in-
volved, which may include costs for pursuing acquisi-
tion, appraisals, financing fees, accounting, adminis-
tration, consultants, legal assistance, architectural
assistance, engineering assistance, application fees,
overhead, and other expenses;’’.
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(b) EQUITY TAKEOUT LOANS.—
(1) AUTHORITY
AND
LIMITATION.—Section
502(c)(4)(B)(iv) of the Housing Act of 1949 (42
U.S.C. 1472(c)(4)(B)(iv)) is amended by inserting
before the period at the end the following: ‘‘or under
paragraphs (1) and (2) of section 514(j), except that
an equity loan referred to in this clause may not be
made available after the date of the enactment of
the Housing and Community Development Act of
1994 unless the Secretary determines that the other
incentives available under this subparagraph are not
adequate to provide a fair return on the investment
of the borrower, to prevent prepayment of the loan
insured under section 514 or 515, or to prevent the
displacement of tenants of the housing for which the
loan was made’’.
(2) APPROVAL OF ASSISTANCE.—Subparagraph
(C) of section 502(c)(4) of the Housing Act of 1949
is amended by striking the matter preceding clause
(i) and inserting the following:
‘‘(C) APPROVAL
OF ASSISTANCE.—The Secretary
may approve assistance under subparagraph (B) for as-
sisted housing only if the restrictive period has expired for
any loan for the housing made or insured under section
514 or 515 pursuant to a contract entered into after De-
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cember 21, 1979, but before the date of the enactment
of the Department of Housing and Urban Development
Reform Act of 1989, and the Secretary determines that
the combination of assistance provided—’’.
(3) LOAN TERMS.—Section 514 of the Housing
Act of 1949 (42 U.S.C. 1484) is amended by adding
at the end the following new subsection:
‘‘(j) EQUITY TAKEOUT LOANS FOR PRESERVATION
OF LOW-INCOME HOUSING.—With respect to a loan in-
sured under subsection (a), the Secretary may—
‘‘(1) make or insure an equity loan in the form
of a supplemental loan for the purpose of equity
takeout to the owner of housing financed with a loan
insured under this section pursuant to a contract en-
tered into before December 15, 1989, for the pur-
pose of extending the affordability of the housing for
low-income families or persons and very low-income
families or persons for not less than 20 years, except
that such loan may not exceed 90 percent of the
value of the equity in the project as determined by
the Secretary;
‘‘(2) transfer and reamortize an existing loan in
connection with assistance provided under paragraph
(1); and
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‘‘(3) make or insure a loan to enable a non-
profit organization or public agency to make a pur-
chase described in section 502(c)(5).’’.
(4) TECHNICAL
CORRECTION
RELATING
TO
SECTION
515
HOUSING.—Section 515(c)(1) of the
Housing Act of 1949 (42 U.S.C. 1485(c)(1)) is
amended by striking ‘‘December 21, 1979’’ and in-
serting ‘‘December 15, 1989’’.
(c) 
PHASE-IN
OF
RENT
INCREASES.—Section
502(c)(4)(B)(vi) of the Housing Act of 1949 (42 U.S.C.
1472(c)(4)(B)(vi)) is amended by inserting before the pe-
riod at the end the following: ‘‘, except that any such in-
crease in rents for current tenants (except for increases
made necessary by increases in operating costs) shall (I)
be phased in equally over a period of not less than 3 years,
if such increase is 30 percent or more, and (II) be limited
to not more than 10 percent per year if such increase is
more than 10 percent but less than 30 percent’’.
(d) TREATMENT
OF
ACCELERATION
UPON
DE-
FAULT.—Section 502 of the Housing Act of 1949 (42
U.S.C. 1472) is amended—
(1) in subsection (b)(2), by inserting ‘‘or any
payment in the case of acceleration of the amount
due under such a loan pursuant to any default,’’
after ‘‘515’’; and