Secretary may pay the holder of the obligation 
the unpaid balance of the obligation due as of 
the date of the filing of the petition under title 
11, United States Code, plus accrued interest, 
but only upon the assignment, transfer, and de-
livery to the Secretary (in a form and manner 
satisfactory to the Secretary) of all rights, in-
terest, claims, evidence, and records with re-
spect to the housing loan.’’. 
(b) MATURITY OF HOUSING LOANS.—Paragraph (1) 
of section (d) of section 3703 of title 38, United States 
Code, is amended by inserting ‘‘at the time of origination’’ 
after ‘‘loan’’. 
(c) IMPLEMENTATION.—The Secretary of Veterans 
Affairs may implement the amendments made by this sec-
tion through notice, procedure notice, or administrative 
notice. 
SEC. 122. PAYMENT OF FHA MORTGAGE INSURANCE BENE-
FITS. 
(a) IN GENERAL.—Subsection (a) of section 204 of 
the National Housing Act (12 U.S.C. 1710(a)) is amend-
ed— 
(1) in paragraph (1), by adding at the end the 
following new subparagraph: 
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‘‘(E) MODIFICATION
OF
MORTGAGE
IN 
BANKRUPTCY.— 
‘‘(i) AUTHORITY.—If an order is en-
tered under the authority provided under 
section 1322(b) of title 11, United States 
Code, that (a) determines the amount of 
an allowed secured claim under a mortgage 
in accordance with section 506(a)(1) of 
title 11, United States Code, and the 
amount of such allowed secured claim is 
less than the amount due under the mort-
gage as of the date of the filing of the peti-
tion under title 11, United States Code, or 
(b) reduces the interest to be paid under a 
mortgage in accordance with section 1325 
of such title, the Secretary may pay insur-
ance benefits for the mortgage as follows: 
‘‘(I) FULL
PAYMENT
AND
AS-
SIGNMENT.—The Secretary may pay 
the insurance benefits for the mort-
gage, but only upon the assignment, 
transfer, and delivery to the Secretary 
of all rights, interest, claims, evidence, 
and records with respect to the mort-
gage specified in clauses (i) through 
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(iv) of paragraph (1)(A). The insur-
ance benefits shall be paid in the 
amount equal to the original principal 
obligation of the mortgage (with such 
additions and deductions as the Sec-
retary determines are appropriate) 
which was unpaid upon the date of 
the filing of by the mortgagor of the 
petition under title 11 of the United 
States Code. Nothing in this Act may 
be construed to prevent the Secretary 
from providing insurance under this 
title for a mortgage that has pre-
viously been assigned to the Secretary 
under this subclause. The decision of 
whether to utilize the authority under 
this subclause for payment and as-
signment shall be at the election of 
the mortgagee, subject to such terms 
and conditions as the Secretary may 
establish. 
‘‘(II) ASSIGNMENT
OF
UNSE-
CURED
CLAIM.—The Secretary may 
make a partial payment of the insur-
ance benefits for any unsecured claim 
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under the mortgage, but only upon 
the assignment to the Secretary of 
any unsecured claim of the mortgagee 
against the mortgagor or others aris-
ing out of such order. Such assign-
ment shall be deemed valid irrespec-
tive of whether such claim has been or 
will be discharged under title 11 of 
the United States Code. The insur-
ance benefits shall be paid in the 
amount specified in subclause (I) of 
this clause, as such amount is reduced 
by the amount of the allowed secured 
claim. Such allowed secured claim 
shall continue to be insured under sec-
tion 203. 
‘‘(III) INTEREST
PAYMENTS.— 
The Secretary may make periodic pay-
ments, or a one-time payment, of in-
surance benefits for interest payments 
that are reduced pursuant to such 
order, as determined by the Secretary, 
but only upon assignment to the Sec-
retary of all rights and interest re-
lated to such payments. 
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