Source: https://www.law.cornell.edu/uscode/text/12/1708
Timestamp: 2019-04-24 10:27:14+00:00

Document:
Subject to the provisions of the Federal Credit Reform Act of 1990 [2 U.S.C. 661 et seq.], there is hereby created a Mutual Mortgage Insurance Fund (in this subchapter referred to as the “Fund”), which shall be used by the Secretary to carry out the provisions of this subchapter with respect to mortgages insured under section 1709 of this title. The Secretary may enter into commitments to guarantee, and may guarantee, such insured mortgages.
updated projections of the annual subsidy rates to ensure that increases in risk to the Fund are identified and mitigated by adjustments to underwriting standards, program participation, or premiums, and the financial soundness of the Fund is maintained.
to meet the housing needs of the borrowers that the single familymortgage insurance program under this subchapter is designed to serve.
(b) Advisory BoardThere is created a Federal Housing Administration Advisory Board (“Board”) that shall review operation of the Federal Housing Administration, including the activities of the Mortgagee Review Board, and shall provide advice to the Federal Housing Commissioner with respect to the formulation of general policies of the Federal Housing Administration and such other matters as the Federal Housing Commissioner may deem appropriate. The Advisory Board shall, in all other respects, be subject to the provisions of the Federal Advisory Committee Act.
3 shall be appointed by the Chairman and Ranking Minority Member of the Subcommittee on Housing and Community Development of the Committee on Banking, Finance and Urban Affairs of the House of Representatives.
not less than 1 person with a background of leadership representing rural housing interests.
Members of the Advisory Board shall be selected to ensure, to the greatest extent practicable, geographical representation or every region of the country.
Not more than 8 members of the Advisory Board may be from any one political party.
Membership of the Advisory Board shall not include any person who, during the previous 24-month period, was required to register with the Secretary under section 3537b(c)  of title 42 or employed a person for purposes that required such person to so register.
Of the members of the Advisory Board first appointed, 5 shall have terms of l year, and 5 shall have terms of 2 years. Their successors and all other appointees shall have terms of 3 years.
The Advisory Board is empowered to confer with, request information of, and make recommendations to the Federal Housing Commissioner. The Commissioner shall promptly provide the Advisory Board with such information as the Board determines to be necessary to carry out its review of the activities and policies of the Federal Housing Administration.
The Board shall, not later than December 31 of each year, submit to the Secretary and the Congress a report of its assessment of the activities of the Federal Housing Administration, including the soundness of underwriting procedures, the adequacy of information systems, the appropriateness of staffing patterns, the effectiveness of the Mortgagee Review Board, and other matters related to the Federal Housing Administration’s ability to serve the nation’s homebuyers and renters. Such report shall contain the Board’s recommendations for improvement and include any minority views.
The Board shall meet in Washington, D.C., not less than twice annually, or more frequently if requested by the Federal Housing Commissioner or a majority of the members. The Board shall elect a chair, vice-chair and secretary and adopt methods of procedure. The Board may establish committees and subcommittees as needed.
Subject to the provisions of Section 7 of the Federal Advisory Committee Act, all members of the Board may be compensated and shall be entitled to reimbursement from the Department for traveling expenses incurred in attendance at meetings of the Board.
The Board shall terminate on January 1, 1995.
There is established within the Federal Housing Administration the Mortgagee Review Board (“Board”). The Board is empowered to initiate the issuance of a letter of reprimand, the probation, suspension or withdrawal of any mortgagee found to be engaging in activities in violation of Federal Housing Administration requirements or the nondiscrimination requirements of the Equal Credit Opportunity Act [15 U.S.C. 1691 et seq.], the Fair Housing Act [42 U.S.C. 3601 et seq.], or Executive Order 11063.
the Chief Financial Officer of the Department or their designees.
The Board may issue a letter of reprimand only once to a mortgagee without taking action under subparagraphs  (B), (C), or (D) of this section. A letter of reprimand shall explain the violation and describe actions the mortgagee should take to correct the violation.
The Board may place a mortgagee on probation for a specified period of time not to exceed 6 months for the purpose of evaluating the mortgagee’s compliance with Federal Housing Administration requirements, the Equal Credit Opportunity Act [15 U.S.C. 1691 et seq.], the Fair Housing Act [42 U.S.C. 3601 et seq.], Executive Order 11063, or orders of the Board. During the probation period, the Board may impose reasonable additional requirements on a mortgagee including supervision of the mortgagee’s activities by the Federal Housing Administration, periodic reporting to the Federal Housing Commissioner, or submission to Federal Housing Administration audits of internal financial statements, audits by an independent certified public accountant or other audits.
The Board may issue an order temporarily suspending a mortgagee’s approval for doing business with the Federal Housing Administration if (i) there exists adequate evidence of a violation or violations and (ii) continuation of the mortgagee’s approval, pending or at the completion of any audit, investigation, or other review, or such administrative or other legal proceedings as may ensue, would not be in the public interest or in the best interests of the Department. Notwithstanding paragraph (4)(A), a suspension shall be effective upon issuance by the Board if the Board determines that there exists adequate evidence that immediate action is required to protect the financial interests of the Department or the public. A suspension shall last for not less than 6 months, and for not longer than 1 year. The Board may extend the suspension for an additional 6 months if it determines the extension is in the public interest. If the Board and the mortgagee agree, these time limits may be extended. During the period of suspension, the Federal Housing Administration shall not commit to insure any mortgage originated by the suspended mortgagee.
implementation of other corrective measures acceptable to the Secretary.
Material failure to comply with the provisions of a settlement agreement shall be sufficient cause for suspension or with­drawal.
The Board shall issue a written notice to the mortgagee at least 30 days prior to taking any action against the mortgagee under subparagraph (B), (C), or (D) of paragraph (3). The notice shall state the specific violations which have been alleged, and shall direct the mortgagee to reply in writing to the Board within 30 days. If the mortgagee fails to reply during such period, the Board may make a determination without considering any comments of the mortgagee.
If the Board takes action against a mortgagee under subparagraph (B), (C), or (D) of paragraph (3), the Board shall promptly notify the mortgagee in writing of the nature, duration, and specific reasons for the action. If, within 30 days of receiving the notice, the mortgagee requests a hearing, the Board shall hold a hearing on the record regarding the violations within 30 days of receiving the request. If a mortgagee fails to request a hearing within such 30-day period, the right of the mortgagee to a hearing shall be considered waived.
In any case in which the notification of the Board does not result in a hearing (including any settlement by the Board and a mortgagee), any information regarding the nature of the violation and the resolution of the action shall be available to the public.
Whenever the Secretary, upon request of the Mortgagee Review Board, determines that there is reasonable cause to believe that a mortgagee is violating, has violated, or is about to violate, a law, rule or regulation or any condition imposed in writing by the Secretary or the Board, and that such violation could result in significant cost to the Federal Government or the public, the Secretary may issue a temporary order requiring the mortgagee to cease and desist from any such violation and to take affirmative action to prevent such violation or a continuation of such violation pending completion of proceedings of the Board with respect to such violation. Such order shall include a notice of charges in respect thereof and shall become effective upon service to the mortgagee. Such order shall remain effective and enforceable for a period not to exceed 30 days pending the completion of proceedings of the Board with respect to such violation, unless such order is set aside, limited, or suspended by a court in proceedings authorized by subparagraph (B) of this paragraph. The Board shall provide the mortgagee an opportunity for a hearing on the record, as soon as practicable but not later than 20 days after the temporary cease-and-desist order has been served.
Within 10 days after the mortgagee has been served with a temporary cease-and-desist order, the mortgagee may apply to the United States district court for the judicial district in which the home office of the mortgagee is located, or the United States District Court for the District of Columbia, for an injunction setting aside, limiting of suspending the enforcement, operation, or effectiveness of such order pending the completion of the administrative proceedings pursuant to the notice of charges served upon the mortgagee, and such court shall have jurisdiction to issue such injunction.
In the case of violation or threatened violation of, or failure to obey, a temporary cease-and-desist order issued pursuant to this paragraph, the Secretary may apply to the United States district court, or the United States court of any territory, within the jurisdiction of which the home office of the mortgagee is located, for an injunction to enforce such order, and, if the court shall determine that there has been such violation or threatened violation or failure to obey, it shall be the duty of the court to issue such injunction.
a director, officer, employee, agent, or other person participating in the conduct of the affairs of the mortgagee, lender, or loan correspondent.
in violation of any other requirement as established by the Secretary.
if a mortgagee is withdrawn, publish its decision in the Federal Register.
if the mortgagee is a State bank or State savings association that is not a member of the Federal Reserve System or is a subsidiary or affiliate of such a bank, the Board of Directors of the Federal Deposit Insurance Corporation.
that each appraisal be a written statement used in connection with a real estate transaction that is independently an  impartially prepared by a licensed or certified appraiser setting forth an opinion of defined value of an adequately described property as of a specific date, supported by presentation and analysis of relevant market information.
The Appraisal Subcommittee of the FederalFinancial Institutions Examination Council shall include the Secretary or his designee.
Any mortgagee that is authorized by the Secretary to process mortgages as a direct endorsement mortgagee (pursuant to the single-family home mortgage direct endorsement program established by the Secretary) may contract with an appraiser chosen at the discretion of the mortgagee for the performance of appraisals in connection with such mortgages. Such appraisers may include appraisal companies organized as corporations, partnerships, or sole proprietorships.
Any appraisal conducted pursuant to subparagraph (A) shall be conducted by an individual who complies with the qualifications or standards for appraisers established by the Secretary pursuant to this subsection.
In conducting an appraisal, such individual may utilize the assistance of others, who shall be under the direct supervision of the individual responsible for the appraisal. The individual responsible for the appraisal shall personally approve and sign any appraisal report.
Any individual who is an employee of an appraisal company (including any company organized as a corporation, partnership, or sole proprietorship) and who meets the qualifications or standards for appraisers and inclusion on appraiser fee panels established by the Secretary, shall be eligible for assignment to conduct appraisals for mortgages under this subchapter in the same manner and on the same basis as other approved appraisers.
With respect to any employee of an appraisal company described in subparagraph (A) who is offered an appraisal assignment in connection with a mortgage under this subchapter, the person utilizing the appraiser may contract directly with the appraisal company employing the appraiser for the furnishing of the appraisal services.
have demonstrated verifiable education in the appraisal requirements established by the Federal Housing Administration under this subsection.
to maintain copies of all such advertisements and promotional materials, in such form and for such period as the Secretary requires.
The Federal Credit Reform Act of 1990, referred to in subsec. (a)(1), is title V of Pub. L. 93–344, as added by Pub. L. 101–508, title XIII, § 13201(a), Nov. 5, 1990, 104 Stat. 1388–609, which is classified generally to subchapter III (§ 661 et seq.) of chapter 17A of Title 2, The Congress. For complete classification of this Act to the Code, see Short Title note set out under section 621 of Title 2 and Tables.
The Federal Advisory Committee Act, referred to in subsec. (b), is Pub. L. 92–463, Oct. 6, 1972, 86 Stat. 770, which is set out in the Appendix to Title 5, Government Organization and Employees.
Section 3537b(c) of title 42, referred to in subsec. (b)(5), was in the original “section 112(c) of the Department of Housing and Urban Development Reform Act of 1989”, meaning section 112 of Pub. L. 101–235, which does not contain a subsec. (c), but enacted section 13 of the Department of Housing and Urban Development Act, which was classified to section 3537b of title 42 prior to repeal by Pub. L. 104–65, § 11(b)(1), Dec. 19, 1995, 109 Stat. 701, and which contained a subsec. (c) relating to registration with the Secretary.
The Equal Credit Opportunity Act, referred to in subsec. (c)(1), (3)(B), is title VII of Pub. L. 90–321, as added by Pub. L. 93–495, title V, § 503, Oct. 28, 1974, 88 Stat. 1521, which is classified generally to subchapter IV (§ 1691 et seq.) of chapter 41 of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see Short Title note set out under section 1601 of Title 15 and Tables.
The Fair Housing Act, referred to in subsec. (c)(1), (3)(B), is title VIII of Pub. L. 90–284, Apr. 11, 1968, 82 Stat. 81, which is classified principally to subchapter I (§ 3601 et seq.) of chapter 45 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under section 3601 of Title 42 and Tables.
This chapter, referred to in subsec. (c)(7)(A), was in the original “this Act”, meaning act June 27, 1934, ch. 847, 48 Stat. 1246, which is classified principally to this chapter (§ 1701 et seq.). For complete classification of this Act to the Code, see Tables.
The S.A.F.E. Mortgage Licensing Act of 2008, referred to in subsec. (d)(2)(F), is title V of div. A of Pub. L. 110–289, July 30, 2008, 122 Stat. 2810, also known as the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, which is classified generally to chapter 51 (§ 5101 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 5101 of this title and Tables.
Section 1709(s) of this title, which was transferred and redesignated as subsec. (e) of this section by Pub. L. 110–289, div. B, title I, § 2116(3), July 30, 2008, 122 Stat. 2832, was based on act June 27, 1934, ch. 847, title II, § 203(s), as added Pub. L. 101–235, title I, § 135, Dec. 15, 1989, 103 Stat. 2028; amended Pub. L. 108–386, § 8(b), Oct. 30, 2004, 118 Stat. 2231; Pub. L. 110–289, div. B, title I, § 2116(2), July 30, 2008, 122 Stat. 2832.
2010—Subsec. (f)(5). Pub. L. 111–203, § 373(1), added par. (5) and struck out former par. (5) which read as follows: “if the mortgagee is a national bank, or a subsidiary or affiliate of such a bank, the Comptroller of the Currency;”.
Subsec. (f)(6). Pub. L. 111–203, § 373(2), inserted “and” at end.
Subsec. (f)(7). Pub. L. 111–203, § 373(3), inserted “or State savings association” after “State bank” and substituted period for “; and” at end.
2009—Subsec. (c)(2)(E). Pub. L. 111–22, § 203(a)(1)(A), inserted “and” after semicolon at end.
Subsec. (c)(2)(F). Pub. L. 111–22, § 203(a)(1)(B), substituted “or their designees.” for “; and”.
Subsec. (c)(9). Pub. L. 111–22, § 203(a)(2), added par. (9).
Subsecs. (d) to (g). Pub. L. 111–22, § 203(b)(1), (2), added subsec. (d) and redesignated former subsecs. (d) to (f) as (e) to (g), respectively.
Subsec. (h). Pub. L. 111–22, § 203(b)(3), added subsec. (h).
Subsec. (e). Pub. L. 110–289, § 2116(3), transferred subsec. (s) of section 1709 of this title and redesignated it as subsec. (e) of this section. See Codification note above. Former subsec. (e) redesignated (f).
Subsec. (e)(3)(B). Pub. L. 110–289, § 2116(1)(A), made technical amendment to reference in original act which appears in text as reference to “this subsection”.
Subsec. (e)(5). Pub. L. 110–289, § 1404, added par. (5).
Subsec. (f). Pub. L. 110–289, § 2116(1)(B), redesignated subsec. (e) as (f).
2000—Subsec. (c)(2)(E). Pub. L. 106–377, § 1(a)(1) [title II, § 209(c)(1)], struck out “and” at end.
Subsec. (c)(2)(F). Pub. L. 106–377, § 1(a)(1) [title II, § 209(c)(2)], which directed substitution of “and” for “or their designees.”, was executed by inserting “and” after semicolon to reflect the probable intent of Congress, because the phrase “or their designees.” appeared at end of par. (2) and did not appear in subpar. (F).
Subsec. (c)(2)(G). Pub. L. 106–377, § 1(a)(1) [title II, § 209(c)(3)], added subpar. (G).
1992—Subsec. (b)(11). Pub. L. 102–550, § 502, added par. (11).
Subsec. (c)(3)(C). Pub. L. 102–550, § 518, inserted “temporarily” after “order”, “(i)” after “Administration if”, “(ii)” after “violations and”, and “, and for not longer than 1 year. The Board may extend the suspension for an additional 6 months if it determines the extension is in the public interest. If the Board and the mortgagee agree, these time limits may be extended” after “6 months”.
Subsec. (c)(7), (8). Pub. L. 102–550, § 519(2), added par. (7) and redesignated former par. (7) as (8).
1990—Subsec. (e)(3), (4). Pub. L. 101–625 added pars. (3) and (4).
1989—Pub. L. 101–235 substituted “Federal Housing Administration operations” for “Mutual Mortgage Insurance Fund” in section catchline, designated existing provisions as subsec. (a) and inserted heading, and added subsecs. (b) to (e).
1967—Pub. L. 90–19 substituted “Secretary” for “Commissioner” wherever appearing.
1950—Act Apr. 20, 1950, substituted “Commissioner” for “Administrator” wherever appearing.
1939—Act June 3, 1939, substituted “created” for “create”.
1938—Act Feb. 3, 1938, inserted “with respect to mortgages insured under section 1709 of this title”.
  So in original. Probably should be “contendere”.
  So in original. Probably should be “and”.

References: § 13201
 § 11
 § 503
 § 2116
 § 203
 § 135
 § 8
 § 2116
 § 373
 § 373
 § 373
 § 203
 § 203
 § 203
 § 203
 § 203
 § 2116
 § 2116
 § 1404
 § 2116
 § 1
 § 209
 § 1
 § 209
 § 1
 § 209
 § 502
 § 518
 § 519