Sec. 203. Mortgage Insurance Fund
611 words·~3 min read·
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There is established the Mortgage Insurance Fund, which the Corporation shall— maintain and administer; and use to cover losses incurred on covered securities insured under this Act, when such losses exceed the first position losses absorbed by private market holders of such securities. The Mortgage Insurance Fund shall be credited with any— insurance fee amounts required to be deposited in the Fund under this section; guarantee fee amounts collected under section 601; and amounts earned on investments pursuant to subsection (h).
The Corporation has the responsibility to ensure that the Mortgage Insurance Fund remains financially sound. The Mortgage Insurance Fund shall be solely available to the Corporation for use by the Corporation to carry out the functions authorized by this Act and may not be used or otherwise diverted to cover any other expense of the Federal Government. Notwithstanding any other provision of law, amounts received by the Mortgage Insurance Fund pursuant to any fees collected under this section shall not be subject to apportionment for the purposes of chapter 15 of title 31, United States Code, or under any other authority.
The Corporation shall endeavor to ensure that the Mortgage Insurance Fund attains a reserve balance— of 1.25 percent of the sum of the outstanding principal balance of the covered securities for which insurance is being provided under this title within 5 years of the FMIC certification date, and to strive to maintain such ratio thereafter, subject to subparagraph (B); and of 2.50 percent of the sum of the outstanding principal balance of the covered securities for which insurance is being provided under this title within 10 years of the FMIC certification date, and to strive to maintain such ratio at all times thereafter.
The Corporation shall charge and collect a fee, and may in its discretion increase or decrease such fee, in connection with any insurance provided under this title to— achieve and maintain the reserve ratio goals established under subsection (e); achieve such reserve ratio goals, if the actual balance of such reserve is below the goal amounts established under subsection (e); and fund the operations of the Corporation. In exercising the authority granted under paragraph (1), the Corporation shall consider— the expected operating expenses of the Mortgage Insurance Fund; the risk of loss to the Mortgage Insurance Fund in carrying out the requirements under this Act; the risk presented by, and the loss absorption capacity of, the credit enhancement that is provided on the pool of eligible mortgages collateralizing the covered security to be insured under this title; economic conditions generally affecting the mortgage markets; the extent to which the reserve ratio of the Mortgage Insurance Fund met— the reserve ratio set for the preceding 12-month period; or the reserve ratio goals established in subsection (e); and any other factor that the Corporation determines appropriate.
The fee required under paragraph (1)— shall be set at a uniform amount applicable to all institutions purchasing insurance under this title; may not vary— by geographic location; or by the size of the institution to which the fee is charged; and may not be based on the volume of insurance to be purchased by an approved issuer. Any fee amounts collected under this subsection shall be deposited in the Mortgage Insurance Fund. The full faith and credit of the United States is pledged to the payment of all amounts from the Mortgage Insurance Fund which may be required to be paid under any insurance provided under this title.
Amounts in the Mortgage Insurance Fund that are not otherwise employed— shall be invested in obligations of the United States; and may not be invested in any covered security insured under this Act.