§ 7308. Mortgages.

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§ 7308. Mortgages.

One or more bonds or other obligations secured by one or more mortgages, or in connection with which the obligor gives one or more mortgages to indemnify the insurer of the obligation, shall be an authorized investment if:

(1)Insured by Federal Housing Administrator.-- Insured by the Federal Housing Administrator pursuant to the National Housing Act of June 27, 1934 (48 Stat. 1246), and its amendments and supplements heretofore or hereafter enacted; or

(2)Guaranteed or insured under Federal Servicemen's Readjustment Act.-- Guaranteed or insured under the Federal Servicemen's Readjustment Act of June 22, 1944 (58 Stat. 284), and its amendments and supplements heretofore or hereafter enacted: Provided, That at the date of acquisition the guaranty shall be in an amount not less than one-third of the sum invested, or, if an insured mortgage, the insurance shall be in an amount not less than 15% thereof; or

(3)Insured by the Farmers Home Administration, United States Department of Agriculture.-- Insured by the Farmers Home Administration, United States Department of Agriculture, pursuant to the Bankhead-Jones Farm Tenant Act of July 22, 1937 (50 Stat. 522), and its amendments and supplements heretofore or hereafter enacted, or pursuant to the act of August 28, 1937 (50 Stat. 869), and its amendments and supplements heretofore or hereafter enacted; or

(4)Other mortgages.-- At the date of the acquisition or of any extension of the mortgage it shall meet the following requirements:

(i)Contain an unconditional promise to pay the principal of and interest upon obligations which it secures.

(ii)Be a first lien upon improved real estate situated within the Commonwealth, including improved farm lands, prior to all other liens except the lien of taxes previously levied or assessed but not then payable and except taxes then due or payable or delinquent for the payment of which taxes provision is made in the mortgage settlement.

(iii)The unpaid principal amount of the obligations shall not exceed four-fifths of the fair value of the real estate as fixed by two persons familiar with real estate values in the vicinity who shall have actually inspected it and shall so certify in a written appraisement preserved among the records of the fiduciary.

(iv)The principal debt evidenced by the obligations shall be payable in not more than five years after the date of acquisition by the fiduciary, or be amortized within a period of not exceeding 30 years from the date of the acquisition in substantially equal payments at successive intervals of not more than one year each and in an amount sufficient to pay the principal debt and interest thereon within the term of the loan.

(v)All interest has been paid in full to the next preceding interest payment date.

Nothing in this paragraph shall be construed to be a limitation upon the power of a fiduciary to accept a purchase money obligation in exchange for an asset of the estate or trust upon such terms and conditions and with such security as shall be reasonable under the circumstances.

20c7308v

Cross References. Section 7308 is referred to in section 7309 of this title; section 7102 of Title 35 (Health and Safety).

20c7309s