Sec. 249. risk-sharing demonstration
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## Sec. 249 risk-sharing demonstration **[**[12 U.S.C. 1715z–14](/us/usc/t12/s1715z–14)**]** ###
(a)The purpose of this section is to authorize a demonstration mortgage risk-sharing program designed to test the feasibility of entering into risk-sharing contracts with private mortgage insurers and with insured community development financial institutions in order to reduce Government risk and administrative costs, and to speed mortgage processing. The Secretary shall limit the demonstration under this section to not more than four administrative regions of the Department of Housing and Urban Development, and shall assure that the program is in the financial interest of the Government and will not result in loss of employment by any employees of the Department of Housing and Urban Development before the expiration of the 5-year period beginning on the date of the enactment of the Community Renewal Tax Relief Act of 2000.96 The aggregate number of mortgages insured under this section in any administrative region of the Department of Housing and Urban Development in any fiscal year may not exceed 20 percent of the aggregate number of mortgages and loans insured by the Secretary under this title in such region during the preceding fiscal year.97 96The date of enactment was December 21, 2000. 97Section 143(3)(C)(i) of the Community Renewal Tax Relief Act of 2000 (H.R. 5662, 106th Congress, as introduced in the House of Representatives, enacted by section 1(a)(7) of the Consolidated Appropriations Act, 2001, Pub. L. 106–554) provides that this sentence is amended by striking “insured” and inserting “for which risk of nonpayment is shared”. The amendement did not specify which occurrence of “insured” to strike and could not be executed. ###
(b)Notwithstanding any other provision of this Act inconsistent with this section, the Secretary is authorized, in providing mortgage insurance with respect to one- to four-family dwellings under sections 203(b), 234, and 245, to enter into risk-sharing contracts with private mortgage insurance companies which have been determined to be qualified insurers under section 302(b)(2)(C) and with insured community development financial institutions. Such contracts shall require private mortgage insurance companies and insured community development financial institutions to— ####
(1)assume a secondary percentage of loss on any mortgage insured pursuant to section 203(b), 234, or 245 covering a one- to four-family dwelling, which percentage of loss shall be set forth in the risk-sharing contract, with the first percentage of loss to be borne by the Secretary; ####
(2)perform or delegate underwriting, credit approval, appraisal, inspection, commitment, claims processing, property disposition, or other functions as the Secretary shall approve as consistent with the purposes of this section and shall set forth in the risk-sharing contract. ###
(c)Any contract for risk-sharing under this section shall contain such provisions relating to the sharing of premiums received by the Secretary with a private mortgage insurer or insured community development financial institution on a sound actuarial basis, establishment of loss reserves, manner of calculating claims on such risk-sharing contract, conditions with respect to foreclosure, handling and disposition of property prior to claim or settlement, rights of assignees, and other similar matters as the Secretary may prescribe pursuant to regulations. Pursuant to a contract under this section, a private mortgage insurance company or insured community development financial institution shall endorse loans for risk-sharing and take such other actions on behalf of the Secretary and in the Secretary's name as the Secretary may authorize. ###
(d)The Secretary shall require any private mortgage insurance company or insured community development financial institution participating in the program under this section to provide risk-sharing for those mortgages offered by the Secretary for inclusion in the program. ###
(e)Insured Community Development Financial Institution For purposes of this section, the term “**insured community development financial institution**” means a community development financial institution, as such term is defined in section 103 of Reigle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4702) that is an insured depository institution (as such term is defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)) or an insured credit union (as such term is defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752)).
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- 12 USC 1715z–14
- Pub. L. 106-554
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Sec. 249
risk-sharing demonstration
Cite12 USC 1715z–14
Pub. L.Pub. L. 106-554
Cites 5Cited by 0 across 0 sources