§1709–2 — Title 12 Banks and Banking | U.S. Code

Summary

It makes it illegal for a person who intends to defraud to repeatedly do three things with one- to four-family homes (including condominiums and cooperatives) tied to HUD or VA loans. The three things are: buy a home that is already in default or goes into default within one year of the purchase; stop making the mortgage or deed-of-trust payments when they are due, even if the buyer is not the one legally responsible for the loan; and take the rent from the property for their own use. The rule applies when the loan is insured or held by the Secretary of Housing and Urban Development, guaranteed by the Department of Veterans Affairs, or made by the Department of Veterans Affairs.

Title 12, §1709–2

Banks and Banking — Source: USLM XML via OLRC

Whoever, with intent to defraud, willfully engages in a pattern or practice of— (1)

(2)failing to make payments under the mortgage or deed of trust as the payments become due, regardless of whether the purchaser is obligated on the loan, and

(3)applying or authorizing the application of rents from such dwellings for his own use,

Notes & Related Subsidiaries

Editorial Notes

Codification Section was enacted as part of the Housing and Urban Development Act of 1970, and not as part of the National Housing Act which comprises this chapter.

Amendments

1991—Par. (1). Pub. L. 102–54 substituted “Department of Veterans Affairs” for “Veterans’ Administration” in two places. 1988—Pub. L. 100–242 inserted parenthetical reference to condominiums and cooperatives in par. (1), substituted “due, regardless of whether the purchaser is obligated on the loan” for “due” in par. (2), and substituted “$250,000” for “$5,000” and “5” for “three” in closing provisions.

§1709–2 Equity skimming; penalty; persons liable; one dwelling exemption

Summary

Title 12, §1709–2

Notes & Related Subsidiaries

Editorial Notes

Amendments

Citations & Metadata