§3701 — Title 12 Banks and Banking | U.S. Code

Summary

Creates a single federal way for HUD to foreclose on multifamily mortgages (mortgages on apartment buildings and similar properties). Different state rules make HUD’s foreclosures slow and costly. Long delays let buildings fall into disrepair, raise federal costs, and hurt residents and neighborhoods. Post-sale redemption periods under some state laws make selling and fixing buildings harder. A faster, uniform foreclosure process and keeping the practice of not allowing post-sale redemption will help. Using a nonjudicial option will also cut court cases. The goal is to provide one clear federal foreclosure remedy for these multifamily mortgages.

Title 12, §3701

Banks and Banking — Source: USLM XML via OLRC

(a)The Congress finds that—

(1)disparate State laws under which the Secretary of Housing and Urban Development forecloses multifamily mortgages burden the programs administered by the Secretary pursuant to these authorities, and cause detriment to the residents of the affected projects and the community generally;

(2)long periods to complete the foreclosure of these mortgages under certain State laws lead to deterioration in the condition of the properties involved; necessitate substantial Federal management and holding expenditures; increase the risk of vandalism, fire loss, depreciation, damage, and waste with respect to the properties; and adversely affect the residents of the projects and the neighborhoods in which the properties are located;

(3)these conditions seriously impair the Secretary’s ability to protect the Federal financial interest in the affected properties and frustrate attainment of the objectives of the underlying Federal program authorities, as well as the national housing goal of “a decent home and a suitable living environment for every American family”;

(4)application of State redemption periods to these mortgages following their foreclosure would impair the salability of the properties involved and discourage their rehabilitation and improvement, thereby compounding the problems referred to in clause (3);

(5)the availability of a uniform and more expeditious procedure for the foreclosure of these mortgages by the Secretary and continuation of the practice of not applying postsale redemption periods to such mortgages will tend to ameliorate these conditions; and

(6)providing the Secretary with a nonjudicial foreclosure procedure will reduce unnecessary litigation by removing many foreclosures from the courts where they contribute to overcrowded calendars.

(b)The purpose of this chapter is to create a uniform Federal foreclosure remedy for multifamily mortgages.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1992—Subsec. (a)(1). Pub. L. 102–550, § 517(a)(1), substituted “multifamily mortgages” for “real estate mortgages which the Secretary holds pursuant to title II of the National Housing Act or section 312 of the Housing Act of 1964 covering multiunit residential and nonresidential properties”. Subsec. (b). Pub. L. 102–550, § 517(a)(2), substituted “multifamily mortgages” for “multiunit residential and nonresidential mortgages held by the Secretary of Housing and Urban Development pursuant to title II of the National Housing Act or section 312 of the Housing Act of 1964”.

Statutory Notes and Related Subsidiaries

Effective Date

Pub. L. 97–35, title III, § 371, Aug. 13, 1981, 95 Stat. 431, provided that: “(a) Except as otherwise provided in this subtitle, the provisions of this subtitle [for classification of subtitle A (§ 300–371) of title III of Pub. L. 97–35, see Tables] shall take effect on October 1, 1981. “(b) The

Amendments

made by section 324, 325, and 326(a) [amending section 1437f of Title 42, The Public Health and Welfare] shall apply only with respect to contracts entered into on and after October 1, 1981.”

Short Title

Pub. L. 97–35, title III, § 361, Aug. 13, 1981, 95 Stat. 422, provided that: “This part [enacting this chapter] may be cited as the ‘Multifamily Mortgage Foreclosure Act of 1981’.”

§3701 Findings and purpose

Summary

Title 12, §3701

Notes & Related Subsidiaries

Editorial Notes

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Amendments

Short Title

Citations & Metadata