§1475 — Title 42 The Public Health and Welfare | U.S. Code

Summary

The Secretary can temporarily stop a borrower’s loan payments of principal and interest while the loan is still active if the borrower proves they cannot pay because of events beyond their control and paying would severely hurt their living standard. In extreme hardship, the Secretary may cancel interest that would be due during the pause. If the loan’s mortgage is later foreclosed after such a pause, the borrower cannot be charged a deficiency if they tried in good faith to pay. When foreclosing, the Secretary must use the State’s foreclosure rules if those rules are better for the borrower. That option depends on Congress approving any extra money needed in appropriations.

Title 42, §1475

The Public Health and Welfare — Source: USLM XML via OLRC

(a)During any time that any such loan is outstanding, the Secretary is authorized under regulations to be prescribed by him to grant a moratorium upon the payment of interest and principal on such loan for so long a period as he deems necessary, upon a showing by the borrower that due to circumstances beyond his control, he is unable to continue making payments of such principal and interest when due without unduly impairing his standard of living. In cases of extreme hardship under the foregoing circumstances, the Secretary is further authorized to cancel interest due and payable on such loans during the moratorium. Should any foreclosure of such a mortgage securing such a loan upon which a moratorium has been granted occur, no deficiency judgment shall be taken against the mortgagor if he shall have faithfully tried to meet his obligation.

(b)In foreclosing on any mortgage held by the Secretary under this subchapter, the Secretary shall follow the foreclosure procedures of the State in which the property involved is located to the extent such procedures are more favorable to the borrower than the foreclosure procedures that would otherwise be followed by the Secretary. This subsection shall be subject to the availability of amounts approved in appropriations Acts, to the extent additional budget authority is necessary to carry out this subsection.

Editorial Notes

Amendments

1990—Pub. L. 101–625 amended section catchline generally, designated existing provisions as subsec. (a) and inserted heading, and added subsec. (b).

§1475 Loan payment moratorium and foreclosure procedures

Summary

Title 42, §1475

Notes & Related Subsidiaries

Editorial Notes

Amendments

Citations & Metadata