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Title 12, Banks and BankingRelease 119-73not60

§1709–2 Equity Skimming; Penalty; Persons Liable; One Dwelling Exemption

Title 12 › Chapter 13— NATIONAL HOUSING › Subchapter II— MORTGAGE INSURANCE › § 1709–2

Last updated Apr 3, 2026|Official source

Summary

Makes it illegal for someone, intending to cheat, to repeatedly buy one- to four-family homes (including condominiums and co-ops) that are already in default or go into default within one year of the purchase when the loan is insured or owned by the Secretary of Housing and Urban Development or guaranteed or made by the Department of Veterans Affairs. The person then must not stop making the mortgage payments when they are due and may not take the rent money from those homes for personal use.

Full Legal Text

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,

Legislative History

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.

Reference

Citations & Metadata

Citation

12 U.S.C. § 1709–2

Title 12, Banks and Banking

Last Updated

Apr 3, 2026

Release point: 119-73not60