Administration of Titles Two and Three of 'The National Housing Act

(Continued from Page 11) of the mortgagor, such proportion of the credit balance remaining in such group account as the outstanding face amount of the insured rnortgage bears to the total outstanding face amount of all insured mortgages assigned to such group. The insurance upon such mortgage shall thereupon terminaie and the mortgagee shall apply such payment against the principal of the rnsured mortgage.

4, If the mortgagor pays the insured mortgage in full prior to it_s final maturity date, the mortgagee may terminate its rights and obligations under the contract of insurance by written notice to the Administration. The Administration shall thereupon pay over to the mortgagor such share of the credit balance of the group account of the group to which the insured mortgage has been assigned as the Administration shall determine to be equitable and not inconsistent with the preservation of the solvency of such account and of the Mutual Mortgage Insurance Fund.

5. The mortgagor and morigagee shall have no vested right in the credit balance in such group account, and the determinatibn by the Administration as to the amount to be oaid to. or for the bene- fit of, the mortgagor and mortgagee, under the four preceding sections, shall be final and conclusive as to all oarties.

6. The mortgagee shall be under no duty to foreclose upon the mortgaged premises except in the event that the mortgagor abandons the premises, or otherwise leaves them unoccupied, and is at the same time in default under the insured mortgage, In such event, the mortgagee must institute foreclosure poieJdings within sixty days (60) after the date when the mortgaged premises became unoccupied in ordei to secure the benefitJunder the contract oI rnsurance,

7. If the mortgagee,- at- any time within thirty (30) -days after acquiring possession of the mortgaged premises by foreclosure, tenders to the Federal Housing Administrator possession of, and good marketable title (by quit-claim deed) to, such premises, undamaged by fire,.earthquake, flood or tornado, and assigns (with- out recourse or warranty) any and all claims which it may have acqgired against the mortgagor as a result of the foreclosuie proceedings, the Administration shall promptly deliver to the mortgagee: a. Debentures of the Mutual Mortgagg fnsurance Fund as set forth in Section 204 (b) of the National Housing Act, bearing interest at the rate of 3 per cent per annum, and having a total face value equal to the remaining amount of the principal of the mortgage, as defined in Section 204 (a) of the Act, which is unpaid, but not exceeding the principal amount that would have been outstanding if the mortgagee had commenced the foreclosure proceedings by which it acquired title to the prem- ises,_within ninety days of the first default by the mortgagor continuing t-o the time of foreclosure; plus amounts paid-by mortgagee for taxes and insurance accruing for the period between the dates of default and institution of foreclosure proceedings; b. A Certificate of Claim in accordance with Section 204 (c\ of the National Housing Act, which shall become oayable, if at all, upon the sate of the premises covered bv the insured mortgage in accordance with Section 204 G\ of ihe Act. The amount of such Certificate of Claim shall be that allowed bv the Administrator asifilti,fffction 204 (c).

Assignments

_ l. If the mortgagor conveys the mortgaged premises, while the insured_ mortgage is still outstanding, thJ mortgagee shall not reIease the mortgagor from his obligations under the insured mortgage. unless such conveyance is to a mortgagor approved bv the Admipistration and such mortgagor assumessuch oblieations. Upon such assumption and notice thereof to the Administration. the mortgagor to whom the conveyance is made shall become entitled to the benefits of the contract of insurance.

2. If an insured mortgage is assigned to a mortgagee approved b-y the Administration, the rights of the original m-ortgagee^ under the contract of insurance shall thereupon ter-minate, bui- iis obliga- tions thereunder shall terminate only upon giving written notice to the Administration of such-assignment. If the approved.mortgasee to whom such assignment is mide shall thereupon assunie the"obligations.of the-insured mortsasee. and within thirty (30) days there- after give notice to the Administrator of such ajsumption. it shall become entitled to the benefits of the contract of insuiance-

3. If an insured mortgage be assigned to any one,. other than an approved.mortsagee; or, to an approved mortgagee that does not assume the obligations under the contract of insurance and give notice thereof to the Administration as above set forth; or, upon the issuance and sale by a mortgagee to another (whether or not it,be a mortgagee), of any participation certificate, trustee's certificate or any like instrument, purporting to convey title, or interest in the title, of any partial interest or 6enefit in an insured mortgage or group of insured mortgages, the contract of insurance shall terminate. The Administration shall thereupon pay to the mortgagor such portion, if any, of the Mutual Mortgage Insurance Fund as the Administration in its discretion may de-m equitable, and all rights of the mortgagee and mortgagor under the contract of insurance shall terminate.

NOTE: Regulat-ions, covering Insurance of Low-cost Housing projects -provided Jor.in Title II, and covering National Mortgage Associations provided for in Title III, are not included heiein. but the following is explanatory:Low Cost Housing fnsurance

The Administrator may also insure first mortgages, other than mortgages, delned in Section 201 (a) of this Title, covering prop- erty held by Federal or State instrumentalities, private limitad dividend corporations, or municipal corporate instrumentalities of one or more States, formed for the purpose of providing housing for persons of low income which are regulated or restricted by law or by the Administrator as to rents, charges, capital structure, rate of return, or methods of operation. Such mortgages shall contain terms, conditions, and provisions satisfactory to the Administrator. but need not conform to the eligibility requirements of Section 203. S_ubject- to the right of the Administrator to impose a premium c_harge, in elcess of, or less than, the amount specified for mortgages defined in Section 201 (a). the provisions of Sections 204 and 205 shall be applicable to mortgages insured under this section: Provided, that_, the insurance wjth respect to any low-cost housing project shall not exceed $10,000,000.

The Administrator will presently issue special regulations for the administration of the provisions of the foregoing Section 207 of this Title. Preliminary negotiations with respect ihereto should be conducted with the Administrator. at Washington, D. C.

TITLE III_NATIONAL MORTGAGE ASSOCIATIONS

The Administrator is authorized to provide for the establishrnent of National -Mortgage Associations, subject to rules and regulations to be prescribed by him. Any number of natural persons, not less than five-, may apply for authority to establish a National Mortgage Association, and each such association shall have a caoital stock of a par value of not less than $5,000,000. Thev will be authorized to conduct business in any state of the United States or in the Dis- trict of Columbia and to have one or more offices in each state or in the District of Cotumbia, one of which offices shall be desisnated at the time of organization as its principal office; and each such association, for.the purpose of all actions by or against it, real.. personal and mixed. and all suits of equity, shall be deemed a citizen oI that state, Each such association shall have power to per- form the usual corporate functions and do all things necessary and incidental -to the proper management of its afiairJ and the proper conduct of its business.

In particular, such National Mortgage Associations shall be authorized:

(l) To purchase and sell first mortsases and other such first liens as are commonly given to secure advinces on real estate held in fee simple or under leaseholds, under the laws of the state in which the real estate is located, together with the credit instruments, if any. secured thereby; such mortgages not to exceed 80 per cent of the aopraised value of the property as of the date the mortgage is purchased; and.

(2) To borrow money for srich purposes through the issuance of notes. bonds, debentures, or such other obligations;

(3) To issue and have outstanding at any time irotes, bonds, debentures, or other such obligations in an aggregate amount not to exeeed (a) ten times the aggregate par vatue of its outstanding capital stock. and in no event to exceed (b) the current face value of morrsases held by it and insured under the provisions of this Title plus the amount of its cash on hand and on deoosit and the amount of its investments in bonds or obligations of, or guaranteed as to principal and interest by the United States. (No National Mortgage Association shall borrow money except through the issuance of sueh nntes. bonds. debentures, or other obligations: or. issrre any such notes. bonds. debentures. or other obligations, except wirh the aDproval of the Administrator): and.

(4) Act as deoositories of public monies, when so designated hy the Seeretarv of the Treasury, in the same general manner as do natinnal bankinq associations.

Mon;es of any National Mortgage Association not invested in first mortqages or other liens as provided above or in operating facilities approved by the Administrator, shall be kept in cash on hand or on deposit, or invested in bonds or other obligations of, or guaranteed as to principal and interest by, the United States; except that each such association shall keep and maintain such reserves as the Administrator shall by rules and regulations prescribe.

No individual, association, partnership, or corporation, except associations organized under this section, sha1l hereafter use the words "national mortgage association," or any combination of such words, as the name or a part thereof under which he or it shall do business. Every individual, partnership, association, or corporation violating this prohibition shall be guilty of a misdemeanor and .shall be punished by a fine of not exceeding $100 or imprisonment not exceeding thirty days, or both, for each day during which such violation is committed or repeated. The provisions of Section 5243 of the Revised Statutes shall not apply to associations created under this Title'

ARTT.LE xrr

Amendments

These regulations may be amended by the Administration at any time and from time to time, in whole or in part, but such amendment shall not affect the insurance on any mortgage already insured, or any prospective mortgage on which the Administration has made a commitment to insure'

JAMES A. MoFFETT, Federal Housing Administrator.

Washington, D. C., November 1, 1934.

New Assistant Sales Man.ger

E. E. Abrahamson arrived in San Francisco November 1 to take up his duties as assistant to Geo. W. Gorman, sales manager, in the Hammond Lumber Company's head office.

Returning to California after spending some years in the East, where he was sales manager in the company's Chicago office, is just a case of coming back home for Mr. Abrahamson. He is a Californian, born in Samoa, and he gained his early lumber experience in the big Hammond Redwood mill there.

The Diamond Match Co. Wins Reward For Forest Conservation

Washington, D. C., Oct. 25.-The Diamond Match Co., with lumber operations near Stirling City, Calif., has been rewarded by the Lumber Code Authority with an additional production allotment of lO/o for placing these operations in four California counties on a sustained yield basis in accordance with the conservation provisions of Schedule C of the Lumber Code. The Resident Committee granted the company's application for the additional allotment upon certification by the Western Pine Division's administrative agency that the company had fulfilled the Lumber Code's requirements of operators who would earn the I0/o extra production privilege specified in the Code.

The application consisted of a documented report of the company's conservation and reproduction program during the last ten years and affidavits attesting to ability and intention to carry forward the sustained yield basis of operation.

The company's California timber stand is of mixed fir and pine located in the Sierras in Butte, Pumas, Shasta and Tehama counties.

Four other large companies already have filed applications with the Authority for tlr'e lo/o additional production allotments based on their reports of sustained yield operations. Their applications have been certified by their Di visional agency and now await approval by the Authority. These companies are; IJrania Lumber Co., IJrania, La.; Allison Lumber Co., Bellamy, Ala.; Crossett Lumber Co., Crossett, Ark.; and Southern Pine Lumber Co., Dibold, Tex.

Residential Building for October Shows Large Increase

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Inqufuies Solicited

New York, Nov. S.-Contracts for residential building awarded during October in thirty-seven states totaled $26,300,000, an advance of 22.3 per cent over the total for the like 1933 month and a gain ol 47.8 per cent over the aggregate for September, last, F.W. Dodge Corporation announced today.

Residential awards in September were $17,800,000 and in October, 1933, they totaled $21,500,000.

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From the October 15,1924 issue of The California Lumber Merchant