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§ 2704. —  Insurance for emergency mortgage loans and advances.

[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
  January 24, 2002 and December 19, 2002]
[CITE: 12USC2704]

                       TITLE 12--BANKS AND BANKING
Sec. 2704. Insurance for emergency mortgage loans and advances

(a) Institutions eligible

    The Secretary is authorized, upon such terms and conditions as the 
Secretary may prescribe, to insure banks, trust companies, finance 
companies, mortgage companies, savings and loan associations, insurance 
companies, credit unions, and such other financial institutions, which 
the Secretary finds to be qualified by experience and facilities and 
approves as eligible for insurance, against losses which they may 
sustain as a result of emergency loans or advances of credit made in 
accordance with the provisions of section 2703 of this title and this 
section with respect to mortgages eligible for assistance under this 

(b) Amount of insurance

    In no case shall the insurance granted by the Secretary under this 
section to any financial institution on loans and advances made by such 
financial institution for the purposes of this chapter exceed 40 per 
centum of the total amount of such loans and advances made by the 
institution, except that, with respect to any individual loan or advance 
of credit, the amount of any claim for loss on such individual loan or 
advance of credit paid by the Secretary under the provision of this 
section shall not exceed 90 per centum of such loss.

(c) Premium charge; amount

    The Secretary is authorized to fix a premium charge or charges for 
the insurance granted under this section, but in the case of any loan or 
advance of credit, such charge or charges shall not exceed an amount 
equivalent to one-half of 1 per centum per annum of the principal 
obligation of such loan or advance of credit outstanding at any time.

(d) Waiver of compliance with rules and regulations; finality and 
        incontestability of payment for loss; transfer of insurance

    The Secretary is authorized and empowered to waive compliance with 
any rule or regulation prescribed by the Secretary for the purposes of 
this section if, in the Secretary's judgment, the enforcement of such 
rule or regulation would impose an injustice upon an insured lending 
institution which has substantially complied with such regulations in 
good faith. Any payment for loss made to an insured financial 
institution under this section shall be final and incontestable after 
two years from the date the claim was certified for payment by the 
Secretary, in the absence of fraud or misrepresentation on the part of 
such institution unless a demand for repurchase of the obligation shall 
have been made on behalf of the United States prior to the expiration of 
such two-year period. The Secretary is authorized to transfer to any 
financial institution approved for insurance under this chapter any 
insurance in connection with any loan which may be sold to it by another 
insured financial institution.

(e) Maximum aggregate amount of loans and advances insured

    The aggregate amount of loans and advances insured under this 
section shall not exceed $1,500,000,000 at any one time.

(Pub. L. 94-50, title I, Sec. 105, July 2, 1975, 89 Stat. 251.)

                  Section Referred to in Other Sections

    This section is referred to in sections 2703, 2705, 2706 of this