liance of those instruments with any other local filing requirements.

SEC. 816. [12 U.S.C. 3765] EFFECT OF SALE.

A sale, made and conducted as prescribed in this title to a ona fide purchaser, shall bar all claims upon, or with respect to, The property sold, for each of the following persons:

(1) NOTICE RECIPIENTS.-Any person to whom the notice of default and foreclosure sale was mailed as provided in this title, and the heir, devisee, executor, administrator, successor, or assignee claiming under any such person.

(2) SUBORDINATE CLAIMANTS WITH KNOWLEDGE.-Any person claiming any interest in the property subordinate to that of the mortgage, if such person had actual knowledge of the foreclosure sale.

(3) NONRECORDED CLAIMANTS.-Any person claiming any interest in the property, whose assignment, mortgage, or other conveyance was not duly recorded or filed in the proper place for recording or filing, or whose judgment or decree was not duly docketed or filed in the proper place for docketing or filing, before the date on which the notice of the foreclosure sale was first served by publication, as required by section 809(3), and the executor, administrator, or assignee of such a person.

(4) OTHER PERSONS.-Any person claiming an interest in the property under a statutory lien or encumbrance created subsequent to the recording or filing of the mortgage being foreclosed, and attaching to the title or interest of any person designated in any of the foregoing paragraphs.

SEC. 817. [12 U.S.C. 3766] COMPUTATION OF TIME.

Periods of time provided for in this title shall be calculated in consecutive calendar days, including the day or days on which the actions or events occur or are to occur for which the period of time s provided and including the day on which an event occurs or is to occur from which the period is to be calculated.

SEC. 818. [12 U.S.C. 3767] SEVERABILITY.

If any part of this title shall, for any reason, be adjudged by a court of competent jurisdiction to be invalid, or invalid as applied o a class of cases, such judgment shall not affect, impair, or invaliHate the remainder thereof, and shall be confined in its operation o the part thereof directly involved in the controversy in which Euch judgment shall have been rendered.

SEC. 819. [12 U.S.C. 3768] DEFICIENCY JUDGMENT.

(a) IN GENERAL.

(1) REFERRAL TO ATTORNEY GENERAL.-If after deducting the payments provided for in section 813 of this title, the price at which the security property is sold at a foreclosure sale is less than the unpaid balance of the debt secured by the security property, resulting in a deficiency, the Secretary may refer the matter to the Attorney General who may commence an action or actions against any or all debtors to recover the deficiency, unless such an action is specifically prohibited by the mortgage.

(2) OTHER RECOVERIES.-In any action instituted pursuant to this section the United States may recover

(A) any amount authorized by section 3011 of title 28, United States Code; and

(B) the costs of the action.

(b) LIMITATION.-Any action commenced to recover a deficiency under this section must be brought not later than 6 years after the date of the last sale of the security property.

FORECLOSURE OF MORTGAGES FOR MULTIFAMILY

HOUSING

EXCERPT FROM HOUSING AND COMMUNITY DEVELOPMENT
AMENDMENTS OF 1981

[Public Law 97-35; 95 Stat. 422; 12 U.S.C. 3701 et seq.]

TITLE III—BANKING, HOUSING, AND RELATED PROGRAMS

Subtitle A-Housing and Community Development

PART 6-MULTIFAMILY MORTGAGE FORECLOSURE

SHORT TITLE

SEC. 361. [12 U.S.C. 3701 note] This part may be cited as the "Multifamily Mortgage Foreclosure Act of 1981".

FINDINGS AND PURPOSE

SEC. 362. [12 U.S.C. 3701] (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 saleability 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 part is to create a uniform Federal foreclosure remedy for multifamily mortgages.

DEFINITIONS

SEC. 363. [12 U.S.C. 3702] As used in this part

(1) "mortgage" means a deed of trust, mortgage, deed to secure debt, security agreement, or any other form of instrument under which any interest in property, real, personal or mixed, or any interest in property including leaseholds, life estates, re versionary interests, and any other estates under applicable State law, is conveyed in trust, mortgaged, encumbered, pledged, or otherwise rendered subject to a lien, for the purpose of securing the payment of money or the performance of an obligation;

(2) "multifamily mortgage" means a mortgage held by the Secretary pursuant to

(A) section 608 or 801, or title II or X, of the National Housing Act;

(B) section 312 of the Housing Act of 1964, as it existed immediately before its repeal by section 289 of the Cranston-Gonzalez National Affordable Housing Act;

(C) section 202 of the Housing Act of 1959, as it existed immediately before its amendment by section 801 of the Cranston-Gonzalez National Affordable Housing Act;

(D) section 202 of the Housing Act of 1959, as amend ed by section 801 of the Cranston-Gonzalez National Affordable Housing Act; and

(E) section 811 of the Cranston-Gonzalez National Affordable Housing Act.

(3) "mortgage agreement" means the note or debt instrument and the mortgage instrument, deed of trust instrument, trust deed, or instrument or instruments creating the mortgage, including any instrument incorporated by reference therein (including any applicable regulatory agreement), and any instrument or agreement amending or modifying any of the foregoing;

(4) "mortgagor" means the obligor, grantor, or trustor named in the mortgage agreement and, unless the contest otherwise indicates, includes the current owner of record of the security property whether or not personally liable on the mortgage debt;

(5) "person" includes any individual, group of individuals, association, partnership, corporation, or organization;

(6) "record" and "recorded" include "register" and "registered" in the instance of registered land;

(7) "security property" means the property, real, personal or mixed, or an interest in property, including leaseholds, life estates, reversionary interests, and any other estates under applicable State law, together with fixtures and other interests subject to the lien of the mortgage under applicable State law;

(8) "State" means the several States, the District of Columbia, the Commonwealth of Puerto Rico, the territories and possessions of the United States, and the Trust Territory of the Pacific Islands, and Indian tribes as defined by the Secretary; (9) "county" means county as defined in section 2 of title I, United States Code; and

(10) "Secretary" means the Secretary of Housing and Urban Development.

APPLICABILITY

SEC. 364. [12 U.S.C. 3703] Multifamily mortgages held by the Secretary encumbering real estate located in any State may be foreclosed by the Secretary in accordance with this part, or pursuant to other foreclosure procedures available, at the option of the Secretary. If the Secretary forecloses on any such mortgage pursuant to such other foreclosure procedures available, the provisions of section 367(b) may be applied at the discretion of the Secretary.

DESIGNATION OF FORECLOSURE COMMISSIONER

SEC. 365. [12 U.S.C. 3704] A foreclosure commissioner or commissioners designated pursuant to this part shall have a nonjudicial power of sale as provided in this part. Where the Secretary is the holder of a multi-family mortgage, the Secretary may designate a foreclosure commissioner and, with or without cause, may designate a substitute foreclosure commissioner to replace a previously designated foreclosure commissioner, by executing a duly acknowledged, written designation stating the name and business or residential address of the commissioner or substitute commissioner. The designation shall be effective upon execution. Except as provided in section 368(b), a copy of the designation shall be mailed with each copy of the notice of default and foreclosure sale served by mail in accordance with section 369(1). The foreclosure commissioner, if a natural person, shall be a resident of the State in which the security property is located and, if not a natural person, the foreclosure commissioner must be duly authorized to transact business under the laws of the State in which the security property is located. The foreclosure commissioner shall be a person who is responsible, financially sound and competent to conduct the foreclosure. More than one foreclosure commissioner may be designated. If a natural person is designated as foreclosure commissioner or substitute foreclosure commissioner, such person shall be designated by name, except that where such person is designated in his or her capacity as an official or employee of the government of the State or subdivision thereof in which the security property is located, such person may be designated by his or her unique title or position instead of by name. The Secretary shall be a guarantor

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