SAVING CLAUSE Section 17 of act June 30, 1945, cited to text, provided: "The sections, subsections, paragraphs, and provisos of this Act (sections 672, 745, 751-753, 771, 781, 857, 861, 874, 880, 1016, 1020b, 1020d of this title and section 694 of title 38) are hereby declared to be separable, and if any one or more of the sections, subsections, paragraphs, or provisos of this act, or the application thereof to any person or circumstance, should be held to be unconstitutional or invalid for any other reason, the validity of other sections, subsections, paragraphs, and provisos of this Act, and the application thereof to other persons or circumstances, shall not be affected thereby." EFFECTIVE DATE Section 19 of act June 30, 1945, cited to text, provided: "This act (sections 672, 745, 751-753, 771, 781, 857, 861, 874, 880, 1016, 1020b, 1020d of this title and section 694 of title 38) shall become effective on July 1, 1945." NATIONAL FARM-LOAN ASSOCIATIONS; SPECIAL PROVISIONS § 745. New members.-After a charter has been granted to a national farm loan association, any person who is the owner, or about to become the owner, of farm land qualified under section 771 of this title as the basis of a mortgage loan, and who desires to borrow on a mortgage of such farm land, may become a member of the association by a majority vote of the directors, or by the loan committee where said committee has been empowered to elect applicants to membership, and upon subscribing for one share of the capital stock of such association for each $100 of the face of his proposed loan or any major fractional part thereof. He shall at the same time file with the secretary-treasurer his application for a mortgage loan, giving the particulars required by section 771 of this title. As used in this section, the term "person" includes an individual, an incorporated association, and a corporation which is eligible for a loan under section 771 of this title. (As amended June 30, 1945, ch. 204, § 1 (b), 59 Stat. 266.) AMENDMENTS * * * to 1945-Act of June 30, 1945, cited to text, amended section by inserting after "by a majority vote of the directors" the following ", or by the loan membership, and" in first sentence. SAVING CLAUSE AND EFFECTIVE DATE Saving clause and effective date of amendment by act June 30, 1945, cited to text, see notes set out under section 712 of this title. APPRAISAL FOR FARM LOANS § 751. Investigation by loan committee; report by appraiser; report and approval by committee; notification to applicant.-Whenever an application for a mortgage loan is made to a national farm-loan association, the loan committee provided for in section 712 of this title shall forthwith make, or cause to be made, such investigation as it may deem necessary as to the character and solvency of the applicant, and the sufficiency of the security offered. The committee may request a report on the value of the security by a land bank appraiser appointed under the authority of section 656 of this title, in which event such an appraiser shall investigate and make a written report to the association upon the security offered. The committee shall cause written report to be made of the results of such investigation or investigations as it has required to be made and shall, if it concurs in ap such report, approve the same in writing. No loan shall be made unless the report of the committee is favorable. After the investigation required in this section has been made, the association has requested and received a report upon the value of the security by a land bank appraiser, and the loan committee has reached an agreement as to the amount and terms of the loan which may be offered to the plicant, if such amount is not in excess of 65 per centum of the normal value of the security offered as determined by said appraiser the secretary-treasurer may notify the applicant of the amount and terms of the loan approved by the loan committee: Provided, That any such notice shall contain a statement that the amount and terms of the loan offered to the applicant are subject to and conditioned upon subsequent approval or disapproval by the Federal land bank. (As amended June 30, 1945, ch. 204, § 2, 59 Stat. 266.) AMENDMENTS 1945-Act June 30, 1945, cited to text, amended section generally by adding provisions contained in second and fifth sentences. SAVING CLAUSE AND EFFECTIVE DATE Saving clause and effective date of amendment by act June 30, 1945, cited to text, see notes set out under section 712 of this title. § 752. Submission of loan application and required reports to land bank; consideration by bank.--The written report required in section 751 of this title, together with any report made by a land bank appraiser, shall be submitted to the Federal land bank with the application for the loan, and the land bank shall examine said written report when it passes on the loan application which it accompanies, but it shall not be bound by the value placed upon the property by the loan committee. (As amended June 30, 1945, ch. 204, § 2, 59 Stat. 266.) AMENDMENTS 1945-Act June 30, 1945, cited to text, amended section by inserting after "of this title," the following "together with any report made by a land bank appraiser," omitting "directors of said" following "and the", substituting "it passes" for "they pass", and by substituting "the value placed upon the property by the loan committee.", for "said appraisal". SAVING CLAUSE AND EFFECTIVE DATE Saving clause and effective date of amendment by act June 30, 1945, cited to text, see notes set out under section 712 of this title. § 753. Requirement for appraisal of land offered as security before making land bank loan.-Before any mortgage loan is made by any Federal land bank, or joint-stock land bank, it shall refer the application to one or more of the land bank appraisers appointed under the authority of section 656 of this title, and such appraiser or appraisers shall investigate and make a written report on the security offered for said loan: Provided, That if a land bank appraiser has made a report on said security to the national farm-loan association, the Federal land bank need not request an additional report. No such loan shall be made by said land bank unless the written report of the land bank appraiser is favorable. (As amended June 30, 1945, ch. 204, § 2, 59 Stat. 266.) 775275-48- -9 AMENDMENTS 1945-Act June 30, 1945, cited to text, amended section by omitting "and written report of the loan committee" following "refer the application", and by adding the proviso to the first sentence. SAVING CLAUSE AND EFFECTIVE DATE Saving clause and effective date of amendment by Act June 30, 1945, cited to text, see notes set out under section 712 of this title. RESTRICTION ON LOANS OF FEDERAL LAND BANKS BASED ON FIRST MORTGAGES § 771. Restrictions enumerated.-No Federal Land Bank organized under this chapter shall make loans except upon the following terms and conditions: Second. Agreement for repayment on amortization plan.-Every such mortgage shall contain an agreement providing for the repayment of the loan on an amortization plan by means of a fixed number of annual or semiannual installments sufficient to cover, first, a charge on the loan at a rate not exceeding the interest rate in the last series of farm-loan bonds issued by the land bank making the loan; second, a charge for administration and profits at a rate not exceeding, except with the approval of the Governor of the Farm Credit Administration, 1 per centum per annum on the unpaid principal, said two rates combined constituting the interest rate on the mortgage; and, third, such amounts to be applied on the principal as will extinguish the debt within an agreed period, not less than five years nor more than forty years: Provided, That after five years from the date upon which a loan is made the mortgagor may, upon any regular installment date, make in advance any number of payments or any portion thereof on account of the principal of his loan as provided by his contract or pay the entire principal of such loan, under the rules and regulations of the Farm Credit Administration: And provided further, That under the rules and regulations of the Farm Credit Administration any land bank may agree, at the time a loan is made or thereafter, that the mortgagor may make such payments or portions of payments in advance or pay the entire principal of such loan during the first five years the loan is in effect: And provided further, That before the first issues of farm-loan bonds by any land bank the interest rate on mortgages may be determined in the discretion of said land bank, subject to the provisions and limitations of this subchapter. (d) To liquidate indebtedness of the owner of the land mortgaged incurred for agricultural purposes, or incurred at least two years prior to the date of the application for the loan. Fifth. Limitation on amount of loans; appraisal; reappraisal.-No such loan shall exceed 65 per centum of the normal value of the farm mortgaged, said value to be ascertained by appraisal, as provided in sections 751-756 of this title. In making said appraisal the value of the farm for agricultural purposes shall be the basis of appraisal and the normal earning power of said farm shall be a principal factor. Ninth. Interest on defaulted payments; payment of taxes and liens; insurance.-Every borrower shall pay simple interest on defaulted payments at a rate not exceeding 6 per centum per annuin, and by express covenant in his mortage deed shall undertake to pay when due all taxes, liens, judgments, or assessments which may be lawfully assessed against the land mortgaged. Taxes, liens, judgments, or assessments not paid when due, and paid by the mortgagee, shall become a part of the mortgage debt and shall bear simple interest at a rate not exceeding 6 per centum per annum. Every borrower shall undertake to keep insured to the satisfaction of the Farm Credit Administration all buildings the value of which was a factor in determining the amount of the loan. Insurance shall be made payable to the mortgagee as its interest may appear at time of loss, and at the option of the mortgagor and subject to general regulations of the Farm Credit Administration; sums so received may be used to pay for reconstruction of the buildings destroyed. Twelfth. Reduction of interest on loans and deferment of principal.-Notwithstanding the provisions of paragraph "Second" of this section, the rate of interest on any loans on mortgage made through national farm loan associations or through agents as provided in sections 801-808 of this chapter, or purchased from joint stock land banks, by any Federal land bank, outstanding on May 12, 1933, or made through national farm loan associations after such date, shall not exceed 32 per centum per annum for all interest payable on installment dates occurring within a period of nine years commencing July 1, 1935; and no payment of the principal portion of any installment of any such loan outstanding on June 3, 1935, shall be required prior to July 11, 1938, if the borrower shall not be in default with respect to any other condition or covenant of his mortgage. The foregoing provisions shall apply to loans made by Federal land banks through branches, except that the rates of interest paid for the respective periods above specified shall be one-half of 1 per centum per annum in excess of the rates of interest paid during the corresponding periods by borrowers on mortgage loans made through national farm loan associations. The foregoing provisions shall also apply to interest on so-called purchase-money mortgages and on real estate sales contracts taken by the Federal land banks which is payable on installment dates occurring after June 30, 1942, except that in the case of such mortgages and contracts the rate of interest shall be onehalf of 1 per centum per annum in excess of the rate paid by borrowers on mortgage loans made through national farm loan associations. The Secretary of the Treasury shall pay each Federal land bank, as soon as practicable after October 1, 1933, and after the end of each quarter thereafter, such amount as the Land Bank Commissioner certifies to the Secretary of the Treasury is equal to the amount by which interest payments on mortgages held by such bank have been reduced, during the preceding quarter, by reason of this paragraph; but in any case in which the Land Bank Commissioner finds that the amount of interest payable by such bank during any quarter has been reduced by reason of the refinancing of bonds under section 992 of this chapter, the amount of the reduction so found shall be deducted from the amount payable to such bank under this paragraph. No payments shall be made to a bank with respect to any period after June 30, 1944. There is authorized to be appropriated, out of any money in the Treasury not otherwise appropriated, the sum of $15,000,000 for the purpose of enabling the Secretary of the Treasury to make payments to Federal land banks which accrue during the fiscal year ending June 30, 1934, and such additional amounts as may be necessary to make payments accruing during subsequent fiscal years. (As amended June 27, 1942, ch. 449, § 1, 56 Stat. 391; June 30, 1945, ch. 204, § 4, 59 Stat. 267.) AMENDMENTS 1945-Act June 30, 1945, cited to text, amended section by inserting second proviso in subsec. Second, by striking out "incurred prior to January 1, 1937" and inserting in lieu thereof "incurred at least two years prior to the date of the application for the loan" in subpar. (d) of subsec. Fourth, by substituting “65" for "50", inserting "normal" preceding "value", omitting "and 20 per centum of the value of the permanent, insured improvements thereon" following "by appraisal", by inserting "normal" preceding "earning" in first par. of subsec. Fifth, and by striking out "the rate of 8 per centum per annum" and inserting in lieu thereof "a rate not exceeding 6 percentum per annum" in the first and second sentences of subsec. Ninth. 1942-Act June 27, 1942, cited to text, amended Twelfth subsec. by substituting "seven years" for "five years" in first sentence, by adding third sentence, and by substituting "June 30, 1944" for "June 30, 1942" in fifth sentence. SAVING CLAUSE AND EFFECTIVE DATE Saving clause and effective date of amendment by act June 30, 1945, cited to text, see notes set out under section 712 of this title. POWERS OF FEDERAL LAND BANKS GENERALLY § 781. Enumerated powers. * Seventh. Borrowing money.-To borrow money severally, or jointly and severally with one or more other Federal land banks, to give security therefor, and to pay interest thereon. Eighth. Buying and selling obligations of United States; purchasing notes and mortgages of Federal Mortgage Corporation.-To buy and sell United States Government obligations direct or fully guaranteed; and to purchase and acquire from the Federal Farm Mortgage Corporation notes and mortgages representing loans made by the Land Bank Commissioner pursuant to section 1016 of this title, upon farm property situated in the farm credit district in which said bank is located, and purchase money mortgages and contracts for the sale of farms held by the Federal Farm Mortgage Corporation in connection with the sale of farm property situated in such district: Provided, That no such note and mortgage, purchase-money mortgage, or contract shall be purchased pursuant hereto unless (1) the unpaid balance of the indebtedness represented or secured thereby, together with any indebtedness to the Federal land bank secured by a prior mortgage on the property, does not exceed 65 per centum of the normal value of the farm as determined upon appraisal made pursuant to this subchapter; |