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(g) Insurance contract as incontestable.—Any contract of insurance executed by the Secretary under this section shall be conclusive evidence of the eligibility of the mortgage for insurance, and the validity of any contract of insurance so executed shall be incontestable in the hands of any holder thereof from the date of the execution of such contract, except for fraud or misrepresentation of which such holder has actual knowledge.
(h) Release of mortgagor.-The Secretary may, at any time, for good cause shown and under such terms and conditions as he may prescribe, consent to the release of the mortgagor from his liability under the mortgage or the credit instruments secured thereby, or consent to the release of parts of the mortgaged property from the lien of the mortgage.
(i) Assignment of mortgage.—The holder of any mortgage insured under sections 1001-1005d of this title may, upon notice to the Secretary, assign such mortgage together with the accompanying note and contract of insurance and the assignee thereof shall thereupon become entitled to all the benefits of such contract of insurance: Provided, That no such assignment shall be binding upon the Secretary until notice thereof has been given the Secretary and the Secretary has acknowledged receipt of such notice. (Aug. 14, 1946, ch. 946, § 5, 60 Stat. 1072.)
$ 10050. Payment of insurance upon default; issuance of notes; purchase of notes by Treasury; assignment of mortgage.-(a) In any case in which the mortgagor under a mortgage insured under section 1005b of this title is in default for more than twelve months, the mortgagee shall be entitled to receive the benefit of the insurance as provided in this section, upon assignment to the Secretary of (1) all the mortgagee's rights and interests arising under the mortgage so in default; (2) all claims of the mortgagee against the mortgagor or others, arising out of the mortgage transaction; (3) all policies of title or other insurance and all surety bonds and other guaranties and any and all claims thereunder relating to the mortgage or the mortgaged property; (4) any balance of the mortgage loan not advanced to the mortgagor; and (5) any cash or property held by the mortgagee, or to which he is entitled, as deposit made for the account of the mortgagor and which has not been applied in reduction of the principal of the mortgage indebtedness; and upon transfer to the Secretary of such originals or copies of records, documents, books, papers and accounts relating to the mortgage transaction, as the Secretary prescribes. Upon such assignment and transfer, the Secretary shall pay to the mortgagee, in cash, an amount equal to the value of the mortgage and the note and mortgage shall thereupon become a part of the fund. For the purposes of this subsection, the value of the mortgage shall be determined, in accordance with rules and regulations prescribed by the Secretary, by adding to the amount of the original principal obligation of the mortgage which was unpaid on the date of default, the amount of all unpaid interest and the amount of all payments which have been made by the mortgagee for taxes, special assessments, water rates, and other payments in discharge of liens which are prior to the mortgage, and insurance on the property mortgaged, and by deducting from such total amount any amount received on account of the mortgage indebtedness after such default.
(b) If there should not be sufficient cash in the fund to enable the Secretary to make payments to mortgagees as provided in subsection (a) of this section, the Secretary may make and issue notes to the Secretary of the Treasury to obtain funds to make such payments. Such notes shall be signed by the Secretary or by his duly authorized representatives and shall be negotiable. Such notes shall bear interest, payable semiannually, at a rate equal to the average rate of interest, computed to the end of the calendar month next preceding the date of issue, borne by all interest bearing obligations of the United States then forming a part of the public debt, and shall have such maturities as the Secretary may determine with the approval of the Secretary of the Treasury.
(c) The Secretary of the Treasury is authorized to purchase any notes issued by the Secretary pursuant to this section and any renewals thereof and for such purchases may use as a public debt transaction the proceeds from the sale of any securities issued under sections 745, 747, 752–754b, 757b, 757c, 758, 760, 764–766, 769, 771, 773, 774 (2) and 801 of Title 31, and the purposes for which such securities may be issued under said sections, are extended to include any such purchases. All redemptions, purchases, and sales by the Secretary of the Treasury of such notes shall be treated as public debt transactions of the United States.
(d) In any case in which the mortgagor violates any covenant or condition of his mortgage, the Secretary may require the mortgagee to assign such mortgage, together with the incidents thereto, upon payment of the value of the mortgage determined in accordance with this section. (Aug. 14, 1946, ch.964, $ 5,60 Stat. 1072.)
$ 1005d. Procedure with respect to mortgages in default; disposition of realized amounts.- (a) Upon accepting the assignment of any insured mortgage, the Secretary shall ascertain whether or not the mortgagor (which term as used in this section shall include the mortgagor or his heirs or assigns) desires to remain in possession of the mortgaged property. If the mortgagor does not desire to remain in possession of the mortgaged property or if the Secretary is unable to make the findings prescribed by the next sentence, the Secretary may proceed to foreclose the mortgage. If the mortgagor desires to remain in possession of the mortgaged property and if the Secretary finds that the mortgagor (1) has made reasonable efforts to meet all defaulted payments and to comply with the other covenants and conditions of his mortgage and (2) will probably be able to meet such defaulted payments within five years after the maturity date or dates of the defaulted payments, the Secretary may enter into an agreement with the mortgagor providing for the payment of such defaulted payments together with interest thereon, at such times not later than five years after the maturity date or dates as the Secretary may deem to be within the probable future means of the mortgagor. Should any mortgagor with whom the Secretary has entered into such agreement thereafter fail to meet any payments, the Secretary may proceed to foreclose the mortgage.
(b) Amounts realized under section 1025 of this title on account of property which was subject to an insured mortgage shall be deposited in the fund. Amounts payable by the Secretary under section 1024 (a) of this title as taxes, with respect to such property, shall be paid out of the fund. (Aug. 14, 1946, ch. 964, $ 5,60 Stat. 1072.)
$ 1006. Same; appropriation
Section omitted from Code by Act Aug. 14, 1946, ch. 964, § 4, 60 Stat. 1071, Provisions of former section now covered by section 1005 of this title.
SUBCHAPTER II–PRODUCTION AND SUBSISTENCE LOANS
Act Aug. 14, 1946, ch. 964, $ 4, 60 Stat. 1071 amended subchapter heading to read as now set out.
8 1007. Eligible borrowers; terms.-Out of the funds made available under section 1009 of this title, the Secretary may make loans to farmers and stockmen who are citizens of the United States for the purchase of livestock, seed, feed, fertilizer, farm equipment and supplies, other farm needs, the refinancing of indebtedness and family subsistence: Provided, That no loan shall be made under this section for the purchase or leasing of land or for the carrying on of any land-purchase or land-leasing program: Provided further, That, under this section, (1) the initial loan to any one borrower shall not exceed $3,500 and no further loan may be made by the Secretary under sections 1007, 1008, and 1009 of this title to a borrower so long as the total amount outstanding to that borrower, including interest and taxes or other liens and obligations which have accrued and are properly chargeable to the account of the borrower, exceeds $5,000; (2) the term of any such loan, including renewals and extensions, shall not exceed five years from the date the original loan was made; and (3) no person who has failed to liquidate his indebtedness under this section for five consecutive years shall be eligible for further loans hereunder until he has paid such indebtedness in full, except that indebtedness to the Farm Security Administration or the Emergency Crop and Feed Loan Offices heretofore created shall not be included until five years from August 14, 1946, in determining the amounts of loans, terms of loans, and five-year period for eligibility set forth in this section. (As amended Aug. 14, 1946, ch.964, $ 4,60 Stat. 1071.)
Act Aug. 14, 1946, cited to text amended section generally to also allow loans for seed and feed, to prohibit loans for the purchase or lease of land, and to limit amount of loans.
$ 1007a. Conditions and penalties attaching to loans.—Hereafter rural rehabilitation loans shall be subject to the conditions and penalties prescribed by sections 1020k and 1020n of Title 12, except that the functions conferred upon the Governor of the Farm Credit Administration by said sections are hereby conferred, for the purposes hereof upon the Secretary of Agriculture. (July 1, 1941, ch. *267, § 1, 55 Stat. 440.)
Section is not a part of "The Bankhead-Jones Farm Tenant Act" which constitutes this chapter.
$ 1008. Debt adjustment.—The Secretary may assist in the voluntary adjustment of indebtedness between farm debtors and their creditors and may co-operate with State, Territorial, and local agencies and committees engaged in such debt adjustment. Services furnished by the Secretary under this section may be without charge to the debtor or creditor. (As amended Aug. 14, 1946, ch. 964, $ 4, 60 Stat. 1071.)
Act Aug. 14, 1946, cited to text, amended section by omitting sentence relating to completion of farm debt undertaking not completed on July 22, 1937.
$ 1009. Appropriations.—There is authorized to be appropriated to the Secretary such sums as the Congress may from time to time determine to be necessary to enable the Secretary to carry out the purposes of sections 1007, 1008, and 1009 of this title. (As amended Aug. 14, 1946, ch. 964,8 4, 60 Stat. 1071.)
Act Aug. 14, 1946, cited to text, amended section to provide for the necessary appropriations to carry out provisions of sections 1007, 1008, and 1009 of this title.
SUBCHAPTER III-RETIREMENT OF SUBMARGINAL LAND 8 1010. Retirement of submarginal lands Effect of amendments to sections 1015-1029 of this title.-Section 3 of act Aug. 14, 1946, ch. 964, 60 Stat. 1064 provided in part that sections 1015–1029 of this title were amended by act Aug. 14, 1946, § 3, ch. 964, 60 Stat. 1064, except insofar as they affected sections 1010-1013 of this title.
§ 1011. Same; powers of Secretary of Agriculture
(c) To sell, exchange, lease, or otherwise dispose of, with or without a consideration, any property so acquired, under such terms and conditions as he deems will best accomplish the purposes of sections 1010–1013 of this title, but any sale, exchange, or grant shall be made only to public authorities and agencies and only on condition that the property is used for public purposes : Provided, however, That an exchange may be made with private owners and with subdivisions or agencies of State governments in any case where the Secretary of Agriculture finds that such exchange would not conflict with the purposes of this chapter, and that the value of the property received in exchange is substantially equal to that of the property conveyed. The Secretary may recommended to the President other Federal, State, or Territorial agencies to administer such property, together with the conditions of use and administration which will best serve the purposes of a land-conservation and land-utilization program, and the President is authorized to transfer such property to such agencies. (As amended July 28, 1942, ch. 531, 56 Stat. 725.)
Subsec. (c) amended by Act July 28, 1942, cited to text, which added proviso thereto.
Adjustment of Sebastian Martin grant boundary disputes.-Act Aug. 11, 1945, ch. 366, 59 Stat. 532, provided : "That either the War Food Administrator or the Secretary of Agriculture be, and either of them is hereby, authorized to adjust claims to any portions of the so-called Sebastian Martin grant lands, situated between State Highway Numbered 64 and the western boundary of said grant, and between the fence constructed by the Government on the west side of Ojo Sarco Creek and the eastern boundary of said grant, in the State of New Mexico, which are administered under title III, of the Bankhead-Jones Farm Tenant Act of July 22, 1937 (50 Stat. 522, 525) [7 U. S. C. $$ 1010–1012].
"SEC. 2. That for the purpose of carrying out the provisions of this act [Act Aug. 11, 1945, ch. 366, 59 Stat. 532] if the War Food Administrator or the Secretary of Agriculture shall find, within twenty years after the acquisition by the United States of the lands described in section 1, that the title to any portion or portions of the aforesaid lands is in dispute, and that the person or persons claiming the same or their predecessors in the occupancy thereof and under whom the right thereto is claimed, have been in open, actual visible, exclusive, hostile, continuous, and adverse possession thereof, for a period of ten years previous to the date on which the United Stated acquired such land or interest, irrespective of whether color of title during such possession can be established or not, either the War Food Administrator or the Secretary of Agriculture is hereby authorized to execute and deliver, on behalf of and in the name of the United States, to the person or persons so occupying said lands, whom either of them finds entitled thereto under the provisions of this act, a quitclaim deed to such land or interest.
"SEC. 3. Either the War Food Administrator or the Secretary of Agriculture is further authorized, upon a finding by either of them, that any lands situated within the areas described in section 1, which are not claimed by any person or persons as aforesaid, or right to which cannot be established as aforesaid, are not suitable for use and administration in connection with the land-conservation and land-utilization program administered under title III of the Bankhead-Jones Farm Tenant Act 17 U. S. C. $$ 1010–1012), to sell such lands so situated, under such terms and conditions as either of them deems will best accomplish the purposes of title III of the Bankhead-Jones Farm Tenant Act 17 U. S. C. A. 88 1010-1012] : Provided however, That the consideration to be paid for such lands shall not be less than the value as appraised by authorized representatives of the United States."
Transfer of functions.-Functions of Secretary of Agriculture with respect to uses of Mineral deposits in lands under subsec. (c) of this section transferred to Secretary of the Interior, see note under section 1018 of this title. § 1013. Expired
SUBCHAPTER IV-GENERAL PROVISIONS § 1014. Farmers' Home Corporation Financial control of Corporation, see chapter 14 of Title 31, Money and Finance.
8 1015. Powers of Secretary of Agriculture.-For the purposes of this chapter, the Secretary shall have the power to
(a) Appoint (without regard to the civil-service laws or sections 661-663, 664-673 and 674 of Title 5) such experts as may be necessary in carrying out the provisions of this chapter: Provided, That the Administrator of the Farmers Home Administration shall be appointed by the President, by and with the advice and consent of the Senate. The salary of none of such experts or the Administrator shall exceed $10,000 per annum.
The Secretary shall also have the power to appoint, subject to the provisions of the civil-service laws, such other officers and employees as may be necessary and fix their compensation in accordance with sections 661-663, 664-673 and 674 of Title 5, except that for a period of not to exceed nine months from August 14, 1946, the Secretary may make appointments and continue employees of the Farm Security Administration and the non-civilservice employees of the Emergency Crop and Feed Loan Division, utilized in the performance of the functions of the Farmers' Home Administration under this chapter, without regard to the civil-service laws or regulations.
(b) The Secretary may administer his powers and duties under this chapter through such area finance, State, and local offices in the United States and in the Territories of Alaska and Hawaii and in Puerto Rico as he determines to be necessary: Provided, That existing regional offices shall be liquidated on or before June 30, 1947. The Secretary may authorize one office to serve the area composed of two or more States (Territories or Puerto Rico) if he determines that the volume of business in the area is not sufficient to justify separate State offices.
(c) Accept and utilize voluntary and uncompensated services, and with the consent of the agency concerned, utilize the officers, employees, equipment, and information of any agency of the Federal Government, or of any State, Territory, or political subdivision.
(d) Within the limits of appropriations made therefor, make necessary expenditures for personal services and rent at the seat of govern