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fiscal years. (July 17, 1916, sec. 12, 39 Stat. 370; Apr. 20, 1920, sec. 4, 41 Stat. 570; Mar. 4, 1923, secs. 306, 307, 42 Stat. Î476; Mar. 4, 1933, sec. 2, 47 Stat. 1547; May 12, 1933, secs. 24, 25, 41, 48 Stat. 43, 44, 51; June 16, 1933, secs. 73, 74, 80 (a), 48 Stat. 271, 273; June 3, 1935, secs. 3, 18, 22, 49 Stat. 314, 319; June 24, 1936, 49 Stat. 1912; July 22, 1937, sec. 1, 50 Stat. 521; Aug. 19, 1937, secs. 5 (a), 12, 50 Stat. 704, 708, June 16, 1938, sec. 1, 52 Stat. 709; June 29, 1940, sec. 1, 54 Stat. 684; 12 U. S. C., sec. 771.)

638–77. Loans to be in current funds, bonds of corporation, or farm loan bonds.--Amounts transmitted to farm loan associations by Federal land banks to be loaned to its members shall, at the option of the bank, be in current funds or Federal Farm Mortgage Corporation bonds, or, at the option of the borrower, in farm loan bonds. (July 17, 1916, sec. 12, 39 Stat. 370; Jan. 31, 1934, sec. 7, 48 Stat. 346; 12 U. S. C., sec. 772.)

638–78. Mortgages on farm lands under United States reclamation proj. ects.—That the term "first mortgage," as used in section 12 of the Federal Farm Loan Act, approved July 17, 1916, shall be construed to include mortgages on farm lands under United States reclamation projects, notwithstanding there may be against such lands a reserved or created lien in favor of the United States for construction or other charges as provided in the Act of June 17, 1902, and Acts amendatory thereof and supplementary thereto, known as the reclamation law: Provided, That such lands are otherwise eligible for loans under the Federal Farm Loan Act: And provided further, That the amount and date of maturity of such lien shall be given due consideration in fixing the value of such lands for loan purposes. (May 15, 1922, sec. 3, 42 Stat. 542; 12 U. S. C., sec. 773.)

638–79. Loans on lands in drainage, irrigation, or conservancy districts.—That the Farm Credit Administration, the Federal Farm Mortgage Corporation, the Federal land banks, the Land Bank Commissioner, and any lending or financing agency established by or under thé Farm Credit Act of 1933, as amended, or the Federal Farm Loan Act, as amended, are authorized to make loans or acquire mortgages on lands in any drainage, irrigation, or conservancy district, notwithstanding the existence of any prior lien or charge arising out of an assessment for special benefits made by such district, in any case where (1) such land is otherwise eligible for a loan, (2) such assessment is payable over a period of years, and (3) reasonable security exists for the repayment of the loan, taking into consideration all facts and values, including the term and size of the loan, the integrity of the applicant, and the increased earning capacity of the lands arising from the improvements or benefits in respect of which the assessment was made. (June 4, 1936, 49 Stat. 1461; 12 U. S. C., sec. 773a.)

638-80. Powers of Federal land banks; enumerated powers. That every Federal land bank shall have power, subject to the limitations and requirements of this Act,

First. To issue, subject to the approval of the Federal Farm Loan Board (now Farm Credit Administration]*, and to sell farm loan bonds of the kinds authorized in this Act, to buy the same for its own account, and to retire the same at or before maturity.

*See Ex. Or. 6084, p. 254, this volume.

Second. To invest such funds as may be in its possession in the purchase of qualified first mortgages on farm lands situated within the farm credit district within which it is organized or for which it is acting. In order to reduce and/or refinance farm mortgages, to invest such funds as may be in its possession in the purchase of first mortgages on farm lands situated within the farm credit district within which it is organized or for which it is acting, or to exchange farm-loan bonds for any duly recorded first mortgages on farm lands executed prior to the date this paragraph, as amended, takes effect, at a price which shall not exceed in each individual case the amount of the unpaid principal of the mortgage on the date of such purchase or exchange, or 50 per centum of the normal value of the land mortgaged and 20 per centum of the value of the permanent insured improvements thereon as determined upon an appraisal made pursuant to this Act, whichever is the smaller: Provided, That any mortgagor whose mortgage is acquired by a Federal land bank under this paragraph shall be entitled to have his farm-mortgage indebtedness refinanced in accordance with the provisions of sections 7 and 8 of this Act on the basis of the amount paid by the bank for his mortgage.

Third. To receive and to deposit in trust with the farm loan registrar for the district, to be by him held as collateral security for farm loan bonds, first mortgages upon farm land qualified under section 12 of this Act, and to empower national farm loan associations, or duly authorized agents, to collect and immediately pay over to said land banks the dues, interest, amortization installments and other sums payable under the terms, conditions, and covenants of the mortgages and of the bonds secured thereby

Fourth. To acquire and dispose of

(a) Such property, real or personal, as may be necessary or convenient for the transaction of its business, which, however, may be in part leased to others for revenue purposes.

(b) Parcels of land acquired in satisfaction of debts or purchased at sales under judgments, decrees, or mortgages held by it. But no such bank shall hold title and possession of any real estate purchased or acquired to secure any debt due to it, for a longer period than five years, except with the special approval of the Federal Farm Loan Board [now Farm Credit Administration] * in writing. Every such bank may carry real estate as an asset, for a period of not exceeding five years, at its normal value but not to exceed the amount of the bank's investment therein at the time of acquirement of such real estate.

Fifth. To deposit its securities and its current funds subject to check, with any member bank of the Federal Reserve System, and to receive interest on the same as may be agreed.

Sixth. To accept deposits of securities or of current funds from national farm loan associations holding its shares, but to pay no interest on such deposits.

Seventh. To borrow money, to give security therefor, and to pay interest thereon.

Eighth. To buy and sell United States bonds and Federal Farm Mortgage Corporation bonds.

*See Ex. Or. 6084, p. 254, this volume.

Ninth. To charge applicants for loans and borrowers, under rules and regulations promulgated by the Federal Farm Loan Board (now Farm Credit Administration]*, reasonable fees not exceeding the actual cost of appraisal and determination of title. Legal fees and recording charges imposed by law in the State where the land to be mortgaged is located may also be included in the preliminary costs of negotiating mortgage loans. The borrower may pay such fees and charges or he may arrange with the Federal land bank making the loan to advance the same, in which case said expenses shall be made a part of the face of the loan and paid off in amortization payments. Such addition to the loan shall not be permitted to increase said loan above the limitations provided in section twelve.

Tenth. When in the judgment of the directors conditions justify it, to extend, in whole or in part, any obligation that may be or become unpaid under the terms of any mortgage, and to accept payment of any such obligation during a period of five years or less from the date of such extension in such amounts as may be agreed upon at the date of making such extension. The sum of $25,000,000 of the amount authorized to be appropriated under section 5 of this Act, as amended, shall be used exclusively for the purpose of supplying any bank with funds to use in its operations in place of any amounts of which such bank may be deprived by reason of extensions made as provided in this paragraph. The terms of any such extension shall be such as will not defer the collection of any obligation due by any borrower which, after investigation by the bank of the situation of such borrower, is shown to be within his capacity to meet. In the case of any such extension, or in the case of any deferment of principal as provided in paragraph "Twelfth" of section 12 of this Act, it shall be the duty of the Secretary of the Treasury, on behalf of the United States, upon the request of the Federal land bank making the extension, and with the approval of the Land Bank Commissioner, to subscribe at such periods as the Commissioner shall determine, to the paid-in surplus of such bank an amount equal to the amount of all such extensions and deferments made by the bank during the preceding period. Such subscriptions shall be subject to call, in whole or in part, by the bank with the approval of the Commissioner upon thirty days' notice. To enable the Secretary of the Treasury to make such subscriptions to the paid-in surplus of the Federal land banks, there is hereby authorized to be appropriated the sum of $50,000,000, to be immediately available and remain available until expended. Upon payment to any Federal land bank of the amount of any such subscription, such bank shall execute and deliver a receipt therefor to the Secretary of the Treasury in form to be prescribed by the Land Bank Commissioner. The amount of any subscriptions to the paid-in surplus of any such bank may be repaid in whole or in part at any time in the discretion of the bank and with the approval of the Land Bank Commissioner, and the Commissioner may at any time require such subscriptions to be repaid in whole or in part if in his opinion the bank has resources available therefor. The unexpended balances of the funds appropriated by the Fourth Deficiency Act, fiscal year 1933, approved June 16, 1933 (48 Stat. 279), the Emergency Appropriation Act, fiscal year 1935, approved June 19, 1934 (48 Stat. 1060); The Second Deficiency Appropriation Act, fiscal year 1935, approved

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August 12, 1935 (49 Stat. 592), the First Deficiency Appropriation Act, fiscal year 1936, approved June 22, 1936, the Treasury Department Appropriation Act, 1937, approved June 23, 1936, and the Treasury Department Appropriation Act, 1938, approved May 14, 1937, for the purpose of enabling the Secretary of the Treasury to make subscriptions to the paid-in surplus of the Federal land banks, as provided for in this paragraph, and the proceeds of all repayments on account of such paid-in surplus, shall be held in the Treasury of the United States as a revolving fund and shall be available for subscriptions to paid-in surplus made pursuant to this paragraph, as amended.

Eleventh. At any time within five years after the date this paragraph takes effect, any borrower who has obtained a loan from a Federal land bank may on application to such Federal land bank and upon approval of such application by the directors of the bank postpone the payment of any unpaid installment or installments in the manner herein provided in this section. Such postponed payment shall be made by paying at the time each succeeding annual installment is due, one-tenth of the amount of the postponed payment, and, in the case of semiannual installments, by paying at the time each succeeding semiannual installment is due, one-twentieth of the postponed payment, until the amount of such postponed payment has been paid. In any case in which the number of remaining installments due on the mortgage is less than ten, in the case of annual installments, or less than twenty, in the case of semiannual installments, the amount of the postponed payment shall be distributed proportionately over the remaining number of installment payments.

Twelfth. For the period of five years after the date this paragraph takes effect, every borrower shall pay simple interest on extended payments at the same rate of interest as stipulated in the mortgage securing the loan as to payments not in default and by express covenant in his mortgage 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 interest at the rate provided in the mortgage.

Thirteenth. When in the judgment of the directors conditions justify it, and with the approval of the Federal Farm Loan Board [now Farm Credit Administration]*, to reamortize, in whole or in part, the aggregate amount remaining unpaid under the terms of any mortgage, and to accept payment of such aggregate amount on an amortization plan by means of a fixed number of annual or semiannual installments sufficient to cover the interest payable on the mortgage, and in addition thereto such amounts to be applied upon the principal as will extinguish the debt within an agreed period of not more than forty years from the date of the reamortization; to deposit such mortgages with the farm loan registrar as collateral security for farm loan bonds at an amount not exceeding the principal of the original loan remaining unpaid at the date of such amortization; and with the approval of the Federal Farm Loan Board [now Farm Credit Administration]* to charge the borrower an amount not to exceed the actual cost incurred in connection with such reamorti. zation.

*See Ex. Or. 6084, p. 284, this volume.

Fourteenth. To enter into agreements with national farm-loan associations of the district under the terms of which losses incurred and gains realized on account of the disposition of lands covered by a defaulted mortgage indorsed by such association will be shared equally by the bank and the association.

Fifteenth. To exchange farm loan bonds for Federal Farm Mortgage Corporation bonds of equal face value.

Sixteenth. To exchange Federal Farm Mortgage Corporation bonds for farm loan bonds of equal face value.

Seventeenth. To make loans to other Federal land banks upon such terms and conditions as may be approved by the Farm Credit Administration.

Eighteenth. To accept conditional payments from borrowers for subsequent credit upon their indebtedness to the land bank; and to allow interest on such payments. All conditional payments so accepted shall be subject to such terms and conditions, not inconsistent with the provisions of this paragraph and with any rules or regulations prescribed for its efficient execution by the Farm Credit Administration, as may be agreed upon at the time of their acceptance. If a conditional payment is accepted for subsequent credit upon a first mortgage which is at the time or is thereafter pledged as collateral security for an issue of farm-loan bonds, all requirements, conditions, and limitations set forth in the seventh, eighth, and ninth paragraphs of section 22 of this Act, as amended, shall apply to such payment the same as though it were a present payment on the principal of the mortgage pledged as collateral security, and the land bank shall forthwith notify the farm loan registrar of its receipt of such payment and account to him therefor. Every conditional payment accepted by a land bank for subsequent credit upon indebtedness of a borrower shall be credited upon such indebtedness as the borrower may from time to time direct in accordance with the terms and conditions upon which the payment has been accepted, and at the option of the bank may in any event be credited upon such indebtedness as and when it matures if it is not otherwise paid by the borrower at or before maturity. If at any time after five years from the date on which a borrower's loan was made, the aggregate of the borrower's conditional payments accepted on account of his indebtedness under such loan and not yet credited thereon equals or exceeds his total indebtedness under the loan, all unmatured indebtedness under such loan shall become due and payable at once, and the payments so accepted shall forthwith be credited upon the borrower's indebtedness under the loan so far as may be necessary to pay it in full. Any balances of conditional pay

. ments remaining uncredited when the indebtedness on account of which they have been accepted has been paid in full shall be refunded to the borrower by the land bank. (July 17, 1916, sec. 13, 39 Stat. 372, Jan. 23, 1932, sec. 5, 47 Stat. 14; Mar. 4, 1933, secs. 3, 4, 47 Stat. 1548; May 12, 1933, secs. 22, 23, 48 Stat. 42, 43, June 16 16, 1933, secs. 79, 80 (a), 48 Stat. 272, 273; Jan. 31, 1934, sec. 8 (a), 48 Stat. 347; Aug. 19, 1937, secs. 5 (a), 15 (a) and (b), 16, 17, 19,50 Stat. 704, 708, 709; 12 U. S. C., sec. 781.)

638–81. Restrictions on Federal land banks; enumeration of restrictions.-That no Federal land bank shall have power

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