---
kind: "section"
citation: "24 C.F.R. § 266.620"
title: "24"
number: "266.620"
heading: "Termination of contract of insurance and indemnification."
url: "https://uscodex.org/cfr/24/266.620"
---

# §266.620. Termination of contract of insurance and indemnification.

- (a) The contract of insurance shall terminate if any of the following occurs:
  - (1) The mortgage is paid in full;
  - (2) The HFA acquires the mortgaged property and notifies the Commissioner that it will not file an insurance claim;
  - (3) A party other than HFA acquires the property at a foreclosure sale;
  - (4) The HFA notifies the Commissioner of Termination of Insurance (voluntary termination);
  - (5) The HFA or its successors commit fraud or make a material misrepresentation to the Commissioner with respect to information culminating in the contract of insurance on the mortgage or while the contract of insurance is in existence;
  - (6) The receipt by the Commissioner of an Application for Final Claims Settlement;
  - (7) If the HFA acquires the mortgaged property and fails to make an initial claim.
- (b) In lieu of termination of the mortgage insurance contract pursuant to [paragraph (a)(5)](#a-5) of this section, the Commissioner may, in his or her full discretion, permit a Level I participant rated “A” or higher to indemnify HUD, or otherwise reimburse HUD in a manner acceptable to the Commissioner, for the full amount of the mortgage claim.

## Notes

### Amendments

[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83440, 83445, Dec. 22, 2020]

### Authority

Authority: 12 U.S.C. 1715z-22.; 42 U.S.C. 3535(d).

### Source

Source: 59 FR 62524, Dec. 5, 1994, unless otherwise noted.

### Amendments

[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83440, 83445, Dec. 22, 2020]