---
kind: "section"
citation: "12 U.S.C. § 1715z–21"
title: "12"
title_heading: "Banks and Banking"
number: "1715z–21"
heading: "Delegation of insuring authority to direct endorsement mortgagees"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/1715z-21"
units:
  - "Chapter 13 — National Housing"
  - "Subchapter II — Mortgage Insurance"
---

# §1715z–21. Delegation of insuring authority to direct endorsement mortgagees

- (a) **Authority—** The [Secretary](/usc/12/1715z–22a.md?p=4) may delegate, to one or more [mortgagees](/usc/12/1707.md?p=b) approved by the [Secretary](/usc/12/1715z–22a.md?p=4) under the direct endorsement program, the authority of the [Secretary](/usc/12/1715z–22a.md?p=4) under this chapter to insure [mortgages](/usc/12/1707.md?p=a) involving property upon which there is located a dwelling designed principally for occupancy by 1 to 4 families.
- (b) **Considerations—** In determining whether to delegate authority to a [mortgagee](/usc/12/1707.md?p=b) under this section, the [Secretary](/usc/12/1715z–22a.md?p=4) shall consider the experience and performance of the [mortgagee](/usc/12/1707.md?p=b) compared to the default rate of all insured [mortgages](/usc/12/1707.md?p=a) in comparable markets, and such other factors as the [Secretary](/usc/12/1715z–22a.md?p=4) determines appropriate to minimize risk of loss to the insurance funds under this chapter.
- (c) **Enforcement of insurance requirements—**
  - (1) **In general—** If the [Secretary](/usc/12/1715z–22a.md?p=4) determines that a [mortgage](/usc/12/1707.md?p=a) insured by a [mortgagee](/usc/12/1707.md?p=b) pursuant to delegation of authority under this section was not originated in accordance with the requirements established by the [Secretary](/usc/12/1715z–22a.md?p=4), and the [Secretary](/usc/12/1715z–22a.md?p=4) pays an insurance claim with respect to the [mortgage](/usc/12/1707.md?p=a) within a reasonable period specified by the [Secretary](/usc/12/1715z–22a.md?p=4), the [Secretary](/usc/12/1715z–22a.md?p=4) may require the [mortgagee](/usc/12/1707.md?p=b) approved under this section to indemnify the [Secretary](/usc/12/1715z–22a.md?p=4) for the loss.
  - (2) **Fraud or misrepresentation—** If fraud or misrepresentation was involved in connection with the origination, the [Secretary](/usc/12/1715z–22a.md?p=4) may require the [mortgagee](/usc/12/1707.md?p=b) approved under this section to indemnify the [Secretary](/usc/12/1715z–22a.md?p=4) for the loss regardless of when an insurance claim is paid.
- (d) **Termination of mortgagee’s authority—** If a [mortgagee](/usc/12/1707.md?p=b) to which the [Secretary](/usc/12/1715z–22a.md?p=4) has made a delegation under this section violates the requirements and procedures established by the [Secretary](/usc/12/1715z–22a.md?p=4) or the [Secretary](/usc/12/1715z–22a.md?p=4) determines that other good cause exists, the [Secretary](/usc/12/1715z–22a.md?p=4) may cancel a delegation of authority under this section to the [mortgagee](/usc/12/1707.md?p=b) by giving notice to the [mortgagee](/usc/12/1707.md?p=b). Such a cancellation shall be effective upon receipt of the notice by the [mortgagee](/usc/12/1707.md?p=b) or at a later date specified by the [Secretary](/usc/12/1715z–22a.md?p=4). A decision by the [Secretary](/usc/12/1715z–22a.md?p=4) to cancel a delegation shall be final and conclusive and shall not be subject to judicial review.
- (e) **Requirements and procedures—** Before approving a delegation under this section, the [Secretary](/usc/12/1715z–22a.md?p=4) shall issue regulations establishing appropriate requirements and procedures, including requirements and procedures governing the indemnification of the [Secretary](/usc/12/1715z–22a.md?p=4) by the [mortgagee](/usc/12/1707.md?p=b).

## Source credit

(June 27, 1934, ch. 847, title II, § 256, as added Pub. L. 104–204, title IV, § 427, Sept. 26, 1996, 110 Stat. 2928.)