---
kind: "section"
citation: "12 U.S.C. § 1735f–11"
title: "12"
title_heading: "Banks and Banking"
number: "1735f–11"
heading: "Review of mortgagee performance and authority to terminate"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/1735f-11"
units:
  - "Chapter 13 — National Housing"
  - "Subchapter V — Miscellaneous"
---

# §1735f–11. Review of mortgagee performance and authority to terminate

- (a) **Periodic review of mortgagee performance—** To reduce losses in connection with single family [mortgage](/usc/12/1707.md?p=a) insurance programs under this chapter, at least once a year the [Secretary](/usc/12/1715z–22a.md?p=4) shall review the rate of early defaults and claims for insured single family [mortgages](/usc/12/1707.md?p=a) originated or underwritten by each [mortgagee](/usc/12/1707.md?p=b).
- (b) **Comparison with other mortgagees—** For each [mortgagee](/usc/12/1707.md?p=b), the [Secretary](/usc/12/1715z–22a.md?p=4) shall compare the rate of early defaults and claims for insured single family [mortgage](/usc/12/1707.md?p=a) loans originated or underwritten by the [mortgagee](/usc/12/1707.md?p=b) in an area with the rate of early defaults and claims for other [mortgagees](/usc/12/1707.md?p=b) originating or underwriting insured single family [mortgage](/usc/12/1707.md?p=a) loans in the area. For purposes of this section, the term “area” means each geographic area in which the [mortgagee](/usc/12/1707.md?p=b) is authorized by the [Secretary](/usc/12/1715z–22a.md?p=4) to originate insured single family [mortgages](/usc/12/1707.md?p=a).
- (c) **Termination of mortgagee origination approval—**
  - (1) Notwithstanding [section 1708(c) of this title](/usc/12/1708.md?p=c), the [Secretary](/usc/12/1715z–22a.md?p=4) may terminate the approval of a [mortgagee](/usc/12/1707.md?p=b) to originate or underwrite single family [mortgages](/usc/12/1707.md?p=a) if the [Secretary](/usc/12/1715z–22a.md?p=4) determines that the [mortgage](/usc/12/1707.md?p=a) loans originated or underwritten by the [mortgagee](/usc/12/1707.md?p=b) present an unacceptable risk to the insurance funds. The determination shall be based on the comparison required under [subsection (b)](#b) and shall be made in accordance with regulations of the [Secretary](/usc/12/1715z–22a.md?p=4). The [Secretary](/usc/12/1715z–22a.md?p=4) may rely on existing regulations published before this section takes effect.
  - (2) The [Secretary](/usc/12/1715z–22a.md?p=4) shall give a [mortgagee](/usc/12/1707.md?p=b) at least 60 days prior written notice of any termination under this subsection. The termination shall take effect at the end of the notice period, unless the [Secretary](/usc/12/1715z–22a.md?p=4) withdraws the termination notice or extends the notice period. If requested in writing by the [mortgagee](/usc/12/1707.md?p=b) within 30 days of the date of the notice, the [mortgagee](/usc/12/1707.md?p=b) shall be entitled to an informal conference with the official authorized to issue termination notices on behalf of the [Secretary](/usc/12/1715z–22a.md?p=4) (or a designee of that official). At the informal conference, the [mortgagee](/usc/12/1707.md?p=b) may present for consideration specific factors that it believes were beyond its control and that caused the excessive default and claim rate.

## Source credit

(June 27, 1934, ch. 847, title V, § 533, as added Pub. L. 100–242, title IV, § 407(b), Feb. 5, 1988, 101 Stat. 1902; amended Pub. L. 107–73, title II, § 209, Nov. 26, 2001, 115 Stat. 675.)

## Notes

### Editorial Notes

### Amendments

2001—Pub. L. 107–73 amended section catchline and text generally. Prior to amendment, text read as follows:

“(a) To reduce losses in connection with mortgage insurance programs under this chapter, the Secretary shall review, at least once a year, the rate of early serious defaults and claims involving mortgagees approved under this chapter. On the basis of this review, the Secretary shall notify each mortgagee which, as determined by the Secretary, had a rate of early serious defaults and claims during the preceding year which was higher than the normal rate for the geographic area or areas in which that mortgagee does business. In the notification, the Secretary shall require each mortgagee to submit a report, within a time determined by the Secretary, containing the mortgagee’s (1) explanation for the above normal rate of early serious defaults and claims; (2) plan for corrective action, if applicable, both with regard to (A) mortgages in default; and (B) its mortgage-processing system in general; and (3) a timeframe within which this corrective action will be begun and completed. If the Secretary does not agree with this timeframe or plan, a mutually agreeable timeframe and plan will be determined.

“(b) Failure of the mortgagee to submit a report required under subsection (a) of this section within the time determined by the Secretary or to commence or complete the plan for corrective action within the timeframe agreed upon by the Secretary may be cause for suspension of the mortgagee from participation in programs under this chapter.”