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B-183515 1 (1975-09-16)

handle is hein.gao/gaobadcou0001 and id is 1 raw text is: DECISIlN FILE: B-183515 PATE:SEP 16 1975 MATTER OF: Title I Housing Act Claim DIGEST: Bank's claims for loss on refinanced note for term in excess of taximum maturity allowable under title I of National Housing Act and implcenting regulations which was resubmaitted for payment on basis of original note marked paid by renewal with legend stamped in error, cannot be certified for payment since new note executed within conteamplation of refinancing proviso of IvNational Alousing Act and regulations necessarily operates as discharge of original note. This decision to Mr. B. C. Tyner, an authorized certifying officer of the Departant of Housing and Urban DevelopMent (HUD), is in response to his letter dated March 24, 1975, requesting advice as to whether a voucher enclosed therewith payable to Farmers and Merchants Bank, Spokane, Washington, in the amount of $1,250.71 may be certified for payment. The vouc-her covers a claim on a Federal Housing Administration (1HA) loan maade by the bank upon the borrow- ers' FHA Title I note, which loan was insured pursuant to title I of the National Housing Act, as amended, 12 U.S.C. Z, 1701 tL* Mr. Tyner's xplanation of the pertinent facts and circum- stances giving rise to his question is set forth below. The note in question was ado pursuant to a credit application Submitted to the bank on arch 3, 1972. The proceeds of the loan were disbursed to the borrowers ,on March 8, 1972, and on March 8, 1972, the borrowers executed a note in the amount of $1,S65.04 rep- resenting an amount financed of 11,000, and a finance charge of $265.04, with an annual percentage rate of 10.25 percent. The borrowere subsequently encountered difficulties and the obligation of March 8, 1972, was refinanced by another note on October 26, 1972, for a term of 110 Months. At the time of the foregoing transactions, section 2(b) of the National Housing Act, as amended, 12 U.S.C. 1 1703(b) (1970) pro- vided in pertinent part as followss t ft 1&k 0. 1 . W N .tI I OU.LER C 0 THE COMPTROLLER GENERAL * iJ i OF THE UNITED STATES * WASHINGTON. 0. C. 20548 E~ q

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