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B-183784 1 (1976-01-23)

handle is hein.gao/gaobaddsg0001 and id is 1 raw text is: 4Ri& oF-csior FILE: B-13378 MATTER OF: DIGEST: THE COMPTROLLER GENERAL OF THE UNITED STATES WASHINGTON, .C C. 20548 41 ' LIZHED DEil SIOR 55 Qomp. Gon. DATE: IAN 2 3 1-973 Vational housing Act mobile home loan insurance - delinquent insurance premium payments 1. Timely payment by insured lender of premiums for mobile home loan insurance under section 2, title I, of National housing Act, as amended, 12 U.S.C.A. 9 1703--which requires payment of premiums in advance- is a prerequisite to continued insurance coverage. There is no basis for implication, underlying HUD proposal to set off against insurance claims past due and future premiums of delinquent lending institu- tion, that insurance coverage is unaffected by non- payment of premiums. 2. Claims under mobile home loan insurance pursuant to - 12 U.S.C.A. § 1703 by lending institution presently delinquent in insurance premium payments may be allowed if default on loan occurred while premium payments were current, but cannot be allowed if default occurred or was imminent after premium payuents became delinquent. Past due premium charges may be set off against allow- able claims, if lender agrees to such setoff. Alterna- tively, remaining insurance coverage may be cancelled. In no event is set-off of future premium charges appro- priate. 3. GAO recommends, pursuant to 31 U.S.C.A. § 1176, that HUD regulations be amended in terms of foregoing issues and conclusions. Mr. B. C. Tyner, Authorized Certifying Officer, Department of Housing and Urban Development (I:UD), has requested our decision con- cerning the propriety of certifying a voucher presented to him in the amount of $7,533.31 covering a claim by the First Colonial Life Insurance Company and then setting off past due and future insurance premiums that have not been paid by First Colonial against the funds otherwise payable under the voucher. This claim, which is one of 30 similar claims by First Colonial that are presently pending at lIUD, represents a request for reimbursement of a loss sustained on a loan made by the inaured lending institution for the purchase of a mobile home. The loan was made and submitted to 1UD for insurance pursuant to section 2, title 1, of the National Housing Act, as amended, 12 U.S.C.A. § 1703, and regulations issued pursuant thereto, 24 C.F.R. ;§ 201.501 et seq. (1975). dl

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