U.S. Code » Title 12 » Chapter CHAPTER 38— MULTIFAMILY MORTGAGE FORECLOSURE

12 U.S.C. § 3701

Findings and purpose

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(a) The Congress finds that—(1) disparate State laws under which the Secretary of Housing and Urban Development forecloses multifamily mortgages burden the programs administered by the Secretary pursuant to these authorities, and cause detriment to the residents of the affected projects and the community generally;(2) long periods to complete the foreclosure of these mortgages under certain State laws lead to deterioration in the condition of the properties involved; necessitate substantial Federal management and holding expenditures; increase the risk of vandalism, fire loss, depreciation, damage, and waste with respect to the properties; and adversely affect the residents of the projects and the neighborhoods in which the properties are located;(3) these conditions seriously impair the Secretary’s ability to protect the Federal financial interest in the affected properties and frustrate attainment of the objectives of the underlying Federal program authorities, as well as the national housing goal of “a decent home and a suitable living environment for every American family”;(4) application of State redemption periods to these mortgages following their foreclosure would impair the salability of the properties involved and discourage their rehabilitation and improvement, thereby compounding the problems referred to in clause (3);(5) the availability of a uniform and more expeditious procedure for the foreclosure of these mortgages by the Secretary and continuation of the practice of not applying postsale redemption periods to such mortgages will tend to ameliorate these conditions; and(6) providing the Secretary with a nonjudicial foreclosure procedure will reduce unnecessary litigation by removing many foreclosures from the courts where they contribute to overcrowded calendars.(b) The purpose of this chapter is to create a uniform Federal foreclosure remedy for multifamily mortgages.(Pub. L. 97–35, title III, § 362, Aug. 13, 1981, 95 Stat. 422; Pub. L. 102–550, title V, § 517(a), Oct. 28, 1992, 106 Stat. 3791.)Editorial NotesAmendments

1992—Subsec. (a)(1). Pub. L. 102–550, § 517(a)(1), substituted “multifamily mortgages” for “real estate mortgages which the Secretary holds pursuant to title II of the National Housing Act or section 312 of the Housing Act of 1964 covering multiunit residential and nonresidential properties”.

Subsec. (b). Pub. L. 102–550, § 517(a)(2), substituted “multifamily mortgages” for “multiunit residential and nonresidential mortgages held by the Secretary of Housing and Urban Development pursuant to title II of the National Housing Act or section 312 of the Housing Act of 1964”.

Statutory Notes and Related SubsidiariesEffective Date

Pub. L. 97–35, title III, § 371, Aug. 13, 1981, 95 Stat. 431, provided that:“(a) Except as otherwise provided in this subtitle, the provisions of this subtitle [for classification of subtitle A (§ 300–371) of title III of Pub. L. 97–35, see Tables] shall take effect on October 1, 1981.“(b) The amendments made by sections 324, 325, and 326(a) [amending section 1437f of Title 42, The Public Health and Welfare] shall apply only with respect to contracts entered into on and after October 1, 1981.”

Short Title

Pub. L. 97–35, title III, § 361, Aug. 13, 1981, 95 Stat. 422, provided that: “This part [enacting this chapter] may be cited as the ‘Multifamily Mortgage Foreclosure Act of 1981’.”

Notes of Decisions
Cited in 14 cases, 1982–2020 · leading case: Lisbon Square v. United States, 856 F. Supp. 482 (E.D. Wis. 1994).
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Lisbon Square v. United States, 856 F. Supp. 482 (E.D. Wis. 1994). · cites it 3× “Terry Gray was named foreclosure commissioner, and non-judicial foreclosure auctions were scheduled May 1, 1991 pursuant to 12 U.S.C. § 3701 et seq. On April 30,1991, Mr.”
Davidson Rehab Assocs. v. United States Dep't of Hous. & Urban Dev. (In Re Davidson Rehab Assocs.), 103 B.R. 440 (Bankr. S.D.N.Y. 1989). · cites it 3× “Failing to do so, HUD commenced foreclosure on the Premises through a non-judicial foreclosure sale pursuant to the Multifamily Mortgage Foreclosure Act of 1981, 12 U.S.C. §§ 3701 et seq. (1984) (“Foreclosure Act”).”
Little Earth of United Tribes, Inc. v. U.S. Dep't of Hous. & Urban Dev., 675 F. Supp. 497 (D. Minnesota 1987). · cites it 2× “The Court finds no discriminatory intent in HUD’s decision to proceed with non-judicial foreclosure under Minnesota law rather than under the Multifamily Mortgage Foreclosure Act (the “Act”), 12 U.S.C. §§ 3701 et seq. Under the Act, which became effective October 1, 1981, HUD…”
Walker v. Pierce, 665 F. Supp. 831 (N.D. Cal. 1987). “tiffs and the class as a result of the mortgage sales: (1) all of the Regulatory Agreements will be terminated (Complaint ¶¶ 50(b), 57, 58(a)); (2) none of the projects will be eligible for further Section 8 Housing Assistance Payment (“HAP”) contracts (Complaint ¶ 54); (3)…”
Jones v. Turnage, 699 F. Supp. 795 (N.D. Cal. 1988). “Plaintiffs further argue that, because the National Housing Act was amended in 1981 to create a uniform federal foreclosure remedy (see 12 U.S.C. § 3701 ), the Court can infer by Congress’ failure to do the same for the VA statute that state anti-deficiency laws were intended to…”
Chicago Title Ins. v. Sherred Vill. Assocs., 544 F. Supp. 320 (D. Me. 1982). · cites it 2× “Finally, plaintiffs note that the Multifamily Mortgage Foreclosure Act of 1981, 12 U.S.C.A. § 3701 et seq., establishes a set of priorities for payment of proceeds from the foreclosure of multifamily mortgages assigned to HUD, under which mechanics’ liens filed after the…”
Oakbrook Vill. Assocs. v. Cisneros, 25 F. Supp. 2d 730 (E.D. La. 1998). · cites it 2× “Plaintiff Oakbrook Village Associates (Oakbrook) instituted this suit against the Secretary of Housing and Urban Development (“the Secretary”) and the United States Department of Housing and Urban Development (“HUD”) pursuant to the Multi-Family Foreclosure Act of 1981 (“the…”
Ku v. United States Dep't of Hous. & Urban Dev., 508 F. App'x 14 (2d Cir. 2013). “Ku sued defendants under the Multifamily Mortgage Foreclosure Act, 12 U.S.C. § 3701 et seq. (the “MMFA”), and the Fifth Amendment, alleging that he was improperly excluded from bidding on Burton Towers at a foreclosure sale conducted by HUD.”
Geneva Ltd. Partners v. Kemp, 779 F. Supp. 1237 (N.D. Cal. 1990). “The Court is satisfied that the notice of HUD’s foreclosure action received by plaintiffs complied with the notice rules specified in the Multifamily Mortgage Foreclosure Act, 12 U.S.C. §§ 3701 et seq. (“MMFA”). The MMFA requires that Notice of Default and Foreclosure be…”
Kennedy Heights Apts., Ltd. I v. McMillan, 78 F. Supp. 2d 562 (N.D. Tex. 1999). “On August 3, 1998, Defendant Duncan McMillan (“McMillan”) accepted an appointment from HUD to act as Foreclosure Commissioner for purposes of foreclosing on Plaintiffs’ properties 1 under the Multifamily Mortgage Foreclosure Act of 1981, 12 U.S.C. § 3701 et seq. (“the Act”).…”
Kennedy Heights Apts. Ltd. I v. United States, 63 Fed. Cl. 731 (Fed. Cl. 2005). “In this action, Plaintiffs seek to recover surplus proceeds from the Department of Housing and Urban Development’s (HUD) foreclosure sale of their low-income housing projects pursuant to the Multifamily Mortgage Foreclosure Act (MMFA), 12 U.S.C. §§ 3701 et seq. In addition, they…”
Chicago Title Ins. v. Sherred Vill. Assocs., 708 F.2d 804 (1st Cir. 1983). “Appellants also point to Congress’s 1981 enactment of the Multifamily Mortgage Foreclosure Act (MMFA), 12 U.S.C. § 3701 et seq., as evidence of Congress’s intent that a federal rule of priority should govern in this case.”
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