573 



(g) Disposition of moneys. 



All moneys received by the Secretary of Com- 

 merce iinder the provisions of sections 1271 to 1276 

 and 1279 of this title shall be deposited in the Fund. 



(b) Additional requirements 



Obligations guaranteed under this subchapter 

 and agreements relating thereto shall contain such 

 other provisions with respect to the protection of the 

 security interests of the United States (including ac- 

 celeration and subrogation provisions and the issu- 

 ance of notes by the obligor to the Secretary of 

 Commerce) , liens and releases of liens, payments of 

 taxes, and such other matters as the Secretary of 

 Commerce may, in his discretion, prescribe. (As 

 amended Oct. 19, 1972, Pub. L. 92-507, § 3. 86 Stat. 

 910.) 



Amendments 



1972 — Subsec. (a) . Pub. L. 92-507 substituted provisions 

 relating to the purposes for which guarantees may be 

 made, for provisions relating to the eligibility of mort- 

 gages for Insurance. 



Subsec. (b). Pub. L. 92-507 substituted provisions re- 

 lating to the eligibility requirements of obligations for 

 guarantee, for provisions relating to the eligibility of 

 loans for Insurance. 



Subsec. (c). Pub. L. 92-507 substituted provisions that 

 security for guarantee may relate to more than one vessel, 

 that security may consist of any combination of types of 

 security, and that an obligation may have the latest 

 maturity date permissible for any vessel which serves as 

 security for the government guarantee of the related 

 obligations, for provisions relating to the prior determina- 

 tion of the soundness of the property or project for mort- 

 gage or loan. 



Subsec. (d) . Pub. L. 92-507 Incorporated provisions of 

 former subsec. (c) Into subsec. (d) and extended provi- 

 sions of this subchapter to commercial fishing vessels. 

 Provisions of former subsec. (d) were incorporated Into 

 subsec. (e) . 



Subsec. (e). Pub. L. 92-507 Incorporated provisions of 

 former subsec, (d) Into subsec. (e) and substituted 

 therein provisions authorizing the Secretary to fix a fee 

 for the guarantee of obligations and providing separate 

 formulae for delivered vessels and vessels under construc- 

 tion, for provisions authorizing the Secretary to fix a 

 premium charge for the insurance of mortgages and loans 

 and providing separate formulae for mortgages and loans 

 by reference to section 1273 of this title. Provisions of 

 former subsec. (e) were Incorporated Into subsec. (f). 



Subsec. (f ) . Pub. L. 92-607 Incorporated provisions of 

 former subsec. (e), relating to the collection of Investiga- 

 tion fees from applicants for Insurance Into subsec. (f), 

 and substituted therefor provisions relating to the collec- 

 tion of Investigation fees from applicants for guarantee. 



Provisions of former subsec. (f) Incorporated into sub- 

 sec. (g). 



Subsec. (g). Pub. L. 92-507 Incorporated provisions of 

 former subsec. (f) Into subsec. (g). 



Subsec. (h). Pub. L. 92-507 added subsec. (h). 



1970 — Subsec. (a)(8). Pub L 91-469, §31. Inserted 

 "research, or for" preceding "commercial use". 



Subsec. (b) Pub. L. 91-469. §32. inserted In par. (2) 

 "research, or for" preceding "commercial use", substituted 

 In par. (4) "not exceed" for "be less than", and Inserted 

 In par. (4) restriction that advance and principal amount 

 of other advances under Insured loans outstanding at 

 time of advance shall not exceed 87 Vj per centum of 

 actual cost of vessel where in the case of the approved 

 vessel the minimum downpayment by the mortgagor re- 

 quired by section 1159 of this title would be 12 '/j per 

 centum of cost of vessel. 



1968 — Subsec. (a)(5). Pub. L. 90-341 substituted pro- 

 vision that the maximum interest rates allowed on ship 

 mortgages ellblble for Insurance coverage be at such 

 rates on the outstanding principle obligation as deter- 

 mined by the Secretary of Commerce to be reasonable. 



taking Into account the prevailing rates and the risks 

 assumed by the Department of Commerce, for provision 

 setting a. maximum of 5 per centum per annum, or 6 

 per centum per annum when the Secretary determined 

 that In certain areas or under special circumstances the 

 mortgage or lending market demanded It. 



1960— Subsec. (a)(3). Pub. L, 86-518 substituted 

 "twenty-ftve years" for "twenty years." 



Subsec (a)(8). Pub L 86-685. § 2, Inserted cl (e). 



Subsec (b)(2). Pub. L 86-685. § 3. Inserted cl. (e). 



1959— Subsec. (a)(2). Pub. L. 86-123, §2 substituted 

 "and which Is. or In the case of a vessel to be recon- 

 structed or reconditioned would have been, eligible for 

 mortgage aid for construction" for "which Is eligible for 

 mortgage aid" In the proviso. 



Subsec. (d). Pub. L. 86-127, §1(3), Inserted In two 

 Instances "excluding the average amount (except Interest) 

 on deposit In an escrow fund created under section 1279a 

 of this title". 



Subsec. (e). Pub. L. 86-127, §1(4), Inserted after 

 "commitments" the words "for services In connection 

 with the escrow fund authorized by section 1279a of this 

 title". 



Subsec. (f). Pub. L. 86-123, §1(3). substituted "sec- 

 tions 1101—1110" for "sections 1101—1109" of Act June 

 29, 1936, which, for purposes of codification, has been 

 changed to "sections 1271 — 1279 of this title." 



1954 — Act Sept. 3, 1954, provided standards of eligibil- 

 ity for both mortgages and loans, set up restrictions, and 

 provided for premium charges 



1953— Subsec. (a)(2). Act Aug. 15, 1953, §2(1). added 

 "or. In the case • • • National defense features". 



Subsec. (a)(8). Act Aug 15. 1953, §2(2). added "con- 

 struction of vessels under subchapter V of this chapter". 



Subsec. (a)(8) (c). Act Aug. 15, 1953. § 2(3) . extended 

 coverage to vessels engaged in foreign trade 



1950 — Subsec. (a) Act Sept 28, 1950. Inserted provi- 

 sions In pars. (2). (7). and (8). concerning purchase of 

 vessels for use on the Great Lakes pursuant to the 

 Merchant Ship Sales Act of 1946. 



1939 — Subsec (a) (3) Act Aug. 4, 1939. Included mort- 

 gages to secure new loans or advances made to aid financ- 

 ing of vessels designed for use In the fishing trade or 

 Industry. 



§ 1275. Defaults. 



(a) Rights of obligee. 



In the event of a default, which has continued for 

 thirty days. In any payment by the obligor of princi- 

 pal or interest due under an obligation guaranteed 

 under this subchapter, the obligee or his agent shall 

 have the right to demand, at or before the expiration 

 of such period as may be specified in the guarantee 

 or related agreements, but not later than ninety days 

 from the date of such default, payment by the Sec- 

 retary of Commerce of the unpaid principal amount 

 of said obligation and of the unpaid interest thereon 

 to the date of payment. Within such period as may 

 be specified in the guarantee or related agreements, 

 but not later than thirty days from the date of such 

 demand, the Secretary of Commerce shall promptly 

 pay to the obligee or his agent the unpaid principal 

 amount of said obligation and unpaid Interest 

 thereon to the date of payment : Provided, That the 

 Secretary of Commerce shall not be required to make 

 such payment if prior to the expiration of said 

 period he shall find that there was no default by the 

 obligor in the payment of principm.! or interest or 

 that such default has been remedied prior to any 

 such demand. 



(b) Notice of default. 



In the event of a default under a mortgage, loan 

 agreement, or other security agreement between the 

 obligor and the Secretary of Commerce, the Secre- 



