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constitute an amount equal to one share of stock for each $100 of the unpaid balance of the indebtedness represented or secured by the note and mortgage, purchase-money mortgage, or contract being purchased and acquired, together with the indebtedness secured by any prior lien on the property in favor of the Federal land bank; (3) the national farm loan association in which such stock is held elects the borrower to membership, if not already a member, and agrees to be liable for the indebtedness secured by the note and mortgage, purchase-money mortgage, or contract being purchased and acquired; and (4) the land bank takes such action, if any, as may be necessary to reduce the rate of interest on the indebtedness secured by the mortgage, purchase-money mortgage, or contract acquired or purchased to the same rate of interest the bank is charging on first-mortgage loans which it is then making.

Ninth. Charging fees for loans.-To charge applicants for loans and borrowers, under rules and regulations promulgated by the Farm Credit Administration, reasonable fees not exceeding the actual cost of appraisal and determination of title. Legal fees and recording charges imposed by law in the State where the land to be mortgaged is located may also be included in the preliminary costs of negotiating mortgage loans. The borrower may pay such fees and charges or he may arrange with the Federal land bank making the loan to advance the same, in which case said expenses shall be made a part of the face of the loan and paid off in amortization payments. Such addition to the loan shall not be permitted to increase said loan above the limitations provided in section 771 of this title.

Tenth. Extension of obligations unpaid under terms of mortgages.When in the judgment of the directors conditions justify it, to extend, in whole or in part, any obligation that may be or become unpaid under the terms of any mortgage, and to accept payment of any such obligation during a period of five years or less from the date of such extension in such amounts as may be agreed upon at the date of making such extension. The terms of any such extension shall be such as will not defer the collection of any obligation due by any borrower which, after investigation by the bank of the situation of such borrower, is shown to be within his capacity to meet.

Eleventh. Postponement of payment of installments of loans. At any time within five years after March 4, 1933, any borrower who has obtained a loan from a Federal land bank may on application to such Federal land bank and upon approval of such application by the directors of the bank postpone the payment of any unpaid installment or installments in the manner herein provided in this section. Such postponed payment shall be made by paying at the time each succeeding annual installment is due, one-tenth of the amount of the postponed payment, and, in the case of semiannual installments, by paying at the

time each succeeding semiannual installment is due, one-twentieth of the postponed payment, until the amount of such postponed payment has been paid. In any case in which the number of remaining installments due on the mortgage is less than ten, in the case of annual installments, or less than twenty, in the case of semiannual installments, the amount of the postponed payment shall be distributed proportionately over the remaining number of installment payments.

Twelfth. Interest rate; on extended payments; on taxes, liens, etc., paid by mortgagee. For the period of five years after March 4, 1933, every borrower shall pay simple interest on extended payments at the same rate of interest as stipulated in the mortgage securing the loan as to payments not in default and by express covenant in his mortgage deed shall undertake to pay when due all taxes, liens, judgments, or assessments which may be lawfully assessed against the land mortgaged. Taxes, liens, judgments, or assessments not paid when due, and paid by the mortgagee, shall become a part of the mortgage debt and shall bear interest at the rate provided in the mortgage.

Thirteenth. Reamortization of mortgages.-When in the judgment of the directors conditions justify it, and with the approval of the Farm Credit Administration, to reamortize, in whole or in part, the aggregate amount remaining unpaid under the terms of any mortgage, and to accept payment of such aggregate amount on an amortization plan by means of a fixed number of annual or semiannual installments sufficient to cover the interest payable on the mortgage, and in addition thereto such amounts to be applied upon the principal as will extinguish the debt within an agreed period of not more than forty years from the date of the reamortization; to deposit such mortgages with the farm loan registrar as collateral security for farm loan bonds at an amount not exceeding the principal of the original loan remaining unpaid at the date of such amortization; and with the approval of the Farm Credit Adminstraton to charge the borrower an amount not to exceed the actual cost incurred in connection with such reamortization.

Fourteenth. Agreements to share gains and losses with associations.— To enter into agreements with national farm loan associations of the district under the terms of which losses incurred and gains realized on account of the disposition of lands covered by a defaulted mortgage indorsed by such association will be shared equally by the bank and the association.

Fifteenth. Exchange for and purchase of Federal Farm Mortgage Corporation bonds.-To exchange farm loan bonds for Federal Farm Mortgage Corporation bonds of equal face value.

Sixteenth. Exchange of Federal Farm Mortgage Corporation bonds for farm loan bonds.-To exchange Federal Farm Mortgage Corporation bonds for farm loan bonds of equal face value.

Seventeenth. Loans to other Federal land banks, Federal intermediate credit banks, or banks for cooperatives. To make loans to other Federal land banks, to Federal intermediate credit banks, or to banks for cooperatives organized under the Farm Credit Act of 1933, as amended, upon such terms and conditions as may be approved by the Farm Credit Administration.

Eighteenth. Accepting conditional payments for subsequent credit on indebtedness.-To accept conditional payments from borrowers for subsequent credit upon their indebtedness to the land banks; and to allow interest on such payments. All conditional payments so accepted shall be subject to such terms and conditions, not inconsistent with the provisions of this paragraph and with any rules or regulations prescribed for its efficient execution by the Farm Credit Administration, as may be agreed upon at the time of their acceptance. If a conditional payment is accepted for subsequent credit upon a first mortgage which is at the time or is thereafter pledged as collateral security for an issue of farm loan bonds, all requirements, conditions, and limitations set forth in sections 897-899 of this title shall apply to such payment the same as though it were a present payment on the principal of the mortgage pledged as collateral security, and the land bank shall forthwith notify the farm loan registrar of its receipt of such payment and account to him therefor. Every conditional payment accepted by a land bank for subsequent credit upon indebtedness of a borrower shall be credited upon such indebtedness as the borrower may from time to time direct in accordance with the terms and conditions upon which the payment has been accepted, and at the option of the bank may in any event be credited upon such indebtedness as and when it matures if it is not otherwise paid by the borrower at or before maturity. If at any time after five years from the date on which a borrower's loan was made, the aggregate of the borrower's conditional payments accepted on account of his indebtedness under such loan and not yet credited thereon equals or exceeds his total indebtedness under the loan, all unmatured indebtedness under such loan shall become due and payable at once, and the payments so accepted shall forthwith be credited upon the borrower's indebtedness under the loan so far as may be necessary to pay it in full. Any balances of conditional payments remaining uncredited when the indebtedness on account of which they have been accepted has been paid in full shall be refunded to the borrower by the land bank.

Nineteenth. Deferment of installment payments. To permit any borrower to defer payment of the principal portions of installments on his loan in order that he may pay, in whole or in part, any indebtedness which is secured by a lien junior to the lien of the bank upon the farm land mortgaged to secure his loan. Such a deferment may be permitted

for other purposes for a period not exceeding five years under regulations prescribed by the Farm Credit Administration.

Twentieth. Purchasing assets of Federal Farm Mortgage Corporation. Without regard to any limitations or restrictions of this subchapter, to purchase all assets, except cash, accounts receivable, and reserved mineral interests, held by the Federal Farm Mortgage Corporation as a result of loans made on or before July 1, 1947, in the farm credit district in which said bank is situated and to assume the liabilities of said Corporation for future payment funds of borrowers and trust accounts applicable to said assets. The purchase price of notes and mortgages, purchase money mortgages, and real estate sales contracts shall be equal to the total of the unpaid balances on such items and accrued interest thereon at the date as of which purchase is made, less the total of the liabilities of the Corporation being assumed by the bank as herein provided. The purchase price of real estate, sheriffs' certificates, loans called for foreclosure, loans in suspense, judgments, and any other assets eligible for purchase under this paragraph but not specifically identified herein shall be equal to the fair market value of the assets as determined by agreement. The total consideration for the purchase shall be payable over a period of not more than ten years from the date as of which purchase is made, and upon such terms as shall be agreed upon through negotiation with the Board of Directors of the Corporation. (July 17, 1916, ch. 245, § 13, 39 Stat. 372; Jan. 23, 1932, ch. 9, § 5, 47 Stat. 14; Mar. 4, 1933, ch. 270, §§ 3, 4, 47 Stat. 1548; Ex. Ord. No. 6084, Mar. 27, 1933; May 12, 1933, ch. 25, title II, §§ 22, 23, 48 Stat. 42, 43; June 16, 1933, ch. 98, title VII, § 79, title VIII, § 80 (a), 48 Stat. 272, 273; Jan. 31, 1934, ch. 7, § 8 (a), 48 Stat. 347; Aug. 19, 1937, ch. 704, §§ 5 (a), 15 (a), (b), 16, 17, 19, 50 Stat. 704, 708, 709; June 30, 1945, ch. 204, §§ 5-7, 59 Stat. 267; Oct. 29, 1949, ch. 786, § 3, 63 Stat. 986; June 1, 1955, ch. 117, 69 Stat. 81; Aug. 11, 1955, ch. 785, title III, § 305, 69 Stat. 665; July 26, 1956, ch. 741, title I, § 104 (e), 70 Stat. 664.)

Abolishment of office of Land Bank Commissioner, see section 636f (a) of this title.

Restrictions on Federal Land Banks

12 U. S. C. § 791

Enumeration of restrictions

No Federal land bank shall have power

F. F. L. Act § 14

First. Limiting deposits.-To accept deposits of current funds payable upon demand except from its own stockholders, or to transact any bank

ing or other business not expressly authorized by the provisions of this subchapter.

Second. Loaning on first mortgages except through associations.-To loan on first mortgage except through national farm loan associations as provided in sections 711-722 and 731-734 of this title, or through agents as provided in sections 801-808 of this title, or direct to borrowers as provided in section 723 of this title.

Third. Accepting other than first mortgages.-To accept any mortgages on real estate except first mortgages created subject to all limitations imposed by sections 771 and 772 of this title, and those taken as additional security for existing loans.

Fourth. Issuing excess of bonds; receiving excess of mortgages from associations. To issue or obligate itself for outstanding farm loan bonds (including consolidated bonds issued on its behalf) in excess of twenty times the amount of its capital and surplus, or to receive from any national farm loan association additional mortgages when the principal remaining unpaid upon mortgages already received from such association shall exceed twenty times the amount of its capital stock owned by such association.

Fifth. Demanding unauthorized commissions. To demand or receive, under any form or pretense, any commission or charge not specifically authorized in this subchapter.

Sixth. Accepting mortgages on personal property exempt from execution. To accept as additional security for any loan to any borrower under this subchapter, or any installment on any such loan, any personal property which is exempt from execution upon judgment under the laws of the State in which the land with respect to which the mortgage is given is situated. (July 17, 1916, ch. 245, § 14, 39 Stat. 372; Mar. 4, 1933, ch. 270, § 5 (a), (b), 47 Stat. 1549; June 16, 1933, ch. 98, title VII, §§ 71,75 (a), 48 Stat. 271.)

Loans by Federal Land Banks Through Agents

12 U. S. C. § 801

Loans; when authorized

F. F. L. Act § 15

Whenever it shall appear to the Farm Credit Administration that national farm loan associations have not been formed, and are not likely to be formed, in any locality, because of peculiar local conditions, said administration may, in its discretion, authorize Federal land banks to make loans on farm lands through agents approved by said administration. (July 17, 1916, ch. 245, § 15, 39 Stat. 373; Ex. Ord. No. 6084, Mar. 27, 1933.)

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