B-114860, NOV 15, 1973, 53 COMP GEN 337

B-114860, NOV 15, 1973, 53 COMP GEN 337

CORPORATIONS - GOVERNMENT - CLAIMS SETTLEMENT AUTHORITY THE CLAIM OF THE FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) AGAINST THE FEDERAL HOUSING ADMINISTRATION (FHA) OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FOR HANDLING, AS SUCCESSOR MORTGAGEE, THE ADJUSTMENTS NECESSITATED BY THE CONVERSION FROM INSURANCE FOR HOUSING FOR MODERATE INCOME AND DISPLACED FAMILIES UNDER SECTION 221(D)(3) OF THE NATIONAL HOUSING ACT, AS AMENDED, TO INSURANCE FOR RENTAL AND COOPERATIVE HOUSING FOR LOWER INCOME FAMILIES UNDER SECTION 223 OF THE ACT MAY NOT BE CONSIDERED BY THE UNITED STATES GENERAL ACCOUNTING OFFICE (GAO) FOR THE FHA WHILE NOT SPECIFICALLY CHARTERED AS A CORPORATION IS DEFINED IN THE GOVERNMENT CORPORATION CONTROL ACT (31 U.S.C. 846) AS A "WHOLLY OWNED GOVERNMENT CORPORATION," AND AS GOVERNMENT CORPORATIONS ARE AUTHORIZED TO SETTLE THEIR OWN CLAIMS OR TO HAVE THEIR FINANCIAL TRANSACTIONS TREATED AS FINAL, GAO IS WITHOUT AUTHORITY TO DETERMINE FNMA'S ENTITLEMENT TO THE HANDLING CHARGES CLAIMED.

TO JOHN P. COOKSON, NOVEMBER 15, 1973:

YOUR LETTER OF JUNE 6, 1973, REQUESTS OUR DECISION AS TO A DIFFERENCE IN POSITION BETWEEN THE FEDERAL HOUSING ADMINISTRATION (FHA) OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT AND YOUR OFFICE, THE FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) AS TO THE ENTITLEMENT TO $49 IN HANDLING CHARGES WHICH THE FHA HAS DETERMINED TO BE DUE THE NEW ENGLAND MERCHANTS NATIONAL BANK IN ACCORDANCE WITH THE PROVISIONS OF SECTION 236.520(C) OF THE FHA REGULATIONS (24 CFR 236.520(C)).

IT APPEARS FROM YOUR LETTER AND ATTACHED CORRESPONDENCE THAT THE MORTGAGE INSURANCE ON FHA PROJECT NO. 016-44041-LDP, BULLOCKS POINT, EAST PROVIDENCE, RHODE ISLAND, FNMA NO. 38-790920 WAS CONVERTED FROM INSURANCE FOR HOUSING FOR MODERATE INCOME AND DISPLACED FAMILIES UNDER SECTION 221(D)(3) OF THE NATIONAL HOUSING ACT, AS AMENDED, 12 U.S.C. 1715L TO INSURANCE FOR RENTAL AND COOPERATIVE HOUSING FOR LOWER INCOME FAMILIES UNDER SECTION 223 OF THAT ACT, 12 U.S.C. 1715Z-1. BY LETTER DATED FEBRUARY 5, 1973, FHA NOTIFIED YOU THAT THE EFFECTIVE DATE FOR THE CONVERSION OF THE MORTGAGE INSURANCE HAD BEEN CHANGED FROM MARCH 23, 1972, TO APRIL 29, 1971, WHICH ESTABLISHED APRIL 29, 1971, AS THE BEGINNING DATE FOR THE COMPUTATION OF INTEREST REDUCTION PAYMENTS AND MORTGAGE INSURANCE PREMIUMS. THAT LETTER SET OUT THE BASIS FOR PROPOSED ADJUSTMENTS AND REQUESTED THAT YOU PREPARE AN ADJUSTED BILLING WHICH INCLUDED THE $49 IN HANDLING CHARGES WHICH YOU QUESTION.

FNMA PURCHASED THE LOAN FROM THE NEW ENGLAND MERCHANTS NATIONAL BANK ON JUNE 26, 1972. THE $49 WHICH YOU QUESTION AS DUE THAT BANK AS ORIGINATING MORTGAGEE REPRESENTED HANDLING CHARGES AT $3.50 A MONTH FOR THE 14 MONTHS PRIOR TO THAT PURCHASE. YOU FEEL THAT THIS HANDLING CHARGE IS DUE FNMA AS SUCCEEDING MORTGAGEE. THUS, IN EFFECT, YOUR REQUEST CONSTITUTES A CLAIM ON BEHALF OF FNMA FOR THE $49.

CONGRESS CREATED THE FHA AS A GOVERNMENT AGENCY TO PERFORM CERTAIN COMMERCIAL OPERATIONS AND AS AN INCIDENT TO PERFORMING THOSE OPERATIONS IT WAS GIVEN AUTHORITY TO SUE AND TO BE SUED. SEE SECTION 1 OF TITLE I OF THE NATIONAL HOUSING ACT, 48 STAT. 1246, AS AMENDED BY THE ACT OF AUGUST 23, 1935, 49 STAT. 684, 722; 12 U.S.C. 1702. THE AUTHORITY GRANTED UNDER THIS PROVISION OF LAW IS SIMILAR IN EFFECT TO THE EXTRAORDINARY AUTHORITY TO DETERMINE AND PRESCRIBE OBLIGATIONS FOUND IN MANY GOVERNMENT CORPORATION CHARTERS, AND ALTHOUGH THE FEDERAL HOUSING ADMINISTRATION IS NOT SPECIFICALLY CHARTERED AS A CORPORATION, FOR THE PURPOSE OF THE GOVERNMENT CORPORATION CONTROL ACT, IT IS DEFINED IN 31 U.S.C. 846 AS A "WHOLLY OWNED GOVERNMENT CORPORATION." IN 27 COMP. GEN. 429 (1948) OUR OFFICE ADVISED THE FHA (FORMERLY THE PUBLIC HOUSING ADMINISTRATION) THAT CLAIMS AGAINST THE AGENCY SHOULD NOT BE FORWARDED FOR SETTLEMENT PURPOSES TO THIS OFFICE FOR THE FOLLOWING REASONS:

IT WAS NOT INTENDED UNDER THE REGULATION (PROMULGATED PURSUANT TO THE GOVERNMENT CORPORATION CONTROL ACT 31 U.S.C. 841) TO REQUIRE THE SUBMISSION TO THIS OFFICE OF CLAIMS AGAINST GOVERNMENT CORPORATIONS. FACT, SUCH A REQUIREMENT WOULD APPEAR TO BE INCONSISTENT WITH THE STATUTORY AUTHORITY GIVEN TO THE VARIOUS CORPORATIONS GENERALLY (1) TO SUE AND TO BE SUED IN THEIR OWN NAMES AND (2) TO SETTLE THEIR OWN CLAIMS OR TO HAVE THEIR FINANCIAL TRANSACTIONS TREATED AS FINAL AND CONCLUSIVE, AND, ALSO, TO BE INAPPROPRIATE IN ANY CASE WHERE SUCH SUBMISSION WAS NOT DIRECTED BY SPECIFIC PROVISION OF LAW. ***

BASED ON THIS RATIONALE WE HAVE DECLINED TO CONSIDER CLAIMS AGAINST THE FHA. B-156202, MARCH 9, 1965.

ON NOVEMBER 9, 1965, BY OPERATION OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT ACT, PUBLIC LAW 89-174, APPROVED SEPTEMBER 9, 1965 (79 STAT. 667), THE FHA WAS TRANSFERRED TO THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT. SECTION 5(A) OF THE ACT (42 U.S.C. 1451) TRANSFERRED TO AND VESTED IN THE SECRETARY OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT ALL OF THE FUNCTIONS, POWERS AND DUTIES OF THE FEDERAL HOUSING COMMISSIONER AND THE FHA WHICH EXISTED PRIOR TO NOVEMBER 9, 1965. PURSUANT TO THE AUTHORITY CONFERRED ON THE SECRETARY BY SECTION 7D OF THE ACT HE AUTHORIZED EACH OFFICER, EMPLOYEE AND ORGANIZATIONAL UNIT OF THE FHA TO EXERCISE THE FUNCTIONS, POWERS AND DUTIES VESTED IN, OR DELEGATED OR ASSIGNED TO, THE OFFICE OR POSITION OR OFFICER OR EMPLOYEE OR ORGANIZATIONAL UNIT HAVING THE SAME TITLE IMMEDIATELY PRIOR TO THE EFFECTIVE DATE OF THE ACT. SEE INTERIM ORDER II, EFFECTIVE JANUARY 18, 1966 (31 F.R. 815).

SINCE THE AUTHORITY GRANTED THE FHA HAS NOT BEEN MODIFIED BUT MERELY RELOCATED WITHIN THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT THROUGH OPERATION OF THE REFERENCED STATUTE, WE BELIEVE THAT THE HOLDING SET FORTH IN B-156202, CITED ABOVE, IS APPLICABLE TO THE SUBJECT CASE AND ACCORDINGLY OUR OFFICE IS WITHOUT AUTHORITY TO DETERMINE FNMA'S ENTITLEMENT TO THE $49.

WE MIGHT POINT OUT HERE THAT THE SECRETARY OF HOUSING AND URBAN DEVELOPMENT HAS GENERAL REGULATORY POWER OVER FNMA (12 U.S.C. 1723AH)) AND HAS AUTHORITY OVER FHA. HENCE YOU MAY WISH TO PRESENT YOUR QUESTION TO THE SECRETARY.