A-76992, OCTOBER 15, 1936, 16 COMP. GEN. 381

A-76992, OCTOBER 15, 1936, 16 COMP. GEN. 381

FEDERAL HOUSING ADMINISTRATION - DEFAULTED MODERNIZATION LOAN ACCOUNTS - DISPOSITION OF CASES INVOLVING BALANCES NOT COLLECTIBLE BY THE ADMINISTRATOR THE ACT OF APRIL 3, 1936, 49 STAT. 1187, HAVING AMENDED TITLE I OF THE NATIONAL HOUSING ACT, TO PROVIDE THAT THE ADMINISTRATOR "SHALL HAVE THE POWER * * * TO COLLECT OR COMPROMISE ALL OBLIGATIONS ASSIGNED TO OR HELD BY HIM AND ALL LEGAL OR EQUITABLE RIGHTS ACCRUING TO HIM IN CONNECTION WITH THE PAYMENT OF SUCH INSURANCE UNTIL SUCH TIME AS SUCH OBLIGATIONS MAY BE MAY BE REFERRED DIRECTLY TO THE ATTORNEY GENERAL FOR SUIT OR COLLECTION MAY BE REFERRED DIRECTLY TO THE/ATTORNEY GENERAL FOR SUIT OR COLLECTION EVEN THOUGH THE ADMINISTRATOR IS AUTHORIZED TO SUE AND BE SUED, ALL CASES INVOLVING ITEMS BELIEVED BY THE ADMINISTRATOR TO BE UNCOLLECTIBLE TO BE AND RECOMMENDATIONS, FOR SUCH FURTHER ACTION AS REQUIRED BY THE LAW AND THE FACTS. 16 COMP. GEN. 72, AMPLIFIED.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE ADMINISTRATOR, FEDERAL HOUSING ADMINISTRATION, OCTOBER 15, 1936:

THERE WAS RECEIVED AUGUST 11, 1936, A LETTER DATED JULY 28, 1936, FROM THE GENERAL COUNSEL, FEDERAL HOUSING ADMINISTRATION, AS FOLLOWS:

THIS WILL ACKNOWLEDGE YOUR LETTER OF JULY 27, 1936, ADDRESSED TO THE ADMINISTRATOR, AND REFERRING TO THE COLLECTION PROCEDURE OF THE FEDERAL HOUSING ADMINISTRATION, WHICH READS IN PART AS FOLLOWS:

"IN THE INSTANT MATTER RELATING TO DEFAULTED MODERNIZATION LOAN ACCOUNTS WHICH HAVE BEEN INSURED UNDER TITLE I OF THE NATIONAL HOUSING ACT OF JUNE 27, 1934, 48 STAT. 1246, AS AMENDED BY THE ACT OF AUGUST 23, 1935, 49 STAT. 722, THERE APPEARS TO BE NO APPLICABLE STATUTE PROVIDING FOR ANY DISPOSITION OF THE SAID ACCOUNTS CONTRARY TO THE USUAL PROCEDURE IN SIMILAR CASES AS ABOVE SET OUT. ACCORDINGLY, YOU ARE ADVISED THAT IN ALL CASES SUCH AS THOSE REFERRED TO IN YOUR SUBMISSION OF JUNE 13, 1936, ARISING UNDER TITLE I OF THE NATIONAL HOUSING ACT, WHERE THE BALANCE DUE THE GOVERNMENT CANNOT BE COLLECTED BY YOU WITHOUT REFERENCE TO THE DEPARTMENT OF JUSTICE--- IT BEING NOTED IN THIS CONNECTION THAT THE ACT OF AUGUST 23, 1935, 49 STAT. 722, AMENDING THE NATIONAL HOUSING ACT, AUTHORIZES YOU IN YOUR OFFICIAL CAPACITY "TO SUE AND BE SUED IN ANY COURT OF COMPETENT JURISDICTION, STATE OR FEDERAL"--- THERE SHOULD BE TRANSMITTED TO THIS OFFICE THE ORIGINAL PAPERS PERTAINING TO SUCH CLAIMS, TOGETHER WITH A COMPLETE REPORT OF ALL PERTINENT FACTS AND CIRCUMSTANCES AND AN ADMINISTRATIVE RECOMMENDATION. IT WILL THEN BE FOR THIS OFFICE TO DETERMINE WHAT FURTHER ACTION, IF ANY, SHOULD BE TAKEN TO ATTEMPT COLLECTION IN INDIVIDUAL CASES.'

IT APPEARS, FROM THE QUOTATION SET FORTH ABOVE, THAT THE AMENDMENT TO TITLE I OF THE NATIONAL HOUSING ACT CONTAINED IN PUBLIC, NO. 486, 74TH CONGRESS, SEC. 1 (C), HAS NOT BEEN CONSIDERED. THIS SECTION READS IN PART AS FOLLOWS:

"/C) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE ADMINISTRATOR SHALL HAVE THE POWER, UNDER REGULATIONS TO BE PRESCRIBED BY HIM AND APPROVED BY THE SECRETARY OF THE TREASURY * * * TO COLLECT OR COMPROMISE ALL OBLIGATIONS ASSIGNED TO OR HELD BY HIM AND ALL LEGAL OR EQUITABLE RIGHTS ACCRUING TO HIM IN CONNECTION WITH THE PAYMENT OF SUCH INSURANCE UNTIL SUCH TIME AS SUCH OBLIGATIONS MAY BE REFERRED TO THE ATTORNEY GENERAL FOR SUIT OR COLLECTION.'

THE ABOVE-QUOTED PROVISIONS, TOGETHER WITH THE PROVISIONS AUTHORIZING THE ADMINISTRATOR TO SUE AND BE SUED, WOULD SEEM TO REMOVE THE FEDERAL HOUSING ADMINISTRATOR FROM THE APPLICATION OF SECTION 236 OF THE REVISED STATUTES, AS AMENDED BY THE ACT OF JUNE 10, 1921, 42 STAT. 24, AND TO AUTHORIZE THE ADMINISTRATOR TO TAKE ALL STEPS NECESSARY FOR COLLECTION, INCLUDING THE REFERENCE TO THE ATTORNEY GENERAL FOR SUIT OF ALL CASES IN WHICH HE MAY DETERMINE SUIT SHOULD BE FILED.

IN VIEW OF THE ABOVE, YOUR OPINION IS RESPECTFULLY REQUESTED AS TO THE METHOD OF OPERATION SUGGESTED IN OUR SUBMISSION OF JUNE 13, 1936. IT IS UNDERSTOOD, OF COURSE, THAT WHEN THE FEDERAL HOUSING ADMINISTRATION REFERS A CASE TO THE GENERAL ACCOUNTING OFFICE WITH A RECOMMENDATION THAT IT BE MARKED CLOSED, SUCH A RECOMMENDATION IS NOT INTENDED TO LIMIT THE RIGHTS OF THE GENERAL ACCOUNTING OFFICE TO TAKE SUCH FURTHER ACTION AS IT DEEMS NECESSARY IF THE RECOMMENDATION OF THE ADMINISTRATOR IS NOT AGREED WITH.

IN VIEW OF THE FACT THAT THE AUTHORITY OF LAW GENERALLY TO COMPROMISE CLAIMS OF THE UNITED STATES AGAINST DEBTORS IS CONFERRED ON CERTAIN OFFICIALS, IT NECESSARILY REQUIRED A SPECIFIC STATUTE TO REMOVE THE CLAIMS OF THE FEDERAL HOUSING ADMINISTRATION FROM THE GENERAL RULE AND AUTHORIZE THE ADMINISTRATOR TO COMPROMISE PARTICULAR CLAIMS, AND IT IS CLEAR FROM THE ABOVE-QUOTED AMENDMENT, ACT OF APRIL 3, 1936, 49 STAT. 1187, THAT THE LAW CONTEMPLATES THAT SUCH CLAIMS MAY BE REFERRED DIRECTLY TO THE ATTORNEY GENERAL FOR SUIT OR COLLECTION EVEN THOUGH THE ADMINISTRATOR IS AUTHORIZED TO SUE AND TO BE SUED.

OF COURSE, IN MATTERS REFERRED HERE, THE ADMINISTRATIVE RECOMMENDATION IS ALWAYS GIVEN VERY CAREFUL CONSIDERATION, AND IT IS NOTED THAT THERE APPEARS NO INTENTION IN THE FEDERAL HOUSING ADMINISTRATION TO URGE ANY LIMITATION ON THE DUTIES AND RESPONSIBILITIES OF THIS OFFICE IN CASES WITH RESPECT TO WHICH THIS OFFICE DOES NOT AGREE WITH THE ADMINISTRATIVE RECOMMENDATION. WITH THIS UNDERSTANDING THERE APPEARS NO OBJECTION TO THE PROCEDURE SUGGESTED IN A COPY OF YOUR LETTER OF MAY 19, 1936, WHICH ACCOMPANIED YOUR LETTER OF JUNE 13, 1936, THAT ALL CASES INVOLVING ITEMS BELIEVED BY THE FEDERAL HOUSING ADMINISTRATION TO BE UNCOLLECTIBLE SHOULD BE TRANSMITTED TO THIS OFFICE WITH COPIES OF THE INVESTIGATORS' REPORTS AND THE FINDINGS OR ADMINISTRATIVE RECOMMENDATIONS BASED THEREON. AFTER SUCH REPORTS HAVE BEEN RECEIVED, THEY WILL BE EXAMINED, AND IF THERE IS AGREEMENT WITH THE ADMINISTRATIVE RECOMMENDATIONS, A RECORD OF THE DEBT WILL BE MADE AND THE PAPERS FILED FOR SUCH FUTURE ACTION AS MAY BE NECESSARY OR DESIRABLE. IF THE ADMINISTRATIVE RECOMMENDATIONS SHOULD BE QUESTIONED A LETTER TO THAT EFFECT WILL BE SENT TO THE FEDERAL HOUSING ADMINISTRATION REQUESTING SUCH ADDITIONAL REPORT, ETC., AS MAY BE DESIRABLE, AND SUCH FURTHER ACTION WILL BE TAKEN AS MAY BE REQUIRED BY THE LAW AND THE FACTS.