B-165746 December 26, 1968

B-165746 December 26, 1968

Attorneys

Mr. John O. Garass United States Attorney District of North Dakota P. O. Box 272 Fargo, North Dakota 58102

Dear Mr. Garass:

Reference is made to your letter of December 2, 1968, concerning a request by the Crown Life Insurance Company that we release a lien and the right to redemption that the United States has with respect to certain real estate owned by that company.

The property involved previously was owned by Glenn R. Peterson and D. Lucille Peterson, but the Crown Life Insurance Company held a first mortgage thereon. This first mortgage was superior to a mortgage held by the Federal Housing Administration and upon a foreclosure action brought by the Crown Life Insurance Company the property was purchased by that company for the amount of its first mortgage.

Our authority to release liens in favor of the United States is, as recognized in your letter, contained in 28 U.S.C. 2410(d) which provides as follows:

"Whenever any person has a lien upon any real or personal property, duly recorded in the jurisdiction in which the property is located, and a junior lien, other than a tax lien, in favor of the United States attaches to such property, such person may make a written request to the officer charged with the administration of the laws in respect of which the lien of the United States arises, to have the same extinguished. If after appropriate investigation, it appears to such officer that the proceeds from the sale of the property would be insufficient to wholly or partly satisfy the lien of the United States, or that the claim of the United States has been satisfied or by lapse of time or otherwise has become unenforceable, such officer shall so report to the Comptroller General who may issue a certificate releasing the property from such lien."

Our Office has no authority to issue a certificate of release of liens of the United States under the above-quoted statutory provision except upon the conditions expressly stipulated therein. On of the conditions expressly stipulated is that the applicant "has a lien" upon the property. Where, as in this case, the applicant becomes the owner of the property before the issuance of the release, the applicant no longer has a lien upon the property so that the afforcementioned condition stipulated in the statute no longer exists. In the absence of such condition, our Office is without authority to issue a certificate of release. See 17 Comp. Gen. 180 and 30 id. 268.

Accordingly, the request of the Crown Life Insurance Company for a certificate of release must be denied.

While the United States might otherwise have a right to redeem the property within a period of one year under 28 U.S.C. 2410(c), your attention is invited to the provisions of 12 U.S.C. 1701k, relating to the National Housing Act, which provide that:

"The right to redeem provided for by section 2410(c) of Title 28, shall not arise in any case in which the subordinate lien or interest of the United States derives from the issuance of insurance under this chapter."

While we have no authority to waive a right of redemption accorded by State law, in view of the provisions of 12 U.S.C. 1701k there may be some question that the United States could take advantage of the laws of North Dakota where the property is situated which accords to owners and junior lien holders the right to redeem real property within one year after the date of the foreclosure sale.

Mr. Robert L. Stroup II, attorney for the Crown Life Insurance Company is being sent a copy of this letter.

Sincerely yours,

FRANK H. WEITZEL Assistant Comptroller General of the United States