(a) The provisions of this section are enacted to facilitate mortgage financing by private financial institutions with respect to any housing covered by this Act.
(b) There is created a Housing Insurance Fund which shall be used by the Executive Director of the Virgin Islands Housing Finance Authority as a revolving fund for carrying out the provisions of this section. The Commissioner of Finance is hereby authorized and directed to transfer to such fund the sum of $75,000 from the Moderate Income Housing Fund established pursuant to the provisions of section 3027, Title 33 of the Virgin Islands Code, notwithstanding any limitations on the availability of amounts in such Fund.
(c) The Executive Director of the Virgin Islands Housing Finance Authority is authorized, upon the application of the mortgagee, to insure or make commitments to insure any mortgage executed in connection with the sale to residents of the Virgin Islands of housing constructed under contract or contracts with the Federal Government and/or the Government of the United States Virgin Islands or any department or agency thereof, including the Virgin Islands Housing Authority, for any-authorized public housing purpose. To be eligible for insurance under this section (1) the mortgaged property shall be held by a mortgagor approved by the Executive Director of the Virgin Islands Housing Finance Authority (2) the mortgage shall involve a principal obligation in an amount not to exceed 90 percent of the amount which the Executive Director of the Virgin Islands Housing Finance Authority estimates will be the value of the property, when the project is completed, exclusive of off-site public utilities, facilities and streets.
(d) The Executive Director of the Virgin Islands Housing Finance Authority is authorized to fix a premium charge for the insurance of mortgages under this section but in the case of any mortgage such charge shall not be more than an amount equivalent to 1 ½ per centum per annum of the amount of the principal obligation of the mortgage outstanding at any time, without taking into account delinquent payments of prepayments.
(e) In any case where a mortgagee under a mortgage insured under this section shall have acquired the mortgaged property from the mortgagor under fault, the mortgagee shall be entitled to receive the benefits of the insurance upon assignment, transfer and delivery to the Executive Director of the Virgin Islands Housing Finance Authority, within a period and in accordance with rules and regulations to be prescribed by the Executive Director of the Virgin Islands Housing Finance Authority, of (1) all right and interest arising under the mortgage so in default; (2) all claims of the mortgagee against the mortgagor or others, arising out of the mortgage transactions or foreclosure proceedings (3) any balance on the mortgage loan not advanced to the mortgagor and (4) all records, documents, books, papers and accounts relating to the mortgage transaction. Upon such assignment, transfer and delivery the obligation of the mortgagee to pay the premium charges for mortgage insurance shall cease, and the Executive Director of the Virgin Islands Housing Finance Authority shall make payment to the mortgagee in accordance with the provisions of the agreement for mortgage insurance.
(f) The Executive Director of the Virgin Islands Housing Finance Authority is authorized, subject to the approval of the Governor, to issue such rules and regulations as may be necessary to carry out the provisions of this section.