section 1105 (c) (2) of the act applicable to lenders; and

(5) The borrower (or other party in interest) shall have (in addition to such other rights or remedies, if any, as it may have) such rights as are provided for the borrower (or other party in interest) in sections 1105 (c) (2) and 1105 (d) of the act and, to the extent not in express conflict with said sections 1105 (c) (2) and 1105 (d), or with this section, in the loan agreement and the obligation or obligations evidencing the loan, and any collateral or security therefor and policies of insurance maintained by the borrower pursuant to the loan agreement; and the interest of the borrower (or other party in interest), including its interest for the purpose of asserting. pursuing or enforcing said rights and remedies, shall be as provided in paragraph (d) of this section: Provided, however, That the rights and interest of the borrower (or other party in interest) shall at all times be subordinate to, and not in derogation of, the rights and interest of the Secretary, and that all property purchased by the Secretary at foreclosure proceedings or other public sale shall be free of any rights or interest of the borrower (or other party in interest).

(c) Interest of Secretary. The interest of the Secretary as insurer of the mortgage or loan and as assignee of the mortgagee or lender, as the case may be (including his interest for the purpose of asserting, pursuing or enforcing any or all of the rights and remedies stated in paragraphs (a) (1), (2) and (3) and (b) (1), (2) and (3) of this section), in the mortgage or loan agreement and the obligation or obligations secured by the mortgage or evidencing the loan, as the case may be, the collateral or security for the mortgage or loan agreement or the obligation or obligations secured by the mortgage or evidencing the loan, as the case may be, the policies of insurance maintained by the mortgagor or borrower pursuant to the mortgage or loan agreement, as the case may be, the vessel or vessels or other property covered by the mortgage or in respect of which the loan is made, as the case may be, and any cash, securities or other property (other than property purchased by the Secretary at foreclosure proceedings or other public sale and any payments or receipts for the requisition, sale, charter, operation or other use or disposition of any

such property, all of which property, payments and receipts shall belong to and vest exclusively in the Secretary) which may at any time be collected, received, realized or held by or for the Secretary (or others) in respect thereof (including payments referred to in paragraphs (a) (2) and (b) (2) of this section), shall be an amount equal to the total of

(1) The accrued and unpaid interest on and the unpaid balance of the principal of the mortgage and the obligation or obligations secured by the mortgage or the loan and the obligation or obligations evidencing the loan as of the date of the Secretary's acceptance of the assignment referred to in paragraph (a) or (b) of this section, as the case may be, together with all interest and other amounts which shall have become due and payable by the mortgagor or borrower on or under the mortgage or loan agreement (or loan), as the case may be, and/or the obligation or obligations secured by the mortgage or evidencing the loan, as the case may be, subsequent to said date,

(2) Premium charges, if any, due to the Secretary under the mortgage or loan agreement, as the case may be, including premium charges due to the Secretary as assignee of the mortgagee or lender, as the case may be, and

(3) The expenses (including administrative expenses) incurred and advances and disbursements made by the Secretary (or the United States) in the assertion, pursuit and/or enforcement of the rights and remedies, or any of them, stated in paragraph (a) or (b) of this section, as the case may be, and all other expenses (including administrative expenses) incurred and advances and disbursements made by the Secretary (or the United States) in connection with the vessel or vessels (or any of them) or other property (other than those incurred or made in respect of any vessel or vessels or other property purchased by the Secretary at foreclosure proceedings or other public sale, after the time of acquisition of title at such foreclosure proceedings or other public sale), or otherwise allocable thereto in amounts determined by the Secretary to be fair and reasonable,

after deducting therefrom all cash payments theretofore made to the Secretary on account of said items; and such interest shall be discharged and satisfied in full before discharging and satisfying

any interest of the mortgagor or borrower (or other party in interest).

(d) Interest of mortgagor or borrower (or other party in interest). The interest of the mortgagor or borrower (or other party in interest), including its interest for the purpose of asserting, pursuing or enforcing any or all of the rights stated in paragraphs (a) (5) and (b) (5) of this section, in the mortgage or loan agreement and the obligation or obligations secured by the mortgage or evidencing the loan, as the case may be, the collateral or security for the mortgage or loan agreement or the obligation or obligations secured by the mortgage or evidencing the loan, as the case may be, the policies of insurance maintained by the mortgagor or borrower pursuant to the mortgage or loan agreement, as the case may be, the vessel or vessels or other property covered by the mortgage or in respect of which the loan is made, as the case may be, and any cash, securities or other property (other than property purchased by the Secretary at foreclosure proceedings or other public sale and any payments or receipts for the requisition, sale, charter, operation or other use or disposition of any such property, all of which property, payments or receipts shall as stated above belong to and vest exclusively in the Secretary) which may at any time be collected, received, realized or held by or for the Secretary (or others) in respect thereof (including payments referred to in paragraphs (a) (2) and (b) (2) of this section), shall be a residual interest after full discharge and satisfaction of the interest of the Secretary as provided in paragraph (c) of this section, and the Secretary shall pay or otherwise account therefor to the mortgagor or borrower (or other party in interest) as he deems proper, but without liability for so doing.

§ 298.10 Premium charges.

(a) Rates. Premium charges for the insurance of mortgages and loans under Title XI of the act shall be payable at rates as fixed by the Secretary and as set forth in the respective commitments to insure and/or contracts of insurance. Such rates in the case of mortgages insured under section 1103(a) and loans insured under section 1103(b) shall be within the maximum and minimum rates prescribed by section 1104 (d) of the act. The maximum and minimum rates ap

plicable to insurance of mortgages under section 1106 shall not be less than those for mortgages insured under section 1103 (a) of the act.

(b) Computation. Premium charges shall be computed on the average principal amount of the mortgage or loan to be outstanding during the annual period covered by said premium charges. In the case of a loan, the computation of average principal amount to be outstanding shall take into account all advances to be made under the loan during the annual period. In the case of a mortgage, the computation of average principal amount to be outstanding shall take into account all fixed payments required under the mortgage.

(c) Reduction and increase. Premium charges shall be subject to reduction for erroneous calculations, for advances overestimated, for voluntary prepayments made under the mortgage or the loan agreement, and for extraordinary payments made under the mortgage or the loan agreement, such as proceeds of insurance upon total loss applied in reduction of principal and additional payments contingent on earnings. Premium charges shall be subject to increase for erroneous calculations, for advances underestimated and for fixed payments required under the mortgage or the loan agreement which are delinquent.

In

(d) Time of payment. Premium charges shall be paid to the Secretary by the mortgagee or lender annually in advance, the first such premium charge to be paid at the time of the execution and delivery of the contract of insurance, and each subsequent premium charge to be paid on or before each succeeding anniversary date. the event that the Secretary at any time determines that the amount of any premium charge is not correct, he shall promptly give notice thereof to the mortgagee or lender and mortgagor or borrower, as the case may be, specifying the correct amount, the basis of computation thereof, and the amount of the deficiency or excess. The mortgagee or lender, as the case may be, shall within thirty days after receipt of said notice pay or cause to be paid to the Secretary the amount of any deficiency. The Secretary shall promptly refund to the mortgagee or lender the amount of any

excess.

(e) Provisions for payment by mortgagor or borrower. The mortgage or the loan agreement, as the case may be,

shall provide (1) that the mortgagor or borrower shall pay to the mortgagee or lender the amount required for the payment of each premium charge at least sixty days before the payment of such charge of the Secretary is due (except for the first payment which shall be made not later than the time of execution and delivery of the contract of insurance and for any deficient premium charge which shall be paid not later than fifteen days before such payment is due by the mortgagee or lender to the Secretary), and (2) that the failure of the mortgagor or borrower to make such payment shall be a default under the mortgage or shall give the lender the right to mature the loan, as the case may be.

(f) Provisions for payment by mortgagee or lender. The contract of insurance shall require the mortgagee or lender to pay premium charges to the Secretary when due (subject to such period of grace as may be provided in the contract of insurance), but only to the extent received from the mortgagor or borrower.

(g) Manner and place of payment. Unless otherwise specified by the Secretary, all premium charges may be paid by check (which need not be certified) payable to "Maritime Adm.-Commerce", delivered in person or sent through the mails to the Maritime Administration, Washington, D.C., 20235, accompanied by a letter stating that the payment is of a premium charge under the contract of insurance and specifying the period covered by the payment.

(h) Premiums earned when paid. Each premium charge shall be deemed to be fully earned when paid and no refund will be made by the Secretary of any premium charge paid in the event the insurance shall terminate: Provided, however, That if the insurance shall terminate by reason of payment in full of the obligation or obligations secured by the mortgage or evidencing the loan, or if the insurance shall terminate prior to any advance under the mortgage or loan, any premium charge paid shall be subject to reduction as provided in paragraph (c) of this section and refund as provided in paragraph (d) of this section.

§ 298.11 Applicability of the regulations in this part.

(a) Applicable generally; exceptions. The regulations in this part shall be ap

plicable to all applications for insurance, commitments to insure and contracts of insurance (except as to the latter where entered into pursuant to a prior commitment) made, issued or entered into after the effective date hereof, and all mortgages and loans covered thereby, except as may be otherwise required or approved by the Secretary and provided in said applications, commitments, contracts, mortgages and/or loans (including as to the latter, the loan agreements).

(b) Prior regulations superseded. The regulations in this part supersede Part 296 of this title and General Order No. 29 (as amended) dated April 13, 1939 (4 F. R. 1621) as of the effective date hereof, but shall not affect any commitment to insure or contract of insurance issued or entered into prior to said effective date, or any mortgage or loan covered thereby, including the provisions of any rules and regulations forming a part of or otherwise applicable to any such commitment, contract, mortgage or loan.

(c) Future amendments. The regulations in this part may be amended by the Secretary at any time. No such amendment shall affect any commitment to insure or contract of insurance theretofore issued or entered into or any mortgage or loan covered thereby, including the provisions of any rules and regulations forming a part of or otherwise applicable to any such commitment, contract, mortgage or loan, but all such amendments shall be effective as to any application for insurance, commitment to insure or contract of insurance (except as to the latter where entered into pursuant to a prior commitment) made, issued or entered into after the effective date thereof, and any mortgage or loan covered thereby, except as may be otherwise required or approved by the Secretary and provided in said application, commitment, contract, mortgage and/or loan (including as to the latter, the loan agreement).

(d) Applicability to United States. Nothing in the regulations in this part shall be deemed to impose any obligation on the United States, the Secretary or the Administration in action to those contained in Title XI of the act or other provisions of law or the contracts or commitments entered into under the authority of said Title XI.

Sec. 299.129 Supplemental application to bareboat charter government-owned, war-built, dry-cargo vessel(s) under section 5 (e) of the Merchant Ship Sales Act of 1946, as amended by Public Law 591, 81st Congress.

299.130 Uniform bareboat charter of a warbuilt dry-cargo vessel under the Merchant Ship Sales Act of 1946, "Shipsalesdemise 303".

299.131 Application for transfer of a warbuilt vessel in settlement of a claim against the United States. 299.132 Application for transfer of another vessel for a vessel constructed in the United States since January 1, 1937, which was taken for use by the United States.

299.133 Application for adjustment of purchase price of vessel purchased prior to March 8, 1946.

299.134 Application for the reconversion, alteration or modification of a vessel.

Subpart H-Accounting Procedure

Purpose.

Definitions.

299.91

299.92 299.93

299.200

Capital necessarily employed.

TANKERS

299.204

Net voyage profit.

Accounting requirements.

Statements required by the Administration.

Certifications and verifications.

299.207 Statement of purposes and reserva

tions.

Subpart 1-Assumption of Mortgage by New Mortgagor

299.301 Application to transfer a vessel, sub、 ject to mortgage.

AUTHORITY: The provisions of this Part 299 issued under sec. 204, 49 Stat. 1987, as amended; 46 U.S.C. 1114. Interpret or apply sec. 12, 60 Stat. 49, as amended; 50 U.S.C. App. 1745, except as otherwise noted.

SOURCE: The provisions of this Part 299 contained in General Order 60, Revised, 22 F.R. 11103, Dec. 31, 1957, unless otherwise noted.

Subpart A-General Provisions

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