to subsection (b) and upon notice by the FHA, repurchase such mortgage in an amount equal to the remaining principal obligation under the mortgage, as determined in accordance with guidelines issued by the FHA. (b) Exception The FHA shall provide, by regulation, for the FHA to waive the applicability of any binding agreements regarding repurchase of a mortgage entered into by a mortgagee pursuant to subsection (a) in cases in which hardship circumstances for the mortgagor materially contributed to the default of the mortgage. For purposes of this subsection, such hardship circumstances may include divorce, job or other income loss, health problems, death in the family, and such other situations as the FHA may prescribe. (c) Effective date This section shall take effect on the date of the enactment of this Act. During the transition period under section 551, any reference in this section to the FHA shall be construed to refer to the Secretary of Housing and Urban Development to the extent the Secretary has not delegated authority under this section to the FHA pursuant to section 552(1). 225. Indemnification by mortgagees (a) In general If the FHA determines that at or before the time of loan closing the mortgagee knew, or should have known based on the information then reasonably available to the mortgagee, of a serious and material violation of the requirements established by the FHA with respect to a mortgage executed after the date of the enactment of this Act by such mortgagee approved by the FHA under the direct endorsement program or insured by a mortgagee pursuant to the delegation of authority under section 256 of the National Housing Act ( 12 U.S.C. 1715z–21 ) such that the mortgage loan should not have been approved and endorsed for insurance, and the FHA pays an insurance claim with respect to the mortgage within a reasonable period specified by the FHA, the FHA may require the mortgagee approved by the FHA under the direct endorsement program or the mortgagee delegated authority under such section 256