[Code of Federal Regulations]
[Title 38, Volume 2]
[Revised as of July 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 38CFR36.4279]

[Page 583]
 
            TITLE 38--PENSIONS, BONUSES, AND VETERANS' RELIEF
 
          CHAPTER I--DEPARTMENT OF VETERANS AFFAIRS (CONTINUED)
 
PART 36--LOAN GUARANTY--Table of Contents
 
Sec. 36.4279  Extensions and reamortizations.

    (a) Provided the debtor(s) is (are) a reasonable credit risk(s), as 
determined by the holder based upon review of the debtor's (s') 
creditworthiness, including a review of a current credit report(s) on 
the debtor(s), the terms of repayment of any loan may, by written 
agreement between the holder and debtor(s), be extended in the event of 
default, to avoid imminent default, or in any other case where the prior 
approval of the Secretary is obtained. Except with the prior approval of 
the Secretary, no such extension shall set a rate of amortization less 
than that sufficient to fully amortize at least 80 percent of the loan 
balance so extended within the maximum maturity prescribed for loans of 
its class.
    (b) In the event of a partial prepayment pursuant to Sec. 36.4211, 
the balance of the indebtedness may, by written agreement between the 
holder and the debtor(s), be reamortized, provided the reamortization 
schedule will result in full repayment of the loan within the original 
maturity, and provided the debtor(s) is (are) a reasonable credit 
risk(s), as determined by the holder based upon review of the debtor's 
(s') creditworthiness, including a review of a current credit report(s) 
on the debtor(s).
    (c) Unless the prior approval of the Secretary has been obtained, 
any extension or reamortization agreed to by a holder which relieves any 
obligor from liability will release the liability of the Secretary under 
the guaranty on the entire loan. However, if such release of liability 
of an obligor results through operation of law by reason of an extension 
or other act of forbearance, the liability of the Secretary as guarantor 
will not be affected thereby, Provided, The required lien is maintained 
and the title holder is and will remain liable for the payment of the 
indebtedness: And further provided, That if such extension or act of 
forbearance will result in the release of the veteran, all delinquent 
installments, plus any foreclosure expenses which may have been 
incurred, shall have been fully paid.
    (d) The holder shall promptly forward to the Secretary an advice of 
the terms of any agreement effecting a reamortization or extension of a 
guaranteed loan, together with cop(y)(ies) of the credit report(s) 
obtained on the debtor(s).

(Authority: 38 U.S.C. 3712)

[36 FR 1253, Jan. 27, 1971, as amended at 53 FR 34295, Sept. 6, 1988]