[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: 38CFR36.4284]

[Page 589]
 
            TITLE 38--PENSIONS, BONUSES, AND VETERANS' RELIEF
 
          CHAPTER I--DEPARTMENT OF VETERANS AFFAIRS (CONTINUED)
 
PART 36--LOAN GUARANTY--Table of Contents
 
Sec. 36.4284  Computation of guaranty claims.

    (a) Subject to the limitation that the maximum amount payable shall 
in no event exceed the amount originally guaranteed, the amount payable 
on a claim for the guaranty shall be the percentage of the loan 
originally guaranteed applied to the indebtedness computed as of the 
date of claim but not later than (1) the date of judgment or of decree 
of foreclosure; or (2) in nonjudicial foreclosures, the date of 
publication of the first notice of sale; or (3) in cases in which the 
security is repossessed without a judgment, decree, or foreclosure, the 
date the holder repossesses the security; or (4) if no security is 
available, the date of claim but not more than 6 months after the first 
uncured default. Deposits or other credits or setoffs including any 
escrowed or earmarked funds legally applicable to the indebtedness on 
the date of the claim computation shall be applied in reduction of the 
indebtedness upon which the claim is based.
    (b) Credits accruing from the proceeds of a sale or other 
disposition of the security shall be reported to the Secretary incident 
to such submission, and the amount payable on the claim shall in no 
event exceed the remaining balance of the indebtedness.
    (c) Any allowable expenditures or costs, paid by the holder, and any 
accrued and unpaid interest to the applicable cutoff date as set forth 
in paragraph (a) of this section at the maximum rate allowable, may be 
deducted from the proceeds of the sale of the property, or may be 
included in the accounting to the Secretary on such loan. For loans 
guaranteed prior to May 8, 1984, the holder may also either deduct from 
sales proceeds, or include in the accounting, accrued interest at a rate 
of 6 percent from such cutoff date to the date of resale or other 
liquidation but not to exceed 60 days. For loans guaranteed on or after 
May 8, 1984, the holder may also either deduct from sales proceeds, or 
include in the accounting, accrued interest at a rate 4.75 percent below 
the contract interest rate from such cutoff date to the date of resale 
or other liquidation but not to exceed 90 days.


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

    (d) In computing the indebtedness for the purpose of filing a claim 
for payment of a guaranty, or in the event of a transfer of the loan 
under Sec. 36.4281, or other accounting to the Secretary, the holder 
shall not be entitled to treat repayments theretofore made, as 
liquidated damages, or rentals, or otherwise than as payments on the 
indebtedness, notwithstanding any provision in the note, or mortgage, or 
otherwise, to the contrary.
    (e) Appropriate computation of the guaranty, proceeds of 
liquidation, and allowable costs for claims filed under 
Sec. 36.4283(f)(4) are specified in Sec. 36.4276(c).

[36 FR 1253, Jan. 27, 1971, as amended at 49 FR 22082, May 25, 1984; 58 
FR 37861, July 14, 1993]