[Code of Federal Regulations]
[Title 24, Volume 4]
[Revised as of April 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR1007.75]

[Page 831]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
CHAPTER IX--OFFICE OF ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, 
               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 1007_SECTION 184A LOAN GUARANTEES FOR NATIVE HAWAIIAN HOUSING
--Table of Contents
 
Sec. 1007.75  Payment under guarantee.

    (a) Lender options. (1) Notification. If a borrower on a loan 
guaranteed under this part defaults on the loan, the holder of the 
guarantee certificate shall provide written notice of the default to 
HUD.
    (2) Payment. Upon providing the notice required under paragraph 
(a)(1), of this section, the holder of the guarantee certificate shall 
be entitled to payment under the guarantee (subject to the provisions of 
this section) and may proceed to obtain payment in one of the following 
manners:
    (i) Foreclosure. The holder of the certificate may initiate 
foreclosure proceedings (after providing written notice of that action 
to HUD). Upon a final order by the court authorizing foreclosure and 
submission to HUD of a claim for payment under the guarantee, HUD will 
pay to the holder of the certificate the pro rata portion of the amount 
guaranteed (as determined under Sec. 1007.60) plus reasonable fees and 
expenses as approved by HUD. HUD's rights will be subrogated to the 
rights of the holder of the guarantee, who shall assign the obligation 
and security to HUD.
    (ii) No foreclosure. Without seeking foreclosure (or in any case in 
which a foreclosure proceeding initiated under paragraph (a)(2)(i) of 
this section continues for a period in excess of 1 year), the holder of 
the guarantee may submit to HUD a request to assign the obligation and 
security interest to HUD in return for payment of the claim under the 
guarantee. HUD may accept assignment of the loan if HUD determines that 
the assignment is in the best interest of the United States. Upon 
assignment, HUD will pay to the holder of the guarantee the pro rata 
portion of the amount guaranteed (as determined under Sec. 1007.60). 
HUD's rights will be subrogated to the rights of the holder of the 
guarantee, who shall assign the obligation and security to HUD.
    (b) Requirements. Before any payment under a guarantee is made under 
paragraph (a) of this section, the holder of the guarantee shall exhaust 
all reasonable possibilities of collection. Upon payment, in whole or in 
part, to the holder, the note or judgment evidencing the debt shall be 
assigned to the United States and the holder shall have no further claim 
against the borrower or the United States. HUD will then take such 
action to collect as HUD determines to be appropriate.

                       PARTS 1008-1699 [RESERVED]