[Code of Federal Regulations]

[Title 45, Volume 4]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 45CFR1336.67]



[Page 239-240]

 

                        TITLE 45--PUBLIC WELFARE

 

CHAPTER XIII--OFFICE OF HUMAN DEVELOPMENT SERVICES, DEPARTMENT OF HEALTH 

                           AND HUMAN SERVICES

 

PART 1336_NATIVE AMERICAN PROGRAMS--Table of Contents

 

   Subpart F_Native Hawaiian Revolving Loan Fund Demonstration Project

 

Sec. 1336.67  Security and collateral: Responsibilities of the Loan 

Administrator.



    The Loan Administrator may require any applicant for a loan from the 

RLF to provide such collateral as the Loan Administrator determines to 

be necessary to secure the loan. (Section 803A(b)(3))

    (a) As a Credit Factor. The availability of collateral security 

normally is considered an important factor in making loans. The types 

and amount of collateral security required should be governed by the 

relative strengths and weaknesses of other credit factors. The taking of 

collateral as security should be considered with respect to each loan. 

Collateral security should be sufficient to provide the lender 

reasonable protection from loss in the case of adversity, but such 

security or lack thereof should not be used as the primary basis for 

deciding whether to extend credit.

    (b) Security Interests. Security interests which may be taken by the 

lender include, but are not limited to, liens on real or personal 

property, including leasehold interests; assignments of income and 

accounts receivable; and liens on inventory or proceeds of inventory 

sales as well as marketable securities and cash collateral accounts.



[[Page 240]]



    (1) Motor vehicles. Liens ordinarily should be taken on licensed 

motor vehicles, boats or aircraft purchased hereunder in order to be 

able to transfer title easily should the lender need to declare a 

default or repossess the property.

    (2) Insurance on property secured. Hazard insurance up to the amount 

of the loan or the replacement value of the property secured (whichever 

is less) must be taken naming the lender as beneficiary. Such insurance 

includes fire and extended coverage, public liability, property damage, 

and other appropriate types of hazard insurance.

    (3) Appraisals. Real property serving as collateral security must be 

appraised by a qualified appraiser. For all other types of property, a 

valuation shall be made using any recognized, standard technique 

(including standard reference manuals), and this valuation shall be 

described in the loan file.

    (c) Additional security. The lender may require collateral security 

or additional security at any time during the term of the loan if after 

review and monitoring an assessment indicates the need for such 

security.