[Code of Federal Regulations]

[Title 24, Volume 4]

[Revised as of April 1, 2006]

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

[CITE: 24CFR1007.75]



[Page 830]

 

                 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]