[Code of Federal Regulations]

[Title 49, Volume 4]

[Revised as of October 1, 2006]

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

[CITE: 49CFR260.55]



[Page 837]

 

                        TITLE 49--TRANSPORTATION

 

       CHAPTER II--FEDERAL RAILROAD ADMINISTRATION, DEPARTMENT OF 

                             TRANSPORTATION

 

PART 260_REGULATIONS GOVERNING LOANS AND LOAN GUARANTEES UNDER THE 

 

                    Subpart F_Loan Guarantees_Lenders

 

Sec.  260.55  Lender's loan servicing.



    (a) The lender is responsible for servicing the entire loan and for 

taking all servicing actions that are prudent. This responsibility 

includes but is not limited to the collection of payments, obtaining 

compliance with the covenants and provisions in the loan documents, 

obtaining and analyzing financial statements, verification of tax 

payments, and insurance premiums, and maintaining liens on collateral.

    (b) The lender must report the outstanding principal and interest 

balance on each guaranteed loan semiannually.

    (c) At the Administrator's request, the Lender will periodically 

meet with the Administrator to ascertain how the guaranteed loan is 

being serviced and that the conditions and covenants of the loan 

documents are being enforced.

    (d) The Lender must obtain and forward to the Administrator the 

Borrower's annual financial statements within 120 days after the end of 

the Borrower's fiscal year and the due date of other reports as required 

by the loan documents. The Lender must analyze the financial statements 

and provide the Agency with a written summary of the Lender's analysis 

and conclusions, including trends, strengths, weaknesses, extraordinary 

transactions, and other indications of the financial condition of the 

Borrower.

    (e) Neither the Lender nor the Holder shall alter, nor approve any 

amendments of, any loan instrument without the prior written approval of 

the Administrator.