[Code of Federal Regulations]

[Title 7, Volume 14]

[Revised as of January 1, 2007]

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

[CITE: 7CFR1965.24]



[Page 299-300]

 

                          TITLE 7--AGRICULTURE

 

   CHAPTER XVIII--RURAL HOUSING SERVICE, RURAL BUSINESS--COOPERATIVE 

SERVICE, RURAL UTILITIES SERVICE, AND FARM SERVICE AGENCY, DEPARTMENT OF 

                         AGRICULTURE (CONTINUED)

 

PART 1965_REAL PROPERTY--Table of Contents

 

Subpart A_Servicing of Real Estate Security for Farm Loan Programs Loans 

                       and Certain Note-Only Cases

 

Sec.  1965.24  Servicing note-only cases.



    Each loan made on a note-only basis without real estate security 

will be serviced in a manner consistent with the best interests of the 

FmHA or its successor agency under Public Law 103-354.

    (a) Sale of real property on which improvements were made with note-

only FmHA or its successor agency under Public Law 103-354 funds. Any 

loan evidenced only by an unsecured note will be collected by voluntary 

means at the time of the sale of the property, if possible. If 

collection is not possible, the loan may be assumed by the purchaser of 

the property on the terms of the note if the assumption is determined to 

be in the FmHA or its successor agency under Public Law 103-354's best 

financial interest. If collection or assumption cannot be effected, 

consideration should be given to settling the account in accordance with 

Subpart B of Part 1956 of this chapter, if it is eligible, obtaining 

judgment, or classifying it as collection-only. In case of a judgment 

sale, the State Director with the advice of OGC and the U.S. Attorney, 

will authorize an employee to attend the sale



[[Page 300]]



and if appropriate, enter a bid on behalf of the Government under 

Subpart A of Part 1955 of this chapter.

    (b) Assumption of note-only when real property securing another FmHA 

or its successor agency under Public Law 103-354 loan is involved. When 

a borrower has an FmHA or its successor agency under Public Law 103-354 

loan secured by real estate and another FmHA or its successor agency 

under Public Law 103-354 loan evidenced only by a note and the real 

estate is to be transferred and the entire secured real estate debt is 

to be assumed, all or a part of the unsecured note up to the present 

market value of the property in excess of existing liens must also be 

assumed.



[51 FR 4140, Feb. 3, 1986, as amended at 51 FR 45439, Dec. 18, 1986]