7 USC 2005 - Payment of losses on guaranteed loans

U.S Code last checked for updates: Nov 22, 2024

§ 2005.

Payment of losses on guaranteed loans

(a)

Payments to lenders

(1)

Requirement

(2)

Payment toward loan guarantee

(b)

Administration

(1)

Loss by lender

If the lender of a guaranteed farmer program loan takes any action described in section 1981(b)(4) of this title with respect to the loan and the Secretary approves such action, then, for purposes of the guarantee, the lender shall be treated as having sustained a loss equal to the amount by which—

(A)

the outstanding balance of the loan immediately before such action, exceeds

(B)

the outstanding balance of the loan immediately after such action.

(2)

Net present value of loan

The Secretary shall approve the taking of an action described in section 1981(b)(4) of this title by the lender of a guaranteed farmer program loan with respect to the loan if such action reduces the net present value of the loan to an amount equal to not less than the greater of—

(A)

the greatest net present value of a loan the borrower could reasonably be expected to repay; and

(B)

the greatest amount that the lender of the loan could reasonably expect to recover from the borrower through bankruptcy, or liquidation of the property securing the loan, less all reasonable and necessary costs and expenses that the lender of the loan could reasonably expect to incur to preserve or dispose of such property (including all associated legal and property management costs) in the course of such a bankruptcy or liquidation.

(3)

Construction of subsection

(Pub. L. 87–128, title III, § 357, as added Pub. L. 100–233, title VI, § 619, Jan. 6, 1988, 101 Stat. 1683; amended Pub. L. 101–624, title XXIII, § 2388(d)(2), Nov. 28, 1990, 104 Stat. 4053.)

cite as: 7 USC 2005