12 U.S.C. § 2202d — Protection of borrowers who meet all loan obligations
submitted 38 years ago by Pub. L. 92-181 to r/title-12-BANKS-AND-BANKING · 293 words · no verdicts yet
This section addresses Protection of borrowers who meet all loan obligations. It states the duties, permissions, limits, and procedures described below.
(a) Foreclosure prohibited. A qualified lender* may not foreclose because a borrower failed to provide additional collateral if the borrower has paid all accrued principal, interest, and penalties.
(b) Prohibition against required principal reduction. A qualified lender may not require a borrower to reduce outstanding principal by more than the regularly scheduled principal installment when due, unless (1) the borrower sells or otherwise disposes of some or all collateral; or (2) the parties agree in a written agreement.
(c) Nonenforcement. After the borrower has paid all accrued principal, interest, and penalties, the lender may not accelerate the repayment schedule because the borrower did not timely make one or more principal or interest payments.
(d) Placing loans in nonaccrual status. (1) If a lender places a loan* in nonaccrual status, it must document the change and promptly tell the borrower in writing what it did and why. (2) If the borrower was current on principal and interest when this happened and the lender denies a request to return the loan to accrual status, the borrower may have the denial reviewed by the appropriate credit* review committee under section 2202. (3) This subsection applies only when placing the loan in nonaccrual status causes adverse action against the borrower.
A qualified lender* may not foreclose on any loan* because of the failure of the borrower thereof to post additional collateral, if the borrower has made all accrued payments of principal, interest, and penalties with respect to the loan.
A qualified lender may not require any borrower to reduce the outstanding principal balance of any loan made to the borrower by any amount that exceeds the regularly scheduled principal installment payment (when due and payable), unless—
the borrower sells or otherwise disposes of part or all of the collateral; or
the parties agree otherwise in a written agreement entered into by the parties.
After a borrower has made all accrued payments of principal, interest, and penalties with respect to a loan made by a qualified lender, the lender shall not enforce acceleration of the borrower’s repayment schedule due to the borrower having not timely made one or more principal or interest payments.
If a qualified lender places any loan in nonaccrual status, the lender shall document such change of status and promptly notify the borrower thereof in writing of such action and the reasons therefor.
If the borrower was not delinquent in any principal or interest payment under the loan at the time of such action and the borrower’s request to have the loan placed back into accrual status is denied, the borrower may obtain a review of such denial before the appropriate credit* review committee under section 2202 of this title.
This subsection shall only apply if a loan being placed in nonaccrual status results in an adverse action being taken against the borrower.
Source credit: (Pub. L. 92–181, title IV, § 4.14D, as added Pub. L. 100–233, title I, § 107, Jan. 6, 1988, 101 Stat. 1581.)
- 1988Enacted · Pub. L. 92-181 · 101 Stat. 1581
A history note hasn’t been published yet. The record shows enactment by Pub. L. 92-181 on 1988-01-06.
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