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25 U.S.C. § 1491 — Defaults; written notification; pro rata payments; subrogation and assignment rights of Secretary; cancellation of uncollectable portion of obligations; forbearance for benefit of borrower; interest or charges cessation date

submitted 52 years ago by Pub. L. 93-262 to r/title-25-INDIANS · 150 words · no verdicts yet

in plain englishAI-generated · not legal advice

This section explains what happens when a guaranteed loan defaults. It allows a holder to notify the Secretary, receive the guaranteed share, and transfer the debt rights to the United States.

If a loan guaranteed under this subchapter defaults, the guaranty-certificate holder may immediately notify the Secretary in writing. The Secretary must then pay the holder the proportional part of the guaranteed amount, take the holder’s rights by subrogation, and receive an assignment of the debt and security. The Secretary may cancel the part of an assigned or subrogated obligation that cannot be collected. The section does not prevent the loan parties from agreeing to forbearance for the borrower’s benefit if the Secretary approves it. The Secretary may set the date, no later than the date of a foreclosure judgment and decree or sale, when interest or charges stop accruing.

the actual law source: uscode.house.gov ↗public domain

In the event of a default of a loan guaranteed hereunder, the holder of the guaranty certificate may immediately notify the Secretary in writing of such default and the Secretary shall thereupon pay to such holder the pro rata portion of the amount guaranteed and shall be subrogated to the rights of the holder of the guaranty and receive an assignment of the obligation and security. The Secretary may cancel the uncollectable portion of any obligation, to which he has an assignment or a subrogated right under this section. Nothing in this section shall be construed to preclude any forbearance for the benefit of the borrower as may be agreed upon by the parties to the loan and approved by the Secretary. The Secretary may establish the date, not later than the date of judgment and decree of foreclosure or sale, upon which accrual of interest or charges shall cease.

Source credit: (Pub. L. 93–262, title II, § 211, Apr. 12, 1974, 88 Stat. 80; Pub. L. 98–449, § 6, Oct. 4, 1984, 98 Stat. 1725.)

history & why it existsrecord from the source credit
  • 1974Enacted · Pub. L. 93-262 · 88 Stat. 80
  • 1984Amended · Pub. L. 98-449 · 98 Stat. 1725

A history note hasn’t been published yet. The record shows enactment by Pub. L. 93-262 on 1974-04-12.

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