Title 25 — IndiansRelease 119-73
§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
Title 25 › Chapter CHAPTER 17— - FINANCING ECONOMIC DEVELOPMENT OF INDIANS AND INDIAN ORGANIZATIONS › Subchapter SUBCHAPTER II— - LOAN GUARANTY AND INSURANCE › § 1491
Summary
On default, guaranty holder may notify Secretary. Secretary must pay the holder the pro rata amount, be subrogated to the holder’s rights, receive assignment of obligation and security, and may cancel uncollectible part. Parties may agree to forbearance with Secretary approval. Secretary may set a date, not later than judgment and decree of foreclosure or sale, when interest or charges stop.
Full Legal Text
Title 25, §1491
Indians — Source: USLM XML via OLRC
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.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
Amendments
1984—Pub. L. 98–449 struck out proviso at end of second sentence which provided that proceedings pursuant to this section shall be effective only after following the procedure set out in section 386a of this title.
Reference
Citations & Metadata
Citation
25 U.S.C. § 1491
Title 25 — Indians
Last Updated
Apr 6, 2026
Release point: 119-73