§1492 Claims for losses; submission to Secretary; reimbursement: single and aggregate loss limitations, conditions; assignment of note or judgment; collection or cancellation by Secretary; interest or charges cessation date

Summary

When a lender loses money on a government‑insured loan, including unpaid interest, the lender must send a claim to the Secretary. If the Secretary agrees a loss happened, the lender will be paid back, but no more than 90% of the loss on any one loan and no more than 15% of the lender’s total insured loans. Before payment, the lender must try reasonable collections and use any loan security to repay the debt. After the lender is paid, the loan note or judgment is transferred to the United States and the lender gives up any further claims against the borrower or the government. The Secretary can then try to collect the rest or cancel what can’t be collected and may set a date when interest or charges stop.