§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

If a lender loses money on a loan insured under this program (including interest that has accrued), the lender must send a claim to the Secretary to be repaid. The Secretary will pay if a loss is shown, but payment for any one loan cannot be more than 90% of that loss and the lender cannot be paid for losses over 15% of all its insured loans. Before any payment, the lender must try reasonable collection steps and sell any loan security if possible, using the proceeds on the debt. If the Secretary pays, the loan note or judgment is turned over to the United States and the lender gives up further claims against the borrower or the government. The Secretary can try to collect the debt further, cancel any uncollectable part, and set a date when interest or charges stop.