Purchase and sale of interests in loans.

CFR · 2024-01-01 · US · Title 12

(a) (1) (2) (3) (4) (5) (i) Retains some risk of loss from the transferred asset for any cause except the seller's breach of usual and customary warranties or representations designed to protect the purchaser against fraud or misrepresentation; or (ii) Has an obligation to make payments of principal or interest to any party resulting from: (A) Default on the payment of principal or interest on the loan by the borrower or guarantor or any other deficiencies in the obligor's performance; (B) Changes in the market value of the assets after transfer; (C) Any contractual relationship between the seller and purchaser incident to the transfer that, by its terms, could continue even after final payment, default, or other termination of the assets transferred; or (D) Any other cause, except the retention at servicing rights alone shall not constitute recourse. (6) (b) (1) For the purpose of pooling and securitizing such loans under title VIII of the Act; (2) Purchases of a participation interest that qualifies under the institution's lending authority, as set forth in subpart A of this part, and meets the requirements of § 614.4330 of this subpart; (3) Loans purchased from the Federal Deposit Insurance Corporation, provided that the Farm Credit System institution with direct lending authority under title I, II or III of the Act: (i) Conducts a thorough due diligence prior to purchase to ensure that the loan, or pool of loans, qualifies under the institution's lending authority as set

official document · source cfr-2024 · id 12:§ 614.4325