Subordination and waiver of liens on chattel security.

CFR · 2024-01-01 · US · Title 7

(a) (1) The prior lien will soon mature or has matured and the prior lienholder desires to extend or renew the obligation, or the obligation can be refinanced. The relative lien position of the Agency must be maintained; and (2) The subordination will permit another creditor to refinance other debt or lend for an authorized direct loan purpose. (b) (1) If the lien is on basic chattel security, the amount of subordination is necessary to provide the lender with the security it requires to make the loan; (2) Approval of a subordination is limited to a specific amount and the loan to be secured by the subordination is closed within a reasonable time; (3) Only one subordination to one creditor may be outstanding at any one time in connection with the same security; (4) The borrower has not been convicted of planting, cultivating, growing, producing, harvesting or storing a controlled substance under Federal or state law. “Borrower” for purposes of this provision, specifically includes an individual or entity borrower and any member stockholder, partner, or joint operator, of an entity borrower and any member, stockholder, partner, or joint operator of an entity borrower. “Controlled substance” is defined at 21 CFR part 1308. The borrower will be ineligible for a subordination for the crop year in which the conviction occurred (5) The borrower can document the ability to repay the total amount due under the subordination and pay all other debt payments scheduled for the subject op

official document · source cfr-2024 · id 7:§ 1962.30