General conditions of guarantee.

CFR · 2024-01-01 · US · Title 7

A loan guarantee under this part will be evidenced by a Loan Note Guarantee issued by the Agency. Each Lender will execute a Lender's Agreement. If a valid Lender's Agreement already exists, it is not necessary to execute a new Lender's Agreement with each loan guarantee. The provisions of this part and 7 CFR part 4287, subpart D will apply to all outstanding guarantees. In the event of a conflict between the guaranteed loan documents and these regulations as they exist at the time the documents are executed, the regulations will control. (a) (2) The guarantee will be unenforceable to the extent that any loss is occasioned by: (i) A provision for Interest on Interest, Default or penalty Interest, or late payment fees; (ii) The violation of usury laws; (iii) Use of loan proceeds for unauthorized purposes or to the extent that loan funds are used for purposes other than those specifically approved by the Agency in its Conditional Commitment; (iv) Failure to obtain or maintain the required security regardless of the time at which the Agency acquires knowledge thereof; and (v) Negligent Loan Origination or Negligent Loan Servicing unless otherwise determined under paragraph (d) of this section. (3) The Agency will guarantee payment as follows: (i) To any Holder, 100 percent of any loss sustained by the Holder on the guaranteed portion of the loan it owns and Interest through the Interest Termination Date due on such portion. (ii) To the Lender, subject to the provisions of this p

official document · source cfr-2024 · id 7:§ 4279.220