Servicing related to collateral.

CFR · 2024-01-01 · US · Title 7

(a) (1) Obtain income and insurance assignments when required. (2) Ensure the borrower has or obtains marketable title to the collateral. (3) Inspect the collateral as often as deemed necessary to properly service the loan. (4) Ensure the borrower does not convert loan security. (5) Ensure the proceeds from the sale or other disposition of collateral are accounted for and applied in accordance with the lien priorities on which the guarantee is based or used for the purchase of replacement collateral. (6) Ensure the loan and the collateral are protected in the event of foreclosure, bankruptcy, receivership, insolvency, condemnation, or other litigation. (7) Ensure taxes, assessments, or ground rents against or affecting the collateral are paid. (8) Ensure adequate insurance is maintained. (9) Ensure that insurance loss payments, condemnation awards, or similar proceeds are applied on debts in accordance with lien priorities on which the guarantee was based, or used to rebuild or acquire needed replacement collateral. (b) (i) When the security item is being sold for market value and the proceeds will be applied to the loan in accordance with lien priorities. In the case of term loans, proceeds will be applied as extra payments and not as a regular installment on the loan. (ii) The security item will be used as a trade-in or source of down payment funds for a like item that will be taken as security. (iii) The security item has no present or prospective value. (2) A partial rele

official document · source cfr-2024 · id 7:§ 762.142