§ 103.35. What must the lender do if the borrower defaults on the loan?
294 words·~1 min read·
/us/cfr/t25/s§ 103.35·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(a)The lender must send written notice of the default to the borrower, and otherwise meet the standard of care established for the lender in this part. The lender's notice to the borrower should be sent as soon as possible after the default, but in any event before the lender's notice to BIA under paragraph
(b)of this section. For purposes of the Program, "default" will mean a default as defined in this part.
(b)The lender also must send written notice of the default to BIA by certified mail (return receipt requested), or by a nationally-recognized overnight delivery service (signature of recipient required) within 60 calendar days of the default, unless the default is fully cured before that deadline. This notice is required even if the lender grants the borrower a forbearance under § 103.36(a). One purpose of the notice is to give BIA the opportunity to intervene and seek assistance for the borrower, even though BIA has no duty, either to the lender or the borrower, to do so. Another purpose of the notice is to permit BIA to plan for a possible loss claim from the lender, under § 103.36(d). The lender's notice must clearly indicate:
(1)The identity of the borrower;
(2)The applicable Program guaranty certificate or insurance agreement number;
(3)The date and nature of all bases for default;
(4)If a monetary default, the amount of past due principal and interest, the date through which interest has been calculated, and the amount of any late fees, precautionary advances, or other amounts the lender claims;
(5)The nature and outcome of any correspondence or other contacts with the borrower concerning the default; and
(6)The precise nature of any action the borrower could take to cure the default.