§ 2005. Payment of losses on guaranteed loans
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/usc/title-7/section-2005A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(a)Payments to lenders
(1)Requirement Within 3 months after a court of competent jurisdiction confirms a plan of reorganization under chapter 12 of title 11, for any borrower to whom a lender has made a loan guaranteed under this chapter, the Secretary shall pay the lender an amount estimated by the Secretary to be equal to the loss incurred by the lender for purposes of the guarantee.
(2)Payment toward loan guarantee Any amount paid to a lender under this subsection with respect to a loan guaranteed under this chapter shall be treated as payment towards satisfaction of the loan guarantee.
(b)Administration
(1)Loss by lender If the lender of a guaranteed farmer program loan takes any action described in section 1981(b)(4) of this title with respect to the loan and the Secretary approves such action, then, for purposes of the guarantee, the lender shall be treated as having sustained a loss equal to the amount by which—
(A)the outstanding balance of the loan immediately before such action, exceeds
(B)the outstanding balance of the loan immediately after such action.
(2)Net present value of loan The Secretary shall approve the taking of an action described in section 1981(b)(4) of this title by the lender of a guaranteed farmer program loan with respect to the loan if such action reduces the net present value of the loan to an amount equal to not less than the greater of—
(A)the greatest net present value of a loan the borrower could reasonably be expected to repay; and
(B)the greatest amount that the lender of the loan could reasonably expect to recover from the borrower through bankruptcy, or liquidation of the property securing the loan, less all reasonable and necessary costs and expenses that the lender of the loan could reasonably expect to incur to preserve or dispose of such property (including all associated legal and property management costs) in the course of such a bankruptcy or liquidation.
(3)Construction of subsection This subsection shall not be construed to limit the authority of the Secretary to enter into a shared appreciation arrangement with a borrower, or the terms and conditions which shall be required of a borrower, under section 2001(e) of this title.
(Pub. L. 87–128, title III, § 357, as added Pub. L. 100–233, title VI, § 619, Jan. 6, 1988, 101 Stat. 1683; amended Pub. L. 101–624, title XXIII, § 2388(d)(2), Nov. 28, 1990, 104 Stat. 4053.)
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- Public Law 100–233To provide credit assistance to farmers, to strengthen the Farm Credit System, to facilitate the establishment of secondary markets for agricultural loans, and for other purposes
- Public Law 101–624To extend and revise agricultural price support and related programs, to provide for agricultural export, resource conservation, farm credit, and agricultural research and related programs, to ensure consumers an abundance of food and fiber at reasonable prices, and for other purposes
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8 references not yet in our index
- Pub. L. 87–128, title III, § 357
- Pub. L. 100–233, title VI, § 619
- 101 Stat. 1683
- Pub. L. 101–624, title XXIII, § 2388(d)(2)
- 104 Stat. 4053
- Pub. L. 87–128
- 75 Stat. 307
- Pub. L. 101–624
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§ 2005
Payment of losses on guaranteed loans
Fed. Reg.×9
Stat.×2
Stat. Comp.×1
U.S.C.×1
Pub. L.Pub. L. 87–128, title III, § 357
Pub. L.Pub. L. 100–233, title VI, § 619
Stat.101 Stat. 1683
Pub. L.Pub. L. 101–624, title XXIII, § 2388(d)(2)
Stat.104 Stat. 4053
Cites 11 · showing 8Cited by 13 across 4 sources