25 U.S.C. § 1487 — Loans eligible for insurance

Page 234 TITLE 25—INDIANS § 1487 § 1487. Loans eligible for insurance Any loans insured hereunder shall be re- stricted to those made by a financial institution subject to examination and supervision by an agency of the United States, a State, or the Dis- trict of Columbia, and to loans made by Indian organizations from their own funds to other tribes or organizations of Indians. (Pub. L. 93–262, title II, § 207, Apr. 12, 1974, 88 Stat. 80.) § 1488. Lenders authorized to make loans; de- crease or increase of liability under the guar- anty Loans guaranteed hereunder may be made by any lender satisfactory to the Secretary, except as provided in section 1486 of this title. The li- ability under the guaranty shall decrease or in- crease pro rata with any decrease or increase in the unpaid portion of the obligation. (Pub. L. 93–262, title II, § 208, Apr. 12, 1974, 88 Stat. 80.) § 1489. Loans made by certain financial institu- tions without regard to limitations and re- strictions of other Federal statutes with re- spect to certain particulars Any loan made by any national bank or Fed- eral savings and loan association, or by any bank, trust company, building and loan associa- tion, or insurance company authorized to do business in the District of Columbia, at least 20 per centum of which is guaranteed hereunder, may be made without regard to the limitations and restrictions of any other Federal statute with respect to (a) ratio of amount of loan to the value of the property; (b) maturity of loans; (c) requirement of mortgage or other security; (d) priority of lien; or (e) percentage of assets which may be invested in real estate loans. (Pub. L. 93–262, title II, § 209, Apr. 12, 1974, 88 Stat. 80.) § 1490. Maturity of loans The maturity of any loan guaranteed or in- sured hereunder shall not exceed thirty years. (Pub. L. 93–262, title II, § 210, Apr. 12, 1974, 88 Stat. 80.) § 1491. Defaults; written notification; pro rata payments; subrogation and assignment rights of Secretary; cancellation of uncollect- able portion of obligations; forbearance for benefit of borrower; interest or charges ces- sation date In the event of a default of a loan guaranteed hereunder, the holder of the guaranty certificate may immediately notify the Secretary in writ- ing of such default and the Secretary shall thereupon pay to such holder the pro rata por- tion of the amount guaranteed and shall be sub- rogated to the rights of the holder of the guar- anty and receive an assignment of the obliga- tion and security. The Secretary may cancel the uncollectable portion of any obligation, to which he has an assignment or a subrogated right under this section. Nothing in this section shall be construed to preclude any forbearance for the benefit of the borrower as may be agreed upon by the parties to the loan and approved by the Secretary. The Secretary may establish the date, not later than the date of judgment and decree of foreclosure or sale, upon which accrual of interest or charges shall cease. (Pub. L. 93–262, title II, § 211, Apr. 12, 1974, 88 Stat. 80; Pub. L. 98–449, § 6, Oct. 4, 1984, 98 Stat. 1725.) Editorial Notes AMENDMENTS 1984—Pub. L. 98–449 struck out proviso at end of sec- ond sentence which provided that proceedings pursuant to this section shall be effective only after following the procedure set out in section 386a of this title. § 1492. Claims for losses; submission to Secretary; reimbursement: single and aggregate loss limitations, conditions; assignment of note or judgment; collection or cancellation by Sec- retary; interest or charges cessation date When a lender suffers a loss on a loan insured hereunder, including accrued interest, a claim therefor shall be submitted to the Secretary. If the Secretary finds that the loss has been suf- fered, he shall reimburse the lender therefor: Provided, That the amount payable to the lender for a loss on any one loan shall not exceed 90 per centum of such loss: Provided further, That no reimbursement may be made for losses in excess of 15 per centum of the aggregate of insured loans made by the lender: Provided further, That before any reimbursement is made, all reason- able collection efforts shall have been exhausted by the lender, and the security for the loan shall have been liquidated to the extent feasible, and the proceeds applied on the debt. Upon reim- bursement, in whole or in part, to the lender, the note or judgment evidencing the debt shall be assigned to the United States, and the lender shall have no further claim against the borrower or the United States. The Secretary shall then take such further collection action as may be warranted, or may cancel the uncollectable por- tion of any debt assigned pursuant hereto. The Secretary may establish a date upon which ac- crual of interest or charges shall cease. (Pub. L. 93–262, title II, § 212, Apr. 12, 1974, 88 Stat. 80.) § 1493. Loan refusal; conditions; prohibition against acquisition of additional loans; pay- ment of claims on loans made in good faith Whenever the Secretary finds that any lender or holder of a guaranty certificate fails to main- tain adequate accounting records, or to dem- onstrate proper ability to service adequately loans guaranteed or insured, or to exercise prop- er credit judgment, or has willfully or neg- ligently engaged in practices otherwise detri- mental to the interests of a borrower or of the United States, he may refuse, either tempo- rarily or permanently, to guarantee or insure any further loans made by such lender or holder, and may bar such lender or holder from acquir- ing additional loans guaranteed or insured here- under: Provided, That the Secretary shall not