1955.18—Actions required after acquisition of property.
The approval official may employ the services of local designated attorneys, of a case by case basis, to process all legal procedures necessary to clear the title of foreclosure properties. Such attorneys shall be compensated at not more than their usual and customary charges for such work. Contracting for such attorneys shall be accomplished pursuant to the Federal acquisition regulations and related procurement regulations and guidance.
(e) Credit to the borrower's account or foreclosure judgment account—
(1) For SFH accounts.
When FmHA or its successor agency under Public Law 103-354 acquired the property, the account will be satisfied unless:
(i)
In a voluntary conveyance case where the debt exceeds the market value of the property and the borrower is not released from liability, in which case the account credit will be the market value (less outstanding liens if any); or
(ii)
In a foreclosure where the bid is less than the account balance and a deficiency judgment will be sought for the difference, in which case the account credit will be the amount of FmHA or its successor agency under Public Law 103-354's bid.
(2) For all types of accounts other than SFH.
When FmHA or its successor agency under Public Law 103-354 acquired the property, the account credit will be as follows:
(A)
Where the market value of the property equals or exceeds the debt or where the borrower is released from liability for any difference, the account will be satisfied.
(B)
Where the debt exceeds the market value of the property and the borrower is not released from liability, the account credit will be the market value (less outstanding liens, if any).
(ii)
In a foreclosure, the account credit will be the amount of FmHA or its successor agency under Public Law 103-354's bid except when incremental bidding as provided for in § 1955.15(f)(7)(ii) of this subpart was used, in which case the account credit will be the maximum bid that was authorized by the State Director.
(3) For all types of accounts when FmHA or its successor agency under Public Law 103-354 did not acquire the property.
The sale proceeds will be handled in accordance with applicable State laws with the advice and assistance of OGC, including remittance of funds, application of the borrower's account credit, and disbursement of any funds in excess of the amount due FmHA or its successor agency under Public Law 103-354.
(4) In cases where FmHA or its successor agency under Public Law 103-354 acquired security property by means other than voluntary conveyance or foreclosure.
In these cases, such as conveyance by a bankruptcy trustee or by Court Order, the account credit will be as follows:
(i)
If the market value of the acquired property equals or exceeds the debt, the account will be satisfied.
(ii)
If the debt exceeds the market value of the acquired property, the account credit will be the market value.