CFR > Title 7 - Agriculture > SUBTITLE B—Regulations of the Department of Agriculture > CHAPTER XLII—RURAL BUSINESS-COOPERATIVE SERVICE AND RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE (parts 4274 to 4290) > PART 4287—SERVICING > SUBPART B—Servicing Business and Industry Guaranteed Loans (§4287.101 to §4287.200) > 4287.145—Default by borrower.

4287.145—Default by borrower.

(a) The lender must notify the Agency when a borrower is 30 days past due on a payment or is otherwise in default of the Loan Agreement. Form FmHA 1980-44, “Guaranteed Loan Borrower Default Status,” will be used and the lender will continue to submit this form bimonthly until such time as the loan is no longer in default. If a monetary default exceeds 60 days, the lender will arrange a meeting with the Agency and the borrower to resolve the problem.
(b) In considering options, the prospects for providing a permanent cure without adversely affecting the risk to the Agency and the lender is the paramount objective.
(1) Curative actions include but are not limited to:
(i) Deferment of principal (subject to rights of any holder);
(ii) An additional unguaranteed loan by the lender to bring the account current;
(iii) Reamortization of or rescheduling the payments on the loan (subject to rights of any holder);
(iv) Transfer and assumption of the loan in accordance with § 4287.134 of this subpart;
(v) Reorganization;
(vi) Liquidation;
(vii) Subsequent loan guarantees; and
(viii) Changes in interest rates with the Agency's, the lender's, and holder's approval, provided that the interest rate is adjusted proportionately between the guaranteed and unguaranteed portion of the loan and the type of rate remains the same.
(2) In the event a deferment, rescheduling, reamortization, or moratorium is accomplished, it will be limited to the remaining life of the collateral or remaining limits as contained in § 4279.126 of subpart B of part 4279 of this chapter, whichever is less.