US CODE: Title 25,1485. Sale or assignment of loans and underlying security

TITLE 25 > CHAPTER 17 > SUBCHAPTER II > § 1485

§ 1485. Sale or assignment of loans and underlying security

(a) In general

Any loan guaranteed or insured under this subchapter, including the security given for such loan, may be sold or assigned by the lender to any person.

(b) Initial transfers

(1) In general

The lender of a loan guaranteed or insured under this subchapter may transfer to any individual or legal entity—

(A) all rights and obligations of the lender in the loan or in the unguaranteed or uninsured portion of the loan; and

(B) any security given for the loan.

(2) Additional requirements

With respect to a transfer described in paragraph (1)—

(A) the transfer shall be consistent with such regulations as the Secretary shall promulgate under subsection (i) of this section; and

(B) the lender shall give notice of the transfer to the Secretary.

(3) Responsibilities of transferee

On any transfer under paragraph (1), the transferee shall—

(A) be deemed to be the lender for the purpose of this subchapter;

(B) become the secured party of record; and

(i) performing the duties of the lender; and

(ii) servicing the loan in accordance with the terms of the guarantee by the Secretary of the loan.

(1) In general

Any transferee under subsection (b) of this section of a loan guaranteed or insured under this subchapter may transfer to any individual or legal entity—

(A) all rights and obligations of the transferee in the loan or in the unguaranteed or uninsured portion of the loan; and

(B) any security given for the loan.

(2) Additional requirements

With respect to a transfer described in paragraph (1)—

(A) the transfer shall be consistent with such regulations as the Secretary shall promulgate under subsection (i) of this section; and

(B) the transferor shall give notice of the transfer to the Secretary.

(3) Acknowledgment by Secretary

On receipt of a notice of a transfer under paragraph (2)(B), the Secretary shall issue to the transferee an acknowledgment by the Secretary of—

(A) the transfer; and

(B) the interest of the transferee in the guaranteed or insured portion of the loan.

(4) Responsibilities of lender

Notwithstanding any transfer permitted by this subsection, the lender shall—

(A) remain obligated on the guarantee agreement or insurance agreement between the lender and the Secretary;

(B) continue to be responsible for servicing the loan in a manner consistent with that guarantee agreement or insurance agreement; and

(d) Full faith and credit

(1) In general

The full faith and credit of the United States is pledged to the payment of all loan guarantees and loan insurance made under this subchapter after December 13, 2002.

(2) Validity

(A) In general

Except as provided in subparagraph (B), the validity of a guarantee or insurance of a loan under this subchapter shall be incontestable if the obligations of the guarantee or insurance held by a transferee have been acknowledged under subsection (c)(3) of this section.

(B) Exception for fraud or misrepresentation

Subparagraph (A) shall not apply in a case in which a transferee has actual knowledge of fraud or misrepresentation, or participates in or condones fraud or misrepresentation, in connection with a loan.

(e) Damages

Notwithstanding section 3302 of title 31, the Secretary may recover from a lender of a loan under this subchapter any damages suffered by the Secretary as a result of a material breach of the obligations of the lender with respect to a guarantee or insurance by the Secretary of the loan.

(f) Fees

The Secretary may collect a fee for any loan or guaranteed or insured portion of a loan that is transferred in accordance with this section.

(g) Central registration of loans

On promulgation of final regulations under subsection (i) of this section, the Secretary shall—

(1) provide for a central registration of all guaranteed or insured loans transferred under this section; and

(2) enter into 1 or more contracts with a fiscal transfer agent—

(A) to act as the designee of the Secretary under this section; and

(B) to carry out on behalf of the Secretary the central registration and fiscal transfer agent functions, and issuance of acknowledgments, under this section.

(h) Pooling of loans

(1) In general

Nothing in this subchapter prohibits the pooling of whole loans or interests in loans transferred under this section.

(2) Regulations

In promulgating regulations under subsection (i) of this section, the Secretary may include such regulations to effect orderly and efficient pooling procedures as the Secretary determines to be necessary.

(i) Regulations

Not later than 180 days after December 13, 2002, the Secretary shall develop such procedures and promulgate such regulations as are necessary to facilitate, administer, and promote transfers of loans and guaranteed and insured portions of loans under this section.

Notes
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Parallel authorities (CFR)

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