Current as of October 03, 2022 | Updated by FindLaw Staff
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(a) Collateral preservation. When a lender acquires title to the collateral and the final loss claim is not paid until final disposition, the lender must proceed as quickly as possible to develop a plan to fully protect the collateral from deterioration (weather, vandalism, etc.). Hazard insurance in an amount necessary to cover the market value of the collateral must be maintained.
(b) Collateral sale.
(1) Upon acquiring the collateral, the lender must prepare and submit without delay to the Agency a plan on the best method for the sale of the collateral, keeping in mind any prospective purchasers. The Agency must approve the plan in writing. If an existing approved liquidation plan addresses the disposition of acquired property, no further review is required unless modification of the plan is needed.
(2) Whenever the conversion of collateral to cash can reasonably be expected to result in a negative net recovery amount, the lender should consider abandonment of the collateral. If the lender seeks to abandon the collateral, the lender must obtain written Agency approval before abandoning the collateral.
(c) Re-title collateral. Any collateral accepted by the lender must not be titled in the Agency's name in whole or in part.
Cite this article: FindLaw.com - Code of Federal Regulations Title 7. Agriculture § 7.5001.523 Property acquired by the lender - last updated October 03, 2022 | https://codes.findlaw.com/cfr/title-7-agriculture/cfr-sect-7-5001-523/
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