There are two main documents to consult regarding restructuring guaranteed loans. The first is the Code of Federal Regulations for Agriculture, also known as 7 CFR, which is included below as a reference. (Agriculture is Title 7.) The second is the Farm Loan Program (FLP) instructions that FSA uses to interpret the CFR. These instructions are provided below as a reference.
Farm Loan Program InstructionsPart 12 Servicing Delinquent Accounts Section 1 General Process for Restructuring Guaranteed Loans Monetary Default – Overall Loan Servicing Process (7 CFR 762.143) A Default and Servicing Delinquent Loans A borrower is in default when they are 30 days past due on a payment or in violation of provisions of the loan documents. When a default occurs, the lender is expected to work with the borrower so that the loan can be brought current and the borrower can continue the farming operation. Prompt followup on delinquent payments, early recognition of loan problems, and prudent use of restructuring tools are keys to resolving many delinquent loans. The lender has an assortment of restructuring tools that may be used to bring the loan current. These include:
- debt writedown
- IA, if eligible.
- Payment Due Date – Payment Missed
- 30 Calendar Days After Due Date – Borrower in Default
- Within 45 Calendar Days After Due Date – Meeting Between Borrower and Lender
- 60 Calendar Days After – IA Determination Earliest Date that Lender Can Initiate Foreclosure Action
- Within 120 Calendar Days After Due Date – Loan Restructuring Plan Implemented or Decision to Liquidate Made