Page:United States Statutes at Large Volume 101 Part 3.djvu/380

 101 STAT. 1678

PUBLIC LAW 100-233—JAN. 6, 1988

property securing a loan foreclosed on by the lender thereof, such provision of State law shall prevail.". SEC. 615. DEBT RESTRUCTURING AND LOAN SERVICING.

(a) IN GENERAL.—Subtitle D (7 U.S.C. 1981 et seq.) is amended by adding at the end thereof the following new section: 7 USC 2001.

"SEC. 353. DEBT RESTRUCTURING AND LOAN SERVICING.

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"(a) IN GENERAL.—The Secretary shall modify delinquent farmer program loans made or insured under this title, or purchased from the lender or the Federal Deposit Insurance Corporation under section 309B, to the maximum extent possible— "(1) to avoid losses to the Secretary on such loans, with priority consideration being placed on writing-down the loan principal and interest (subject to subsections (d) and (e)), and debt set-aside (subject to subsection (e)), whenever these procedures would facilitate keeping the borrower on the farm or ranch, or otherwise through the use of primary loan service programs as provided in this section; and "(2) to ensure that borrowers are able to continue farming or ranching operations. "(b) EuGiBiLTTY.—To be eligible to obtain assistance under subsection (a)— "(1) the delinquency must be due to circumstances beyond the control of the borrower, as defined in regulations issued by the Secretary; "(2) the borrower must have acted in good faith with the Secretary in connection with the loan as defined in regulations issued by the Secretary; "(3) the borrower must present a preliminary plan to the Secretary that contains reasonable assumptions that demonstrate that the borrower will be able to— "(A) meet the necessary family living and farm operating expenses; and (B) service all debts, including those of the loans restructured; and "(4) the loan, if restructured, must result in a net recovery to the Federal (Government, during the term of the loan as restructured, that would be more than or equal to the net recovery to the Federal Government from an involuntary liquidation or foreclosure on the property securing the loan. "(c) RESTRUCTURING DETERMINATIONS.— "(1) DETERMINATION OF NET RECOVERY.—In

determining the net recovery from the involuntary liquidation of a loan under this section, the Secretary shall calculate— "(A) the recovery value of the collateral securing the loan, in accordance with paragraph (2); and "(B) the value of the restructured loan, in accordance with paragraph (3). "(2) RECOVERY VALUE.—For the purpose of paragraph (1), the recovery value of the collateral securing the loan shall be based

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"(A) the amount of the current appraised value of the property securing the loan; less "(B) the estimated administrative, legal, and other expenses associated with the liquidation and disposition of the loan and collateral, including— • t, i ,; R^

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