Page:United States Statutes at Large Volume 103 Part 3.djvu/49

 PUBLIC LAW 101-239—DEC. 19, 1989 103 STAT. 2117 during the default reduction invgram and shall pay in full all remaining principal and intenrest on such loan or loans. ''(3) BENEFITS OF THE DEFAULT BEDUcnoN PBOGRAM.— For each borrower meeting the requirement of paragraph (2)— "(A) no penalties shall be chaiged on defaulted loans whkh are paid in fiil^ ''(B) the guaranty agency shall report to the appropriate credit bureau or biueaus that the loan has been paid in full; and additional assistance under this title shall be reestablished. "(4) SBCBETART'S SHASB OF BEPAYifENTS. —The Secretary's equitable share for purposes of section 428(c)(2)(D) of amounts paid by any borrower under paragraph (2) of this subsection shall be 81.5 percent of the principal amount outstanding on the loan at the time <^ repayment, multiplied by the reinsurance percentage in effect when the payment under the guaranty agreement was made with respect to such loan. '(b) OTHER REPAYMENT INCENTIVES. — 'XD SALE OF LOAN.— "(A) Upon securing consecutive payments for 12 months of amounts owed on a loan for which the Secretary has made a payment under paragraph (1) of section 428(c), the guaranty agency (pursuant to an agreement with the Sec- retary) or the Secretary shall, if practicable, sell the loan to an eligible lender. Sucn loan shall not be sold to an eligible lender who has been found by the guaranty agency or the Secretary to have substantially fiaued to exercise the due diligraice required of lenders under this part "(B) An agreement between the guaranty agency and the Contracts. Secretary for purposes of this paragraph shall provide— 'Xi) for the repayment by uie agency to the Secretary of 81.5 percent of the amount of the principal balance outstanding at the time of such sale, multiplied by the reinsurance percentage in effect when payment under the guaranty agreement was made with respect to the loan; and obligation to reimburse such agency for the amount expended by it in dischaige of its insurance obligation under its loan insurance program, and (ID of the obliga- tion to pay to the holder of such loan a spedal allow- ance pursuanttosection 438. "(Q A loan which does not meet the requir^nents of subparagraph (A) may also be eligible for sale under this paragraph upon a determination that the loan was in de- fault duetoclerical or data processing error and would not, in the absence of such error, be in a delinquent status. "(2) USE OF PROCEEDS OF SALES. — Amounts received by the Secretary pursuant to the sale of such loans by a guaranty ageiu7 under this paragraph shall be deductedfinmithe calcula- tions d the amount of reimbursement for which the agency is eligible under paragraph (l)(B)(ii) oi this section for the fiscal year in which the amount was received, notwithstanding the fact that the default occurred in a prior fiscal year. "(3) BORROWER ELIGranjTV. —Any borrower whose loan is sold under paragraph (1) shall not be precluded by section 484 from
 * \0 notwithstanding section 484, eligibility to receive
 * (u) for the reinstatement by the Secretary (1) of the

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