USDA HB-1-3555, Chapter 4 (Lender Responsibilities), § 4.6
USDA Handbook HB-1-3555 section 4.6. Full verbatim section text, substring-verified against snapshot 5e55d0368d5b464d.
Verbatim regulatory text
Verbatim provisions from USDA HB-1-3555, Chapter 4 (Lender Responsibilities), § 4.6 — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
USDA HB-1-3555, Chapter 4 (Lender Responsibilities), § 4.6
SELL LOANS ONLY TO APPROVED LENDERS [7 CFR 3555.54] A. Procedure A SFHGLP loan may be sold only to an Agency-approved lender, Fannie Mae, or Freddie Mac. The selling lender must report any guaranteed loan sale to the Agency by using Form RD 3555-11, Lender Record Change. The notification of transfer of the loan(s) should be emailed to the Rural Development Servicing Office at [email protected]. If the loan is sold to a party not approved to participate in the SFHGLP, the Loan Note Guarantee will be considered invalid. Should a lender be unable to complete the sale of a loan due to the loss of the original Loan Note Guarantee, the lender may request a copy from the Agency. The Agency will provide a copy marked “Reissued Loan Note Guarantee.” If the loan was closed in the Agency’s Lender Loan Closing System, the lender can access a duplicate copy within the system. B. Purchaser Risks and Responsibilities The purchaser of a SFHGLP loan acquires all the rights of a loan holder under the guarantee. This means that, should there ever be a loss, the purchaser is entitled to file a loss claim with the Agency. However, the purchaser must ensure that it properly fulfills all servicing obligations and must provide the Agency any requested assistance for its program monitoring. Negligent servicing actions from the lender may invalidate the Loan Note Guarantee. Negligent servicing is defined as servicing that is inconsistent with §3555.252 and includes the failure to perform those services which a reasonably prudent lender would perform in servicing its own loan portfolio of loans that are not guaranteed. Examples include, but are not limited to, violation of usury laws, civil rights laws, servicing requirements, failure to obtain the required security, and use of loan funds for unauthorized purposes. The Agency maintains the authority to enforce this policy regardless of the timeframe in which Rural Development is made aware of such action. Negligent servicing includes not only the concept of a failure to act, but also not acting in a timely manner or acting contrary to the way a reasonably prudent lender would act up to the time of loan maturity or until a final loss is paid.
Operationalizing USDA HB-1-3555, Chapter 4 (Lender Responsibilities), § 4.6
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