§53722. Actions by Secretary

(a) General Authority.-On default under an obligation or related agreement between the Secretary and the obligor, the Secretary, on terms that may be provided in the obligation or agreement, may-

(1) assume the obligor's rights and duties under the obligation or agreement, make any payment in default, and notify the obligee or the obligee's agent of the default and the Secretary's assumption; or

(2) notify the obligee or the obligee's agent of the default.

(b) Demands by Obligees.-

(1) Demand.-If the Secretary proceeds under subsection (a)(2), the obligee or the obligee's agent may demand that the Secretary pay the unpaid principal amount of the obligation and the unpaid interest on the obligation. The demand must be made within the earlier of-

(A) a period that may be specified in the guarantee or a related agreement; or

(B) 60 days from the date of the Secretary's notice.

(2) Payment.-If a demand is made under paragraph (1), the Secretary shall pay to the obligee or the obligee's agent the unpaid principal amount of the obligation and the unpaid interest on the obligation to the date of payment. Payment shall be made within the earlier of-

(A) a period that may be specified in the guarantee or a related agreement; or

(B) 30 days from the date of the demand.

(c) Continued Effect of Guarantee.-A guarantee of an obligation remains in effect after an assumption of the obligation by the Secretary.

(d) Additional Responses.-If there is a default on an obligation, the Secretary shall conduct operations under this chapter in a manner that-

(1) maximizes the net present value return from the sale or disposition of assets associated with the obligation, including prompt referral to the Attorney General for collection as appropriate;

(2) minimizes the amount of any loss realized in the resolution of the guarantee;

(3) ensures adequate competition and fair and consistent treatment of offerors; and

(4) requires appraisal of assets by an independent appraiser.

( Pub. L. 109–304, §8(c), Oct. 6, 2006, 120 Stat. 1618 ; Pub. L. 109–163, div. C, title XXXV, §3507(a)(1)(C), (F), Jan. 6, 2006, 119 Stat. 3555 .)

Amendments Not Shown in Text

Subsecs. (a) to (c) of this section were derived from sections 1273(e) (last sentence) and 1275(b) of the former Appendix to this title, which were amended by Pub. L. 109–163, div. C, title XXXV, §3507(a)(1)(C), (F), Jan. 6, 2006, 119 Stat. 3555 . For applicability of those amendments to this section, see section 18(a) of Pub. L. 109–304, set out as a Legislative Purpose and Construction note preceding section 101 of this title. Those provisions of the former Appendix to this title were amended by striking "Secretary" each place it appears and inserting "Secretary or Administrator".

In subsection (a), before paragraph (1), the words "an obligation or related agreement" are substituted for "a mortgage, loan agreement, or other security agreement" for consistency in the revised chapter.