Title 7

SECTION 1955.11

1955.11 Conveyance of property to Rural Development by trustee in bankruptcy.

§ 1955.11 Conveyance of property to Rural Development by trustee in bankruptcy.

(a) Authority. With the advice of OGC (and prior approval of the National Office for MFH, Community Programs, and insured B&I loans), the State Director within his/her authority is authorized to accept a conveyance of property to the Government by the Trustee in Bankruptcy, provided:

(1) The Bankruptcy Court has approved the conveyance;

(2) The conveyance will permit a substantial recovery on the Rural Development debt; and

(3) Rural Development will acquire title free of all liens and encumbrances except Rural Development iens.

(b) Fees and deed. (1) Rural Development may pay any necessary and proper fees approved by the bankruptcy court in connection with the conveyance. Before paying a fee to a trustee for a Trustee's Deed in excess of $300 for any loan type(s) other than Farmer Programs or $1,000 for Farmer Program loans, prior approval of the Administrator must be obtained. The State Director will process the necessary documents as outlined in § 1955.5(d) of this subpart for payment of fees as recoverable costs.

(2) Conveyance may be by Trustee's Deed instead of a warranty deed. If upon advice of OGC it is determined a deed from any other person or entity (including the borrower) is necessary to obtain clear title, a deed from such person or entity will be obtained.

(c) Acceptance. The conveyance will be accepted for an amount of credit to the borrower's Rural Development account(s) as set forth in § 1955.18(e)(4) of this subpart.

(d) Reporting. Acquisition of property under this section will be reported in accordance with § 1955.18(a) of this subpart.

[50 FR 23904, June 7, 1985, as amended at 53 FR 27827, July 25, 1988]

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