12 C.F.R. § 614.4512 Definitions.
Title 12 - Banks and Banking
For the purposes of this subpart, the following definitions apply: (a) Application for restructuring means a written request— (1) From a borrower for the restructuring of a distressed loan in accordance with a preliminary restructuring plan proposed by the borrower as a part of the application; (2) Submitted on the appropriate forms prescribed by the qualified lender; and (3) Accompanied by sufficient financial information and repayment projections, where appropriate, as required by the qualified lender to support a sound credit decision. (b) Certified lender means a qualified lender that has been certified for financial assistance under section 6.4 of the Act. (c) Cost of foreclosure means: (1) The difference between the outstanding balance due as provided by the loan documents on a loan made by a qualified lender and the liquidation value of the loan, taking into consideration the borrower's repayment capacity and the liquidation value of the collateral used to secure the loan; (2) The estimated cost of maintaining a loan classified as a high-risk asset; (3) The estimated cost of administrative and legal actions necessary to foreclose a loan and dispose of property acquired as the result of the foreclosure, including attorneys' fees and court costs; (4) The estimated cost of changes in the value of collateral used to secure a loan during the period beginning on the date of the initiation of an action to foreclose or liquidate the loan and ending on the date of the disposition of the collateral; and (5) All other costs incurred as the result of the foreclosure or liquidation of a loan. (d) Distressed loan means a loan for which the borrower does not have the financial capacity, as determined by the lender, to pay according to its terms and which exhibits one or more of the following characteristics: (1) The borrower is demonstrating adverse financial and repayment trends; (2) The loan is delinquent or past due under the terms of the loan contract; (3) One or both of the factors listed in paragraphs (d) (1) and (2) of this section, together with inadequate collateralization, present a high probability of loss to the lender. (e) Foreclosure proceeding means: (1) A foreclosure or similar legal proceeding to enforce a lien on property, whether real or personal, that secures a noninterest-earning asset or distressed loan; or (2) The seizing of and realizing on non-real property collateral, other than collateral subject to a statutory lien arising under title I or II of the Act to effect collection of a nonaccrual or distressed loan. (f) Loan means a loan made to a farmer, rancher, or producer or harvester of aquatic products, for any agricultural or aquatic purpose and other credit needs of the borrower, including financing for basic processing and marketing directly related to the borrower's operations and those of other eligible farmers, ranchers, and producers or harvesters of aquatic products. (g) Qualified lender means: (1) A System institution that makes loans (as defined in paragraph (f) of this section) except a bank for cooperatives; and (2) Each bank, institution, corporation, company, union, and association described in section 1.7(b)(1)(B) of the Act, but only with respect to loans discounted or pledged under section 1.7(b)(1) of the Act. (h) Restructure or restructuring means rescheduling, reamortization, renewal, deferral of principal or interest, monetary concessions, and the taking of any other action to modify the terms of, or forbear on, a loan in any way that will make it probable that the operations of the borrower will become financially viable. [53 FR 35454, Sept. 14, 1988, as amended at 58 FR 48791, Sept. 20, 1993]
Title 12: Banks and Banking
PART 614—LOAN POLICIES AND OPERATIONS
Subpart N—Loan Servicing Requirements; State Agricultural Loan Mediation Programs; Right of First Refusal
§ 614.4512 Definitions.
