USDA: Final Rule Publication
May 23, 2016
A final rule amending the Section 502 guaranteed loan regulation (7 CFR 3555) was published today and will take effect on June 17, 2016. The Agency made the changes to the sections noted below to promote process efficiencies that can translate into cost-savings for our program servicers and taxpayers:
- 3555.306 Liquidation: The Agency authorizes the servicer to obtain directly from an appraiser the liquidation value appraisal required after the expiration of the real estate owned (REO) marketing period. Prior to this change the Agency ordered the appraisal. This improvement in the REO and claims process is expected to reduce the timeframe in which the Agency pays a loss claim by up to 44 days.
- 3555.353 Loss Covered by the Guarantee: The Agency has modified this section to include the servicer’s cost of obtaining the liquidation value appraisal as an eligible cost for reimbursement when calculating a loss payment.
- 3555.353 Net Recovery Value: The Agency has updated this section to remove the reference to the requirement that the Agency obtain the liquidation value appraisal.
Additional guidance will be provided with Handbook HB-1-3555 updates which will be published on June 17, 2016.
Questions regarding this announcement may be directed to the National Office Division at (202) 720-1452.
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