Loans made by FmHA or its successor agency under Public Law 103-354 are authorized and executed pursuant to Federal programs adopted by Congress to achieve national purposes of the U.S. Government.
(a) Instruments evidencing or securing a loan payable to or held by the Farmers Home Administration or its successor agency under Public Law 103-354, such as promissory notes, bonds, guaranty agreements, mortgages, deeds of trust, financing statements, security agreements, and other evidences of debt or security shall be construed and enforced in accordance with applicable Federal law.
(b) Instruments evidencing a guarantee, conditional commitment to guarantee, or a grant, such as contracts of guarantee, grant agreements or other evidences of an obligation to guarantee or make a grant, executed by the Farmers Home Administration or its successor agency under Public Law 103-354, shall be construed and enforced in accordance with applicable Federal law.
(c) In order to implement and facilitate these Federal loan programs, the application of local procedures, especially for recordation and notification purposes, may be utilized to the fullest extent feasible and practicable. However, the use of local procedures shall not be deemed or construed to be any waiver by FmHA or its successor agency under Public Law 103-354 of Federal immunity from any local control, penalty, or liability, or to subject FmHA or its successor agency under Public Law 103-354 to any State required acts or actions subsequent to the delivery by FmHA or its successor agency under Public Law 103-354 officials of the instrument to the appropriate local or State official.
(d) Any person, corporation, or organization that applies for and receives any benefit or assistance from FmHA or its successor agency under Public Law 103-354 that offers any assurance or security upon which FmHA or its successor agency under Public Law 103-354 relies for the granting of such benefit or assistance, shall not be entitled to claim or assert any local immunity, privilege, or exemption to defeat the obligation such party incurred in obtaining or assuring such Federal benefit or assistance.
(e) The liability of an auctioneer for conversion of personal property mortgaged to FmHA or its successor agency under Public Law 103-354 shall be determined and enforced in acceptance with the applicable Federal law. ``Auctioneer'' for the purposes of this subpart includes a commission merchant, market agency, factor or agent. In all cases in which there has been a disposition without authorization by FmHA or its successor agency under Public Law 103-354 of personal property mortgaged to that agency, any auctioneer involved in said disposition shall be liable to the Government for conversion--notwithstanding any State statute or decisional rule to the contrary. [44 FR 10979, Feb. 26, 1979]