After the issuance of a Loan Note Guarantee, the lender shall not sell or transfer the entire loan without the prior written approval of the Agency. The Agency will not pay any loss or share in any costs (i.e., appraisal fees, environmental studies, or other costs associated with servicing or liquidating the loan) with a new lender unless a relationship is established through a substitution of lender in accordance with paragraph (a) of this section. This includes cases where the lender has failed and been taken over by a regulatory agency such as the Federal Deposit Insurance Corporation (FDIC) and the loan is subsequently sold to another lender.
(a) The Agency may approve the substitution of a new lender if:
(1) The proposed substitute lender:
(i) Is an eligible lender in accordance with 4279.29 of subpart A of part 4279 of this chapter;
(ii) Is able to service the loan in accordance with the original loan documents; and
(iii) Agrees in writing to acquire title to the unguaranteed portion of the loan held by the original lender and assumes all original loan requirements, including liabilities and servicing responsibilities.
(2) The substitution of the lender is requested in writing by the borrower, the proposed substitute lender, and the original lender if still in existence.
(b) Where the lender has failed and been taken over by FDIC and the guaranteed loan is liquidated by FDIC rather than being sold to another lender, the Agency will pay losses and share in costs as if FDIC were an approved substitute lender. Sec. Sec. 4287.136-4287.144 [Reserved]