(a) Approval. When a debt settlement application is approved, the State Director will:
(1) Send the original approved Form FmHA or its successor agency under Public Law 103-354 1956-1 to the Finance Office.
(2) Notify debtors in writing of settlement approval, including the specific amount and terms of the offer that were accepted, for compromise and adjustment offers under Sec. 1956.124 and cancellations with application under Sec. 1956.130(a) of this subpart.
(3) Not be required to notify debtors of settlement approval when debts are cancelled without application under Sec. 1956.130(b) or charged off under Sec. 1956.136 of this subpart.
(b) Requesting additional information. When rejection appears to be necessary either because of lack of information or because the amount of a compromise or adjustment offer is inadequate, the State Director may request the servicing official to obtain the additional information or make an effort to obtain a more acceptable offer, as the circumstances justify. Notice of rejection of an offer will be withheld in such cases until sufficient time has elapsed to enable the debtor to present further information or a new offer.
(c) Rejection. When a debt settlement application is rejected, the State Director will:
(1) Insert the reasons for rejection on the Form FmHA or its successor agency under Public Law 103-354 1956-1.
(2) Retain the original Form FmHA or its successor agency under Public Law 103-354 1956-1 in the State Office and return case files and copies of Form FmHA or its successor agency under Public Law 103-354 1956-1 to the servicing official.
(3) Request the Finance Office to return any adjustment or compromise payment held by the Finance Office to the borrower, in care of the servicing official.
(4) Return any adjustment or compromise payment held by the State Office to the borrower, in care of the servicing official.
(5) Notify the debtor in writing of the reasons for the rejection for compromise and adjustment offers under Sec. 1956.124 and cancellations with application under Sec. 1956.130(a) of this subpart.
(d) Appeal rights. In accordance with Subpart B of Part 1900 of this chapter, the debtor will be given the right to appeal the rejection of any debt settlement offer made by the debtor under this subpart.