source:
  type: regulation
  id: usda-7cfr-3555.306
  authority: 7 CFR Part 3555 — USDA Single Family Housing Guaranteed Loan Program § 3555.306 — Liquidation
  description: '7 CFR Part 3555 — USDA Single Family Housing Guaranteed Loan Program, §3555.306 Liquidation. Captured
    section-complete (all subsections verbatim).

    '
obligations:
- id: usda-7cfr-3555.306-a
  canonical_id: usda-7cfr-3555.306-a
  section: 7 CFR §3555.306(a)
  description: 'Liquidation — (a): (a) General. (1) When a lender determines that a borrower is unable or unwilling
    to meet loan obligations with servicing options under this subpart, the lender must accelerate the guaranteed
    loan and, if necessary, foreclose. (2) Prior to acceleration the lender must have advised the borrower, in wr…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - section-complete
  primary_source:
    tier: 1
    authority: 7 CFR Part 3555 — USDA Single Family Housing Guaranteed Loan Program § 3555.306
    source_class: ecfr-xml
    source_url: https://www.ecfr.gov/current/title-7/subtitle-B/chapter-XXXV/part-3555
    snapshot_id: 60bd6fb03befa14c
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:f1f884c828bb807baf369d30e1a9479648dfa62165e28511a0730ed785181a8b
    paragraph_quote: (a) General. (1) When a lender determines that a borrower is unable or unwilling to meet loan
      obligations with servicing options under this subpart, the lender must accelerate the guaranteed loan and,
      if necessary, foreclose. (2) Prior to acceleration the lender must have advised the borrower, in writing,
      of available foreclosure avoidance options and the borrower must have failed to request such options. (3)
      The lender must accelerate the guaranteed loan, with a demand letter, when the account is three scheduled
      payments past due unless there is a reasonable prospect of resolving the delinquency through another method.
      (4) The borrower is responsible for all expenses associated with liquidation and acquisition.
    drafter_attestation: Verbatim (whitespace-normalized) slice of §3555.306 subsection (a) from snapshot 60bd6fb03befa14c;
      substring-verified.
  judgment: false
- id: usda-7cfr-3555.306-b
  canonical_id: usda-7cfr-3555.306-b
  section: 7 CFR §3555.306(b)
  description: 'Liquidation — (b): (b) Foreclosure. (1) The lender must initiate foreclosure within 90 calendar
    days of the decision to liquidate unless Federal, State, or local law requires that foreclosure action be delayed.
    When there is a legal delay (such as bankruptcy), foreclosure must be initiated within 90 calendar days afte…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - section-complete
  primary_source:
    tier: 1
    authority: 7 CFR Part 3555 — USDA Single Family Housing Guaranteed Loan Program § 3555.306
    source_class: ecfr-xml
    source_url: https://www.ecfr.gov/current/title-7/subtitle-B/chapter-XXXV/part-3555
    snapshot_id: 60bd6fb03befa14c
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:f1f884c828bb807baf369d30e1a9479648dfa62165e28511a0730ed785181a8b
    paragraph_quote: (b) Foreclosure. (1) The lender must initiate foreclosure within 90 calendar days of the decision
      to liquidate unless Federal, State, or local law requires that foreclosure action be delayed. When there is
      a legal delay (such as bankruptcy), foreclosure must be initiated within 90 calendar days after it becomes
      possible to do so. Foreclosure initiation begins with the first public action required by law such as filing
      a complaint or petition, recording a notice of default, or publication of a notice of sale. (2) Lenders must
      exercise due diligence in completing the liquidation process to ensure the foreclosure is cost effective,
      expeditious, and completed in an efficient manner, as otherwise provided by the Agency. The lender must choose
      the foreclosure method representing the best interest of the Federal Government. (3) The lender's decision
      to bid at foreclosure and any bid amount will be based upon the property value, whether the property value
      is sufficient to cover the existing debt and incurred costs, and any potential to recover a deficiency. The
      lender will encourage third party bidding at a foreclosure sale when the total debt, including the cost of
      acquiring, managing and disposing of the property, if acquired, is greater than the gross proceeds expected
      from a foreclosure sale at market value.
    drafter_attestation: Verbatim (whitespace-normalized) slice of §3555.306 subsection (b) from snapshot 60bd6fb03befa14c;
      substring-verified.
  judgment: false
- id: usda-7cfr-3555.306-c
  canonical_id: usda-7cfr-3555.306-c
  section: 7 CFR §3555.306(c)
  description: 'Liquidation — (c): (c) Unless State law imposes other requirements, the lender may reinstate an
    accelerated account if the borrower pays, or makes acceptable arrangements to pay, all past-due amounts, any
    protective advances, and any foreclosure-related costs incurred by the lender.'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - section-complete
  primary_source:
    tier: 1
    authority: 7 CFR Part 3555 — USDA Single Family Housing Guaranteed Loan Program § 3555.306
    source_class: ecfr-xml
    source_url: https://www.ecfr.gov/current/title-7/subtitle-B/chapter-XXXV/part-3555
    snapshot_id: 60bd6fb03befa14c
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:f1f884c828bb807baf369d30e1a9479648dfa62165e28511a0730ed785181a8b
    paragraph_quote: (c) Unless State law imposes other requirements, the lender may reinstate an accelerated account
      if the borrower pays, or makes acceptable arrangements to pay, all past-due amounts, any protective advances,
      and any foreclosure-related costs incurred by the lender.
    drafter_attestation: Verbatim (whitespace-normalized) slice of §3555.306 subsection (c) from snapshot 60bd6fb03befa14c;
      substring-verified.
  judgment: false
- id: usda-7cfr-3555.306-d
  canonical_id: usda-7cfr-3555.306-d
  section: 7 CFR §3555.306(d)
  description: 'Liquidation — (d): (d) Bankruptcy. (1) When a borrower files a petition in bankruptcy, the lender
    must suspend collection and foreclosure actions in accordance with Title 11 of the United States Code. (2) The
    lender may accept conveyance of security property by the trustee in the bankruptcy, or the borrower, if the
    ba…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - section-complete
  primary_source:
    tier: 1
    authority: 7 CFR Part 3555 — USDA Single Family Housing Guaranteed Loan Program § 3555.306
    source_class: ecfr-xml
    source_url: https://www.ecfr.gov/current/title-7/subtitle-B/chapter-XXXV/part-3555
    snapshot_id: 60bd6fb03befa14c
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:f1f884c828bb807baf369d30e1a9479648dfa62165e28511a0730ed785181a8b
    paragraph_quote: (d) Bankruptcy. (1) When a borrower files a petition in bankruptcy, the lender must suspend
      collection and foreclosure actions in accordance with Title 11 of the United States Code. (2) The lender may
      accept conveyance of security property by the trustee in the bankruptcy, or the borrower, if the bankruptcy
      court has approved the transaction, and the lender will acquire title free of all liens and encumbrances except
      the lender's liens. (3) Whenever possible after the borrower has filed for protection under Chapter 7 of Title
      11 of the United States Code, a reaffirmation agreement will be signed by the borrower and approved by the
      bankruptcy court prior to discharge, if the lender and the borrower decide to continue with the loan. (4)
      The lender must protect the guaranteed loan debt and all collateral securing the loan in bankruptcy proceedings.
      (5) The lender can include principal and interest lost as a result of bankruptcy proceedings in any claim
      filed in accordance with &#xA7; 3555.354.
    drafter_attestation: Verbatim (whitespace-normalized) slice of §3555.306 subsection (d) from snapshot 60bd6fb03befa14c;
      substring-verified.
  judgment: false
- id: usda-7cfr-3555.306-e
  canonical_id: usda-7cfr-3555.306-e
  section: 7 CFR §3555.306(e)
  description: 'Liquidation — (e): (e) Maintain condition of security property. The lender must make reasonable
    and prudent efforts to ensure that the condition of the security property is maintained during any liquidation,
    acquisition, and sale of the property. These efforts include, but are not limited to, periodic inspections,
    per…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - section-complete
  primary_source:
    tier: 1
    authority: 7 CFR Part 3555 — USDA Single Family Housing Guaranteed Loan Program § 3555.306
    source_class: ecfr-xml
    source_url: https://www.ecfr.gov/current/title-7/subtitle-B/chapter-XXXV/part-3555
    snapshot_id: 60bd6fb03befa14c
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:f1f884c828bb807baf369d30e1a9479648dfa62165e28511a0730ed785181a8b
    paragraph_quote: (e) Maintain condition of security property. The lender must make reasonable and prudent efforts
      to ensure that the condition of the security property is maintained during any liquidation, acquisition, and
      sale of the property. These efforts include, but are not limited to, periodic inspections, performing necessary
      repairs, winterization, securing the property, removing debris, yard maintenance and ensuring the continuance
      of property insurance. The lender must identify, determine the cause, and document any environmental hazard
      affecting the value of the security property. The lender must retain a record of all efforts to maintain the
      condition of the security property.
    drafter_attestation: Verbatim (whitespace-normalized) slice of §3555.306 subsection (e) from snapshot 60bd6fb03befa14c;
      substring-verified.
  judgment: false
- id: usda-7cfr-3555.306-f
  canonical_id: usda-7cfr-3555.306-f
  section: 7 CFR §3555.306(f)
  description: 'Liquidation — (f): (f) Lender acquisition of title. If at liquidation, the title to the property
    is conveyed to the lender, the lender will submit a loss claim package, including a market value appraisal,
    within 60 days of the foreclosure sale date or the date the lender acquires title. If eviction action is required
    …'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - section-complete
  primary_source:
    tier: 1
    authority: 7 CFR Part 3555 — USDA Single Family Housing Guaranteed Loan Program § 3555.306
    source_class: ecfr-xml
    source_url: https://www.ecfr.gov/current/title-7/subtitle-B/chapter-XXXV/part-3555
    snapshot_id: 60bd6fb03befa14c
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:f1f884c828bb807baf369d30e1a9479648dfa62165e28511a0730ed785181a8b
    paragraph_quote: (f) Lender acquisition of title. If at liquidation, the title to the property is conveyed to
      the lender, the lender will submit a loss claim package, including a market value appraisal, within 60 days
      of the foreclosure sale date or the date the lender acquires title. If eviction action is required in order
      to obtain a market value appraisal, the lender must submit the loss claim package, including the market value
      appraisal, within 60 days of the date the occupants clear the premises. The lender must submit the loss claim
      request, including the market value appraisal, in accordance with subpart H.
    drafter_attestation: Verbatim (whitespace-normalized) slice of §3555.306 subsection (f) from snapshot 60bd6fb03befa14c;
      substring-verified.
  judgment: false
- id: usda-7cfr-3555.306-g
  canonical_id: usda-7cfr-3555.306-g
  section: 7 CFR §3555.306(g)
  description: 'Liquidation — (g): (g) Debt settlement reporting. The lender must report to the IRS and all national
    credit reporting repositories any debt settled through liquidation. [78 FR 73941, Dec. 9, 2013, as amended at
    81 FR 6430, Feb. 8, 2016; 81 FR 31164, May 18, 2016; 84 FR 70886, Dec. 26, 2019]'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - section-complete
  primary_source:
    tier: 1
    authority: 7 CFR Part 3555 — USDA Single Family Housing Guaranteed Loan Program § 3555.306
    source_class: ecfr-xml
    source_url: https://www.ecfr.gov/current/title-7/subtitle-B/chapter-XXXV/part-3555
    snapshot_id: 60bd6fb03befa14c
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:f1f884c828bb807baf369d30e1a9479648dfa62165e28511a0730ed785181a8b
    paragraph_quote: (g) Debt settlement reporting. The lender must report to the IRS and all national credit reporting
      repositories any debt settled through liquidation. [78 FR 73941, Dec. 9, 2013, as amended at 81 FR 6430, Feb.
      8, 2016; 81 FR 31164, May 18, 2016; 84 FR 70886, Dec. 26, 2019]
    drafter_attestation: Verbatim (whitespace-normalized) slice of §3555.306 subsection (g) from snapshot 60bd6fb03befa14c;
      substring-verified.
  judgment: false
