PART 300-GENERAL

§ 300.4 Administration of loans, grants and farm debt adjustment activities for needy persons, under the rural rehabilitation program of the Farm Security Administration.

(a)

(1) * Provided further, That no loan shall be made without the Secretary's approval to any cooperative association or agency which will result in a total indebtedness of such association or agency to the Farm Security Administration exceeding the amount of $25,000. [As added by Sec. Memo. 796, amended, Nov. 5, 1941; 6 F.R. 5687]

NOTE: Subparagraph (1) of paragraph (a) of § 300.4 was amended by the addition at the end thereof of the language set forth above, by Sec. Memo. 796, amended, Nov. 5, 1941; 6 F.R. 5687.

§ 300.6 Administration of the defense housing program. (a) The Farm Security Administration is authorized and directed to administer the program undertaken by the Department of Agriculture pursuant to the allocation of funds made by the President under the Urgent Deficiency Appropriation Act, 1941, approved March 1, 1941, (55 Stat. 14) under the heading "Emergency Funds for the President," or under other law, for the provision of temporary shelter in localities where by reason of national defense activities a shortage of housing exists, as determined by the President, and where it is not practicable under existing law or through private enterprise to meet the immediate need for emergency housing.

(b) The Administrator of the Farm Security Administration, and, in his absence, the Acting Administrator, are hereby authorized to exercise and per

form, in connection with the defense housing program undertaken by the Department of Agriculture, supra, the powers and functions which they are authorized to exercise and perform in connection with the resettlement program of the Farm Security Administration, so far as consistent with such defense housing program: Provided, however, That in the procurement of materials, supplies, articles, equipment, and machinery for use in connection with such defense housing program, the central procurement facilities of the Department of Agriculture shall be utilized, as provided in the regulations of the Department of Agriculture and Farm Security Administration instructions as of this date.

(c) The Administrator of the Farm Security Administration (or, in his absence, the Acting Administrator) is authorized to correspond directly with the Coordinator of Defense Housing in connection with this program: Provided, however, That, when such correspondence deals with the allocation of or accounting for funds, it shall be signed, or approved in advance, by the Director of Finance, or his authorized representative, and copies of such correspondence shall be furnished to the Office of Budget and Finance. (55 Stat. 14) [Sec. Memo. 901, Apr. 30, 1941; 6 F.R. 2225, as amended by Sec. Memo. 901, Supp. 1, Aug. 25, 1941; 6 F.R. 4351]

NOTE: Paragraph (a) of § 300.6 was amended by inserting the phrase "or under other law," immediately after " Emergency Funds for the President,' " and paragraph (c) was added, by Sec. Memo. 901, Supp. 1, Aug. 25, 1941; 6 FR. 4351.

§ 300.7 Authority to designate counties in which loans for the purchase of farms pursuant to the provisions of Title I of the Bankhead-Jones Farm

Tenant Act may be made. The Administrator of the Farm Security Administration is hereby given the authorization to determine within each State the particular counties in which loans are to be made during each fiscal year with the advice of the State farm security ad

visory committee, which committee shall take into account data on farm population and prevalence of tenancy. The names of counties so determined shall be published in the FEDERAL REGISTER. (50 Stat. 522; 7 U.S.C. 1000-1029) 259, Sept. 26, 1941; 6 F.R. 4913]

PART 373-STANDARD METHODS § 373.1 Standard rural rehabilitation loans; criteria and county office routine.

(g) Notes and other security.

(5) Certificates of priority (that is, abstracts of the liens filed or recorded against the property to be mortgaged) will be required in all cases where loan funds are being advanced and a new or renewal mortgage is taken, and may be required at the discretion of the regional director in other cases where new securing documents are taken. Costs therefor, if any, will be paid by or charged to the account of the borrower whenever a mortgage on new security or a renewal mortgage is taken, except that where the new or renewal mortgage is not given to secure a new loan or advance and the borrower's Loan Agreement was executed on a copy of Form FSA-RR 15 printed previous to the revision of the revision of the Form dated March 15, 1940, the costs for such certificates may not be charged to the borrower. The regional director will issue detailed instructions as to the circumstances under which certificates of priority will be required and how they will be obtained.

(i) Certificates of priority will be prepared on Form FSA-LE 87 or Form FSARR 87A, "Report of Lien Search" (depending upon the recommendation of the regional attorney as to which of the two forms should be used), in an original and one copy covering all liens other than liens on real estate. The original will be retained by the RR supervisor and the copy will be forwarded to the regional office.

(ii) Certificates of priority should in all cases be executed by competent persons. It is preferable wherever possible,

[A.O.

that they be prepared by competent FSA employees at no cost to the borrower. They may be obtained, however, through regular commercial channels if it is impracticable for FSA employees to perform such services and the amounts involved are not unreasonable. The maximum charges which may be considered reasonable for such services will be determined by the regional director for each state or area.

(6) In areas where local law gives the landlord a prior lien on crops and it is impossible to obtain a subordination from him the best lien obtainable will be taken. In those instances in which an obligation secured by a lien prior to that of the FSA (i) is about to mature or has matured, and the holder of such a lien desires to extend or renew the obligation, or (ii) where the refinancing of said obligation can be obtained from another lending agency or individual (provided said refinancing is determined by the regional director to be necessary in the furtherance of the rehabilitation of the borrower; and, Provided further, That the principal amount of the obligation to be secured by the lien in favor of the refinancing agency or individual does not exceed the unpaid principal balance plus accrued interest or other proper charges due under the existing prior lien at the time the subordination provided for herein becomes effective), a subordination agreement may be executed by the regional director to preserve the priority of such lien or of the lien which will be substituted therefor if the obligation is refinanced, providing the relative position of the FSA lien is maintained, and the repayment of the FSA loan is not thereby jeopardized. It is the policy of the FSA not to subordinate FSA liens, to either Federal or non-Federal agencies or individuals. In particular, except as herein provided, it is contrary to FSA

policy to subordinate FSA liens in order to permit borrowers to obtain credit from outside sources. As a general rule, it is considered that the rehabilitation of the borrower can best be achieved by providing all his credit needs from FSA funds during the period of his rehabilitation. Exceptions to the foregoing policy may be granted only upon written authority of the Director of the RR Division. After such authority has been given, the regional director may prepare and execute the subordination agreement.

(h) Executing, recording and filing of securing documents.

(3) Statutory fees for filling or recording mortgages or other legal instruments (including renewal mortgages or statements, or Form FSA-LE 126, "Affidavit of Extension and Renewal") incidental to loan transactions will in all cases be paid by or charged to the account of the borrower.

(4) RR supervisors will be expected to collect all necessary fees from the borrower in payment for recording, filing, or other similar action, at the time of delivery of the loan check or at the time of execution of new or renewal security. In each instance in which cash is accepted by the collecting official or other FSA personnel to be used to pay the filing fees or cost of recordation of security instruments, Form FSA-385, "Acknowledgement of Payment of Filing or Recording Fees", will be executed in duplicate. (Books of serially numbered "Acknowledgement" Forms will be issued to collecting officials from the regional office upon their request.) The original will be given to the borrower and the copy will be retained in the book. It is important that the collecting official or other personnel who accept custody of such fees make it clear to the borrower that the amount so accepted is not received by the Government as a credit on the borrower's loan indebtedness, but is accepted only for the purpose of paying the recordation or filing fees in behalf of the borrower. Collecting officials will obtain written receipt for disbursement of the fees collected either in the blank space at the bottom of the retained copy of the "Acknowledgement" Form, or on a separate receipt form issued by the county clerk or other official performing the

service for which the fee was collected. If a separate receipt is obtained, it should be securely fastened to the book of copies of the "Acknowledgement" to be retained permanently in the county office. If the borrower is without financial resources, and the necessary fees cannot be collected from him in advance, the RR supervisor may pay such fees by means of Standard Form No. 1034, "Public Voucher for Purchases and Services Other than Personal". In cases where local recording officials or others will not or cannot accept Standard Form No. 1034 in payment of such fees, the RR supervisor, if specifically authorized in his "Letter of Authorization", may pay such fees in cash and obtain reimbursement by means of a separate Standard Form No. 1012, "Voucher for Per Diem and/or Reimbursement of Expenses Incident to Official Travel". Where payment of recording, filing, or other fees chargeable to the borrower is made by means of Standard Form No. 1034, or where the fee is paid in cash and reimbursement is sought through Standard Form No. 1012, the Voucher, in either case, must contain instructions that the amount of such fee be charged to the account of the borrower for whom the fee has been paid. Such claims for reimbursement must not be included on the same Voucher as claims for mileage and per diem reimbursements, and will be submitted in an original and three copies. Wherever possible, the RR supervisor must avoid paying recording and filing fees in cash and seeking reimbursement through Standard Form No. 1012 because of the additional cost incident to the transfer of such charges to the borrower's account when they are paid in this way. [As amended Sept. 10, 1937; 6 F.R. 4833]

§ 373.4 Community and cooperative service loans; criteria and county office routine.

(b) Objectives and limitations.

(11) Bonding employees of associations. Where loans have been made to master borrowers or joint borrowers to serve a group, or to a majority of the participants of a service or association (hereinafter to be referred to in this subparagraph as "association"), the re

gional director shall require to the extent he deems necessary the bonding of trustees, agents, operators, employees or officers (hereinafter referred to in this subparagraph as "trustees") of the association for the faithful performance of their obligations and proper use of funds. It is mandatory that trustees of a medical or sanitation association be bonded. The cost of the bond should be met by the association, except as provided below. It is the policy of the FSA to discourage designation of FSA employees as trustees of such associations. However, RR supervisors may, through the function of countersignature, exercise control over expenditures of funds deposited to the credit of the association in supervised bank accounts. In cases where it is not possible to designate a member of or participant in, the association, or another competent person acceptable to the members or participants as trustee, FSA employees may be so designated on a temporary basis until other qualified trustees may be selected. If FSA employees are so designated, they must, at their own expense, secure separate Bonds for the purpose even though they may be carrying FSA Bonds in favor of the United States of America. case may an FSA employee serve as trustee of an association where the cost of his bond in borne by the association. [As amended Feb. 1, 1941; 6 F.R. 1063]

In no

§ 376.1 Rural rehabilitation loans; collecting office procedure; security servicing.

(b) Release of real estate security. (1) Real estate security may be released in the following cases:

(i) Where the borrower wishes to sell real estate mortgaged to the Government and apply the proceeds (less such sale expenses as may be necessary) on the debt secured by such mortgage. Where only a part of the proceeds is to be applied on the debt, there must be adequate security remaining or substituted, and the application must be transmitted to Washington for the approval of the Director of the Rural Rehabilitation Division. [As amended Mar. 21, 1941; 6 F.R. 17661

§ 376.2 Collections of rural rehabilitation loans; regional office functions; responsibility of the regional office. (a) The regional director, the assistant regional director, RR, the chief of the regional Loan and Collection section, or any delegate of the regional director within the regional office is authorized, on behalf of the Government, to execute proofs of claim and other instruments required to be executed by the Government in order to establish the Government's claims or defenses in probate proceedings, proceedings under the Bankruptcy Act and other court proceedings affecting RR loans. Such authority will be exercised only after consultation with the regional attorney. (54 Stat. 611, and [As Sec. Memo. 867, June 28, 1940) added by FSA Instr. 760.2 Feb. 21, 1941; 6 F.R. 1461]