Section 7266 - Loan Defaults and Terminations(a) The lender shall make every reasonable effort allowable under the law to recover all property, or the value thereof, for which a loan has been guaranteed under the loan guarantee programs and for which the borrower fails to meet the repayment schedule of the loan.(b) The liability of the Department for defaulted loans shall be limited to the lesser of either: (1) The amount of the loan guarantee.(2) The outstanding balance of the loan plus the costs incurred by the lender in recovering and selling the property. Any amount recovered shall be deducted when calculating the outstanding balance.(c) The Department shall terminate a loan guarantee agreement when either of the following occur: (1) The loan has been repaid.(2) The lender fails to meet the conditions of the loan guarantee agreement.Cal. Code Regs. Tit. 9, § 7266
1. Renumbering and amendment of former section 7265 to section 7266 filed 4-5-94; operative 5-5-94 (Register 94, No. 14). Note: Authority cited: Sections 19006, 19016 and 19470, Welfare and Institutions Code. Reference: Sections 19460 through 19470 and 19853, Welfare and Institutions Code.
1. Renumbering and amendment of former section 7265 to section 7266 filed 4-5-94; operative 5-5-94 (Register 94, No. 14).