§ 1980.122 - Substitution of lenders.

With prior written approval of the FmHA or its successor agency under Public Law 103-354 State Director, a new eligible lender may be substituted for the original provided the new lender agrees in writing to assume all servicing and other responsibilities of the original lender and acquires the unguaranteed portion of the loan. Such substitution may be made without the holder's consent but not without notice to holder(s) by the substituted lender. The new lender will execute Form FmHA or its successor agency under Public Law 103-354 1980-38 at the same time of the substitution. After approval of the lender, Form FmHA or its successor agency under Public Law 103-354 1980-42, “Notice of Substitution of Lender,” will be completed by the FmHA or its successor agency under Public Law 103-354 servicing representative and mailed to the Finance Office. Form FmHA or its successor agency under Public Law 103-354 1980-24, must be completed by the original lender to claim any buydown/subsidy due the lender from the date of the last subsidy period through the date of the substitution of lenders. Once the substitution is consummated, FmHA or its successor agency under Public Law 103-354 cannot process any request for buydown/subsidy from the original lender.