114 STAT. 2900 PUBLIC LAW 106-568—DEC. 27, 2000 of the guarantee certificate shall provide written notice of the default to the Secretary. "(ii) PAYMENT. — Upon providing the notice required under clause (i), the holder of the guarantee certificate shall be entitled to payment under the guarantee (subject to the provisions of this section) and may proceed to obtain payment in one of the following manners: " (I) FORECLOSURE. — "(aa) IN GENERAL. — The holder of the certificate may initiate foreclosure proceedings (after providing written notice of that action to the Secretary). "(bb) PAYMENT. —Upon a final order by the court authorizing foreclosure and submission to the Secretary of a claim for payment under the guarantee, the Secretary shall pay to the holder of the certificate the pro rata portion of the amount guaranteed (as determined pursuant to subsection (f)) plus reasonable fees and expenses as approved by the Secretary. "(cc) SUBROGATION. —The rights of the Secretary shall be subrogated to the rights of the holder of the guarantee. The holder shall assign the obligation and security to the Secretary. "(II) No FORECLOSURE. — "(aa) IN GENERAL. — Without seeking foreclosure (or in any case in which a foreclosure proceeding initiated under clause (i) continues for a period in excess of 1 year), the holder of the guarantee may submit to the Secretary a request to assign the obligation and security interest to the Secretary in return for payment of the claim under the guarantee. The Secretary may accept assignment of the loan if the Secretary determines that the assignment is in the best interest of the United States, "(bb) PAYMENT.— Upon assignment, the Secretary shall pay to the holder of the guarantee the pro rata portion of the amount guaranteed (as determined under subsection (f)). "(cc) SUBROGATION. — The rights of the Secretary shall be subrogated to the rights of the holder of the guarantee. The holder shall assign the obligation and security to the Secretary. "(B) REQUIREMENTS. —Before any payment under a guarantee is made under subparagraph (A), the holder of the guarantee shall exhaust all reasonable possibilities of collection. Upon payment, in whole or in part, to the holder, the note or judgment evidencing the debt shall be assigned to the United States and the holder shall have no further claim against the bprrower or the United States. The Secretary shall then take such action to collect as the Secretary determines to be appropriate.
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