PUBLIC LAWS-CH. 588-DEC. 28, 1945 Notice of default. Forbearance for benefit of veteran. Refinancing indebt- edness. " PROCEDURE ON DEFAUIr "SEC. 506. In the event of default in the payment of any loan guar- anteed under this title, the holder of the obligation shall notify the Administrator who shall thereupon pay to such holder the guaranty not in excess of the pro rata portion of the amount originally guar- anteed, and shall be subrogated to the rights of the holder of the obligation to the extent of the amount paid on the guaranty: Provided, That prior to suit or foreclosure the holder of the obligation shall notify the Administrator of the default, and within thirty days there- after the Administrator may, at his option, pay the holder of the obligation the unpaid balance of the obligation plus accrued interest and receive an assignment of the loan and security: Providedfurther, That (1) nothing herein shall be construed to preclude any forbear- ance for the benefit of the veteran as may be agreed upon by the parties to the loan and approved by the Administrator; and (2) the Administrator may establish the date, not later than the date of judgment and decree of foreclosure or sale, upon which accrual of interest or charges shall cease. "LOANS ON DELIJNQUENT INDEBTEDNESS "SEB. 507. Any loan made to a veteran, the proceeds of which are to be used to refinance any indebtedness of the veteran which is secured of record on property to be used or occupied by the veteran as a home or for farming purposes, or indebtedness incurred by him in the pur- suit of a gainful occupation which he is pursuing or which he proposes in good faith to pursue, or any delinquent taxes or assessments on such property or business, is automatically guaranteed if made pur- suant to the provisions of this title, including the following: "(1) Such loan became in default or the delinquency occurred not later than ten years after the termination of the war; "(2) Such refinancing will aid the veteran in his economic read- justment; and "(3) The amount of the guaranteed loan does not exceed the reasonable value of the property or business, as determined by proper appraisal made by an appraiser designated by the Administrator. "I NSURANCE OF LOANS "SEC. 508. (a) Any loans which might be guaranteed under the provisions of this title, when made or purchased by any financial insti- tution subject to examination and supervision by an agency of the United States or of any State or Territory, including the District of Columbia, may, in lieu of such guaranty, be insured by the Adminis- trator under an agreement whereby he will reimburse any such insti- tution for losses incurred on such loan up to 15 per centum of the aggregate of loans so made or purchased by it. "(b) Loans insured hereunder shall be made on such other terms, conditions, and restrictions as the Administrator may prescribe within the limitations set forth in this title. The Administrator may fix the maximum rate of interest payable on any class of non-real- estate loans insured hereunder at a figure not in excess of a 3 per centum discount rate or an equivalent straight interest rate on non- amortized loans. "(c) The Administrator shall pay the same amount on each loan insured hereunder as he would be required to pay under the sixth sentence of section 500 (c) hereof if the loan were guaranteed rather than insured. Insurance of loans in lieu of guarantee. Terms, etc. Amomnt of pymsent. Aetc, p. 62t. [59 STAT. 630
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