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18.1 INTRODUCTION
The servicer is required to employ an experienced and knowledgeable staff, follow accepted industry servicing practices, and maintain a servicing platform that keeps records of all servicing actions. Servicers are fully responsible for complying with this Chapter regardless of any sub-servicing arrangements. Chapter 17 of this Handbook outlines the servicer’s responsibility to report to the Agency all loans through Electronic Status Reporting (ESR).
When a loan becomes past due, the servicer must take prompt and aggressive action to help the borrower bring the account current. The servicer should work closely with the borrower to resolve any delinquency as early as possible to prevent further collection activity. In cases where the borrower is unable or unwilling to repay the loan, the servicer must take prompt action to liquidate the loan, either by encouraging the borrower to liquidate voluntarily or through foreclosure.
Section 1 of this Chapter states the minimum actions the servicer is required to take to bring past-due accounts current. Section 2 of this Chapter describes various alternatives to foreclosure that the servicer will pursue, including traditional and streamline servicing actions. Section 3 of this Chapter describes the policy on custodial property requirements. Section 4 describes the requirements within the foreclosure process. Section 5 provides servicers with requirements when a property is in a county, parish or municipality that has been declared by the President of the United States to be a major disaster area where federal aid in the form of individual assistance is being made available. Servicer’s can locate all servicing related cost and fee schedules on the USDA Training and Resource Library in the Loan Servicing section under Loss Mitigation found at https://www.rd.usda.gov/resources/usda-linc-training-resource-library/loan- servicing.
SECTION 1: COLLECTION EFFORTS AND REQUIREMENTS [7 CFR 3555.301]