- 4 - situation and to consider payment alternatives. Between 1991 and 1996, petitioners explored with Mr. Guenther two alternatives to foreclosure of the FmHA mortgages. The first of these options involved a debt restructuring, and the second entailed a buyout of the mortgages by petitioners at net recovery value. Net recovery value was calculated as the amount that would be realized from liquidation of the mortgaged collateral, reduced by prior liens and certain costs. In April and May of 1996, FmHA advised petitioners that they did not qualify for debt restructuring, that FmHA intended to foreclose on its mortgages, and that petitioners could avoid foreclosure by buying out the FmHA loans at net recovery value. A Debt and Loan Restructuring System Analysis Report, dated April 18, 1996, contained the following language: “You may buy out your FmHA loans for the Net Recovery Value of $92,057.00. * * * If you pay the Net Recovery Value, any remaining balance on your FmHA accounts will be written off. The debt written off may be subject to recapture.” A Notice of Intent To Accelerate or To Continue Acceleration and Notice of Borrowers’ Rights, dated May 6, 1996, further detailed the terms of these arrangements and informed petitioners: If you are eligible and pay the recovery value, FmHA will write off the rest of your debt up to $300,000. If you are eligible to pay the recovery value, FmHA will require you to sign a recapture agreement. This agreement would allow FmHA to require you to pay the difference between the recovery value and the currentPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011