§ 5-28-29-32 — Claims; subrogation

Indiana § 5-28-29-32

• Jurisdiction: Indiana
• Title 5: STATE AND LOCAL ADMINISTRATION
• Art. 28: INDIANA ECONOMIC DEVELOPMENT
• Ch. 29: Capital Access Program

Text

(a) If the payment of a claim has fully
covered the lender's loss on an enrolled loan or if the payment of a
claim when combined with any recovery from the borrower has fully
covered the lender's loss, the corporation, upon request, is subrogated
to the rights of the lender with respect to any collateral, security, or
other right of recovery in connection with the loan that has not been
realized by the lender. The lender thereafter shall assign to the
corporation any right, title, or interest to any collateral, security, or
other right of recovery in connection with the loan.
(b) If an assignment has been made under subsection (a), the
corporation is not required to undertake the obligations of the lender
under the lender's loan documents, except for obligations directly
related to the corporation's assigned rights of recovery in connection
with the loan. The lender shall fulfill any other obligations the lender
has under the loan documents in the same manner and to the same
degree as would be required if the assignment had not been made. The
lender shall provide the corporation with all reasonable assistance the
corporation requests in proceeding with respect to any collateral,
security, or other right of recovery, except that the lender does not need
to incur any out-of-pocket expenses.
(c) If the corporation desires to exercise the right of subrogation in
connection with an enrolled loan, and would be entitled to exercise that
right except that the lender's loss has not been fully covered, the
corporation, at the corporation's option, may pay from funds in the
reserve fund an amount sufficient to result in the lender's loss being
fully covered. A payment under this subsection may cover a principal
amount not covered under the program or not included in the lender's
claim. Upon making a payment under this subsection, the corporation
is subrogated to the rights of the lender in accordance with subsection
(a).
(d) Notwithstanding any other provision of this section, the
corporation may not exercise the right of subrogation unless the
corporation determines, in the corporation's discretion, that the lender
has not exercised reasonable care and diligence in collection activities
with respect to the loan, or that there is a reasonable basis for believing
that the lender will not exercise reasonable care and diligence in the
future with respect to those collection activities.

Legislative History

As added by P.L.162-2007, SEC.24.