Loan ServicingLoan Servicing

By LSA’sBy LSA’s

LSA Loan ServicingLSA Loan Servicing

• Cash repayments at Cash repayments at 22-CN 22-CN parapara 51 51– Receive repayment request from producer or Receive repayment request from producer or

agentagent– Compute repayment amountCompute repayment amount– If applicable compute denied benefits for PE If applicable compute denied benefits for PE

and PCFand PCF– Accept repayment and deposit at CCBAccept repayment and deposit at CCB– Release EWR’sRelease EWR’s– Distribute repayment documentDistribute repayment document

Denied Benefit Because of Denied Benefit Because of PEPE• Each individual designates his share Each individual designates his share

of a ‘permitted entity’ of a ‘permitted entity’ • Any share of an entity which is not Any share of an entity which is not

designated may result in a PE factor designated may result in a PE factor of less than 1.0000of less than 1.0000

• PE factor is applied to LDP’s and loan PE factor is applied to LDP’s and loan market gainsmarket gains

• Monitor field 17Monitor field 17

Denied Benefit Because of PCFDenied Benefit Because of PCF

• PCF may be less then 1.000 when PCF may be less then 1.000 when producer:producer:– does not provide active personal does not provide active personal

labor or managementlabor or management– is actively engaged and eligible on a is actively engaged and eligible on a

portion of a farm because of portion of a farm because of landowner provisionlandowner provision

– is a cash rent tenant and ineligible for is a cash rent tenant and ineligible for payment for the cash rented landpayment for the cash rented land

• Monitor field 18Monitor field 18

Loan ServicingLoan Servicing

• Certificate Redemptions at Certificate Redemptions at 22-CN 22-CN parapara 52 52– Not subject to payment limitNot subject to payment limit– Not reported to IRS unless IRS directs FSA to do Not reported to IRS unless IRS directs FSA to do

otherwiseotherwise– Prepare CCC 694-2 for producer signaturePrepare CCC 694-2 for producer signature– Agents execute CCC-605 Part EAgents execute CCC-605 Part E– Accept repayment and deposit to CCBAccept repayment and deposit to CCB– Release receipts Release receipts – Distribute repayment documentDistribute repayment document

Loan Servicing (Cont’d)Loan Servicing (Cont’d)

• Maturity date notification letter in 22-Maturity date notification letter in 22-CN para 53ECN para 53E

• Charges due on forfeited loans in para Charges due on forfeited loans in para 5454– Statement of charges from COPSStatement of charges from COPS– Send producer notification and collectSend producer notification and collect– If not paid after 30 days, refer to county If not paid after 30 days, refer to county

officeoffice

• LSA document examplesLSA document examples

Offsets for CCC ClaimsOffsets for CCC Claims

• Offsets triggered by field 67 of CMA Offsets triggered by field 67 of CMA process recordprocess record

• Applicable to loans and LDP’sApplicable to loans and LDP’s

• Offsets have priority over assignmentsOffsets have priority over assignments

• If lien holders won’t sign waiver, If lien holders won’t sign waiver, producer is ineligibleproducer is ineligible

• Contact the admin county officeContact the admin county office

AssignmentsAssignments

• Applicable to LDP’s onlyApplicable to LDP’s only

• Triggered by field 68Triggered by field 68

• Locate the assignmentLocate the assignment

• Issue applicable amounts to assigneeIssue applicable amounts to assignee

• Notify admin county office Notify admin county office

ReportsReports

• Section 1614 per 1-CMA para. 555Section 1614 per 1-CMA para. 555– Next submission due Oct 15Next submission due Oct 15

• Federal Funding Accountability and Federal Funding Accountability and Transparency Act of 2006Transparency Act of 2006

Pop Quiz

Can a producer redeem an ELS loan with a certificate?

No

Can a producer assignloan proceeds?

No