Lapas attēli
PDF
ePub

FORMS MANUAL INSERI

EXHIBIT 3

FORM FmHA 1924-14

[merged small][merged small][ocr errors][merged small][merged small][merged small]

All borrowers are expected to repay their loans according to planned repayment schedulea However, sometimes borrower will not be able to pay as scheduled. If this happens, you may inquire about the following servicing options:

[ocr errors][ocr errors]

Deferral:

An approved delay in making regularly scheduled payments. Such a delay may be gramed of FmMA finds that, der to circumstances beyond your control, you are temporarily unable to continue making the scheduled payments on such leans without unduly impairing your standard of living. A more detailed description is available at ang FHA Office

Limited Resource Program:

The Farmers Home Administration (FmHA; has authority to make limited resource form ownership and operating loans to qualified applicante

The program provides credit at an interest rate which is lower than FmMA's regular interest rate.

In addition to making loans at reduced interest rate, borrowers with existing form ownership and operating loam whe qualify as limited resource operators may have their loans rewritten at the lower 'sterent rate.

[blocks in formation]

v.

Rewriting loans made for operating purposes at the interest rate of the original note or current loan rate, whichever in the lesser.

Reamortization:

Rewriting loans made for real estate purposes at the interest rate of the original note or current loan rate, whichever on the leuce.

VL Subordination of the FmHA lien to the lien of another creditor.

VII. Restructuring the business and debt by orlling a portion of your aucta

[ocr errors]

If you would like additional information regarding any of the above items and how to apply you should contact the FMHA County Supervisor. You will be asked to attend a conference with the FmMA County Supervisor and you must furnish the information necessary for FMHA to make a decision on your request. The County Supervisor can advise you of the information needed for a decision.

PROCEDURE FOR PREPARATION

PREPARED BY

NUMBER OF COPIES

SIGNATURES REQUIRED

DISTRIBUTION OF COPIES

FmMA 1934-14 (Rev. 9/85!

Used by County Supervisor in the following cases: (1) When the borrower receives an initial or subsequent loan. In these cases, signature lines and date line should be typed on the last page and the form signed by the County Supervisor and the borrowers. (2) When the borrower is sent Form FmHA 1924-25, "Notice of Intent to Take Adverse Action." Form FmHA 1924-14 must be attached to Form FmHA 1924-25 when sent to the borrower. (3) When the borrower intends to sell, voluntarily convey or transfer security. (4) In November of each year the County Supervisor will send Form FmHA 1924-14 to all FO, SW, OL, EM, EE, RL, SL, EO and RHF borrowers. (5) Before the borrower signs an accelerated repayment agreement. In items (2), (3). (4), (5) and (6). the County Supervisor will date and initial the County Office file copy the day the form is sent.

: FmHA Instructions 1910-A, 1924-B, 1950-C, 1955-A, 1962-A, and 1965-A.

: County Supervisor.

: Original and one.

: Borrower(s) and County Supervisor's at initial and subsequent loan closings. No signatures required at other times.

: Signed original only retained in County Office file. Copy to borrower.

(2-3-86) SPECIAL PN

REVERSE OF FORM FmHA 192

FARMER PROGRAM BORROWER RESPONSIBILIĪTES

Please read carefull the following summary of major FaHA requirements Former Program insured borrower, should under. stand what the Farmers Home Adminustration FmHA express of them and how FmMA con be af better servise. This as ones ■ 'complete list of all responsibilities of on FIMA borrower: this highlights only comer of their troponsibilitira.

RESPONSIBILITIES CONSIST OF, BUT ARE NOT LIMITED TO, THE FOLLOWING:

PAYMENTS:

SECURITY:

USE OF LOAN FUNDS:

[blocks in formation]

Payments are dur on agreed upon in the moers. It is essential that poṛments be made on time. Extra payments are encouraged whenever possible.

The loon(s) is secured by a Financing Statement and Security Apeement and/or
• real estate mortgage or other security instruments (depending upon the type of
loan or security). These instruments give FmMA a valid lien on crops, chantela.
land. exc... so applicable.

FmMA loan funds will be used for the purpose!s) shown on the Form and Home.
Plan or other plan of operation acceptable to FmHA, and/or Development Plan in
cases of real estate improvements.

The Form FmHA 1962-1, "Agreement For The Use of Proceeds:Release of
Chattel Security," which you signed is the agreement between FmHA and you
which explains what sales you plan to make, approximately when and to whom
those sales will be made, and how the proceeds from those sales will be used.
You must inform FmHA if you want to make any sales which are not listed
on the form, if you want to sell to a purchaser not listed on the form, or if
you inske a sale and you receive an amount of proceeds different from the
amount listed on the form. It may be a violation of Federal criminal low to
make sales which have not been authorized on Form FmMA 1962-1 or to
fail to account for sales proceeds.

FmHA spreed to lend you money based on facts which you supplied shout your
operation. If any changes occur in your operation you should notify the FmHA
County Superviane at ance.

VIOLATION OF RESPONSIBILITIES: Violation along at the stone reopen.stiliver- mar cewalt in denial vt further FmMA sintoms and, muld cause your foMA Lint activated

[ocr errors]
[blocks in formation]

Plaintiffs' supplemental complaint was filed on January 24, 1986. It presented fourteen claims for relief challenging various aspects of the new regulations and forms promulgated by FmHA to be used in taking adverse action against its borrowers. These new regulations and forms were adopted by FmHA in November, 1985, in order to comply with the terms of this court's preliminary and permanent injunctions in this case. See Coleman v. Block, 580 F.Supp. 192 (D.N.D. 1983) and Coleman v. Block, 580 F. Supp. 194 (D.N.D. 1984). Defendants brought a motion for an order granting a summary judgment of dismissal of thirteen of the claims for relief, filed June 16, 1986. On May 7, 1987, this court entered an order dismissing eleven of the claims for relief, and granting in part and dismissing in part the remaining two. One of these two involved a procedural error and is not now at issue.

The other of the two, the tenth claim for relief, asserted that the forms used by FmHA to notify borrowers of impending adverse actions on their loans violated the due process clause of the Fifth Amendment to the United States Constitution in a number of ways. This court, in its order of May 7, 1987, found that two aspects of the notice procedure constituted denials of due process. Defendants were directed to take

three actions that would begin the process of curing the flaws in the notice procedure. Plaintiffs brought motions for a temporary restraining order and for an order

to show cause why a preliminary injunction should not be issued on May 12, 1987. By these motions plaintiffs sought sweeping retroactive relief, which would have effectively undone all the adverse actions taken against borrowers by FmHA using the defective forms. These motions were based on this court's finding in the May 7 order that the forms were in violation of the Constitution. On May 15, 1987, this court entered an order denying the motion for a temporary restraining order and requiring defendants to show cause why a preliminary injunction should not be entered. On that same day, plaintiffs brought an alternative motion to have the order of May 7 amended to accomplish the same retroactive relief sought by the previous two motions. The hearing on the order to show cause and on the motion to amend the order was held on May 21, 1987.

This court deliberately chose not to grant retroactive relief in its order of May 7, and instead entered an order aimed only at a prompt cure of the flaws in the notice process. This course of action was chosen after consideration of the mixed beneficial and detrimental impact retroactive relief would have on the plaintiff class, and, to a lesser extent, its disruption of FmHA's operations. Plaintiffs now seek to persuade this court that retroactive relief would lead to greater benefits and fewer harms to the class than this court had previously contemplated; and that this court's decision not to grant retroactive relief was therefore erroneous. The appropriate vehicle for this attempt is the motion to amend the verdict brought pursuant to Rule 59(e) of the Federal Rules of Civil Procedure. A preliminary injunction will not be issued.

This court now concludes that its decision not to grant any retroactive relief was an error. When the order of May 7 was drafted, this court did not give sufficient consideration to the fact that the FmHA borrowers who have received the faulty notice forms can be grouped into several categories defined by the stages of the adverse action

process. This failure resulted in some borrowers not receiving the appropriate remedy for FmHA's violation of their constitutional rights to due process. Retroactive relief will have a different impact on borrowers in the early stages of the process than it will on borrowers in the later stages of the process. The standards for application of retroactive relief are most properly applied in turn to each of these categories of borrowers, rather than to all the notified borrowers as an undifferentiated group.

The three part standard governing the application of retroactive relief was enunciated by the United States Supreme Court in Chevron Oil Co. v. Huson, 404 U.S. 97 (1971).

[ocr errors]

First, the decision to be applied nonretroactively
must establish a new principle of law, either by
overruling clear past precedent on which litigants
may have relied, see, e.g., Hanover Shoe v. United
Shoe Machinery Corp., supra, at 496, or by
deciding an issue of first impression whose
resolution was not clearly foreshadowed, see, e.g.,
Allen v. State Board of Elections, supra, at 572.
Second, it has been stressed that "we must
weigh the merits and demerits in each case by
looking to the prior history of the rule in question,
its purpose and effect, and whether retrospective
operation will further or retard its operation."
Linkletter v. Walker, supra, at 629. Finally, we
have weighed the inequity imposed by retroactive
application, for "[w]here a decision of this Court
could produce substantial inequitable results if
applied retroactively, there is ample basis in our
cases for avoiding the 'injustice or hardship' by a
holding on nonretroactivity." Cipriano v.City of
Houma, supra, at 706.

404 U.S. at 106-107.

As is often true in cases involving due process issues, there was no clear precedent rendering the result in this case obvious or predictable with certainty. Further, this court had previously ruled in its order denying a preliminary injunction in this case that plaintiffs' due process challenge to the forms was not likely to succeed on its merits. Coleman v. Block, 632 F. Supp. 1005 (D.N.D. 1986). This preliminary ruling was not, as defendants argue, binding precedent that was overruled by this court's order

« iepriekšējāTurpināt »