4. Subject to section 25 and unless an assistance program adopted under the Act respecting the Société de financement agricole (chapter S-11.0101) or the forest management funding program established under section 124.37 of the Forest Act (chapter F-4.1) provides otherwise, the Fonds guarantees to a lender the repayment of losses in principal and interest resulting from a farm loan or a forestry loan granted from 1 August 1978, and of expenses allowable by regulation that are incurred by the lender to protect his securities or to claim or obtain from the debtor in default the sums owing to him or that have become payable on the loan.
The Fonds may also repay out of its assets, to a lender or to the Société, the principal of and interest on unrecovered disbursements relating to or connected with judicial proceedings instituted by a borrower against the lender or the Société with respect to a farm loan or a forestry loan.
For the purposes of this Act, the losses in principal and interest contemplated in the first paragraph include
(a) the unpaid amount in principal of the loan in the absence of security for the latter, or the amount of the net loss in principal sustained by a lender following realization upon his movable and immovable securities; or
(b) the amount, computed in the manner provided by regulation, of the net loss in principal sustained by a lender following the disposition by him, by onerous title, of the immovable having secured a loan, the ownership of which was acquired by the lender by the exercise of a right to take in payment; and
(c) the uncollected interest accrued, to the date of authorization of payment of the loss by the Fonds, on any amount contemplated in subparagraph a or b and, if the borrower has so undertaken under the terms of the document evidencing the loan, on any unpaid amount or payment of interest and on any sum disbursed by the lender for the preservation, protection and recovery of his debt, at the rate stipulated in the said document and, as the case may be, adjustable in the manner provided for therein.
The Société may, with respect to a farm loan or a forestry loan granted by a lender other than the Société, refuse or cancel the right to the insurance contemplated in the first paragraph, when such lender fails to comply with this Act or the regulations thereunder or with the Act under which such loan is granted or the regulations respecting the said Act.
1978, c. 49, s. 4; 1988, c. 3, s. 2; 1991, c. 11, s. 1; 1992, c. 32, s. 36, s. 43; 1992, c. 57, s. 436; 1996, c. 14, s. 23.