| (a) Subject to subsection (b) of this section, and
in accordance with the Agreement, the Office shall reimburse a PFI
for Losses claimed under the procedure described in §200.109
of this chapter (relating to Procedure for Making a Claim for Reimbursement
for Charging Off of an Enrolled Loan).
(b) The Office may reject a claim in part or in full
if:
(1) the Office, in its sole discretion, determines:
(A) the representations and warranties provided by
the PFI in the Agreement were misleading or false;
(B) the representations and warranties provided by
the PFI at the time of enrolling the Qualified Loan were misleading
or false;
(C) the PFI did not exercise due care and diligent
efforts to liquidate the loan collateral, realize the personal or
other financial guarantees, or otherwise recover on the loan;
(D) the documentation provided by the PFI does not
substantiate the claim;
(E) reimbursing the claim would violate state or federal
law or policy; or
(F) other good cause exists; or
(2) the PFI:
(A) fails to submit required information or documentation
within the time period specified by the Office in the Office's notice
of deficiency sent to the PFI;
(B) seeks reimbursement of more than the Guaranteed
Amount, in which case the Office shall reimburse no more than the
Guaranteed Amount.
(c) If the Fund does not contain amounts sufficient
to cover the total amount of a Loss claim, the Office shall pay an
amount up to the available balance of the Fund. This payment shall
fully satisfy the claim and the PFI has no further right to receive
any other amount with respect to such claim.
(d) The Office shall review Loss claims in the order
in which it receives them.
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