38. (1) A lender must take all of the measures described in subsection 37(3) that are applicable before submitting a claim to the Minister for loss sustained as a result of a loan.
(2) Subject to subsection (3), a lender must submit a claim for loss within 36 months after the expiry of the period specified in the notice referred to in subsection 37(1) or, if the lender has given no notice of default, within 36 months after the day on which the last payment is received.
(3) The Minister is authorized to extend the 36-month period for submission of the claim referred to in subsection (2) if the lender requests the extension before the period expires.
(4) A claim for loss must be certified by the lender and be accompanied by
(a) documentation that substantiates
(i) the cost and proof of payment of the purchase or improvement that was financed by the loan in an amount equal to or greater than the principal outstanding on the loan, and
(ii) the amount disbursed by the lender under the loan agreement;
(b) a copy of the loan record; and
(c) the loan approval and administration file, if requested by the Minister.
(5) A claim for loss must include the lender’s acknowledgement that it has acted with due diligence in applying the procedures referred to in section 8 and has taken the measures described in subsection 37(3).
(6) A claim for loss must include all documents that evidence the security taken by the lender in respect of the loan and all guarantees and suretyships taken by the lender in respect of the loan.
(7) A loss sustained by a lender in respect of a loan must be calculated by determining the aggregate of the following amounts and deducting from that aggregate amount the proceeds realized from the taking of any measures described in subsection 37(3) and any overcharges referred to in paragraph 27(2)(b) that have not been reimbursed to the borrower:
(a) the amount of principal outstanding on the loan;
(b) the amount of interest due and not paid pursuant to the loan agreement, calculated in accordance with subsection (8);
(c) uncollected taxed costs for, or incidental to, any legal proceedings in respect of the loan; and
(d) legal fees and disbursements, other than the costs referred to in paragraph (c), and other costs incurred by the lender for services rendered to it by persons other than its employees, for the purpose of collecting, or attempting to collect, the loan from the borrower or the guarantor or surety.
(8) The amount of interest referred to in paragraph (7)(b) is calculated as follows:
(a) in respect of the period beginning on the day after the last day on which interest is current and ending on the day of the first scheduled payment date after that day, at the rate of interest in effect under the loan agreement on the last day on which interest is current,
(b) in respect of the 12-month period immediately following the period referred to in paragraph (a), at the rate of interest in effect under the loan agreement on the first day of the 12-month period,
(c) in respect of the 12-month period immediately following the period referred to in paragraph (b), at a rate of interest equal to one half of the rate of interest referred to in that paragraph, and
(d) in respect of the 12-month period immediately following the period referred to in paragraph (c), at a rate of interest of 0%.
- SOR/2009-102, s. 22;
- SOR/2014-7, s. 24.
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