SALES OF VENDEE LOANS WITH OR WITHOUT RECOURSE.

SEC. 7001. SALES OF VENDEE LOANS WITH OR WITHOUT RECOURSE. Section 1816(d) of title 38, United States Code, is amended— (1) by redesignating paragraph (3) as subparagraph (C); (2) by inserting after paragraph (2) the following: “(3) (A) Before October 1, 1989, notes evidencing such loans may be sold with or without recourse as determined by the Administrator, with respect to specific proposed sales of such notes, to be in the best interest of the effective functioning of the loan guaranty program under this chapter, taking into consideration the comparative cost-101 STAT. 1330–279effectiveness of each type of sale. In comparing the cost-effectiveness of conducting a proposed sale of such notes with recourse or without recourse, the Administrator shall, based on available estimates regarding likely market conditions and other pertinent factors as of the time of the sale, determine and consider— “(i) the average amount by which the selling price for such notes sold with recourse would exceed the selling price for such notes if sold without recourse; and “(ii) the total cost of selling such notes with recourse, including— “(I) any estimated discount or premium; “(II) the projected cost, based on Veterans’ Administration experience with the sale of notes evidencing vendee loans with recourse and the quality of the loans evidenced by the notes to be sold, of repurchasing defaulted notes; “(III) the total servicing cost with respect to repurchased notes, including the costs of taxes and insurance, collecting monthly payments, servicing delinquent accounts, and terminating insoluble loans; “(IV) the costs of managing and disposing of properties acquired as the result of defaults on such notes; “(V) the loss or gain on resale of such properties; and “(VI) any other cost determined appropriate by the Administrator. “(B) Not later than 60 days after making any sale described in subparagraph (A) of this paragraph occurring before October 1, 1989, the Administrator shall submit to the Committees on Veterans’ Affairs of the Senate and the House of Representatives a report describing— “(i) the application of the provisions of such subparagraph, and each of the determinations required thereunder, in the case of such sale; “(ii) the results of the sale in comparison to the anticipated results; and “(iii) actions taken by the Administrator to facilitate the marketing of the notes involved.”; and (3) in subparagraph (C), as redesignated by clause (1) of this section— (A) by striking out “The Administrator may sell any note securing” and inserting in lieu thereof “Beginning on October 1, 1989, the Administrator may sell any note evidencing”; and (B) by redesignating clauses (A) and (B) as clauses (i) and (ii), respectively.