PROCEDURES ON DEFAULT.

SEC. 907. PROCEDURES ON DEFAULT. (a) In General.—Paragraph (7) of section 3732(c) is amended— (1) in the matter preceding subparagraph (A), by striking out “that was the minimum amount for which, under applicable 108 STAT. 4678State law, the property was permitted to be sold at the liquidation sale”; (2) in subparagraph (A)— (A) by striking out “the Secretary may accept conveyance of the property to the United States for a price not exceeding” and inserting in lieu thereof “(i) the amount was the minimum amount for which, under applicable State law, the property was permitted to be sold at the liquidation sale, the holder shall have the option to convey the property to the United States in return for payment by the Secretary of an amount equal to”; and (B) by striking out “and” after “loan;” and inserting in lieu thereof “or”; (C) by adding at the end the following: “(ii) there was no minimum amount for which the property had to be sold at the liquidation sale under applicable State law, the holder shall have the option to convey the property to the United States in return for payment by the Secretary of an amount equal to the lesser of such net value or total indebtedness; ana”; and (3) in subparagraph (B), by striking out “paragraph (6)(B)” and inserting in lieu thereof “paragraph (6)”. (b) Conforming Amendment.—Paragraph (6) of such section is amended— (1) by striking out “either”; (2) by striking out “sale or acquires” and all that follows through “(B) the” and inserting in lieu thereof “sale, the”; and (3) by redesignating clauses (i) and (ii) as clauses (A) and (B), respectively.