Reimbursement of a Loss Sustained on a Property Improvement Loan

B. C. Tyner, Authorized Certifying Officer for the Department of Housing and Urban Development, requested advice concerning a claim for payment of a loss sustained on a property improvement loan made to James and Myra Rodrigues. Since the maturity date of the note submitted for insurance was subsequently extended by the lender's written agreement beyond the maximum statutory term for such losses in effect at the time the loan was made, the lender's claim for reimbursement of its losses on the note must be denied. The bank's contention that it should be allowed to rescind the extension agreement must be rejected since the agreement was clear and unambiguous and there was no basis to justify the rescission.