§ 41.5. Treatment of collateral.
(a) When a loan contract is in default and a licensee proceeds by due process of law to issue execution against a consumer, the consumer may be charged with attorney’s fees, court costs and the actual and reasonable expenses of repossessing, storing and selling the property.
(b) When a loan contract is in default and a licensee obtains possession of the security in a manner other than by writ of execution, the licensee shall immediately notify the consumer by registered or certified mail, directed to the last known address of the consumer, that the collateral will be sold at public or private sale and that the consumer may redeem his property upon payment of the contract in full at a licensed office of the licensee or, at the option of the licensee, may reinstate the contract upon payment of the past due payments and default charges, within 15 days of the date of mailing of the notice. The notice shall set forth the itemized amount necessary to redeem the collateral. Upon compliance with this subsection, the licensee may require the consumer to pay the actual costs incurred by the licensee in obtaining possession of the security. The Administrator reserves the right to determine the propriety of an item of cost charged to the consumer.
(c) When a consumer’s property is sold at public or private sale because of default, the licensee shall return to the consumer the amount realized from the sale in excess of the total of the balance due, including accrued default charges and the actual costs incurred. The Administrator reserves the right to fix a fair value of a property sold in determining the excess due to a consumer when the property is not sold in a commercially reasonable manner, and the Administrator reserves the right to determine the propriety of an item of cost charged to the consumer.
(d) Whenever a consumer’s property is sold or disposed of by public or private sale, a licensee shall, within 15 days of the date of sale, give notice to the consumer, by registered or certified mail directed to the last known address, of a deficiency claimed and a complete accounting of the costs of sale and of the proceeds of sale. This notice shall set forth the net balance remaining due. A licensee shall forfeit the right to a deficiency for failure to give the consumer the notices required in this section within the required time.
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