(a) Demands by Obligees.— Except as provided in subsection (c), if an obligor has continued in default for 30 days in the payment of principal or interest on an obligation guaranteed under this chapter, the obligee or the obligees agent may demand that the Secretary pay the unpaid principal amount of the obligation and the unpaid interest on the obligation to the date of payment. The demand must be made within the earlier of
(1) a period that may be specified in the guarantee or a related agreement; or
(2) 90 days from the date of the default.
(b) Payments by Secretary.—
(1) In general.— If a demand is made under subsection (a), the Secretary shall pay to the obligee or the obligees agent the unpaid principal amount of the obligation and the unpaid interest on the obligation to the date of payment. Payment shall be made within the earlier of
(A) a period that may be specified in the guarantee or a related agreement; or
(B) 30 days from the date of the demand.
(2) If no existing default.—
The Secretary is not required to make payment under this subsection if, within the appropriate period under paragraph (1), the Secretary finds that the obligor was not in default or that the default was remedied before the demand.
(c) Assumption of Rights and Obligations Before Demand.—
An obligee or the obligees agent may not demand payment under this section if the Secretary, before the demand and on terms that may be provided in the obligation or a related agreement, has assumed the obligors rights and duties under the obligation and any related agreement and made any payment in default. However, the guarantee of the obligation remains in effect after the Secretarys assumption.
