(1) A warranty department who has a standard system agreement need to get into towards that loan rehabilitation contract into the Secretary. The latest warranty company have to introduce a loan treatment program for everybody borrowers with an enthusiastic enforceable promissory mention for the purpose of rehabilitating defaulted loans, except for money for which a view could have been obtained, financing on which a standard allege try registered less than § , and you can fund on which the new debtor could have been found guilty of, or has actually pled nolo contendere or guilty to, a criminal activity associated with swindle inside the obtaining term IV, HEA system guidance, therefore, the loan is generally purchased, if the practicable, of the an eligible financial and you can taken from standard reputation.