Section 103.39 - When will BIA refuse to pay all or part of a lender's claim?BIA may deny all or part of a lender's claim for loss when:
(a) The loan is not guaranteed or insured as indicated in § 103.18 ;(b) The guarantee or insurance coverage has become invalid under §§ 103.28 , 103.29 , or 103.36(e) ;(c) The lender has not met the standard of care indicated in § 103.30 ;(d) The lender presents a claim for a residual loss after attempting to liquidate loan collateral, and:(1) The lender has not made a reasonable effort to liquidate all security for the loan;(2) The lender has taken an unreasonable amount of time to complete its liquidation efforts, the probable consequence of which has been to reduce overall prospects of loss recovery; or(3) The lender's loss claim is inflated by unreasonable liquidation expenses or unjustifiable deductions from collateral liquidation proceeds applied to the loan balance; or(e) The lender has otherwise failed in any material respect to follow the requirements of this part, and BIA can reasonably attribute some or all of the lender's loss to that failure.