7 CFR §763.22

1. (a)The Agency may deny a loss claim in whole or in part due to negligence that contributed to the loss claim. This could include, but is not limited to:
   1. (1)The escrow and servicing agent failing to seek payment of a missed installment from the buyer within the prescribed timeframe or otherwise does not enforce the terms of the land contract;
   2. (2)Losing the collateral to a third party, such as a taxing authority, prior lien holder, etc;
   3. (3)Not performing the duties and responsibilities required of the escrow or servicing agent;
   4. (4)The seller's failure to disclose environmental issues; or
   5. (5)Any other action in violation of the land contract or guarantee agreement that does not terminate the guarantee.
2. (b)[Reserved]