TeachMeFinance.com - explain Loan forfeiture
Loan forfeiture The term 'Loan forfeiture ' as it applies to the area of agriculture can be defined as ' Under commodity program rules, a producer or processor who pledges a stored commodity as collateral to the Commodity Credit Corporation to obtain a nonrecourse loan can settle the repayment obligation by forfeiting the commodity without any penalty. This happens, by design, if forfeiture is more profitable than selling the commodity in the marketplace. In this way the loan program serves a price support function'.
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