Common use of Payment Application Clause in Contracts

Payment Application. The Lender must apply estimated loss payments first to the unsecured principal of the guaranteed por- tion of the debt and then to the unsecured interest of the guaranteed portion of the debt. In the event the bankruptcy court at- tempts to direct the payments to be applied in a different manner, the Lender will imme- diately notify the FmHA or its successor agency under Public Law 103–354 servicing office.