After consulting any applicable regional instructions, determine whether the loan meets the criteria in C. above. Document your determination. If you are unable to make a determination or have questions concerning State law, refer the question to the ARC, Programs. If necessary, the ARC, Programs will refer the question to regional counsel. SI 01110.600 B.3. and SI 01120.005.
Regional instructions confirm that oral loans are binding in the State where the brothers live.
Upon questioning, the CR learns that Mr. Tyson had told his brother he would repay him when he received the proceeds of an insurance settlement. Mr. Tyson stated that he thought he would receive payment in 9 months. The CR determines that the loan is bona fide. An oral loan agreement is legally enforceable under State law and statements from Mr. Tyson and his brother confirm that Mr. Tyson acknowledges his obligation to repay and intends to accomplish this by using anticipated income. Mr. Dottle has converted his ownership interest in the land into a contract.