1788.1 General and definitions. This part implements those provisions by setting forth the requirements to be met by all borrowers. Irregularity has the meaning found in Sec. Loan documents means the loan agreement, notes, and mortgage evidencing or used in conjunction with an RUS loan. Mortgage means the mortgage, deed of trust, security agreement, or other security document securing an RUS loan.
Mortgaged property means any property subject to the lien of a mortgage.
RUS means the Rural Utilities Service and includes the Rural Telephone Bank. 1788.2 General insurance requirements. Prudent Utility Practice shall mean any of the practices, methods, and acts which, in the exercise of reasonable judgment, in light of the facts, including but not limited to, the practices, methods, and acts engaged in or approved by a significant portion of the electric utility industry in the case of an electric borrower or of the telecommunications industry in the case of a telecommunications borrowers prior thereto, known at the time the decision was made, would have been expected to accomplish the desired result consistent with cost-effectiveness, reliability, safety, and expedition. It is recognized that Prudent Utility Practice is not intended to be limited to optimum practice, method, or act to the exclusion of all others, but rather is a spectrum of possible practices, methods, or act which could have been expected to accomplish the desired result at the lowest reasonable cost consistent with cost-effectiveness, reliability, safety, and expedition. Each policy or other contract for such insurance shall contain an agreement by the insurer that, notwithstanding any right of cancellation reserved to such insurer, such policy or contract shall continue in force for at least 30 days after written notice to each mortgagee of suspension, cancellation, or termination.