Internal USDA Report Says $4B In USDA Stimulus Loans May Have Gone To Ineligible Borrowers

[Purveyor]

Source: Associated Press

WASHINGTON — An internal Agriculture Department report says the government may have given out more than $4 billion in stimulus housing loans to ineligible borrowers.

A preliminary report from the USDA inspector general made available Friday says a sample of 100 loans out of 81,000 showed that almost a third were given to ineligible borrowers — including some with income that exceeded the program limits, others who already owned homes and borrowers who purchased homes with swimming pools. The loans were paid for by the 2009 economic stimulus.

The inspector general's report says the loans precluded other, eligible borrowers from receiving the help. Based on the sample results, the report estimates that 27,206 loans worth about $4 billion — or more than a third of those granted — could be ineligible.

The stimulus included more than $10 billion for the program, which guarantees single family housing loans in rural areas. It reduces lenders' risk by reimbursing up to 90 percent of the outstanding principal and interest if a borrower defaults.

USDA rural development officials disagreed with parts of the inspector general's report, saying they believed only 10 of the 100 sampled loans went to ineligible borrowers. Dallas Tonsager, USDA undersecretary of development, said in a statement to the auditors that several steps have already been taken to improve the loan distributions, including beefing up training. The report said many loan officers were unaware of specific requirements for loan eligibility.

Read more: http://www.therepublic.com/view/story/6a8ac8ddc52a4412aef939bd64d7d5eb/US-Stimulus-Rural-Housing-Loans/

[bluesbassman]

1. The lenders that processed those loan need to be forced to buy them back.

The report said many loan officers were unaware of specific requirements for loan eligibility.

Excuse me, but this is bullshit. Regardless of whether the loan officers we're "aware" of the guidelines or not, the lender's underwriters should have been, and ultimately the lender is responsible for the quality and compliance of the loans they originate.

The "program" isn't at fault here. The loans are originated through lenders that are authorized to make them. These lenders are manipulating the guidelines to do loans for people and property that do not qualify. The Feds need to come down hard on these lenders and make them buy back every stinking loan they made that does not meet guidelines.

[SpiralHawk]

2. Did the money go to whining Republicon welfare queens & kings?

as usual?

I would not be at all surprised to learn it is so...It would be yet another example of Republicon family values in action...

[fatbuckel]

3. I like how 10 bad loans out of 100 is somehow better.

[valerief]

4. That's a helluva lot less than gets "lost" in Iraq and Afghanistan. nt

[Downwinder]

5. That's not a "swimming pool." That's a concrete lined stock tank. n/t

[molly77]

6. millions in illegal stimulus funds

have been given out to a wind farm corporation with ...get this ..Larry Summers , former Enron employees and the Mafia ties. There was a rep. from NY who was blowing the whistle on them, then it became public knowledge that he was gay. Forgot his name. 100 arrests in Europe for illegal carbon trading. So glad cap and trade has not passed to make this type of crime more common in the US. Even though New England for some reason has cap and trade. 40 million dollars of power charged to New England rate payers that never existed.Max Blumenthal, Conn AG, took them to court and lost with the supremes...of course.

[benld74]

7. THis is pure unadulterated BS