U.S. Farm Lender Says Many Delinquencies Are Settled

The Farmers Home Administration said Wednesday that some of the 83,480 loan delinquencies targeted last month for official collection had already been settled by the time notices were sent out.

Moreover, many state FmHA offices have been reporting far fewer delinquencies than the Agriculture Department agency listed on Nov. 25 when it finished sending out the notices.

Agency spokesman Joe O’Neill said the 83,480 loan delinquencies reported last month represented “everybody who owed money” and were behind in their payments to FmHA.

In all, more than $8 billion in overdue loans is involved. The notices give a delinquent borrower 45 days to fill out forms showing how the debt will be settled.

O’Neill said in an interview that lists of 83,490 delinquent loans were sent to county FmHA offices so local officials could weed out those who had already made arrangements to settle their debt, or for some other reason were not slated to get the notices.

As a result, several thousand borrowers were pared from the tally, he said. Those remaining were mailed notices by certified mail over a 10-day period beginning on Nov. 15.

“No, indeed, we did not send out that many,” O’Neill said. “It’s probably closer to 80,000, somewhere in there.”

Congress ordered FmHA in the Agricultural Credit Act of 1987 to revise its lending practices and to come up with ways of handling long-overdue debt owed by thousands of farmers. One of the important features is a debt writedown or forgiveness provision, which took effect last month.

The purpose of the notices is to give tardy payers an opportunity to let FmHA know how they want to handle their debt under the new law. If a farmer does not respond within the 45-day period after receiving the notice, the agency can begin collection proceedings, including foreclosure and forced liquidation.