A Record That No One Wanted to Set

Here’s more proof that the Northridge earthquake has set a staggering new standard of destruction. According to Bernard Kulik, associate administrator for disaster assistance for the Small Business Administration, the number of SBA loan applications issued by and returned to the agency since the main temblor now surpasses the total recorded after the following major disasters:

Hurricane Hugo in the Virgin Islands, Puerto Rico and the Carolinas in 1989; the Loma Prieta earthquake in 1989; the Los Angeles riots in 1992; Hurricane Andrew in Florida and Louisiana in 1992; Typhoon Omar in Guam in 1992; Hurricane Iniki in Hawaii in 1992, and 1993’s great Midwest floods, which covered parts of nine states.

Moreover, the worst 12 months ever recorded in terms of the number and amount of SBA disaster loans were logged last fiscal year, with 55,000 loans amounting to $1.6 billion. Already this year the Northridge quake has amounted to 110,000 loans and $3.55 billion.

Thus when the number of people who have registered for Northridge disaster assistance (600,000 and counting) begins to rival the population of the nation’s 19th-largest city (Washington), you can begin to see how thousands of people might fall through the cracks.

In fact, an SBA survey conducted last month found that 17% had not turned in loan applications for at least one of the following reasons: because they did not know that the SBA would loan money to cover insurance deductibles, because they did not know that the filing deadlines have been repeatedly extended or because they assumed that they would not qualify for a loan. Given the 313,000 SBA loan applications outstanding, about 53,000 people might qualify for help and don’t know it.

Another problem is that the scam artists, hoping to take advantage of confusion and dismay and make easy money, are out in droves to prey upon the unsuspecting. One example involved a KTLA-TV cameraman who allowed an unlicensed contractor to work on his home, which he had vacated. The phony contractor moved his family into the house, and eviction procedures took nearly seven months.

Fortunately, the Federal Emergency Management Agency and state and local officials are working on separate letters to quake victims in Los Angeles, Ventura and Orange counties who have received SBA loan applications and have not yet turned them in. These may help those who deserve aid but are unaware that it is still available. The Los Angeles letter will notify recipients of local aid programs.

The sooner those letters are sent out, the better. And officials of the Contractors State License Board are taking part in sweeps through quake-damaged neighborhoods in search of unlicensed contractors. The sweeps are an excellent idea that may curtail “aftershocks” of fraud, shoddy work and additional misery.