Louisiana Disaster Victims identify SBA formula to calculate the ability to repay impossible to reach


When Louisiana disaster victims look for help from FEMA they expect to be treated fairly and equally. But when FEMA told thousands of disaster victims they had to apply for SBA loans it was at that point homeowners became victims of federal departments

By Murray Wennerlund published 7-12-2018 updated 7-12-2018 4 min. 1 seconds read viewed 893 times. Download PDF

"...if they could afford to repay the loan..."
"It's reasonable to think that SBA sort of did underwriting..."
This is what HUD training contractor CFI International presented by Bonnie Lester a consultant for CFI stated to a group of state OCD-DRU workers during an April 2016 training session titled "CDBG-DR Duplication of Benefits, 4-7-16".

When using the SBA Loan processing procedures detailed in the SBA SOP 50 10 revision 9 and reading the transcripts from HUD CDBG-DR Training then cross referencing the SBA investors training you may get the impression that the SBA is undermining HUD's National Objectives and are placing Low to Moderate Income families at risk of losing their homes which were required collateral by the SBA. The SBA is not working in the best interest of disaster victims and completely undermining the HUD CDBG-DR program designed to assist those of low to moderate incomes.

To Homeowners looking for disaster recovery funds the SBA will qualify all your needs with your credit history or collateral alone without emphasis on the true current ability to repay.

To Investors, the SBA promotes that all disaster loans are 100% secured by borrowers collateral.

When I learned that Mr. and Mrs. Aultman were living on 90% of their monthly retirement income and their SBA Loan offer for $124,000 would add $439 per month for 30 years, it didn't take much to calculate that the 14% increase would place the Aultmans at 104% expense to income ratio and they would be filing for bankruptcy in a matter of months or forced to re-enter the job market to increase their monthly income.

HUD vs. SBA Household Income levels to receive HUD Grants and financial assistance via the CDBG-DR Program.

HUD CDBG-DR Program is based on providing 80% of the appropriations and allocations assistance funds to the 80% AMI households in the most impacted disaster areas. Our OCD-DRU requested a waiver to lower the 80% of the appropriations and allocations to 50% and HUD countered with 55% of the funds to be used for 80% AMI families in the most impacted disaster areas.

Ascension Retiree Household of 2 = $47,900 80% AMI (Moderate income)
51% to 80% ($23,950 to $47,900) moderate income Ascension Parish.
31% to 50% ($14,370 to $23,950) Low Income Ascension Parish (SBA Loans Qualify to $20,300)
0% to 30% ($0.00 to $14,370) Extremely Low Income Ascension Parish

HUD 80% AMI 2018
(IMAGE HUD 80% AMI Ascension Parish Louisiana)

Exhibit: HUD 80% AMI (Link)

SBA uses it's own household income levels which include levels below 80% AMI. This is in direct conflict with HUD's national objective to assist 80% AMI Low to Moderate Income Households.

SBA Minimum Income Levels
(IMAGE SBA Minimum Income Levels)

Exhibit: SBA Minimum Income Levels

The SBA will calculate the ability to repay by your credit repayment history and / or what they believe your future pay increases will be. For our Retirees that have a household of 2 the SBA minimum income of $20,300 qualification could set this couple up for financial bankruptcy and the loss of their home twice, once to the disaster and the second to the SBA loan program.

To calculate the ability to repay based on $20,300 pre-tax income is not what a prudent person would think is reasonable. To have loan payments over $400 per month would be unthinkable and to place a low income disaster victim in a position that they have to use their home as collateral is a formula for a second disaster, homelessness. We can not allow our Low to Moderate income households to fall victim to financial debt after the disaster, this group does not have the means to repay this debt and any rational thinking person would know this. To take advantage of a household that can not think rationally due to the disaster and the frustration knowing relief is only in the form of a loan that places their home at risk just adds to health issues and financial stress due to their debt burden.



Comment | Suggestion | Feedback

DRRA Disaster Recovery Reform Act of 2018 , 2019 , 2020, 2021 to 2022 Homeowners Perspective

Each year new disasters offer the opportunity for politicians to create new bills that do little more than pump tax dollars into the same dysfunctional programs we have had since 1954.

by Murray Wennerlund published 1/15/2022 4 min. 9 seconds read

Continue Reading

Promote a Safe and Healthy workplace environment

If you build a safe, hostile free work environment you will find workers are more willing to return to work than to remain on Federal Pandemic Unemployment Compensation assistance. Too many studies show those willing to work will work.

by Murray Wennerlund published 5/11/2021 1 min. 9 seconds read

Continue Reading

Two unemployment programs that the state of Louisiana Workforce should launch.

Short-Time Compensation and Partial Unemployment Insurance assistance. Federally funded American Rescue Act Plan of 2021 that could strength local economy while building back the labor force at a manageable and economically based pace.

by Murray Wennerlund published 5/11/2021 2 min. 56 seconds read

Continue Reading

Is the increased cost of building materials in 2020, 2021 making your disaster recovery impossible to afford?

Do you know HUD 2019 Guidance? Have you researched the meaning of, "Reassess Unmet Need When Necessary". Has your state informed you of their reassessment processes? Can you manage the additional cost caused by the 2020, 2021 pandemic economic downturn?

by Murray Wennerlund published 3/6/2021 updated 3-21-2021 4 min. 22 seconds read

Continue Reading

Louisiana playing the insiders game taking disaster funds from the taxpayers and giving it to it's contractors

Nationally we are seeing just how simple it is to take back funds allocated to help during a disaster. From a federal level all the way down to state levels, disaster allocations are always looked at as a pot of gold for local government as long as they..

by Murray Wennerlund published 11/30/2020 updated 1-15-2022 2 min. 30 seconds read

Continue Reading

RE: Secretary Steven T. Mnuchin on Status of Facilities Authorized Under Section 13(3) Federal Reserve Act

With a congress knowledgeable of the issues caused by the pandemic it is clear to me we can allocate the funds you have removed very quickly and more efficiently than before. This time we can get the money in the hands of business owners at a local level.

by Murray Wennerlund published 11/29/2020 updated 1-11-2022 1 min. 20 seconds read

Continue Reading

The 2020 pandemic disaster intensifies past disaster by pushing up the costs to rebuild by over 80% nationally

What started as a calm murmur of the possibility that disaster victims will be paying more for materials to recover after a disaster has turned into a loud distress siren. Between pandemic caused reduction in soft wood production and 20 import tariffs.

by Murray Wennerlund published 8/29/2020 updated 8-30-2020 4 min. 11 seconds read

Continue Reading

Pandemic Unemployment Assistance, Disaster Unemployment Assistance and Unemployment Insurance.

Pandemic Unemployment Assistance, Disaster Unemployment Assistance and Unemployment Insurance.

by Writers Pool published 8/6/2020 updated 1-15-2022 15 seconds read

Continue Reading

What proposals would you make to secure your future during the 2020 / 2021 declared pandemic?

When congress runs out of ways to not do anything for disaster relief they turn to the public and ask if we wouldnt mind if they repeat what the 111th congress did. Is that Ok America? I think its like handing in someones old research project.

by Writers Pool published 8/6/2020 updated 1-15-2022 1 min. 14 seconds read

Continue Reading

You wait for someone else to speak. You think your congressional representatives will focus on your issues.

Do you think by not speaking with your congressional representatives disaster recovery assistance will just magically be created? Do you think our dysfunctional parties then your disaster recovery in mind? Learn the American Political Process and speak.

by Murray Wennerlund published 8/6/2020 3 min. 43 seconds read

Continue Reading