SBA Disaster Loans for Homeowners will cost you Federal Grants that are offered later.

SBA Disaster Federal Secured Loans.

Changes on a State and Sub-Contractor level of the state that are needed to screen SBA data provided to the state. These are the main issues and the states that can be taking to correct what could be thousands of mistakes of classifying homeowners with what is known as the SBA Issue when it has actually nothing to do with taking the SBA assistance and everything about not taking the money. The State of Louisiana Office of Community Development - Disaster Recovery Unit (OCD-DRU) and it's main contractor IEM Inc. continue to ignore reports that hundreds of homeowners have be grouped into the "SBA Fix" category by mistake and could actually be costing Louisiana Homeowners nearly $55 million by being wrongfully labeled by IEM Inc, State OCD-DRU and the Quality Control group and it's contractors.

The State of Louisiana OCD-DRU needs to screen:

  • SBA cancellation codes C10-C16 and identify via the SBA datafeed how many homeowners have been penalized the SBA DOB incorrectly using HUD Guidance 2013 and SBA Cancellation codes.
    • Our research estimates over 700 homeowners were not correctly vetted of this issue and IEM Inc. management as well as senior management of the OCD-DRU refuse to research this issue.
  • SBA did not update it's datafeed from "Approved" to "Declined" on many homeowners when the homeowners application information changed.
    • Homeowners have had to research their SBA status as well as their codes to report to the state. The state's senior director would interogate the homeowner and ask personal and financial information to why the SBA changed from Approved to Declined. In most reported cases it was of no concern to why, the person was in prison, died, it didn't matter because the SBA clearly declined all SBA funds to the family which made them ineligible for the SBA loan.
  • SBA did not confirm the homeowners ability to repay the loan even when the homeowner requested lower monthly payments due to the inability to repay what the SBA calculated to be their monthly payments.
    • In some cases the SBA offered monthly payments more than double of what the household could afford in additional debt burden. The SBA did not change the monthly payment amount to fit the homeowners ability to repay the loan but still listed the federal assistance as available to the homeowner thus penalizing the homeowner with the SBA loan as a duplication of benefits even when not drawn.
  • SBA approves 15 and 30 year payment terms to seniors over 80 years of age without concern of the ability to live to the term of the loan contract when homes are used as collateral.
    • Many families are unaware of the financial responsibility they will have when living under the same roof as the retiree and senior family member with the SBA loan. The SBA seems to have offered loan terms longer than average living age.
  • SBA has classified homeowners as incorrectly when questioned over the phone for reasons why the homeowner did not sign and return their SBA loan documents.
    • Each case seems slightly different. A family that instructed the SBA to cancel the loan application may be classified as Canceled by Applicant while a family that simply ignored the SBA completely may be classified canceled by the SBA. The differences are one method still reports the loan as Approved while the other method would show the loan Declined.
  • SBA does not provide in the Datafeed any cancel codes that may actually affect the status of the homeowner.
    • A cancel code of C23 for a low to moderate income family still penalizes that family for the total SBA loan amount whereas a cancel code of C10 for a low to moderate income family allows a hardship to be declared and removes the SBA approved loan amount form the SBA Duplication of Benefits calculations. This could have been simply the difference between a homeowner answering the phone when the SBA call centered was calling for a follow up to why they didn't sign and return their loan application and the homeowner that blocked the incoming call. We have found homeowners classified incorrectly or penalized by the states auditors for not knowing the correct classification of their loan status and cancellation status.
  • State Contractor you were not trained to identify issues with SBA classifications and codes. You followed the instructions from the State OCD-DRU.
  • State of Louisiana Office of Community Development - Disaster Recovery Unit, you were trained most likely by CFI International and only know what the Grantee is responsible to know.
  • CFI International you were only training Grantees within their scope of work as HUD CDBG-DR instructed you to do.
  • HUD CDBG-DR you manage billions of dollars and expect other federal agencies in the sequence of disaster assistance to do their jobs as their Standard Operating Procedures state.

When One Government Agency stops following proper operating procedures for any reason that agency jeopardizes the whole delivery chain or in this case the sequence of disaster assistance.

When FEMA directs you to apply for an SBA Disaster Loan and does not tell you that you are NOT required to apply for an SBA Disaster Loan that is mistake #1.

When the SBA Disaster Loan Program takes your credit and asset information for your application they will tell you when to expect your approval and your loan amount.

This is your Withdrawal period if you do not what to continue with the SBA Disaster Loan Program. You must ask them to withdraw you and to list your account status as "Withdrawn" or you my be classified as Approved which will be reported to your state Grantee handling your HUD CDBG-DR long term recovery.

If you signed your loan documents and mailed them the time in the mail is the only time you have to also withdraw from the program. The SBA calls this the time before they start processing the loan which is the minute your loan application arrives in their processing department.

Once your loan is in processing your loan status can never be "Withdrawn" or "Declined" or "Canceled" it will remain "Approved".

This is your introduction to the SBA Duplication of Benefits issue we are about to explode open for you right now.

A 3 month research project has identified that over 1,000 Louisiana homeowners could actually be classified incorrectly by the SBA. Homeowners that called to withdraw their applications were classified as cancelled and "Dissatisfied with loan terms and conditions". This incorrectly place the homeowner in the Approved Loan status instead of a Withdrawn status by the SBA.
Other major issues we found during our 3 month research of the SBA loan issue and the state of Louisiana OCD-DRU to include their contractors was:

  • Low to Moderate Income households had to report to the Director of Homeowners Assistance individually SBA issues once the homeowner was aware of the issue. The program Appeals process did not allow a homeowner to appeal SBA issues because the State OCD-DRU and it's contractors have grouped all SBA issues into one group and have referred all homeowners with any SBA issues to their congressional representatives.
  • Community leaders should start taking a stand against the SBA Disaster Loan Program and FEMA delivery sequence
    Murray Wennerlund

    When FEMA tells a low income family or a moderate income family to apply to the SBA FEMA is sending that family into debt burden beyond recovery. When you thought your disaster was bad, wait one year to see what applying for SBA loans will do to LMI

  • SBA Disaster Loan Program may be your path to financial bankruptcy 6.5. THE FIXED DEBT METHOD FDM
    Murray Wennerlund

    After a disaster money becomes the top priority. We have lived as a nation of people that believe money spent will be money earned at a future date. The SBA believes that as well, they actually calculate your future pay raises when offering disaster loans

  • How the Federal SBA Loan program for Homeowners places more debt and puts at risk recovery efforts.

    The SBA Loan Program will harm every American Household after a declared disaster for one simple fact. The Federal SBA Loan Program does not take into consideration any current income to expense ratio for the victims of the disaster.

  • Dear SBA we would like to lower our disaster loan amount, we can not afford your proposed monthly payment.

    Dear. 2016 Louisiana Flood Victim, we have received your request to decrease your loan amount from 125,000 to 25,000. Your payment amount is reduced from 440.00 to 437.00. Your payment terms have been changed from 30 years to 5 years.

  • Subject: Discussion request: Approved SBA Loans declined by homeowners.
    Writers Pool

    This email was sent to the director of Homeowner Assistance Programs in the state of Louisiana. The email letter requested a discussion regarding the issues. The requested discussion was quickly dismissed and the email referred to a public outreach.

  • Here is a copy of a letter from the SBA El Paso TX office we hope you never receive.

    Pay your SBA then send money to El Paso TX. Need SBA to endorse an insurance check, send to Fort Worth TX. If you owe money to the SBA they will forward your check to the El Passo TX office for you and then audit your account.

  • SBA and CDBG DR Duplication of Benefits

    If you havent read the report published by the Congressional Research Service CRS that was prepared for Members and Committees of Congress report number R44553 then you should. Ill be making many references to this report as well as others.

  • You recently registered with FEMA for assistance with your disaster losses
    Writers Pool

    You were told that you had to apply for a SBA Loan to be eligible for possible grants from FEMA. They may have mentioned Vehicle Grants, Home Repair Grants or any number of grants that only FEMA offered but you had to apply for a SBA Loan first.

  • SBA Disaster Loan Application No
    Writers Pool

    SBA will follow up with you many times by mail and by telephone to get you to complete your loan application and to sign the agreement for the loan. This is totally up to you if you would like to take the SBA loan now or wait for better options if any.

  • What to say when offered an SBA Loan after a disaster
    Writers Pool

    If you were told you needed to apply for an SBA loan to get additional FEMA resources I would say youre a fool if you are above AMI 120, have great credit and a good job. If you say Yes to a Federal Secured Loan you may have lost out on 10s of thousands

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