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I understand that there will be testimony in Lubbock on
I believe the FmHA guarantee program is worthwhile and
Congratulations on being selected to testify before congressman Combest and the Agricultural Sub Committee.
I would appreciate you conveying my thoughts on the FmHA guaranteed loans. I believe the intent of the FmHA was to help farmers who could not obtain bank finan
With the inception of the guaranteed loans this took a lot of pressure off of the FmHA.
The theory behind the guaranteed loans is good. However, the application process is cumbersome and almost always requires outside help in the preparation of the forms. As with most government agencies you are required to give the same information in 6 different places. Most bank personnel that I am acquainted with do not have the time to properly fill out this volume of paper, much less being able to interpret the often gray regulations. Additionally, I would like to add that the settlement process is slow and awkward. I have known instances whereby it has taken almost 2 years to collect on the guarantee. The regulations are so overwhelming that if the agency so desires to renege on the guarantee there is almost always an out for them.
Certainly guaranteed loans would be an attractive program for our community, but due to time and paperwork involved and the horror stories regarding collection we have not actively pursued them. I would be in favor of any positive efforts to help streamline and make the process more effective for the farmer and the banker. This is a program that could be vital to our area and the entire agricultural sector.
Stephen N. Sherrill
PBOX 090 DUHANDLE. TEILS-2060
You have asked me to provide a letter of our experiences with FmHA guaranty loans.
Currently FirstBank Southwest has three FmHA guaranty loans, two of which just
The loan in loss claim status was a Loan Note Guarantee (through the Parmer County
I realize that we may have made some mistakes, but we have serviced farm production
claim specialist he was less than complimentary at the way we serviced the loan and I did not appreciate his attitude through the whole process.
Hopefully, we have worked out an alternative plan with the borrower where we do not have to rely on the FmHA claim. Based on this loss claim experience, FirstBank Southwest does not ever intend to participate in the FmHA Guarantee Loan program for the following reasons:
1.) Inconsistency of advise received from each County office as well as the District office.
2.) The Deaf Smith County supervisor and District director treated us as if we have never serviced a farm production loan.
3.) The State office claims official took the attitude of guilty until proven innocent.
hope this letter will help you in your testimony before the subcommittee and if you have any questions feel free to call.
It is my opinion that FmHA has strayed from its original purpose of financing young farmers trying to get started ... to financing marginal customers who really shouldn't be in this business, i.e. becoming the "lender of last resort". I firmly believe if a loan is not good enough to be funded through a financial institution with depositors' money, it is not worthy to be financed at FmHA by taxpayers.
Our bank has limited its experience with FmHA by choice. This last year, we initiated a guaranteed loan on a customer that started in April and was finally closed in December.
FmHA charged excessive fees and was more concerned over the individuals' living expenses being out of balance by $312.00 than his wheat crop making only 9 bushel per acre yield.
We have FmHA borrowers that come through our doors stating that they need a "turn down letter from your bank so I can get my FmHA loan." This is time-consuming and non-productive to the bank and I feel it has added to the problem of keeping individuals in the farming business that probably shouldn't be there.
In closing, it might be beneficial if you would take a guaranteed loan application to the committee meeting and ask those people to fill it out. I like the people who work with FmHA, but I understand when they can find a better job why they move on.