HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.
![handle is hein.gao/gaobaawcd0001 and id is 1 raw text is:
DCCUKRNT f2SUME
03761 - rB2854106]
rCollarction of Credit Report Fees by the Farmers Hom
administrationl. CED-77-134; B-114860. October 7, 1977. 6 pp.
Report to Secretary, Departrent of Agriculture; by Baltas ..
Birkle (for Henry Eschwege, Directcr, Community and Economic
Development Div.).
Issue Areai Domestic Housing and Community Development:
Minimizing Mortgaqge Insurance Losses (2108).
Contact: Community and Economic Development Liv.
udge Function: Ccumerce and Transportation: Mortgage Credit
and Thrift Insurance (401).
Organizaticn Concerned: Farmers Home Administration.
Congressional Relevance: House Comuittee on BamkirLg, Currency
and Housing; Senate Committee cn Banking, Housing and Urban
Affair's.
The Farmers Home Administration's rural housing loan
program was reviewed to determilic whether it vas economical and
efficisrt. The agency has joined other governmental agencies in
obtaining credit reports from credit-reporting companies which
are under contract with The lepartment of Housing and Urban
Development. The Farners 9cme Admiristration's regulations list
the credit bureaus tc be used, the areas covered by each bureau,
and the fees charged the Gover ,ent for each report. Under the
agency's curien procedures, credit rsports may be ordered for
each rural housing lcan applicant and are paid for by the
agency. If the applicant is successful, he is required to pay an
$8 fee for the credit rqport at the time the loan is closed. If
unsucces=ful, the aprli-:ant is not required tc reimburse the
agency for the cost ci the cr;dit report. In addition, the
agency does not collect the actaial cost of the credit report
fram all borrowers. FindingsiConcluslons: During the 12 month
Deriod ended June 30, 1977, the VarAers Home Adainistration lost
about $721,000 by paying for the credit reports of ineligible
applicants end by nct collecting the actual cost of credit
reports for eligible applicants. The cost cf credit reports for
ineligible applicants is borne by the Rural Housing Insurance
Fund, which is reimbursed annually for losses Ahrough
appropriations. Since 1967, the number of applications for
individual housinq loans withdrawn or rejected has risen
sharply. As the number of uithdravn and rejected applications
increased, 'he agency's losses or credit reports also increased.
According to preliminary data fiom the Department of
Agriculturefs Office of .udit,, thS Farmers Home Administration
paid over $2 million for credit reports on loan applicants who
did not receive loans from fiscal year 1972 through fiscal year
1976. Recommendations: The Fecretary of Agriculture should
require the Farmers Home Adninistiation to charge applicants for
the cost of the credit rspcrts at the time of application. This
can be in the form of a loan initiation fee sufficient to cover](ViewImageLocal?handle=hein.gao/gaobaawcd0001&div=1&collection=&method=preview&ext=.png&size=3)