The Farmers Home Administration is preparing for another round of notices to borrowers who missed paying loan installments by Jan. 1 - including 83 of the 1,199 Utahns who have FmHA loans.
As of July 3, there were 15,704 newly delinquent borrowers, the agency said. Notices telling them to settle their debts or face foreclosure will be mailed by early fall. Upon receipt, a delinquent borrower will have 45 days to respond.Maryln Aycock, an FmHA spokesman, said the new wave of delinquencies is in addition to more than 66,000 borrowers notified last fall that they would have to provide certain financial and production information to the agency if they wanted help in handling their debts.
If there is no response, or if a borrower is in such poor financial shape no alternative can be worked out, forced sale or foreclosure proceedings are authorized.
Aycock said unlike the earlier list of delinquents - many of whom were in arrears three years or more - the new batch involve farmers who are only six months or more behind.
"We don't know the cause of these (being behind)," he said. "Some, you can reasonably assume, were the result of drought last year ... but we're not ready to say just how much."
The procedure is specified by the Agricultural Credit Act of 1987, which requires FmHA collectors to tell delinquent borrowers of various liberalized debt-servicing options available to the borrowers.
Aycock said the 15,704 newest delinquencies represent a sharp reduction from more than 30,000 who missed the Jan. 1 deadline but made their payments later.
"It will continue to go down as we get into the year," Aycock said in an interview. "By the time we get around to mailing (the notices), I don't know what it'll be."
The FmHA, an agency of the Agriculture Department, is often called the government's farm lender of last resort. Eligible borrowers cannot qualify for loans from commercial lenders.
When the first notices were mailed last fall, farmers had 45 days in which to apply for loan assistance, which could include reamortization or rescheduling, payment deferral, reduced interest rates and, in some cases, debt forgiveness.
The FmHA, in turn, had 60 days in which to review the applications and decide on debt-relief options for the farmers.
Delinquent borrowers submitted more than 35,000 applications, but more than 31,000 who were notified last fall did not respond. According to April 24 figures, the agency's most recent, more than 12,500 farmers had qualified for some kind of debt adjustment.
The remainder of those applications received were still awaiting FmHA action as of April 24, or had been returned incomplete. Some had been settled by borrowers or were written off by the agency.