Accusations of Agency Error in Disaster Loans (Katrina/Rita)

New York Times ^ | February 27, 2007 | RON NIXON and LESLIE EATON

[PAR35]

Last September, the Small Business Administration, which provides most long-term rebuilding aid to disaster victims, accelerated its lending to homeowners and businesses in the Gulf Coast, responding to criticism that it had been slow to respond to Hurricanes Katrina and Rita of 2005.

But now federal investigators are looking into accusations that in speeding up its work, the agency made thousands of loans without following its own rules to avoid fraud. Current and former employees of the agency have told investigators that agency workers failed to secure proper proof that borrowers owned the houses they were supposed to rebuild or had the required insurance.

Caroline Pankove, who worked as a lawyer for the disaster-loan program at the agency from June through December of last year, complained to the agency’s managers and its inspector general that employees were improperly pressured to approve loans quickly.

Loan policies were applied inconsistently, Ms. Pankove said, and disaster victims’ paperwork was often misplaced or mailed out with errors.

[PAR35]

Your tax dollars at work.

[Enchante]

"But now federal investigators are looking into accusations that in speeding up its work, the agency made thousands of loans without following its own rules to avoid fraud"

DUH.... and if any of the people who were clamoring for instant action expected anything else, they are even more stupid than they seemed...... you can't get a gov't bureaucracy to throw around billions of dollars in a hurry and not expect major fraud and other problems. Just look at how bad gov't bureaucracies can be when they have plenty of time to institute proper procedures.

[digger48]

So, basically, it's still Bush's Fault that people in New Orleans are committing Fraud ?

[processing please hold]

Rita? I'm surprised anyone remembers Rita. She's the one that got us. No house damage but lots of fallen trees and a week without electricity...and it was boiling hot weather. We were very lucky and we thanked God profusely.

[DustyMoment]

This pox will never go away.

[PAR35]

It was mainly the democrat congressmen and governor that were pushing for this course of action.

[PAR35]

I did look, and the same thing happened after 9/11.