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Loan Forgiveness Frightens Some Folks
posted (February 10, 2012)
In October, Government wrote of 62 million dollars in loans held by the Housing Department. Some of the loans date back to the late 80's, many are from the 90's, and the rest from the "aughts." Indeed there are thousands of them.

Matter of fact, the Department of Housing sent out 12 thousand letters informing those who owe that their loans are being forgiven, written off, expunged form the record.

Those letters have been going out for the past few weeks - and we'd expect most folks would be relieved. But - in an outcome that you can file under the law of unintended consequences - many are reacting in anger, even outrage.

And that's because of two things: first, some folks just don't understand the letters - they think they are being charged for the loan amount - instead of being forgiven the debt.

Second, a lot of people say they have no memory of making any such loans, and that their names have been used fraudulently. Such cases may exists, but from the little we saw today, the amnesia is either selective or real, but amnesia it is. Director of the Housing Department Noel Harvey told us that many folks have come in disavowing loans which it turns out they did make many years ago:..

Noel Harvey, Director of the Housing Department
"Basically once we send out a letter to our clients, that means there is a physical file at the department with their name, address and signatures. So any letter that went out there, we had a physical file within the department, and what we would advise people that if they get a letter, and they did not receive a loan - to visit the department for us to review the file and make a determination."

"You have witnessed a particular case when you came into my office where this man came in either 'playing forget' or forgot that he got a loan. He actually made 9 payments of $100 each and after cross examination he eventually agreed that perhaps he may have gotten the loan. He recalled visiting the department with a particular politician in 1996, and eventually they asked him to do a sample signature, and the sample matches the sample of the agreement that he had signed with the department."

"Remember these loans dated back from 1986. These WASA loans are from 1986. This lady that came in this morning, I don't want to call her name, but when we pulled her file, she wrote a letter apologizing that she should be ashamed of herself for not paying back the loan."

Jules Vasquez
"However, up until she saw that she?"

Noel Harvey
"She denied all aspects. She denied even getting any money from anybody, and her case is that she didn't really understand the letter because she was thinking that she has to pay that money back when that letter was saying that we have written off the balance of your WASA loan."

Jules Vasquez
"So then people who are accusing the Department of Housing of making mistakes and sending out wrong forgiveness letters, its most likely them who have it wrong."

Noel Harvey
"I would say so."

Jules Vasquez
"Because you all are not inventing names?"

Noel Harvey
"We are not doing that. We have the physical file."

The case that came to light today was of Sebastian Hamilton, a Ladyville Resident who got a six hundred dollar home improvement loan back in June of 2001 - approved by his then area representative Ralph Fonseca.

First off, his wife didn't understand the letter and then she misread the amount, taking six hundred for sixty thousand dollars. But in addition to all that, today she told Monica Bodden that she knows nothing about the loan because she wants some clarity on the situation:..

Barbara Hamilton
"I know nothing about it, and my husband knows nothing about it. But they claim that they have proof, so we just have to go by what they say right now that they have proof of it. I can't do anything more, I was just clarifying to him that we don't know anything about it. That is as far as I went."

"I cannot recall that - any at all - that he came home with any money or that he told me that he was going to borrow money. I cannot recall because I didn't see him with any loan, and if it was for housing, we would be living in a better condition than this."

Monica Bodden
"Do you think that there may be a possibility that maybe he did receive the $600 but cannot recall?"

Barbara Hamilton
"Yes it could be a possibility. I wouldn't say all together no, but as far as I recall, I cannot remember about any. I am sorry that he is not here; he would have spoken on his behalf."

"I was very concerned, and if there was a problem behind, I am just trying to clear his name. I just went by to clarify his name. If he is guilty of it or not, it's best that it is in the open. If he said that he did borrow it, I would worry about it."

She says she is going into the housing office on Monday to clear things up. But, for the record and the absolute avoidance of doubt: if you get a letter from the Housing Department - it is almost certainly going to be for debt forgiveness, not for debt collection. As we said at the top, 62 million in loans were written off for all housing loans with balances of less than sixty thousand dollars. Interestingly, only about 5% of those loans were performing, and those were the ones that were being deducted from the paychecks of public officers.

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