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August 24, 2012: Secretary Vilsack Responds to NHLP Regarding RHS Debt Collection Practices

In a letter dated August 17, Secretary of Agriculture Thomas Vilsack responded to a June 12 letter from NHLP, cosigned by 28 other organizations and persons, requesting that USDA stop the practice of collecting losses from Section 502 loan borrowers who have defaulted on their direct and guaranteed RHS home loans. This response came after CBS News and other media reports on the issue.

In the response, the Secretary, stated that
      RHS has made substantial progress in this area, they continue to examine
      new ways to assist rural homeowners. After considering your recommend-
      ations at length, we are contemplating adjustments that may be undertaken
      to address our shared interest in the future prosperity of these essential
      My staff looks forward to communicating with you in the weeks and months
      ahead as they seek the views of those likely to be affected by these changes.

One day earlier, CBS Evening News broadcast a story about Charlie Ward, an Ohio Section 502 direct loan borrower, part of whose social security income is being garnished to offset his debts to the RHS for defaulting on his RHS loan. Mr. Ward defaulted on his RHS loan due to his wife’s illness and subsequent death. The story can be viewed on line at

The Wall Street Journal had done a more in depth story on the practice in May. A copy of that article can be accessed at

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