U.S. Rep. Chellie Pingree called the U.S. Department of Agriculture’s years-long delay in foreclosing on poor, rural Maine homeowners that racked up large debts “unconscionable.”
Pingree, along with Rep. Jared Golden and Sen. Susan Collins, said they’re pushing the USDA for answers after an investigation published by the Bangor Daily News and ProPublica revealed a direct loan program that’s meant to provide an affordable pathway to homeownership to poor and rural Americans has left some Mainers with insurmountable debt.
The program is part of a suite of rural homeownership programs offered by the U.S. Department of Agriculture. Since March, the USDA has filed 56 foreclosures in federal courts against properties purchased with a rural development mortgage known as a Section 502 direct loan.
All but one were in Maine, even though nearly a fifth of the loans in the USDA’s national portfolio are in default, according to internal agency data obtained by the BDN and ProPublica. The borrowers here have been in default for an average of nearly nine years and owe $110,000 more than they would have had the agency moved to take possession of the properties when they first defaulted.
The foreclosures started just before President Donald Trump’s Justice Department sued the state of Maine in April over its inclusion of transgender athletes in girls’ sports, part of a larger spat between Trump and Maine Gov. Janet Mills. Neither the White House nor the USDA would say whether the foreclosures are connected in any way to those ongoing conflicts.
“This investigation reveals a systemic failure of oversight, efficiency and accountability at the agency tasked with supporting rural Americans,” said Pingree, a Democrat from Maine’s 1st District. “The idea that someone could owe nearly $400,000 on a home now worth $40,000 is unconscionable — and it’s the result of USDA’s neglect.”
Golden spokesperson Mario Moretto said the Democratic congressman from the 2nd District has questions for the USDA about why Mainers are the subject of nearly all the agency’s foreclosure proceedings.
“On its face, it seems Mainers are being targeted,” Moretto said in a statement.
The USDA did not respond to questions on Wednesday.
Collins spokesperson Blake Kernen said the story by the BDN and ProPublica was the first time the senator had heard about these “allegations.” The Republican’s office reached out to the USDA for more information, Kernen said.
Meanwhile, Sen. Angus King, an independent who caucuses with Democrats, is weighing possible policy fixes or solutions, spokesperson Matthew Felling said.
Pingree, who is a member of a House appropriations subcommittee overseeing the USDA’s direct loan program, said she proposed language in the House agriculture appropriations bill that would force the USDA to disclose the scope of the problem. If the language is approved, it would require the agency to regularly report the number of foreclosures and abandoned properties related to the direct loan program.
“We need this type of information to identify real reforms so this program works as intended — with local oversight, timely intervention, and protections for vulnerable homeowners,” Pingree said. “USDA’s inaction and silence has gone on long enough.”
Bangor Daily News reporter Sawyer Loftus may be reached at [email protected].
