BAY ST. LOUIS, Miss. -- Six months after back-to-back-to-back hurricanes lashed the Mississippi Gulf Coast and southern Florida, the Small Business Administration says it has been processing and approving low-cost disaster loans at a record pace for tens of thousands of hurricane victims.
But those figures carry little weight with critics who say that even a record pace isn’t fast enough given the scope of the natural disaster, or with victims left wondering why their application has been denied or, worse, if it has gotten lost in some bureaucrat's computer.
The SBA has the numbers to back up its claims. As of Feb. 21, its records show it has approved a total of 17,136 home loans worth a total of $1.2 billion in Mississippi and 30,188 home loans worth $2 billion in Louisiana. Across all the areas hit by the hurricane trifecta of Katrina, Rita and Wilma, the SBA has approved $4.12 billion in loans to more than 58,000 residents who qualified for loans of up to $200,000 at below-market interest rates to repair or rebuild their homes or up to $40,000 to replace renters' lost possessions.
In hard-hit Hancock County, Miss., alone, the SBA has approved 2, 416 home loans totaling more than $245 million.
"The SBA has been approving disaster loans at an unprecedented pace," says SBA Administrator Hector Barreto. "Never before in our history has the SBA been asked to respond to a disaster of this magnitude, and our people have worked tirelessly, compassionately and with urgency to meet the needs of the people affected by these hurricanes. Our results beat by more than six months the time it took SBA to reach $4 billion after (California's) Northridge Earthquake, which was the only other disaster to surpass the $2 billion mark in our 52-year history."
But it's also possible to look at the glass as half empty. Six months after Katrina, the SBA still hasn't processed 31 percent of the home loan applications it has received in Mississippi and 41 percent from Louisiana residents. And of those applications it has processed, 41 percent were rejected in Mississippi and 39 percent in Louisiana.
Criticism over qualifying criteria
The SBA has no explanation for the high numbers of rejected loans other than to say that the applicants didn’t have adequate income or good credit ratings.
"We’re a little bit more lenient (than banks) when it comes to qualifying standards," says Matthew Young, an SBA spokesman in Mississippi. "However, we still have to be accountable and prudent in making the loans because it’s taxpayer money."
That statement highlights the Catch-22 nature of the disaster loan process: Many Katrina victims are out of work and forced to lean more heavily on credit cards than ever before, a combination that few lenders are likely to consider a good credit risk. And despite their desperate financial circumstances and the fact that many Gulf Coast residents had comparatively low incomes before the storm, the SBA hasn't taken any steps to adjust its qualifying criteria.
The agency's response also has left some hurricane victims with clean credit but little cash feeling bitter and frustrated.
Patrick Kimbrell of Bay St. Louis said he applied for an SBA loan after FEMA rejected his request for disaster assistance because he hadn't yet applied for a loan. Then the SBA turned down his application because the agency deemed him not creditworthy, he says.
"My wife and I bought a house just five months before Katrina hit," Kimbrell says. "The bank saw nothing wrong with my credit and loaned me the money.
"I don't know what the heck is wrong with the SBA. I've never missed a payment in life; paid off several loans, including some car loans, and didn't carry any balance on my credit card."
Kimbrell says he is making repairs on his home using a small insurance settlement. "It won't be enough to repair (the house) all the way," he says. "But at least we got a roof put on it."
The SBA does have an appeal process for those that have been denied a loan, and Kimbrell said he might challenge the ruling if he can find the time between making repairs to his home, making a living and getting his family's life back on track.
Process, process, process
Getting an SBA loan can be a daunting process, especially if all your financial records were wiped out along with your home. SBA applicants must submit loan applications and provide income statements, tax returns and other income-verifying data. Loan officers then assess an applicant's capability to repay the loan based on its internal criteria. SBA "loan verifiers" also physically inspect the damaged properties. The agency also requires that applicants put up some kind of collateral, which in disaster situations usually means the real estate they are rebuilding.
Although the agency averaged more than $36 million in loan approvals a day during December, some applicants say they have been waiting for months to hear whether their applications have been approved.
"We've had an SBA application in since before Thanksgiving and haven't heard a single word," says Yancey Pogue, a Bay St. Louis real estate agent. "Now, to be fair, I also haven't been pestering them on the phone every day like you have to do with every other government agency these days, so maybe it's time I get started on that mission. But don't you think that ... waiting for that long just to hear back is, well, wrong?"
Pogue isn't the only one criticizing the SBA for the pace at which it is processing applications. Lawmakers have ripped SBA officials at congressional hearings, accusing officials of dragging their feet at a time when people need critical help.
SBA's Barreto acknowledges that in the early days after the hurricanes his agency suffered through computer snafus, had problems gaining access to the stricken areas and that its 880-person disaster assistance section was overwhelmed. But he says the first two problems have been solved and the agency has grown its disaster-assistance team to more than 4,000 since then.
"More than two-thirds of SBA's 6,346 employees are working seven days a week to handle the demand for loans," he says. "We are committed to doing whatever it takes to make sure every person who needs and qualifies for help, gets it quickly."
SBA chief has his defenders
And although some in Congress called for Barreto to resign, he has his supporters on Capitol Hill as well. Hurricanes Katrina, Rita and Wilma were a "triple whammy (that) caused unprecedented challenges for government officials trying to provide assistance to the hurricane victims," House Small Business Committee Chairman Don Manzullo, R-Ill., said at a December press conference. "Quite frankly, the SBA is in a no-win situation with this disaster. It is understandable that those affected by the disaster want to get their loans as soon as possible. At the same time, taxpayers demand accountability and a reasonable expectation that the loans will be paid back. That takes time to determine whether applicants can pay back the loans."
Manzullo noted that owners of businesses that received SBA loans to rebuild after the 9/11 terrorist attacks also complained about the slow processing times. "Earlier this year we learned that twice as many of the 9/11 loan recipients defaulted on their loans than any previous disaster, saddling taxpayers with the added costs of repaying the loans," he said. "And still, the SBA was criticized for not responding fast enough."
Such statistics hardly register with someone like Kimbrell, who is juggling two jobs and scrambling every day to make ends meet. "I'll tell you about disaster," he says. "The SBA is a disaster, that's what that is."
Historic ruins await their fate
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to wise: the reason why new orleans and several surrounding neighborhoods were wiped out was because of the federal government's negligence in making sure the levees were properly maintained. i grew up in chalmette. i traveled through the 9th ward, lakeview and new orleans east many, many times...i know where just about every street is...i had friends and family in every part of the city and many of them lost everything...it is the federal government's fault that new orleans was under water due to the levee breaks...have you read the fema baloney? have you read what michael brown said? have you read any of it? or none of it? or all of it? every finger points back to the federal government and their incompentencies...not one congressman or senator can say they had no idea how catastrophic this would be...not one...studies have been done in the past; work orders have been filed in the past...the mississippi river gulf outlet has been a source of controversy since its inception...flooding and storm, tidal surges and its consequences have been well known for 40 years...it is the federal government's obligation, duty to make sure this never happens again...and it is downright shameful that people are still having to wait for trailers, financial settlements from insurance companies, etc...it is downright shameful...several friends are sinking further and further into depression because they don't know what to do...imagine your home torn to shreds, water to and over the rooftop...every memory and sentimental object destroyed, your routine gone, your sense of normalcy gone, your community, your family, your friends, your neighbors, your life gone...just imagine what you would do if, in a matter of 24 hours, your entire life was gone...your entire day to day activities were forever changed...imagine it's you and then say who should do what and when...
lf fumar (Sent Mar 1, 2006 3:08:09 PM)
How some misguided people can compare the costs of repairs in New Orleans to a math problem involving the cost of gasoline is amazing to me. Where is it written that any govt is required to bail anyone out of their personal problems. I went through hurricane Andrew in South Florida and the US Govt did not pay for my repairs. Can you say home owners insurance? If you are too dumb to protect your investments than who is to blame for that? You live in a flood plain for crying out loud! It's snowing here in Wisconsin is Bush to blame for that?
Ed from MIlwaukee (Sent Mar 1, 2006 3:16:53 PM)
You want to know where the money and help is? Check out Iraq. While you were so worried about possible gay marriage and abortion rights, you forgot about what really matters, and that is electing a president with at least half a brain to run this country. Sorry for your losses, but you voted for him.
Myra, Winter Park, Florida (Sent Mar 1, 2006 3:31:18 PM)
My daughter lost her home in Chalmette, La. which is located in St.Bernard Parish. I wish Mr. Bush would worry about Americans in the storm strickened area like he does rebuilding Iraq,and offering to rebuild a Masque in Iraq. For the money he is offering he could rebuild all homes without flood insurance. My daughter lived in a part of the Parish that has not flooded in over 60 years and was told she did not need flood insurance. Now she has nothing and is a school teacher with three children. Maybe it is better to be a foreigner in our own country, it looks like that is the only way we can get attention.
I had about 25,000 worth of damage, but it was from the wind and I had insurance to rebuild. I think someone in Washington needs to step up.
Is he crazy about the port deal?
Susan Sheppard ,Picayune,Ms (Sent Mar 1, 2006 3:33:23 PM)
Jane Faust:
I am dumbfounded by your arrogance. New Orleans is very, very different from the beach cities of Mississippi. My family and I went through Hurricane Camille and lived through the night and misery thereafter. My parents were grateful for my summer friends from New Orleans...they brought supplies to our doorstep...we recovered. I think you may have never lived through a disaster, other than one that is personal.
JG, California (Sent Mar 1, 2006 3:50:07 PM)
I absolutely cannot believe the vitriolic posts on this website. No small wonder our country is going to heck in a handbasket, with such small-minded, self-centered, apathetic (except where it concerns their own needs and wants), vindictive people in its' midst.
What goes around comes around, folks.
M. Franklin, Pensacola, Florida (Sent Mar 1, 2006 3:54:23 PM)
When looking at the demographics of the two coastal towns being examined in the "Rising from Ruin" piece MSNBC is doing, it's worthy to note that the demographics of both towns is above 70% white. I thought part of the outrage within the Katrina disaster was how minorities were left out to dry. I am not saying that we should not examine the rebuilding process in a town with a white majority, but isn't that "un-even" journalism?
Roosevelt (Sent Mar 1, 2006 3:59:53 PM)
Why is the Small Business Administration doing home loans in this case? SBA doesn't offer home loans anywhere else. Am I missing something here?
J9, Loveland Colorado (Sent Mar 1, 2006 4:02:33 PM)
Just where do people get off on saying that these people should just help themselves. They are not affected by any disaster. We pay billions of dollars to help rebuild Iraq, give billions more to help the people in the tsunami nations, and billions more to help people all over the world. What is wrong with helping some of our own. It does not matter whether there were poor and unemployed people there in the Mississippi and Louisiana areas, it seems like it should be the duty of the US Government to help in those situations. Just because it is not your disaster, you would be the first the ask for help if it was.
Bill, Oklahoma (Sent Mar 1, 2006 4:08:34 PM)
Why is it that we are willing to go to war and all but completely distroy a country spending millions of dollars to do so, then spend millions more rebuilding that country. Yet, for some reason when a disaster hits home the government runs around with their thumbs in the dark side of the moon pointing fingers about how it is someone elses fault that the process for sending relief is slow and ineffective. Oddly enough, the government tends to point fingers at different branches of itself. What's even more wrong with the situtation is that instead of saying opps we screwed up they say oh we found out that it was so and so's fault, he or she is no longer a member of the government and is now under investigation( A excuse to spend more tax dollars to investigate). Now, that's great the government has found a scape goat, but still over 6 months later the stories have not gotten any better from the people that need help. And relief is hidden behind so much red tape that the government makes it all but impossible to U.S. CITIZENS to get the relief they need so much so that they don't have to sleep in tents on the side of the highway. Growing up in school I remember hearing LAND OF THE FREE, HOME OF THE BRAVE and that the U.S. is THE LAND OF OPPORTUNITY what I have discovered now that I'm a grown man is that isn't true. It's really LAND OF THE FREE (as long as you play by our rules) HOME OF THE BRAVE (when we don't send our men and women overseas to find weapons that aren't there) and the U.S. is THE LAND OF OPPORTUNITY (assuming that you are not a below poverty level family). I think saying that all of this is a discrace is way more than a understatement. My heart goes out to all of the victims of Katrina, May GOD be with you because after 6 months of waiting we all know that the government isn't.
Heith, Dallas, TX (Sent Mar 1, 2006 4:14:07 PM)
So many negative comments from people around the country who seem to think the people New Orleans and the rest of the Gulf Coast were living in flood prone areas with no insurance and no job. Shows how much they know. To buy a house and have a mortgage you are required to have insurance. Period. Almost all of the people who were affected had jobs and worked for a living. What we have gotten with these storms is the insurance companies saw the amount of devastation and are now hedging on paying out any money. Making matters worse is that the year before, the homeowners insurance companies increased everyones deductible for storm damages without any public review. I am sure the people in Florida are familiar with that scenario. We now have hundreds of thousands of homes that were destroyed in the storm surge in areas that the federal government assured everyone was not in a flood zone. As to New Orleans being below sea level, only certain parts of the city are really below sea level. However, the flood maps have not been updated in years and actual levels are at the moment unknown. Now, people would like to rebuild but they do not know if they will have to elevate their house, can rebuild without elevating, or if the government will forbid rebuilding. Those questions will not be answered until the feds determine elevations which is months away. How can you rebuild, using your life savings and insurance money, if you do not even know if you will be allowed to rebuild.
It gets mentioned that the federal government is not required to help these people. Just think what would happen to many financial institutions if suddenly the 200 thousand plus homes all defaulted on their loans. What will happen to all those cities where the evacuees have settled. Now they are tasked with spending money to provide the facilities to handle these people. The city of Houston is overwhelmed with the costs of keeping those evacuees. Don't think they can just send them packing, there is nothing in New Orleans for them to return to. Most of the homes that were flooded are uninhabitable. FEMA has not come thru with the trailers needed to house people.
It's a sad thought but New Orleans, no matter what is done, will be much smaller. The people affected by these storms need some help. Help them get the resources to either rebuild or settle somewhere else. We helped New York following 9/11 and FLorida following Andrew and the other hurricanes of 2004. We need to help the Gulf Coast. Who knows, the next disaster may be your hometown.
Jim C, Marrero, LA (Sent Mar 1, 2006 4:24:19 PM)
I can't believe some of the harsh things people can say, but in this country nothing surprises me. That statement is not for the intelligent people of the U.S.A.. I myself was in the disater area and to me if you haven't experiencd it or really don't have to deal with the slow progress of the situation then you shouldn't make comments. I am a tax paying citizen in Louisiana and just have not had any help at all. So to the people who are still waiting, still calling FEMA, and SBA join the party. It's not about the government or the rest of the country taking the responsility some people really do need alittle help and there's really no help at the time. So lets not be so cruel and have alittle heart sometime, because everyone is not just looking for a hand-out!
Cheetah, Baton Rouge, La (Sent Mar 1, 2006 4:26:30 PM)
God helps those who help themselves...
angela, niagara falls, ny (Sent Mar 1, 2006 4:38:57 PM)
Matt from N.O (now Philly),
Since you didn't interpret my comment correctly let me elaborate...My comments were directed to those who will not have home owners (or didn't for that matter), which lets be honest here, is not many people in the greater N.O. area. Like you pointed out, places like the West, Fla...all over the country are prone to different 'adverse events,' but each is subject to varying levels of high insurance rates b/c of risk - a simple example: Home Owners in Philly is significantly less than L.A. b/c of earthquakes. So no, we should not all be quarentined to 'safer' areas; live where ever the hell you want, but don't try to re-establish yourself in a 'high risk' area - N.O. - and not take responsibility into your own hands. Everyday I read about how the govn't is failing the people I am talking about, like I said that's BS...Refer to Mike in Oceanside, CA who's comment compliments what I am saying.
Additionally, I don't get the whole blame game fiasco...Events like Katrina are unprecedented and unique, therefore there is no benchmark for response efforts. Quite frankly, everyone did whatever was possible in the chaotic aftermath of Katrina. It's not like FEMA, or any agency for that matter, had their feet up on their desks while aimlessly surfing the web. The same people pointing fingers are the same ones not acting on solutions.
Wise (Sent Mar 1, 2006 4:41:26 PM)
Somehow, it seems appropriate and unsurprising that the SBA and FEMA under the Bush administration would be there to help those who need it least and find those in dire need unqualified or ineligible for loans and assistance. What percentage has been turned down for assistane? ? ?
Bob Cunningham, Omaha, NE (Sent Mar 1, 2006 4:41:38 PM)
Let's put Oprah and Walmart in charge of disaster recovery. They seem to act faster, care more for the people, and understand more than about disaster recovery then FEMA.
Tina, Des Moines, Iowa (Sent Mar 1, 2006 4:42:26 PM)
It's my opinion that if the folks in New Orleans want to rebuild their homes, again below sea level, it should be at their own cost, within their own State and City budgets. I live in "earthquake" country and pay plenty in insurance costs to cover my home and furnishings in case of disaster. I've been a single parent for 26 years, and sure, I have a full time job, but I live pay check to pay check like most everyone else. I know that most people rent, but the cost of rental insurance isn't very high, at the very least when something like this happens your belongings are covered, well worth the small investment. I say, if you choose to live in hurricane country, under sea level, do it at your own risk, at your own cost, and be responsible. I know I am.
Sharon, Salt Lake City, UT (Sent Mar 1, 2006 4:48:51 PM)
Wow, I cannot believe the self-centered, selfish and frankly un-American sentiments that are being voiced here.
After Katrina hit N.O. many people gave up their jobs and left their families to go and help out with the resuce effort. The one government agency that was supposed to take care of the resuce and relief effort messed up so badly that it was left up to private citizens volunteering to rescue many of the affected.
Everyone agrees that the government failed in its duty to its citizens during that awful period. And now the government is again failing them in their time of need. They are asking for a 'loan' not a handout. And just because some previous recipients have defaulted does not mean that all recipients will also default.
So many people here are complaining that these people are slackers who do not want to work and that they should look for work rather than look for a loan. That is beyond stupid. The number one priority is to house and feed your family. If where you work has been wiped out and there is no work for miles around how do you do this?
Hugh and Kevin are correct, if we focused a little more on helping our own rather than spending HUNDREDS OF BILLIONS on a pointless war we could have already solved the problems caused by Katrina.
It's time for people to rally around those affected by Katrina and other disasters....after all if tragedy struck you, wouldn't you want some help? Isn't that how we Americans like to portray ourselves as in the movies? The nation that stands together? Well put up or shut up I say. Stop being so self centered and extend kindness to people who really need it.
John, Upstate NY (Sent Mar 1, 2006 4:51:55 PM)
Brianna in Seattle, you must be joking! You are telling people to start taking responsibility for themselves, as if they had any control over Katrina. Knock Knock.....anyone in there. Wake up Brianna!
Amy - California (Sent Mar 1, 2006 5:12:25 PM)
I think people should go after the insurance companies more than the government, how can an insurance company justify denying your claim when your paying them exorbident premiums to begin with. These companies talk a big talk, but when it comes down to the actual payout, forget it buddy. I feel for some of these people who did actually have all the necessary insurance to hopefully help pay for damages, when in the end they get nothing. Insurance companies need to be held accountable as well, that is what we pay them for is to cover any damages we may incur.
Ginnie, Nevada (Sent Mar 1, 2006 5:26:43 PM)
Dear Jane in Orlando.
I'm so glad I'm not YOU! How can any human being be so filled with venom for their fellow citizens. The saying "There but for the grace of God go I" comes to mind. I hope you never find yourself in the position of needing aid and comfort from your fellow man.
The law of Karma will apply!
Diane Hopkins Evergreen Colorado (Sent Mar 1, 2006 5:27:37 PM)
Dear Jane,
I am amazed if you believe all of New Orleans and the surrounding area is as you describe, sitting and waiting.The news clippings are showing the sensational part. I am from St.Bernard Parish which was totally forgotten by the news reports.Not until it was noted that the oil companies were effected did our area get attention. And the citizens of St.Bernard helped each other with rescue and medical assistance and we also walked out of the devastated area.We were in a no flood zone so did not have flood insurance..7 feet above sea level yet we carried homeowners. And to all,this has been worse than any loss you can imagine ie;parents, divorce etc.I have been a tax payer for 30 years and now I need some help. Try not to be so cynical people ,it could be you next time. We just keep praying and believing God will take care of us as he has sent us so many blessings since Katrina. We have made so many knew friends.Living it every day and blessed to be alive.
Helen,now in slidell (Sent Mar 1, 2006 5:35:51 PM)
The fact that many of the 9/11 SBA loans that were quickly dispersed are either in default or fraudulous raises the question; Where is that fine line between giving out loans quickly and lending responsibly? I don't know the answer, but I do know that we all end up paying for bad loans eventually. And I also know that people need help getting back on their feet after a disaster such as Katrina. Again, I don't know the answer. I do think it shows what a mess our government has become. That being said, I really doubt this disaster would have been handled any better by any other administration, this is many many years in the making. The recent administrations simply didnt have to deal with anything like this to show us their similar incompetence.
Mike, Baltimore (Sent Mar 1, 2006 5:51:17 PM)
This article neglects to point out a very important part of the claim process that many people are not aware of. After you apply for FEMA assistance, they may send you an SBA application. They will not provide any grant until you have completed the SBA application and submitted it. HOWEVER, if the SBA application is REJECTED, the claim goes BACK TO FEMA, and they will at that point usually issue a grant. This is exactly how it worked for me after hurricane Ivan; after being rejected by the SBA, FEMA awarded a grant for the amount of the claim. It is very important to complete the entire process!
James, Pensacola, FL (Sent Mar 1, 2006 5:52:22 PM)
I feel sympathy for the people in NO but I don't think it is right that they should be whining for help. I have seen so much about NO whining and fussing about not getting help when they needed it but I have also seen Mississippians getting up and taking care of their business themselves. I rarely hear complaints in the media from Mississippians that are in as bad or worse shape than some of the people who are complaining in NO. I wonder why that is? Could it be that Mississippians have learned to depend on themselves and God and not the federal government?
Lynda, Owensboro, Kentucky (Sent Mar 1, 2006 6:56:30 PM)
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