On Wednesday, the USDA announced the temporary suspension of past-due debt collections and foreclosures for distressed borrowers under the Farm Storage Facility Loan and the Direct Farm Loan programs. The Department said the measures will provide relief to farmers during the COVID-19 pandemic. USDA will temporarily suspend non-judicial foreclosures, debt offsets or wage garnishments, and referring foreclosures to the Department of Justice.
USDA has extended deadlines for producers to respond to loan servicing actions, including loan deferral consideration for financially distressed and delinquent borrowers. In addition, for the Guaranteed Loan program, flexibilities have been made available to lenders to assist in servicing their customers. The announcement expands previous actions to lessen financial hardship.
According to USDA data, more than 12,000 borrowers, approximately 10% of all borrowers, are eligible for the relief. The temporary suspension is in place until further notice and is expected to continue while the national COVID-19 disaster declaration is in place.
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