[StBernard] Question for SBA

[Westley Annis]

This sounds like the same answer as "not being able to buy into flood
insurance because of the precendent it would set to the insurance industry".
Does anyone know this is a crisis of huge proportions and our ancestors came
here 200 years ago to escape the tyrany of such crises? All the powers that
be are worried about is how is this going to look? This is a special case.
They can talk all they want but we know its boiling down to "if they can't
see a benefit for them, they won't do it" Fine, the middle class will all go
belly up and be at the government's mercy, but then who is going to support
them? If they can't see that far, we are going to crash and burn and take
them with us. Is justice that blind? Mudpie 



	----- Original Message -----
	
	I'd like to submit a reason for the SBA wanting a "Demand for
Payoff" letter 
	in order to not reduce your SBA loan amount by the amount of your
current 
	mortgage. 
	
	Very simply, the SBA does not want to be in competition with the
mortgage 
	industry. The SBA would put a real hurt on the mortgage industry if
they 
	made loans freely available at below market rates. Anyone who
qualified for 
	an SBA loan would then automatically replace their mortgage with the
more 
	friendly SBA loan. This could jeopardize the future of the mortgage 
	industry which prices it's loans assuming they will stay on the
books for a 
	certain period of time. If the SBA loan program messed up this
pricing and 
	timing, it could wreak havoc in the mortgage industry. As a result,
SBA 
	will only "replace" mortgages issued by lenders who demand payoff. 
	
	I do not have any "official" document that states this as being the
reason, 
	but given the government's (SBA) advantage over non-governmental
lenders (no 
	taxes to pay or need to make a profit), I can see their rationale
for this 
	requirement. 
	
	
	Paul V. Perez 
	Certified Financial Planner