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The Farmers Home Administration, which is the lender on loans totally about $20,000 to the Washington and Sperryville volunteer fire departments, will sell that “paper” at auction this fall, and to protect against foreclosure, accountant Wally Cox has advised the county to purchase the notes.
Calling the practice “part of the ' government’s going-out-of-business sale,” Mr. Cox explained that the loans aren’t carried on the books of •the Farmers Home Administration and so can be sold off and counted as assets to balance the agency’s accounts. He reported that the notes sold last year included loans secured from FH A by clients of his accounting firm. The notes were purchased by credit organizations which, in one case, called in the balance due, and in another, refused new bond hold. ers parity on a utility system, thereby requiring the water and sewer authority to get a “second mortgage,” which drove up user rates. “Then what was a feasible utility operation becomes infeasable,” he noted. “I don’t know the ! terms of the (Washington and Sperryville squads’) indentures, but (the buyer of the notes) could put the squeeze on,” he cautioned the supervisors. “If a credit company picks up those things at auction, they could make it very difficult.” 1 By buying the notes, not only would the board be protecting the
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