Sunday, November 24, 2019

Housing Authority - Part 9

What could have the McHenry County Housing Authority have done differently? What should it have done differently?

First of all, it should have taken the tenant's complaint seriously. The employees of the MCHA seem to have "circled the wagons" and made up their minds. Once "they" decided that pawn shop loans were "income", they were not going to back down.

Even when I quoted HUD Regulations to them and pointed out that the Tenant was not engaged in a business of "pawn shop loans" and certainly was not an employee of the pawn shop, they should have asked themselves the question, "Could the Tenant be right?"

When I suggested to the Executive Director to get an opinion from a CPA, that fell on deaf ears. What would a CPA have said? "Are you kidding me?" I guess they wanted to avoid that embarrassment.

But they should have re-read the HUD Regulations, especially the part about "net income", not gross income. Even if they didn't know what the difference was, it should have caused them to inquire about it. And they should have made an effort to understand what short-term collateralized loans really are.

The Housing Authority must have, or know, a CPA.

The problem was compounded by the unwillingness of the Chairman of the Board of Commissioners to recognize the error in gross income vs. net income. And, as a banker of 35 years' experience, he should have known in a heart beat that short-term collateralized loans are not income.

Further, the Executive Director was wrong when she said that many of the pawn shop loans had not been redeemed. As a matter of fact, all of them were redeemed. But, even if none had been redeemed, that would not have caused loan proceeds to become income.

The Housing Specialist and the Housing Supervisor should be required to attend trainings by HUD in how to understand and apply Regulations.

How many other Tenants of the MCHA have been harmed by staff mistakes?

Many Section 8 tenants do not have the resources to challenge errors successfully. Some of them might assume that the staff should know the rules and regulations and they would apply them correctly. Now we know that they don't know some of the Regulations and they don't apply them correctly.

And, worse, they dug in their heels when challenged.

If you know any clients of the MCHA who has been treated unfairly, let me know. As I have said many times, "I am not a lawyer, but ..." 

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