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United States v. William A. Day, A/K/A William Arthur Day, A/K/A William Day, A/K/A Bill A. Day, A/K/A Bill Day, and Helen L. Day, Husband and Wife, Henry W. Richardson and Barbara L. Richardson, Husband and Wife Richard Oil Company Yorkshire, Inc. U.S. Department of Agriculture, on Behalf of Commodity Credit Corporation and Decatur County A.S.C. Committee U.S. Department of Agriculture Farmers Home Administration and Decatur County, Iowa

Citation: 857 F.2d 1184Docket: 88-1334

Court: Court of Appeals for the Eighth Circuit; November 6, 1988; Federal Appellate Court

Narrative Opinion Summary

William A. Day and Helen L. Day appeal a district court's summary judgment favoring the government in a foreclosure action related to a Small Business Administration (SBA) disaster loan. The Days borrowed money from the SBA and secured the loan with a mortgage on their farmland. They fell behind on payments in 1980 and 1981, received consent to defer a 1982 payment, but ultimately failed to make the deferred payment, prompting the SBA to initiate foreclosure proceedings. The Days argue that the SBA abused its discretion by not granting them further forbearance. The court found no abuse of discretion, noting that the SBA had already accepted late payments and deferred a payment for ten months. Additionally, the SBA delayed foreclosure for nine months after notifying the Days of their default and took their financial situation into consideration before proceeding. Consequently, the court upheld the SBA's actions, affirming the summary judgment.

Legal Issues Addressed

Consideration of Borrower's Financial Situation Before Foreclosure

Application: The SBA took into account the financial situation of the borrowers before proceeding with foreclosure, demonstrating reasonable consideration and delay in action.

Reasoning: Additionally, the SBA delayed foreclosure for nine months after notifying the Days of their default and took their financial situation into consideration before proceeding.

Discretion of Government Agencies in Loan Forbearance

Application: The court found that the SBA did not abuse its discretion by refusing further forbearance after considering the borrowers' financial situation and previous accommodations.

Reasoning: The Days argue that the SBA abused its discretion by not granting them further forbearance. The court found no abuse of discretion, noting that the SBA had already accepted late payments and deferred a payment for ten months.

Foreclosure Proceedings and Summary Judgment

Application: The court upheld the government's right to initiate foreclosure proceedings after the borrowers defaulted on their loan payments, affirming the summary judgment in favor of the government.

Reasoning: William A. Day and Helen L. Day appeal a district court's summary judgment favoring the government in a foreclosure action related to a Small Business Administration (SBA) disaster loan.