
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, May 11, 1990                   TAG: 9005110124
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A6   EDITION: METRO 
SOURCE: Los Angeles Times
DATELINE: WASHINGTON                                LENGTH: Medium

HUD AUDITS PREDICT $177 MILLION IN TITLE X LOAN DEFAULTS

A federal housing program that financed expensive projects including marinas and golf courses probably will cost the government $177 million in loan defaults, more than three times earlier estimates, federal auditors reported Thursday.

The audits, made public by the Department of Housing and Urban Development, said the program was mismanaged during the Ronald Reagan administration, with grants often made on the basis of influence wielded by Republican consultants who had friends inside the agency.

The program, known as Title X, was killed last year by HUD Secretary Jack Kemp on grounds that it had proven to be of little benefit to moderate- or low-income Americans.

Auditors for the inspector general's office at HUD said the program's losses already have topped an earlier estimate of $55 million, and more defaults are expected.

Although Kemp abolished the program, losses continued to mount this year because he had too few staff members monitoring previously funded projects, the reports said. Advised of this shortcoming, Kemp last week created a new unit to watch over ongoing projects, officials said.

The new audits identified two former HUD officials from the Reagan administration, Shirley M. Wiseman and Maurice Barksdale, as having lobbied successfully for financially risky projects of dubious merit. Both have testified at congressional hearings into mismanagement at HUD.

Wiseman received $182,600 for work as a consultant for two Texas developments - one in Dallas and the other in Austin - that were approved by HUD headquarters after being rejected by HUD regional offices, the audits said.

Although the developers, who received a total of $20 million in HUD financing, have repaid their loans on schedule, the long-term "financial viability" of their projects is questionable, the auditors reported.

Wiseman, in testimony to the Lantos subcommittee last summer, acknowledged that during the tenure of former HUD Secretary Samuel R. Pierce Jr., the agency often awarded housing grants based on political favoritism.

Pierce, after an initial appearance before the House panel a year ago, has refused to give further testimony on grounds that it might incriminate him.

by CNB