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Off a two-lane stretch of U.S. Route 1 in rural Caribou, Maine, sits a white ranch-style house that’s been consumed by weeds and vines.
The house was once the fulfillment of a dream. The owner had purchased it in 2006 through a federal mortgage program designed specifically for people like her: impoverished, first-time homeowners who live in the most rural parts of the United States. The loan, which came directly from the U.S. Department of Agriculture, required no down payment.
But things started going wrong from the day she moved in. First, the basement flooded. Then the furnace stopped working. As major repair costs accumulated over the next six years, the woman’s health deteriorated until she was forced to leave her job as a manager at Kmart. Her disability check was not enough to cover medical expenses and the upkeep required for the house — let alone the $855 monthly mortgage.
So in 2012 she drove to a USDA office 20 miles away and tried to give the house back. She said staff there would not accept her keys, telling her instead to call a toll-free number for help, as agency protocol requires. She left a message and did not hear back. She stopped paying her mortgage and moved out.
Her dream home sat abandoned for more than a decade.
USDA guidance says the agency should act quickly when borrowers fall behind on payments “to minimize any potential loss to the Government and to the borrower.” A prompt sale keeps the government from having to pay the legal and administrative costs associated with foreclosure down the road and may protect the borrower from incurring a major blemish on their credit history.
But that did not happen. Rather, 13 years passed before a sheriff’s deputy knocked on the door of the woman’s public housing apartment in May and served her with foreclosure papers on the now dilapidated ranch home that’s been overtaken by squatters. The government’s delay hurt the value of its investment and left the woman with a bill far greater than the cost of the loan she initially took out — with additional interest and other fees that had accumulated over those years.
The woman, now 68, declined to be interviewed, but her attorney, Tom Cox, said she allowed him to share her experience on the condition that she not be named to protect her privacy.
Since March, the USDA has filed 56 foreclosures in the federal court system against properties purchased with a rural development mortgage, also known as a Section 502 direct loan. All but one were in Maine. The borrowers have been in default for an average of nearly nine years.
As in the case of the Caribou homeowner, the USDA’s delays in those cases have resulted in borrowers racking up more debt because of the interest and fees that piled up in the intervening years, according to a Bangor Daily News and ProPublica examination of the foreclosure cases and interviews with former USDA officials and legal experts.
On average, borrowers in the 55 Maine cases owe $110,000 more than they would have had the agency moved to take possession of the properties when they first defaulted, the Bangor Daily News and ProPublica found. This includes what the USDA calls “preservation and inspection” fees, a broad category on the foreclosures filings that can include home repairs and yard maintenance, among other things.
Borrowers who can’t pay risk having the government garnish their wages or federal benefits such as Social Security. The Caribou woman had her disability checks garnished six times since 2015 to offset her debt before the USDA even foreclosed on her property, according to her lawyer. The best way to keep the government from garnishing federal benefits is to file for bankruptcy, attorneys said.
“It really undermines the concept of giving access to homeownership to a population who might not otherwise have been able to afford it,” said Rhiannon Hampson, former USDA rural development director for Maine who stepped down in January before President Donald Trump was inaugurated. “The irony, with all of these fees piled on, is that they can’t afford to get out of it.”
The recent wave of foreclosure filings in Maine underscores the government’s failure to monitor a mortgage program that since its founding in 1949 has poured tens of billions of tax dollars into giving the poorest Americans a shot at homeownership.
The USDA does not publicly report how often it files foreclosures. U.S. Rep. Chellie Pingree, a Maine Democrat and member of a House appropriations subcommittee overseeing the USDA’s direct loan program, has proposed language in the House agriculture appropriations report for the 2026 fiscal year calling on the agency to regularly report the number of foreclosures and abandoned properties related to the direct loan program. The bill awaits a vote before the full House of Representative.
The USDA regularly filed foreclosures in Maine prior to the coronavirus pandemic but has rarely done so in recent years, according to Richard H. Broderick Jr., a Maine attorney with whom the agency had contracted to file foreclosures until 2022. Kevin Crosman, the Maine attorney now filing foreclosures on behalf of the USDA, would not comment on why the agency started doing so again.
Reporters visited 12 of the 55 homes in the Bangor Daily News’ core coverage area in May. At least five appeared to be abandoned and in disrepair — with windows boarded up or a sign affixed to the door saying it was being cared for by a New York company — raising doubts that the government will recoup its investments.
The USDA is supposed to take custody of properties purchased with a Section 502 direct loan and begin the foreclosure process when the homeowner becomes incapacitated, dies or has abandoned it, according to the agency’s handbook. Otherwise the properties may languish and lose value.
"It really undermines the concept of giving access to homeownership to a population who might not otherwise have been able to afford it."— Rhiannon Hampson, former USDA rural development director for Maine
Agency guidelines do not specify how soon the government should step in after a loan falls into delinquency, but under federal law, lenders cannot foreclose on a property until borrowers have been in default for 120 days.
Nearly a fifth of the USDA’s 159,208 Section 502 direct loans in its active national portfolio — 30,496 — were delinquent as of March, according to internal agency data obtained by the Bangor Daily News and ProPublica. That rate is double what a 1993 internal agency report said was acceptable. But neither the USDA nor the White House would say why the agency is focusing on foreclosures in Maine. Vermont is the only other state in which the USDA has filed a single foreclosure, according to federal court filings.
The foreclosures started just before Trump’s Justice Department sued the state of Maine in April over its inclusion of transgender athletes in girls’ sports, part of a larger spat between Trump and Maine Gov. Janet Mills. The White House would not say whether the foreclosures are connected in any way to those ongoing conflicts.
The Trump administration is seeking to eliminate the 76-year-old rural homeownership program in the White House’s budget proposal for the 2026 fiscal year. Some of his predecessors, including Barack Obama and George W. Bush, have also sought to cut back the $880 million direct mortgage program, which has bipartisan support in Congress.
A USDA spokesperson said the Trump administration is in the process of reviewing the loans to “understand the magnitude of the problems it has inherited.” The agency noted that in Maine alone, more than 800 properties are considered delinquent and nearly 400 homes are being tracked for foreclosure. The USDA did not respond to additional questions.
“Hopelessly in Debt”
In 2013, months after the Caribou woman had abandoned her property, she received a letter at her new residence from the USDA informing her that she had to pay the government $22,000 in missed mortgage payments and late fees or she’d lose the Caribou home, said Cox, her lawyer. He said she did not pay because she did not want the house anymore. The USDA sent her nearly a dozen letters between 2014 and 2015 claiming foreclosure was imminent, but a decade passed before she was served with foreclosure papers this spring.
A sign on the front door says the property is being maintained by a New York City company, which did not return calls seeking comment. A green tarp stretches across missing sections of the roof. Inside, piles of garbage and feces litter the floor.
A real estate broker who inspected the home in June with Cox estimated the value of the house to be around $40,000, a steep depreciation from the 2006 purchase price of $144,000.
During the time since she abandoned the property, what the woman owes USDA continued to balloon, Cox said.
His client now owes the government $393,463, according to court documents — nearly 10 times what the home is worth. Nearly 60% of that comprises interest that accumulated after she defaulted, as well as $91,304 in “preservation and inspection” fees.
“If the USDA had dealt with this back in 2012, they might have gotten most or all of their money back by selling the home” before it deteriorated, Cox said. “They’re not going to collect it now. It’s a huge waste of government resources and money to let this happen.”
Other USDA borrowers simply continue living in their homes long after they default on their loans, accumulating more debt with each passing year that the government does not move to collect.
"It’s a huge waste of government resources and money to let this happen."— Attorney Tom Cox
Christine Ogden had stopped paying the $465-a-month mortgage for her blue saltbox home in the coastal Maine town of Searsport in 2013, according to court documents. She said she told the USDA at the time to take her home after the agency threatened her with foreclosure if she did not pay.
But it took the government until 2019 to attempt to foreclose upon her property. The case was dismissed in 2020 amid the coronavirus pandemic. Five years later, in April, she received a summons to appear in federal court to start foreclosure proceedings again.
Ogden now owes $203,787 on what had been a $66,200 mortgage, according to court documents. Half of her debt comprises interest that accumulated after she defaulted, as well as other fees she would not have had to pay had the USDA addressed the delinquency sooner, an analysis by the Bangor Daily News and ProPublica found.
Ogden, who has lived rent-free in the house for 12 years, says she is unable to pay the burgeoning debt and does not know what will happen. The foreclosure will hurt her credit, making it harder for her to get another loan or find rental housing, she said.
“I'm 59,” Ogden said. “I’ll be homeless, basically.”
Little Government Oversight
The owners of another property, in Norridgewock in central Maine, also stopped paying their mortgage — and moved out of the house — years before the USDA foreclosed on the home this spring, court records show. The owners have not appeared to live at the property since at least 2014, according to property tax records, and defaulted on their loan in 2019 — but the government did not file for foreclosure until April.
The owners, it turned out, were violating USDA rules by renting out their home. The tenant, who answered the door when a reporter visited in May after the foreclosure was filed in federal court, would not share his name but estimated that he has paid $100,000 in rent to the owners during the 12 years he said he has lived there. USDA guidelines allow borrowers to rent their homes for up to three years, and only under very narrow circumstances.
Properties purchased under the 502 direct loan program are supposed to be the borrower’s permanent residence and not meant to generate income, according to USDA guidelines. Homeowners can rent out their properties only due to certain life events such as if their families outgrow their current home or if they are moving for a job. But the borrower must still pay the mortgage every month.
The USDA says the owners of the Norridgewock home owe the agency $276,191. The homeowners live in Tennessee, according to foreclosure summons and other court records filed this year by the USDA; they did not respond to calls made to phone numbers listed under their names.
USDA staff based in Maine who once were in close touch with borrowers when they ran into financial trouble now have little to no oversight of Section 502 loans. That’s because a major restructuring in the 1990s eliminated many of the county offices that had managed all aspects of the loans and centralized the servicing of these loans to an office in St. Louis, said Leslie Strauss, a senior policy analyst for the Housing Assistance Council, a Washington, D.C.-based nonprofit focused on affordable rural housing.
These changes came on the heels of an internal study in 1991 concluding that centralizing the administration of these loans would result in better service and a lower delinquency rate of about 10%, according to a 1993 report by the U.S. Government Accountability Office. More than three decades later, the delinquency rate for Section 502 direct loans has nearly doubled to 19%.
Hampson, Maine’s former USDA rural development official who now leads economic development for the Gulf of Maine Research Institute, said she had been pushing the agency to allow local staff to regain oversight of borrowers’ financial situations “so that we can go out and monitor what’s going on, so that we aren’t caught by surprise.”
But her effort did not gain traction, Hampson said.
As the foreclosures accumulated in Maine in recent months, the USDA website published an advisory directing struggling Maine borrowers to call the St. Louis office for help. But fewer staff members are available to respond after Trump’s recent cuts to the federal workforce.
As of early May, 1,536 employees — nearly a third of the rural development office — had taken the buyout, according to USDA documents outlining the results of the Trump administration’s two financial incentive offers to quit. Of those, 197 worked in the St. Louis office.
“We can’t afford failure,” Hampson said of the long-delayed foreclosures leading to insurmountable debt. “The onus is on the government to make sure that we’re providing the right kind of safety nets to prevent this sort of thing from happening.”
Bangor Daily News reporter Sawyer Loftus may be reached at sloftus@bangordailynews.com.
Michael Shepherd, Sasha Ray and Paula Brewer of BDN contributed reporting. Mariam Elba of ProPublica contributed research.