Durham Council Orders Internal Audit Of City's Loan Program

An internal audit of the program was ordered Thursday. It was ordered in part because a homeowner who got a loan almost a decade ago still has not paid it back.

The City Council voted to start foreclosure procedures on Marlynda Bodison's house. But her situation has raised the question: should the city be in the business of giving out loans?

The home Bodison owns at 607 Canal St. has become the latest sore spot for the city. The house had council members questioning the actions of city staff.

"I don't see how a loan can go without payment for as long as it did," council member Eugene Brown said.

In 1994, Bodison received nearly $30,000 in federal money from the city. In nearly 10 years, she only has paid back about $2,000.

Bodison said she refuses to make payments because the city failed to repair the house as required by the federal grant.

"I did everything I was supposed to do and more," she said. "I went above and beyond. If you want to know where the blame lies, it's with the staff here in the city."

Brown agreed there is a problem at City Hall.

"The housing department is synonymous with incompetence and scandal," Brown said.

Just three years ago, City Hall came under fire for failing to collect on more than $800,000 in small business loans. Many of the small businesses did not even exist.

Since then, the city has recouped little of that money.

Recently, a report found the city has a 27-percent delinquency rate on its housing loans.

City Manager Marcia Conner defended the loan programs, saying the problems lie elsewhere.

"One of the things we need to look at is support services we provide to people who get into trouble," Conner said.

In Bodison's case, the Council blamed the homeowner and voted to foreclose, claiming that citizens need to comply by the rules.

The Council also voted to conduct an internal audit to try and determine what went wrong and what kind of improvements can be made to the loan system.