For nearly a decade, Mr. Cadle faced the threat of arrest by authorities in Texas as the result of a lengthy debt collection dispute in which a county court concluded that Mr. Cadle had tried to financially ruin a debtor and used a pattern of abusive lawsuits.
Mr. Cadle says his run-ins with the law are a consequence of his willingness to demand repayment from some powerful people. And he makes no apologies for working hard to collect from debtors.
“We are heartless because people refuse to pay us even payments they can afford?” he said. “You aren’t taking advantage of anyone if you are simply asking them to pay what they owe you.”
Some of the debts are so hard to collect that the F.D.I.C. lets these loans go for a song. LeMire Schmeglar, a mortgage broker in Chicago, bought 191 delinquent loans with a book value of $6 million. He paid just over $15,000.
F.D.I.C. officials, in a written statement to The New York Times, said the agency had tried to balance its mandate to recoup as much as possible through the sale of loans it acquired while still protecting the interests of borrowers.
“We are statutorily required to sell assets in a way that will get as much money back for the uninsured depositors and other creditors, including our insurance fund,” Andrew Gray, an F.D.I.C. spokesman, said in the statement. “By focusing on a small percentage of particularly distressed assets, the view becomes distorted.” Mr. Gray added that the agency was creating a new unit to field any complaints from customers who had loans at failed banks.
There is a fair amount of mystery about the F.D.I.C.’s auction process. Bidding is not open to the public. And the list of winners is next to impossible to decipher. It is filled with enigmatic names like “Brown Bark III” and “Oceanside, CA 92054,” entities that have no Web sites or telephone listings.
Matthew Anderson, a partner at Foresight Analytics, a California firm that has studied the F.D.I.C. sales, said the buyers of these loans typically hoped to earn a profit of 25 to 35 percent a year — a high rate of return, but achievable only by buying loans with big risks. The forceful collection efforts are spreading nationally as bank failures increase. A search of court records shows cases filed by buyers of F.D.I.C. business loans in states like Florida, Arizona and Michigan.
In Arizona, Michael W. Bauer, 53, an electrician and owner of a vending machine business, said that after 15 years in business, and never once defaulting on a loan, he might have to file for bankruptcy because an entity called SMS Financial XVII, which bought his loans from the F.D.I.C. after the failure of First National Bank of Nevada, had filed a foreclosure lawsuit against him.
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“I owe the money. I know that, and I am prepared to repay my loan over time,” he said. “But to be strong-armed like this, at the moment when you are the most vulnerable, it just does not seem right.”
Northwest Arkansas, home to Wal-Mart and the poultry giant Tyson Foods, is hardly the epicenter of the banking crisis. But because ANB Financial was one of the first reasonably large banks to go bust, just as the wave of mortgage defaults was getting under way, the distressed loan drama is playing out here with particular intensity.
Even before the F.D.I.C.- sponsored auctions took place last fall, some of the agency’s Arkansas staff tried to warn small-business owners in the Fayetteville area to try to quickly clear up any past-due debts or be prepared to face the consequences, according to company owners and a former agency contractor.
“They said it out loud and quite clearly,” said Marsha G. Dunbar, who worked as a contractor for the F.D.I.C. after it took over ANB, where she once was a loan officer. “Settle up these debts now, or it is not going to be pleasant,” Ms. Dunbar said, paraphrasing the warnings.
Mr. Shoulders and his wife, Katherine, who bought the Fayetteville Athletic Club 13 years ago, heard these same warnings. They offered to pay $6 million immediately, and an additional $1 million upon the future sale of the gym, if the agency would agree to forgive their $10 million in debt.