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Background
This case was submitted fully stipulated in accordance with
Rule 122, and the facts are so found. The stipulations of the
parties, with accompanying exhibits, are incorporated herein by
this reference. At the time the petition was filed in this
matter, petitioners resided in the State of Wisconsin.
Prior to and during the year at issue, petitioners operated
a 235-acre farm in Dane County, Wisconsin. A principal activity
of petitioners’ agricultural enterprises was the production of
milk. In 1991, however, petitioners’ milk production fell to the
point that they were no longer able to make monthly payments due
under two outstanding mortgages on their farm real estate. These
mortgages were held by the Farmers Home Administration (FmHA) and
encumbered 135 acres of petitioners’ property. The first had
been entered on December 27, 1979, in the amount of $182,000.
The underlying loan had originally borne interest at a rate of 10
percent, which rate had subsequently been reduced to 8.25
percent. The second mortgage, in the amount of $24,090, had been
executed on July 23, 1984, to secure a loan bearing 5-percent
interest.
Faced with the above-mentioned inability to meet payment
obligations on these mortgages, petitioners contacted Richard A.
Guenther, County Supervisor and Agriculture Credit Manager of the
Dane County office of the Farm Service Agency, to explain their
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Last modified: May 25, 2011