Big Mess with a federal debt

I'm hoping someone will have some input on this unique situation. Please forgive me for the length of this post, I condensed as much as possible. I had a mortgage through Farmers Home Administration which is under USDA) for 15 years. During the early years of the loan, bookkeeping was done by hand at a local county office. I became aware of small bookkeeping errors that I addressed and never received an answer for. At one point (unrelated to the errors) in the loan, we got behind in payments. We made payment arrangements to catch up the delinquent amount. The final payment on the past due amount (there was 3 or 4 payments in the arrangement) arrived about a week late, so they said since we had not kept our agreement they were going to foreclose. We contested and had to appear before a USDA official along with the head of the county office. What got me was they "CASHED" the check that was received late, and when they decided to foreclose, they refunded the amount with a US Treasury check. At the hearing I gave the related information on the late payments, made statements about believing there was bookkeeping errors and asked why my check was refunded if I supposedly owed them money. The county agent denied the refund was due to the cashed check and would only state that the cause for the refund must be from an
over-payment sometime during the course of the loan. Again when I asked how I could get a refund when I had owed a back payment, there was no response. The USDA official only said he would rquest an audit of the account, which I never received any information from if they had. We ended up keeping the house on a technicality because the inept county agent forgot to send us a required form prior to starting foreclosure proceedings. This hearing was tape-recorded which I did not receive a copy of. Several years later I purchased another house and kept the previous for rental property. While initially remodeling the house to prepare it for rental, my wife lost her job and we got behind on the mortgage again. At the point just prior to foreclosure they told us they would release the house for sale and if it brought less then the pay-off we would likely be forgiven most of the difference and what we did pay would be over 60 months. We accepted this to avoid a foreclosure on our credit history. The house sold and we owed a difference of about $7,000 or $8,000. I called FMHA and discussed our current financial problems and told them I was trying to workout settlements with other creditors to avoid a BK. If I got arrangements with the other debts, I would call back and offer a settlement and begin payments with them. I was not told that they were only allowed to keep the account for a certain period of time. The next thing I know FMHA turned the account over to the Treasury for collection, which in turn contracts private collectors first. The initial fees for this jumped the total amount to about $11,000. I procrastinated for a couple of years, the Treasury had an intercept on tax refunds, which I usually got very little in returns anyway. I finally decided to address this and called the Treasury and told them the history. They were abrupt and said they were only the "collector" for the government and if I wanted to send any proof of my claims they would look at it. I told them I had requested FMHA send me my records several months prior and had received nothing. The woman arrogantly asked why I did not have copies of my history. I explained that it started almost 20 years ago, the bookkeeping was by hand at points, and I was not sent statements, and in my records should be the recording of me addressing some of these complaints years ago. She cut me off and said they could only request the information from FMHA and send me what they received from them. It's been about a year since I requested from FMHA and about 3 months since I requested verification from Treasury (by phone). In the mean time, there are still intercepts on my tax refunds and my CR shows an $8,000 collection by USDA. I did send a CRRR to the CRA's demanding full validation and or removal in 30 days. I fear that the Treasury is not liable to
all the FTC regulations like private agency's. A lot of government agency's are not always bound by the regulations of other's, just look at the IRS. Any advise would be greatly appreciated.

Thanks, MAG