Scotsman Guide > News > April 2019 > News Story

 Enter your e-mail address and password below.

  •  
  •  

Forgot your password? New User? Register Now.

News Archives

 
Subscribe icon Subscribe to our weekly e-newsletter, Top News.

HUD delays new FHA guidelines after lawsuit


The U.S. Department of Housing and Urban Development has issued a 90-day stay to controversial new regulations designed to curb companies from providing downpayment assistance.

HUDThe decision came after the filing of a lawsuit by the Cedar Band of Paiutes, a Native American tribe in Utah that operates the Cedar Band Corp. (CBC).

The CBC, in turn, manages the Chenoa Fund, an affordable-housing program that provides downpayment assistance nationwide. CBC’s operations would have been massively hampered by the proposed regulations, which restrict groups to providing financial aid only to borrowers within their geographic jurisdiction.

“Aside from its discriminatory effect, this new policy fails to do anything to reduce risk associated with FHA-insured mortgages,” said Paul Terry, CEO of the Cedar Band Corp., after HUD announced the proposal last week. “HUD is using that claim as a smokescreen to obscure its real intent, and it’s consumers who will suffer.”

Indeed, CBC estimates that some 50 percent of its clients are minority borrowers. Its lawsuit sought to immediately cease enforcement of HUD’s new regulations on the basis that it was adopted “pursuant to an improper process,” thereby violating federal law. Specifically, the suit states that the guidelines were issued without prior notice or public opportunity to comment, as well as without legally required consultation with affected Native American tribes.

“We understand that HUD officials must balance protection of the Mutual Mortgage Insurance Fund (MMIF) with its mission of helping low- to moderate-income families fulfill their dream of homeownership," said Bobby Rowser, a member of the Cedar Band of Paiutes and a board member of Cedar Band Corp.. “However, limiting the Band to the reservation does nothing to lower defaults on FHA mortgages. We urge HUD to seek for and evaluate public commentary and data, prior to implementing policy changes.”

“The harm that HUD inflicted on CBCMA and the members of the Cedar Band with this administrative action is staggering," said lead counsel Helgi C. Walker of Gibson Dunn & Crutcher LLP, which the CBC retained for the lawsuit. “We are pleased that the government understood the need to hit the pause button and return to the status quo for a period of time. We remain confident that we will prevail in permanently rectifying this unlawful agency action.”

 

 


 

Questions? Contact at (425) 984-6019 or arniea@scotsmanguide.com.

Get the latest news and articles from Scotsman Guide straight to your inbox.


Send me the following e-mails:





Learn more about Scotsman Guide e-mails

Thank you for signing up to receive e-mails from Scotsman Guide.

A confirmation e-mail has been sent to the address you provided.

For questions regarding your e-mail subscriptions please contact Circulation@ScotsmanGuide.com or call (800) 297-6061.


Fins A Lender Post a Loan
Residential Find a Lender Commercial Find a Lender
Follow Us:Visit Scotsman Guide Facebook pageVisit Scotsman Guide LinkedIn pageVisit Scotsman Guide Twitter page
 
 
 
 

 
 

© 2019 Scotsman Guide Media. All Rights Reserved.  Terms of Use  |  Privacy Policy