Ferrell v. HUD

No. 98-2361 (7th Cir. July 26, 1999). ; Clearinghouse Number: 10056

Description

Low- and Moderate-Income Families Appeal Seventh Circuit Decision Allowing HUD to Suspend Mortgage Assignment Program

Abstract

Plaintiff-appellees challenge a Seventh Circuit holding that the U.S. Department of Housing and Urban Development (HUD) no longer retained authority to run a mortgage assignment program pursuant to a 20-year-old consent decree. In 1976 HUD agreed to operate the assignment program to help financially strapped families with mortgages insured by the Federal Housing Administration. The consent decree required HUD to accept the assignment of mortgages held by families who fell behind in their monthly payments through no fault of their own and who appeared likely to be able to make monthly payments within three years. HUD paid the outstanding principal balance and entered into forbearance agreements with the homeowners. In 1996 Congress replaced the program with loss-mitigation (foreclosure-avoidance) measures, offered at the sole discretion of lenders. The district court ordered the temporary reinstatement of the assignment program or an equivalent while it decided whether HUD should reinstate the assignment program. The Seventh Circuit reversed, agreeing with defendant-appellant’s argument that the Balanced Budget Downpayment Act, Pub. L. No. 104-99, eliminated the statutory authority for the assignment program. In their appeal for rehearing en banc, plaintiffs argue that the panel misapprehended (1) the proper standard for ruling on the motion for preliminary injunction; (2) the limited nature of appellate review of preliminary injunctive relief; and (3) the impact of the 1998 amendment to section 230 of the National Housing Act, 12 U.S.C. § 1715u. They argue that the court should have remanded the case for the district court to conduct a full hearing on the merits.

Additional Information

Attorney Information
William P. Wilen, Daniel P. Lindsey, Wendy L. Stasell, National Center on Poverty Law, 50 E. Washington, Suite 500, Chicago, IL 60602 (312.263.3830); George D. Gould, Community Legal Services, 1424 Chestnut St., Philadelphia, PA 19102 (215.981.3717).
Docket Date
1999-07-26 00:00:00+00:00