HUD Reverse Mortgage Suit Revived to Proceed

Remember the case filed by two widowers against the US Department of Housing and Urban Development (HUD) under the Housing Equity Conversion Mortgage (HECM) program? Well, it was recently revived by an appeals court within Washington. The case was given the green-light by three judges of the aforesaid court who argued that HECM regulations seem to be in conflict with the governing statute on which they are based. As you might already know, when you purchase a FHA-insured home under the HUD homes program, ownership reverts to HUD when you default on the loan.

In their 13-page opinion, the judges wrote that “We admit to being somewhat puzzled as to how HUD can justify a regulation that seems contrary to the governing statute”. In other words, the appeals court was particularly confounded by the regulations of the HECM program that appear to offer no protection to surviving spouses of borrowers yet the statute approving the same HECM program categorically affords them protection.

The lawsuit, filed on March 8, 2011, was previously dismissed by a lower court judge who ruled that the complainants were not the borrowers and that the lender had the right to foreclose the mortgage when defaulted on, as in death of the borrower.

In the suit, the widowers argue that as surviving spouses, they are protected against foreclosure by a provision in the National Housing Act that approves the HECM program. The provision, according to the applicants, defines the term ‘homeowner’ on the HECM loan as encompassing the spouse of the borrower. The HECM loan matures upon borrower’s death, according to the same statute.

The appeals court, however, stated that there are a couple of remedies that HUD could come up with, such as accepting the mortgage obligation, clearing the loan balance and eschewing the foreclosure.

The HUD homes program offers cheap homes for sale to prospective homeowners insured by the FHA. The suit against HUD will now proceed in the District Court of Washington, D.C.

The full news article can be read here.

Hurricane Sandy and HUD Homes

Hurricane Sandy has been rough on everyone, and not just during the actual event. The aftermath is perhaps the most difficult part of any hurricane. There can be so much damage, so many things to replace.

In extreme examples, you may even have to replace your home. While this is of course a horrible tragedy, it’s created opportunities to those in the area who have been affected, as well any anyone else looking to buy homes.

Help with HUD Homes

The U.S. Department of Housing & Urban Development (HUD) has recently said that they will offer aid to the area
. Additionally, there’s an inventory of vacant and HUD homes now available for purchase.

It’s important to jump on such opportunities as quickly as possible, since they may very well be time-sensitive if only due to the large number of other people who will also be taking advantage of the aid.

Many of these HUD homes will sell at a discount during the hurricane recovery process. This means that those who jump on HUD homes discounts could save a lot of money in the process. You certainly don’t want to be left behind in the process of buying these HUD homes.

HUD houses are cheap homesThis means that if you have any interest in HUD homes for sale at all, or even if you might have interest in them in the future, now is the time to act. You never know when opportunities like these will come around again. And as a bonus, the measure will help victims in distress at the same time. It’s always difficult to have to deal with a hurricane on top of all of life’s other troubles.

There are many resources online for information on HUD homes. An example is the site RealtyStore.

That’s why it can help immensely to learn how to buy HUD homes.

History Has Led To A Flood of HUD Homes For Sale

HUD homes for sale were largely the result of George Romney's efforts to improve home ownership for blacks and other minoritiesTo understand why there are so many HUD homes for sale, it helps to look back to the days when Housing and Urban Development got its start. There were some challenging times during back then, and some of the challenges involved rioting. However, there were some heroes at the time that did their best to resolve some of the discrepancies in the system.

George Romney, the father of current presidential candidate Mitt Romney, felt the root cause of rioting in inner cities during the 1960s was the blighted black ghettos. It was his intention to use his power as secretary of Housing and Urban Development to change this to give blacks the same advantages as their white counterparts and end the tensions between the races.

During his tenure as part of the Nixon Cabinet, Romney ordered the rejection of applications for sewer, water, and projects for highway development for those cities and states that fostered segregated housing in their local areas. His “Open Communities” initiative was not cleared with White House officials, and when Nixon supporters got word of grants being denied under these regulations, they complained to the president directly.

Nixon took the position that legal segregation was entirely wrong, but he also felt that forcing integration into the arenas of education and housing was equally as wrong. So, rather than supporting Romney’s actions, he ordered his domestic policy chief, John Ehrlichman to put a stop to it.

The president understood that the consequences of his own actions would assure the continuation of segregation in areas of American society that held the most promise for change. However, he stood firm in his resolve to the point that he forced the former governor of Michigan out of his administration by shutting down the program and refusing to meet with him.

The current administration under the guidance of President Obama has been inundated by private lawsuits which have prodded them to a bit more action than other administrations by withholding funds from counties like Westchester, N.Y. and cities such as Joliet, Ill because they have not met civil rights obligations.

However, they have not gone far enough to create a climate where discrimination in housing is totally wiped out. They have failed to issue regulations that correctly define what “affirmatively further” means. Even though billions of taxpayer dollars have been thrown at trying to fix the housing inequities, there have been no discernible changes as to date.

Black Americans earning high wages are still predominantly living in poor neighborhoods while their white counterparts making far less live in neighborhoods that are more affluent. While $400 million have been channeled into Milwaukee through HUD block grants, this city is tied with Detroit as America’s most segregated metropolitan area when it comes to African Americans.

New York City which boasts of having the largest black population in the United States has gathered in $4 billion worth of block grants from 1993 to present day, but this money has only eased racial segregation to the tune of 3 percent. To reach true integration levels today, it would mean that 80 percent of blacks living in New York would have to move.

A professor at University of Minnesota Law School, Myron Orfield, stated that if Romney’s efforts had been adhered to, rather than the federal government kicking him out, the reshaping of American life would have taken place and the nation would have looked very different today.

The riots that took place during 1067 in Detroit profoundly affected Romney, and that was only partly due to the 2,000 buildings that were destroyed and the 43 lives that succumbed to the violence. He also felt that brute force was not the answer to taming the inequities that existed. He felt the answer was to eliminate the problems that led to the violence in the first place.

In today’s political climate there still remains much contention in the area of race relations. Those contentions often are over equal housing for everyone. It was in 1992 that then President Bill Clinton assigned Henry Cisneros with the job of HUD secretary. Cisneros sincerely wished to change the situation, but still today there exist inequities in the system.

Officials within the Obama administration assert that they will finish work on defining rules that explain exactly what “affirmatively further fair housing” really means.

With the current crisis caused by Hurricane Sandy, there is an even greater need for help with housing. Will HUD step up and be the light at the end of the proverbial tunnel it was intended to be. Who knows? Government agencies have long held the distinction of failing to do what is right for the people.

If you are considering HUD homes for sale as an option, this free Guide for buying HUD homes can help you determine if this is the way you would like to go to buy the home of your choice.

Regardless of the problems that government regulations have caused with housing in the past, there is no reason anyone should not take full advantage of the assistance being offered today.