CBC Mortgage Agency obtained a Court Order stating the effective date of FHA Mortgagee Letter 19-06 for 90 days from April 24th, the date of the order. This means that case numbers pulled prior to July 23rd, 2019 are not impacted by the referenced mortgagee letter. Assuming CBCMA does not prevail in obtaining injunctive relief between now and July 23, 2019, the referenced mortgagee letter would go into effect on July 23, 2019 and any case number pulled from that date forward will be subject to the terms of the new policy.
We congratulate the FHA for agreeing to this stay so that existing buyers are not negatively impacted and the industry has an opportunity to work with FHA to develop a better solution. CBC Mortgage Agency stresses our support of the FHA and its responsibility to properly manage risk to the MMIF, but limiting governmental entities’ area of operation will do nothing to protect the MMIF. The restrictions on the area of operations of a governmental DPA in Mortgagee Letter 2019-06 were not formulated based on data, but upon assumptions that somehow jurisdiction affects loan performance when CBCMA’s loan performance data indicates otherwise. HUD’s Mortgagee Letter purports to be an informal “guidance” document that merely “clarifies” existing law governing the provision of down payment assistance. In fact, the Mortgagee Letter represents a radical shift in longstanding HUD policy. In addition, HUD does not have the statutory authority to establish the rules contained in the Mortgagee Letter.
It should be noted that we do not claim to speak for the industry. We feel the industry should voice its opinions and concerns. National down payment assistance programs can be run responsibly and their presence is beneficial to the industry. We ask you to notify the MBA in writing that you want them to support our efforts. There are additional resources you and your staff can pursue to lend your support listed on chenoafund.org by clicking the link at the top of the page, or by following this LINK.