CBC Mortgage Agency Applauds Belated Recognition of Agency Overreach
Today, the Cedar Band of Paiutes, Cedar Band Corporation, and CBC Mortgage Agency (collectively, CBCMA) received important recognition of their claims in their ongoing litigation against the Department of Housing and Urban Development (HUD) regarding Mortgagee Letter 19-06, which sought to dramatically restrict down payment assistance by governmental entities, including CBCMA’s Chenoa Fund.
HUD’s motion officially recognizes the complete revocation of its unlawfully issued and fatally misguided Mortgagee Letter 19-06.
Importantly, HUD’s motion included a sworn declaration from a HUD official, Julie Shaffer, describing the steps that HUD has taken to resolve the agency’s admitted violation of the preliminary injunction. In her declaration, Shaffer states that “HUD does not have a basis to enforce jurisdictional limitations on governmental entities providing downpayment assistance…HUD will not issue any policies with respect to jurisdictional limitations with respect to the provision of downpayment assistance other than through rulemaking.”
“HUD’s declaration validates arguments that CBCMA has pressed throughout its lawsuit challenging Mortgagee Letter 19-06,” said Richard Ferguson, president of CBCMA. “Finally, HUD has acknowledged that the now-rescinded Mortgagee Letter changed its existing policy and that the agency has no authority to enforce jurisdictional limitations on the provision of downpayment assistance by governmental entities.”
CBCMA asks HUD to take constructive steps to ensure that families in need of downpayment assistance across the nation have access to Chenoa Fund’s downpayment assistance program (DPA), so that they too can achieve the dream of homeownership. CBCMA urges HUD to acknowledge the critical need for DPA, especially amongst minorities lacking intergenerational wealth. HUD should collect data on the performance of individual government DPA programs, examine risk factors, consult with Native American tribes, and seek public comment to avoid creating arbitrary rules regarding government DPA which have unnecessary deleterious consequences.
About CBC Mortgage Agency
CBCMA provides secondary financing to borrowers who are receiving loans insured by the Federal Housing Administration (FHA). CBCMA takes great care to make sure that these FHA loans perform well, including providing education as well as 12 months of counseling to borrowers after the purchase of their home. In addition, CBCMA regularly reviews its credit standards to ensure that the borrowers it assists are credit worthy.