Section 4625

Citation: Section 4625
Parent Document: Cole v. Harris, 187 U.S. App. D.C. 156 (1977)
Jurisdiction: United States (federal)
Effective Date: 1977-11-14
Original Source: https://www.courtlistener.com/opinion/7891523/cole-v-harris/ ↗

Full Text

1,663 chars

Reference to the record, moreover, indicates that HUD’s acquisition was indeed involuntary. An understanding of further background events, some of which were not described by the District Court, may be helpful in making a fair characterization. As noted by the District Court, rehabilitation work began in May of 1971. According to the Acting Director of the HUD District of Columbia Area Office, whose affidavit in relevant part below describes the chronology of events,14 in March of 1972 the non*169profit sponsor asked HUD to approve a substitution of contractors and to increase the insured mortgage from $2.9 million to $3.2 million. HUD agreed to this “unusual action” of increasing its liability. After the second contractor abandoned work on the project and placed a lien on the property, the nonprofit sponsor was thrown into default. At this point, in April of 1973 HUD was informed that the mortgagee had elected to foreclose, as it was permitted to do by HUD regulations. The sponsor then sought a second increase from HUD in the amount of the insured mortgage, which was presumably the mortgagee’s condition for allowing the sponsor to complete the work. By HUD’s account, however, “[bjecause of the past history of the project and since this increase would require rents in excess of what tenants in the neighborhood could afford or would be willing to pay, HUD had no alternative but to reject this request.”15 HUD’s inability to extend a second insurance increase was presumably based on 24 C.F.R. § 236.56, which, as noted, directs that mortgage insurance shall not be committed where the rents would be in excess of rents for similar housing.16

Other Sections in This Document (158)

Full Text