Johnson v. United States Department of Housing and Urban Development (Hud), 911 F.2d 1302 (1990)

Citation: Johnson v. United States Department of Housing and Urban Development (Hud), 911 F.2d 1302 (1990)
Parent Document: Johnson v. United States Department of Housing and Urban Development (Hud), 911 F.2d 1302 (1990)
Jurisdiction: United States (federal)
Effective Date: 1990-10-29
Original Source: https://www.courtlistener.com/opinion/546951/johnson-v-united-states-departme... ↗

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HUD regulations promulgated pursuant to the National Housing Act of 1961 gave the private owner of section 221(d)(3) housing two ways of terminating the regulatory agreement before the expiration of the mortgage. The owner could either prepay the mortgage, or, with the consent of the mortgagee, terminate federal mortgage insurance. 24 C.F.R. Sec. 207.253(a), (b) (1988). Mortgage prepayment within the first twenty years of the life of the mortgage required HUD's approval. 24 C.F.R. Sec. 221.524(a)(2) (1988). After twenty years, the owner was free to prepay the remainder of the mortgage balance and release itself from the regulatory agreement without HUD's consent. 24 C.F.R. Sec. 221.524(a)(1)(ii). The owner's right to terminate federal mortgage insurance after obtaining the consent of the mortgagee was not restricted in the same way. Instead, Title 12 U.S.C. Sec. 1715t (Section 229 of the National Housing Act of 1959) authorized the Secretary to terminate a federal mortgage insurance contract upon the request of the owner or mortgagor and the lender or mortgagee at any time prior to the expiration of the mortgage. HUD interpreted this authorization as nondiscretionary, requiring HUD's approval whenever a request was brought by both the owner and the mortgagee. 24 C.F.R. Sec. 207.253(b).

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