{"id":7677,"date":"2019-09-06T15:07:11","date_gmt":"2019-09-06T15:07:11","guid":{"rendered":"https:\/\/chenoafund.org\/?p=7677"},"modified":"2026-03-18T15:49:38","modified_gmt":"2026-03-18T15:49:38","slug":"court-rules-to-dismiss-litigation-of-controversial-mortgagee-letter","status":"publish","type":"post","link":"https:\/\/chenoafund.org\/court-rules-to-dismiss-litigation-of-controversial-mortgagee-letter\/","title":{"rendered":"Courts Dismiss Cases Over Controversial Mortgagee Letters"},"content":{"rendered":"<p><em>CBC Mortgage Agency Lauds Court Acknowledgement of Agency Overreach<\/em><\/p>\n<p>Salt Lake City, UT \u2013 On August 29, 2019, the ongoing legal dispute between the Cedar Band of Paiutes, Cedar Band Corporation, and CBC Mortgage Agency (collectively, CBCMA) and the Department of Housing and Urban Development (HUD) came to a conclusion, with the Court\u2019s dismissal of CBCMA\u2019s original complaint without prejudice. The dismissal came on the heels of CBCMA\u2019s initial victory in the matter, and the Court\u2019s award of a preliminary injunction preventing HUD from enforcing certain unlawful restrictions on the down payment assistance (DPA) programs that CBCMA provides to potential home buyers across the country. U.S. District Judge David Nuffer dismissed the litigation based on a declaration filed by HUD that (1) its current legal guidelines do not contain any type of geographical or jurisdictional limitation on where a government can provide down payment assistance, and (2) HUD\u2019s withdrawal of Mortgagee Letter 2019-06, which imposed unlawful restrictions which previously decimated CBCMA\u2019s business. Given the withdrawal of the original Mortgagee Letter, and the additional assurances made by HUD, CBCMA did not oppose HUD\u2019s request to dismiss the lawsuit.<\/p>\n<p>HUD\u2019s controversial Mortgagee Letter attempted to impose unlawful jurisdictional limitations on governmental entities providing down payments to home buyers seeking Federal Housing Administration (FHA) loans. The Mortgagee Letter would have ended national assistance programs and harmed potential home buyers, particularly low-to-moderate income individuals, who rely heavily on down payment assistance to purchase a home. HUD claimed it was trying to protect taxpayers, but had no data to support its policy positions. In fact, CBCMA presented information to the effect that its client base actually demonstrates a lower rate of default than other HUD programs nationally.<\/p>\n<p>\u201cThe Court\u2019s dismissal of this case officially recognizes HUD\u2019s misguided and unlawful approach of Mortgagee Letter 19-06,\u201d said Richard Ferguson, CBCMA president. \u201cSince April 18, we have fought on behalf of future homeowners across the country who would lose access to down payment assistance programs like CBCMA\u2019s Chenoa Fund.\u201d<\/p>\n<p>However, the Cedar Band believes that the fight may not be over. HUD has indicated that it intends to engage in rulemaking, where it may again attempt to implement its flawed policies, reduce access to FHA loans, and ultimately do so in a manner that undermines the sovereignty of the Cedar Band and other Indian Tribes.<\/p>\n<p>In a sworn declaration from HUD official Julie Shaffer, the agency acknowledged that \u201cHUD does not have a basis to enforce jurisdictional limitations on governmental entities providing down payment assistance\u201d and that it will not issue any further policies related to down payment assistance programs \u201cother than through rulemaking.\u201d<\/p>\n<p>\u201cWe will not give up the fight against HUD to preserve our ability to provide down payment assistance to first-time homebuyers, and to continue to engage in meaningful economic development activities for the Band,\u201d said Delice Tom, Chairwoman of the Cedar Band of Paiutes. \u201cShould HUD proceed with rulemaking, we expect them to engage in a meaningful \u2018collaborative\u2019 process with the Cedar Band and other National Tribal organizations, consistent with both HUD\u2019s own Tribal Consultation policy as well as the District Court\u2019s Order\u201d she added. The Chairwoman concluded by noting that \u201cCedar Band is grateful to those who have supported us throughout this process, including Congressman Ben McAdams (D-UT), Bishop Harry Jackson, and the countless Chenoa Fund borrowers, who have shared their stories.\u201d<\/p>\n<p>CBCMA believes that it should have the opportunity to demonstrate the success of its programs before HUD takes any sort of further action. Currently, HUD does not have data on individual government entities because it does not require the identification of the specific governmental entity providing DPA, even though it can and does require the identification of individual non-profits providing DPA and for every first-lien lender. As a result, HUD is unable to identify which government programs or practices might substantially increase the risk of loss to the Federal Government.<\/p>\n<p>CBCMA has encouraged HUD to collect data on a more granular level, identifying which government entity provides the down payment to accurately track the performance and pricing of loans originated by each governmental entity. HUD can then require that each governmental entity manage their DPA programs to specified performance standards.<\/p>\n<p>About CBC Mortgage Agency<\/p>\n<p>CBCMA provides secondary financing to borrowers, who are receiving loans insured by the Federal Housing Administration (FHA). CBCMA takes great care to ensure that the 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.<\/p>\n<p>CBCMA is a wholly owned subsidiary of Cedar Band Corporation, a federally chartered tribal corporation wholly owned by the Cedar Band of Paiutes, a federally recognized American Indian band. For more information about CBCMA and its programs, visit chenoafund.org<\/p>\n","protected":false},"excerpt":{"rendered":"<p>CBC Mortgage Agency Lauds Court Acknowledgement of Agency Overreach Salt Lake City, UT \u2013 On August 29, 2019, the ongoing legal dispute between the Cedar&#8230;<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[104],"tags":[419],"class_list":{"0":"post-7677","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-updates-and-announcements","7":"tag-mortgagee-letter"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Courts Dismiss Cases Over Controversial Mortgagee Letters - CBC Mortgage Agency<\/title>\n<meta name=\"description\" content=\"Read about the court&#039;s decision to dismiss litigation surrounding a controversial mortgagee letter at the Chenoa Fund.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/chenoafund.org\/court-rules-to-dismiss-litigation-of-controversial-mortgagee-letter\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Courts Dismiss Cases Over Controversial Mortgagee Letters - 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