| HUD No.00-164 | |
| Further Information: | For Release |
| In the Washington, DC area: 202/708-0685 | Friday |
| Or contact your local HUD office | July 14, 2000 |
STATEMENT BY FHA COMMISSIONER WILLIAM C. APGAR ON COURT RULING UPHOLDING HUD'S AUTHORITY TO TERMINATE A LENDER WITH HIGH DEFAULT RATE
Federal Housing Commissioner William C. Apgar today issued the following statement in response to the ruling by the Fourth U.S. Circuit Court of Appeals upholding the Department of Housing and Urban Development's authority to bar Capitol Mortgage Bankers, Inc., from originating FHA-insured mortgages. The Circuit Court reversed a U.S. District Court decision that said HUD had exceeded its statutory authority in barring Capitol Mortgage.
"We welcome the Circuit Court's ruling as a victory for the consumer and a reaffirmation of HUD's responsibility to, in the court's words, 'quickly and efficiently root out poor performing lenders.' HUD took action against Capitol Mortgage and, since June 1999, 47 other lenders because their default rate exceeded 300 percent of the normal rate. This is what we are required to do under the National Housing Act that created FHA and the Housing and Community Development Act, which included specified appropriate actions to be taken to reduce losses in the FHA program. Bad lenders beware. We have used and will continue to use our powers under the law to protect our customers."
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