AARP-HUD Non-Borrowing Spouse Clash Continues

The ongoing non-borrowing spouse litigation continues, as both the Department of Housing and Urban Development (HUD) as well as the AARP Litigation Foundation have recently filed court documents arguing why the case should — and shouldn’t — be dismissed.

Earlier this month, HUD filed to dismiss ongoing litigation involving six people, on the grounds that they have “received all possible relief to which they are entitled,” court documents show.

“A case is moot when ‘a party has already obtained all the relief that it has sought,’” HUD’s April 9 court filing states, quoting a previous, but unrelated, case. “HUD has fully complied with the Court’s Orders, including the latest remand order. No live issues therefore remain in the case and it should be dismissed.”

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The plaintiffs referenced in the court filing include Charlie Plunkett, Clarisa Welte, Roselaine LaBonte, Winnie Barlock, Robert Bennett and Leila Joseph — all of whom are involved in the non-borrowing spouse lawsuit first filed in the U.S. District Court for Washington D.C.by the AARP Litigation Foundation on behalf of several plaintiffs in 2011.

That lawsuit was at first dismissed for lack of standing, but was brought back by AARP in a court of appeals and was ruled in favor of the plaintiffs in the case, who claimed they had been unduly foreclosed upon and should be considered “homeowners” under the terms of the loans.

The plaintiffs were granted the ability to remain in their homes, while HUD later adjusted policy to reflect new protections for all new and existing non-borrowing spouses. Because of its new policies and practices — namely, those outlined in Mortgagee Letter 2015-03 — HUD argues in its recent court filings that the ongoing case be concluded.

Additionally, HUD says that five of the six plaintiffs in the case have now been provided with all of the relief they sought — protection from foreclosure and displacement — and their claims are therefore moot.

The remaining plaintiff was determined to be ineligible for the relief provided, but nothing remains of her claims because the court approved the criteria that were applied to her, so her claims are moot as well, the court document states.

However, a week after HUD’s filings, court documents were filed on behalf of the plaintiffs in the case, charging that HUD has failed to provide adequate relief to the plaintiffs and other non-borrowing spouses who may be in similar situations.

“Plaintiffs clearly claim that they are entitled to more than what HUD has provided, and HUD has no viable argument that the class claims are moot,” the April 16 document states. “Indeed, HUD has completely disregarded this Court’s admonition to treat similarly situated cases in a similar manner. In any event, HUD’s actions on remand do not provide a basis for stripping this Court of subject matter jurisdiction.”

The plaintiffs argue that HUD’s recent Mortgagee Letter does not provide any necessary relief, and that its reasons for urging the court to dismiss the case make no sense.

Through the court documents, the plaintiffs “ask for a declaratory judgment that HUD’s failure to protect surviving spouses from foreclosure is arbitrary, capricious and contrary to law, and for an order enjoining HUD from enforcing foreclosure requirements against surviving spouses after the death of a borrower spouse, from foreclosing on any mortgage that has been assigned to HUD, and to offer lenders the option of immediately assigning loans without foreclosing on surviving spouses.”

HUD declined to comment beyond what the court filings state.

Written by Emily Study

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  • Who said that HUD has now made it so that there will no further court action? How silly, sophomoric, and ridiculous.

    If anything HUD’s Mortgagee Letters have only made matters worse, much worse. Thank goodness AARP is trying to do the right thing under 12 USC 1715z-20(j).

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