The Housing and Urban Development Department, acting under a recent court order, says it has notified more than 35,000 homeowners that they may be eligible for assistance that they were denied when they faced foreclosure on their homes.
A Chicago judge ruled last March that the department, HUD Secretary Samuel R. Pierce Jr. and several other HUD officials were in contempt of court because they had failed to follow court orders to help certain low-income homeowners facing foreclosures.
In late June, U.S. District Court Judge Hubert L. Will told HUD to begin notifying homeowners within 60 days that they could qualify for the assistance.
Will ordered HUD to send registered letters to the last known addresses of the homeowners, to hire a professional locater service, issue a press release and publish newspaper advertisements to try to contact those who could be eligible.
The former owners may be able to get their homes back or receive other compensation. HUD began sending the letters last week.
In the press release issued last week, HUD noted that a federal court "recently ruled that HUD improperly applied eligibility criteria to homeowners" in its mortgage assignment program.
The release did not say, however, that the court had ordered HUD to try to track down the homeowners, or that HUD had asked for a delay of that order by a federal appeals court, which refused the request.
HUD attorneys also have asked the appeals court to throw out the contempt finding. A hearing on this appeal is scheduled for Sept. 24.
The court case, a nationwide class-action suit first filed in 1973 by a group of borrowers, involves a HUD program under which owners who default on HUD-insured loans can ask the department to take over the mortgages and work out a payment plan, thus avoiding foreclosure. Homeowners can qualify for assistance if they were unable to make their payments because of circumstances beyond their control, such as loss of a job.
Although a settlement was reached in 1976, the borrowers complained in 1979, and again in 1983 and 1984 that HUD was not living up to the terms of the settlement. In a harshly worded contempt citation last March, Judge Will agreed with the borrowers.
HUD now must reprocess the applications of the more than 35,000 homeowners who sought between Jan. 1, 1980, when the settlement went into effect, and July 11, 1983. During that period, the judge said, HUD improperly applied eligibility criteria when it denied requests for help.
Nearly 3,000 borrowers may be eligible to get their own houses back or to get comparable housing, the judge said. If HUD can't do that, it must pay the borrowers "compensatory money damages," Will ruled.
DACHA DISCUSSION . . . Pierce and a 20-member delegation of government and private industry officials will leave next week for a 10-day trip to the Soviet Union, the secretary announced yesterday.
The occasion is a meeting of a joint committee created by the U.S.-Soviet Agreement on Cooperation in Housing and Other Construction, first signed in 1974. Under the agreement, which runs through June 1989, the two countries exchange information on housing, urban development and other construction subjects. Pierce will be the first Cabinet member to attend a meeting of the joint committee since 1978.
Businessmen making the trip are Austin Guirlinger, president of Cardinal Industries Inc., a housing developer and manufacturer; Kenneth E. Horn, a cement manufacturing consultant; George H. Matters, chairman of U.S. Home Corp., a large developer of single-family homes; Henry Nagy, head of Spancrete Industries, a manufacturer of machinery to make concrete planks; A. Alfred Taubman of the Taubman Co., a major real estate development firm; and Gregory Weidler of ARCO Chemical, which makes building materials and components.
The delegation will also include June Q. Koch, HUD assistant secretary for policy development and research; Janet Hale, HUD acting general deputy assistant secretary for housing; Alfred C. Moran, HUD assistant secretary for community planning and development; Dr. Arthur A. Ezra, director of the division for fundamental research in emerging and critical engineering systems for the National Science Foundation; Maj. Gen. Norman Delbridge Jr., deputy chief of Army engineers; and William R. Lawson, assistant commissioner of the General Services Administration's Public Building Service for design and construction.