Judge Leaves Door Open for Servicer to Refile HUD Suit
August 12, 2011
A federal district court in Dallas dismissed a civil lawsuit against the Department of Housing and Urban Development and HUD Secretary Shaun Donovan because the plaintiff, a mortgage lender and servicer, lacked standing to bring suit. U.S. District Court Judge Barbara Lynn for the Northern District of Texas, however, gave American Home Mortgage Servicing, Inc. (AHMSI) another opportunity to amend and refile its complaint. Ruling against AHMSI on standing, Lynn never got to the core of the complaint, which accused HUD of failing to pay insurance claims submitted by AHMSI on 161 defaulted FHA-insured mortgage loans, which it serviced. AHMSI claimed...