HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.
![handle is hein.gao/gaobadxuc0001 and id is 1 raw text is:
DOCUMENT RESUME
02234 - [A1412483]
The Need for HUD to More Fairly Treat Homeowner Claims for
Defects in Existing Insured Homes. April 15, 1977. 12 pp.
Testimony before the House Committee on Government Operationx:
Manpower and Housing Subcommittee; by Wilbur D. Campbell,
hssociate Director, Community and Economic Development Div.
Issae Area: Domestic Housing and Community Development:
Minimizing Costs in Maintaining Integrity and Livability of
Subsidized Housing (2107).
Contact: Community and Economic Development Div.
Budget Function: Community and Regional Development (450).
Organization Concerned: Department of Housing and U'ban
Development.
Congressional Relevance: House Committee on Government
Operations: Manpower and Housing Subcommittee. Rep. Ralph H.
Metcalfe.
Authority: National Housing Act, sec. 518(b). National Housing
Act, sec. 203. National Housing Act, sec. 221. National
Housing Act, sec. 235. Housing Authorization Act of 1976,
sec. =.iS(d).
The Department of Housing and Urban Development (HUD)
neels to treat more fairly homeowner claims for defects in
existing insured homes. A review of the section 518(b) program
operated by HUD's Chicago area office revealed many problems
with processing claims under this program.
Finlings/Conclusions: From April 1975 through January 1977,
HUD's Chicago regional office received 45% of the 77,000 claims
received nationwide under the section 518(b) program. HUD's
Chicago area office received about 17% of the nationwide claims.
About 197 f the claims received by the Chicago area office have
passed eligibility and validity tests, and have been accepted
for reimbursement. Because the criteria used by HUD are vaguc in
terms of identifying what constitutes an eligible defect or how
to determine that the defect existed at the time of insurance
commitment, Chicago area -arsonnel have had to use considerable
discretion in evaluating claims. As a result, homeowners filing
claims have not been tr atu ccisistently in a fair and
equitable manner. The Chicago area office has also not followod
prescribed procedures in re.mbursing homeowners for the costs
incurred in correcting section 518(b) defects. An examination of
54 claims that had been pai6 showed that the amounts paid in 39%
of the cases were incorrect. Most errors were underpayments.
Rec3mendations: The Secretary of HUD should direct the Chicago
area office to reevaluate all claims it has rejected on the
basis of inappropriate criteria and to resolve serious doubts in
favor of the homeowner in evaluating criteria. (SC)](ViewImageLocal?handle=hein.gao/gaobadxuc0001&div=1&collection=&method=preview&ext=.png&size=3)