567 F.Supp. 313 (N.D.Miss. 1983), Civ. A. GC 80-53, United States v. Garner

Docket Nº:Civ. A. GC 80-53
Citation:567 F.Supp. 313
Party Name:United States v. Garner
Case Date:July 01, 1983
Court:United States District Courts, 5th Circuit, Northern District of Mississippi
 
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Page 313

567 F.Supp. 313 (N.D.Miss. 1983)

UNITED STATES of America, Plaintiff,

v.

L.J. GARNER and Tommie N. Garner, Defendants.

Civ. A. No. GC 80-53-WK-O.

United States District Court, N.D. Mississippi, Greenville Division.

July 1, 1983

Falton O. Mason, Jr., Asst. U.S. Atty., Oxford, Miss., for plaintiff.

Isaiah Madison, North Mississippi Rural Legal Services, Greenville, Miss., for defendants.

MEMORANDUM OPINION

KEADY, District Judge.

In this action involving a Farmers Home Administration (FmHA) loan, plaintiff, United States, sues defendants-borrowers, L.J. and Tommie N. Garner, husband and wife, for foreclosure and possession of their residential property. Following a hearing on March 4, 1983, the Court reserved final ruling pending submission of briefs on the single question of FmHA loan refinancing under 42 U.S.C. § 1471(a) of the Housing Act of 1949. 1

Page 314

Defendants claim they are entitled to have their delinquent rural housing loan considered for refinancing under § 1471(a) and, until this is accomplished, foreclosure may not occur. Plaintiff argues that refinancing of FmHA loans is not allowed by the applicable Department of Agriculture regulations. The important question before this court is one of first impression: whether the regulation that prohibits FmHA loan refinancing is valid.

42 U.S.C. § 1471(a) provides in pertinent part:

(a) The Secretary of Agriculture (hereinafter referred to as the "Secretary") is authorized, subject to the terms and conditions of this title, to extend financial assistance, through the Farmers Home Administration ... (4) to an owner described in clause (1), (2), or (3) for refinancing indebtedness which--

(A) was incurred for an eligible purpose described in such clause,

(B)(i) if not refinanced, is likely to result (because of circumstances beyond the control of the applicant) at an early date in the loss of the applicant's necessary dwelling or essential farm service buildings, or (ii) if combined (in the case of a dwelling that the Secretary finds not to be decent, safe, and sanitary) with a loan for improvement, rehabilitation, or repairs and not refinanced, is likely to result in the applicant's continuing to be deprived of a decent, safe, and sanitary dwelling. (emphasis added)

Id. The present language of § 1471(a) was inserted by the Housing and Community Development Amendments of 1979, Pub.L. No. 96-153, 93 Stat. 1101. These amendments deleted old subsection (c) which prohibited refinancing of indebtedness less than five years old and revised and redesignated subsection (B). Pursuant to these amendments, the Secretary of Agriculture promulgated regulations that control qualifying conditions under 42 U.S.C. § 1471(a). The regulation here applicable is found at 7 C.F.R. § 1944.22(a) and provides simply that "[r]efinancing of FmHA debts is not authorized," 7 C.F.R. § 1944.22(a) (1982) (emphasis added), while providing for refinancing non-FmHA debts under specified conditions, § 1944.22(b). The court must, therefore, determine whether this regulation, which exempts non-FmHA debt refinancing from the blanket prohibition, was reasonably adopted by the Secretary of Agriculture or whether he lacked statutory authority to bar refinancing of FmHA debts...

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