United States District Court, W.D. Washington, Seattle
ORDER GRANTING MOTION TO DISMISS
L. ROBART, United States District Judge
the court is Defendant Secretary of Housing and Urban
Development's (“the Secretary”) motion to
dismiss for lack of subject matter jurisdiction and failure
to state a claim. (Mot. (Dkt. # 23).) Plaintiff Karen Marie
Isaacson, who is proceeding pro se and in forma
pauperis, opposes the Secretary's motion. (Resp.
(Dkt. # 24).) The court has considered the parties'
briefing, the relevant portions of the record, and the
applicable // law. Considering itself fully advised,
court DISMISSES this case without prejudice for lack of
subject matter jurisdiction.
Isaacson challenges as unconstitutional two mortgage
insurance-related provisions promulgated by the Department of
Housing and Urban Development (“HUD”): (1) the
regulation codified at 24 C.F.R. § 203.43f(d)(iii)
(“the Regulation”), and (2) the rule memorialized
in HUD Handbook 4235.1 REV-1 § 3-4(B)(4) (“the
Rule”). (See generally Compl. (Dkt. # 4).) The
Rule and the Regulation govern which manufactured homes are
eligible for mortgage insurance on home equity conversion
mortgages (“HECM”), more commonly known as
reverse mortgages. See HUD Handbook 4235.1 REV-1
§ 1-3(A), available at
(last visited Apr. 13, 2017). Ms. Isaacson contends that the
Rule and the Regulation violate the Fifth Amendment by making
her manufactured home ineligible for a reverse mortgage.
(Compl. ¶¶ 4.01-.12.)
Statutory, Regulatory, and Rulemaking Framework
255 of the National Housing Act (“NHA”)
authorizes the Secretary to “carry out a program of
mortgage insurance” that facilitates the reverse
mortgage market. 12 U.S.C. § 1715z-20(a). The reverse
mortgage market “permit[s] the conversion of a portion
of accumulated home equity into liquid assets” for
“elderly homeowners.” Id. §
1715z-20(a)(1); see also id.§ 1715z-20(b)(1)
(defining “elderly homeowner”). Although the NHA
contains multiple insurance eligibility restrictions, see
Id. § 1715z-20(d)(1)-(2)(C), it also expressly
leaves the prescription of additional eligibility
requirements to the Secretary's discretion, id.
to this statutory authority, the Secretary has implemented a
series of insurance eligibility rules and regulations,
including the Rule and the Regulation at issue here. The
Regulation is a subsection of 24 C.F.R. § 203.43f, which
regulates what types of manufactured homes are eligible for
mortgage insurance. See 24 C.F.R. § 203.43f. To
be eligible for mortgage insurance, the Regulation requires
that a manufactured home “have been occupied only at
the location subject to the mortgage sought to be
insured.” 24 C.F.R. § 203.43f(d)(iii). The
Regulation has been in place since 1983. See
Eligibility of Manufactured Homes for Mortgage Insurance, 48
Fed. Reg. 7731-01 (Feb. 24, 1983).
Handbook 4235.1 REV-1 (“the Handbook”) extends
the availability of federal mortgage insurance to reverse
mortgages on manufactured homes. See generally HUD
Handbook 4235.1 REV-1. Section 3-4 of the Handbook limits the
types of manufactured home that are eligible for
reverse-mortgage insurance. Id. § 3-4. Many of
the constraints the Handbook imposes are similar to the
mortgage insurance eligibility requirements found in 24
C.F.R. § 203.43f. Id. The Rule, which is a
subsection of Section 3-4, renders ineligible for mortgage
insurance any reverse mortgage on a manufactured unit that
was “installed or occupied previously at any other site
or location.” Id. § 3-4(B)(4). The Rule
has been in place since 1994. See Id. at
“Transmittal” (indicating the Rule issued on
November 18, 1994).
Ms. Isaacson's Allegations
2016, Ms. Isaacson visited Guild Mortgage to “begin the
process of applying” for a reverse mortgage. (Compl.
¶ 3.01.) When Ms. Isaacson mentioned that she had
previously relocated her manufactured home, Guild
Mortgage's loan officer informed Ms. Isaacson that the
Rule precludes reverse mortgages on relocated manufactured
homes. (Id. ¶ 3.02.) The loan officer emailed
Ms. Isaacson an archived version of the Handbook, and Ms.
Isaacson independently confirmed that the current version of
the Handbook precludes a reverse mortgage on a relocated
manufactured home. (Id. ¶ 3.03.)
Isaacson then contacted several departments of HUD to seek
clarification or waiver of the Rule. (Id. ¶
3.04, Ex. 1.) Eventually, a HUD employee responded that to be
eligible for mortgage insurance, “the manufactured unit
must not have been previously installed or occupied at any
other site or location.” (Id. ¶ 3.04, Ex.
4 at 1.) He also confirmed that there is no exception to the
Rule. (Id.) In response to Ms. Isaacson's
request that HUD provide authority for the Rule, the HUD
employee attached a copy of the Handbook. (Id.
Isaacson asserts that the Secretary has prohibited movement
of manufactured homes (id. ¶¶ 3.12-.14),
exceeded his legislative authority (id. ¶¶
3.16-.20), placed the Regulation and the Rule in
difficult-to-locate sources (id. ¶ 3.21),
forced third parties to convey bad news (id. ¶
3.22), and misled various parties into believing the
Regulation and the Rule are validly promulgated (id.
¶¶ 3.23-.29). She contends that the Secretary has
thereby violated the Fifth Amendment's due process
clause, including its equal protection component, and the
Fifth Amendment's takings clause. (Id.
The Secretary's ...