United States District Court, W.D. Washington, Seattle
ORDER GRANTING DEFENDANT'S MOTION TO
S. Lasnik United States District Judge.
matter comes before the Court on defendant's
“Motion to Dismiss” pursuant to Rules 12(b)(1)
and 12(b)(6) of the Federal Rules of Civil Procedure. Dkt. #
18. Plaintiff Karen Marie Isaacson alleges that the U.S.
Secretary of Housing and Urban Development (the
“Secretary”) violated her constitutional rights
to due process, equal protection under the law, and freedom
of contract. See Dkt. # 5. Defendant moves to
dismiss on the basis that plaintiff both lacks standing and
fails to state a claim upon which relief can be granted. The
Court has considered the memoranda and evidence submitted by
the parties, and the remainder of the record. For the following
reasons, defendant's motion is GRANTED.
2016, plaintiff contacted a loan officer at Guild Mortgage
seeking advice about obtaining a home equity conversion
mortgage (also known as a “reverse mortgage”) for
her manufactured home. Dkt. # 5 ¶ 3.04. After plaintiff
mentioned that she had recently purchased the previously
owned home and relocated it to her property, the loan officer
allegedly told plaintiff that “HUD has a rule that if
you move your house you can't get a reverse
mortgage.” ¶ 3.05. The HUD rule to which the loan
officer was referring appears in the HUD Handbook, HUD
Handbook 4235.1 REV-1 § 3-4, (the “Rule”) as
well as in the Code of Federal Regulations, 24 C.F.R. §
203.43f, (the “Regulation”). Both the Rule and
the Regulation prevent HUD from insuring a reverse mortgage
for a manufactured home if the home has been moved from the
location where it was originally installed. Id.
Plaintiff later received, via email from the loan officer, a
copy of the HUD Handbook page on which the Rule was printed.
Dkt. # 5 ¶ 3.07.
225 of the National Housing Act (“NHA”),
authorizes HUD to extend optional insurance to lenders of
qualifying reverse mortgages “to meet the special needs
of elderly home owners” and “increase the
involvement of mortgagees and participants in the mortgage
markets.” 12 U.S.C. § 1715z-20(a). As a result,
HUD does not contract directly with home owners but rather
with authorized lenders to provide insurance on loans to
members of the public. Id. § 1715z-20(c).
further states that:
The Secretary may, upon application by a mortgagee, insure
any home equity conversion mortgage eligible for insurance
under this section and, upon such terms and conditions as
the Secretary may prescribe, make commitments for the
insurance of such mortgages prior to the date of their
execution or disbursement to the extent that the
Secretary determines such mortgages (1) have promise for
improving the financial situation or otherwise meeting the
special needs of elderly homeowners; (2) will include
appropriate safeguards for mortgagors to offset the special
risks of such mortgages; and (3) have a potential
for acceptance in the mortgage market.
Id. § 1715z-20(c) (emphasis added).
Accordingly, the Secretary may impose conditions upon HUD
insurance. He is also bound to issue reverse mortgage
insurance only to the extent that he determines such a
mortgage will both include protections that insulate
homeowners from certain risks and potentially be accepted by
a lender in the mortgage market. See id.
receiving a copy of the Rule, plaintiff contacted HUD
inquiring whether an exception might be made in her case.
Dkt. # 5 ¶ 3.09. When HUD notified her that no such
exception would be made, “[p]laintiff realized she
would have no alternative but to sue HUD.” Id.
¶¶ 3.11-3.12. At no time did plaintiff submit an
application to HUD for insurance or to Guild Mortgage (or any
other lender) for a reverse mortgage.
filed this lawsuit in September 2017. Dkt. ## 1, 5.
The Secretary then filed a motion to dismiss, which asserts
plaintiff lacks standing and fails to state a claim. Dkt. #
Federal Rules of Civil Procedure state that, “[i]f the
court determines at any time that it lacks subject-matter
jurisdiction, the court must dismiss the action.”
Fed.R.Civ.P. 12(h)(3). In order for a federal court to have
subject-matter jurisdiction over a claim, the plaintiff must
have standing under Article III of the Constitution to
challenge an alleged wrong in federal court. Warth v.
Seldin, 422 U.S. 490, 498 (1975).
establish standing, a plaintiff must show that (1) she
suffered an injury in fact; (2) that a causal connection
exists between the injury and the defendant's conduct;
and (3) that it is likely that the injury will be redressed
by a favorable decision. Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560-61 (1992). At the pleading
stage, “[t]he party invoking federal jurisdiction bears
the burden of establishing these elements.”
Id. at 561. Though the Court treats pleading-stage
factual allegations as true, plaintiff must allege ...