JUDGE HALTS HUD'S SALE OF HOUSES

GREENE HOMES SHOULD GO TO POOR, HOMELESS

A federal judge here yesterday temporarily blocked the Department of Housing and Urban Development from selling any of its stock of 47,000 foreclosed homes unless they are for the benefit of homeless or low-income people.

Acting in response to a lawsuit filed by a national coalition of advocates for the homeless, U.S. District Judge Harold H. Greene declared that the "public interest in housing for the homeless is obviously very great."

Greene added, "The fact is that every time an available home is sold, {the homeless} are injured because those houses are not available to" them.

The judge said HUD has ignored the requirements of a law passed by Congress last year requiring the department to survey its properties and determine which could be used to house the homeless.

Greene's ruling halts the sales until Sept. 14, when another federal judge here is scheduled to consider whether to extend the ban until HUD changes its policies to benefit the homeless.

Homeless advocate Mitch Snyder, whose Community for Creative Non-Violence was one of the groups that challenged HUD, said the judge's ruling yesterday is a victory for the indigent.

"We can't afford to lose any more housing for the homeless," he said. "We're in the midst of a crisis. There are {homeless} people all across the country who are screaming and yelling for those buildings."

Earlier this month, HUD scrapped plans to put 158 Washington area houses up for sale at a special auction in Bethesda, although an auctioneer hired by HUD went ahead and accepted sealed bids on individual properties. Greene's ruling yesterday means that none of those bids can be accepted by HUD for the time being.

HUD has said that it generally sells the homes to the highest bidders -- frequently investors -- but insists that it has several programs designed to help homeless people find places to live.

Recently, HUD has been selling an average of 7,100 properties each month -- houses that had Federal Housing Administration mortgage insurance and that went into foreclosure when their owners could no longer keep up the mortgage payments. The program has produced some $2.4 billion in proceeds since Oct. 1, the start of the current fiscal year.

Florence W. Roisman, attorney for the homeless groups, argued in favor of Greene's granting the temporary restraining order blocking the HUD sales.

Roisman, citing the large numbers of homeless families and families on waiting lists for public housing, said that as the HUD sales continue, homes that may be suitable for homeless and low-income people are being lost forever to private investors.

"Congress told HUD to look at these issues before it gave away the inventory," she said. "There are organizations that are desperately eager" to occupy and make use of the foreclosed houses.

W. Robert Irvin, a Justice Department lawyer appearing on behalf of HUD, argued that the restraining order was unnecessary. "What is the emergency here?" he asked rhetorically, pointing out that the government has been selling homes under the FHA program since it was created in 1934.

Greene, interrupting from the bench, pointed out that the McKinney Act, passed by Congress to help the homeless, was passed only last year.

Irvin stressed that HUD has a number of other programs under which homeless and low-income people can buy or lease foreclosed homes at a discount. The agency offers single-family homes for sale to homeless advocacy groups at a 10 percent discount before the properties are sold, and also leases some properties for $1 a year.

Irvin said that HUD would lose about $456,000 in "carrying costs" by not being able to sell homes in the course of a two-week period.

HUD's current inventory of more than 40,000 homes is the largest in its history.

Articles appear as they were originally printed in The Washington Post and may not include subsequent corrections.