SOURCE: Primary Residential Mortgage, Inc.

November 06, 2007 16:05 ET

Primary Residential Mortgage, Inc. Reacts to News of HUD Injunction

SALT LAKE CITY, UT--(Marketwire - November 6, 2007) - The U.S. Department of Housing and Urban Development (HUD) recently announced that starting October 31, 2007, they would prohibit seller funded down payment assistance programs for Federal Housing Authority (FHA) loans. These seller funded programs help borrowers who are unable to provide the minimum 3% required for FHA loans.

However, on October 31, the U.S. District Court in Washington D.C. issued a preliminary injunction preventing HUD from implementing the regulation until a final decision is made in court.

"We are pleased to hear that the courts have asked HUD to reconsider their stance," says David Zitting, President and CEO of Primary Residential Mortgage, Inc. "From the moment HUD's intentions were announced, we felt that HUD was analyzing the situation too narrowly. HUD should re-analyze their decision to eliminate the down payment assistance programs and allow potential new homeowners to utilize these resources if they can demonstrate that the other characteristics of their ability to borrow are stable."

HUD has cited statistics that the down payment assistance programs have foreclosure rates that are two-times as much as other programs. Of loans made in 2000 and 2001 with assistance from non-profit down payment programs, the foreclosure rate is around 15%, while the typical FHA rate is 6%.

However, proponents contend that prohibiting the programs will put un-due strain on homebuyers and that the higher foreclosure rates are due to other factors than the down payment assistance programs themselves.


Headquartered in Salt Lake City, Utah, Primary Residential Mortgage, Inc. (PRMI) was founded by Dave Zitting, Jeff Zitting, and Steve Chapman in 1998. Since its inception, PRMI has evolved from a four-person business to a nationwide multi-billion dollar operation with 800 employees working in approximately 200 Branches in 47 states. Branches operate under the PRMI brand or as DBAs as part of the Divisional Joint Venture and Consortium Partner programs. Serving all segments of the market, Primary Residential Mortgage, Inc. is a privately held, debt-free company that focuses primarily on traditional loan products. Licensed in Arizona, Alabama, Arkansas, California, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Wisconsin, and Wyoming.

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