the Matter of
DENNIS & YVONNE BUTCHER,
Claim No. 7-709806440A
DECISION and ORDER
Petitioners were notified by Due Process Notice that the Secretary
of the U.S. Department of Housing and Urban Development (HUD) intended
to seek administrative offset of any Federal payments due to Petitioners
in satisfaction of a delinquent and legally enforceable debt allegedly
owed to HUD. Administrative offset is authorized by 31 U.S.C. ?
3720A. The claimed debt has resulted from a defaulted loan that
was insured against non-payment by the Secretary pursuant to Title
I of the National Housing Act (12 U.S.C. ? 1703).
Petitioners have made a timely request for a hearing concerning the existence, amount or enforceability of the debt allegedly owed to HUD. The administrative judges of this Board have been designated to conduct a hearing to determine whether the debt allegedly owed to HUD is legally enforceable. 24 C.F.R. ?? 17.150-161 and 20.4(b). As a result of Petitioner's request, referral of the debt for offset was temporarily stayed by the Board.
Discussion31 U.S.C. ? 3720A provides Federal agencies with a remedy for the collection of debts owed to the United States Government. The burden of proof is on the Secretary to prove the existence or amount of the alleged debt. 31 C.F.R. ? 285(f)(8)(i). The Secretary has filed a Statement with documentary evidence in support of his position that Petitioners are indebted to the Department in a specific amount.
Petitioners do not dispute the existence or amount of the debt incurred pursuant to the retail installment contract insured by the Secretary under Title I of the National Housing Act, 12 U.S.C. ? 1703, or that the debt is delinquent. Rather, Petitioners assert that the debt is not legally enforceable against them because of (1) forgery (2) incomplete and poor workmanship; and (3) financial hardship. (Petitioners' Letters dated January 4, 2000 and May 3, 2000, hereinafter ("Pets. Ltr.").
On December 2, 1995, Petitioners executed and delivered to Alltown Builders Inc. an installment contract in the principal amount of $25,000.00. (Secretary's Statement dated March 28, 2000, hereinafter ("Secy. Stat."), Exh. A). The installment note was assigned to the Money Store on January 4, 1996. Id. Thereafter, on October 31, 1996, assignment of the note was made by the Money Store to the Secretary. Id. at Exh. B.
Petitioners assert that a forgery of their signatures on the completion certificate has been committed. (Pets. Ltr. dated May 3, 2000). Petitioners have not submitted any documentary evidence to support this assertion. Instead, Petitioners original statements in their letter of appeal contradicts Petitioners allegation of forgery. In Petitioner's January 4, 2000 letter to the Board, they state that:
[t]he contractor had us sign a pile of documents in our home that
we felt locked into after he had gone. The contractor was paid by
the lender before the repairs were done. The contractor insisted
that we had to sign a form stating that the work was completed in
order for him to get the money to finish the job. (Pets. Ltr. dated
January 4, 2000).
I(We) understand that the selection of the dealer or contractor
and the acceptance of the materials used and the work performed
is my(our)responsibility, and HUD does not guarantee the quality
or workmanship of the property improvements. (Decl. of Goodman,
Finally, the record contains a letter written by Petitioner husband to HUD's Title I Regional Service Center stating that Petitioners cannot meet their current monthly payment obligations due to financial circumstances. (Decl. of Goodman, Exh. D). Additionally, Petitioners have submitted their Notice of Dismissal from the United States Bankruptcy Court, Eastern District of New York, of their Chapter 13 petition in bankruptcy. (Pets. Ltr. dated January 4, 2000, unmarked Exh.). Therefore, Petitioners may be asserting unenforceability of the debt due to financial hardship. However, this Board must determine whether, as a matter of law, this debt is legally enforceable against Petitioners. Unfortunately, evidence of hardship, no matter how compelling, cannot be taken into consideration in determining whether the debt is legally enforceable. Anna Filiziana, HUDBCA No. 95-A-NY-T11 (May 21, 1996).
While Petitioners may wish to negotiate repayment terms with the Department, this Board is not authorized to extend, recommend, or accept any payment plan or settlement offer on behalf of the Department. Petitioners may want to discuss this matter with Lester J. West, Director, HUD Albany Financial Operations Center, 52 Corporate Circle, Albany, NY 12203-5121. His telephone number is 1-800-669-5152, extension 4206. A review of Petitioners' financial status may be conducted if Petitioners submit to that HUD Office a Title I Financial Statement (HUD Form 56142).
OrderThe debt which is the subject of this proceeding is legally enforceable against Petitioners in the amount claimed by the Secretary. The Order imposing the stay of referral of this matter to the IRS for administrative offset or to the U.S. Department of Treasury is vacated.
It is hereby ORDERED that the Secretary is authorized to seek collection of this outstanding obligation by means of administrative offset of any eligible Federal payments due to Petitioners.
June 15, 2000