The State - News from June 2, 1987

Faced with a legal challenge to the sale of mortgages on 300 low-income housing projects around the nation, the U.S. Department of Housing and Urban Development agreed to postpone today’s scheduled opening of sealed bids. The lawsuit, filed in San Francisco federal court late Friday, asserted that sale of the mortgages by the Reagan Administration would have the effect of ending subsidies to project residents and of ending various regulations intended to protect them. The petition said sale of the mortgages, which have a face value of $536 million, would be illegal and asked U.S. District Judge Robert Peckham to issue a temporary restraining order against opening of the bids. Attorneys on both sides agreed to a stipulation in which HUD said no mortgage sales would be closed before July 8 and they would file briefs and present arguments before Peckham on July 6. The suit was brought by the San Francisco Neighborhood Legal Assistance Foundation and the National Housing Law Project.