Need for Fairer Treatment of Homeowners' Claims for Defects in Existing Insured Homes

CED-77-97: Published: Jul 27, 1977. Publicly Released: Jul 27, 1977.

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Homeowners in Chicago who purchased homes with major defects have been treated unfairly and inconsistently by the Department of Housing and Urban Development (HUD) in their efforts to seek compensation. Ambiguous criteria for evaluating claims and only partial reimbursement were the major deficiencies of the compensation program. Findings and recommendations to rectify the situation are applicable throughout the country.

Better criteria are needed to evaluate the validity of claims. A number of rejected claims are similar to claims considered valid. Homeowners were not always informed of the right to appeal rejected claims. Incorrect partial compensation for valid claims was sometimes granted.

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