Global Direct Sales v. Krowne, Civil No. 08-02468 (D. Md. filed Sept. 19, 2008).

Status: Pending.

The federal department of Housing and Urban Development has had a long-standing rule barring home sales where the buyer’s down-payment is funded by the seller. In 2007, HUD adopted new rules (72 Fed. Reg. 56002, 56007 (2007), later stayed by the District Court for the District of Columbia) prohibiting efforts to avoid this rule by sellers giving money to a non-profit organization, which in turn gave a sum a bit less than the amount as a gift to the buyers. Global Direct Sales then partnered with the Penobscot Indian Tribe in Maine to make similar transactions with the tribe serving as intermediary. The Mortgage Lender Implode-O-Meter (ml-implode.com) blog posted an article criticizing this arrangement; Global Direct Sales and the tribe sued over this article. In November 2008, the court denied plaintiff’s requested injunction against the blog. A defense motion to transfer the case to federal court in California is pending.

Links and Court Documents:

Case information and documents: http://ml-implode.com/viewnews/2008-10-09_FHASellerFundedDownpaymentOutfitSuesMLImplodeInEffortToSilenceCr.html

Case information and documents: http://www.citmedialaw.org/threats/global-direct-sales-llc-v-krowne