The Neighborhood Assistance Corp. of America has filed a lawsuit against the Department of Housing and Urban Development, accusing the agency of "trying to silence and undermine" the homeowner assistance group.
According to NACA, HUD has withheld its grant, despite the organization receiving a positive report from the agency's inspector general following a six-month audit.
NACA believes it is being unfairly punished for its unabashed criticism of President Obama's foreclosure prevention programs.
"We will continue to speak out and get our day in court so the American people can see and hear from HUD Secretary Shaun Donovan, and other current and past administration executives on why this administration has overreached in its use of grants and regulations in requiring obedience to its policies and positions," NACA Chief Executive Bruce Marks said in a press release Wednesday.
HUD says it has suspended the nonprofit's grant award due to numerous consumer complaints against it alleging the agency failed to provide impartial counseling to struggling homeowners.
"HUD has received numerous consumer complaints and is investigating allegations that NACA aggressively promotes and sells specific mortgage products to its housing counseling clients and receives significant financial benefit from those products," said Melanie Roussell, a spokeswoman for the agency. "HUD has repeatedly asked NACA for documents and information to enable us to complete this investigation and funds to NACA will not be released until these matters are resolved."