Matthew Broderick Opposes N.Y.U. Expansion Plan

The actor Matthew Broderick, a Greenwich Village resident, told a City Council subcommittee that the university’s proposal could damage the area’s “quirkiness and humaneness.”

Proposal to Seize Underwater Mortgages via Eminent Domain not Well Received

The Board of Supervisors in the California county of San Bernardino has,
perhaps unintentionally, picked a fight with some of the giants of the real
estate industry.  The Board unanimously
approved a plan two weeks ago that would use eminent domain to seize underwater
and restructure them for homeowners unable to sell or refinance the properties.

The Homeowner Protection Program, in which San Bernardino would partner with
the cities of Ontario and Fontana within its borders, is only broadly sketched
out at present but it has already provoked a strong reaction from the Securities Industry and Financial Markets
Association (SIFMA).  SIFMA claims to
represent the interests of hundreds of securities firms, banks and asset
managers.  The trade association fired
off a letter to the Board on Friday, cosigned by more than a dozen of its
member organizations, protesting the proposed actions.  “Based on publicly available information on
the Agreement,” the letter said, “we are very concerned that the good
intentions of the Board of Supervisors will instead result in significant harm
to the residents the Agreement intends to help.”

The thrust of the letter is that such an action as proposed in San
Bernardino would significantly reduce access to credit for mortgage borrowers.  “If eminent domain were used to seize loans,
investors in these loans through mortgage-backed securities or their investment
portfolios would suffer immediate losses and likely be reluctant to provide
future funding to borrowers in these areas. 
It is essential to remember that investors in mortgage-backed securities
channel the retirement and other savings of everyday citizens through their
investment funds.  This program may cause
loans to be excluded from securitizations, and some portfolio lenders could
withdraw from these markets.  In other
words, this program could actually serve to further depress housing values in
the county by restricting the flow of credit to home buyers”

The Los Angeles Times quotes David
Wert, a spokesman for the county as saying the country would use eminent domain
to condemn mortgages on properties that are underwater, that is the owner owns
more on the mortgage than the value of the home, and would then renegotiate the
mortgages at a lower amount.  Only
homeowners who are current on their mortgage payments would be eligible for the

The move is intended to help stimulate the region’s hard-hit economy by
freeing up people who have been stuck in their homes, Wert said. “Real estate
is the foundation of the inland economy, 
 [It] is based on the building and
selling of homes, and this is one way to stimulate that again.”

The program is still in its initial stages and additional details will be
hashed out in public the spokesman on said. 

Among those signing the SIFMA letter one were the Mortgage Bankers
Association, American Bankers Association, National Association of Realtors®,
The Financial Services Roundtable, American Securitization Forum, and the
Residential Servicing Coalition.

…(read more)

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New York, NY – June 18, 2012 – Mayor Michael R. Bloomberg, U.S. Department of Housing and Urban Development Secretary Shaun Donovan, Department of Housing Preservation and Development Commissioner Mathew M. Wambua, Housing Development Corporation President Marc Jahr, New York State Homes and Community Renewal Commissioner/CEO Darryl C. Towns, were joined by to cut the ribbon to mark the official opening of the Via Verde affordable housing development located at 700 Brook Avenue and East 156th Street in the South Bronx. Via Verde, a largely City-financed project that blends 151 rental units and 71 co-op units with innovative and sustainable green design elements, was the winning proposal to New York City’s first juried design competition for affordable and sustainable housing. The development is also the latest to be completed in the Administration’s efforts to rebuild the blighted South Bronx. The Mayor was joined at the announcement by Jonathan Rose Companies President Jonathan F. P. Rose, Phipps Houses President Adam Weinstein, JPMorgan Chase Chief Administrative Officer and Mortgage Banking CEO Frank Bisignano, Congressman Jose E. Serrano, State Senator Ruben Diaz, Sr., Bronx Borough President Rubin Diaz, Jr., and Council Member Maria del Carmen Arroyo.

May Housing Scorecard and Q1 Servicer Assessments Released

The May
edition of the Obama administration’s Housing Scorecard released today by the
U.S.  Departments of Housing and Urban Development
(HUD) and Treasury showed a promise of growing stability in the housing market
although officials cautioned that the overall outlook remains mixed.

The monthly
scorecard is essentially a summary of data on housing and housing finance
released by public and private sources over the previous month and/or
quarter.  Most of the data such as new
and existing home sales, permits and starts, mortgage originations, and various
house price analyses have previously been covered by MND.

This month’s
scorecard is more upbeat than many of its recent predecessors.  It notes that sales of existing houses rose
2.4 percent in April and that the inventories of newly constructed houses
increased for the first time since April 2007. 
With sales up inventories dropped to a 5.1 month supply compared to 5.2
months in March and 12.2 months at the peak in January 2009. Distressed sales
are still a big factor and serious delinquencies and underwater mortgages
continue to hold back the market.

HUD Acting Assistant Secretary Erika
Poethig said, “This month’s indicators show promise – more than 180,000
borrowers took advantage of our enhanced Home Affordable Refinance Program in
the last quarter alone and foreclosure starts are declining as more homeowners
secure mortgage relief  – but with so many households still struggling to
make ends meet it’s clear that we have more work ahead.  That is why we are asking the Congress to
approve the President’s refinancing proposal so that more homeowners can
receive assistance.”

The May Housing Scorecard and the accompanying
data from the Making Home Affordable Program (HAMP) include the results of
first quarter program assessments of participating servicers.  These Servicer Assessments summarize
performance in three categories of program implementation; identifying and
contacting homeowners; evaluating homeowners for assistance, and program
reporting, management, and governance.

In the first quarter of 2012 only
three servicers were found to need minor improvement and six in need of
moderate improvement.  For the second
consecutive quarter, none was found to be in need of substantial enough improvement
to cause for Treasury to withhold program incentives as has been done in the

Release of the first quarter
assessments coincides with the roll-out of the expanded eligibility criteria
for HAMP.  The new HAMP Tier II
guidelines include eligibility for homeowners with a debt-to-income ratio below
31 percent, properties occupied by a tenant, and vacant properties which the
borrower intends to rent.  Servicers began accepting applications for Tier
2 on June 1. 

The HAMP program received 122,872
requests for modifications during April and processed 84,394.  A total of 65,949 requests were denied and
18,445 were approved.  This brings the
number of requests for modifications since the inception of the program to 4.7
million, 2.03 million of which were approved. 

These HAMP statistics for May were also
broken down on a per-servicer basis as were program-to-date numbers.  These can be seen in their entirety here.

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Donovan: Refinancing Proposals Would Benefit Economy, Borrowers, and Taxpayers

In a press briefing held in advance of President Obama’s appearance in Reno, Nevada, Housing and Urban Development (HUD) Secretary Shawn Donovan gave a preview of the home refinancing aspects of the President’s “To Do List” for Congress which he will be discussing further this afternoon.  Donovan also provided updates on the results of last fall’s executive refinancing initiatives.

Donovan said that last October,  the President had included proposals to increase refinancing in the jobs plan he submitted to Congress.  Ordinarily, the Secretary said, the economy would be receiving an enormous boost from the record low interest rates so refinancing is a critical step in realizing this.  When Congress did not act on the jobs bill the President asked administration officials to identify what could be done without Congressional action to remove barrier to refinancing.  Within six weeks, Donovan said, five barriers were identified and the administration moved to remove or mitigate them.

The result has been a 50 percent increase in refinancing applications, roughly one in three of which is for a HARP loan, up from one in ten a year ago.  The increase has been even greater in areas hardest hit by price declines and foreclosures.  According to data from the Mortgage Bankers Association, refinancing applications are up 240 percent in Nevada, 180 percent in Arizona, and 125 percent in Florida and informal surveys suggest that two of every three refinancing applications in the hardest hit states are for HARP loans.  

In January’s State of the Union Address the President laid out the final steps aimed at those borrowers who are doing everything right but still cannot refinance and this week there were three bills introduced in Congress to implement the rest of the President’s program.  The first, introduced by Senators Menendez and Boxer, would remove the barriers remaining for some 12 million borrowers with government-backed mortgages.  The legislation would help borrowers with second liens, cut red tape and costs such as eliminating manual appraisals, and would increase competition.  

Donovan said that currently the servicers who are already handling a mortgage have an incentive to refinance it but other lenders don’t.  The goal is to remove the last bar to cross-servicer competition by extending the same streamlined underwriting currently enjoyed by the existing lender to the rest of the market.   This would also extend streamlined refinancing steps to all GSE borrowers including those with significant equity and thus less credit risk.  

Donovan stressed that these changes are a positive for taxpayers.  First they will pump billions of dollars into the economy   but they will also lower risk by lowering payments, and ultimately eliminate some of the costs of loans that default.

The second piece of legislation, introduced by Senator Feinstein, would provide simple, low-cost refinancing opportunities to non-GSE borrowers by extended streamlined refinancing to those who have been paying on their mortgages but have private label or bank loans.  The new mortgages would be run through the Federal Housing Administration and open up today’s low rates to an estimated three to four million families.  Donovan said that this program is an issue of fairness; many responsible borrowers who have done everything they were supposed to do are still unable to refinance simply because of who owns their loan.

The third piece of legislation proposes to give underwater borrowers who decide to refinance a choice of taking the reduced interest in the form of a lower monthly payment or applying those savings to rebuilding equity in their homes.  To encourage borrowers to make the latter choice the legislation would cover the closing costs of borrowers, a benefit of about $3,000 per homeowner on average.  Taking this course of action would give the majority of underwater borrowers the chance to get back above water in five years or less.

During the question and answer session Donovan was asked about pay-fors for the provisions and said that, while the President had made a proposal to cover the expected cost, the administration is open to looking at other suggestions. 

Another reporter referenced a remark from Senator Boxer that Acting Federal Housing Finance Administration (FHFA) Director Edward J. DeMarco already possesses the authority to implement some of the proposals in her bill.  Donovan said that FHFA was looking at the idea of eliminating manual appraisals and there might be other provisions, but he added that there is an urgency to the President’s proposals.   All of them would help boost the economy, he said, and there is no way of knowing how long we will have these low interest rates.  “We need to move the legislation, not wait for an FHFA analysis.

In addition to the refinancing initiatives laid out by Donovan, the “to do list” the President will detail today contains the following:

  • Legislation that gives companies a new 20 percent tax credit to cover costs of moving their operations back to the U.S. This will be paid for by eliminating current tax incentives that allow companies to deduct the costs of moving their businesses abroad.
  • Legislation that gives a 10 percent income tax credit for firms that create new jobs or increase wages in 2012 and that extends 100 percent expensing in 2012 for all businesses.
  • Legislation that will extend the Production Tax Credit to support American jobs and manufacturing and an expansion of the 30 percent tax credit for investments in clean energy manufacturing.
  • Legislation that creates a Veterans Job Corps to help Afghanistan and Iraq veterans get jobs as police, firefighters, and other jobs to help their communities.

…(read more)

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