Piece by Piece Update
April 2, 2012
Please take note of the following news and calendar items.
Georgia General Assembly Directs $101 Million in State Mortgage Settlement Funds to Boost Economic Development
The $25 billion agreement reached by the Obama Administration, almost every state attorneys general, and the five largest mortgage servicers to help address the nation's foreclosure challenges and establish a new set of mortgage servicing standards represents the largest financial recovery obtained by the attorneys general except for the 1998 Master Tobacco Settlement. Georgia will receive a direct payment of $101.8; million. Under the national settlement provisions, the funds may be distributed by the attorneys general to foreclosure relief and housing programs, including housing counseling, legal assistance, foreclosure prevention hotlines, foreclosure mediation, and community blight remediation. But unfortunately, there is no legal requirement that states spend the funding on foreclosure-related purposes. On Monday, the Georgia House and Senate voted to approve the FY2013 state budget which includes provisions to direct all $101.8 million in Georgia settlement funds to the OneGeorgia Authority ($44.8 million) for support of rural economic development projects and the Regional Economic Business Assistance ($67 million) program for support of urban economic development.
AHAND and GSTAND sent a proposal to the Governor's Office recommending that settlement funds be used for foreclosure relief and housing counseling. ANDP joined AHAND and GSTAND on a subsequent letter to the Governor, Speaker of the House and Lieutenant Governor requesting that the funds be allocated to foreclosure prevention and recovery work as specifically intended by the Settlement terms.
We will continue to keep the Piece by Piece network updated as this issue moves forward and as other mortgage servicers not included in last month's settlement continue discussions with state and federal authorities.
General Assembly Passes Legislation to Strengthen Georgia's Land Banks
The Georgia House voted 161 to 0 to pass SB 284, an important update to statutory legislation authorizing Georgia Land Banks (originally passed in 1991). PBP partners the Fulton County/City of Atlanta Land Bank Authority, the Center for Community Progress, the Livable Communities Coalition, and others worked very hard to make this legislative victory a reality. Key provisions of the legislation which will soon be on its way to Governor Deal for final signature, include:
- ·Updates and strengthens the Land Bank Authority (LBA) model which is critically important given the large amount of vacant and abandoned property as a result of the real estate downturn.
- Allows counties to work together to establish regional land banks. This will be particularly helpful in rural Georgia in which single counties and cities do not have the staff or resources available to establish a LBA.
- Establishes a self financing mechanism for LBAs so that they will have less reliance on funding from local governments. The bill gives local governments an option to allow LBAs to receive up to 75% of city and county property taxes (not school taxes) on a redevelopment project in which the LBA has conveyed property to a developer. On most properties, the local government was previously not receiving any property tax payments prior to the redevelopment.
(Legislation details provided by Chris Norman, Fulton County/City of Atlanta Land Bank Authority)
Atlanta Regional Commission and Piece by Piece Release Report on the Region's NSP1 Successes
ARC and PBP released a report late last month highlighting the Atlanta region's coordinated and strategic approach to implementing NSP1. The City of Atlanta and the eight counties receiving NSP1 funds in the metro area have positively impacted 1,223 single and multi-family units to date in more than 250 neighborhoods. The report shares unique program features from each jurisdiction along with home buyer profiles. Thanks to ARC for funding the publication of the document. Full Report
Clayton County Rolls Out Get Home Now
PBP partners Clayton County and APD Solutions recently launched a new initiative designed to cut the County's foreclosure rate. "Get Home Now" provides loans for buying and repairing a home, with flexible credit requirements and no income limitations. The goal is to increase homeownership while reducing the number of vacant homes resulting from foreclosures, thus stabilizing real estate values and strengthening the local tax base. The program is open to all county residents, but preference is given to public safety personnel, educators and members of the military. More
Fannie Mae and Freddie Mac Consider Mortgage Write-DownsNPR reported last week that Fannie Mae and Freddie Mac may be considering principal write-downs to help homeowners prevent larger losses and keep people in their homes - sparking debate among economists on the best strategies to boost the housing market and avoid triggering strategic defaults. "Principal reduction works," says Mark Zandi, chief economist of Moody's Analytics. "If someone gets a reduction in their principal amount, it gives them a powerful hook to really fight to try to hang on to the home and not go into foreclosure." Other economists disagree, "Once you throw in principal reductions as a carrot, the level of disinformation from consumers will be legion. People will then pretend they have to go into default just to get the principal reduction," says Anthony Sanders, a professor at George Mason University. For more on this debate, click here.
Senators Support Change to Downpayment Requirement in QRM(Courtesy of NHC) Senators Johnny Isakson (R-GA) and Jeff Merkley (D-OR) both emphasized the need to revise the proposed qualified residential mortgage rule (QRM) to remove the 20% downpayment requirement. The senators highlighted the challenges facing our housing finance system last week at a policy event hosted by the National Journal, "Underwater: Washington's Role in Keeping Underwater Homeowners Afloat." At the same event, Federal Housing Finance Agency (FHFA) Acting Director Edward DeMarco and HUD Secretary Shaun Donovan spoke about REO-to-rental, foreclosures and the state of the housing market. For an overview of the National Journal event, click here.
Despite Falling Home Prices; Housing Affordability Worsened Nationwide for Working Families from 2008 to 2010(Courtesy of the Center for Housing Policy) Last week, the Center for Housing Policy released its annual Housing Landscape report, which tracks the affordability of housing for America's working households. In a nutshell, the report found that, despite falling home sale prices, housing affordability worsened between 2008 and 2010 for both working renters and working owners. Based on the latest data from the American Community Survey (2010), the report took a look at the housing costs for working households -- those earning up to 120 percent of median income in their areas and where at least one member worked a minimum of half-time. The increase in the rate of severe housing cost burden among working households occurred exclusively for those earning less than 80 percent of area median income (AMI). The share of working households with severe housing cost burdens increased significantly in 24 states between 2008 and 2010 and was lower in just one - Maine. Eight of those states saw significant increases just in the one year since 2009: Alaska, Georgia, Kentucky, New Jersey, North Carolina, Pennsylvania, South Carolina, and Texas. More
Results from Neighborhood LIFT Event
More than 1,000 attendees explored home ownership opportunities in the city of Atlanta at the Neighborhood LIFT event in at the Georgia World Congress Center on February 10-11, 2012. Guests were able to take advantage of on-site homebuyer education, discuss financing options with Wells Fargo Home Mortgage consultants, and learn more about potential properties to purchase. In the 2 days of the workshop, 236 guests reserved down-payment assistance funds, advancing their goal of owning a home. A total of 375 reservations are available; additional reservations can be made by reaching out to Wells Fargo's non-profit partner, Resources for Resident and Communities. Interested homebuyers should call (404) 525 4130, ext. 17, or visit their website: http://rrc-atl.org/home-ownership-center/neighborhoodlift/
African American Families Fared the Worst During Great Recession; Foreclosure Pushes Families from Middle Class into Poverty
AJC reported that Black Americans, who lost more of their wealth and experienced higher unemployment than other population groups, may also be the last to rebound from the downturn. In Atlanta, the national epicenter of the black middle class, the losses have been devastating. "Black families tend to have a greater percentage of their wealth tied up in their homes than white families do, which has made this housing-driven recession particularly painful for the black community, said Rakesh Kochhar, a senior researcher at the Pew Research Center. According to a Pew study, the recession sapped 16 percent of net worth among white households, 53 percent among black households and 66 percent among Hispanic households. Last year the typical black household in the United States had $5,677 in wealth (measured as assets minus debts). The average white household had 20 times as much, or $113,149, according to the Pew study. "The greatest impact is to devalue the community," said Charlie Carter, former senior economist with the Federal Reserve Bank and a professor of economics at Clark Atlanta University. "When you look at foreclosed homes, or homes people walked away from because they were underwater, it deflates the value of all other homes in the area." (AJC 3-3-2012)
Project Rebuild Legislation Provides $15 Billion for Next Phase of NSP
(Courtesy of NHC and Foreclosure Task Force )Senator Jack Reed (D-RI) has introduced the Project Rebuild Act, legislation that would provide $15 billion in targeted assistance to renovate vacant residential and commercial properties and help communities recover from the foreclosure crisis. Under Reed's bill, about $10 billion would be directed to states, cities, and non-profits through a formula modeled after the successful Neighborhood Stabilization Program (NSP) and $5 billion would be distributed through new competitive grants. For a full text of the bill http://thomas.loc.gov/cgi-bin/query/z?c112:S.2162. PBP partner the National Housing Conference is collecting signatures to a letter encouraging federal legislators to support the Project Rebuild Act. If you are interested in adding your organization's name to the letter, please contact Sarah Jawaid at email@example.com.
Grove Park Neighborhood Releases Property Survey
(Courtesy of Grove Park CLT) This landmark survey, carried out by the Grove Park community members with assistance from Georgia Tech and the Committee for Social Justice, surveyed every parcel in the City of Atlanta's Grove Park neighborhood. The survey identified and rated all abandoned and vacant properties, including land where dumping was occurring. The results will be used to solicit partnerships with corporations, foundations and government entities for a number of different projects that will create a cleaner, safer community. The survey identified a residential vacancy rate of 24% and a commercial vacancy rate of 25%. The GIS-based map highlighted concentrations in the extreme south of the neighborhood, and in the northwestern corner. These areas will be targeted for concentrated assistance. More
2012 Reclaiming Vacant Properties Conference --- June 20-June22 New Orleans, LAPBP partner the Center for Community Progress will host the 2012 Reclaiming Vacant Properties Conference on June 20 - June 22 in New Orleans. The conference will explore the strategies and tools that neighborhoods, cities and states are using to turn the challenge of vacant land and buildings into a foundation on which to build the future. From "rethinking" the competitive 21st century city to hands-on techniques for everything from code enforcement to acquisition of property, the Center for Community Progress' June conference will reflect the broadest thinking and experience of those engaged in repairing and rebuilding their communities. For more information and to register, click here.
Piece by Piece Coordinator