Piece by Piece Update
April 23, 2012
Please take note of the following news and calendar items.
Anti-Blight Provision in the National Mortgage Settlement Offers More than $2 Billion Opportunity to Renew Neighborhoods:
(Courtesy of Amanda Roberts, Enterprise Community Partners - post on NHC Open House Blog) The National Mortgage Settlement is an historic joint state-federal initiative that settles claims that the five largest loan servicers (each affiliated with a major bank) engaged in a number of servicing abuses and improperly foreclosed on thousands of borrowers around the country. In the aggregate, the settlement will cost the servicers approximately $25 billion. Of that total, $17 billion will not be cash payments, but rather credit to the servicers for various activities, including principal reduction and loan modifications. Less appreciated in discussions thus far is that up to 12% of that $17 billion in credit may go toward anti-blight activities.
According to the settlement, servicers can get credit for:
- Forgiveness of principal associated with a property where the servicer does not pursue foreclosure
- Cash costs paid by the servicer for demolition of property
- REO properties donated to accepting municipalities or nonprofits or to disabled servicemembers or relatives of deceased servicemembers
That means over $2 billion could potentially be used around the country to stabilize neighborhoods-paid for by servicers. Indeed, it is financially attractive for servicers to engage in these activities because they will receive a full $1-for-$1 credit for demolition and donations (they will receive $0.50-on-the-dollar credit for the forgiveness of principal). Relative to other activities, such as short sales. Therefore, the hope is that servicers will proactively seek to engage in anti-blight activities and ensure that these activities align with current neighborhood stabilization efforts.
Federal Reserve Guidance on REO
(Courtesy of Enterprise Community Partners) On April 5, the Federal Reserve Board released a new policy statement clarifying that banking organizations under the supervision of the Federal Reserve may rent out residential properties acquired in foreclosure. Given the current state of the housing market and high rental demands, this policy statement explicitly allows banks to rent residential foreclosed properties without demonstrating continuous active marketing of the property for sale. MORE
Recent National Fair Housing Alliance Report "The Banks Are Back, Our Neighborhoods Are Not" Generates Blog Buzz
"Abandoned properties are estimated to reduce neighboring home values by an average of $7,200 and cost cities millions in maintenance and lost tax revenue.....When done right, REOs can be a neighborhood asset. Creative re-use of REO properties can fuel community revival and expand housing opportunities for a broad range of families. Because many bank-owned REOs are in neighborhoods close to good schools, jobs, transportation, recreation, healthy foods and other amenities, they provide a unique avenue for expanding access to opportunity for all families while also breaking down barriers of segregation and isolation" - Janis Bowdler, National Council of La Raza. For more on Janis's comments and other blog entries on the NFHA report, click HERE.
Housing stakeholders call for Broad, Well-Defined Lending Standards
(Courtesy of Sarah Jawaid, NHC) The National Housing Conference along with a cross-industry group of advocates, lenders and housing professionals wrote a letter to the Consumer Financial Protection Bureau in support of broader, well-defined rule for Qualified Mortgages (QM). The QM rule implements requirements from the Dodd-Frank law to reform mortgage finance in the wake of the housing crisis. Narrowly defining a qualified mortgage could stall the housing recovery by making access to credit more difficult. The letter observes, "Congress intended that all creditworthy borrowers - especially low- and moderate-income borrowers and families of color - should be extended the important protections of a QM ... A broad QM, which includes sound underwriting requirements, excludes risky loan features, and gives lenders reasonable protection against undue litigation risk, will help ensure revival of the home lending market."
AJC Reports: Metro Counties Step In to Take Over Unfinished Subdivisions
(Misty Williams, April 8, 2012) "More than 1,500 subdivisions -- representing tens of thousands of vacant lots -- in the Atlanta region have sat dormant for at least a year in the wake of the housing bust, according to the real estate data firm Metrostudy. Some could take decades to build out. The mess has left local governments searching for ways to complete basic infrastructure tasks, such as laying the top layer of asphalt on roads and putting in sidewalks. In Paulding, officials have spent months assessing roads, sidewalks, curbs and gutters, streetlights and other infrastructure problems in more than 170 neighborhoods left behind by defunct builders. Now they're considering an unorthodox remedy in some tough cases: shelling out county dollars to finish what developers should have done in the first place. 'Even though it may not be our problem,' Paulding Commissioner Todd Pownall said, 'those are still homeowners and taxpayers in those developments'.... For now, counties -- including Paulding -- are mostly sticking to what they can accomplish with millions of dollars in bonds they've collected so far. Paulding has fixed problems in and taken over infrastructure maintenance for roughly 30 subdivisions, and officials hope to bring more than two dozen others into the fold soon, Pownall said. In many cases, counties have threatened bonding companies and banks with legal action to recoup funds." FULL ARTICLE
Mark your Calendars
April 23: SmartPower Workshop Protects Homeowners from Contractor Fraud; 6:30 PM; Meeting Room; Mechanicsville Branch Library; 400 Formwalt St. SW - Free Event
This "how to" interactive forum is for all homeowners. It is particularly relevant for homeowners purchasing REO properties that may require rehab. If you own a home, at some point, you will have to deal with a contractor. SmartPower information is critical and urgent to prevent being ripped off by unscrupulous contractors. Come learn how to deal with contractors and recognize typical scams. Also learn what to do before, during and after a project as well as how to find contractors, how to check out contractors, what should be in your contract, insurance issues you didn't know about, managing the building permit process, conflict resolution, how to pay a contractor, change orders, lien waivers and more. MORE
April 28: Fulton County Neighborhood SHOcase Home Show & Expo; 10:00 AM to 6:00 PM; Georgia International Convention Center
The Neighborhood SHOcase is a Special Homeownership Opportunity (SHO) event where qualified homebuyers are given an opportunity to buy real estate in the neighborhoods they desire to live in. The Fulton SHOcase will feature over 60 properties available in Fulton County. Free buyer preparation seminars will be available at various times during the week. These seminars follow an established homeownership education curriculum to help buyers better understand the homebuying process. To register, visit www.homebyrequest.com or call 1-877-484-6669. See the event brochure featuring available homes.
April 28: HomeSafe Georgia Event
D&E, a HUD-approved, nonprofit counseling organization, has partnered with Georgia Department of Community Affairs (DCA) in a Statewide effort to bring awareness and options to the unemployment and mortgage crisis with a Mortgage Payment Assistance program to prevent foreclosures for Georgians, under HomeSafe Georgia. HomeSafe Georgia will help by providing "bridge" mortgage assistance, for up to 18 months, to Georgians who are unemployed or have seen a dramatic decrease in their income due to national economic conditions. See attached flyer for more details.
May 3rd: Free Housing Education and Counseling in Gwinnett County with Housing Counselors from the IMPACT! Group
The IMPACT! Group is partnering with HUD and Gwinnett County Government to offer a day of free housing education and counseling to the public. Learn about the tools available for foreclosure prevention and home retention and how to avoid scams, predatory lending practices, and mortgage fraud. Housing counselors from The IMPACT! Group will be available. MORE
Piece by Piece Coordinator