real estate: December 2007

Saturday, December 15, 2007

Congressman Cohen Announces $150,000 in HUD Grants for Memphis

Washington, DC - December 13, 2007 - Today, Congressman Steve Cohen (TN-09) announced that the U.S. Department of Housing and Urban Development (HUD) has awarded the Ninth District of Tennessee two grants totaling $148,835. “I am very pleased that the Memphis Housing Authority will receive nearly $150,000 from HUD,” said Congressman Cohen. “The Memphis Housing Authority has a very difficult job, and it is my hope that these grants will assist the under-funded housing operations in Memphis.”

The first grant was an award in the amount of $83,835 from the FY 2007 Housing Choice Voucher – Family Self Sufficiency Program. The program is intended to promote the development of local strategies to coordinate the use of assistance under the Housing Choice Voucher programs with public and private resources to enable participating families to achieve economic independence and self-sufficiency.

The second grant was an award in the amount of $65,000 from the FY 2007 Resident Opportunities for Self Sufficiency (ROSS) Public Housing Family Self Sufficiency Program. The purpose of the ROSS program is to provide grants to public housing agencies that are intended for the delivery and coordination of supportive services, resident empowerment activities, and activities that assist residents attain economic self-sufficiency and elderly and disabled residents continue to live independently.

“These grants represent a positive effort by the federal government to provide low-income families with the necessary resources to achieve economic independence and realize their American dream,” added Congressman Cohen.

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source: realestaterama.com

Frank, others prod Fed on subprime lending

Dec. 14, 2007 - The Federal Reserve Board should bar prepayment penalties for subprime loans and limit the size and duration of any remaining prepayment penalties, 19 Democratic House Financial Services Committee members said in a letter yesterday to Fed Chairman Ben Bernanke.

The group, which includes committee Chairman Barney Frank, Mass., wrote the letter to Bernanke as the Fed continues to weigh forthcoming proposed rules which will revise the Home Ownership and Equity Protection Act, enacted in 1994.

Over the last year, the committee has held a number of hearings on issues related to the subprime crisis and passed several pieces of legislation aimed at minimizing its impact. In their letter, committee members said these hearings have helped them identify “a number of lending products and practices you should address.” Besides limits on prepayment penalties, these include:

* requiring prudent underwriting of the borrower’s ability to pay a mortgage for the entire term (verification of income or assets necessary to repay the loan including taxes, insurance and fees should be required);
* eliminating “perverse incentives” which lead consumers to more expensive loans; and
* improving disclosures so that consumers can fully understand loan terms and better compare costs and terms among different lenders.

“We are encouraged that the board is taking these initial steps toward reforms that we hope will be meaningful and lasting improvements to mortgage lending,” the letter said.

In addition to Frank, the letter was signed by Reps. Brad Miller (N.c.), Paul Kanjorski (Pa.), Maxine Waters (Calif.), Carolyn Maloney (N.Y.), Luis Gutierrez (Ill.), Melvin Watt (N.C.), Michael Capuano (Mass.), William Lacy Clay (Mo.), Carolyn McCarthy, (N.Y.), Joe Baca (Calif.), Al Green (Texas), Emanuel Cleaver (Mo.), Gwen Moore (Wis.), Albio Sires (N.J.), Paul Hodes (N.H.), Keith Ellison (Mont.), Ed Perlmutter (Colo.) and Christopher Murphy (Conn.).

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source: realestaterama.com

Thousands of Washington residents to receive Ameriquest checks next week

OLYMPIA - December 14, 2007 - December will be a bit more rewarding for 8,750 Washington residents. They’ll receive checks this month totaling nearly $9.9 million as part of a national settlement with former subprime lending giant Ameriquest.

Attorney General Rob McKenna and Scott Jarvis, director of the Department of Financial Institutions (DFI), announced today that the checks are in the mail from the settlement administrator and should arrive at homes within a week. Consumers will receive payments as little as $47 to as much as $7,950, depending on when they applied for a loan and individual circumstances. The average check is $1,130.

The money comes from last year’s $325 million national settlement, in which states alleged widespread fraud by Ameriquest as part of a high-pressure scheme to sell mortgages that trapped consumers into debt and put them at risk of losing their homes.

“We’re glad to be able to put money back into the pockets of families whose American dream of homeownership became a nightmare,” McKenna said. “The Ameriquest settlement continues to serve as a serious warning to the subprime mortgage industry that we won’t tolerate predatory lending.”

The Ameriquest settlement ranks as the second-largest government consumer protection settlement in history. The states alleged that Ameriquest deceived consumers, inflated home appraisals, and fabricated employment and income information in order to make the largest possible profit. Consumers were tied into loan balances significantly higher than the true value of their homes, which ultimately blocked them from refinancing with other lenders or selling without taking a substantial loss.

“Many Ameriquest victims were already homeowners who thought they’d save money by refinancing but instead were trapped into mortgages they couldn’t repay,” McKenna said.

“DFI continues in its efforts to educate and protect Washington consumers so they are less likely to become victims of predatory lending practices,” Jarvis said. “If and when consumers do fall victim to unethical and/or illegal practices, we are here to ensure perpetrators are held accountable. This settlement is just one example of our commitment to helping Washington families and carrying out the DFI mission of protecting the public, promoting economic vitality and preserving integrity in the marketplace.”

Nationwide, 64 percent of the borrowers who were eligible for restitution agreed to participate in the settlement by filling out refund request forms prior to the Sept. 10 deadline. Washington’s participation was slightly higher. A little more than 70 percent of the 12,369 Washington residents who were eligible for restitution will receive checks – and they will receive larger payments than borrowers in other states.

The payments are higher because Washington received more money for legal costs as a result of its leadership role in the investigation and settlement negotiations. The Attorney General’s Office and DFI agreed to add more than $2 million of those funds to the restitution pool in order to provide larger payments to consumers.

Among other things, the states’ settlement required Ameriquest to provide full disclosure regarding interest rates, discount points, prepayment penalties, and other loan or refinancing terms. The company must also ensure that every loan benefited borrowers, not only Ameriquest and its commissioned employees.

ACC Capital Holdings, Ameriquest’s parent company, announced on Aug. 31, 2007, that it was closing Ameriquest, no longer taking retail loan applications. At the same time, it sold Argent, its wholesale loan servicing unit, to Citigroup.
Washington agencies are now turning their attention to dealing with an anticipated increase in foreclosures as borrowers with adjustable rate mortgages see significant increases in their loan payments amid declining property values. Among their efforts:

* In July, DFI announced it would adopt a statement of regulatory guidance standards on subprime lending in an effort to more effectively protect Washington consumers.
* DFI conducted a statewide, bilingual advertising campaign in an effort to inform Washington homeowners of the need to understand their mortgage requirements and to work with lenders to avoid foreclosure.
* The Attorney General’s Office is requesting legislation this session to reduce foreclosure rescue schemes that include an option to buy or lease back the property. In this time of rising mortgage rates, desperate homeowners have been lured by offers of assistance – only to be cheated out of equity they’ve built up and tricked into transferring ownership of their home. This important bill would require a written contract with clearly disclosed terms be completed by the homeowner and the purchaser prior to the property’s transfer. It would also require that the homeowner must receive at least 82 percent of the difference between the property’s fair market value and the underlying mortgage in the event of a sale to a third party.
* In June, the Attorney General’s Office convened a think tank with the Washington Bar and Northwest Justice Project to look at issues around mortgage problems and fraud. The think tank brought together representatives from government agencies and nonprofit organizations, private attorneys and industry professionals. From this, organizers formed work groups to further explore ways to reduce the rate of foreclosure in Washington, help consumers who face the loss of their homes and crack down on fraud.
* In September, Governor Chris Gregoire formed a Task Force for Homeowner Security. The group is evaluating instability in the national subprime mortgage market and will soon make recommendations to minimize the impact of this national trend in Washington. Jarvis is a member of the task force and the Attorney General’s Office supports the task force’s work.
* DFI continues to offer consumer education to ensure Washington residents understand their rights and make informed decisions about home loans. The agency offers consumers a Guide to Home Loans online, in booklet format and on CD-ROM. To order a booklet or CD, call (360) 902-8700 or (877) 746-4334.

CONSUMER INFORMATION: Detailed information about the Ameriquest settlement and restitution is available at http://www.ameriquestmultistatesettlement.com/. Consumers also may contact the settlement administrator at 1-800-420-5875. (Hearing-impaired persons may call 866-494-8274.)

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source: realestaterama.com

New Hampshire Housing Commits Over $1 Million Under New Housing Initiative

Bedford, NH - December 14, 2007 - New Hampshire Housing Finance Authority recently awarded $1,040,000 in down payment and closing cost assistance to over fifty units of new workforce housing within six developments around the state. The funding awards were made under the Authority’s New Production Initiative. The New Production Initiative was created to enable developers to construct new affordable single family home ownership units that increase the state’s affordable housing supply.

Under this new program, qualified home buyers may receive up to $20,000 for down payment and closing cost assistance when they use one of the Authority’s mortgage products to purchase a unit within any of the six new developments that were chosen through a competitive review process and received program awards.

Prescott Square/Dalton Village in Nashua is sponsored by the City of Nashua, United Way of Nashua, Bennett-Prescott, LLC., and Southern New Hampshire Services. The project consists of 41 condominium/town house units and 7 single family homes in an area where affordable home ownership units are scarce.

Demetria’s Crossing in Manchester is a partnership between Demetria’s Crossing, LLC, NeighborWorks Greater Manchester, Anagnost Investments Inc., and the City of Manchester. The completed project will consist of 26 two bedroom and 40 three bedroom condominium units.

Gile Hill in Hanover will be built on land donated by the town of Hanover and is being developed by Gile Community Housing LLC. The completed development will consist of 59 two and three bedroom home ownership condominium units and 61 rental apartments in a total of 12 buildings.

Kinkade Haven in Loudon consists of 15 two to four bedroom single family detached Energy Star homes. The developer is Green Energy Construction, LLC. The Town of Loudon provided a density bonus to the developer in exchange for preservation of 135 acres of perpetual green space.

Moulton Cove in Laconia, sponsored by Brady-Sullivan Properties and Anagnost Investments, Inc., is currently under construction and when complete will consist of 42 condominium units.

Cobb Hill Construction is the developer for Bow Highlands in Bow. The project consists of 42 Energy Star condominium units with spectacular views.

To qualify for the down payment/closing cost assistance under this program, borrowers must meet the requirements of New Hampshire Housing’s Single Family Mortgage Program. The assistance is in the form of a deferred payment second mortgage at 0% interest due on sale, refinance, or if the home is no longer owner occupied. More information on the New Production Initiative may be found on the Authority’s website at www.nhhfa.org or by calling New Hampshire Housing’s Home Ownership Division at 1-800-649-0470.

New Hampshire Housing is a non-profit, public benefit corporation established by the State Legislature. New Hampshire Housing operates a number of programs designed to assist low and moderate income persons to obtain housing. Since its inception, New Hampshire Housing has assisted more than 36,000 families purchase their own homes and has been instrumental in financing the creation of more than 12,000 multi-family housing units.

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source: realestaterama.com

Bill To Ease Foreclosure Crisis Passes Senate

WASHINGTON, D.C. - December 14, 2007 - Today, the U.S. Senate passed S.2338, legislation aimed at resetting interest rates to refinance without the usual burdens associated with a Federal Housing Administration (FHA) loan, by a vote of 93 to 1. Much of the bill language was taken from the Expanding American Homeownership Act of 2007 – legislation introduced by U.S. Senator George V. Voinovich (R-OH) last month in order to spur action by the Senate to help ease the foreclosure crisis and increase homeownership opportunities for millions of American first-time home buyers. The House version of this bill passed overwhelmingly last year by a vote a 415-7. This is the second of two bills introduced by the senator aimed at easing this crisis.

“I am pleased that my colleagues have finally taken real action to not only help ease the current foreclosure crisis but also break down the barriers that separate Americans from the dream of homeownership,” Sen. Voinovich said. “We must continue to do everything in our power to help Americans in immediate need while fighting to create an ownership society.”

S. 2338, which was stagnating in the Senate Committee on Banking, Housing and Urban Affairs prior to the introduction of Sen. Voinovich’s bill, will enable FHA to help those facing foreclosure to refinance for lower rates while helping millions of more low- and moderate-income families to buy a first home. Many of these borrowers currently must pay subprime rates because FHA lacks the ability to offer an affordable financing option.

FHA was created in 1934 to give homebuyers access to reasonably priced mortgages under fair terms. Since then, it has been able to help more than 34 million families become homeowners. This legislation will modernize FHA and offer Americans a variety of safe homeownership options at a fair price.

S.2338 will do the following:

1) Reduces the current statutory 3 percent minimum down payment to 1.5 percent, reducing a significant barrier to homeownership. FHA’s existing down payment requirement does not meet the demands of today’s marketplace, where most first-time homebuyers put down 3 percent or less.

2) Increase and simplify FHA’s loan limits. FHA’s loan limit in high-cost areas would rise from 87 to 100 percent of the GSE conforming loan limit and in lower-cost areas from 48 to 65 percent of the conforming loan limit. This change is crucial in today’s housing market. In many areas of the country, the existing FHA limits are lower than the cost of new construction, eliminating FHA financing as an option for buyers of new homes in those markets. FHA has simply been priced out of the market in other areas, such as California, where FHA insured only about 5,000 home mortgages in all of 2005, down 95 percent from 109,000 in 2000.

3) Creates a new counseling program for troubled homeowners. The bill creates a pre-purchase counseling demonstration to test the effectiveness of a variety of counseling options. The bill also significantly expands eligibility for post-purchase counseling for low- and moderate-income homeowners who are having trouble making their mortgage payments.

The passage of S.2338 is the first component in Sen. Voinovich’s legislative strategy to assist struggling homeowners in avoiding foreclosure. The second component addresses the tax consequences of debt forgiveness.

Declining home prices and rising foreclosure rates have forced more and more families – often minorities, the elderly and immigrants – to sell their homes for less than they paid for them, and sometimes for less than the outstanding debt. Others have worked out a deal with their lenders where part of their mortgage debt has been forgiven. The Internal Revenue Service currently taxes any loan forgiveness as “income.”

That’s why Sen. Voinovich introduced the Mortgage Relief Act of 2007 in May – legislation which will relieve families of a tax burden when their lender forgives part of the mortgage on a principal residence. The Mortgage Relief Act passed the House in October 386-27 but has yet to be voted on in the Senate. He is pushing hard for the Senate to pass the Mortgage Relief Act before Christmas recess and is working with Senate leadership to make that happen.

“Clearly it is unfair to tax people on income that doesn’t exist,” Sen. Voinovich said. “This is particularly true at a time when they have experienced a substantial economic loss on the most significant asset they own and have no way to pay the tax. This tax is unfair and must end immediately.”

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source: realestaterama.com

real estate

Saturday, December 15, 2007

Congressman Cohen Announces $150,000 in HUD Grants for Memphis

Frank, others prod Fed on subprime lending

Thousands of Washington residents to receive Ameriquest checks next week

New Hampshire Housing Commits Over $1 Million Under New Housing Initiative

Bill To Ease Foreclosure Crisis Passes Senate

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