Despite Missing Out On NSP2, There’s Still Much Work To Do in Chicago Suburbs
Posted by Kari Lydersen on February 7, 2010
Civic leaders and planners in the south and west Chicago suburbs were disappointed to learn that the regional collaborative proposals submitted by the Chicago Metropolitan Agency for Planning (CMAP) supporting their work and featured in the current issue of Shelterforce were not among the winners of the second round of Neighborhood Stabilization Program (NSP2) grants announced by HUD on January 14.
But they have little time to despair because in November 2009 the Collaboratives were awarded NSP 1 funding of about $12 million through Cook County. They had hoped their joint efforts would receive a second infusion of resources to help further the idea of combining forces rather than competing to push holistic, transit-oriented development and economic stimulus in neighboring but often socially disjointed communities.
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Modifying the Modification Program (HAMP)
Posted by Matthew Brian Hersh on February 1, 2010
The administration last week announced changes to its Home Affordable Modification Program (HAMP) after falling short of its goals of staving off foreclosures by way of mortgage modifications, with some saying the program has actually hurt the economic recovery because it only prolongs, in some cases, the inevitable foreclosure
That being said, the changes are largely good, and can better turn temporary loan modifications into permanents ones through better documentation and guidance. Though the one thing that most housing experts agree on is missing: principal reduction.
As of the end of 2009, roughly 110,000 loans had been permanently modified (and 900,000 trial modifications) since the $75 billion program went into effect in spring 2009, a number that was likely boosted late in the year by the administration’s requirement to place trial modifications in temporary review period “to ensure that all borrowers are being fairly evaluated for the program.” During that review period, banks were not allowed cancel HAMP modifications “for any reason other than failure to meet the HAMP property eligibility requirements.” Up until December, the number of permanent modifications had hovered at a significantly lower level—under 50,000.
But the one thing that banks had been hesitant to do is still not in the picture. Principal reduction, according to Barry Zigas, a Shelterforce contributor and director of housing policy for the Consumer Federation of America, “principal modifications are emerging as the key variable in creating lasting, stable mortgage modifications.”
The changes could, however, lead to good news for homeowners and for HAMP, Zigas writes, simply by getting rid of the some of the red tape during the process, and conducting various verification procedures at the outset, rather than while a homeowner is under trial modification:
“The loan mod program has been plagued by long start up times, confusion and lost paperwork as lenders try to scale up parallel underwriting practices in their servicing shops. One contributor to these delays have been documentation requirements that were adopted to prevent fraud, but seem to have been more effective in preventing legitimate modifications. Streamlining of required documents and quicker acceptance of initial qualifying material would be a big help in reducing the paper chase that has frustrated so many borrowers.”
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The Risk In The System Starts to Come Home
Posted by Matthew Brian Hersh on January 27, 2010
Elizabeth Warren, the Harvard Law professor who chairs the Congressional Oversight Panel that watches over the Troubled Asset Relief Program (TARP) has never been known to mince words, and she’s not starting now. In the past few days by way of a handful of interviews and, most recently, an appearance on The Daily Show, she’s advocated aggressively for the passage of a Congressional Financial Protection Agency as a fundamental element of regulatory reform.
Moreover, it can’t be compromised for a variety of interests, namely those of insiders, she told The Huffington Post.
“We just can’t pass a regulatory reform bill that acquiesces to the industry on every front and where everything is so watered down that nobody has to take a hard vote.”
She’s not alone, of course. In the current issue of Shelterforce, John Taylor, president and CEO of the National Community Reinvestment Coalition, advocated for the passage of a CFPA, and take “CRA and all of the existing fair lending and consumer protections away from the bank regulatory agencies and instead establish a consumer-focused agency to enforce these laws.”
But Taylor argues that HR 3126, the bill that was to create CFPA, was “significantly weaker than the one offered by President Obama,” most notably for the exclusion of CRA, leaving the oversight of the Community Reinvestment Act to the “same regulators who had failed to enforce it for so many years.” Though Taylor pointed to the Senate version of the CFPA bill, as part of a broader bank reform bill, that restored the amendments lost in the House Financial Services Committee. That language, which is “virtually identical to that offered by President Obama,” had led to a widespread mobilization effort across the country among community groups to support the initiative. That bill is now part of the larger regulatory reform bill, “HR 4173, or, the Wall Street Reform and Consumer Protection Act.
Warren, in her appearance on the Daily Show, displayed a fair level of urgency when it came to constituents calling their elected officials to encourage them to back this bill:
“This really is the moment, the chips are all on the table. we’re going to write what the American economy looks like for 50 years going forward, and right now, the CEOs have any real change bottled up in the Senate.
“If you have never written a senator before, now is the time.
“This is America’s middle class; we’ve hacked at it, and chipped at it, and pulled on it for 30 years now. And now, there’s no more to do: either we fix this problem going forward, or the game really is over.”
Watch a very informative and entertaining eight minutes here:
| The Daily Show With Jon Stewart | Mon – Thurs 11p / 10c | |||
| Elizabeth Warren | ||||
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“Top Of The Pecking Order” for Housing Bubble Blowups
Posted by Matthew Brian Hersh on January 26, 2010
The New York Times has a pretty good rundown of all the players involved in the collapse of the sale of New York City’s Cooper Village and Stuyvesant Town apartment complexes, replete with this quote:
Its the poster child for the entire housing bubble, said Daniel Alpert, managing partner of Westwood Capital. Therell be some other spectacular blowups, but this will be at the top of the pecking order.
While investors are left in limbo, the residents of some 11,000 apartments are also left in the lurch as maintenance of the 80-acre complex is widely believed to suffer as creditors take over the twin housing complexes.
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Massive NYC Real Estate Deal Collapses
Posted by Matthew Brian Hersh on January 25, 2010
The Wall Street Journal is reporting that the purchaser of two colossal apartment complexes on Manhattan’s east side, Peter Cooper Village and Stuyvesant Town, has abandoned them to its creditors, after it defaulted on the on the $4.4 billion debt used to help finance the deal. The complexes were purchased as part of a venture between Tishman Speyer Properties and Blackrock Inc. in 2006.
The 2006 $5.4 billion sale represented the biggest real estate deal in U.S. history. Cooper Village and Stuyvesant Town comprise more than 11,000 units over a sprawling 80 acres. The Journal reports that the properties’ value has potentially plummeted to less than $2 billion.
According to The Journal:
The property’s owners signaled they would be unable to reach a deal with lenders and instead decided to allow creditors to proceed with what amounts to an orderly deed-in-lieu of foreclosure, which means a borrower voluntarily gives the property back to lenders to avoid a foreclosure proceeding.
A default has appeared imminent for months, with reports long speculating that owners could hold out on default until February at the latest. And what about the residents? In September 2009, The New York Times reported that the 25,000 tenants were unlikely to face rent increases or evictions in the event of a loan default, but that the complexes could suffer from a protracted period of reduced maintenance.
The enclave is an iconic development built in the 1940s to house returning WWII veterans, with the help of eminent domain and public subsidies. “Stuyvesant Town and Peter Cooper Village are remarkable for remaining an affordable, middle-class community amid Manhattan’s spiraling luxury housing market,” wrote Brad Lander, then director of the Pratt Center for Community Development in New York City in Shelterforce in 2006 following the properties’ sale. Lander has since been elected to the New York City Council, representing parts of Brooklyn.
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Honor Thy Mortgage!
Posted by Matthew Brian Hersh on January 22, 2010
Thinking about walking away from your mortgage because of your underwater mortgage? Stephen Colbert, in his inimitable way, tells us to think again, and to honor mortgage because “your honor was so precious to the banks that they bundled it with other people’s honor and sold it to Wall Street honor speculators.”
Click Here for a laugh on a not-so-funny topic.
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Some Thoughts On This Martin Luther King Jr. Day
Posted by David Holtzman on January 18, 2010
On this Martin Luther King Jr. Day, as one of the lucky ones who actually had the day off to reflect on this great man’s legacy, I started thinking about what’s actually happening around race in the United States today. Some things I have read and heard recently make me feel pretty optimistic about the position of African-Americans and about the relationship between blacks and whites. But I have to catch myself and remember that optimism on the surface can hide some nagging uncertainty beneath.
Many people have doubtless heard of a new poll by the Pew Research Center that finds twice as many blacks are more optimistic about the future than was the case just two years ago. These results belie the incredibly bad economy, which has affected blacks in far greater proportion than whites. Of course, a certain Mr. Obama was elected during the past two years, which has to be a factor in blacks’ hopeful view. But Juan Williams, reporting about the poll on NPR, says that the data also reflect years of progress for blacks in education, housing, and other areas.
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Inclusive Revitalization In the South Bronx: Melrose Commons
Posted by Kaid Benfield on January 18, 2010
I’m sure many in the Rooflines readership are familiar with the inspiring story of Melrose Commons and Nos Quedamos in the South Bronx. It is much less known in my world of environmental advocates, so I chose it as my entry for MLK Day on my NRDC blog.
Here’s some of what I said:
Melrose is a large-scale redevelopment project that, when completed, will comprise some 2,000 mixed-income homes along with shops and services in a part of the South Bronx that had deteriorated badly. The project is making great progress and enjoys very good sustainability characteristics, along with strong support and participation from neighborhood residents working to improve their community. But, as with many such stories, it did not begin that way.
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HUD Announces NSP2 Grants
Posted by Matthew Brian Hersh on January 14, 2010
The U.S. Department of Housing and Urban Development announced this morning the long-awaited list of grantees for the second round of the Neighborhood Stabilization Program (NSP2)—$2 billion in available funds set aside in the American Recovery and Reinvestment Act of 2009.
The grants were awarded competitively to applicants who “developed the most innovative ideas to rebuild local communities, while demonstrating that they have the capacity to be responsible stewards of taxpayer dollars.”
See the full HUD news release here, which includes a link to a full list of recipients.
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NSP2 Announcement Coming Soon
Posted by Matthew Brian Hersh on January 14, 2010
HUD Secretary Shaun Donovan is expected to announce the NSP2 grantees, benefitting from nearly $2 billion of neighborhood stabilization program funds made available in the American Recovery and Reinvestment Act.
Donovan will hold a press conference today in Detroit to make “a major American Recovery and Reinvestment Act funding announcement.” The funding to be announced is designed to help neighborhoods hard-hit by vacancies and abandonment to recover from the effects of the housing crisis.
Donovan will be joined by Governor Jennifer Granholm, Senator Debbie Stabenow, Congresswoman Carolyn Cheeks Kilpatrick, Executive to Detroit Mayor Dave Bing, Saul Green as well as community leaders and additional state and federal elected officials, according to a HUD news release.
For NSP2, there were 482 applicants, requesting over $15 billion, according to Sharon Price, policy director for the National Housing Conference. HUD is reportedly willing to hold briefings for those that did not receive a grant.
National Housing Institute
