REFinBlog

Editor: David Reiss
Brooklyn Law School

August 23, 2016

Tuesday’s Regulatory and Legislative Roundup

By Jamila Moore

  • New York approved a two billion dollar housing bill aimed at increasing the number of affordable units in New York, improving the existing public housing complexes, and addressing New York’s homelessness issues.
  • The state of New Jersey approved a 34.8 billion dollar budget and allocated 300 million for anti-poverty initiatives throughout the state.

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August 23, 2016 | Permalink | No Comments

August 22, 2016

Monday’s Adjudication Roundup

By Jamila Moore

  • Variant Holding Co. LLC asks a Delaware court to dismiss a case they filed against their past CEOs for interfering with the company’s real estate purchase and sales.
  • An Oklahoma court determined that Enable Midstream Partners LP can no longer run their gas pipeline through a local tribal landowners real property.
  • New Jersey reinstated a lawsuit against Wells Fargo and a third party for allegedly covering up an environmental contamination before selling a property in 1988.

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August 22, 2016 | Permalink | No Comments

August 19, 2016

Bringing Debt Collectors to Heel

By David Reiss

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TheStreet.com quoted me in Debt Collectors Hounding You With Robo Calls? Here’s What To Do. It reads, in part,

Mike Arman, a retired mortgage broker residing in City of Oak Hill, Fla., owns a nice home, with only $6,000 left on the mortgage. He’s never been late on a payment, and his FICO credit score is 837.

Yet even with that squeaky clean financial record, Arman still went through the ninth circle of Hell with devilish debt collectors.

“The mortgage servicer would call ten days before the payment was even due, then five days, then two days, then every day until the payment arrived and was posted,” he says. “I told them to stop harassing me, and that my statement was sufficient legal notice under the Fair and Accurate Credit and Transaction Act (FACTA). But they said they don’t honor verbal statements, which is a violation of the law. So, I sent them a registered letter, with return receipt, which I got and filed away for safekeeping.”

The next day, though, the mortgage servicer called again. Instead of taking the call, Arman called a local collections attorney, who not only ended the servicer’s robo calls, but also forced the company to fork over $1,000 to Arman for violating his privacy.

“That was the sweetest $1,000 I have ever gotten in my entire life,” says Arman.

 Not every financial consumer’s debt collector story ends on such an upbeat note, although Uncle Sam is working behind the scenes to get robo-calling debt collectors off of Americans’ backs.

The latest example of that is a new Federal Communications Commission rule that closed a loophole that allowed debt collectors to robo call people with impunity.

Here’s how the FCC explains its new ruling against robo calls.

“The Telephone Consumer Protection Act prohibits most non-emergency robo calls to cell phones, but a provision in last year’s budget bill weakened the law by allowing debt collectors to make such calls when the debt is owed to, or even just guaranteed by, the federal government,” the FCC states in a release issued last week. “Under the provision passed by Congress, debt collectors can make harassing robo calls to millions of Americans with education, mortgage, tax and other federally-backed debt.”

“To make matters worse, the provision raised concerns that it could lead to robo calls not only to those who owe debt, but also their family, references, and even to someone who happens to get assigned a phone number that once belonged to another person who owed debt,” the FCC report adds.

Under the new rules, debt collectors can only make three robo calls or texts each month per loan to borrowers – and they can’t contact the borrower’s family or friends. “Plus, debt collectors are required to inform consumers that they have the right to ask that the calls cease and must honor those requests,” the FCC states.

That’s a big step forward for U.S. adults plagued by debt collection agency robo calls. But the FCC ruling is only one tool in a borrower’s arsenal – there are other steps they can take to keep debt collectors at bay.

If you’re looking to take action, legal or otherwise, against debt collectors, build a good, thorough paper trail, says Patrick Hanan, marketing director at ClassAction.org.

“Keep any messages, write down the phone number that’s calling and basically keep track of whatever information you can about who is calling and when,” Hanan advises. “Just because you owe money, that doesn’t mean that debt collectors get to ignore do-not-call requests. They need express written consent to contact you in the first place, and they need to stop if you tell them to.”

Also, if you want to speak to an attorney about it, most offer a free consultation, so there isn’t any risk to find out more about your rights, Hanan says “They’ll tell you right off the bat if they think you have a case or not,” he notes.

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Going forward, expect the federal government to clamp down even harder on excessive debt collectors. “The Consumer Financial Protection Board takes complaints about debt collector behavior seriously, and has recently issued a proposal to further limit debt collectors’ ability to contact consumers,” says David Reiss, professor of law at Brooklyn Law School. “In the mean time, one concrete step that consumers can do is send a letter telling the debt collector to cease from contacting them. If a debt collector continues to contact a consumer — other than by suing — it may be violating the Fair Debt Collection Practices Act.”

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August 19, 2016 | Permalink | No Comments

Friday’s Government Report Roundup

By Robert Engelke

  • In a report titled, Tenure Choice and the Future of Homeownership, the US Department of Housing and Urban Development in part with other contributors discuss how the future of American homeownership is being pushed in contradictory directions by demographic changes. The aging of the Baby Boomers would support higher levels of homeownership, but the increasing minority share of the population and the persistent racial gap in homeownership acts to reduce homeownership.
  • In a paper titled Credit and Collateral: Rising Denial Rates on Home Purchase Mortgage Applications, 2001-2011, the US Department of Housing and Urban Development estimates how the likelihood that an application is denied by the lender has changed over time after accounting for characteristics of loan applicants.
  • Using the Metropolitan Surveys of the American Housing Survey, from 1995-2004, this paper, titled Good Home Improvers Make Good Neighbors, analyzes the differences in real appreciation rates between neighborhoods with different levels of median home improvement spending, even for households with comparable levels of individual expenditures.

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August 19, 2016 | Permalink | No Comments

August 18, 2016

Micro-Units for Millennials

By David Reiss

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Construction Dive quoted me in An Emerging Megatrend? Developers Experiment with Microunits to Target Millennial Market. It opens,

As U.S. home prices and rents continue to soar, some developers are taking aim at a new target market — those willing to sacrifice square footage to be able to live near their work and area nightlife at a more budget-friendly price.

These microhousing units, also known as microapartments and microcondos, have most of the amenities of their full-size counterparts but typically range from around 350 square feet to 550 square feet, with some buildings offering up units at a relatively roomy 1,000 square feet. Many also come outfitted with furnishings specifically designed for the unit — folding beds, hidden storage and convertible pieces that do double duty, such as a dining table that also functions as a work desk.

However, the growing concept is seeing mixed results in the U.S. Is microhousing just a passing fad as younger renters look for an affordable stepping stone to a larger space, or does it represent a shift in what some Americans are looking for in a home?

The Draw of Smaller Spaces

Jam-packed cities like Tokyo are prime markets for these tiny units because the cost of land is at a premium, according to David Reiss, professor of law and academic program director at the Center for Urban Entrepreneurship at the Brooklyn Law School. Microunits are particularly appealing to single, young professionals who spend a lot of time working and hanging out with friends rather than entertaining in their own homes, he said.

The primary draw, however, is “location, location, location,” Reiss said. “When young adults are choosing between a small space in the center city or a larger space further afield, there will always be some who opt for the former.”

This hasn’t always been the case, according to architect David Senden, partner at international design firm KTGY. Americans used to put a premium on living space, but there’s been a “shift on the priority list,” and “location and has jumped to the absolute top,” he said. There’s also a growing desire for shorter commuting times.

However, whether the overall demand for microhousing is on the uptick is debatable. Some developers see microunits as the solution that will provide millennials with the opportunity to live in vibrant urban settings, as well as offer baby boomers or those looking to downsize a minimalist living space without having to give up the modern conveniences they’ve come to expect.

When Microhousing Is a Viable Concept

Reiss said population density  and high prices need to be components of any successful micro project . When prices, in both rent and homes, “outpace middle-class income,” as they have done in cities like San Francisco and New York City, then some people will give up square footage in order to stay close to their friends or jobs. “The microunit might present a very attractive trade-off of space and cost for that demographic,” he said. Reiss added that New York City is even amending its zoning laws to allow for more micro developments.

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August 18, 2016 | Permalink | No Comments

Thursday’s Advocacy & Think Tank Roundup

By Robert Engelke

  • Senior Fellow in Residence Ed DeMarco and Center for Financial Markets Director Michael Bright have released the first in a four-part series of papers designed to help policymakers end the conservatorship of Fannie Mae and Freddie Mac and put our housing finance system on a path that ensures stability. This first paper briefly recaps how the system failed and reminds the reader why reform is necessary.
  • The Joint Center for Housing Studies, published a report, Are Renters and Homeowners in Rural Areas Cost-Burdened?, which found that housing cost burden rates in some rural counties are significant. The study also learned that rural counties of the Northeast and west, that are adjacent to high-cost metros, have even higher cost burden rates than those in parts of the Midwest.

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August 18, 2016 | Permalink | No Comments

August 17, 2016

Wednesday’s Academic Roundup

By Robert Engelke

  • This paper, Agglomeration Effects and Liquidity Gradients in Local Rental Housing Markets, empirically analyzes the relation between local liquidity in rental housing markets and urban agglomeration effects. Using listed rent offers from online market platforms,
  • This paper, Housing Costs and Commuting Distance, shows households face a tradeoff between housing costs and commuting costs. Using a database that connects residence and workplace neighborhoods in eight larger metropolitan areas, we model the difference in housing costs as a function of estimated commuting distance.
  • This overview article, The Disruptive Implications of Fintech-Policy Themes for Financial Regulators, which provides a framework for analysing the disruptive potential of fintech and regulatory implications, is envisaged to be an anchor for more specific pieces that examine particular areas of fintech in detail. The purpose of this article is not to delve into excessive detail regarding each area of fintech highlighted. We believe that such a high level perspective is necessary so as to introduce a more coherent blueprint for regulatory thinking and design, avoiding silo-based and narrowly reactive approaches to increasingly complex financial innovation that weaves in both digital and legal innovations.
  • This paper, The Boom and Bust of US Housing Prices from Various Geographic Perspectives, summarizes changes in housing prices during the recent U.S. boom and bust from various geographic perspectives.

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August 17, 2016 | Permalink | No Comments