REFinBlog

Editor: David Reiss
Brooklyn Law School

January 17, 2017

Tuesday’s Regulatory & Legislative Roundup

By Robert Engelke

January 17, 2017 | Permalink | No Comments

January 16, 2017

To The Mountaintop!

By David Reiss

1200px-1-19-Martin-Luther-King-ftr

In honor of Martin Luther King, Jr. day, the opening of his last speech, I’ve Been to the Mountaintop:

Thank you very kindly, my friends. As I listened to Ralph Abernathy and his eloquent and generous introduction and then thought about myself, I wondered who he was talking about. It’s always good to have your closest friend and associate to say something good about you. And Ralph Abernathy is the best friend that I have in the world. I’m delighted to see each of you here tonight in spite of a storm warning. You reveal that you are determined to go on anyhow.

Something is happening in Memphis; something is happening in our world. And you know, if I were standing at the beginning of time, with the possibility of taking a kind of general and panoramic view of the whole of human history up to now, and the Almighty said to me, “Martin Luther King, which age would you like to live in?” I would take my mental flight by Egypt and I would watch God’s children in their magnificent trek from the dark dungeons of Egypt through, or rather across the Red Sea, through the wilderness on toward the promised land. And in spite of its magnificence, I wouldn’t stop there.

I would move on by Greece and take my mind to Mount Olympus. And I would see Plato, Aristotle, Socrates, Euripides and Aristophanes assembled around the Parthenon. And I would watch them around the Parthenon as they discussed the great and eternal issues of reality. But I wouldn’t stop there.

I would go on, even to the great heyday of the Roman Empire. And I would see developments around there, through various emperors and leaders. But I wouldn’t stop there.

I would even come up to the day of the Renaissance, and get a quick picture of all that the Renaissance did for the cultural and aesthetic life of man. But I wouldn’t stop there.

I would even go by the way that the man for whom I am named had his habitat. And I would watch Martin Luther as he tacked his ninety-five theses on the door at the church of Wittenberg. But I wouldn’t stop there.

I would come on up even to 1863, and watch a vacillating President by the name of Abraham Lincoln finally come to the conclusion that he had to sign the Emancipation Proclamation. But I wouldn’t stop there.

I would even come up to the early thirties, and see a man grappling with the problems of the bankruptcy of his nation. And come with an eloquent cry that we have nothing to fear but “fear itself.” But I wouldn’t stop there.

Strangely enough, I would turn to the Almighty, and say, “If you allow me to live just a few years in the second half of the 20th century, I will be happy.”

Now that’s a strange statement to make, because the world is all messed up. The nation is sick. Trouble is in the land; confusion all around. That’s a strange statement. But I know, somehow, that only when it is dark enough can you see the stars. And I see God working in this period of the twentieth century in a way that men, in some strange way, are responding.

January 16, 2017 | Permalink | No Comments

Monday’s Adjudication Roundup

By Robert Engelke

  • The U.S. Securities and Exchange Commission has received a settlement offer from real estate developer Lobsang Dargey in a $136 million EB-5 fraud case playing out in Washington federal court, signaling a possible resolution to the high-profile case.
  • Morgan Stanley, Credit Suisse AG and other megabanks on Wednesday urged a New York state judge to ditch multiple lawsuits over nearly $2 billion worth of residential mortgage-backed securities brought by a stand-in for defunct Belgian banking giant Fortis Bank NV/SA
  • Moody’s Corp. said Friday it has agreed to pay $864 million in a settlement with the U.S. Department of Justice and 21 states over the ratings agency’s work on residential mortgage backed securities and other products whose crashes led to the financial crisis.

January 16, 2017 | Permalink | No Comments

January 13, 2017

Trust for Trump

By David Reiss

photo by David R. Tribble

US News & World Report quoted me in Here’s What We Know About Donald Trump’s Trust Fund. It opens,

With all the talk about how Donald Trump will be handling his vast business empire as he assumes the presidency, some questions were finally answered this week, and this much is clear: Donald Trump is putting his business assets in a trust.

“Through the trust agreement, he has relinquished leadership and management of the Trump Organization to his sons Don and Eric, and a longtime Trump executive, Alan Weiselberg,” says Sheri Dillon, a lawyer for the president-elect.

But what does that mean?

What is a trust to begin with? A trust is a legal structure with three main parties: The trustor, trustee and beneficiary. The trustor gives another party, the trustee, the right to manage the specified assets for the benefit of its designated beneficiaries.

“According to Trump, his sons, Donald Jr. and Eric, as well as a business associate, would be the trustees. After transferring the assets to the trust, Trump could then be a beneficiary of the trust,” says David Reiss, professor of law at Brooklyn Law School. “The trustees administer the affairs of the trust on behalf of the beneficiaries. The beneficiary receives the income from the trust or the property within the trust.”

Trump has previously said his children will be the primary financial beneficiaries of the trust, but Trump made it clear that he planned on returning to the Trump Organization when his presidency is over. At that point, it’s possible Trump could have a fat check waiting for him, depending on the trust’s structure.

“The trust’s income or property could be doled out on an ongoing basis or deferred to some future point in time, depending on the terms of the trust,” Reiss says.

January 13, 2017 | Permalink | No Comments

Friday’s Government Reports Roundup

By Jamila Moore

  • The U.S. Department of Housing and Urban Development completed a study analyzing the Boston, Massachusetts housing market. The study found a total need of over 40,000 rental and sales units required to house the residents of Boston, Massachusetts. Additionally, the study uncovers the current economic status of the city as a whole and its relation to housing.
  • The Troubled Asset Relief Program (TARP) has released 22.6 billion dollars to their three housing programs in the U.S. The three housing programs vary in their support to the public. Their services include loan modification to ensure that residents can remain in their home and refinancing one’s loan to ensure it is federally insured by the Federal Housing Authority (FHA).

January 13, 2017 | Permalink | No Comments

January 12, 2017

Dr. Carson’s Slim Housing Credentials

By David Reiss

photo by Gage Skidmore

Law360 quoted me in Carson’s Slim Housing Credentials To Be Confirmation Focus (behind paywall). It opens,

Dr. Ben Carson will face a barrage of questions Thursday on topics ranging from his views on anti-discrimination enforcement to the basics of running a government agency with a multibillion-dollar budget at his confirmation hearing to lead the U.S. Department of Housing and Urban Development.

Carson, a famed neurosurgeon and former Republican presidential candidate, was President-elect Donald Trump’s surprise choice for HUD secretary, given the nominee’s lack of experience or statements on housing issues. That lack of a track record means that senators and housing policy advocates will have no shortage of areas to probe when Carson appears before the Senate Banking Committee.

“I want to know whether he has any firm ideas at all about housing and urban policy. Is he a quick study?” said David Reiss, a professor at Brooklyn Law School.

Trump tapped Carson in early December to lead HUD, saying that his former rival for the Republican presidential nomination shared in his vision of “revitalizing” inner cities and the families that live in them.

“Ben shares my optimism about the future of our country and is part of ensuring that this is a presidency representing all Americans. He is a tough competitor and never gives up,” Trump said in a statement released through his transition team.

Carson said he was honored to get the nod from the president-elect.

“I feel that I can make a significant contribution particularly by strengthening communities that are most in need. We have much work to do in enhancing every aspect of our nation and ensuring that our nation’s housing needs are met,” he said in the transition team’s statement.

The nomination came as a bit of a surprise given that Carson, who has decades of experience in medicine, has none in housing policy. It also came soon after a spokesman for Carson said that he had no interest in a Cabinet position because of a lack of qualifications.

Now lawmakers, particularly Democrats, will likely spend much of Thursday’s confirmation hearing attempting to suss out just what the HUD nominee thinks about the management of the Federal Housing Administration, which provides insurance on mortgages to low-income and first-time home buyers; the management and funding for public housing in the U.S.; and even the basics of how he will manage an agency that had an approximately $49 billion budget and employs some 8,300 people.

“You will have to overcome your lack of experience managing an organization this large to ensure that you do not waste taxpayer dollars and reduce assistance for families who desperately need it,” Sen. Elizabeth Warren, D-Mass., said in a letter to Carson earlier in the week.

To that end, Carson could help allay fears about management and experience by revealing who will be working under him, said Rick Lazio, a partner at Jones Walker LLP and a former four-term Republican congressman from New York.

“The question is will the senior staff have a diverse experience that includes management and housing policy,” Lazio said.

One area where Carson is likely to face tough questioning from Democrats is anti-discrimination and fair housing.

Carson’s only major public pronouncement on housing policy was a 2015 denunciation of the Affirmatively Furthering Fair Housing rule that the Obama administration finalized after it languished for years.

The rule, which was part of the 1968 Fair Housing Act but had been languishing for decades, requires each municipality that receives federal funding to assess their housing policies to determine whether they sufficiently encourage diversity in their communities.

In a Washington Times, op-ed, Carson compared the rule to failed efforts to integrate schools through busing and at other times called the rule akin to communism.

“These government-engineered attempts to legislate racial equality create consequences that often make matters worse. There are reasonable ways to use housing policy to enhance the opportunities available to lower-income citizens, but based on the history of failed socialist experiments in this country, entrusting the government to get it right can prove downright dangerous,” Carson wrote.

Warren has already indicated that she wants more answers about Carson’s view of the rule and has asked whether Carson plans to pursue disparate impact claims against lenders and other housing market participants, as is the current policy at HUD and the U.S. Department of Justice.

Warren’s concerns are echoed by current HUD Secretary Julian Castro, who said in an interview with National Public Radio Monday that he feared Carson could pull back on the efforts the Obama administration has undertaken to enforce fair housing laws.

“I’d be lying if I said that I’m not concerned about the possibility of going backward, over the next four years,” Castro said in the interview.

HUD, as the agency overseeing the Federal Housing Administration, has also been involved in significant litigation against the likes of Deutsche Bank, HSBC, Bank of America and JPMorgan Chase & Co., among others, seeking to recover money the FHA lost on bad loans they sold to the agency.

“Will you commit to continuing to strictly enforce these underwriting standards in order to protect taxpayers from fraud?” Warren asked.

Carson has also drawn criticism from fair housing advocates for his views on the assistance the government provides to the poor, saying in his memoir that such programs can breed dependency when they do not have time limits.

To that end, housing policy experts will want to hear what Carson wants to do to ease the affordability crisis, boost multifamily building and improve conditions inside public housing units. HUD also plays a major role in disaster relief operations, another area where people will be curious about Carson’s thinking.

“I’d be looking at hints of his positive agenda, not just critiques of past programs,” Reiss said.

January 12, 2017 | Permalink | No Comments

Thursday’s Advocacy & Think Tank Roundup

By Jamila Moore

  • Colorado school districts and politicians banned together to provide housing to staff members and students. Rentals in the Colorado have increased at rapid rates. As a result, many school districts have been building their own housing developments to support the housing crisis.
  • Anand Parekh and Dennis Shea gave Ben Carson guidelines to help ensure Americans are healthy and have the appropriate housing. The four guidelines range from healthcare, broadband access, to senior living.
  • Since 2010, foreclosures in the U.S. have decreased dramatically, a whopping 78.2%. As of November 2016, foreclosures were down 30%. This comes as no surprise because the economy is better and more Americans are employed.

January 12, 2017 | Permalink | No Comments