August 29, 2016
Monday’s Adjudication Roundup
- PricewaterCooperhouse LLP reached a 5.5 billion dollar settlement in their mortgage bankruptcy trial. This decision to settle came days before the opposing party was set to rest their case.
- A Texas judge dismissed a case against the state of Texas which alleged the Texas Department of Housing and Community Affairs violated the Fair Housing Act.
- A New York Federal judge dismissed a case by a real estate investor claiming that Mercury Capital Corp. and Paradigm Capital Group LLC encouraged him to make unsound investments in loans.
August 29, 2016 | Permalink | No Comments
August 26, 2016
Friday’s Government Report Roundup
- The U.S. Department of Housing and Urban Development released a report examining housing sales in the U.S. in the month of July.
- The Office of Inspector General released a report of their audit of the City of Pasadena’s compliance with their Development Block Grant program.
- Muncie Housing Choice Voucher program has not implemented it’s program with fidelity according to a report from the Office of Inspector General.
August 26, 2016 | Permalink | No Comments
August 25, 2016
What Is Constructive Eviction?
Realtor.com quoted me in What Is a Constructive Eviction? A Rental Gone Very, Very Wrong. It opens,
Most renters have certainly heard of eviction—the dreaded process in which a landlord kicks out a tenant for not paying rent or some other major infraction. But what is a constructive eviction?
That’s a whole different ballgame, where a landlord essentially “evicts” a tenant by not fixing an uninhabitable rental. And while “constructive” may sound like a positive word, it’s not. It means the landlord is failing to fulfill his legal duty.
Constructive eviction is rare, but tenants who face this dire scenario should know their rights, and how to fight back.
How Constructive Evictions Work
“A common way landlords attempt to force out tenants would be by failing to provide heat in the winter,” says Brooklyn Law School professor David Reiss. Other ways a landlord could run into constructive eviction territory include turning off the water supply or failing to clean up flaking lead paint or toxic mold.
Constructive evictions are uncommon, because most landlords will usually help tenants with an issue. Or, if they are reluctant at first, they’ll eventually reach a compromise with a tenant through the court system, says Boston attorney Robert Pellegrini.
As such, tenants should attempt to work through any problems with the landlord first. That said, if a property owner won’t budge and the living environment puts a renter in harm’s way, a tenant can pursue a constructive eviction claim.
How To File A Constructive Eviction Claim
Unfortunately, tenants can’t file a constructive eviction claim if their floors creak or if their walls are painted a hideous shade of avocado green.
“More minor conditions like peeling (nonlead) paint, stuck windows, and drafty doors would be weak bases for a claim,” says Reiss.
Pellegrini agrees, adding, “The standards are very high for this, because you’re basically asking the court to conclude that the landlord essentially evicted you when he hasn’t.”
Here are five things a tenant must demonstrate to an attorney to prove a constructive eviction:
- Your landlord owed you (the tenant) a duty, such as providing heat in the winter or a residence free from toxic mold.
- The landlord neglected the duty.
- The apartment became uninhabitable as a result of the neglect.
- You gave the landlord notice of the neglect and time to take care of it.
- You left the apartment within a reasonable amount of time after the landlord’s failure to fix the issue.
August 25, 2016 | Permalink | No Comments
Thursday’s Advocacy and Think Tank Roundup
- The Milken Institute released a report, The Supply Side: Defining a Pathway for Increasing California’s Housing Development Opportunities, which detailed methods California can use to address their affordable housing crisis.
August 25, 2016 | Permalink | No Comments
August 24, 2016
Wednesday’s Academic Roundup
- The Impact of Major Life Events on Australian Household Financial Decision-Making and Portfolio Rebalancing, Tracey West & Andrew Worthington
- Contaminated Childhood: The Chronic Lead Poisoning of Low-Income Children and Communities of Color in Federally Assisted Housing, Emily Benfer
- Stimulating Housing Markets, David Berger, Nicholas Turner, & Eric Zwick, Chicago Booth Research Paper No.16-16, 7, 2016
- Factors Affecting Customer to Buy Apartments in Dhaka City, Mostafa Kamal, Omar Sarker, & Shah Pramanik, International Journal of Business Administration Vol. 7, No. 3, 8, 2016
- Boomeranged! The Effect of Coresiding Adult Children on Housing Transitions Among Older Homeowners, Ryan Goodstein,FDIC Division of Depositor & Consumer Protection Working Paper No. 2016-02, 1, 2016
August 24, 2016 | Permalink | No Comments
August 23, 2016
Jumbo Mortgage Deals Ahead
The Wall Street Journal quoted me in Attention, Jumbo-Mortgage Shoppers: Deals Ahead (behind paywall). It opens,
With more lenders offering jumbo loans, borrowers have more bargaining power to negotiate the best terms.
During the first quarter of this year, 20.3% of all first mortgages originated were jumbo loans, according to Guy Cecala, CEO and publisher of trade publication Inside Mortgage Finance. That’s up from 18.9% last year and 5.5% in 2009, just after the financial crisis.
“At the end of the day, it’s all just supply and demand for capital,” says Doug Lebda, founder and CEO of LendingTree, an online financing marketplace. “Over 60% of people still don’t think they can shop for loans—even rich people. But everything is negotiable.”
Since only a small percentage of jumbo loans are sold to investors, the “vast majority are winding up on bank balance sheets,” according to Michael Fratantoni, chief economist of the Mortgage Bankers Association. But because these loans are held in a lender’s portfolio and aren’t subject to the guidelines of investors purchasing them—as opposed to conforming loans, which must comply with hard-and-fast parameters established by Fannie Mae and Freddie Mac—terms and underwriting standards vary widely.
“Borrowers may find more flexibility with lenders that keep mortgages on their own books,” says David Reiss, a Brooklyn Law School professor who specializes in real estate. “These lenders can usually take a more individualized approach to underwriting than a lender that sells its mortgages off to be securitized with a whole bunch of other mortgages.”
* * *
Here are a few things to consider when negotiating a jumbo loan:
• Prepare before applying. “Jumbo lenders are focusing on borrowers with good credit and resources,” said Brooklyn Law School’s Mr. Reiss. Before applying, borrowers should clean up their credit report and keep debt in check. Lenders look at total debt-to-income ratio and overall credit to determine how strong a buyer is; the stronger the buyer, the more the negotiating power.
• Create a relationship. “If you’re a substantial borrower with a substantial relationship with a bank—one of our wealth clients—the guidelines might get a bit more flexible,” saysPeter Boomer, executive vice president of PNC Mortgage, a division of PNC Bank NA.
• Don’t hesitate to negotiate. “They are the customer, and the lender is not doing them a favor,” says Mr. Lebda, of LendingTree. “People are ecstatic when they get approved for a mortgage, but they actually need to think about it the other way—that the lender should be ecstatic for giving them a loan.”
August 23, 2016 | Permalink | No Comments
Tuesday’s Regulatory and Legislative Roundup
- 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.
August 23, 2016 | Permalink | No Comments
