December 15, 2015
Tuesday’s Regulatory & Legislative Round-Up
- The Consumer Financial Protection Bureau (CFPB) has released a tool to measure financial well being, it is a scale of ten questions which financial educators can use to gauge financial well being more precisely and it builds off of the definition of financial well being which the CFPB released in January 2015.
December 15, 2015 | Permalink | No Comments
December 14, 2015
Down Payment Help
The Dallas Morning News quoted me in Asking for Help with Down Payment Can Often Be Difficult. It reads, in part,
How do you ask a question when no one wants to talk about the subject?
Often, it’s quite clumsily, without much effort at sparking an honest exchange.
* * *
Before asking, hopeful buyers should investigate options, said David Reiss, a real estate professor at The Brooklyn Law School.
“You would want to press your lenders to identify all first-time homebuyer programs you might be eligible for,” Reiss suggested.
The Federal Housing Administration offers loans with low down payments, and many state housing finance agencies offer low or no-down loans to eligible buyers, he noted.
In any case, said Reiss, “It would be helpful to know your options when speaking with family members about a gift.
“They might be willing to give a smaller gift for an FHA mortgage, or they might be willing to make a larger gift if they see that it would result in lower monthly payments for your,” Reiss said.
“And the mere fact you did this type of research is evidence that you are a financially responsible adult,” he concluded.
December 14, 2015 | Permalink | No Comments
Monday’s Adjudication Roundup
- EB-5 fraud case will get a jury trial contrary to the request from the SEC. The court rejected the SEC’s attempt to block it claiming it came too late.
- Wells Fargo settles with a group of homeowners for $25.7 million in a RICO class action for unnecessary property inspections and charging delinquent borrowers.
- AARP backs the CFPB’s $109 million fine of PHH Mortgage Corp. for allegedly making mortgage kickbacks, citing to CFPB’s enforcement power.
December 14, 2015 | Permalink | No Comments
December 11, 2015
Friday’s Government Reports
- The U.S. Census Bureau has released the latest batch of data from it’s American Community Survey on Small Area Income and Poverty statistics.
December 11, 2015 | Permalink | No Comments
Feds Financing Multifamily
The Congressional Budget Office has released The Federal Role in the Financing of Multifamily Rental Properties. The report opens,
Multifamily properties—those with five or more units— provide shelter for approximately one-third of the more than 100 million renters in the United States and account for about 14 percent of all housing units. Mortgages carrying an actual or implied federal guarantee have been an important source of financing for acquiring, developing, and rehabilitating multifamily properties, particularly after the collapse in house prices and credit availability that accompanied the 2008–2009 recession. According to the Federal Reserve, the share of outstanding multifamily mortgages carrying such a guarantee increased by 10 percentage points, from 33 percent at the beginning of 2005 to 43 percent at the end of the third quarter of 2014. (A slightly larger increase of about 16 percentage points occurred in the federal government’s market share of the much larger single-family market.) Such guarantees are made by a variety of entities, and some policymakers are looking for ways to make the federal government’s involvement more effective. Other policymakers have expressed concern about that expanded federal role and are looking at ways to reduce it. (1)
This debate is, of course, key to housing policy more generally: to what extent should the government be involved in the provision of credit in that sector?
This report does a nice job of summarizing the state of the multifamily housing sector, particularly since the financial crisis. It provides an overview of federal mortgage guarantees for multifamily projects and reviews the choices that Congress faces when it decides to determine Fannie and Freddie’s fate. That is, should we have a federal agency guarantee multifamily mortgages; take a hybrid public/private approach; authorize a federal guarantor of last resort; or take a largely private approach?
We should start by asking if there is a market failure in the housing finance sector and then ask how the government should intercede to correct that market failure. My own sense is that we intercede too much and we should move toward a federal guarantor of last resort with additional support for the low- and moderate-income subsector of the market.
December 11, 2015 | Permalink | No Comments
December 10, 2015
Using Homeowners Insurance
Univision quoted me in When to Use Your Home Insurance Policy (Cuándo Usar la Póliza de Seguro del Hogar). It opens,
It is not advisable to use your homeowners insurance every time something breaks. Find out why and learn when it’s the best time to file a claim and when to avoid it.
As explained by David Reiss, Professor and Research Director at Brooklyn Law School’s Center for Urban Business Entrepreneurship, it is important to think carefully about the consequences of making a claim for a small loss.
We leave you with several issues you should consider when deciding whether to file a claim.
Is the payment worth the effort?
Generally, the homeowner will be responsible for the first part of the loss in an amount equal to the deductible of the policy. “So if the policy has a $1,000 deductible, and there was a $1,500 loss, only $500 at most would be paid by the insurance company,” said the expert.
Many claims, canceled policy!
After a homeowner files multiple claims, many insurance companies may cancel a policy. Reiss recommends that you determine how this would work beforehand.
Thanks to Ana Puello for assistance with the translation.
December 10, 2015 | Permalink | No Comments
Thursday’s Advocacy & Think Round-Up
- The Harvard Joint Center for Housing Studies has released America’s Rental Housing: Expanding Options for Diverse and Growing Demand in which it finds that the last ten years have seem an unprecedented growth in the demand for rental housing.
December 10, 2015 | Permalink | No Comments
