- NY Federal Court ended the suit against US Bank and Bank of America brought by Blackrock and NCUA for failure to properly oversee residential mortgage-backed security trusts finding that most of the trusts fell under state law.
- Deutsche Bank, Morgan Stanley and UBS Securities have settled with Federal Home Loan Bank of Boston for misleading it to purchase $5.9 billion in bad mortgage-backed securities.
- Associated Bank agrees to $200 million, record-breaking settlement with US Department of Housing and Urban Development in discriminatory lending suit.
Tag Archives: discrimination
Wednesday’s Academic Roundup
- Rights at Risk in Privatized Public Housing, by Jaime Lee, Tulsa Law Review, Vol. 50, 2015, pp. 759-801.
- Making Firms Liable for Consumers’ Mistaken Beliefs: Theoretical Model and Empirical Applications to the U.S. Mortgage and Credit Card Markets, by Alexei Alexandrov, Consumer Financial Protection Bureau, Apr. 27, 2015.
- Discrimination at the Margins: The Intersectionality of Homelessness & Other Marginalized Groups, by Kaya Lurie, Breanne Schuster, & Sara Rankin, Seattle University School of Law, May 6, 2015.
- Supply Restrictions, Subprime Lending and Regional US House Prices, by André K. Anundsen & Christian Heebøll, Norges Bank Working Paper 18, 2014.
- Global Liquidity, House Prices and the Macroeconomy: Evidence from Advanced and Emerging Economies, by Ambrogio Cesa-Bianchi, Luis Felipe Céspedes, & Alessandro Rebucci, IDB Working Paper No. IDB-WP-576.
Wednesday’s Academic Roundup
- The Rescue of Fannie Mae and Freddie Mac, by W. Scott Frame, Andreas Fuster, Joseph H. Tracy & James I. Vickery, FRB Atlanta Working Paper No. 2015-2.
- Architectural Exclusion: Discrimination and Segregation Through Physical Design of the Built Environment, by Sarah Schindler, 124 Yale Law Journal 1934 (2015).
- Assessing Financial Security of Low Income Households in the United States, by Jae Min Lee & KyoungTae Kim, Journal of Poverty, Forthcoming.
Wednesday’s Academic Roundup
- Keepings, by Donald J. Kochan, NYU Environmental Law Journal (2015) Forthcoming.
- Low-Income Housing Policy, by Robert A. Collinson, Ingrid Gould Ellen, & Jens Ludwig, NBER Working Paper No. w.21071.
- Housing Discrimination Among Available Housing Units in 2012: Do Paired Testing Studies Understate Housing Discrimination, by Rob Pitingolo & Stephen L. Ross, April 5, 2015.
Good Data Makes Good Mortgages
The CFPB issued a proposed rule about increasing the quality of information that lenders report about mortgage applications. The press release regarding the proposed rule states that these changes will ease the reporting burden on lenders, and that may very well be true. But the contested part of these rules relate to the type of information to be collected:
- Improving market information: In the Dodd-Frank Act, Congress directed the Bureau to update HMDA regulations by having lenders report specific new information that could help identify potential discriminatory lending practices and other issues in the marketplace. This new information includes, for example: the property value; term of the loan; total points and fees; the duration of any teaser or introductory interest rates; and the applicant’s or borrower’s age and credit score.
- Monitoring access to credit: The Bureau is proposing that financial institutions provide more information about underwriting and pricing, such as an applicant’s debt-to-income ratio, the interest rate of the loan, and the total discount points charged for the loan. This information would help regulators determine how the Ability-to-Repay rule is impacting the market, and would also help the Bureau monitor developments in specific markets such as multi-family housing, affordable housing, and manufactured housing. The proposed rule would also require that covered lenders report, with some exceptions, all loans related to dwellings, including reverse mortgages and open-end lines of credit.
Lenders are not going to like this, because this new information may be used against them in a variety of ways — in Fair Housing lawsuits, by the CFPB in enforcement actions, by members of Congress seeking to increase credit access to various constituencies.
I like this because regulators and academic researchers have been hamstrung by limited and stale data on the fast-moving mortgage market. The mortgage market is often driven by the short-term profit-seeking of private actors and by special interests pushing their agendas with the Executive and Legislative Branches. Good data can inform good decision-making that can ensure that the housing finance system is vibrant and provides sustainable credit for households over the long term.
Comments on the proposed rule are due by October 22, 2014.
Reiss on NY RE Regulation
Law360 quoted me in What’s Up Next In NYC Real Estate Legislation (behind a paywall). It reads in part,
New York City lawmakers have introduced a slew of new bills in recent months that could impact commercial real estate owners and developers with changes like new protections for rent-regulated tenants and more public review for zoning changes. Here are explanations and some experts’ thoughts about the proposed laws.
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Fighting Alleged Double Standards for Regulated and Market-Rate Tenants
City Council members Mark Levine and Corey Johnson are drafting a bill to combat what they claim is a trend of property owners unfairly discriminating against their rent-regulated tenants, preventing them from taking advantage of amenities that market-rate tenants can enjoy.
The issue gained a lot of attention last year when news broke that Extell Development Co.’s project at 40 Riverside Drive might have two separate entrances: one for owners of its condominiums and one for those living in the affordable units.
The “poor door” arrangement, which has reportedly been used at several buildings around the city, sparked outrage from tenants, who argued that developers were abusing the 421-a subsidy program, which gives tax abatements in exchange for affordable housing.
Levine and Johnson’s new bill would alter the city’s rental bias code, which protects tenants from discrimination based on race, gender or age, to include rent-regulated as a protected status.
Under de Blasio’s plan for mandatory inclusionary zoning at all new development projects, the bill appears to be an effort to establish actual integrated communities, said Brooklyn Law School professor David Reiss.
“Mandatory inclusionary zoning is not just about affordable housing; to a large extent it’s about socioeconomic integration,” Reiss said. “I think this bill about double standards is really not about protecting affordable housing as much as it is about respecting socioeconomic diversity.”
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Requiring Two Years of Experience for a Crane Operation License
In April, Manhattan Councilman Benjamin Kallos introduced a bill that would require crane operators to have at least two years of experience working in New York City in order to obtain licenses.
Industry insiders note that the licensing process is effectively controlled by a local union, and many are concerned that this new bill would give the union even more power, essentially blocking the use of any crane contractors that are not affiliated with it.
“There’s a spat between developers and unions, and the bill is firmly taking the side of the unions,” Reiss said. But he added that the real question is what is actually in the public interest. “What is the level of safety that we need?”
The Bloomberg administration had a more developer-friendly approach, creating a plan to allow operators to get licenses if they had worked in a similarly dense city before. But the crane operators’ union sued over those rules, and the litigation remains pending.
