- Enterprise Community Partner’s and other affordable housing advocates have launched #CapsHurtCommunities, a campaign to raise spending caps imposed and restore critical funding. They are urging organizations and concerned citizens to reach out to Congress while the members on recess – asking them to support tax extenders legislation and fully fund affordable housing. The Summer Advocacy Tool Kit contains a variety ideas for creating awareness around the issue.
- The Make Room Campaign’s mission is to raise awareness around the rent affordability crisis currently being played out in homes across the U.S. The Campaign has a novel approach – celebrity concerts, held on the 1st, (when the rent is due) in rent burdened living rooms. In July, Grammy Award winning Artist Timothy Bloom held a concert in the Paterson NJ (See, NJ Factsheet) home of the five member Montgomery family, which spends more than half its income on rent and despite holding three jobs, is behind on bills and cannot afford a vehicle. Last Month’s concert was in the Los Angeles, CA (See, CA Factsheet) home of the Duartes where Carly Rae Jepson performed her hit song, “Call Me Maybe.”
- National Association of Realtors’ Pending Home Sales Index took a dip in June, after five months of increases. on the other hand, when compared to June of 2014, it reflects an 8.2% increase.
Tag Archives: New Jersey
Monday’s Adjudication Roundup
- Bankrupt Washington Mutual settles in class action suit for $10 million after duping plaintiffs into taking out mortgages with low “teaser rates.”
- Goldman Sachs asks NY Federal Judge not to certify class action suit over its Abacus collateralized debt obligation, which caused $1 billion in investor losses.
- The Third Circuit Court of Appeals has ruled that the Fair Debt Collection Practices Act (FDCPA) covers foreclosure complaints in suit brought by Bank of America and a NJ law firm.
- First Horizon National Corp.’s subsidiary First Tennessee Bank settles with FDIC over violation of due-diligence regulations for Federal Housing Administration-insured home loans for $212.5 million.
- HSBC and Assurant settle for $1.8 billion over allegations that the bank got kickbacks for getting consumers to purchase inflated flood insurance.
Monday’s Adjudication Roundup
- New Jersey Condominium Association files a complaint alleging that the U.S. Federal Emergency Management Agency (FEMA) breached its contracts by failing to pay flood insurance benefits for damage from Hurricane Sandy.
- The US Supreme Court justices are reviewing an Eleventh Circuit decision that allows second-mortgage liens to disappear for Chapter 7 debtors when the first mortgage is undersecured. The justices expressed concern in letting this happen.
- Federal Deposit Insurance Corp. suit against RBS Securities Inc. for $140 million over residential mortgage-backed securities is dismissed as time-barred under recent US Supreme Court ruling in CTS Corp. v. Waldburger.
- UBS Americas Inc. has settled confidentially with Capital Ventures International over alleged $109 million of risky mortgage-backed securities.
The State of the Foreclosure Crisis
Rob Pitingolo of the Urban Institute issued State of the Foreclosure Crisis: Past the Peak but Not Recovered. It opens,
Much attention has been given to statistics that show new foreclosure activity nationally has slowed over the past few years. When it comes to metropolitan area markets, however, some have gotten worse, while others have stagnated. It is not simple enough to declare an end to the foreclosure and delinquency crisis when there are as many as a quarter (25%) of metro areas that have not yet begun their recovery. (1)
It continues,
the rate of 90 day or more delinquency steadily fell in 2010 and 2011, ending at 3.1% in September 2013. In contrast, the foreclosure inventory only turned the corner in mid -2012, and is still higher than the March 2009 level at 4.5%, around seven times the pre-crisis level. Historically, a foreclosure inventory under 1% is what we would expect in “normal” market conditions.” (1, footnote omitted)
It concludes, “attention must be paid to individual metropolitan housing markets. Some are in much better shape than others; and some have made great strides since the peak of serious delinquency in December 2009. However, it may be premature to declare the problem is “ending” until all metro area markets show signs of recovery.” (2) The report identifies the starkest differences in metro areas:
Three geographic regions were hard hit at the beginning of the foreclosure crisis: California metros, Florida metros, and “Rust Belt” metros (those in Midwest states like Ohio, Michigan and Indiana). All three of those regions have seen solid improvements since December 2009.
On the other hand, the Northeast has generally performed poorly in the past several years. Serious delinquency rates in major metropolitan markets like New York City, Philadelphia and Baltimore have all worsened since December 2009. Other metro areas in New York like Buffalo, Rochester and Syracuse have similarly struggled, as have metro areas surrounding New York like New Jersey and Connecticut. (5)
The report concludes with a call for a nuanced response to the current state of the foreclosure crisis: “communities need strong examples to build upon, rigorous data and analysis, and a commitment to evidence-based policymaking that strives toward the best fit between policy solutions and policy problems.” (6) This seems like the right call and the appropriate response to headlines that report the national trend without mentioning the variations among metro areas.
Shadowed by the Shadow Inventory
My former colleague at Seton Hall, Linda Fisher, has posted Shadowed by the Shadow Inventory: A Newark, New Jersey Case Study of Stalled Foreclosures & Their Consequences on SSRN. The paper presents the findings of a small, but interesting empirical study. The study “tests the extent to which bank stalling has contributed to foreclosure delays and property vacancies in” one neighborhood in Newark, New Jersey. (6) Fisher states that this “is the first study to trace the disposition of each property in the sample through both public and private sources, allowing highly accurate conclusions to be drawn.” (6)
Fisher reaches “a similar conclusion to the previous studies with respect to stalling: without legal excuse or ongoing workout efforts, banks frequently cease prosecuting foreclosures.” (7) Fisher also finds that the stalled foreclosures in her study “do not strongly correlate with property vacancies.”(7) Fisher claims that her findings “are generalizable to similar urban areas in judicial foreclosure states,” but I would like to have seen more support for that claim in the paper. (45)
As a side note, I found her description of foreclosure in New Jersey interesting:
The New Jersey foreclosure system provides a representative example of a judicial foreclosure regime, albeit one with heightened procedural protections for borrowers enacted into the state’s Fair Foreclosure Act. For instance, lenders must file a notice of intention to foreclose containing information about, inter alia, the lender, servicer and amount required to cure, before filing a foreclosure complaint in court. Once borrowers are served with process, they may file a contesting answer and litigate the matter, as with any civil case. Because ninety-‐four percent of New Jersey foreclosures in a typical year are not contested, the process is largely administrative and handled through a statewide Office of Foreclosure. Court personnel scrutinize bank evidence in support of default judgments. Borrowers may file late answers, and are responsible only for curing arrears and paying foreclosure fees up until the time of judgment. (14-15, emphasis added, citations omitted)
Because this blog has as one of its main focuses downstream litigation judicial opinions, it is important to remember how few cases actually reach a court room, let alone result in a written opinion by a judge.
