- Real Estate Price Indices and Price Dynamics: An Overview from an Investment Perspective, David Geltner, Annual Review of Financial Economics, Vol .7, pp. 615–633, 2015.
- Migration and Housing Price Effects of Place-Based College Scholarships, Timothy J. Bartik & Nathan Sotherland, Upjohn Institute, Working Papers, 15-245, 2015.
- Big Data and Big Cities: The Promises and Limitations of Improved Measures for Urban Life, Edward L. Glaeser, Scott Duke Kominers, Michael Luca & Nikhil Naik, HKS Working Paper No. 075.
- The Supply Side of Household Finance, Gabriele Foà, Leonardo Gambacorta, Luigi Guiso, & Paolo Emilio Mistrulli, BIS Working Paper No. 531.
Tag Archives: real estate
Wednesday’s Academic Roundup
- The Liquidity Crisis, Investor Sentiment, and REIT Returns and Volatility, Daniel Huerta, Journal of Real Estate Portfolio Management, Forthcoming.
- Counting Casualties in Communities Hit Hardest by the Foreclosure Crisis, Matthew J. Rossman, Utah Law Review (2016 Forthcoming).
- Climate Change and Long-Run Discount Rates: Evidence from Real Estate, Stefano W. Giglio, Matteo Maggiori, Johannes Stroebel & Andreas Weber, CEPR Discussion Paper No. DP10958 (Paid Access).
- Commercial Bank Failures During the Great Recession: The Real (Estate) Story, Adonis Antoniades, BIS Working Paper No. 530.
Thursday’s Advocacy & Think Tank Round-up
- Corelogic’s Second Quarter U.S. Equity Report indicated that over three-quarters-of -a-million properties regained equity, while 4.4 million remain in negative equity over the same period. Aggregate negative equity fell $28 billion from $338 billion to $309 billion. According to Corelogic this reduction is caused both by foreclosure completions and home price appreciation.
- According to a study by the National Association of Realtors (NAR) new home construction is trailing job growth in major metro areas. NAR sees this as the primary reason for the affordability crisis now gripping the nation in many of the same areas.
- The National Fair Housing Alliance (NFHA) has filed a complaint with the U.S. Department of Housing and Urban Development (HUD) against certain real estate agencies and individual realtors who are alleged to have treated black and latino buyers in Jackson Mississippi in drastically different ways than they treated equally qualified white buyers. According to the NFHA complaint white buyers were shown a wider variety of homes while black and latino purchasers were largely steer into majority minority neighborhoods.
- The NHFA, in a related vein, also released a study entitled Where You Live Matters – 2015 Fair Housing Trends Report which draws a stark parallel between the historic lack of investment in communities of color and the racial disparities in educational, social, and economic outcomes that have resulted.
- NYU’s Furman Center has released a Brief entitled Black and Latino Segregation and Socioeconomic Outcomes which finds that the burgeoning Latino population in the U.S. is largely “inheriting the segregated urban structures experienced by African Americans.” This segregation seems to lead to reduced socioeconomic prospects when compared with whites, including lower earnings, more violent crime, less access to credit and lower homeownership rates.
Bank Break-ins
Chris Odinet has posted Banks, Break-Ins, and Bad Actors in Mortgage Foreclosure to SSRN. The abstract reads,
During the housing crisis banks were confronted with a previously unknown number mortgage foreclosures, and even as the height of the crisis has passed lenders are still dealing with a tremendous backlog. Overtime lenders have increasingly engaged third party contractors to assist them in managing these assets. These property management companies — with supposed expertise in the management and preservation of real estate — have taken charge of a large swathe of distressed properties in order to ensure that, during the post-default and pre-foreclosure phases, the property is being adequately preserved and maintained. But in mid-2013 a flurry of articles began cropping up in newspapers and media outlets across the country recounting stories of people who had fallen behind on their mortgage payments returning home one day to find that all of their belongings had been taken and their homes heavily damaged. These homeowners soon discovered that it was not a random thief that was the culprit, but rather property management contractors hired by the homeowners’ mortgage servicer.
The issues arising from these practices have become so pervasive that lawsuits have been filed in over 30 states, and legal aid organizations in California, Florida, Michigan, Nevada, and New York report that complaints against lender-engaged property managements firms number among their top grievances. This Article analyzes lender-engaged property management firms and these break-in foreclosure activities. In doing so, the paper makes a three-part call to action, which includes the implementation of bank contractor oversight regulations, the creation of a private cause of action for aggrieved homeowners, and the curtailment of property preservation clauses in mortgage contracts.
This is a timely article about a cutting edge issue. All too often I have heard pro-bank lawyers claim that banks almost never foreclose improperly. The news reports and lawsuits discussed in this article counter that claim. And yet, I hope that some empirically-minded person could quantify the frequency of such misbehavior to better inform policymakers going forward.
Wednesday’s Academic Roundup
- An Extrapolative Model of House Price Dynamics, Edward L. Glaeser & Charles Nathanson, HKS Working Paper No. RWP15-012.
- Old Suburbs Meets New Urbanism, Nicole Stelle Garnett, Notre Dame Legal Studies Paper No. 1512.
- Credit Scoring and Loan Default, Rajdeep Sengupta & Geetesh Bhardwaj, International Review of Finance Vol. 15, Issue 2, pg. 139-167, 2015. (Paid access).
- Product Market Effects of Real Estate Collateral, Azizjon Alimov.
- Reforming REIT Taxation (Or Not), Bradley T. Borden, Houston Law Review, Vol. 52, 2015, Forthcoming; Brooklyn Law School, Legal Studies Paper No. 416.
- Age, Demographics, and the Demand for Housing, Revisited, Richard K. Green & Hyojung Lee, June 4, 2015.
Reset Tsunami
Newsday quoted me in When Home Equity Lines of Credit Reset when your plan resets. It reads,
A decade isn’t really a long time – just ask the millions of homeowners whose 10-year-old home equity lines of credit are resetting.
There are two types of HELOC resets: Variable interest rates can reset, and an interest-only repayment plan can reset to amortize. That means payments will switch to include principal and interest, explains David Reiss, a law professor specializing in real estate at Brooklyn Law School.
Many are in for a shock. If you’ve been making interest-only payments for 10 years, “the switch to amortizing over the compressed 20-year period [remaining on a 30-year loan] can lead to an increase of 100 percent or more,” says Peter Grabel of Luxury Mortgage Corp. in Stamford, Connecticut.
If your HELOC is resetting, know what to expect.
“You will no longer be able to draw on the equity line,” says Casey Fleming, author of “The Loan Guide: How to Get the Best Possible Mortgage.” You’ll have a specific time to pay off the loan.
Consider your goals: “What is your purpose for having a HELOC?” says Ray Rodriguez of TD Bank in Manhattan. That drives the options.
Plan for change: “Prepare for the end of the draw period. Find out what your new payment will be,” says Kevin Murphy of McGraw-Hill Federal Credit Union in Manhattan. Cut expenses to make up for the jump.
Explore options: Consider refinancing your debt into a longer-term fixed-rate loan, suggests Ben Sullivan of Palisades Hudson Financial Group in Scarsdale. Replace the HELOC with a new one, or combine your first mortgage with your HELOC into a new interest-only ARM. Talk to a mortgage counselor.
Wednesday’s Academic Roundup
- Beyond Disparate Impact: How the Fair Housing Movement Can Move On, by Rigel Christine Oliveri, Washburn Law Journal, Forthcoming,
- Crowding Out Effects of Refinancing on New Purchase Mortgages, by Steven A. Sharpe & Shane M. Sherlund, FEDS Working Paper No. 2015-017.
- Have Distressed Neighborhoods Recovered? Evidence from the Neighborhood Stabilization Program, by Jenny Schuetz, Jonathan S. Spader & Alvaro Cortes, FEDS Working Paper No. 2015-016.
- A Standing Question: Mortgages, Assignment, and Foreclosure, by Eric A. Zacks & Dustin A. Zacks, Journal of Corporation Law, Vol. 40, 2015, Forthcoming.
- Socioeconomic and Racial Disparities in the Financing Returns to Homeownership, by Tom Mayock & Rachel Spritzer.
- REIT Spinoffs: Passive REITs, Active Businesses, by Richard Nugent, Tax Notes, pg. 1513 & 1635, March 23 & 30, 2015.
- Asset-Level Risk and Return in Real Estate Investments, by Jacob S. Sagi, April 19, 2015.
