Tuesday, October 25, 2011

President Obama Announces New Refinancing Plan to Help Struggling Homeowners

President Obama unveiled on Monday new rules to make it easier for homeowners to refinance their mortgages at today’s low-interest rates, no matter how far their property values have tumbled. The new changes to the Home Affordable Refinance Program (HARP) would apply to loans owned or guaranteed by Fannie Mae and Freddie Mac and to qualify, homeowners must be making on-time payments on their current mortgages.

The president announced the plan in Las Vegas, Nevada, one of the states hit hardest by the foreclosure crisis and where the unemployment rate is 13.4 percent, the highest in the nation. Federal officials hope that reducing monthly payments would free up cash for consumers to spend elsewhere, giving not a boost not only to the housing market, but to the overall economy as well.

In Kansas, NeighborWorks America’s Midwest regional director John Santner welcomed the potential boost for homeowners and housing. “Anything we can do to help solve the housing crisis would be a good thing,” he told the Kansas City Star.

HARP was originally unveiled in 2009, but it has fallen far short of expectations. It was designed to help up to 5 million people, but so far has reached only about 822,000. This new version would eliminate the previous limits which allowed only borrowers whose mortgages were no greater than 125 percent of the value of their homes to qualify. And it would remove certain fees and relieve banks of certain risks as part of the changes.

The program is not expected to increase costs to taxpayers. The Federal Housing Finance Agency is expected to publish final details in mid-November and borrowers can begin to enroll during the first quarter of next year.

Wednesday, October 19, 2011

Creating an Opportunity from All of the Empty Houses? An Affordable Housing Response by NeighborWorks America to the REO Crisis

by Thomas P. Deyo,
Deputy Director,
Green, National Real Estate
and Community Stabilization

NeighborWorks America

This home was once foreclosed and abandoned.
NHS of New Haven rehabilitated it and sold it.

The growing number of empty houses in neighborhoods hit hard by foreclosures presents a huge challenge for residents still in these neighborhoods — and for the banks and government entities that now own many of these properties. Property values have plummeted for homeowners; homes have become shells of shelter having been stripped of their copper wire, plumbing or anything of value; communities have become health hazards or magnets for crime. (See The New York Times Foreclosures Empty Homes, and Criminals Fill Them Up.)

Many responses have been launched to address the situation.

An early public policy response to the crisis was the Neighborhood Stabilization Program (NSP) that offered support to local initiatives to stabilize high-foreclosure communities, mitigate impacts on neighborhoods and families, reduce blight, and offer affordable housing choices to residents. Many NeighborWorks organizations participated in NSP efforts and their initial efforts with local government entities and many other nonprofit organizations have shown successes and positive impact of their work in many communities across the country.

While various responses have been important efforts in establishing a foothold, gaining large scale control of properties and achieving significant gains for affordable housing have been difficult.

But now maybe an opportunity presents itself. The federal government is investigating ways to encourage private investment in significant holdings of “REO” or “real-estate owned” properties held by FHA and the GSEs, and the Federal Housing Finance Agency (FHFA) requested comment on strategies for disposition, including as rental properties. (see FHFA, Treasury, HUD Seek Input on Disposition of Real Estate Owned Properties.)

The opportunity is the potential of adding a substantial amount of affordable rental and for-sale houses for low and moderate income families at a time of desperate need for such housing in our nation. The risk is that a unique opportunity to produce public benefit of longer-term stabilization of fragile communities and increasing supply of affordable housing may be missed in favor of quick disposition without regard to community interests. We believe it’s time to seize the opportunity at hand.

Local nonprofit housing corporations and community residents should be central to any long-term viable solution. In partnership with FHA, the GSEs, and the private market, these groups can deliver on meeting the needs of communities for housing and stability.

The time is now to respond with a plan that takes the available resource that is impacting community strength and turn it into a community opportunity. In simple measure the plan calls for nonprofits to acquire, rehab, and maintain properties, rent at affordable rents to low- and moderate-income community residents, and when markets return sell at affordable prices to these same households and return to government a share of the proceeds to compensate for lower acquisition costs. (See NeighborWorks America comment letter.) This is not easy or simple but requires commitment and recognition that to make an opportunity requires taking some risk.

Monday, October 17, 2011

New Appraisers’ Tool Helps Homeowners Get Credit for Green Features

By Michelle A. Winters,
Senior Manager, Green Strategies
NeighborWorks America
Homeowners who have invested in energy saving upgrades can now have greater confidence that their property will be appraised at a fairer market value.

The nation’s largest professional association of real estate appraisers released a form recently that is intended to help appraisers identify and describe a home’s green features, from solar panels to energy-saving appliances. The Appraisal Institute says the Residential Green and Energy Efficient Addendum is the first of its kind. It will help the industry standardize the way residential energy-efficient features are analyzed and reported.

The form was issued as an optional addendum to Fannie Mae Form 1004, the appraisal industry’s most widely used form for mortgage lending purposes. Used by Fannie Mae, Freddie Mac and the Federal Housing Administration, Form 1004 is completed by appraisers to uphold safe and sound lending. Currently, the value of a home’s green features is rarely part of the equation.

The Appraisal Institute encourages use of the form not just by appraisers, but also by lenders, homebuilders, real estate agents and the homeowners themselves. Lenders can request that the form is included with Form 1004 or provide it to homeowners to fill out and give to appraisers. Real estate agents can use the data to help populate the multiple listing service (MLS). Key stakeholders in the homebuying process can all take advantage of this new tool.

NeighborWorks America has done work with the Appraisal Institute in the past. In 2010, NeighborWorks partnered with the Appraisal Institute, the US Green Building Council and others to help the National Association of Realtors® develop a Green MLS Toolkit. The tool kit was created to help Realtors® add green fields to their local multiple listing service, so that it is easier to market and identify green homes for homebuyers and sellers.

The Appraisal Institute’s latest tool can be downloaded here.

Tuesday, October 11, 2011

New York Housing Counselors and Partners Strategize Next Stage of Helping Homeowners Facing Foreclosure

Darryl Towns, Commissioner/CEO
NYS Homes and Community Renewal

With funding for an extensive network of foreclosure counseling and legal services in New York set to expire in December, housing counselors and their partners throughout the state recently met to strategize about a path forward.

“By 2011, we thought the crisis would be done,” remarked Hilary Lamishaw, of the NYS Coalition for Excellence in Homeownership Education, as she opened the daylong conference. “We don’t know what the service delivery system will look like, but regardless, homeowners are going to have to be served,” Lamishaw added.

Housing counselors and their partners had been gathering at regional meetings leading up to the conference, discussing what might happen in their communities post-funding, sharing best practices and lessons learned.

The conference, sponsored by the NYS Coalition for Excellence in Homeownership Education, the Empire Justice Center and NeighborWorks America, with funds provided by New York State Homes and Community Renewal, provided an opportunity to hear about trends and models from throughout the country. The models included effective triage, on-line intakes, weekly webinars, and technologies such as Hope Loan Port, which have brought new efficiencies in service delivery and cost in other states. Faced with the loss of federal and state funding, Community Development Corporation of Long Island, a local NeighborWorks affiliate, is planning to hold group foreclosure intervention sessions.

Housing counselors weigh in on major topics that will serve as a starting point
for a statewide foreclosure prevention plan.

Lou Tisler, executive director of Neighborhood Housing Services of Cleveland, discussed the positive long-term impact Ohio Governor’s Foreclosure Prevention Task Force has had in giving the issue the political cachet needed to innovate.

Faith Schwartz with the Hope Now Alliance emphasized that it is important to embrace technology so that the work gets done.

Josh Zinner with the New York Community Economic Development Advocacy Project noted that although unemployment may be the immediate trigger now for delinquencies, underneath is often a sub-prime or predatory loan that makes the homeowner at increased risk.

The need for a fair and honest approach to principal reduction was another recurring theme as the audience considered what might really help mitigate foreclosure.

Conference participants developed a series of recommendations to serve as a start of a statewide plan of action, including strategies addressing policy, outreach, fee-for-service and funding, statewide collaboration, and improving the efficiency of counseling and legal issues. Plans are also under way for the development of uniform homeowner education materials that can be accessed from a single point of entry.

“We are facing similar issues in Philadelphia so that is why I came,” said Allison Hughes of the Homeownership Counseling Association of the Delaware Valley. “I thought that morale would be low, but everyone here is upbeat and focused, and the discussion has been great.”

“It was a strong collaboration between government, the courts, housing counselors, legal services, and elected officials in New York State that built an effective response to foreclosure over the last three years. Now that funds are scarce, we will need that collaboration more than ever as we chart a new path on behalf of New York’s homeowners,” said Deborah Boatright, NeighborWorks America Northeast regional director.

Friday, October 7, 2011

In San Francisco, Gordon Chin Left a Legacy of Building Bridges

Rep. Nancy Pelosi presents Chin with his American Flag
Chinatown CDC’s founding Executive Director Gordon Chin retired last Friday drawing national praise for his contributions to San Francisco's communities and to the field of community development since 1977.

About 800 people attended a gala celebration of Chinatown CDC's 34th anniversary and farewell tribute to Chin, including the honorable Congresswoman Nancy Pelosi and special guests such as San Francisco Mayor Ed Lee and Assemblyman Mark Leno. Representative Pelosi paid tribute to Chin by presenting him with a United States flag flown in Washington, D.C. in his name.

Chin’s leadership at Chinatown CDC has had a huge impact on San Francisco residents and neighborhoods. The organization assists more than 4,000 residents and manages 2,300 units of housing in the greater San Francisco area.

 San Francisco Mayor Ed Lee honors Gordon Chin
The nonprofit is one of San Francisco’s most important
community organizations because of its leadership in affordable housing issues and city matters in the past 30 years, Doug Shoemaker, director of the Mayor’s Office of Housing told the San Francisco Chronicle.

Robert Burns, director of Field Operations for NeighborWorks America added, “Gordon's work on behalf of low income and working class residents of San Francisco embodied the core values of NeighborWorks and sets an example for all of us to follow within our own communities.”

Chin spoke of his 34 years at Chinatown CDC as the best and thanked his wife Dorothy for all her support. He plans to write, consult and focus on developing The Gordon Chin Leadership Fund, which will expand community leadership programs and enhance Chinatown CDC's ability to respond quickly to important community issues.

“It’s always been about building bridges between people, partnerships within the community and between communities,” Chin said.

"A heartfelt thanks to all of you who joined us for the evening celebration," said Fei Tsen, chair of Chinatown CDC board of directors. "It was a truly joyful event and so great to have the opportunity to speak with so many of you. On behalf of the children and families who benefit from your help, a very special mahalo from the heart."

On October 1, Norman Fong became Chinatown CDC's executive director. He has been with the nonprofit since 1990. Fong is committed to building upon Chin's legacy and model of leadership to ensure Chinatown CDC continues pave the way in the community development field.

Monday, October 3, 2011

Housing Partnership Network and Citi Foundation Launch Fund to Advance Innovations in Neighborhood Stabilization

Citi Foundation announced recently that it is committing $2.75 million to the Housing Partnership Network (HPN) to support the neighborhood stabilization efforts of community-based housing organizations in 10 metropolitan areas across the country. The Innovations in Neighborhood Stabilization and Foreclosure Prevention Initiative will provide the community based organizations with grants and other resources to support high-impact neighborhood revitalization projects over a two-year period. HPN has been a partner with NeighborWorks America and five other national organizations in neighborhood stabilization efforts through the National Community Stabilization Trust. HPN also collaborates with NeighborWorks America on the StrengthMatters Initiative.

Four NeighborWorks organizations will be a part of the Citi Foundation and HPN initiative:

Housing Development Fund will work to stabilize Connecticut cities with high rates of foreclosure by developing a cohort of “landlord entrepreneurs” who will play a significant role as owner-occupants in a new, coordinated financing and training model for the purchase, rehabilitation and responsible management of owner-occupied small multi-family properties.

HAP Housing will advance strategic neighborhood approaches for the stabilization of three low-income Springfield, Massachusetts neighborhoods hit hard first by the effects of foreclosures and abandonment, and then by a devastating F-3 tornado on June 1, 2011.

Neighborhood Housing Services of Chicago will implement a new model for advising homeowners through a network of Resolution Specialists who will work in partnership with the homeowner, lender, and servicer to modify mortgages through the new national Mortgage Resolution Fund effort.

Neighborhood Housing Services of New York City, Inc. (NHSNYC) in collaboration with the New York Mortgage Coalition (NYMC) and the Long Island Housing Partnership (LIDP) will create a foreclosure intervention program for existing homeowners who may qualify to own or rent their homes if prices were reset to current market valuations.