Foreclosure-Free (Almost) Homeownership

Homeowners in community land trusts (CLTs) across the nation continue to have substantially lower delinquency and foreclosure rates than owners of market-rate homes, according to survey results released recently by an independent researcher at Vanderbilt University working in partnership with the National Community Land Trust Network.

Results from the survey found that conventional home-owners were 8 times as likely to be in the process of foreclosure than CLT homeowners at the end of the 4th quarter of 2009. According to the Mortgage Bankers Association (MBA) survey of market-rate mortgages, 4.6 percent were in the process of foreclosure, compared to only 0.6 percent of CLT mortgages. This represents a widening of the gap as compared to 2008, when market-rate home-owners were 6 times more likely to be in the process of foreclosure as compared to their CLT counterparts.

Columbia Gets Green Light for Expansion

A controversial, 17-acre expansion of Columbia University’s Harlem campus received a nod from the New York Court of Appeals, which overturned a lower court decision, tentatively allowing the university to pursue a $6.3 billion development in facilities for science and health-care research, along with housing and amenities. The ruling allows the state to deem the area blighted, which allows the project to qualify for eminent domain. The area, known as Manhattanville, is currently home primarily to warehouses and auto repair shops.

The expansion effort has caused a great deal of strife in the neighborhood, as documented in 2008 in Shelterforce (“Will Columbia Take Manhattanville?” Shelterforce #158).

Earlier this year, the proposal was put to a halt by the New York State Supreme Court’s appellate division, citing a misuse of the eminent domain law by the state on the university’s behalf. Specifically, the court ruled that there was no civic purpose behind the school’s expansion plan. The school’s developer argued that the proposed project had civic value, adding education facilities, community vitality, and increased job opportunities.

Punitive Measures for Walk-Aways

A few years ago, we warned that lenders, particularly GSEs like Fannie Mae and Freddie Mac, would take punitive measures on people who made strategic defaults on their homes, and it looks like that’s where things are heading. Fannie Mae has announced that borrowers who default despite ability to pay and don’t seek modifications will be barred from getting a new Fannie Mae-backed loan for seven years. The House has also passed a measure that requires HUD to “rein in strategic defaults” on FHA loans by defining “strategic default” and encourage lenders to block potential borrowers who have strategically defaulted from getting another FHA mortgage. The measure was as part of legislation that would nearly triple the cap on annual premiums the Federal Housing Authority can charge borrowers and would give the agency more powers to protect itself from fraudulent or poorly underwritten loans.

Dean Baker, co-director of the Center for Economic and Policy Research in Washington, D.C., and regular Shelterforce contributor, who recently wrote a piece on giving homeowners in unwanted mortgage default the right to rent, was critical of the Republican-sponsored measure, writing on Talking Points Memo that it will “punish homeowners who look out for their own best interest and strategically default . . . Maybe they will also prohibit strategic defaulters from getting a loan through the Small Business Administration or allowing their children to get a government guaranteed student loan.”

Strategic default, he notes, is standard business practice. Look no further than New York City’s Cooper Village and Stuyvesant Town—the massive housing complex whose owner strategically defaulted on the $4.4 billion debt used to help finance the deal.

Heck, even Bank of America’s credit loss mitigation executive, Jack Schakett, acknowledged on a conference call with reporters as the company announced its Principal Reduction Enhancement program, that there is “a huge incentive to walk away” and that “foreclosure can be very appealing to customers.”

Filling the Talent Pool in Newark

Talk about an educated community. Newark, New Jersey, has given the green light to a “teachers village” that will comprise three charter schools, 1,000 students, and 221 units of workforce housing that will be marketed to educators. The hope is to bring into the city some of the estimated 15,000 people who teach in Newark-based schools and universities, including a campus of Rutgers University. The village, slated for Newark’s Four Corners Historic District, would replace eight vacant, 19th-century buildings with seven new buildings, and rehab an existing nine-story shell. Four Corners, right in the heart of Newark’s central business district, is an intersection that was the focal point of the city’s planning in 1666, when Newark was first laid out, and was at one point one of the busiest intersections in the United States, used by the early settlers.

Adolfo Carrion: A Brief History

First it was the Office of Urban Policy. Then, at the time of its launch in 2009, it quietly turned into the Office of Urban Affairs: a small, but interesting name change. Its director, Adolfo Carrion, the former Bronx borough president once rumored to be in the running for HUD secretary before President Obama tapped fellow New Yorker Shaun Donovan to head the agency, was at the helm of an upstart White House office. The office was supposed to represent something of a pipeline between the West Wing and respective urban city halls.

Just over a year later, Carrion has left his post, being named HUD’s regional director for New York and New Jersey. Carrion’s tenure as President Obama’s point man on urban issues at the Office of Urban Affairs was short and mostly uneventful, characterized by a muted tone that contrasted with the high level of anticipation it had generated, a reflection of the ethos that “urban policies are the rules and incentives that shape the prosperity, equity, and environmental sustainability of the metropolitan regions in which 8 in 10 people live,” as Xavier de Souza Briggs, associate director of the White House Office of Management and Budget, wrote in Shelterforce just before the 2008 elections.

A new director for the Office of Urban Affairs as not yet been named, and we’ll be watching how that office takes shape anew moving forward. Certainly we wish Carrion well, but we’d like to see that foundation really take hold—soon.