Safeguard Properties

Rep. Israel Announced Bill to Turn ?Zombie? Homes into Housing for Homeless Veterans

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Industry Update
November 23, 2015

In 2014, there were 4,044 Zombie Homes in Suffolk and Nassau Counties

Dix Hills, NY—Congressman Steve Israel (NY-03) joined Suffolk County Legislator Steve Stern, local homeowners and stakeholders to announce legislation that will help veterans organizations buy, renovate and repurpose Long Island zombie homes into housing for homeless veterans. The Housing Our Heroes Act creates a three year pilot program which provides grants to Veterans Service Organizations (VSOs) and Non-Governmental Organizations (NGOs) to purchase and renovate these blighted properties- providing a pathway to homeownership for homeless veterans and taking unsightly zombie homes off the market.

“It is simply unacceptable that our veterans, who have sacrificed so much to defend our country, should ever be forced to sleep on the streets at night,” said Rep. Steve Israel. “My legislation will not only put a roof over our heroes’ heads, it will also transform unsightly zombie homes into renovated properties that will revitalize housing markets in many of our Long Island communities. Whenever we get the opportunity to eliminate two problems with one sustainable solution, we should act on it.”

“No soldier who has ever worn the uniform of our great nation and gone off to protect the ground we stand on should ever have to come home to sleep on it,” Legislator Steve Stern said. “This legislation will help ensure that our military heroes have a place to call home while turning blighted properties into houses fit for heroes. Thank you to Congressman Steve Israel for introducing this important initiative to not only assist our veterans, but also to improve the quality of life for all of our neighbors.”

“Huntington residents have been dealing with the zombie home epidemic in our neighborhoods for far too long,” said Huntington Town Councilwoman Tracey Edwards. “Congressman Israel’s legislation will help improve the quality of life for our veterans and Huntington residents whose home values have been negatively impacted by these eyesores. I look forward to working with him to ensure our residents are taken care of.”

“On Veteran’s Day, as our nation reflects on the sacrifices that military service men and women have made, and continue to make each day, in service to our country United Way of Long Island is pleased to be part of a neighborhood stabilization initiative that will find innovative ways to provide affordable and energy efficient housing for veterans through the federal Housing our Heroes Act,” said Teresa Regnante, President and CEO of United Way Long Island. “We applaud Congressman Israel for his work on behalf of veterans.”

“At the Long Island Coalition for the Homeless, our main goal is to end homelessness and help improve the lives of Long Islanders who may become homeless,” said Greta Guarton, Executive Director at Long Island Coalition for the Homeless. “I applaud Congressman Israel for introducing this legislation to help strengthen our mission and improve the lives of not only our veterans, but our entire Long Island community.”

“Passing the Housing Our Heroes Act would be a win-win for Long Island veterans and residents,” said Frank Amalfitano, Director of United Veterans Beacon House. “Placing homeless veterans in these homes will give them the opportunity and foundation they need to become independent successful members of our community. I applaud Congressman Israel for fighting to improve the lives of our veterans.”

“After fighting for our country, veterans deserve every opportunity possible to help get back on their feet and on track,” said Beth Gabellini, Regional Director of Long Island Supportive Services for Veteran Families. “Congressman Israel’s bill will help us expedite the process of getting veterans and their families off the streets and into homes which provide a stable base for their continued recovery.”

“Zombie homes aren’t only eyesores in our neighborhood, they are actively reducing the value of our homes that we have worked so hard to maintain,” said Gina Raio Bitsimis, Dix Hills homeowner and zombie home neighbor. “I thank Congressman Israel for working to transform these costly eyesores into beautiful homes for our country’s veterans. My family and I will welcome these brave men and women into our neighborhood with open arms and look forward to the increase of both our quality of life and the value of our property.”

According to a 2014 Department of Housing and Urban Development (HUD) report, national veteran homelessness has declined by 33 percent since 2010. However, there are still an estimated 49,933 homeless veterans on the street on any given night in the United States, including more than 2,500 veterans in New York State.

A 2014 Newsday study found that Suffolk County had 2,084 zombie homes and Nassau had 1,960.  The same report found that zombie houses have cost Long Island at least $295 million in depreciated home values, while Long Island municipalities spent at least $3.2 million to clean, maintain and board up these zombie properties in 2013.A zombie home is commonly referred to a home that is in the foreclosure process that is maintained by neither the lender nor the homeowner. In New York the foreclosure process averages 934 days which can leave some homes vacant and decaying for years.

Source: israel.house.gov

Additional Resource: 
H.R. 3970 (current proposed text)

N.J. Towns Tackle Abandoned Homes as ?Zombie Foreclosures? Climb

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Updated 1/19/16: The office of U.S. Senator Bob Menendez (D-NJ) issued a press release titled Menendez Leads Meeting to Address NJ Foreclosure Crisis, Protect Homeowners, Communities.

Link to press release

Legislation Update
November 10, 2015

Law lets municipalities fine creditors if properties fall into disrepair

EAST ORANGE, N.J.—The light-green house on the corner used to look like all the other tidy homes along tree-lined North Grove Street, but last week a city cleanup crew encountered months-worth of debris and overgrowth.

“She used to keep it nice,” longtime neighbor William Berry said of the woman who lived there for years. “She used to have flowers in the front.”

Today, the single-family home with broken basement windows and peeling paint is vacant and in foreclosure, making it one of East Orange’s 423 properties considered to be “zombie foreclosures.” Some 160 of these homes are in such a state of disrepair that they have drawn complaints from neighbors and fines from the city.

New Jersey has the nation’s highest rate of zombie foreclosures, according to a report last month by market researcher RealtyTrac. There are 63,977 houses in foreclosure across the state, 6.2% of which are considered zombies.

Zombie foreclosures have fallen 43% nationwide in the past year, according to RealtyTrac, but in New Jersey they have increased 28.6%. The problem in New Jersey has been exacerbated by the lingering issues related to superstorm Sandy.

Last month, U.S. Sens. Cory Booker and Bob Menendez, Democrats from New Jersey, sent a letter to federal housing officials urging action to help homeowners and municipalities dealing with zombie foreclosures.

To help pay for the abandoned houses’ upkeep, some cities and towns are taking advantage of a year-old state law that allows municipalities to fine the creditors of vacant and foreclosing homes up to $2,500 a day if the properties aren’t maintained.

According to the law, local officials must inform creditors that the property they are foreclosing on has been abandoned and needs maintenance. The creditor has 30 days to comply before the city can issue fines.

Staci Berger, president and CEO of the Housing and Community Development Network of New Jersey, an organization that advocates for low- and moderate-income residents, said the law gives cities and towns the resources they need to combat blight.

“There’s a financial penalty for failing to maintain the property that isn’t borne by the taxpayers,” she said.

In East Orange, the house on North Grove Street was once owned by a businessman who died in 1994 and left the home to his three children, according to his granddaughter Judith Dunkley. The youngest, Sandra Mitchell, moved in after her father’s death but didn’t pay the taxes, Ms. Dunkley said.

Ms. Dunkley’s mother, the estate’s executor, had been paying the tax bill before she developed Alzheimer’s, though she didn’t live in the house, her daughter said.

Ms. Mitchell, who lived in the house for 21 years, said she left in early September after unsuccessfully fighting the foreclosure. She said she kept up the house for two decades and was willing to pay the tax bill, but had trouble getting the necessary paperwork.

“Had I been given notice in a timely manner where I could have made arrangements to do something, I would have,” Ms. Mitchell said.

East Orange has issued $4,000 in fines against Pact Investments LLC—which acquired the house through a tax foreclosure in July 2014—for failing to maintain the property, city officials said.

Avram Frisch, Pact’s attorney, said his client wasn’t aware the home was abandoned and denied receiving notice from the city about maintenance problems.

In East Orange, vacant and abandoned properties represent about 10% of the 4-square-mile city’s residential housing stock, according to city officials. Mayor Lester Taylor’s administration has started an aggressive anti-blight campaign, and in July hired 12 residents for a team charged with cleaning up vacant and derelict properties.

East Orange has issued court summonses to the creditors of 160 abandoned and foreclosing homes during the past year, which will net the city $320,000 in revenue if a court approves the fines, city officials said.

“We tell folks, ‘We don’t want your money, we want you to maintain your property,’ ” Mr. Taylor said.

The money will help pay for the cleanup, but city officials said they prefer that owners—whether they are residents or lenders of foreclosed homes—do the work themselves.

East Orange isn’t the only city issuing fines on foreclosing houses. Newark collects about $40,000 a week from creditors of vacant and abandoned properties, mainly multifamily houses, according to the city.

Other New Jersey cities and towns, including Paterson, Asbury Park and Deptford Township, are building registries to track vacant and abandoned properties, and plan to start issuing fines, officials said.

New Jersey’s banking industry supported the 2014 law, said Mike Affuso, senior vice president for the New Jersey Bankers Association. It is in the banks’ interest to keep up the properties they are planning to sell, and the law gives local creditors enough time to address blight before they are fined, he said.

“If you do the right thing under the law you’re not going to be penalized,” Mr. Affuso said.

Creditors most susceptible to fines are out-of-state, nonbank entities, which Mr. Affuso said own the majority of New Jersey’s vacant and abandoned homes and have greater logistical difficulty maintaining them.

Foreclosure in New Jersey typically takes 2½ to three years. The lengthy process increases the likelihood of owner abandonment and raises costs for lenders, Mr. Affuso said.

“There is an extraordinarily strong correlation between properties that have been in foreclosure for a long period of time and dilapidation,” Mr. Affuso said.

In East Orange, abandoned and blighted homes cause problems for the entire neighborhood, city officials said. Rats and feral cats take up occupancy, overgrown shrubbery blocks the sidewalk and lawns become targets for illegal dumping. Squatters sometimes move in and use the property to fix up old cars or store lawn equipment.

“For every block that has a blighted house, there are lots of other residents paying taxes,” said Christopher Coke, director of the East Orange Department of Public Works. “Why should they have to live next to something that’s in shambles?”

Corrections & Amplifications:

Four hundred twenty-three properties in East Orange are so-called “zombie” foreclosures. A headline on an earlier version of this article said 10% of the city’s properties. (11/11/2015)

Source: The Wall Street Journal

MBA: NJ, NY, Florida contain highest percent of foreclosures

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Industry Update
November 20, 2015

All three states judicial

The most recent Mortgage Bankers Association’s chart of the week shows that since the fourth quarter of 2012, New Jersey, New York, and Florida have had the highest percentage of loans in foreclosure in the nation.
 
It’s important to note that all three of these states primarily use a judicial foreclosure process.

However, despite the high amount, their foreclosure inventories are falling.
 
Florida’s foreclosure inventory declined by 266 basis points over the year ending in the third quarter of 2015, while New Jersey and New York dropped 95 basis points and 149 basis points, respectively.

Source: HousingWire/MBA

Huntington Adds New Fee For Vacant Home Inspections

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Industry Update
October 1, 2015

The Huntington Town Board adopted a law that adds a $100 fee for inspections to identify and confirm whether houses within the town are vacant and abandoned.

The town Department of Public Safety will conduct vacant home inspections. Until now, vacant home inspections were done without a fee. The department will also maintain the Vacant Buildings Registration, which will be available for public inspection.

As the number of requests to inspect abandoned and vacant homes grows, it becomes costly to use Public Safety for inspections without proper remuneration from the property owner, town board member Susan Berland said.

“It is a common-sense approach to charge a fee to the owner of the vacant and/or abandoned building to assess its status in the foreclosure process,” she said.

The board voted 5-0 to pass the measure at the Sept. 16 town board meeting.

Source: Newsday

Additional Resource: Ordinance No. 26-2015

Foreclosure Sales Are Way Down?But So Are Solutions

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Industry Update
November 30, 2015

While the data released on foreclosure sales and starts for the third quarter indicated substantial declines as those totals move toward pre-crisis levels, the number of non-foreclosure workout solutions seems to be declining at nearly the same rate, according to data released by HOPE NOW on Monday.

HOPE NOW reported that the mortgage industry assisted approximately 337,000 homeowners in Q3 with non-foreclosure solutions that included both home retention and home forfeiture workout plans. By comparison, the industry completed 76,000 foreclosure sales during the quarter, which calculates to a ratio of 4.4 non-foreclosure solutions for every one foreclosure sale that was completed during the three-month period.

While the number of foreclosure sales completed dropped significantly both over-the-quarter (15 percent, down from 89,000) and over-the-year (31 percent, down from 110,000) in Q3 2015, the number of non-foreclosure solutions also declined at similar rates—18 percent over-the-quarter (down from 411,000) and 28 percent over-the-year (down from 469,000).
“As loss mitigation efforts have slowed down overall, we are still very focused on markets where recovery has been slower, where unemployment rates remain high and where affordability gaps exist,” HOPE NOW Executive Director Eric Selk said. “Our approach to housing has evolved over the years as the market has shifted from crisis to recovery and our members remain committed to achieving stability in the market.”

Out of the 337,000 non-foreclosure solutions completed by the industry in Q3, approximately 98,000 were permanent loan modifications, 21,000 were short sales, and 218,000 included repayment plans, deeds-in-lieu-of-foreclosure agreements, or other retention plans, according to HOPE NOW. Within those 98,000 permanent loan modifications, approximately 69,000 homeowners completed proprietary loan modifications while approximately 29,000 completed modifications under the government’s Home Affordable Modification Program (HAMP).

Foreclosure starts also declined substantially in Q3 both over-the-quarter down to 159,000 (9 percent, down from 176,000) and over-the-year (26 percent, down from 215,000), according to HOPE NOW.
HOPE NOW, a voluntary, private sector alliance of mortgage servicers, investors, mortgage insurers and non-profit counselors, has hosted eight loss mitigation events in 2015 in areas hit hardest by the foreclosure crisis.

“The data we have collected at our loss mitigation events in 2015 is painting a very clear picture of borrower profiles and what mortgage servicers are able to offer their at-risk customers,” Selk said. “Through eight events this year, 81 percent of attendees are either delinquent on their mortgage or in imminent default and 36 percent are first time applicants for a loan modification. That shows a clear need for immediate attention. Of the borrowers on site, 64% are reviewed for some sort of long term retention option, with another 5 percent reviewed for a short term retention solution such as forbearance.”

Source: DS News

Additional Resource:
HOPE NOW State Loss Mitigation Data September 2015 (full report)

Delgado Applauds Passage of Ohio Foreclosure Fast Track Bill, Urges Senate to Act

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Safeguard in the News
November 18, 2015

On the topic of blight in residential neighborhoods, Ohio-based Safeguard Properties Chairman Robert Klein said, “A vacant and abandoned house is not a bottle of wine. It doesn’t get better with age.”

The state of Ohio is taking steps to remedy the vacant and abandoned property crisis, however, and the rest of the country may follow suit. A bill that would reduce foreclosure timelines and therefore shorten the amount of time that residential properties remain vacant in Ohio passed by a unanimous 88-0 vote in the Ohio House of Representatives earlier this week.

Ohio HB 134 is the second attempt at passing a “fast track foreclosure” bill in the state of Ohio in order to expedite the residential foreclosure process after a similar bill failed last year in the Ohio Senate. Just as Ohio HB 134 did on Tuesday, the previous bill passed unanimously in the state’s House last year. The legislation, if it passes in the Ohio Senate, would reduce the lengthy foreclosure process in Ohio from its current timeline of two to three years or longer down to as low as six months in many cases.

For the mortgage industry, the passage of Ohio HB 134 represents a step toward solving what Five Star Institute President and CEO Ed Delgado termed a “community crisis of national proportion.”

“I applaud the Ohio House of Representatives for passing this bill, and I am pleased that it received such overwhelming support,” Delgado said. “Reducing the amount of time that properties are vacant will ultimately eliminate neighborhood blight and prevent the calamities that often accompany it, such as vandalism, violent sexual assault, drugs, prostitution, and overall deterioration of communities. This bill will take steps to ensure that these magnets for crime will be more quickly rehabilitated and promote the safety of neighborhoods across the state. I urge the Ohio Senate to act quickly in passing this bill.”

Ohio State Rep. Cheryl Grossman, a joint sponsor of Ohio HB 134, stated, “To be able to shorten this process from two to three years down to six months benefits everyone. I think it will have a huge impact. This is something that’s not unique to one area of the state. There are problems throughout the state and throughout our country on what falls in this category. What we can do to respect the homeowners that are maintaining their properties and being responsible and not have to have a boarded-up house next to them, that is huge.”

The bill now moves on to the Ohio Senate, where it ran into problems last year. But Ohio HB 134 has some strong backing that may give the bill the lift it needs in order to pass the Senate and become law.

“We know the people in the Senate who are very involved in this project, including the Governor’s office, and we’re going to keep pushing to make this thing pass. I feel pretty confident that once it passes in Ohio, other states will pick up on it.

The idea for the bill was first proposed by Columbus City Attorney Rick Pfeiffer, and Ohio HB 223 was introduced to the Ohio Senate in June 2013 by Grossman, a Republican, and Ohio State Rep. Michael Curtin, a Democrat. The bill passed unanimously in the Ohio House in April 2014, but then an amended version of the bill failed to make it out of the Ohio State Senate Finance Committee when it was introduced there eight months later in December. A new version of the bill, Ohio HB 134, was introduced earlier this year by the same two joint sponsors, Grossman and Curtin.

The changes to Ohio HB 134 from the bill that did not pass in the Ohio Senate last year include:

  • additional criteria defining a property as vacant and abandoned (three things from a checklist instead of two);
  • a high burden of proof (clear and convincing evidence) that the criteria for defining a property as vacant and abandoned are met;
  • a requirement that the mortgagor must be in monetary fault, along with a burden of proof;
  • a statement that if another mortgagee or defendant has filed an answer or objection, it will preclude the expedited foreclosure;
  • allowing the purchaser to file a motion with the court to proceed with the transfer of the property title if the deed is not prepared within 14 days, and the recording of the court order or confirmation of sale can act as the transfer of title (the previous bill allowed only the recording of the court order to act as transfer of title without first going through the court motion process;
  • and a requirement that the officer record the deed within 14 days after the confirmation of sale and payment of the balance due, not one or the other.

“This preserves the original intent of the bill to allow for an expedited process to foreclose on vacant and abandoned homes while not impeding the homeowners’ rights,” Grossman said. “It also allows second and subsequent attempts at sheriffs sales to be conducted without a minimum bid. This will aid in selling more foreclosed homes to reduce the number of empty houses in our neighborhoods, greatly preventing and reducing the number of blighted homes.”

If Ohio HB 134 passes in the Ohio Senate, Ohio would be the eighth state since 2009 to pass a fast track foreclosure law. The others are Michigan, Oklahoma, Kentucky, Indiana, New Jersey, and Nevada. As is the case in Ohio, the majority of these are judicial foreclosure states, meaning the foreclosure process must pass through the courts to be complete; the only one of the aforementioned states where the foreclosure process is completely non-judicial is Michigan.

Ohio’s bill raises the possibility of fast track foreclosure legislation at the national level. Delgado, who spoke on the topic of finding solutions for neighborhood blight and vacant properties at the National Property Preservation Conference in Washington, D.C. earlier this week, called Ohio HB 134 “an important template toward the introduction of a national course of solution for vacant and abandoned properties.”

“This is the first bill that actually details that once you get a property that is vacant and abandoned, it will be fast-tracked to about six months on the foreclosure,” Klein said. “That is going to have a tremendous, tremendous impact on vacant and blighted properties. We still have a way to go, but this is definitely the first push. The sooner we get this bill passed in the Ohio Senate, I think it will have an impact on community blight on a national scale.”

Source: DS News

Additional Resource:
Safeguard Properties Fast-Track Legislation Resource Center

Senators Call Federal Regulators to Action on Zombie Foreclosures

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Industry Update
October 30, 2015

U.S. Senators Bob Menendez and Cory Booker have written a letter to federal banking and housing leaders urging them to take action on the “zombie” foreclosure crisis which has plagued the nation.

A recent report found that nationwide, there are approximately 20,000 so-called zombie foreclosures, which are residential properties that have been vacated by the owner but the foreclosure process has not yet been completed. With the owners gone, these abandoned properties are typically not maintained by banks, which potentially breeds blight, attracts violent crime, and brings down values of surrounding properties.

While the number of zombie properties has been in decline for the last couple of years, it is on the rise in New Jersey. About 4,000 of the nation’s 20,000 zombie properties (one-fifth) are in the Garden State.

Menendez and Booker, both Democrats from New Jersey, addressed HUD Secretary Julián Castro, Federal Reserve Chairman Janet Yellen, Comptroller of the Currency Thomas Curry, FDIC Chairman Martin Gruenberg, CFPB Director Richard Cordray, FHFA Director Mel Watt, and National Credit Union Administration Chairman Debbie Matz on the zombie foreclosure crisis with their letter, which was dated October 30, the day before Halloweeen.

“Zombie Halloween costumes may cause a scare, but what we really should be frightened about is the growing zombie foreclosure crisis haunting our communities,” Menendez said. “We sent this letter to top federal leaders today because we want to work together to end the unacceptable practice where banks sit on abandoned properties, hitting struggling borrowers with new debt and damaging the property values and quality of life in neighborhoods. It’s past time we put the health of our communities above bank profits.”

Menendez, Ranking Member of the Senate Subcommittee on Housing, Transportation and Community Development, introduced the Preserving American Homeownership Act earlier this year to address the zombie foreclosure crisis. The bill is aimed at helping homeowners who are underwater on their mortgages remain in their homes and mitigate the impact zombie foreclosures have on New Jersey communities and the economy.

FHFA General Counsel Alfred M. Pollard addressed the subject of vacant and abandoned residential properties earlier this week in his testimony before the Pennsylvania Senate Urban Affairs and Housing Committee & House of Representatives Urban Affairs Committee. Pollard reaffirmed that the FHFA’s first priority is avoiding foreclosures and listed several ways to potentially mitigate the vacant and abandoned property crisis: accelerated foreclosure of those properties, streamlined rules, neighborhood-based programs, uniformity, and vacant property registration.

Pollard also stated in his testimony that Fannie Mae and Freddie Mac, which are under the FHFA’s conservatorship, are partnering with National Community Stabilization Trust, a non-profit experienced in stabilizing distressed communities.

“Working together, they will leverage their ties to ‘boots on the ground’ community organizations and local non-profits and work closely with local governments to make timely and informed decisions about the best treatment of individual properties,” Pollard said. “These may include sales to nonprofits, rehabilitation of homes, loan modifications and, in some instances, demolitions.”

Click here to read the letter written by Menendez and Booker.

Click here to read the full text of Pollard’s testimony.

Source: DS News

Schneiderman Announces More Than $11 Million in New Funding for Statewide Foreclosure Prevention and Relief Programs

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Industry Update
October 9, 2015

Since 2012, attorney general’s foreclosure prevention and relief programs have helped more than 50,000 New York families fight to keep their homes
 
Earlier this week, New York Attorney General Eric T. Schneiderman announced $11.5 million in new funding for more than two-dozen legal services organizations statewide to help prevent foreclosures, keep families in their homes, and rebuild communities hit hardest by the housing crash.

Awards will be granted to 28 legal services providers with proven track records of providing services to at-risk homeowners. The grants, which are now before the state comptroller for review and final approval, are for one year with a possibility of a one-year renewal. The new round of funding brings the total foreclosure prevention investment by the office of the attorney general to more than $70 million.
 
The new round of funding will support the Homeowner Protection Program (HOPP), a network of nearly 90 housing counseling and legal services agencies that provide free, high-quality assistance to at-risk families across New York to help them avoid foreclosure. A report released this summer by the attorney general’s office showed the program already helped more than 50,000 New York families.

The attorney general has committed $100 million to support HOPP from the settlements that his office negotiated with the nation’s largest banks following the collapse of the housing market.
 
“New York has long been at the forefront of creating innovative ways to address the foreclosure crisis,” Schneiderman said. “I have said since the day I took office that no one should ever lose their home because they didn’t have access to a lawyer. My office is dedicated to using all the tools at our disposal to make sure mortgage servicers are held accountable in providing relief to New York families who continue to weather the foreclosure crisis.”
 
The legal services providers who will be granted awards include:

  • Brooklyn Legal Services Corp A
  • Brooklyn Bar Association
  • CAMBA (NYC)
  • City Bar Justice (NYC)
  • Empire Justice Center (Rochester)
  • Grow Brooklyn
  • JASA (Queens Legal Services for the Elderly)
  • Labor and Industry For Education (Long Island)
  • Legal Aid Society of North East NY
  • Legal Aid Society of NYC
  • Legal Assistance of Western New York
  • Legal Aid Society of Mid NY
  • Legal Service Bronx
  • Legal Services of Central NY
  • Legal Services of Hudson Valley
  • Legal Services of Rockland County
  • Long Island Housing Services
  • MFY
  • Nassau Suffolk Law Center
  • Nassau County Bar Association
  • New York Legal Assistance Group (NYC and Long Island)
  • Queens Legal Services
  • Queens Volunteer Law Project
  • South Brooklyn Legal Services
  • Staten Island Legal Services
  • The Legal Project (Capital Regions)
  • Touro Law Center (Long Island)
  • Western New York Law Center

The $11.5 Million in funding comes on the heels of an additional $10.1 million investment for housing counseling agencies across New York that was awarded earlier this year, funded by settlements the attorney general reached with Bank of America and Citibank in 2014. Those grants are going to 56 housing counseling agencies that are part of the HOPP network.
 
“Attorney General Schneiderman’s Homeowner Protection Program is a critical resource for New Yorkers,” said Christie Peale, executive director at the Center for NYC Neighborhoods. “Middle- and working-class homeowners across the state have faced so many struggles – the foreclosure crisis, Hurricane Sandy, predatory scams and more. Throughout, this incredible program has been there to help New York families. The Center for NYC Neighborhoods applauds Attorney General Schneiderman for his continued support of the program at a time when New Yorkers need it most.”
 
In addition to HOPP funding, the attorney general has established systems designed to hold mortgage servicers accountable and ensure New York homeowners are getting the relief to which they are entitled. In 2012, the attorney general established the mortgage servicing “Escalation Program” through a partner agency, the Center for New York City Neighborhoods (CNYCN). The escalation program allows HOPP grantees to raise the profile of cases that are particularly difficult or where servicers are not being responsive to modification requests in a timely or reasonable fashion. CNYCN has established relationships with senior-level staff at many of the mortgage servicing companies that can quickly address these issues. Over the past three years, 562 escalation cases have been raised by HOPP partners, and 504 of those cases have now been resolved.
 
In another innovation spearheaded by the attorney general, Long Island HOPP partners collaborated with the Nassau and Suffolk County Courts to create “Bank Days,” when mortgage servicers like Bank of America and Wells Fargo offer struggling homeowners the face-to- face support they need. High-level executives, resolution managers and underwriters have attended these twice-a-month events to resolve issues on the spot and help get homeowners loan modifications. Of the more than 850 cases that Bank of America has worked on at these events this year, 50 percent have been resolved.

The attorney general has made combatting the housing crisis a priority of his administration. His fight against the foreclosure crisis includes the HOPP program and two other key pillars: the New York State Mortgage Assistance Program and AGScamHelp.com.

New York State Mortgage Assistance Program
 
The New York State Mortgage Assistance Program (NYS-MAP), which began processing applications from across the state in October 2014, provides families at immediate risk of losing their homes with small loans to pay off debts that are a barrier to mortgage modification.
 
NYS-MAP loans, which may be as much as $40,000, help families who are struggling to avoid foreclosure to pay off mortgage arrears, delinquent second or third mortgage liens, or unpaid property tax bills. The program is funded with money from the bank settlements.
 
The program is modeled after a New York City-funded pilot program administered through the Center for New York City Neighborhoods. OAG is working with CNYCN, as well as the Empire Justice Center, to assist in the operations of NYS-MAP. Both agencies are contracted by the office of the attorney general to assist with the administration of HOPP.
 
In less than a year, NYS-MAP has approved 438 loans across the state totaling more than $13 million. The average loan amount, statewide, is $26,320.
 
AGScamHelp.com
 
AGScamHelp.com, launched in December, is a Web-based app that helps homeowners avoid foreclosure rescue scams and determine whether a mortgage assistance company has been vetted by a government agency. OAG urges homeowners at risk of foreclosure to work with a free, qualified housing counseling agency within HOPP. The app is supported by funds from the bank settlements.
 
OAG launched AGScamHelp.com in direct response to an observed increase in mortgage rescue scams and deed thefts in New York and across the country. According to a December report by the Center for NYC Neighborhoods and the Lawyers Committee for Civil Rights Under Law, more than 42,000 homeowners have been conned out of $100 million nationwide.
 
New Yorkers have been hit particularly hard. From March 2010 to September 2014, New York homeowners submitted more than 2,700 foreclosure rescue scam complaints to the Lawyer Committee for Civil Rights, documenting at least $8.25 million in losses. Since launching the app in December, the OAG has invested in a targeted advertising campaign to ensure vulnerable homeowners are using the site. As of September, AGScamHelp has been attracting an average of 4,000 users per week.

AGScamHelp.com has several informational features:

  • Search Government-Vetted Companies: AGScamHelp.com allows consumers to search the name of an individual or company to determine if that entity is a “government-vetted” agency (that is, either a member of the attorney general’s HOPP network or a HUD-certified counseling agency). If the company searched is not a government-vetted agency, the consumer will be told to proceed with caution and advised with several tips on how to identify signs of a foreclosure rescue scam.
  • Locate Nearby Counseling Partners: The Web-based app also features an interactive map that allows consumers to find the nearest HOPP grantee. The attorney general has dedicated $100 million to fund HOPP, a network of more than 85 housing counseling and legal services agencies across the state that are dedicated to providing free assistance to New Yorkers.
  • Report Scams: Consumers who have already been contacted by, or are in the process of working with a company suspected of operating a foreclosure rescue scam, also will have the option to file a complaint with the attorney general’s office. They will be directed to a separate page where they can complete a complaint form online. All complaints will be directed to the attorney general’s bureau of consumer frauds and protection, and will be mediated by the attorney general’s office.
  • Get Tips: AGScamHelp.com offers details on how to recognize signs of a foreclosure rescue scam, including samples of scam letters and other materials utilized by fraudsters to target homeowners, and provides information about recent foreclosure scams that have been the subject of enforcement actions brought by the attorney general’s office and other law enforcement agencies.

Read the full 2015 HOPP report here.

Source: Niagara Frontier Publications

Presidential Hopefuls, Housing Experts Attack Housing Crisis

Posted on by Safeguard

Industry Update
October 9, 2015

Presidential candidates from both parties will join New Hampshire officials and national experts for a major housing summit on Friday, Oct. 16, at the New Hampshire Institute of Politics at Saint Anselm College in Manchester, N.H.
 
The event is hosted by the J. Ronald Terwilliger Foundation for Housing America’s Families and the Bipartisan Policy Center. HousingWire is the trade media partner for the event.

The Foundation is making a push to put housing policy front and center in the 2016 political campaign.
 
Presidential candidates Chris Christie, Lindsey Graham, Mike Huckabee, Martin O’Malley and George Pataki are scheduled to participate in the summit, where they, along with New Hampshire officials and national housing experts, will tackle what has been called the “silent crisis” of rising rents and diminished access to homeownership.
 
U.S. Sen. Kelly Ayotte, former Sen. Scott Brown, former HUD Secretary Henry Cisneros and Manchester Mayor Ted Gatsas are among the public figures pitching in to help find solutions to these worsening problems.
 
Leading voices from the real estate and finance industry will also be involved, including the Mortgage Bankers Association, American Bankers Association, Zillow, realtor.com, the National Association of Realtors, Moody’s Analytics and the Urban Institute.
 
Why is this so important, and why New Hampshire, besides the being the location of the New Hampshire primary?
 
In 2013, nearly 36% of New Hampshire’s 519,000 households paid more than 30% of their gross incomes on housing (the traditional measure of affordability), while some 78,000 paid more than 50%, according to a recent Harvard study.
 
Since 2000, median rents in the state have increased by nearly 50%, while median incomes for renters increased only 24% over the same period, according to New Hampshire Housing.
 
Nationally, a record number of households, nearly 12 million, spent more than half their income just on rent in 2013. Rising rents continue to burden families throughout the country.
 
The national homeownership rate has fallen to a 48-year low. The homeownership rates for young adults and minority households have plummeted.
 
For the full agenda, click here.

Source: HousingWire

Mortgage Industry Harmed by Increased Regulation, Survey Finds

Posted on by Safeguard

Industry Update
October 22, 2015

Approximately three-quarters of mortgage industry professionals believe that today’s regulatory environment prevents them from lending to creditworthy borrowers, according to a survey released by Washington, D.C.-based business advisory firm The Collingwood Group on Thursday.

In Collingwood’s October 2015 Mortgage Industry Outlook Report, the firm posed the question, “Is today’s regulatory environment preventing you from lending to people you think can afford and deserve a mortgage?” to a group of mortgage industry professionals that included mortgage lenders or originators, vendors or service providers, the secondary market, mortgage industry trade association/advisors/consultants/attorneys, servicers, and those in government. About 80 percent of the professionals surveyed were originators or lenders.

About 75 percent of the group surveyed said the current regulatory environment is indeed preventing them from lending to consumers who can afford and deserve a mortgage, while 25 percent said today’s regulatory environment does not prevent such lending. One anonymous respondent said, “We punish the whole for the actions of a few.” Yet another anonymous respondent said, “I believe there are many loans we do not do now that we would have closed in the past that were fantastic loans with common sense underwriting.”

The topic of whether or not the mortgage industry has been overregulated in response to the 2008 crisis has been the subject of much debate among lawmakers, mortgage industry professionals, and other industry stakeholders. On Monday, Comptroller of the Currency Thomas Curry announced in an address in Chicago that the OCC was advancing three specific legislative proposals aimed at eliminating regulatory burden on community banks and financial institutions. On Wednesday, the House Financial Institutions and Consumer Credit Subcommittee discussed a series of bills aimed at providing regulatory relief for Main Street. Several of those bills have received bipartisan support.

One of those bills, H.R. 3340, the Financial Stability Oversight Council (FSOC) Reform Act, introduced by Rep. Tom Emmer (R-Minnesota), is aimed at reforming the FSOC, which was created in 2010 in response to the crisis. The new bill would enhance congressional oversight of an organization that has the power to force new regulations on financial institutions. Emmer stated that, “American businesses and consumers are frustrated by an out of control federal bureaucracy. By restoring a transparent, constitutional process, Congress would have the opportunity to verify that the Financial Stability Oversight Council is performing its duties and not harming access capital for families and businesses.”

The Collingwood survey said that the vast majority of survey respondents were angry or frustrated that the manufacturing process has become more important that the substance of loans. Due to confusion surrounding new underwriting rules and fear of unequal enforcement, underwriters are forced to be more conservative.

“It’s amazing that the housing market has outpaced much of the economy despite these regulations;” Collingwood Group Chairman Tim Rood said. “Imagine how well this engine of the economy could do if government just kept its hands off.”

In response to another question from the survey, “What is the top issue that is negatively affecting your origination volume?”, 72 percent cited regulation. Survey respondents said that regulation from the Consumer Financial Protection Bureau (CFPB), another agency created in response to the crisis, was a source of negative influence. The consensus was that while CFPB’s regulations are designed to protect consumers, the new regulations have brought on new compliance costs that have resulted in higher rates and fees for borrowers—making those regulations more harmful than helpful to borrowers no matter how well-intended.

In a public address earlier this week, CFPB Director Richard Cordray defended his agency’s actions against those who say the industry is overregulated.

“When we put those new regulations in place, some were critical of our work,” Cordray said. “For example, the ‘Ability to Repay’ rule requires lenders to make sure that borrowers actually have the ability to repay their loans before extending them a mortgage.  Some enjoyed describing this rule, which was also known as the ‘Qualified Mortgage’ or QM rule, as the ‘Quitting Mortgages’ rule.  They made scary predictions that our rules would cause mortgage costs to double and would cut the volume in half.  They said that no one would make any non-QM loans because the risk of litigation was too great.  They lamented that our rules would lead to the demise of community banks and credit unions, which would have to withdraw from the mortgage market altogether.  We all recognize that change is hard, but we never believed any of this unsupported hyperbole.”

Click here to see the Collingwood Group’s entire report.

Source: DS News