HUD’s Neighborhood Stabilization Program
October 6th, 2008 categories: Community Happenings, Our Market
| HUD No. 08-148 Brian Sullivan (202) 708-0685 www.hud.gov/news/ |
For Release Friday September 26, 2008 |
PRESTON ALLOCATES NEARLY $4 BILLION TO STABILIZE NEIGHBORHOODS IN STATES AND LOCAL COMMUNITIES HARD-HIT BY FORECLOSURE
HUD plans housing summit to explain new Neighborhood Stabilization Program
WASHINGTON - U.S. Housing and Urban Development Secretary Steve Preston today allocated a total of $3.92 billion to all states and particularly hard-hit areas trying to respond to the effects of high foreclosures. HUD’s new Neighborhood Stabilization Program (NSP) will provide targeted emergency assistance to state and local governments to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight within their communities.
HUD plans to host a national housing summit in Washington, DC on October 7-8, as well as a series of regional conferences to explain the details of this new program to governors, mayors, county executives and other State and local leaders.
“To those areas trying to recover from the effects of foreclosure and declining property values, help is on the way,” said Preston. “Clearly, the intent is to put this money to work in communities with the highest need and to have a meaningful impact. Now the real work begins and HUD stands ready to support these States and communities as they work to stabilize their neighborhoods.”
The funding is provided through HUD’s Community Development Block Grant (CDBG) Program under the Housing and Economic Recovery Act of 2008. These targeted funds will be used to purchase foreclosed homes at a discount and to rehabilitate or redevelop them in order to respond to rising foreclosures and falling home values.
State and local governments can use their neighborhood stabilization grants to acquire land and property; to demolish or rehabilitate abandoned properties; and/or to offer downpayment and closing cost assistance to low- to moderate-income homebuyers (household incomes not exceed 120 percent of area median income). In addition, these grantees can create “land banks” to assemble, temporarily manage, and dispose of vacant land for the purpose of stabilizing neighborhoods and encouraging re-use or redevelopment of urban property.
In determining the allocations announced today, HUD followed Congress’s direction that grants be targeted to areas based on the number/percent of foreclosures, subprime mortgages and mortgage defaults and delinquencies. HUD took a data driven approach to this process, relying on numerous data sets from government agencies and private sources.
HUD also will issue specific rules that will assist communities in the administration of this new program and to ensure, as Congress directed, that these grant funds be obligated for specific activities within 18 months. This Congressional timetable may present challenges to state and local governments undertaking ambitious, and in some cases unprecedented, acquisition and rehabilitation activities. Meanwhile, HUD is actively encouraging local governments receiving direct grants to coordinate with each other, and with their state governments, to make most effective use of available funds.
The NSP Program also seeks to prevent future foreclosures by requiring housing counseling for families receiving homebuyer assistance. In addition, the Agency seeks to protect future homebuyers by requiring States and local grantees to ensure that new homebuyers under this program obtain a mortgage loan from a lender who agrees to comply with sound lending practices.
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HUD is the nation’s housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development and enforces the nation’s fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.
HUD’s Methodology for allocating the Supplemental CDBG Appropriation
The Housing and Economic Recovery Act of 2008 calls for allocating funds to States and local governments with the greatest need, as determined by:
- “The number and percentage of home foreclosures in each State or unit of general local government;
- “The number and percentage of homes financed by a subprime mortgages in each State or unit of general local government; and
- “The number and percentage of homes in default or delinquency in each State or unit of general local government.”
To ensure these funds have the maximum impact possible and are targeted to States and local communities with the highest needs, HUD analyzed data from several different sources, including:
- The Mortgage Bankers Association National Delinquency Survey data on the rate of foreclosure starts in 2007 and 2008 as well as current rates of subprime loans and loans in default or delinquency at the state-wide level;
- Census Bureau data from 2006 on the number of owner-occupied mortgages in each state to ensure that all states are treated equally;
- Federal Reserve’s Home Mortgage Disclosure Act (HMDA) data on owner-occupied and investor mortgages made between 2004 and 2006, as well as the percent of those loans that are high-cost;
- Vacancy data from the U.S. Postal Service to determine areas where abandonment of homes due to foreclosure is more likely;
- Public data from the Office of Federal Housing Enterprise Oversight (OFHEO) to measure home price declines; and
- Labor Department data on the rate of unemployment at the city and county level.
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CA Association of Realtor Response to Financial Rescue Vote
October 5th, 2008 categories: Our Market
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Response from Senator Barbara Boxer Regarding the Financial Rescue Legislation
October 4th, 2008 categories: Our Market
Dear Ms. Bonasia:
Thank you for contacting me regarding the financial rescue legislation (H.R.1424). I appreciate hearing from you on this critical issue.
The fundamentals of our economy have been shaken, and Americans are deeply concerned. When Secretary Paulson and Chairman Bernanke placed an urgent phone call a few weeks ago to Congress to say we needed emergency action to prevent a major financial meltdown, I expected they would come forward with a plan that was targeted and reasonable, with appropriate oversight and taxpayer protections.
Unfortunately, what they brought us was a $700 billion blank check, which they asked us to sign with no questions asked. This plan contained no oversight, no taxpayer equity, and no control over CEO pay. I strongly opposed this proposal - and thanks to your phone calls, e-mails, and letters, Congress stopped it in its tracks.
The Senate made major improvements designed to strengthen our economy and protect our taxpayers. Instead of a blank check, the Senate plan included significant Congressional oversight, equity for taxpayers, curbs on executive compensation, an increase in FDIC insurance protection for bank depositors, middle-class tax relief, and job-creating tax incentives for renewable energy. The bill passed the Senate by an overwhelmingly bipartisan vote of 74-25 and the House by a vote of 263-171.
These were very important changes. But let me be honest: There were still aspects of this package that I didn’t like. I preferred the government acquiring more equity instead of toxic assets. I wanted the package to be put forward in smaller installments and to include more checks and balances to make sure it would work.
For me, the deciding factor in my Yes vote was information I received from the State of California. I was told by the Treasurer’s office that without access to credit, which is the goal of this legislation, California wouldn’t be able to sell voter-approved highway, school, and water bonds that are desperately needed for our economy and the creation of good-paying new jobs. In addition, I was told by the Governor’s office, that without action, our state might be forced to withhold funds for law enforcement, schools, and other needed services. This would bring our state to its knees and many middle-class families would be in deep trouble. Small businesses are beginning to tell me they cannot get lines of credit to meet payroll, as well.
Rest assured, I will continue to speak out forcefully about the failures that led us to this place and keep working with my colleagues to strengthen confidence in our markets, protect the American taxpayers, and enact regulatory reform to ensure that we don’t end up in this mess again.
Again, thank you for writing to me about this very important matter. Even though you may feel frustrated with the outcome of the legislation that passed, your voice absolutely resulted in the enactment of a better bill. Feel free to contact me again about any issue of importance to you.
Barbara Boxer
United States SenatorPlease visit my website at
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Two Steps Forward…
October 3rd, 2008 categories: Our Market
Well, today Congress finally passed the “Rescue” bill or Bailout Bill or whatever you want to call it. And it’s a good thing they did. Perhaps not so good the way they did it. One columnist writes that the House held out not on principle but for profit. It does seem like they added a lot of fluff/ earmarks to the bill prior to passing it. I feel a little violated. Kind of like hearing about looters during a natural disaster. One would think that at a critical time like this the leaders of the country would put their own agendas aside for the preservation of the nation at large. Does it seem like I’m expecting too much?
Has our government become so corrupt that the leaders take advantage of this type of situation making patsies of the American people? We need to understand who added what to this bill because it seems to me that it’s not too far from extortion.
Now, I suppose I shouldn’t complain. I yelled and screamed- ranted even- that we needed to adopt a plan to shore up our financial institutions and support our weakening economy. I guess I just thought the brightest minds in the country would come together for the sake of the people and put together a piece of legislation that while unpalatable to the taxpayer, would be a solution that was as close to fair as possible.
I don’t think we really had a choice in the matter. It’s not like we could let our financial institutions fail leaving us on Main Street and Wall Street to flounder in the resulting chaos and instability. I do believe however that it’s a ’sin’ to take advantage of the nation for one’s own profit.
After the bill passed today, unemployment numbers were released showing continued job losses and again, Wall Street tanked. The looming black cloud of the Credit Crisis is causing havoc with not only small businesses but individuals as well. If you think about how we live today, much of it is due to easy and available credit. Without it, it’s hard to cash-flow the lifestyle like we’ve become accustomed to.
Where do we go from here? We hope the Rescue Plan does what it’s intended to do and breathes some life and confidence back into our markets. We can hope that the banks begin to loosen up their purse strings and begin lending again- to businesses, individuals and each other. Perhaps there even may be a few great buying opportunities on Wall Street and hopefully the American taxpayer will someday see a profit from their great investment, given reluctantly in our nation’s dark hour. At least, perhaps we could enjoy some of that imported rum that somehow came to benefit from our generosity .
Finally, perhaps this year our country will elect a new leadership that really has the best interest of the people in their sights. I’m not so cynical to believe it’s impossible but not so naive to expect it. When you go to the polls this November, choose the candidate that you truly believe would put your interests before their own and those who helped them get there. It’s really all we can do from here.
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House Vote Fails- Update From The CA Association of Realtors
September 30th, 2008 categories: Community Happenings
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Wall Street VS Main Street
September 29th, 2008 categories: Community Happenings
ARGH!
Dare I rant a little? What is the difference between Wall Street and Main Street? No, this isn’t a riddle and it shouldn’t be that hard to understand. Wall Street IS Main Street. It’s our economy. Your economy and my economy and all of our closest friends and neighbors all over the world’s economy. What does this credit crisis mean to you? It may mean that your employer doesn’t have access to the credit line that they use, when necessary, to cut your paycheck or to buy materials used in your industry. It’s not just ‘Fat Cats’ looking to buy their next million dollar home or luxury vehicle.
If our supposed ‘leaders’ don’t come up with a plan very, very soon, it’s Main Street that will be bleeding all over Wall Street. It’s your401K, IRA, job, that is at stake. This is no time for partisan politics. It’s interesting to note that the legislature is actually trying to learn from the mistakes of the past and some within won’t let it happen!!! We did have this same type of crisis once before, you may remember it or learning about it… I believe they called it the ‘Great Depression’. So, our congress is trying to work out a deal so financial institutions don’t collapse leaving us Main Streeter’s with no cash and no credit. Some of our ‘leaders’ are evidently unaware of the fire they are playing with and the extent of the damage they could do to their constituents- LIKE YOU AND ME DAMMIT!
Do I want an irresponsible, unthoughtful, shameful bailout for the rich and mighty of Wall Street so I can spend the next 25 years paying off the debt? OF COURSE NOT. And while I don’t have all the answers about the plan that has been in negotiations over this past week, from what I hear, it spans the concerns of both political parties, has oversight and transparency and most of all, will prevent the utter collapse of our tenuous economy.
You (and I) need to let your representatives know it’s not okay to delay. We need to act now- as a cohesive society for our own preservation. Nothing will happen over the next couple of days due to the High Holidays but when congress resumes, we had better have a plan or it’s you and me that will pay the price. There’s no room for petty differences in this case and petty they will seem when this thing comes to a screeching halt.
Do the right thing and COMPLAIN!
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It’s Party Time!
September 29th, 2008 categories: Community Happenings
“What?!?”, you say? That’s right- I said “PARTY TIME”! What better time to have a party than when people need each other the most?
When times get tough, we have the natural tendency to retreat from the world. We conserve our energy, our money and hunker down waiting for the good times to come again. Why wait? Why not bring friends and business partners together for an evening (or afternoon) of lighthearted fun? Not only will it make everyone feel better, it can also create new business alliances between your friends and partners.
These turbulent times we are facing in our economy in practically every sector can make one feel like they are David battling Goliath. Every one of us can at times feel a little defeated in the face of a market that continues to evade recovery. I read in some Rah-Rah management book once the adage, “None of us is smarter than all of us” and I have come to realize the wisdom in that line. Getting people together, sharing ideas or just reminding each other that we’re all in this together can be wonderfully empowering.
This last weekend I had the opportunity to bring my friends and colleagues together for a casual cocktail and BBQ party. Every one of us is feeling the pinch of the economic downturn. We’re all working harder for less money and feeling the stress of our country’s economic crisis. But, as the guests arrived- some old friends and some new acquaintances- there was a feeling of community; a feeling that none of us are alone and ultimately have the support of each other. That’s a powerful antidote to the malaise of the crestfallen. It’s what’s best about the human family, our need for each other and our ability to rise up against the odds particularly with a boost from a friend.
So I ask you; what are you waiting for? There’s no better time for a party than when you need it the most. If you don’t need it, maybe you can bring a little light into your friends lives. See what happens when you reach out and bring people together. ‘We’ can overcome anything!
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Key components of U.S. Dept. of the Treasury Proposal
September 25th, 2008 categories: Our Market
Last Friday, the U.S. Dept. of the Treasury submitted its proposal to promote stability in the U.S. financial markets.Key components of the Treasury’s initial proposal included:
. The authority to issue up to $700 billion of treasury securities to finance the purchase of troubled
. Assets will be managed by private asset managers at the direction of the Treasury.
Cash received from liquidating the assets will be returned to the Treasury’s general fund for the benefit
. Funding for the program will be provided directly by the Treasury from its general fund by increasing
. Once the program is up and running, Treasury will provide updates to Congress semi-annually.
The proposal also would grant Treasury Secretary Paulson sweeping authority regarding the purchase of
On Tuesday, Congress weighed in on the proposal and members of both parties asked for several additions or refinements, including:
. Legislation to help homeowners avoid foreclosure;
. Limiting compensation to executives of troubled firms receiving assistance;
. Greater oversight than the limited bi-annual reporting mechanism in the current proposal;
. Allowing the government to take an ownership stake in companies;
. Decreasing the timeframe for the Treasury workout from two years to one; and
. Limiting the initial outlay followed by a reassessment early next year prior to deploying additional resources.
On Wednesday, Secretary Paulson, Federal Reserve Chairman Ben Bernake, and members of Congress testified before the Housing Financial Services Committee, where legislators proposed adding an imposed tax on Wall Street firms and banks to help pay the cost of the program, and lessen the burden to taxpayers.
NAR President Richard F. Gaylord recently announced the creation of a Presidential Advisory Group to address this critical issue. Five California REALTORS® were appointed to the 20-person Presidential Advisory Group .
According to C.A.R.’s sources, Congress may work through the weekend and into next week to finalize and pass legislation. C.A.R.’s and NAR’s Leadership Teams are in close contact with elected officials and other key leaders in Washington to ensure that interests of the real estate industry are represented.
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Congressional Hearings On U.S. Financial Market Rescue…Cont.
September 24th, 2008 categories: Our Market
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Update From The California Association of Realtors on the Financial Bailout
September 23rd, 2008 categories: Our Market
CA Association of Realtors
Monday, September 22, 2008
Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®
Sept. 22, 2008
Dear C.A.R. Member:
As promised, here is your first Market Matters Daily Briefing on the evolving financial situation impacting our nation. All this week, C.A.R. will be closely following developments in Washington and will be reporting to you, as needed, via this Briefing e-mail, and through C.A.R. Newsline, or Market Matters.
As expected, this weekend the U.S. Dept. of the Treasury submitted its proposal to promote stability in the U.S. financial markets.
Key components of the Treasury’s proposal include:
- The authority to issue up to $700 billion of Treasury securities to finance the purchase of troubled residential and commercial mortgage-related assets, including mortgage-backed securities and loans.
- This authority would expire in two years, and assets must have been originated or issued on or before Sept. 17, 2008, to qualify.
- Assets will be managed by private asset managers at the direction of the Treasury.
- Cash received from liquidating the assets will be returned to the Treasury’s general fund for the benefit of taxpayers.
- Funding for the program will be provided directly by the Treasury from its general fund by increasing its debt limit by $700 billion.
- Once the program is up and running, Treasury will provide updates to Congress semi-annually.
The proposal also grants Treasury Secretary Paulson sweeping authority regarding the purchase of assets, the timing and sale of assets, determining financial institutions’ eligibility to participate and more. To access a fact sheet on the Treasury proposal, go to http://www.treasury.gov/press/releases/hp1150.htm.
Congress is weighing in on the Treasury’s proposal today, and may seek to add an oversight structure, limit the compensation of executives at the companies benefiting from the rescue, and provide mortgage relief for struggling borrowers. We’ll report on this effort in detail tomorrow. As part of that process, House Financial Services Committee Chairman Barney Frank has scheduled a committee hearing this Wednesday.
Our sources tell us that it may be overly optimistic to expect final legislation to be brought forward by Friday and cautioned us to expect this to run into next week. Your Leadership Team will remain in close contact with elected officials and other key leaders in Washington to ensure that the interests of the real estate industry are represented. We’ll be ready to weigh in on the final legislative package, and will keep you informed.
Thanks to all who have shared their thoughts with me this past week.
Sincerely,
William E. Brown
2008 President
CALIFORNIA ASSOCIATION OF REALTORS®
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