State Roundup
Senate Approves Foreclosure Prevention and Employer Assisted Housing Bill
On July 25, the Senate approved legislation (S.2299) to address subprime lending and foreclosures. The bill creates reporting requirements for mortgage lenders and requires the Division of Banks to review and rate lenders on their performance. It also establishes annual licensing requirements for mortgage brokers, requires that borrowers offered high cost loans receive in-person counseling from a qualified nonprofit, and requires fuller disclosure of terms in mortgage ads. Lenders must give most borrowers a 90 day period in which they can pay the delinquency and reinstate the loan before imposing attorney fees and borrowers would have the right to cure a mortgage default up to the foreclosure auction.
The bill also requires the Division to create a foreclosure database, track notices and actions by lenders (originators, location and interest rates) and issue an annual report on trends. The bill appropriates $3 million in FY2008 for implementation (most parts would begin on January 1).
The bill also authorizes DHCD, subject to appropriation, to create a state matching grant program for business that help their employees buy or rent housing in Massachusetts. Firms would be eligible to receive a $1 State match for every $2 they provide. They can design their own programs, within state guidelines, to assist households with incomes up to 120% of the area median (with at least half the assistance helping those with incomes at or below 80% of area median). The maximum grant per firm would be $100,000.
The bill now moves to the House.
Housing Weakness Expected to Continue Through 2007
Economists at UMass Boston report that weakness in the housing market is hurting state economic growth and is likely to worsen. The June 2007 MassBenchmarks notes two opposing trends in the state economy: above-average growth in such sectors as technology, science, knowledge and health, partly offset by weakness in the housing sector which in turn is hurting consumer spending and sales tax growth.
The authors believe the housing market has not yet bottomed out, with prices likely to continue to decline this year and defaults likely to rise as the "peak of the subprime lending crisis approaches." Housing weakness reduced growth in the state's economy in the second quarter (April-June) to an annualized rate of 3.6%, and is expected to keep it to an annualized rate of 3.0% for the balance of the year.
New Massachusetts Commission to End Homelessness Starts Work
A new state Commission to End Homelessness held its first meeting on July 26. The Commission, authorized by October 2006 legislation, is charged with developing a five year comprehensive plan to end family and individual homelessness. Co-chaired by DHCD Undersecretary Tina Brooks and Representative Byron Rushing, its members include Lt. Governor Murray, legislators, city officials, advocates and representatives from DMH, DTA and DVS. The Commission plans to meet twice a month and issue their plan by December 31, 2007.
House Passes Legislation to Restore Exemption for Landlocked Tidelands
On July 26, the House approved a bill (H. 3757) to continue exempting "landlocked tidelands" from the State's Chapter 91 review process. This type of tideland (filled before 1984, at least 250 feet back from the shore and separated from the water by a public way) has been exempt since 1990 by DEP regulation, recognizing that many communities, including Boston, are built, in part, on such land.
In early 2007, however, the State Supreme Judicial Court ruled that DEP had exceeded its legislative authority in creating the exemption, causing great uncertainty for various development projects. The bill largely validates the exemption and all projects previously approved under it, including North Point in Cambridge. It also creates a new Office of Tidelands and Great Ponds within the Office of Administration and Finance to review future tidelands projects. The bill now moves to the Senate.
Federal Roundup
House Passes HUD FY2008 Appropriations Bill
The House of Representatives passed its FY2008 appropriations bill for HUD and related agencies on July 24, providing largely the same funding levels as the House Appropriations Committee did. Minor changes included a $7 million increase for Housing Counseling (funded by cutting Inspector General funding) and language clarifying that public housing operating fund increases can be used for security. Language to continue the suspension of the public housing 8-hour work requirement failed. Detailed information on the budget figures is available from the National Low Income Housing Coalition.
HUD Proposes Rule for Using Public Housing Funds for Borrowing
HUD published a proposed rule in the July 18 Federal Register outlining the steps public housing agencies (PHAs) must follow if they wish to use their future Capital Fund or Operating Fund payments as collateral to borrow private funds to modernize or build public housing, included mixed-finance projects. PHAs must obtain prior HUD approval for such borrowing, must be standard or high-performing, and must complete a physical needs assessment for their entire public housing portfolio by project. Comments are due September 17. The proposed rule is available through HUDCLIPS (go to library, click on what's new and scroll down to July 18).
National Study Finds Massachusetts Ranks High in Subprime Lending Disparities by Race
A new National Community Reinvestment Coalition (NCRC) study of 2005 mortgage lending in 251 metropolitan areas nationwide, Income is No Shield Against Racial Differences in Lending, found that low-income and middle-income African American and Hispanic borrowers are far more likely to have "high cost" mortgages (interest above prevailing rates) than white borrowers in those income brackets and that the disparities were greater among middle income borrowers than low income borrowers.
Three Massachusetts metro areas (Middlesex, Essex and Barnstable counties) were among the five worst areas nationwide in terms of the disparity between the percentage of high cost loans made to Hispanic borrowers (42-49%) and white borrowers (12-15%). Middlesex County was also among the five worst areas in terms of disparities between the percentage of high cost loans made to African American (41.5%) and white (12%) borrowers. .
New Study Finds Affordable Housing Improves Health and Educational Achievement
The Center for Housing Policy and the Enterprise Communities have just completed a comprehensive study Vital Links: Housing's Contributions to the Nation's Health and Education Objectives of research on the link between quality affordable housing and residents health and educational progress. Overall, they find affordable housing offers health benefits by reducing exposure to allergens and lead and supports educational achievement by improving residential stability and reducing stress. The study also includes a bibliography and fact sheets.
HUD Revises Multifamily Housing Occupancy Handbook
On July 16th, HUD announced numerous revisions to its Multifamily Housing Occupancy Handbook, which outlines procedures administrators and managers must follow for most older HUD properties, including those built under Sections 8, 236 and 202. The revised Handbook, along with an 8-page letter memo summarizing the changes and clarifications are available online at HUDCLIPs (see link and instruction on right side of page).
