State Updates
Governor Patrick Signs Homestead Legislation to Protect Homeowners
Legislation updating the Commonwealth's homestead protections was signed into law last month. Ch. 395 of the Acts of 2010 was spearheaded by the Boston Bar Association, Massachusetts Bar Association and the Real Estate Bar Association and accomplishes the following:
• Provides automatic protection to any primary residence up to $125,000 in equity in the home
• Provides $500,000 in homestead protection for homeowners filing a homestead declaration
• Clears up ambiguities and rationalizes the process for filing for homestead protection
• Protects beneficiaries of trusts
• Clarifies that a refinancing mortgage will not be able to terminate previously filed homesteads
• Protects proceeds from the sale of a home or insurance
• Protects spouses and co-owners who transfer property amongst themselves
• Extends homestead protection to manufactured homes
$1.1 Million Added to FY'11 Massachusetts Rental Voucher Program
On Tuesday, January 4th, Governor Patrick signed a supplemental budget that provides $1.1 million for the Massachusetts Rental Voucher Program. This action reverses part of a $2.1 million MRVP veto the Governor made last summer due to the lack of federal FMAP funds. These federal funds have since been provided to the state to help boost the revenue shortfall. The additional $1.1 million will help meet some of the tremendous demand for affordable housing for extremely low income households.
Building Blocks Coalition Advocates for FY'12 Funds for Affordable Housing
CHAPA and several partners are working together to advocate for adequate budget resources for safe, affordable housing for working families, persons with disabilities, and seniors. The group, called the Building Blocks Coalition, is working to draw attention to the fact that Massachusetts housing costs continue to be unaffordable and without greater resources, many more residents are going to end up homeless in the coming year.
As of December 20th, there were over 2,100 homeless families in shelters and 794 in budget motels paid for by the state to serve as shelters. Last year, the Commonwealth relied on $44 million in stimulus funds for homelessness prevention that are no longer available. Advocates are calling on the Patrick-Murray Administration to fill some of this gap with strategic investments in rental assistance, public housing, and homelessness prevention. Governor Patrick's FY'12 budget proposal will be released on January 26th.
Housing Innovations Fund Cut Reversed
CHAPA would like to thank the Patrick-Murray Administration for reversing its decision to reduce the Housing Innovations Fund in the FY'11 capital budget. This important capital program helps build supportive housing for very low income households, including formerly homeless families and individuals.
Affordable Housing Advocates Plan Reception and Briefing for New Legislators
Affordable housing advocates and new legislators will discuss affordable housing issues and programs on January 25th at 10:30 am in the State House. With over 40 new legislators set to be sworn into office on January 5th, this event will serve as an opportunity to form a relationship to work together to increase affordable housing opportunities. Click here for more information.
Federal Updates
Congress Passes Section 202 and Section 811 Reform Bills
Congress sent the President two housing bills for signature on December 28. One (S.118) updates the Section 202 Housing for the Elderly program and one (S.1481) updates the Section 811 Housing for Persons with Disabilities program. Summaries of both bills are on CHAPA's website.
HUD FY'11 Budget Remains Unresolved With Risk of Deep Voucher Cuts
Congress approved a Continuing Resolution (CR) in late December that will keep federal agencies running at current funding levels through March 4. The CR does not include the funding increases included in a House full year proposal earlier this month to provide tenant protection assistance (enhanced vouchers) to currently unprotected residents in expiring use properties.
There is now considerable uncertainty regarding likely HUD funding for the rest of FY'11, as full year funding will now be decided with a Republican-controlled House. As reported previously, incoming House Speaker Boehner has proposed cutting nondefense discretionary funding by 21% in 2011. A Center on Budget and Policy Priorities (CBPP) report estimates that a 21% cut across the board by agency and program would result in the loss of HUD funding for over 750,000 Section 8 vouchers (over 500,000 tenant-based and over 250,000 project-based) including 25,000 in Massachusetts. Public housing, CDBG, HOME and other programs would also be cut.
Tax Bill Extends New Markets Tax Credit but Fails to Include Key Housing Provisions
The President signed the bill to extend the Bush tax cuts on December 17 (HR 4853 – the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010). The new law also extends the New Markets tax credit for two years, authorizing $3.5 billion a year in 2010 and 2011. However, the law did not include funding for the National Housing Trust Fund nor did it re-authorize the low-income housing tax credit exchange program for 2010 or 2011.
MacArthur Foundation Announces Loan Guarantee Fund to Preserve Expiring Use Properties
On December 14, the MacArthur Foundation announced that it will provide $20 million to guarantee investments in nonprofit transactions to preserve federally subsidized rental housing in underserved markets. The guarantee will support an effort to raise $100 million from financial and philanthropic institutions for preservation investments, including the purchase of low income housing tax credits. The initiative is expected to preserve and upgrade about 20 rental properties nationally (including one in Leominster) with over 2,000 low income residents. Recent investors include Massachusetts Mutual Life Insurance, JP Morgan Chase and Met Life.
Report Offers Insights on Building Public Support for Affordable Housing
The most effective advertising and communication programs to build public support for affordable housing are described in a new report from The Partnership for Sustainable Communities, a nonprofit group based in San Rafael, Calif.
"What Works and Why: Affordable Housing Communications Campaigns 2000–2010" examines efforts by advocates and government agencies to win more public and political support for affordable housing. The summary is available for viewing free of charge at www.p4sc.org.
The 36-page report describes 15 campaigns from New York to North Carolina to California, with reproductions of some of the advertisements used in those campaigns.
The full report is free for members of the Partnership for Sustainable Communities (PSC). It costs $12 for nonmembers. For information on all the benefits of membership, go to http://www.p4sc.org/start-receiving-benefits-membership-today
Partnership for Sustainable Communities is a nonprofit organization based in San Rafael, CA. It is dedicated to promoting land use reform, including higher density zoning, infill transit-oriented development and the availability of affordable housing near jobs and transit. For more information, go to www.p4sc.org or call 415-453-2100 x 302
Foreclosure Updates
HUD Provides Guidance on Emergency Loan Program for Unemployed Homeowners
The Dodd-Frank Wall Street Reform and Consumer Protection Act provided $1 billion to HUD to implement the Emergency Homeowners Loan Program (EHLP) Program. HUD has since provided additional guidance on program eligibility and administration. The program will offer a declining balance, deferred payment "bridge loan" for up to $50,000 to assist eligible homeowners with: (i) payments of arrearages, including delinquent taxes, mortgage and hazard insurance premiums and (ii) up to 24 months of monthly payments on their mortgage principal, interest, insurance premiums, and taxes. The program expects to begin receiving applications in March. Approximately $61 million will be available for Massachusetts homeowners.
Massachusetts Foreclosure Deeds and Petitions Down in November
The Warren Group reported a continuation in November of the slow down in foreclosure deeds and petitions filings in Massachusetts that began in October. A total of 416 foreclosure deeds were recorded, the lowest monthly figure reported since February 2007, and the number of petitions filed totaled 1,109, 42% below the number filed in November 2008.
Analysts attribute the slow down to the controversy over robo-signing and holiday foreclosure moratoriums. Even with the recent slowdown, however, the total number of foreclosure deeds recorded this year through November (11,750) is 40% higher than the number reported for the same period in 2009 (8,412). Year to date petition filings (23,200), however, are down 10.3% compared to the same period in 2009.
Congressional Oversight Panel Finds HAMP Foreclosure Prevention Program Ineffective
On December 14, the Congressional Oversight Panel issued a press release and report critical of the U.S. Treasury Department's Home Affordable Modification Program (HAMP).
The Panel found that because Treasury has failed to address flaws in the program identified in a Panel report issued eight months ago, it is likely that HAMP will prevent only 700,000 foreclosures nationwide, far below Treasury's initial goal of 3-4 million. It attributes this in part to Treasury's failure to hold loan servicers (particularly Freddie Mac) accountable for failing to make loan modifications and for repeatedly "losing" paperwork. It also criticizes Treasury for failing to make meaningful program evaluation possible. It concludes, however, that Treasury can still improve the program, both by making it easier for owners to apply for assistance and by intervening to prevent redefaults and urges it to do so.
HUD Issues November HAMP Performance Report and December Housing Scorecard
HUD issued its monthly Home Affordable Modification Program (HAMP) Loan Servicer performance report for November late last month, along with the December Housing Scorecard.
The HAMP report indicates that about 1.47 million households had loans potentially eligible for modification as of the end of September, but the number of active trial or permanent modifications has risen by only about 12,000 in the past two months. Currently, about 505,000 households have active permanent modifications as of the end of November (another 44,000 have been cancelled), up by about 21,000 over the prior month, while another 148,000 have trial modifications. These figures include 12,686 Massachusetts households with permanent modifications and 3,669 with active trials. Nationwide, just under 30% of the modifications have involved principal reduction.
MERS Accused of Failing to Pay Registry of Deeds Filing Fees
On December 15, the Boston Globe reported that the Massachusetts Attorney General's office is investigating whether the Mortgage Electronic Registration Systems, Inc. (MERS) owes millions in filing fees to the state's registries of deeds. The investigation was requested in November by the Essex County Registrar of Deeds, who estimated that MERS had underpaid by as much as $10 million in Essex County alone in the past decade. MERS has stated that it is not required to pay Registry fees since documents are not actually recorded at the registries.
New Study Finds Foreclosure Counseling Beneficial
A new study (Preliminary Analysis of National Foreclosure Mitigation Counseling Program Effects) released in December by the Urban Institute has found that households in foreclosure or at risk who received counseling through the National Foreclosure Mitigation Counseling initiative had greater success in averting foreclosure (by curing their default or obtaining payment relief through loan modifications) than similar households who did not receive such counseling.
Counseled households who received loan modifications got more payment relief, paying about $267 a month less than households with modifications who did not receive counseling. Counseled households also had greater success in sustaining their loan modifications. The study is the second of three annual evaluations of the program mandated by Congress when it provided funding for the mitigation counseling in 2008.
