Thursday, May 31, 2012

Free webinars: Protecting veterans from homelessness and foreclosure

by Emily Salomon, Center for Housing Policy

As we prepare to celebrate the 2012 Housing Person of the Year honorees—organizations that meet the housing needs of Veterans—the National Housing Conference is launching a webinar series tied to this year’s Gala theme, Housing America’s Heroes.  These hour-long webinars will provide background on specific housing challenges facing some veterans, and the unique strategies being used to meet the needs of this population. 

Join us on June 13 at 2:00 p.m. EDT for the first in the series, Homeless Veterans and Rental Housing: Supportive Housing Programs to End Homelessness.  This event will highlight the range of housing challenges faced by the homeless veteran population, examples of federal and state programs to ensure rental housing opportunities exist for veterans, and examples of supportive housing programs that are meeting the critical housing and service needs of this population. Register online now!
The second webinar in this series, Efforts to Protect Veterans from Foreclosure, will take place on June 19 at 3:00 p.m. EDT.  It will feature speakers from the lending community and federal government to discuss the unique challenges and opportunities associated with protecting military families from foreclosure. Learn about how the Servicemembers Civil Relief Act (SCRA), Home Affordable Modification Program (HAMP) and other federal programs are being used to help veterans sustain homeownership and housing stability, and what more can be done to preserve homeownership for the military community. Register online here.

Wednesday, May 30, 2012

The Importance of the American Community Survey for Evidence-Based Policymaking

by Maya Brennan and Laura Williams, Center for Housing Policy

The Center for Housing Policy uses data from the American Community Survey (ACS) on topics such as housing costs, incomes, and employment to support evidence-based policy solutions that allow federal, state, and local governments to spend limited resources more wisely. The data make policy discussions more concrete by expanding knowledge of the struggles faced by working families, the parts of the nation that are more or less affordable to their residents, and the specific needs of special populations like our nation’s veterans.

The ACS has an essential role in several Center for Housing Policy reports that help policymakers allocate scarce resources and evaluate strategies for their communities. Some specific reports and analyses that would not exist without the ACS include:

  • Housing Landscape: Using ACS data on housing costs, employment and income, we document trends in housing costs and incomes for the nation as a whole, for each state, and for many metropolitan areas. In 2012, we found that 23.6 percent of working families (or 10.6 million households) are severely burdened by their housing costs – up from 21.8 percent (10.3 million households) in just two years. The ACS provides evidence to counter assumptions that housing is more affordable and demonstrates the need for policies that increase access to safe and affordable housing for working Americans. 
  • Housing for Veterans: America’s veterans have sacrificed much in service to the nation, yet ACS data show that more than 1.5 million veterans pay more than half of their income on housing. Without the ACS, policymakers might know the story of veterans’ homelessness, but would not know that affordable housing policies should also be part of an overarching strategy for taking care of our returning heroes. 
  • State and Local Data Reports: The Center’s Housing Research and Advisory Service uses data from the ACS to provide detailed reports about housing markets for states and local communities. Mayors' offices, government agencies, and local housing organizations use these reports to target federal funding resources wisely and make decisions about local policy needs. The ACS data are an important resource for understanding local housing markets, where communities have become unaffordable to working families, where development could thrive, how to combat vacant and abandoned properties, and a number of other issues.

As a prior post on this blog noted, eliminating the ACS would impede our ability to know what the country needs, how the population is changing in between Censuses, and what policies and programs would be a good use of the nation’s limited resources. When funds are tight, it is more important than ever to use them wisely. The ACS allows governments, developers, and businesses to understand local conditions, develop smarter policies and programs, and reduce wasteful spending on approaches that are based on guesswork rather than facts.

Tuesday, May 29, 2012

New mortgage finance reform proposal highlights need for government backing

by Ethan Handelman, National Housing Conference

Restructuring expert and former Treasury official Jim Millstein has come out with a plan for mortgage finance reform. The plan models a government guarantee of the secondary mortgage market on the FDIC, creating a reinsurance model that would allow a smooth transition from the current system by gradually rebuilding the reserves to stand between taxpayers and potential claims. The plan is worth looking at (see Panel #4 on this video of a recent presentation and the accompanying slides), but even more important is Millstein’s clear explanation of why we need government backing in secondary mortgage markets.

Millstein’s key early observation is that we need to be realistic about the availability of private capital. Government backed sources currently support the market almost entirely right now, and private capital sources are nowhere near ready to step in. To hammer this home, Millstein compares the average daily trading volume in 2011 of corporate debt, municipal bonds, and non-agency mortgage-backed securities (MBS), which together totaled $30 billion. Average daily trading of government-backed agency MBS was $256 billion, plus another $53 billion of agency debt. That mismatch—more than a factor of ten—helps us see that only government backing can bring in the volume of capital we’ll need for the foreseeable future.

One point where Millstein could spend more time is making the new mortgage finance system has a way to deal with down cycles, those times, like right now, when private capital heads for the hills. For all their flaws, Fannie Mae, Freddie Mac, and FHA are filling the void left by fleeing private capital so that the mortgage markets continue to function. Whatever replaces them needs to do that, too, because the one thing we know for sure is that there will be another down cycle. We just don’t know when, so we need to have the infrastructure in place to ride it out.

A second point is affordability, which Millstein acknowledges in the Q&A portion. Whatever system we create to replace Fannie Mae and Freddie Mac must make credit broadly available through proven, stable products like the 30-year fixed-rate mortgage. Mortgage securitization is amazingly efficient, and our society should provide the benefits of that efficient infrastructure broadly to low- and moderate-income families who can responsibly achieve homeownership and build wealth over time.

Thursday, May 24, 2012

Moving Forward: Expanding our Understanding of the Housing Challenges Facing Low-Income Renters

by Jeffrey Lubell, Center for Housing Policy

As a field, we have become ever more adept at building, managing, and preserving quality rental housing developments that provide stable affordable housing to families in need and help to strengthen local communities. In addition, through the federal housing choice voucher program, we help two+ million renter households afford the costs of private-market housing of their choice.

These programs have been successful in providing quality affordable housing and merit increased funding. For at least the foreseeable future, however, it is unlikely that enough funding will be available to help everyone in need. Currently, only about one-fourth of the households in need of a housing subsidy receive one. (See page 16 of our recently released report, Housing an Aging Population, for one approach to calculating this statistic.)

In a world of constrained government resources, what steps can be taken to help the millions of households with serious housing needs that are not being aided through government rental assistance?

To answer this question, I believe we need to better understand the housing challenges facing unassisted renter households, with a particular focus on learning how to improve the stability and quality of their housing—two outcomes we know are important to ensuring healthy children and families. Most unassisted renters live in privately owned housing, but we know very little about their housing experiences over time. What causes their housing situations to be stable or unstable? How well do their support systems work during times of crisis? If we had a better understanding of these dynamics, we would be in a stronger position to identify strategic opportunities for intervention that might improve renters' residential stability and housing quality.

Here are some of the research questions whose answers could help inform policy in this area:

  • What types of circumstances lead doubled-up families to experience events that undermine the residential stability of household members? What low-cost steps could be taken to reduce the likelihood of these conflicts, facilitate their resolution, or help to minimize the trauma of moves for families that are no longer able to stay in their doubled-up units?
  • What is the quality of housing units occupied by unassisted renters in different types of markets and are there low-cost strategies (e.g., code enforcement, landlord education, etc.) that could materially improve their housing quality?
  • How effective are programs that seek to promote residential stability by providing "back rent," security deposit assistance, or ongoing rent subsidies that are smaller than standard federal rental assistance subsidies? Are some program designs more effective than others?
  • How effective are counseling initiatives aimed at helping renters to better understand their housing options, choose units of higher quality, resolve landlord disputes, etc.?

In extreme circumstances, residential instability can lead to homelessness, and it is in this context that these questions have received the most attention. Among other relevant research, a 2005 study by Martha R. Burt, Carol L. Pearson, and Ann Elizabeth Montgomery examined homelessness prevention strategies in six communities around the country. A new research effort by the Urban Institute evaluating the Homelessness Prevention and Rapid Re-Housing Program—a HUD-administered program funded as part of the Recovery Act that—should provide additional insight into the effectiveness of many of these strategies. And of course, the numerous programmatic efforts being funded through the Homelessness Prevention and Rapid Re-Housing Program will add to the base of experience that practitioners have developed addressing this important issue.

We can and should expand efforts to learn how best to prevent homelessness. At the same time, we need to extend the research to learn how to prevent the type of rapid churning from residence to residence that falls short of formal homelessness but nevertheless negatively impacts children's educational progress and the ability of adults to achieve their personal goals.

The broader objective is to better understand how to improve the residential stability and housing quality of renter households. If we accomplished this goal and applied the lessons learned, we could not only help reduce homelessness but also help the millions of renter households that have serious housing needs but lack access to rental housing subsidies.

This challenge calls for a mix of different research methods, including ethnographic and other qualitative research methods, longitudinal studies, and experiments aimed at evaluating the success and cost-effectiveness of different strategies for strengthening residential stability and housing quality. We also need better data to help us measure the number of doubled-up households and track changes over time.

Given the complexity and multiple causes of residential instability, as well as regional variation, it is unlikely that a single large study will definitively answer all of the relevant questions. This provides important opportunities for researchers around the country to contribute to the field's evolving understanding of this issue and help identify the most promising solutions.

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Join the conversation by commenting on this post.

"Moving Forward" is a monthly column about ideas for the future of U.S. housing policy by Jeffrey Lubell, Executive Director of the Center for Housing Policy. The column offers perspectives on the government role in housing and on broader housing market trends likely to shape future housing policy.

Monday, May 21, 2012

Latest on the HOME program: HUD highlights efforts, GAO studies performance, Congress continues oversight

by Ethan Handelman, National Housing Conference

HOME is a proven building block of affordable housing and community development—a workhorse program that has produced more than 1 million affordable homes. Recent activity in Washington to strengthen the program and remind policymakers of its value are beginning to bear fruit, as demonstrated by several new developments:

1. HUD’s May 2012 program update on HOME outlines steps the agency has taken to improve oversight of grantees, require certification that grantees have fulfilled key underwriting and other requirements, and provide better monitoring of progress. HUD’s update also consolidates key facts about the program for easy reference.

2. GAO report finds positive contributions from HOME and CDBG activities. The May 15 report titled “HUD Has Identified Performance Measures for Its Block Grant Programs, but Information on Impact Is Limited" takes the Government Accountability Office’s usual cautious approach in evaluating program results, but is generally positive on both block grant programs.

3. House Financial Services discusses subpoena again. In a joint hearing by the Subcommitttess on Oversight and Investigations, and Insurance, Housing and Community Opportunity, members of Congress again pushed HUD to release documents related to its oversight of HOME. The Committee stopped short of issuing a subpoena. The hearing focused specifically on HUD’s document production, unlike past hearings on the program itself (see NHC’s testimony at last year’s hearing).

Friday, May 18, 2012

FHFA updates its strategic plan for conservatorship

by Ethan Handelman, National Housing Conference

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, released an updated strategic plan in draft form for public comment. The draft builds on the earlier Strategic Plan for Conservatorship but adds significant additional detail. The four strategic goals heading the plan are in keeping with past statements:

1) Safe and sound housing GSEs.

2) Stability, liquidity, and access in housing finance.

3) Preserve and conserve Enterprise assets.

4) Prepare for the future of housing finance in the United States.

Public comments are due June 13, as described in the release. Suggestions for NHC’s comments should go to Ethan Handelman at

Thursday, May 17, 2012

Some states use settlement funds to aid homeowners, others divert funds

by Sarah Jawaid, National Housing Conference

A small majority of states understand the plight of homeowners struggling from the foreclosure crisis, suggests a recent report by Enterprise Community Partner’s Amanda Sheldon Roberts (Enterprise is a long-time NHC Leadership Circle Member and strategic partner). State attorneys-general, federal officials and five major mortgage servicers announced a $25 billion settlement Feb. 9 that was intended to provide relief in various forms to struggling borrowers and those who have already lost their homes.

Given the loose guidance of the settlement, states have the authority to choose where the funds will be used and many are using the funds to fill budget gaps. Twenty-seven states have agreed to use the funds specifically for housing. For example, of the over $12 million awarded to Arkansas, $9 million will go to down-payment assistance programs, foreclosure counseling and financial literacy programs with the remaining going to legal aid and fees associated with the settlement. Arizona’s over $97 million will also be used for state foreclosure prevention programs. A majority of the over $92 million awarded to Ohio will be used for demolition of abandoned and vacant properties with smaller awards to non-profits and local governments to fund innovative programs to help struggling homeowners and to the attorney general to prosecute foreclosure relief scammers.

While some states understand that homeowners need relief, other states plan to divert settlement funds into general funds or debt repayment. California, one of the hardest hit by the foreclosure crisis, received over $410 million in the settlement and plans to use the funds to pay debts. Texas, Missouri, Georgia, Indiana and Virginia took a similar route in determining the funds were not needed in housing relief.

Andy Schneggenburger, the executive director of the Atlanta Housing Association of Neighborhood-Based Developers, said Georgia governor Nathan Deal’s decision to use the $99 million in funds to bring companies into the state instead of homeowner relief shows “a real lack of comprehension of the depths of the foreclosure problem.” Read the New York Times and NPR for more information.

The invisible soldier

by Gary Officer, Rebuilding Together

NHC invites guest blog posters to write on important housing topics. The views expressed by guest posters do not necessarily reflect those of NHC or its members.

What comes to mind when you think of veterans?

What comes to mind when you think of a struggling head of the household, hardly able to afford basic home maintenance?

Despite our preconceived notions of the typical veteran, or the struggling homeowner, there is a burgeoning segment of the population that is perhaps still unfamiliar to many, but is in need of our help. This is the female veteran.

In the next 20 years, it is projected that women will make up 15 percent of all living veterans. This forecast averages a substantial growth of 11,000 female veterans a year over the next twenty years. And their contributions are great: over half of female enlisted and officer service members have been deployed to Afghanistan and Iraq since September 11.

Simply put, the female veteran is an important subset of the American fabric.

Yet, one can conclude that our female veteran population is not a conventional concept in the minds of many Americans. Although their percentages are modest compared to the scope of veteran numbers, their contributions are large.

The Department of Veterans Affairs recently released a new study, “America’s Women Veterans” which highlights the critical socioeconomic and demographic characteristics of this population, as well as their use of various health services and benefits.

One of the most telling facts to come from this study was that 39 percent of all women Veterans under the age of 65 have children ages 17 years or younger living at home. This means that a large percentage of this population has a household with dependents, and a home that requires upkeep and maintenance in order to be deemed a safe and healthy home for a family.

Heroes at Home is a program launched by Sears Holdings and Rebuilding Together to address the critical housing needs of our military and their families. For five years, we have been responsible for rebuilding 1,200 veterans’ homes, impacting the lives of countless families and individuals.

Through our work with Heroes at Home, we have seen the tragic conditions that many of our nation’s veterans, both male and female, have endured upon their return home. Oftentimes they have sustained critical injuries and life-altering conditions during their service period. Not only must they find ways to care for themselves, but they also must care for their family.

Ms. Williams is one such female veteran, age 46, who served in the US Marine Corps. She is a widower of six children, five of which are still under the age of 18. She suffers from an incurable disease and is unable to continue serving her country. She struggled to support her family on a fixed, minimal income, while also tending to her disease, and it left her house in substandard living conditions.

Heroes at Home provided renovations and modifications free of charge, to create a safe and healthy home environment. These modifications accommodated her needs, and those of her children, so that her experience with warfare was only a memory, not an everyday reality.

Ms. Williams is a snapshot into the situation many female veterans now face upon their return home. Not only have they served our country, but they are mothers, homeowners, and bear great responsibilities unknown to many.

If we stick to the presumed perception of a typical veteran, we are unintentionally diverting our attention towards a segment of the veteran population who, in many cases, require a particular set of needs. According to the America’s Women Veterans report, “Women who have served in the US military are often referred to as ‘invisible veterans’ because their service contributions until 1970 went largely unrecognized by society—even after women were granted Veterans status, there is still a history with issues to access, exclusion, and improper management of health care.”

Both the services required by women Veterans and the issues they face after their return to civilian life are different than those of their male counterparts, but the end goal is the same.

A safe and healthy home is an elemental building block for the sustainability and health of our neighborhoods and communities. In order to provide safe and healthy homes for every person, we must recognize the diverse set of needs that many in this country have, including populaces that are of a growing nature.

No veteran should be invisible.

Gary Officer is President and CEO of Rebuilding Together, an NHC member and a leading nonprofit organization providing critical home repairs, modifications and improvements for America’s low-income homeowners. Rebuilding Together’s Veterans Housing was created to meet the growing needs of veterans from past and present wars.

Monday, May 14, 2012

Let’s not drive blind—keep the American Community Survey

by Ethan Handelman, National Housing Conference

You wouldn’t drive your car with your eyes closed, so why should we make multi-billion dollar policy decisions that way? Last week, the House approved an amendment to eliminate the American Community Survey, a part of the U.S. Census that collects essential data on Americans’ housing and transportation choices, among many other data. Those data are how we see the results of policy choices, how we know whether what we’re doing to provide safe, decent, and affordable housing opportunities are actually working, how we avoid costly policy mistakes.

A recent example—the Center for Housing Policy’s Housing Landscape 2012 report showed that even as housing prices were falling, severe cost burdens for homeowners and renters were getting worse. That’s essential insight for policymakers, because it’s far too easy to simply assume that since house prices have fallen, affordability concerns need not command attention. To provide that insight, the Center for Housing Policy relies, in part, on the data from the American Community Survey.

Likely, the House’s action is simply position-taking without much chance of changing law. But just so that our lawmakers know how important the American Community Survey is, NHC has joined with others organized by the Census Project to express our desire for a robust, mandatory American Community Survey.

Wednesday, May 9, 2012

Serious mortgage delinquency is rising two years after the foreclosure crisis' peak. Why?

by Maya Brennan, Center for Housing Policy

For more than a year, serious mortgage delinquencies seemed to be stabilizing. The average serious delinquency rate in the nation’s 100 largest metro areas would creep down slightly one quarter, hold steady another. Through this period of stabilization, the rate remained shockingly high from a historical perspective, but seemed to be in a holding pattern — quarter after quarter of marginal improvements. The latest data show something different. The serious mortgage delinquency rate is rising again.

The warning signs were there even as the rate was trending down. As the overall serious delinquency rate was stabilizing, the foreclosure component was rising. Loans were entering the foreclosure process faster than they were exiting – pushing the rate up and up. The 90+ day delinquency rate was dropping enough to obscure that, but not anymore.

An analysis by our partners at the Urban Institute shows that foreclosure rates have been both higher and more consistently increasing in metro areas with judicial foreclosure processes compared with those with non-judicial foreclosures. While judicial review provides important safeguards, it also takes time. The foreclosure crisis increased caseloads, and many courts are having trouble keeping up.

Time is a friend and foe for foreclosure response. Some time is needed to ensure that foreclosure cases have merit and to allow tools like mediation to work. Extended timelines, like those in hard-hit judicial states like Florida and New York, do little more than increase foreclosures’ damage to properties, borrowers, and communities.

Florida is re-hiring retired judges and court staff to help process its foreclosures. Other states with severe backlogs may also need to increase court resources or find ways to review cases more efficiently. The alternative is multi-year foreclosure timelines that make long-term recovery harder for everyone.

Friday, May 4, 2012

What's making mortgages so hard to get?

by Ethan Handelman, National Housing Conference

Buying a home is uncommonly affordable these days. Indeed, mortgage rates hit 3.84% according to Thursday’s survey from Freddie Mac—the lowest they’ve ever been. Home prices are low, too. So why are housing markets so slow to respond?

Much of the answer is that it’s still very hard to get a mortgage. Mortgage lending has overcorrected from the too-lax standards during the boom, and there’s no sign of relaxation back to more normal underwriting. A survey conducted by the Federal Reserve found that a majority of banks were less likely to lend to lend to people with credit scores of 620, even with a 10% downpayment, than they were in 2006. Some banks were less likely to lend to borrowers with a credit score of 720 and a 10% downpayment. What could change that lending decision? Having a 20% downpayment.

That shows overcaution, to the result that lending is focusing on high income borrowers with accumulated wealth and very clean credit, but leaving out many low- and moderate-income families who could be responsible borrowers and homeowners. Why are banks doing this? The survey suggests a few major reasons:

  • Borrowers having higher costs for or more trouble obtaining mortgage insurance. That’s the lending decision one step removed, in some ways, and also a symptom of our disrupted housing finance system.
  • Put-backs by Fannie Mae and Freddie Mac. The two mortgage entities have stepped up their demands that lenders repurchase loans previously sold to Fannie or Freddie, making lenders very skittish about new lending.
  • Concern about the future direction of housing prices. This is a broadly shared concern, but it shouldn’t necessarily affect borrower qualifications, only the evaluation of the collateral.
There are other factors, certainly, and the survey goes into more detail. To get us further on the road toward a housing recovery, we’ll need to make mortgage credit more broadly available than it is now, and make sure low- and moderate-income families have access to the same safe and efficiently-priced mortgages that higher-income families do.