HUD new rule

The U.S. Department of Housing and Urban Development recently issued aproposed rule to establish a uniform standard of liability for facially neutral housing practices that have a discriminatory effect in supposed violation of the Fair Housing Act.


Under the proposed rule, liability for "discriminatory effects" or "disparate impact discrimination" under the FHA would be determined by a burden-shifting approach. That is:

(1) the plaintiff or complainant first must bear the burden of proving its prima facie case of either disparate impact or perpetuation of segregation;

(2) the burden then shifts to the defendant or respondent to prove that the challenged practice or policy has a necessary and manifest relationship to one or more of the defendant's or respondent's legitimate, nondiscriminatory interests; and

(3) if the defendant or respondent satisfies its burden, the plaintiff or complainant may still establish liability by demonstrating that these legitimate nondiscriminatory interests could be served by a policy or decision that produces a less discriminatory effect.

According to HUD, neither HUD nor any federal court has ever determined that liability under the Fair Housing Act requires a finding of discriminatory intent, and "[i]t is thus well established that liability under the Fair Housing Act can arise where a housing practice is intentionally discriminatory or where it has a discriminatory effect."

However, there has been some variation in the application of the discriminatory effects standard. HUD uses the three-step burden-shifting approach described above, as do many federal courts of appeals. On the other hand, some courts apply a multi-factor balancing test, other courts apply a hybrid between the two, and one court applies a different test for public and private defendants. The proposed rule would standardize the three-step burden-shifting approach.

Another source of variation is in the application of the burden-shifting test. If the defendant or respondent satisfies its burden to justify its challenged practice as having a necessary and manifest relationship with a legitimate nondiscriminatory interest, courts and HUD administrative law judges have differed as to which party bears the burden of proving whether a less discriminatory alternative to the challenged practice exists.

The majority of federal courts of appeals that use a burden-shifting approach place this burden on the plaintiff, analogizing to Title VII's burden-shifting framework. However, other federal courts have kept the burden with the defendant. HUD has, at times, placed this burden of proving a less discriminatory alternative on the respondent and, at other times, on the complainant. The proposed rule would place the burden of rebuttal on the plaintiff or complainant.

The purpose of HUD's proposed rule is to establish uniform standards for determining when a housing practice with a discriminatory effect violates the Fair Housing Act.

Comments are due 60 days from the date of publication of the proposed rule in the Federal Register, which is expected shortly.

New Mortgage Disclosure Form to Help Safeguard Against Default: CFPB

The new Consumer Financial Protection Bureau (CFPB) aims to avert at least one hitch in the home loan process that some market experts say started a whirlwind of mortgage delinquencies - ensuring consumers have a clear understanding of the cost associated with their mortgage. CFPB unveiled two prototypes for a new regulatory disclosure form Wednesday that the agency will begin testing this week. Each of the prototypes combines the two-page TILA disclosure and the three-page RESPA disclosure into a single, abbreviated form.

Each of the prototypes combines the two-page Truth in Lending Act (TILA) disclosure document from the Federal Reserve and the three-page Real Estate Settlement and Procedures Act (RESPA) disclosure from HUD into a single, abbreviated form which lenders will be required to present to borrowers within three days of application for a mortgage.

The new form will consist of two pages. The first will provide a basic overview of the core costs related to the closing of the loan and the monthly payment the consumer can expect, as well as whether or not the amount of that payment will change over time. Page two offers a more detailed explanation of the cost breakdown.

option A http://www.consumerfinance.gov/wp-content/uploads/2011/05/disclosure1.pdf
 


option B http://www.consumerfinance.gov/wp-content/uploads/2011/05/disclosure1.pdf

IN THE NEWS

Blockbuster Wins Final Approval of Sale to Dish Network


Blockbuster Inc., once the largest video-rental chain, won final approval to sell its assets to Dish Network Corp. for $320 million, Bloomberg News reported yesterday. Dish's bid was declared the highest and best offer after an auction April 6. On April 21, the day the sale had been projected to close, Blockbuster told Bankruptcy Judge Burton Lifland that it needed to give Dish more time to decide which of 1,500 leases to keep or reject. The revised offer approved yesterday gives Dish another 90 days to decide on leases and business contracts, which should allow the company to keep more leases and jobs, Blockbuster lawyer Stephen Karotkin said.



HUD's Donovan Suggests Renter's Tax Credit


Housing and Urban Development Secretary Shaun Donovan floated proposals for a new renter's tax credit to relieve the scarcity of affordable housing, CongressDaily reported yesterday. At a conference at which Harvard's Joint Center for Housing Studies reported that renters have become increasingly squeezed over the past decade, Donovan called for a revamp of today's low-income housing credit and for an expansion of the Community Reinvestment Act, which prods banks to make loans in low-income communities. Donovan made a particular plea for ideas on a renter's tax credit, though he did not advocate a specific proposal himself.

THIS IS JUST WRONG!!!!!!   THEY DO NOT PAY PROPERTY TAX AND CONTRIBUTE TO OUR SCHOOL SYSTEMS, ALTHOUGH THEIR CHILDREN ATTEND THE SCHOOLS.  THEY SHOULD NOT GET A TAX BREAK!   OUR SCHOOL SYSTEM IS STRUGGLING IT NEEDS PROPERTY TAX DOLLARS!    INCREASE THE CORPORATE PROPERTY TAX BASIS AND GIVE A PPORTION TO OUR SCHOOLS!

HUD Grants to Remove Lead Based Paint

The U.S. Department of Housing and Urban Development (HUD) is making grants available to help eliminate lead-based paint and other housing-related health hazards from lower-income homes. HUD is making these grants available through its Lead-Based Paint Hazard Control, Lead Hazard Reduction Demonstration, Healthy Homes Production and Asthma Interventions in Public and Assisted Multifamily Housing Grant Programs.


HUD requires prospective grantees to submit their applications electronically via www.grants.gov. Any changes to HUD-published funding notices will be made available to the public through a Federal Register publication and published on the grants.gov website.

"These grants are critical for states, counties and cities that are on the front lines of protecting our children from lead hazards and other residential hazards," says Jon Gant, director of the Office of Healthy Homes and Lead Hazard Control.



SOURCE: HUD

HUD Deploys Nearly $200M in Emergency Funds for the Unemployed

The U.S. House of Representatives voted to pull the plug on HUD's Emergency Homeowner Loan Program last month, but that hasn't stopped HUD from moving ahead to put the money into the hands of distressed homeowners. The fund was established to provide zero-interest bridge loans of up to $50,000 for unemployed homeowners to continue making their mortgage payments while they look for a new job. HUD just deployed nearly $200 million of the $1 billion allotted to state agencies
http://www.dsnews.com/articles/hud-deploys-nearly-200m-in-emergency-funds-for-unemployed-homeowners-2011-04-04

Frank Wants Tax on Banks, Hedge Funds to Subsidize Housing Programs

On Thursday, Frank introduced the Emergency Mortgage Relief and Neighborhood Stabilization Programs Cost Recoupment Act (H.R. 1151).


The amount paid by each individual firm would be assessed based on risk, to bring in a collective total of $2.5 billion, which would be used to offset the cost of assistance to unemployed homeowners under the Emergency Homeowner Loan Program and for states and communities under the Neighborhood Stabilization Program.

House Votes to Rescind $1B in Neighborhood Stabilization Grants

The U.S. House of Representatives voted Wednesday to pull the plug on HUD's Neighborhood Stabilization Program (NSP) and rescind $1 billion in grant money that has not yet been awarded. The NSP Termination Act (H.R. 861) passed the House with a 242-182 vote. It now moves to the Senate, where it is not expected to be met with such favor. White House officials again indicated that President Obama will veto the bill should it make it that far.

Congressional Hearings Examine the State and Municipal Debt Crisis, Reforming the America's Housing Finance Market

The House Oversight and Government Reform Committee today will hold its second hearing examining the state and municipal debt crisis, while the Senate Banking Committee will hold a hearing today titled "Reforming America's Housing Finance Market." The Senate Banking Committee's hearing at 10 a.m. ET will feature Treasury Secretary Timothy Geithner and HUD Secretary Shaun Donovan, and their prepared witness testimony can be found here. The House Oversight Committee hearing will take place at 1:30 p.m., and the witness list and prepared hearing testimony can be found http://oversight.house.gov/index.php?option=com_content&view=article&id=1198%3A3-15-11-qstate-and-municipal-debt-the-coming-crisis-part-iiq&catid=34&Itemid=1

GA HUD Booklet

Are You at Risk of Foreclosure? Know someone who may be having difficulty making house payments? We want you to know your options and act now to avoid bigger problems later.


The attached booklet is a compilation of information to guide and assist you. It is also available online ( http://portal.hud.gov/hudportal/documents/huddoc?id=forclosure-risk.pdf   – to print in booklet format, select 8½ x 11 inch paper, 2-sided print, flip on short edge).

We encourage you to provide this information to individuals and families in your community who may be in need of assistance in Georgia.

It contains valuable guidance, points of contact, and web links to sources of free assistance from HUD and other federal agencies, national and local government and non-profit partners, including what to do if your lender won’t work with you and how to identify and report a loan modification or foreclosure rescue scam.

Remember, you can always contact a HUD-approved housing counselor for free foreclosure avoidance counseling. Some HUD-approved agencies offer assistance in languages other than English. Call 1-800-569-4287 or visit www.hud.gov/counseling to find one near you.

Operation Watchdog Entangles 15 FHA Lenders

Fifteen direct-endorsement lenders that failed to underwrite loans to Federal Housing Administration (FHA) standards could face more than $23 million in civil enforcement actions following a recommendation by the U.S. [read more]

http://www.mortgageorb.com/e107_plugins/content/content.php?content.7974
 
http://www.hud.gov/offices/oig/reports/files/ig11cf1801.pdf
 
The 15 lenders at the heart of Operation Watchdog included the following:




Lombard, Ill.-based 1st Advantage Mortgage;

West Bloomfield, Mich.-based Birmingham Bancorp Mortgage Corp.;

Flint, Mich.-based Mac-Clair Mortgage Corp.;

Southlake, Texas-based Alacrity Lending Co.;

Millersville, Md.-based Dell Franklin Financial;

Farmington Hills, Mich.-based D&R Mortgage Corp.;

Englewood, Colo.-based Assurity Financial Services LLC;

Arlington, Texas-based Americare Investment Group;

Sugar Creek, Mo.-based American Sterling Bank;

Cheshire, Conn.-based Webster Bank;

Lakeway, Texas-based Alethes LLC;

Edison, N.J.-based Security Atlantic Mortgage Co. Inc.;

Memphis, Tenn.-based First Tennessee Bank NA;

Atlanta-based Pine State Mortgage Corp.; and

Great Neck, N.Y.-based Sterling National Mortgage Co. Inc

HUD TERMINATES FHA APPROVAL OF 15 LENDERRS

HUD announced this week that it has terminated the Origination Approval Agreements of 15 mortgage lenders due to poor performance and high default rates. In addition, the federal agency terminated eight lenders' Direct Endorsement (DE) approval. Lenders with Direct Endorsement agreements are authorized to both originate and underwrite an FHA loan. HUD's regulations permit the agency to terminate its agreement with any mortgagee whose default and claim rate exceeds a certain threshold based on their geographic area.


http://dsnews.us1.list-manage2.com/track/click?u=59816bad6939d5a7dd87e45a5&id=28330f02ce&e=31685a496f

HUD Proposes to Add Sexual Orientation as Anti-Discrimination Factor

The U.S. Department of Housing and Urban Development (HUD) is proposing to add a person’s sexual orientation or gender identity as an anti-discrimination factor for lenders participating in the Federal Housing Administration’s (FHA) loan guarantee programs and other HUD programs.


The proposed rule is available at:

http://portal.hud.gov/hudportal/documents/huddoc?id=LGBTPR.PDF

HUD is seeking public comment on a number of proposed areas including:

1. Prohibiting lenders from using sexual orientation or gender identity as a basis to determine a borrower’s eligibility for FHA-insured mortgage financing. FHA’s current regulations provide that a mortgage lender’s determination of the adequacy of a borrower’s income “shall be made in a uniform manner without regard to” specified prohibited grounds. The proposed rule would add actual or perceived sexual orientation and gender identity to the prohibited grounds to ensure FHA-approved lenders do not deny or otherwise alter the terms of mortgages on the basis of irrelevant criteria.

2. Clarifying that all otherwise eligible families, regardless of marital status, sexual orientation, or gender identity, have the opportunity to participate in HUD programs. In the majority of HUD’s rental and homeownership programs the term “family” already has a broad scope, and includes a single person and families with or without children. HUD’s proposed rule clarifies that families, otherwise eligible for HUD programs, may not be excluded because one or more members of the family may be an LGBT individual, have an LGBT relationship, or be perceived to be such an individual or in such relationship.

3. Prohibiting owners and operators of HUD-assisted housing, or housing whose financing is insured by HUD, from inquiring about the sexual orientation or gender identity of an applicant for, or occupant of, the dwelling, whether renter- or owner-occupied. HUD is proposing to institute this policy in its rental assistance and homeownership programs, which include the Federal Housing Administration (FHA) mortgage insurance programs, community development programs, and public and assisted housing programs.

In addition, HUD is conducting the first-ever national study of discrimination against members of the LGBT community in the rental and sale of housing.


I already thought this was protected hmmm

HUD Announces $2.5MM Fair Lending Settlement

The U.S. Department of Housing and Urban Development, the Metropolitan St. Louis Equal Housing Opportunity Council (EHOC), and First National Bank of St. Louis recently announced a conciliation agreement that will increase the bank's commitment to minority and low-income communities. As part of the agreement, the bank will invest more than $2.5 million over four years in St. Louis City, North St. Louis County, and St. Clair County, Illinois.


A copy of the conciliation agreement is available at:

http://www.hud.gov/offices/fheo/library/10-EHOC-First-National-BankSt-Louis-Agreement-121710.pdf


The agreement reportedly comes after HUD investigated and conciliated a fair housing complaint that was filed by EHOC, a fair housing organization, alleging that the Bank failed to locate branches and provide banking services in African-American neighborhoods.

Under the agreement, First National Bank of St. Louis will finance the construction of rental housing and community development projects in African-American neighborhoods, offer affordable mortgages, and promote consumer financial literacy education. The agreement also calls for the bank to conduct the following activities in the St. Louis area of Missouri and Illinois:

* Open a new bank branch in a majority African-American Census tract;

* Provide $2 million in community development loans and investments;

* Fund a Special Financing Program with $500,000 to provide mortgage rate discounts, down payment assistance, and closing cost assistance;

* Make available Spanish language services in all branches, particularly in loan negotiations;

* Increase its marketing, advertising, and outreach activities;

* Invest $100,000 to provide credit counseling and financial literacy training to residents;

* Offer residents free checking accounts with no fees or minimum balance; and

* Provide $100,000 for fair housing and community reinvestment activities.

HUD Issues HECM Guidance re: Delinquent Property Taxes and Hazard Ins Premiums

HUD recently issued guidance for reverse mortgage homeowners and their lenders on how to handle outstanding property taxes and unpaid hazard insurance premiums. The guidance is intended to assist elderly borrowers who have neglected to pay these expenses and may face foreclosure.


A copy of the mortgagee letter (2011-01) is available at:

http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/11-01ml.pdf

Specifically, the mortgagee letter provides loss mitigation guidance for the resolution of Home Equity Conversion Mortgages (HECM) that are delinquent due to unpaid property charges, and mortgages wherein due and payable requests were previously deferred by HUD. The guidance applies to all HECMs where the mortgagor is delinquent in paying property charges, or the mortgagee has advanced corporate funds to satisfy an unpaid property charge on behalf of the mortgagor, or both.

The guidance includes sample letters that lenders may use to make certain borrowers understand that property tax and hazard insurance are required expenses that must be paid even though the homeowner owes nothing on their mortgage loans. HUD reportedly is planning to publish a proposal to add more preventative measures and consumer protections to the existing reverse mortgage regulations.

HUD November Score Card

http://portal.hud.gov/portal/page/portal/HUD/documents/november_scorecard.pdf

HUD Counseling

The U.S. Department of Housing and Urban Development (HUD) is making $79 million available for a range of housing counseling programs to help families find and preserve housing. The available funding is an increase of $21 million, or 27%, over last year.


The grants will be awarded competitively to approximately 550 applicants, including HUD-approved counseling agencies and state housing finance agencies. The counseling services can relate to a variety of topics, including foreclosure avoidance, home buying and helping borrowers understand how to qualify for reverse mortgages.

HUD's Housing Counseling Grant program will provide approximately $55 million this year for "comprehensive counseling," $9.5 million for reverse mortgage counseling and $14.5 million for supplemental funding for mortgage modification and mortgage scam assistance. There will also be a heightened focus on providing services in languages other than English, HUD says.



SOURCE: U.S. Department of Housing and Urban Development

https://apply07.grants.gov/apply/GetGrant

https://apply07.grants.gov/apply/forms_apps_idx.html

HUD to Investigate Mortgage Loan Denials

The Department of Housing and Urban Development said yesterday that it would investigate the lending practices of certain mortgage lenders to see if any prospective borrowers had been illegally denied a mortgage because they were pregnant or on short-term disability, the New York Times reported today. "Lenders have every right to ascertain the incomes of families to determine whether they are eligible for a mortgage loan, but they have no right to use a pregnancy or a short-term disability as a cause to deny that family a mortgage they would otherwise qualify for," said Shaun Donovan, the agency's secretary. Fannie Mae and Freddie Mac, the two mortgage financing giants, have always required that borrowers have enough income to pay for the loan on closing day and that lenders document that the income is likely to continue for at least three years. Since disability payments typically do not continue for that long, however, some lenders will not count it as qualifying income, several mortgage brokers have said. Some lenders may require new mothers, or others on short-term disability, to reapply for the mortgage once they return to work. If a borrower is on leave at the time of closing, the housing agency said that "lenders must document the borrower's intent to return to work, that the borrower has the right to return to work, and that the borrower qualifies for the loan taking into account any reduction of income due to their leave."


http://www.nytimes.com/2010/07/22/your-money/mortgages/22mortgage.html

HUD Announces M&M III Contracts, Separates Functions

The U.S. Department of Housing and Urban Development (HUD) has announced it is awarding contracts to 23 companies to serve as asset managers (AMs) and 32 other firms to serve as field service managers (FSMs) under the third generation of its Management and Marketing (M&M) program, known as M&M III. The new contracts are intended to reduce risk, increase sale prices and accelerate the pace of reselling HUD's inventory of foreclosed Federal Housing Administration (FHA) homes.