California Reinvestment Coalition Goes to Washington

Last week, members of the California Reinvestment Coalition traveled to Washington, DC, for the annual National Community Reinvestment Coalition conference.  The theme this year was “Creating a Just Economy.”

Keynote speakers during the conference included Federal Reserve Chair Janet Yellen, CFPB Director Richard Cordray, Representative Maxine Waters who is Ranking Member of the House Financial Services Committee, Comptroller Thomas Curry, Senator Sherrod Brown who is Ranking Member of the Senate Banking Committee, Mark Morial, CEO of the National Urban League, and John Taylor, president and CEO of NCRC.

There were a number of sessions focused on reinvestment, affordable housing, small business lending, home ownership, gentrification, economic development, CDFIs, community health benefit agreements, fintech, rural development, fair housing, the racial wealth gap, the Community Reinvestment Act, redlining, and more, including a session entitled “Defending the CFPB” that Paulina Gonzalez, executive director of CRC, moderated.

In addition to attending the conference, CRC members also met with members of the California Congressional delegation and with bank regulators and their staff as well.  During the meetings, CRC members shared what they are seeing from their work in communities, specifically around issues related to small business lending, affordable housing and economic development.

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The president’s so-called “skinny budget” proposal was one of several topics covered at the meetings, and more background about the additional issues is included below.

Program/Department

Budget Proposal Impact on California

HUD Budget 

Eliminates CDBG, reductions for key programs serving renters Loss of $357 million in CDBG funds for CA cities;

$130 million in HOME funds for new affordable housing; Thousands of tenants to lose rental assistance vouchers;

More costs for Medicaid as seniors move to nursing homes w/o Meals on Wheels;

Increased homelessness;

CDFI Fund

Eliminated

Fewer loans, less support for Small Biz Owners. There are 86 CDFIs in CA that made 39,000+ loans in FY 2016.

Legal Services Corporation

Eliminated

11 CA orgs. receive funding through LSC.

Small Business Administration

Prime program defunded; Microloan program frozen Less financing available for CA small businesses.

NeighborWorks

Eliminated

Will harm efforts at building assets, including for 1st time homebuyers, also negative impacts for affordable housing.
AmeriCorps Eliminated

Work on tax returns, literacy, emergency response, health, and economic development.

 

Community Reinvestment Act

This year, CRA celebrates its 40th anniversary. Because of the CRA, financial institutions are helping to meet important community credit needs and building consumer and community wealth, through small business lending, mortgage lending, affordable housing finance, community development activity and bank branch and account access.

  • California Reinvestment Coalition members and other community groups have recently negotiated win-win community commitments with a number of banks, including City National, Bank of Hope, Cathay Bank and Mechanics Bank.
  • But bank regulators need to be more rigorous and timely in their CRA and Fair Lending examinations of banks. Wells Fargo had not had a CRA rating made public in 9 years, and several banks, such as BancorpSouth and Evans Bank that received Satisfactory CRA ratings were later sued for redlining.
  • Regulators should encourage banks to develop Community Benefit Plan agreements with local community groups, and incorporate these agreements into any bank merger approval and subsequent CRA exams.
  • Regulators should also provide CRA downgrades to institutions that engage in discriminatory, unfair, or deceptive practices, or that finance the direct or indirect displacement of low and moderate income people and communities of color, or that finance lenders who make predatory loans in these communities. Banks must diversify management and staff, and develop robust supplier diversity programs.


Rural Communities

Rural communities in California face unique and significant challenges. Banks are well placed to help local communities develop and grow through home mortgage and small business lending, affordable housing investments and low cost accounts.

  • But nonprofit groups and even some banks report that banks only lend and invest in geographic areas that are subject to “full scope” regulatory review (via CRA exams),  that tend to focus on larger, urban areas, especially for the largest banks.
  • Bank regulators should expand the number of full scope areas for banks that are among the biggest depositories and lenders in smaller, rural communities. Branch closings, especially in rural areas, are also effectively limiting access to banking for consumers.

Protect CFPB

The Dodd Frank Act and the creation of the Consumer Financial Protection Bureau are the most effective and publicly popular responses to the financial crisis.

  • The CFPB has secured over $12 billion in consumer relief, more than all of the other, relevant federal agencies combined.
  • The CFPB developed common sense rules that brought order and transparency to mortgages (Qualified Mortgage and QRM rules, home loan modifications (servicing rules, including successors in interest protections), and the collection of home loan data (HMDA rule).
  • Additionally, CFPB enforcement actions have protected consumers and communities from unlawful lending discrimination and unfair and deceptive practices.
  • Importantly, over 1 million consumers (including over 118,000 Californians) have already taken advantage of the CFPB’s user-friendly consumer complaint database to file complaints -some telling their stories – to seek relief but also to inform other consumers and CFPB enforcement officers about problematic practices and actors.
  • The CFPB’s Director, structure and authority must be vigorously protected.
  • Important CFPB rules on payday lending, prepaid cards, mandatory arbitration, debt collection and small business loan data must be finalized and protected from repeal.
  • We also support the CFPB’s work on issues that have important impacts on consumers, ranging from student loans to credit reporting agencies to financing for cars.

Small Business Lending

  • Small business lending has increased since Dodd Frank Act, not decreased as some Dodd Frank critics have suggested. But small business loans are still less available in LMI neighborhoods and neighborhoods of color
  • And many small business owners looking for credit from banks are relegated to higher cost and variable rate credit cards, not term loans.
  • 95% of the small business loans in CA from JPMorgan Chase Bank are credit card loans. While credit cards serve a purpose, they can come with higher costs, variable rates and are not well suited for the longer term capital needs that many businesses have.
  • Dodd Frank Section 1071 data would bring much needed transparency into who is receiving small business loans- and who is not. In the same way that HMDA data created greater transparency in the home lending market, 1071 small business data will shed light on small business lending trends, highlight disparities, and likely lead to increased lending.
  • Fintech, online, and marketplace lenders can present opportunity, but some are clearly also creating harm. CDFIs and community lenders are spending precious capital and staff time refinancing small business owners out of predatory fintech loans and merchant cash advances.
  • An Opportunity Fund analysis of 150 “alternative loans” found an average APR of 94%, and among Hispanic borrowers, the average monthly payment was more than 400% of take-home pay.
  • Advocates are concerned about a weakening of consumer protection under any OCC national fintech charter which will lead to preemption of state laws, and are concerned that the OCC has not shown itself to be a strong bank regulator (see, Wells Fargo).
  • We join Congressman Cleaver in raising concerns that fintech lenders are violating fair lending laws by not making good credit available to neighborhoods of color, that fintech algorithms may be biased, and that predatory fintech loans are destabilizing small business owned by women and people of color. The CFPB and other agencies must vigorously enforce fair lending laws against predatory and discriminatory fintech lenders. Bank partnerships with fintech lenders must be thoroughly scrutinized to ensure fair lending and consumer protection laws are followed
  • In addition to bank and fintech loans, small businesses are vulnerable to high cost products like Merchant Cash Advance and installment loans that can financially sink business owners instead of helping them.

Homeownership

Home loans are hard to come by in neighborhoods of color. Banks are increasingly focused on making jumbo loans which disproportionately benefit white borrowers, while making fewer loans to Latino and African American borrowers, and abandoning FHA loans in favor of their own, unproven products, with less than impressive results.

  • Any future GSE reform must maintain a duty to serve communities and retain affordable housing goals. Currently, Fannie and Freddie need to be held accountable to meeting ambitious affordable housing goals, and should offer more flexible products to qualified homeowners.
  • We are concerned about a return to redlining, and hope to see DOJ, CFPB and HUD continue their important work in enforcing fair housing and fair lending laws.
  • HUD is currently investigating CRC’s first HUD redlining complaint (more information and graphs below), filed against OneWest Bank for having few branches and making few home loans in neighborhoods of color in six Southern California counties.
  • Given our aging population, increased oversight is needed in the reverse mortgage market to ensure that seniors are not taken advantage of by loan originators and servicers.
  • CRC is deeply concerned that seniors are continuing to lose their homes unnecessarily due to servicer bureaucracy, a lack of strong oversight of this industry by HUD, and a very limited infrastructure to help seniors and their families avoid needless foreclosures.  The elimination of funding for Legal Aid organizations will exacerbate this problem.

Affordable Rental Housing

California continues to suffer from an affordable housing crisis. The California Housing Partnership Corporation estimates that California needs 1.5 million affordable homes to accommodate the state’s lowest income residents.

  • Any HUD budgets cuts to key programs such as HOME, CDBG, Rental Assistance and Low Income Housing Tax Credits, could be devastating.
  • California nonprofit housing developers report that many investors, including banks subject to the Community Reinvestment Act, are pulling back from existing commitments in tax credit deals and attempting to renegotiate terms in light of pending tax reform. The result is fewer units produced and more subsidy coughed up at the 11th hour by desperate nonprofits who then must forego developer fees, and local governments which must contribute additional, unplanned subsidies.
  • Banks should receive CRA rating downgrades for such behavior as well as for seeking community development lending credit for loans that foreseeably lead to displacement of low and moderate income residents the CRA was meant to benefit.
  • CRC is deeply concerned about Fannie Mae’s recent commitment to guarantee up to $1 billion in debt backed by single family rental homes owned by private equity giant Blackstone.
  • Fannie Mae and Freddie Mac must continue to invest in the National Housing Trust Fund and Capital Magnet Fund.
  • Importantly, HUD must continue to implement Affirmatively Furthering Fair Housing obligations and assist local jurisdictions in meeting critical housing needs, fighting displacement and creating access to areas of opportunity for all.

Immigrant Access

The current political environment, with its changing policies and harsh rhetoric is threatening to drive immigrant communities out of the country, or out of sight. A recent CRC survey of confirms that many of our organizational members are seeing clients go underground, fail to show up for jobs, and forego access to needed services because they are concerned about ICE.

  • Bank regulators and banks should work together to clarify and simplify the privacy data rights of immigrants so they will not fear that banks will share their private data with the government.
  • Banks should also be encouraged to lend directly to qualified immigrant homeowners and small business owners who may have ITIN numbers, as well as invest in CDFIs and community lenders that make such loans.
  • For banks serving large immigrant populations, they should consider what information may be helpful to share with their customers about power of attorney and other bank access issues should a household member face deportation.

Payday lending

Payday lending continues to be a scourge on working families, charging 400% APR for short term loans that trap unsuspecting consumers in cycles of debt.

  • The CFPB has designed well considered and reasonable rules to protect consumers against abuses.
  • Federal intervention is needed as payday lenders and lobbyists have a stranglehold in Sacramento.
  • Banks should be incentivized to continue to develop small dollar alternatives to such products and to assist CDFIs and other community lenders that seek to fill this niche, and should also be penalized in their CRA exams for any financing to high-cost, predatory lenders.

Overdraft

According to the CFPB, the majority of overdrafts are on transactions of $24 or less and are repaid within 3 days or less. The CFPB calculated that with a median overdraft fee of $34, this is equivalent to a loan with a 17,000 APR.

  • It is telling that payday lenders defend their triple digit APR loans by saying consumers are merely making informed decisions to take out payday loans because they are less expensive than overdraft fees.
  • Banks continue to overly rely on overdraft fees as a source of fee revenue, to the detriment of their clients. CFPB rules on abusive overdraft policies are important, and all regulators should independently examine the impact of overdraft on bank customers, and work with their banks to end this product.

 

More on CRC’s Redlining Complaint Against CIT Group

Redlining Complaint Against OneWest Bank filed by California Reinvestment Coalition

Mortgage lending in 2015 (CRC)

The complaint alleges that OneWest Bank’s lending to borrowers in communities of color is low in absolute terms, low compared to its peer banks, and is lower than one would expect, given the size of the Asian, African American and Latino populations in Southern California.

Branch locations OWB

As part of the complaint, an analysis of the bank’s assessment areas found that OneWest has only 1 branch in an Asian majority census tract, no branches in African American majority census tracts, and 11 branches in Hispanic majority census tracts.

Branches in Asian, African American, and Hispanic majority trats (OWB)

While OneWest’s foreclosure record is not part of the redlining complaint, analysis by CRC and Urban Strategies Council found that OneWest was nine times as likely to foreclose in communities of color as compared to extending mortgage loans in communities of color.

OWB foreclosures vs originations

ThrowBack Thursday: The Roots of the Mortgage Crisis

CRC recently stumbled across a copy of a 2007 report entitled “Sustainability, not attainability: An Examination of Nontraditional Residential Mortgage Lending Products and Practices.” The report included testimony from some companies like New Century Mortgage, who caused billions of dollars in damage to the economy, to say nothing of the individual impact on families who lost their homes. You can order a copy of the report from the CA Senate for $11.75.

Below, we include some choice quotes about the valuable services that companies like New Century Mortgage were providing, or that community advocates didn’t know what they were talking about when they asked for stronger consumer protections. Of course, it turned out the advocates were right, these mortgage would go bad, and our economy would implode as a result. Perhaps smart regulation isn’t so bad after all?  Especially when it comes to the largest asset that many American families will ever own?

Want to learn more about the cost of this crisis?  Check out some other CRC posts below:

NEW CFPB MORTGAGE RULES: WHY DO WE NEED THEM? PART 1

CITY OF LOS ANGELES LAWSUIT AGAINST CHASE, WELLS FARGO, CITIGROUP, AND BANK OF AMERICA

ONEWEST BANK FORECLOSURE TRACKER: HOW MANY FAMILIES ARE LOSING THEIR HOMES?

 

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Learn How Wall Street and Cash Investors Are Outbidding First Time Homebuyers, Displacing Tenants, and Changing Local Communities  

Bloomberg Picture of REO

Cropped version of Bloomberg News graphic of REO to Rental. See the full picture here: http://www.bloomberg.com/infographics/2013-12-20/blackstones-big-bet-on-rental-homes.html

Have you been following the news about the approximately 200,000 homes that Wall Street investors have purchased to create portfolios and then securitized the income and sell bonds?  Does that sound alarmingly familiar to the “create portfolios of mortgages and securitize the payments and sell bonds” profit scheme that brought our economy to its knees?  Are you also worried about the impact this is having on communities?

If so, tune into The Power is Now show on September 23rd at 8:30AM to hear host Eric Lawrence Frazier, MBA as he discusses this issue with two experts.  Click on this link to hear the show and join the conversation.

Maeve Elise Brown is the executive director of Housing and Economic Rights Advocates (HERA), a nonprofit law firm in Oakland, California.  Kevin Stein, associate director of the California Reinvestment Coalition, a nonprofit coalition that advocates for better access to banks.

They will discuss how all-cash investors have elbowed first-time homebuyers out of the market, displaced long-term tenants, and changed the fabric of local communities.

If you’re interested in learning more about this problem and what possible solutions are, check out the resources below.  The letter below was drafted by Maeve Elise Brown at HERA and Kevin Stein at CRC, with input from other allies and CRC members.  The letter outlines the problems created by the REO to Rental scheme, how the government is exacerbating the problem through mass sell-off’s of delinquent mortgages to investors, and how the problem could be addressed by regulators and policymakers.

80 Organizations Ask Federal Gvt. to Address Investor Cash Flooding Into Neighborhoods

Regulators Should Act Now to Protect First-Time Homebuyers, Renters, and Communities

March 4, 2014-California: Eighty organizations are calling on federal regulators to address first-time homebuyers being outbid, tenants being displaced, and neighborhoods undergoing dramatic changes as private equity and investor cash continues flooding into local housing markets, buying up homes. These problems have been worsened by banks withholding REOs from the market and federal housing agencies conducting bulk sales of foreclosed homes and distressed mortgages. One portfolio of single-family rental homes was securitized this fall, though both Fitch Ratings and Standard and Poor’s refused to grant AAA ratings to the securitization, citing numerous uncertainties with this new business model.  Read the rest of the press release here.

 Some more recent press coverage you might be interested in:

Another Shadow in Ferguson as Outside Firms Buy and Rent Out Distressed Homes (NYT: Sept. 3, 2014)

Federal Program Helps Keep Some Delinquent Borrowers in Their Homes (NYT: Sept. 2, 2014)

And press coverage about the letter signed by 80 organizations, urging regulators to act now:

 

Game of Homes The letter sent by 80 organizations expressing concerns about issues with private equity landlords is cited.  Rebecca Burns, Michael Donley, and Carmilla Manzanet. In These Times. March 31, 2014.

Single-family rental home giants form trade group in Washington The letter sent by 80 organizations to federal regulators, including HUD, SEC, CFPB, OCC, Federal Reserve, and FHFA about issues created by private equity and other investors is cited. Tim Logan. Los Angeles Times. March 26, 2014.

Consumer groups seek bond oversight The letter sent to 80 regulators about single family homes being purchased by private equity firms and other investors is cited. Yahoo Finance Australia. March 24, 2014.

Blackstone’s Home Buying Binge Ends as Prices Surge: Mortgages The letter signed by 80 organizations expressing concerns to national housing and bank regulators is cited. John Gittelsohn and Heather Perlberg. Bloomberg. March 14, 2014.

Ninja loans reborn in similar form The concerns outlined by 80 organizations about private equity and investor landlords is cited in this article.  Kevin Stein from the California Reinvestment Coalition is interviewed, as is Maeve Elise Brown, from Housing and Economic Rights Advocates.  Radio New Zealand News. March 10, 2014.

Could a Wall Street firm be your landlord? The letter sent by 80 nonprofit organizations to federal regulators is cited on a show that also includes an interview with Representative Mark Takano about his concerns with the REO to rental model.  A new report from the Center for American Progress about rental securitizatoin is also featured. Ari Melber. The Melissa Harris-Perry Show. March 9, 2014.

First-Time Buyers Being Shut Out In Growing Numbers First-time homebuyers are prevented from purchasing homes when they are forced to compete with all-cash investors. The letter from 80 organizations to the SEC, HUD, CFPB, Federal Reserve, OCC, and FHFA is cited. Mike Wheatley. RealtyBizNews. March 7, 2014.

Want to buy a foreclosure? You may have to compete with a hedge fund Maeve Elise Brown, Executive Director at Housing and Economic Rights Advocates (HERA), outlines the concerns housing advocates have with private equity groups and other investors purchasing large numbers of single family homes.  Brown cites a letter sent by 80 organizations to federal regulators, asking for their assistance in addressing the impacts on tenants, homeowners, and communities. Mark Huffman. ConsumerAffairs. March 6, 2014.

Shut Out of the Housing Market? First-Timers Dwindle The letter sent by 80 organizations to federal regulators is cited. RealtorMag. March 6, 2014.

REAL ESTATE: Where are the boomerang buyers? A letter that 80 organizations sent to the SEC, HUD, CFPB, Federal Reserve, OCC, and FHFA is cited.  The letter calls on regulators to address the impact of private equity firms and other investors flooding into local housing markets and buying up homes. Debra Gruszecki. The Press-Enterprise. March 5, 2014.

Housing Activists: Rental-Property Bonds Might Herald Next Housing Bust The letter outlining concerns by 80 organizations about investor and private equity money pushing out first-time homebuyers, displacing long-term tenants, and changing communities is cited. Dan Weil.MoneyNews. March 5, 2014.

Regulate Wall Street home buying, consumers plead Eighty organizations signed onto a letter, expressing concerns about the impact on first-time homebuyers, long-term tenants, and communities as private equity and investors purchases large numbers of homes with the intention of securitizing the rents from these single family homes. Kim Miller. The Palm Beach Post. March 5, 2014.

78 Groups Urge Scrutiny of Wall Street Cash in Local Housing Markets The letter sent by the California Reinvestment Coalition, Housing and Economic Rights Advocates, and 78 other organizations is cited at approximately 14.25 into the program. Amy Goodman. Democracy Now. March 4, 2014.

California advocates want to put the brakes on REO-to-rental A letter sent by 80 organizations to the SEC, HUD, CFPB, Federal Reserve, OCC, and FHFA outlining concerns about private equity groups and investors buying up homes is cited, as are specific concerns and recommendations to the regulators. Trey Garrison. HousingWire. March 4, 2014.

Wall Street Has Found Its Latest Dangerous Financial Product, Activists Warn A letter sent by the California Reinvestment Coalition, Housing and Economic Rights Advocates, and 78 other organizations is cited.  In the letter, the nonprofit organizations ask federal regulators for help with investor and private equity cash pushing out first-time homebuyers, displacing long-term tenants, and changing communities. Benjamin Hallman and Jillian Berman.HuffingtonPost Business. March 4, 2014.

 

New Study Finds Banks Maintain Foreclosed Homes Worse in Communities of Color

Oakland Picture

A bank-owned home in Oakland that was photographed as part of new study.

Fair Housing of Marin (FHOM), the National Fair Housing Alliance (NFHA), and 16 fair housing centers released a report earlier this week detailing racial disparities in maintenance of bank-owned and Fannie Mae-owned foreclosures in 30 metro areas nationwide. FHOM investigated the Vallejo area and FHOM and NFHA investigated the Richmond and Oakland areas.

The investigations took into account over 30 different aspects of the maintenance and marketing of each property. REOs in communities of color were 2.6 times more likely to have 10 or more deficiencies than REOs in White neighborhoods (32.0% vs. 12.4%).

In the areas that FHOM investigated, REOs in communities of color were

  • 2 to 3 times more likely to have trash accumulated on the premises than REOs in White neighborhoods;
  • about 2.5 times more likely to have unsecured, broken, or boarded windows or have a trespassing or warning sign than REOs in White neighborhoods;
  • about 2.5 times more likely to have a trespassing or warning sign versus REOs in White communities.

To read the full press release about the report and its troubling findings, visit the Fair Housing of Marin website: Investigations of Bank-Owned Properties Uncovers Discrimination

To read the full report, visit this link: http://bit.ly/reo2014

 

 

New Resource for Widowed Homeowners Facing Foreclosure

2016  Update: New legislation introduced by Mark Leno and Cathleen Galgiani provides critical protections for widowed spouses and other survivors who assume home ownership responsibilities when the primary mortgage holder passes away. The Homeowner Survivor Bill of Rights, (Senate Bill 1150) closes a loophole in California law that fails to provide surviving spouses and children important protections against foreclosure that are available to other homeowners.  

Visit www.survivorbillofrights.org to learn more about this important new bill.

Last week, the California Reinvestment Coalition released our 10th Survey of housing counselors and legal aid lawyers to measure how well banks and mortgage servicers are helping homeowners who request assistance in avoiding foreclosure.

As part of the survey, 11 homeowner stories and declarations were also included in the report from homeowners who had worked with attorneys at Housing and Economic Rights Advocates.  Even working with attorneys, homeowners still faced unreasonable delays, requests for the same paperwork on multiple occasions, incorrect loan modification denials, wrong information about investors, and more.

While there were a number of troubling trends in the report, 87% of respondents said they felt that the “widows and orphans” problem still exists, despite federal guidelines released by various agencies in 2013.  The “widows and orphans” problem refers to the fact that many widows, orphans, and others who inherit or have an ownership interest in property have faced foreclosure upon the death of a loved one because they were not listed on the loan, and the servicer would not work with them so that they could keep the family home.

While the CFPB, Fannie Mae, Freddie Mac, and Treasury Department released updated guidelines in 2013, (see the full report for citations) housing counselors report that mortgage servicing staff aren’t always aware of the rules.

To shed further light on this issues, Housing and Economic Rights Advocates (HERA) has created an email address.  For widowed homeowners, or other heirs in similar situations, they can contact HERA via email at: familyhome@heraca.org.  HERA staff will make contact with each person that submits a story to that email address.

July 8, 2014 update: The CFPB issued additional guidance today to banks and mortgage servicers about working with widows and other heirs who are trying to keep their family homes.  You can read it here: CFPB Clarifies Mortgage Lending Rules to Assist Surviving Family Members

A few media stories illustrate the very human impact of bank and mortgage servicer red tape on surviving family members:

1)     Bank might foreclose on home because late husband isn’t residing there

“WASHINGTON — Billions of dollars in foreclosure settlements between big banks and government regulators haven’t helped Laura Biggs. The California woman is scheduled to lose her home nine days before Christmas because her mortgage company concluded that the house is no longer the primary residence of her husband, who’s been dead since 2003.”   Read complete story here: “Bank might foreclose on home because late husband isn’t residing there” (Kevin Hall, McClatchy Washington Bureau, December 9, 2013).

2)     Mortgage Catch Pushes Widows Into Foreclosure

“Ms. Bates, 70, is caught in a foreclosure trap that is ensnaring widows across America: she cannot get help lowering her payments until her name is added to the mortgage note, but the lender says she must be current on payments before that can happen.”  Read complete story here: Mortgage Catch Pushes Widows Into Foreclosure (Jessica Silver-Greenberg, New York Times, 12/1/2012)

3)     Call Kurtis Investigates: Surviving Family Members Losing Homes Left By Loved Ones

“ELK GROVE (CBS13) —The mortgage was in her late husband George’s name. The decorated war veteran died in 2007.  Daughter, April, says she sent Green Tree his death certificate and the grant deed with her mother’s name on it, but says Green Tree will not work with them.”  Read complete story here:  Call Kurtis Investigates: Surviving Family Members Losing Homes Left By Loved Ones (CBS Sacramento, 11/1/2013)

 

California Advocates Attend National Community Reinvestment Conference in Washington, DC

Representatives from member organizations of the California Reinvestment Coalition traveled to Washington DC last week to attend the National Community Reinvestment Coalition conference.  The theme of the conference was “A Just Economy: Ideas, Action, Impact.”

The conference is a gathering of NCRC’s diverse membership base from around the US, including CDFI’s, fair housing organizations, housing counseling organizations, consumer advocates, credit counselors, small business lenders, community organizing and civil rights groups, and more.

Speakers at the conference included Shaun Donovan, the Secretary of Housing and Urban Development (HUD),Thomas Curry, Comptroller of the Currency, Steven Antonakes from the Consumer Financial Protection Bureau, Martin Gruenberg, Chairman of the Federal Deposit Insurance Corporation, and more.

Shaun Donovan

Secretary Donovan spoke about potential reforms to Fannie Mae and Freddie Mac and recognized the conference participants for their work to help people during the foreclosure crisis and to also help with rebuilding afterwards.  He also spoke about the ongoing crisis of a lack of affordable housing in communities across America and cited NCRC’s work to ensure that reforms to Fannie and Freddie don’t leave low-income communities behind.

Fleeced

Wednesday night included a screening of “Fleeced”, a documentary about elder financial abuse which was a big draw with a packed room. A panel discussion included Kim Jacobs, the producer of the film, Anita Gardner, a consumer in the film who faced an uphill battle with her bank when she sought assistance with her mortgage after health problems, as well as Robert Zdenek, the Director of National Neighbors Silver at NCRC, and Dory Rand, president of the Woodstock Institute. The film was commissioned by NCRC, with support from the Atlantic Philanthropies.  A screening will also be held in Sacramento on April 15th at 5:30pm, as part of the Housing California conference and Annette Smith, a consumer featured in the film will also be one of the panelists who speaks after the screening.

California delegates flew into Washington DC early to meet with our elected officials as well as banking and housing regulators.

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On Thursday, as part of NCRC’s Hill Day, CRC Members headed to Capitol Hill to meet with their senators and representatives.  There were a number of topics to discuss, a few of the topics the California delegation discussed included:

  • Payday lending and the upcoming rule-making by the Consumer Financial Protection Bureau
  • The need for more investment in affordable housing in California, especially since the dissolution of redevelopment agencies that funded affordable housing
  • GSE reforms (and ensuring that low-income communities aren’t left behind)
  • A recent proposal for the USPS to offer financial services through a prepaid card
  • Effects of private equity firms and other investors buying up homes
  • The Permanently Protect Tenants at Foreclosure Act of 2013
  • Extension of the Mortgage Debt Forgiveness Act
  • Transparency around foreclosure reporting (to see if mortgage modifications and other assistance is getting to communities equally- a topic recently addressed in a February 2014 GAO report (read more here)
  • Small business lending (especially to minority business owners- read our December report about this issue here)
  • Future mortgage settlements, and concerns about transparency of who is receiving modifications, and whether modifications are getting to communities hit hardest
  • Bank mergers and the impact on rural California- For more on why this is such a pressing matter, see CRC’s “Down in the Valley” 2013 report, or our recent protest against the proposed acquisition of Sterling Bank by Umpqua Bank.
  • Issues faced by widowed homeowners who are facing foreclosure instead of receiving assistance from their bank or mortgage servicer. See this December 2013 article that explains why improvements, monitoring, and enforcement are still needed: “Bank might foreclose on home because late husband isn’t residing there

After meeting with their senators and representatives, attendees were especially excited by the lunchtime speaker: Senator Elizabeth Warren, (D-MA), an outspoken advocate who was paved the way for improvements in policies and programs affecting the same communities and people that NCRC’s members serve.

On Friday afternoon, CRC’s new Executive Director, Paulina Gonzalez spoke at a session: Winning Public Benefits for Your Community, with other advocates including Ernest Hogan, Executive Director of Pittsburgh Reinvestment Group, and Mitria Wilson, from NCRC.

Friday night closed with a bang!  The Rev. Dr. William Barber II was awarded the Senator William Proxmire award, which recognizes the individual whose life’s work exemplifies the spirit and work of Senator Proxmire’s contributions to economic mobility.  Dr. Barber gave a rousing speech about the need for organizations to work together to stop disinvestment in communities.  Senator Proxmire was the author and lead sponsor of the Community Reinvestment Act.

Kevin Stein, Associate Director at CRC, was also confirmed to the National Community Reinvestment Coalition board of directors.

A big thank you to our CRC members who joined the meetings, including:

It was another excellent conference put on by NCRC- See you next year!

80 Organizations Call on Federal Government to Address Private Equity and Investor Landlords

Earlier this week, eighty organizations called on federal regulators to address a flood of cash from private equity groups and other investors.  The advocates are concerned about first-time homebuyers being pushed out of the housing market, long-term tenants being displaced, and communities being changed. The letter below was sent to the Consumer Financial Protection Bureau, the Securities and Exchange Commission, the Federal Housing Finance Agency, the Department of Housing and Urban Development, and the Office of the Comptroller of the Currency.

RE: Need for immediate federal intervention to mitigate the harmful impacts on local communities of investor purchases of REOs and distressed loans, and to stave off the next financial crisis

Dear Comptroller Curry, Chair Yellen, Director Cordray, Director Watt, Chair White, and Secretary Donovan:

This letter is sent on behalf of the undersigned organizations concerning a serious and still growing problem – the creation of another housing bubble, the displacement of tenant and homeowner households, and the destabilization of neighborhoods as a result of failed and negligent federal policies. Such policies and inaction have enabled Wall Street and other cash investors to outbid first time homebuyers, displace tenants, and alter the fabric of local communities.

We are concerned that families and communities will continue to suffer. In Riverside County, one-third of renters are forced to pay more than half of their income in rent, and there is an increase in poor upkeep and a lack of responsiveness by investor landlords to their tenants.[1] In Los Angeles, housing prices are rising but homeownership is declining as first-time homebuyers are priced out of the market.[2] In East Palo Alto, one company controls approximately half of the rental housing stock. And in Oakland, neighborhoods are losing long term residents who are displaced by foreclosures and tenant evictions amidst the frenzy as investors seek to gobble up properties.

At the same time, we are poised to experience another crisis if federal regulators fail to recognize and take corrective action to address red flags that are all too familiar: inflated housing prices, the explosion of securitized housing payments, undue challenges facing homeowners unable to secure the lowest priced loan product for which they qualify, and actions of GSEs that are more focused on profit motive than serving their affordable housing mission.

What follows is a short description of the problems we are seeing, followed by a set of recommendations for policy changes and other assistance to begin to address this crisis.

Making Neighborhoods Worse- Preference for Cash Investors and Bulk Sales of REO and Distressed Mortgages

Banks and other home sellers have demonstrated a preference for cash investors that is locking families out of homeownership. Nationally, cash deals made up 32% to 42.1% of home sales in December 2013.[3]  The failure of banks and investor owners of REOs to properly maintain and repair housing units means that many properties for sale in low income communities and communities of color are too distressed to pass FHA or other property inspections. Bank and investor neglect make these properties unavailable to FHA and other loan borrowers, unfairly closing the market to everybody except cash investors. This has a clear disproportionate impact on protected classes that rely on FHA and other loan products to attain homeownership.

Meanwhile, Fannie Mae and Freddie Mac have engaged in bulk sales of their distressed assets, which can harm neighborhoods without adequate protections in place. The Federal Housing Finance Agency implemented a pilot project in 2012 to address REO disposition, and, in its first transaction, approximately 2500 single-family Fannie Mae REO properties were offered to investors for sale. Many of the properties had tenants. We were, and continue to be, concerned about bidder qualifications and subsequent maintenance by these investor landlords. Furthermore, there has been no transparency regarding the outcome of these deals. And while we applaud the newly introduced Fannie Incentives program for REO purchase by potential owner occupants, we are concerned it will be no more effective than existing “first look” policies which have failed to significantly expand homeownership opportunities for first time homebuyers and others who wish to live in the homes they purchase.

Though the GSEs as conservatees have an obligation to exercise fiscal due diligence, they also have a mission to serve low and moderate income communities, with a particular eye to the needs of vulnerable communities of color.  Mass sell-off of properties to investors does not meet that mission or fair housing obligation.

FHA is also engaging in sell-offs under its Distressed Asset Stabilization Program (DASP). We are concerned that homeowners have been dropped out of the protections of FHA loss mitigation.  Attorneys at HERA have served clients who were not given proper access to required FHA loss mitigation options before being moved into DASP.  By not making sure servicers have engaged in proper loss mitigation, FHA has left its borrowers open to abuses that result in displacement.  As currently designed, FHA bulk sales may, in fact, be more likely to lead to foreclosure, not household or neighborhood stabilization. Though foreclosure sale of these properties is delayed by agreement with HUD for six months following transfer through DASP, specific loss mitigation protocols are not specified by HUD for the subsequent servicer.  Perhaps in response to congressional pressure, FHA has prioritized removal of distressed assets from its portfolio rather than taking the time to make sure servicers are respecting loss mitigation protocols.

Continuing REO bulk sales under current economic conditions ultimately amounts to market interventions that make investor predation a federally‐sponsored event. This repeat offense of looting the most vulnerable communities of our nation dangerously functions to widen race and class inequalities in future years, calling into question the federal commitment to furthering fair housing.  A rationale for bulk sales was to stabilize the market. But now, with prices rising and institutional and smaller investors pouncing on distressed properties and loans, the market no longer needs stabilization. It is our neighborhoods that need stabilization.

The New Housing Bubble- Artificial Inflation of Home Prices

Mortgage servicers and investors have withheld REO inventory from the market to ensure demand exceeds supply and to artificially drive up prices for prospective homebuyers.[4]  The problems with this form of market manipulation are several. Homebuyers who want to live in the property as their primary residence are under water as soon as they sign on the dotted line to buy the home, as the valuation of the home is based on an artificially inflated valuation of the property. This is akin to the pre-crash inflated appraisal problem, with the same effect of putting homeowners into homes that were immediately worth less than what they owed, trapping them until their home value actually rises. Additionally, the withholding of REO inventory has rapidly driven up rental prices to a level that is unaffordable to low and moderate income households and has increased over-crowding. Foreclosed-on homeowners have become renters, increasing demand on the rental side, while renters have been artificially prevented from freeing up rental stock by becoming homeowners due to the withholding of REO stock. In other words, the crush of former homeowners entering the rental market, without renters having the chance to successfully enter the homeownership market, exacerbates the demand for a limited supply of housing for renters. The Bay Area has experienced a supposed rise in equity that is remarkable, to say the least.[5] The artificial increase in rental prices has also come as a result of the preference of servicers/investors for cash and bulk buyers, and new forms of Wall Street financing that facilitate this model, discussed further below.

Wall-Street Backed Investment in Rentals and Rent Securitization: Impacts on Tenants and Communities

A new kind of landlord is buying properties in bulk—hedge funds, private equity firms and other companies that have not been in the rental business for very long, do not have an interest in abiding by their legal duties as landlords, and do not calculate any incentive to being good  landlords. These investor groups have a focus on turning a dollar, but have no connection to the community in which they are investing.[6]  The continued transfer of capital to investors via REO bulk sales now facilitates the creation of a new rental securitization market that benefits the very industry that caused the subprime loan crisis. And the market is growing to an estimated trillion dollars.[7] Though Fitch has indicated that it will review the quality of management of assets in real estate secured pools as part of its ratings assessment, it is not clear what type of assessment it will undertake, what effect it will have on management of properties, or whether it will be more accurate than the AAA ratings given to subprime securities just before the financial collapse.[8]  We expect that it will not include an assessment of the type of market control over rental prices that a very large scale player can exercise when it or a handful of investors own a sufficient portion of the rental market in a given area.

Examples of problems that have arisen already that are of concern to us include reports of hedge funds refusing to accept Section 8 vouchers for renters,[9] the ability of hedge funds to manage the collection of rental payments correctly,[10] and raising rents then moving to quickly evict.[11]

The significant size of the market makes careful government oversight absolutely essential to the safety and stability of communities. “Today more than 13 million households are renting single-family homes and single family rentals outnumber apartments.”[12] Indeed, the REO-to-rental product could grow to a $15 to $20 billion market, according to Moody’s Investors Service.[13] This bold new securitization of housing payments sounds eerily like the securitization of subprime loans which led to the financial crisis. The Federal Reserve Board has raised questions about this new process.[14] Republican Senator Johanns during the Janet Yellen confirmation hearing also raised questions.[15] Congressman Mark Takano recently wrote the House Financial Services Committee, calling for hearings and raising concerns about the securitization of rents and the harmful impacts it is having on communities in the Inland Empire.[16]We join Representative Takano in calling for hearings to examine the dangers and impacts of securitization of rental income.

And yet the problems are not confined only to the largest investor groups. Tenants Together reports receiving hundreds of complaints from California renters regarding problematic investors of various sizes. Investor landlords act without regard to tenant protections found in the federal Protecting Tenants in Foreclosure Act, our state Homeowner Bill of Rights, and local rent control and just cause for eviction ordinances. There is little to no oversight of investor landlords, and little to no enforcement of federal, state and local laws designed to protect renters from the widespread violations which exist today.

Tightened Lending: Not Making Loans Available to Qualified Homebuyers

Homeowners with excellent credit scores are not getting access to properties to buy.  Not only are they frozen out of purchase because of the withholding of REOs, but they are finding lenders unwilling to close on loans they have been approved for.[17] This phenomenon is not new, or a response to new qualified mortgage rules, but appears to represent an on-going reluctance of industry as a whole to make reasonably priced mortgage loans to qualified households. But the new mortgage rules do appear to be providing the industry another excuse for its failure to make credit available to qualified borrowers in low income communities and communities of color.

A further concern is that borrowers who qualify for conventional loans are being steered into costlier FHA loans. While FHA lending is an important source of credit for many borrowers, it should not be a vehicle to charge borrowers more than is appropriate based on their credit profiles.  This is not a theoretical concern; one of the nation’s largest banks, quietly mailed refund checks to customers for improperly steering up to 10,000 of its customers into FHA loans when they may have qualified for lower cost conventional loans.  Customers had to release the Bank from liability in order to cash these checks.[18] Such steering of conventional borrowers into FHA no doubt has a disproportionate impact on borrowers of color who are more likely to be represented among FHA borrowers.

Conversely, there is still a bias against FHA loan products. Home sellers and their real estate professionals should not be permitted to advertise “no FHA” or otherwise fail to consider purchase offers where the borrower is using an FHA loan product.

Conclusion

We respectfully request that your agencies respond immediately and issue any necessary guidance or rules and enforce existing fair housing and other laws so that consumers are better protected in this new landscape as communities struggle to revive themselves from the pain of the foreclosure crisis.

Specifically, we urge that you:

Keep families in their homes.

  • FHA and FHFA must ensure that FHA and GSE loss mitigation and loan modification rules are followed.
  • FHFA must develop more flexible policies to ensure that the GSEs participate fully in all state Hardest Hit Fund program, including by overturning policies that attempt to require “arm’s length transactions,” and instead to allow states to favor nonprofit CDFIs and other programs that seek to keep distressed homeowners in their homes through use of principal reduction modifications or resale to underwater homeowners at current market value.
  • CFPB, FHFA and bank regulators should scrutinize the servicing practices of companies that may have an incentive to improperly foreclosure on borrowers in order to funnel properties to affiliated REO to Rental businesses.

End bulk sales lacking adequate safeguards.

  • Bulk sales of FHA loans should cease unless loan sales clearly carry FHA loss mitigation requirements and give preference to non-profits that have written commitments to keep existing homeowners and tenants in place.
  • FHFA should investigate and provide public data on the impact of the bulk sale program on neighborhoods where bulk sale properties are located. This analysis should consider potential negative fair housing effects of bulk sales programs (e.g. resegregation of communities, locking protected classes out of the homeownership market, etc.).
  • HUD and FHFA should release data to the public on the outcomes of bulk sales programs, the purchasers, the deal terms, and neighborhood effects after these sales.
  • Bank regulators should likewise prevent banks from engaging in bulk sales of loan products and REO properties without regard to neighborhood impacts. Banks should be incentivized to sell any distressed loan pools and REO properties to nonprofit groups that are mission driven to preserve homeownership and promote community stability.

Promote homeownership.

  • FHFA must develop policies for Fannie and Freddie REO properties to prioritize sales to owner occupants or nonprofit organizations.
  • HUD should update the FHA 203K program so that the product can be a viable option that allows borrowers to bid on the large number of properties that require substantial repair.
  • Bank regulators should ensure that bank REO policies that may favor sales to cash investors do not have a disparate impact on protected classes, and instead should favor REO sales to owner occupants.

Protect tenant rights and promote family stability.

  • FHFA, Fannie and Freddie must ensure that the anti-eviction and habitability rights of tenants living in GSE REO properties are respected by all GSE servicers and agents.
  • FHFA, Fannie and Freddie should offer 2-year leases to all tenants living in GSE properties that become REOs.
  • CFPB must fill the regulatory gap that exists and enforce the PTFA as to all bank and investor landlords, and all regulators must ensure the entities they regulate follow federal, state and local tenant protections to slow the tide of foreclosure-related unlawful tenant evictions.  Regulators should require regulated entities to document what happened to the occupants of the properties after foreclosure.
  • All regulators must consider how to protect tenants from the same profit making squeeze that lead to unethical and illegal treatment by so many different actors in the mortgage market, from brokers up through executive staff of banks and investment houses.  To that end, securitization of income stream should be permitted only if there is full transparency and there are reasonable restrictions on rent increases, so that renters are not displaced by investors who are focused on profit. We suggest that a 1% increase in rent per year (if permitted by local rent control law), with a cap at 5% in any 10 year time period be the maximum permitted.  Many of the properties acquired by investors for rental are in low and moderate income communities and communities of color, so unreasonable rent hikes will have a disparate impact on these communities.

Honor fair housing principles.

  • DOJ and HUD must investigate the disparate impact on neighborhoods of various practices, including:
  • Whether protected classes of borrowers and neighborhoods are receiving equal access to loss mitigation and loan modification relief (borrowers of color, widows and orphans, disabled borrowers). A recent GAO report has raised the question of whether Limited English Proficient homeowners have received the same level of service by servicers under the HAMP program.
  • The failure to maintain and market properties so that properties for sale will pass property inspections and allow borrowers to compete with cash investors.
  • Industry players and private sellers discriminating against FHA borrowers by failing to accept FHA offers, which has a clear disparate impact on protected classes.
  • The manipulation of shadow inventory by banks and others that artificially inflates housing prices.
  • When investors in properties have achieved the scale of being major players in the rental market or have achieved such a scale in a given community that there is reason to impose more oversight on their activity.

Promote transparency.

  • SEC and other regulators must ensure there is transparency and appropriate ratings of rental income securitizations to ensure that unsuspecting investors do not unwittingly finance the next financial and housing crisis.

Time is of the essence before we witness further, unnecessary displacement of families and destabilization of communities. After the last crisis, regulators were asked what they had done to prevent the abuses that led to widespread foreclosures, evictions, and community upheaval. The answers provided, and the action taken, were not adequate. We are hopeful that we will not repeat the mistakes of the past.

Should you have any questions about this letter, or wish to discuss these issues further, please contact Maeve Elise Brown of HERA at (510) 271-8443 ext. 307, or Kevin Stein of CRC at (415) 864-3980.

Thank you very much for your attention to these issues and concerns. We have no time to waste in ensuring that neighborhoods are not further destabilized.

Very Truly Yours,

A Community of Friends

Able Works

Action for the Common Good

Advocates for Neighbors, Inc.

Affordable Housing Services, Inc.

Alliance of Californians for Community Empowerment (ACCE)

Asian Inc.

Asian Pacific Policy & Planning Council (A3PCON)

Associated Realtist Property Brokers, Inc., a NAREB local chapter in Oakland, CA

Bet Tzedek Legal Services

California Capital Financial Development Corporation

California Coalition for Rural Housing

California Reinvestment Coalition

California Resources and Training (CARAT)

Causa Justa:Just Cause

Center for Popular Democracy

CHISPA

City Heights Community Development Corporation

Civic Center Barrio Housing Corporation

Community Action Human Resources Agency (Eloy, Arizona)

Community Housing Council of Fresno

Community Housing Development Corporation

Community HousingWorks

Consumer Action

Consumer Credit Counseling Services of Orange County

Consumer Credit Counseling Services of San Francisco

Courage Campaign

East Bay Housing Organizations

East Los Angeles Community Corporation

Fair Housing Law Project, Law Foundation of Silicon Valley

Fair Housing Napa Valley

Fair Housing of Marin

Fair Housing Council of San Diego

Fair Housing Council of the San Fernando Valley

Greenlining Institute

Hacienda CDC (Portland, Oregon)

Hello Housing

Home Defenders League

HomeownershipSF

Housing California

Housing and Economic Rights Advocates

Housing Opportunities of Northern DE, Inc.

Inland Fair Housing and Mediation Board

ISAIAH

Massachusetts Communities Action Network

Multicultural Real Estate Alliance for Urban Change

National Asian American Coalition

National Community Reinvestment Coalition

National Consumer Law Center (on behalf of its low-income clients)

National Housing Law Project

National People’s Action

Neighborhood Housing Services of Greater Cleveland (Ohio)

Neighborhood Housing Services of the Inland Empire

Neighborhood Housing Services of Silicon Valley

NeighborWorks Sacramento Region

New Economy Project

NID-HCA

Northbay Family Homes

Northern Circle Indian Housing Authority

Novadebt

NPHS, Inc.

Orange County Community Housing Corporation

People’s Self Help Housing

PICO National Network

Project LIFT (Houston, Texas)

Public Counsel

Renaissance Entrepreneurship Center

Residential Resources, Inc. (Nashville, Tennessee)

Right to the City Alliance

Rural Communities Assistance Corporation

Sacramento Foreclosure Action Team

Self-Help Enterprises

Shalom Center for T.R.E.E. of Life

Suburban Alternatives Land Trust

Tenants Together

Thai CDC

Unity Council

Vermont Slauson Economic Development Corporation

Ward Economic Development Corporation

Western Center on Law and Poverty


[1] See “Rep. Takano Calls for Congressional Hearings into Rental Backed Securities,” press release and report, January 23, 2014.

[2] See Laura Gottesdiener, “The Empire Strikes Back: How Wall Street Has Turned Housing Into a Dangerous Get-Rich Quick Scheme – Again,” citing a Los Angeles real estate broker noting that from October 2012 to October 2013, home prices rose 20% but the homeownership rate dropped, and that “all of his buyers – every last one of them – were besuited businessmen. And weirder yet, they were all paying in cash.”

[3] See Krista Franks-Brock, “Despite Fewer Foreclosure Starts, Distressed Sales Rose in 2013,” DSNews, January 23, 2014, which indicates 42.1% of sales were cash deals, and December Existing-Home Sales Rise, 2013 Strongest in Seven Years (2014) National Association of Realtors, at http://www.realtor.org/news-releases/2014/01/december-existing-home-sales-rise-2013-strongest-in-seven-years, which indicates 32% were cash deals.

[4] Though inventory is decreasing, the problem remains, and it is not spread evenly across the U.S.  See CoreLogic Reports US Foreclosure Inventory Down 34 Percent Nationally from a year ago, (Jan. 9, 2014), CoreLogic at corelogic.com.  We also note that there is a need for further analysis of the issues, as CoreLogic’s report acknowledges that its calculations are an estimate.

[5] Bay Area leads in underwater mortgage rebounds, (Aug. 30,. 2013), SFGate, at sfgate.com.

[6] See Wall Street Unlocks Profits From Distress With Rental Revolution, (Dec. 2013), Bloomberg at bloomberg.com.

See also, When Wall Street Builds A Rental Empire, (Oct. 25, 2013), Huffington Post, at huffingtonpost.com.   See Also, Private Real Estate Market Continues to Feed Investor Appetite, (Oct. 1, 2013), HousingWire at housingwire.com.   See Also, Who Owns Your Neighborhood- The Role of Investors in Post-Foreclosure Oakland, Urban Strategies Council at urbanstrategies.org.

[8] We note that while Fitch did not give the recent Blackstone deal an AAA rating, Moody’s, Kroll and Morningstar did so, even though the industry does not have a track record.  RPT-Fitch: Too Soon for ‘AAA” Rating on Single-Family Rental Securitizations, (Oct., 2013), Reuters at http://www.reuters.com/article/2013/10/29/fitch-too-soon-for-aaa-on-single-family-idUSFit67461420131029

[11] Charlotte’s Wall Street landlords move quickly to evict, (Nov., 2013), Charlotte Observer at http://www.charlotteobserver.com/2013/11/10/4452995/charlottes-wall-street-landlords.html#.Uul4lj1dXSh).

[12] REO to Rentals, Wall Street Meets Main Street, (Jan. 5, 2013) Mortgage Professional of America, at mpamag.com, citing to National Multifamily Housing Council tabulations of 2012 Current Population Survey, Annual Social and Economic Supplement, U.S. Census Bureau (http://www.census.gov/cps). Updated October 2012. http://www.nmhc.org/Content.cfm?ItemNumber=55508, and to National Apartment Association. http://www.naahq.org/publications/insider/Pages/nr-SingleFamilyRentalsNowExceedMultifamily,CoreLogicReports.aspx

[13] Felipe Ossa, “REO-to-Rental Edges toward Conduit Deals,” National Mortgage News, January 24, 2014.

[15] Janet Yellen Confirmation Hearing (Q&A, Part 2), Bloomberg TV, at minute 26, http://www.bloomberg.com/video/janet-yellen-confirmation-hearing-q-a-part-2-8X~NGlH8QYWMzlJzFv8kMg.html.

[16] Kerri Ann Panchuk, “Are rental bonds driving up the rent?” HousingWire, January 23, 2014.

[17] Lending Standards Tightened in November, (Dec. 1, 2013), HousingWire at housingwire.com.

[18] Wells Fargo sends refunds to some FHA mortgage customers, (Oct. 2012), Los Angeles Times at http://articles.latimes.com/2012/oct/26/business/la-fi-wells-fha-refunds-20121027.