Monday Morning Cup of Coffee: The end of conservatorship, HUD failings and stadium drama

Monday Morning Cup of Coffee takes a look at news across the HousingWire weekend desk, with more coverage to come on bigger issues.

Last Thursday, news broke that the Trump administration has unveiled plans for a massive overhaul of the federal government, including the end of conservatorship for Freddie Mac and Fannie Mae. Mortgage industry professionals will be watching with baited breath until the end of the government-sponsored enterprises comes to pass (or doesn’t).

This proposal is the latest in the Trump administration’s efforts to roll back government involvement in business. Since then, the nation has been mulling over the potential changes, which also include privatizing the U.S. Post Office and combining the Labor and Education Departments.

Some view it as the administration finally taking the training wheels off a stronger, wiser housing economy, while others view the potential changes as throwing Americans back to the wolves of Wall Street.

The Mortgage Bankers Association takes the former position:

“MBA applauds the administration for releasing a proposal to reform Fannie Mae and Freddie Mac which closely tracks much of the work that has been done to date by policymakers on Capitol Hill. It includes many core principles that MBA has long advocated for, such as an explicit government guarantee on MBS only as a catastrophic backstop, allowing for multiple guarantors and ensuring small lender access. MBA is heartened that the proposal recognizes that reform must be part of any plan before either Fannie Mae or Freddie Mac is released from conservatorship,” MBA President and CEO David Stevens said in a statement.

“As with any proposal of this size, the devil is in the details and MBA looks forward to working with the Administration, and Congress to finally tackle this long overdue issue,” he added.

Inglewood, California residents are suing the city in an effort to block the development of the new Clippers arena, according to an article from Amplify. What they want instead is affordable housing, which as you might know is quite scarce in the Los Angeles area.

The residents who filed the suit claim the city is pandering to billionaires instead of caring for its own in the face of rising housing costs.

From the article: 

“Our city has been moving in the wrong direction,” Uplift Inglewood Coalition member Woodrow Curry III said in a press conference Tuesday, according to Amplify.

Curry said the city’s focus on the Forum, a new multi-billion stadium development project for the LA Rams and Chargers and now a new home to the Clippers comes at a steep price for local residents, who fear eventually being priced out of the market.

Residents with Uplift Inglewood, a community advocacy organization, argue that the city violated the California Surplus Land Act, which requires municipalities that plan to sell or give away public land to first seek out proposals for affordable housing construction on the site.

According to the suit, Inglewood will need to add 567 affordable housing units by 2021 to comply with state law and regional housing goals.

A new ProPublica report sheds light on the U.S. Department of Housing and Urban Development’s failure to protect residents in public housing complexes from lead poisoning.

According to the report, which cites reports by the HUD Office of Inspector General and the U.S. Government Accountability Office, hundreds of thousands of residents are at risk of exposure to lead paint and lead poisoning. The reports point out a shoddy reporting system and a lack of communication between the local housing authorities and the HUD as the main factors contributing to this issue.

According to the article, of the 7,000 public housing developments nationwide, lead paint inspections were submitted for fewer than half of them. Only about 2,700 inspections were filed as of February, according to the report. The HUD inspector general was unable to account for the other 4,000 units, but it is important to note that complexes built after 1978 are exempt.

The inspector general, HUD’s internal watchdog, found that HUD failed to ensure that the nation’s 3,800 public housing authorities properly identified and eliminated lead hazards, the article reports.

Earlier in June, HUD announced an agreement with New York City to improve its hazardous health conditions in affordable housing.

Though New York is certainly one of the worst offenders, this appears to be a growing problem across the nation.

From the article:

Emily Benfer, a distinguished visiting scholar and senior fellow at Yale Law School’s Solomon Center for Health Law Policy, said the reports from the GAO and the inspector general should be a “call to action.”

“The reports are very consistent with what we’ve seen on the ground between the Alexander County Housing Authority, the East Chicago Housing Authority and the New York City Housing Authority,” she said. “This indicates there could be a number of housing authorities that have falsely certified, and that HUD has not investigated.”

HUD has responded to these reports saying it agrees with many of the reports’ recommendations for improving lead monitoring.

The banking industry is in test season, stress test season to be exact. So far, it is going well. On Thursday, the Federal Reserve announced that all 35 of the biggest banks in the United States passed the most stringent Federal Reserve stress test scenario to date, the “severely adverse scenario.”

This is good news for the banking industry and could set the big banks up to funnel more of their extra cash into dividends or investments, but this was just the first of two tests in the annual Comprehensive Capital Analysis and Review. The second, more difficult, test will take place this Thursday, and then the Fed will release the full results of exam season.

Stay tuned, and buckle up for a bumpy ride.

Article source: https://www.housingwire.com/blogs/1-rewired/post/43764-monday-morning-cup-of-coffee-the-end-of-conservatorship-hud-failings-and-stadium-drama

Leave a Reply

WP Facebook Auto Publish Powered By : XYZScripts.com
Bunk Beds