Legal/Legislative Updates

EQUAL TREATMENT. Congress is considering and likely to pass legislation that would require FEMA to provide the same coverage for condominiums and co-operatives it offers to owners of single-family detached homes. Under current FEMA rules, condominiums and co-ops that suffer storm damage are eligible for loans, but not for grants, because they are defined as “business associations” and not as residences.   TAKE THAT! The Federal Housing Finance Association, which oversees Fannie Mae and Freddie [Read More...]

COVER UP. Fannie Mae and Freddie Mac are disguising billions of dollars in losses, delaying a day of financial reckoning that the Inspector General for the Federal Housing Finance Agency says they should confront now. NOT MAKING IT EASY. Speaking (more positively) of the GSEs, Fannie and Freddie both reported their seventh consecutive profitable quarters, posting second quarter gains of $10.1 billion and $5 billion, respectively. Fannie will pay another $10.2 billion in dividends to [Read More...]

SHAKING IT UP. President Obama is proposing the equivalent of a neutron bomb strategy for revamping the housing finance system ─ eliminate Fannie Mae and Freddie Mac but leave in place (with some federal support) the 30-year mortgage the quasi-governmental entities have made possible. RIGHTING A WRONG. Lawmakers from New York and New Jersey are sponsoring legislation that would alter a long-standing FEMA policy that denies flood insurance coverage to condominiums and cooperatives because they [Read More...]

GSE REFORM. The bipartisan proposal Sens. Bob Corker (R-TN) and Mark Warner (D-VA) have crafted for reforming the mortgage finance market continues to win plaudits from fellow lawmakers, regulators and industry executive. A separate proposal that Rep. Jeb Hensarling (R-TX), chairman of the House Financial Services Committee, has introduced in that body, is also attracting attention, much of it negative, from housing industry executives and consumers. Notwithstanding the upcoming debate, which is likely to be [Read More...]

NEVER MIND. Remember Federal Reserve Chairman Ben Bernanke’s pretty clear statement that the Fed could begin ‘tapering’ its economic stimulus program by the end of this year? Well, ‘fogetaboutit!” He said recently that “highly accommodative monetary policy for the foreseeable future is what’s needed in the U.S. economy.” Speaking to a group of economists, Bernanke stated flatly, “There will not be an automatic increase in interest rate when unemployment hits 6.5%.” Given the weakness of [Read More...]

EMINENT AGAIN.  The movement to use eminent domain as a strategy for dealing with the foreclosure mess, which seemed to have faded, has resurfaced. The Los Angeles Times reports that federal programs have helped only 10 percent of underwater homeowners and notes favorably that “a more drastic approach [eminent domain] is gaining support. “ SENIOR SLUMP.   The average occupancy rate for senior housing was unchanged in the first quarter, the first time in three years [Read More...]

OWNERS COMMUNITY ASSOCIATIONS This may surprise anyone who views condominiums through the prism created by national news reports, but most residents of condominium communities do not think they are evil personified. In fact, a majority ─ and a large majority, at that ─ are reasonably happy with their common interest ownership experience. Several surveys have reached that conclusion, including the most recent one, commissioned by the Foundation for Community Association Research and conducted by Zogby International. The [Read More...]

GETTING THE SCOOP ON POOP It is an annoying, disgusting and seemingly inevitable by-product of pet-friendly policies in condominium and apartment communities: Some residents don’t clean up after their dogs. Fining offending residents is the obvious response, but finding them after-the-fact can be a problem. Enter PoopPrints, a Knoxville, Tenn. pet waste management company, with a thoroughly modern solution. As the company’s name suggests, its strategy involves identifying the dogs responsible for leaving the deposits [Read More...]

HOUSING RECOVERY CATCHING ON The Housing recovery appears to be contagious, spreading gradually but steadily to more areas of the country. The National Association of Home Builders (NAHB) reported 259 metropolitan areas on its February “improving markets” index, up from 242 in January and the sixth consecutive month in which the index has gained ground. When the trade group began compiling the index in September of 2011, only 12 metropolitan areas made the list. All [Read More...]

EXCLUDE THAT As damaging storms become more frequent, insurers are looking for ways to limit the claims related to them. The latest idea: A new endorsement in both commercial and residential insurance policies that would exclude coverage for cosmetic damage to roofs caused by wind and hail. The insurance industry organizations that standardize forms for property/casualty insurers have drafted endorsements and are in the process of seeking state approval for them. The endorsements would preclude [Read More...]

NOT IMMINENT San Bernardino Country, which attracted national attention last year when lawmakers said they were considering using eminent domain as a tool to deal with underwater mortgages have attracted attention anew with their decision not to pursue that plan. Members of the Joint Powers Authority ― a commission appointed to consider the idea on behalf of the county and two of its cities ― unanimously rejected the proposal, which called for seizing delinquent loans [Read More...]

STILL BUILDING Although surveys show that young adults, sidelined by the economic downturn and rattled by the housing market collapse, appear to be regaining their appetite for home ownership, builders are not curbing their appetite for constructing multi-family housing. Increasing demand for apartments has pushed rents and property values higher, while low interest rates have created a favorable construction climate. As a result, multifamily construction activity has been increasing steadily for the past two years. [Read More...]