April 2016 H OUSING N EWS R EPORT
NEWS BRIEFS
FHFA: Principal Reduction Coming The Federal Housing Finance Agency (FHFA), the federal agency that regulates of mortgage finance companies Freddie Mac and Fannie Mae, said it will offer principal reduction to certain seriously delinquent borrowers that meet certain eligibility criteria. “This plan will no doubt be viewed by some as too small and too late and viewed by others as too large and unnecessary,” said FHFA director Melvin L. Watt in a statement. Last month, Watt, speaking before the Women in Housing and Finance group in Washington, D.C, on March 22, 2016, hinted that the agency was considering allowing principal reductions on Freddie and Fannie-backed mortgages. The new policy shift marks the biggest step Freddie and Fannie will take to reduce mortgage balances for struggling homeowners since the housing crisis erupted in 2008. Approximately 50,000 borrowers will be eligible to have their mortgage balance cut under a plan being considered by the federal regulator of Freddie and Fannie. The modification will be available to owner-occupant borrowers who are 90 days or more delinquent as of March 1, whose mortgages have an outstanding unpaid principal balance of $250,000 or less and whose mark-to-market loan- to-value ratios exceed 115 percent. Fannie and Freddie — which don’t make mortgages but rather buys them from lenders and wrap them into guaranteed securities — would forgive mortgage principal where they determine the companies would lose money in a foreclosure.
Rent to Criminals — Or Else Landlords beware: there’s a new housing sheriff in town and he wants you to rent your property to tenants who are murderers, rapists, thieves — and other criminals. “The fact that you were arrested shouldn’t keep you from getting a job, and it shouldn’t keep you from renting a home,” Julian Castro, Housing and Urban Development Secretary, told themeeting of the National Low Income Housing Coalition on April 4. “Today, I am proud to announce new guidance that makes it clear HUD will use the full force of the law to protect the fair housing rights of folks who’ve been arrested or who are returning to their communities after serving time in jail or prison.” Castro issued new guidelines, warning landlords that: “While having a criminal record is not a protected characteristic under the Fair Housing Act, criminal history-based restrictions on housing opportunities violate the Act if, without justification, their burden falls more often on renters or other housing market participants of one race or national origin over another (i.e., discriminatory effects liability).” So private landlords who have blanket bans on renting to criminals may now be in violation of the Fair Housing Act and could be sued and face penalties for discrimination.
SOURCES: HUD, HUD Guidelines
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SOURCE: FHFA
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