Housing Affairs Letter

News Capsules From Coast To Coast

Treasury Sells Last Of Bum Loans: The Treasury Department gets rid of the last of the $225 billion of mortgage-backed securities it bought during the height of the financial crisis from October 2008 through December 2009. The total sale netted $250 billion returning a $25 billion profit to taxpayers. The profit could end up being a washout if many of the 30-year fixed-rate mortgages default. Backed by Fannie Mae and Freddie Mac, the default tab would be absorbed by taxpayers through another Treasury account created for their financial support to avoid bankruptcy and separate from the $700 billion Troubled Asset Relief Program bank bailout. The repayment from the MBS sales will go to pay down the nation’s debt unless Congress decides otherwise.

Financial Services
SEC, Citigroup Pact Revived In Appeal Ruling: A decision last year by U.S. District Judge Jed Rankin to reject a $285 million settlement between Citigroup and the Securities & Exchange Commission is rejected in the Federal Court of Appeals for the Second Circuit in New York. Rankin ruled that the SEC allowed the bank to avoid admitting any wrongdoing. Appeals justices rebuke Rankin telling him that the SEC likely will prevail if the dispute is sent to the U.S. Supreme Court. The SEC claims that a required guilt admission would undermine several enforcement actions and grind settlements to a halt.

NeighborWorks' $74 Million For Housing Counseling: State housing finance agencies, housing counseling intermediaries and community-based groups receive a combined $74 million in grants from NeighborWorks America to provide housing counseling through its National Foreclosure Mitigation Counseling Program. The awards are expected to result in the involvement of some 1,300 nonprofit counseling agencies and local NeighborWorks’ groups, providing free counseling and other aid to families at risk of losing their homes to foreclosure. The latest round of funding also will be used to train more than 2,000 new counselors. Info: www.cdpublications.com/docs/7562

Massachusetts Home For Low-Income Seniors:  The Concord Housing Authority begins a $6.7 million renovation of the Peter Bulkeley Terrace, a complex for low-income seniors built in 1912. When completed later this year, the new building will have 23 one-bedroom apartments that will include four handicapped-accessible units. The state Department of Housing and Community Development provided $3 million for the project. Concord received $1 million from the Community Preservation Act and the state Affordable Housing Trust Fund, as well as $1.5 million from the sale of a former elderly housing facility, Belknap House.

Detroit’s Brewster Public Housing Doomed: The sprawling Brewster public housing project near downtown Detroit, MI will be demolished this year. Officially the Frederick Douglass complex, the first federally financed public housing development specifically for black families produced several celebrities, including the Supremes singing group, in the 1950s. The abandoned national historic site will convert to a new housing and commercial development.

Immigrant Housing Law Ban Upheld: The 5th Federal Circuit Court of Appeals upholds a lower court ruling stopping the Dallas, TX suburb of Farmers Branch from barring illegal aliens from seeking housing. The justices rule the city overstepped its authority in 2008 by requiring the city building inspector to check the immigration status of anyone wanting to rent an apartment who isn’t a U.S, citizen. Landlords who knowingly rent to illegals could have their rental licenses revoked. Farmers Branch officials are mulling an appeal to the U.S. Supreme Court.

Section 8 Race Bias Charged: Lancaster, CA officials accuse the Los Angeles County Housing Authority of race-based discrimination by favoring black applicants in awarding Section 8 housing vouchers. Lancaster officials say the complaint is a prelude to the city seeking a class-action lawsuit against the housing agency. Officials contend that while the city is home to fewer than 2% of the county’s population, it has become host to a preponderance of the county’s Section 8 families. Housing authority officials acknowledge that Lancaster’s 2,193 voucher holders represent 10% of its countywide roster and that black families hold 70% of those vouchers.

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