Archive
New From the GAO
New GAO Report and Testimonies
Source: Government Accountability Office
+ Report
1. Mine Safety: Reports and Key Studies Support the Scientific Conclusions Underlying the Proposed Exposure Limit for Respirable Coal Mine Dust. GAO-12-832R, August 17.
http://www.gao.gov/products/GAO-12-832R
+ Testimony
1. L.A. Courthouse: Initial Project Justification Is Outdated and Flawed, by Mark L. Goldstein, director, physical infrastructure issues, before the Subcommittee on Economic Development, Public Buildings, and Emergency Management, House Committee on Transportation and Infrastructure. GAO-12-968T, August 17.
http://www.gao.gov/products/GAO-12-968T
Highlights – http://www.gao.gov/assets/600/593800.pdf
FinCEN Reminds Mortgage Companies and Brokers of New Regulatory Requirements
FinCEN Reminds Mortgage Companies and Brokers of New Regulatory Requirements
Source: Financial Crimes Enforcement Network
Financial Crimes Enforcement Network (FinCEN) Director James H. Freis, Jr. today announced the issuance of an advisory for non-bank residential mortgage lenders and originators (RMLOs) to help them identify and report suspicious activity related to potential mortgage fraud. In his remarks before the American Association of Residential Mortgage Regulators’ (AARMR’s) 23rd Annual Regulatory Conference, he also discussed FinCEN’s new anti-money laundering (AML) requirements for RMLOs. As of Monday, Aug. 13, RMLOs must comply with FinCEN’s final rule requiring the establishment of AML programs and the filing of suspicious activity reports (SARs).
…
FinCEN’s Web site is a key source of information available to both regulators and RMLOs. FinCEN has created a page under the "Financial Institutions" link specifically for mortgage companies and brokers, which contains a variety of publications to assist RMLOs with compliance. Earlier this week, FinCEN issued a Notice to remind RMLOs of their compliance obligations under FinCEN’s regulations. In addition, FinCEN issued an administrative ruling, providing that RMLOs who are also subsidiaries of financial institutions that require the RMLOs to have AML programs and file SARs and are examined by a Federal functional regulator are deemed to comply with FinCEN’s regulations. FinCEN has also made available a Webinar for RMLOs that contains useful references, red flags for potential money laundering, and additional guidance based on inquiries that have been received through FinCEN’s Regulatory Helpline.
Weathering the Recession: The Financial Crisis and Family Wealth Changes in Low-Income Neighborhoods
Weathering the Recession: The Financial Crisis and Family Wealth Changes in Low-Income Neighborhoods
Source: Urban Institute
This report looks closely at what happened to assets, debts and home equity for families living in low-income neighborhoods during the Great Recession, using data from the longitudinal Making Connections Survey. We find that both average savings and debt amounts increased between 2005/06 and 2008/09, but asset and debt levels remained lower for vulnerable families, and low-income families disproportionally lost equity during the crisis. Yet even in 2008/09, home equity was substantial and an important component of wealth ($66,000, more than four times as much as families had in savings) for the nearly half of families who were homeowners.
Hurricane Andrew and Insurance: The Enduring Impact of an Historic Storm
Hurricane Andrew and Insurance: The Enduring Impact of an Historic Storm
Source: Insurance Information Institute
Hurricane Andrew struck Florida on August 24, 1992, and the tumult it created for the property insurance market in the state has not ceased in the 20 years since, according to an analysis by the Insurance Information Institute (.I.I.). The I.I.I. white paper outlines six key insurance market changes attributed to the costliest Florida disaster. Insurance claims payouts for Andrew totaled $15.5 billion at the time ($25 billion in 2011 dollars), and it remains the second costliest U.S. natural disaster, after Hurricane Katrina, which hit in 2005. Hurricane Andrew forced individuals, insurers, legislators, insurance regulators and state governments to come to grips with the necessity of preparing both financially and physically for unprecedented natural disaster.
Own-Rent Analysis Reveals Factors Influencing Consumers’ Decision to Buy Versus Rent a Home
Own-Rent Analysis Reveals Factors Influencing Consumers’ Decision to Buy Versus Rent a Home
SOurce: Fannie Mae
The Fannie Mae August 2012 Own-Rent Research Brief investigates the factors that drive Americans’ intentions to own or rent their home. The study provides insights into Americans’ homeownership preferences and raises possible implications for both housing policy makers and industry players in their efforts to manage housing-related risks and to encourage consumers to make sustainable housing choices to ensure a well-functioning housing marketplace. Findings suggest:
- Americans are affected by a mix of demographic and attitudinal drivers in making the own-rent decision.
- It is possible that many of these drivers, especially attitudinal drivers, act as automatic or unconscious biases that lead consumers to their respective housing choices.
- Resources to help consumers to more deliberately understand and balance these drivers may allow them to make better, more sustainable housing choices.
- Exposure to mortgage default, perceived home value appreciation/depreciation, and self-reported underwater status are not significant factors in the models in predicting individuals’ intentions to own a home for their next move.
- These results suggest that Americans’ aspirations to own a home are strong even facing the dramatic challenges in the housing market over the past few years.
New From the GAO
New GAO Report and Testimony
Source: Government Accountability Office
+ Report
1. Drug Control: Initial Review of the National Strategy and Drug Abuse Prevention and Treatment Programs. GAO-12-744R, July 6.
http://www.gao.gov/products/GAO-12-744R
+ Testimony
1. Federal Real Property: Improved Data and a National Strategy Needed to Better Manage Excess and Underutilized Property, by David Wise, director, physical infrastructure, before the Subcommittee on Economic Development, Public Buildings and Emergency Management, House Committee on Transportation and Infrastructure. GAO-12-958T, August 6.
http://www.gao.gov/products/GAO-12-958T
An Evaluation of Privatized Military Family Housing: Lessons Learned
An Evaluation of Privatized Military Family Housing: Lessons Learned (PDF)
Source: Naval Postgraduate School
An analysis of previous efforts to privative military housing and of the current privatization initiative revealed that long-term success requires flexibility to manage the private developers’ and U.S. Government’s exposure to various types of risks. The objective of this report is to identify how the Department of Defense has applied the lessons of early privatization efforts to manage risks and to guarantee success of the current Military Housing Privatization Initiative. Reviews of government reports, surveys, presentations, journal articles, and Congressional testimony were used to trace the progression of these privatization programs in order to highlight key lessons learned and provide a holistic perspective of the evolution of the privatization of military housing.
New From the GAO
New GAO Reports and Testimony
Source: Government Accountability Office
+ Reports
1. Federal Buildings Fund: Improved Transparency and Long-term Plan Needed to Clarify Capital Funding Priorities. GAO-12-646, July 12.
http://www.gao.gov/products/GAO-12-646
Highlights – http://www.gao.gov/assets/600/592378.pdf
2. Medicaid: Providers in Three States with Unpaid Federal Taxes Received Over $6 Billion in Medicaid Reimbursements. GAO-12-857, July 27.
http://www.gao.gov/products/GAO-12-857
Highlights – http://www.gao.gov/assets/600/593096.pdf
3. Ownership by Minority, Female, and Disadvantaged Firms in the Pipeline Industry. GAO-12-896R, August 2.
http://www.gao.gov/products/GAO-12-896R
4. Federal Fleets: Overall Increase in Number of Vehicles Masks That Some Agencies Decreased Their Fleets. GAO-12-780, August 2.
http://www.gao.gov/products/GAO-12-780
Highlights – http://www.gao.gov/assets/600/593248.pdf
5. Cancellation of the Army’s Autonomous Navigation System. GAO-12-851R, August 2.
http://www.gao.gov/products/GAO-12-851R
6. Iraq and Afghanistan: State and DOD Should Ensure Interagency Acquisitions Are Effectively Managed and Comply with Fiscal Law. GAO-12-750, August 2.
http://www.gao.gov/products/GAO-12-750
Highlights – http://www.gao.gov/assets/600/593262.pdf
7. Secure Communities: Criminal Alien Removals Increased, but Technology Planning Improvements Needed. GAO-12-708, July 13.
http://www.gao.gov/products/GAO-12-708
Highlights – http://www.gao.gov/assets/600/592416.pdf
+ Testimony
1. Service-Disabled Veteran-Owned Small Business Program: Vulnerability to Fraud and Abuse Remains, by Richard J. Hillman, managing director, forensic audits and investigative service, before the Subcommittees on Economic Opportunity and Oversight and Investigations, House Committee on Veterans’ Affairs. GAO-12-967T, August 2.
http://www.gao.gov/products/GAO-12-967T
The Rise of Residential Segregation by Income
The Rise of Residential Segregation by Income
Source: Pew Social & Demographic Trends
Residential segregation by income has increased during the past three decades across the United States and in 27 of the nation’s 30 largest major metropolitan areas, according to a new analysis of census tract and household income data by the Pew Research Center.
The analysis finds that 28% of lower-income households in 2010 were located in a majority lower-income census tract, up from 23% in 1980, and that 18% of upper- income households were located in a majority upper-income census tract, up from 9% in 1980.3
These increases are related to the long-term rise in income inequality, which has led to a shrinkage in the share of neighborhoods across the United States that are predominantly middle class or mixed income—to 76% in 2010, down from 85% in 1980—and a rise in the shares that are majority lower income (18% in 2010, up from 12% in 1980) and majority upper income (6% in 2010, up from 3% in 1980).
Despite the long-term rise in residential segregation by income, it remains less pervasive than residential segregation by race, even though black-white segregation has been falling for several decades.
Shifting Confidence in Homeownership: The Great Recession
Shifting Confidence in Homeownership: The Great Recession
Source: Federal Reserve Bank of Boston
The authors study the responses to several questions related to real estate that were added to the Michigan Survey of Consumers in July and August 2011. In particular, they asked about attitudes toward renting versus buying a home, about commuting, and about how much to spend on a mortgage. By matching the results to data (at the ZIP-code level) about relative house price declines during the recent crisis, they can study the relationship between the U.S. housing crash and the attitudes of individual consumers. They find that younger respondents are relatively less confident about homeownership after larger price declines, while older respondents are relatively more confident. In both cases, this is observed only for those with direct experience of loss (via themselves or someone close) during the crash. They find no effect on attitudes towards commuting, and they find that people who live in the high-decline areas believe it is appropriate to spend more on a mortgage.
Own-to-Rent Transitions and Changes in Housing Equity for Older Americans,’ and ‘Health Plan Choice: Findings from the 2011 EBRI/MGA Consumer Engagement in Health Care Survey
Own-to-Rent Transitions and Changes in Housing Equity for Older Americans,’ and ‘Health Plan Choice: Findings from the 2011 EBRI/MGA Consumer Engagement in Health Care Survey
Source: Employee Benefit Research Institute
Own-to-Rent Transitions and Changes in Housing Equity for Older Americans
- Owning is the most common housing arrangement for older Americans: At age 65, more than 8 in 10 Americans report living in houses they own.
- The transition rate from home ownership to renting is 3 percent at age 50, bottoming out at 1.6 percent at age 65. However, these transition rates increase after age 85, reaching a peak of 4.7 percent at age 90.
- Death of a spouse is the most common factor associated with a transition from owning to renting. The next common factor is a drop in household income.
- Median household income for those between ages 50 and 64 who continue to own their home is $79,758, while those who shift from owning to renting in that same age group have a median household income of $53,520.
- Ownership rates are very different for couples and singles, but don’t change a lot across owners’ ages. The home ownership rate hovers around 90 percent for couples and 60 percent for singles.
Health Plan Choice: Findings from the 2011 EBRI/MGA Consumer Engagement in Health Care Survey
- Nearly one-half (47 percent) of covered workers had a choice of health plans in 2011.
- Forty-two percent of large firms offered two or more choices of health plans, compared with 15 percent of smaller firms. Half of consumer-driven health plan enrollees reported that they chose that offering because of the lower premium, while 45 percent reported that the opportunity to save money in the account for future years was a primary reason.
- Among individuals with traditional health coverage, 39 percent cited the good network of providers and 32 percent reported the low out-of-pocket costs as the main reasons for enrolling in the plan.
Is Inclusionary Zoning Inclusionary? A Guide for Practitioners
Is Inclusionary Zoning Inclusionary? A Guide for Practitioners
Inclusionary zoning (IZ) has become an increasingly popular tool for providing affordable housing in an economically integrative manner. IZ policies typically require developers to set aside a proportion of units in market-rate residential developments to be made affordable for lower-income households in exchange for development rights or zoning variances. These policies are considered “inclusionary” because they are intended to allow lower- and moderate-income households to buy or rent property in middle- and upper-income communities. This report examines 11 IZ programs across the United States to determine the extent to which the policies serve lower-income families and provide IZ recipients with access to low-poverty neighborhoods and residentially assign them to high-performing schools, thereby promoting the academic achievement and educational attainment of their children. It also considers ways in which IZ policies vary and how different design features might affect the success of the programs in promoting affordable housing and social inclusion for IZ recipients. Finally, it identifies key program-design aspects that shape the potential to meet the goals of providing affordable housing to low-income households and promoting social inclusion for IZ recipients.
Nightmare on Main Street: Older Americans and the Mortgage Market Crisis
Nightmare on Main Street: Older Americans and the Mortgage Market Crisis
Source: AARP
This is the first study to measure the progression of the mortgage crisis and its effect on people age 50 and older. Based on an analysis of nationwide loan-level data for the years 2007 to 2011, this study examines loan performance based on borrower age, loan type, and borrower demographics.
Despite the perception that older Americans are more housing secure than younger people, millions of older Americans are carrying more mortgage debt than ever before, and more than three million are at risk of losing their homes. As of December 2011, approximately 3.5 million loans of people age 50+ were underwater—meaning homeowners owe more than their home is worth, so they have no equity; 600,000 loans of people age 50+ were in foreclosure, and another 625,000 loans were 90 or more days delinquent. From 2007 to 2011, more than 1.5 million older Americans lost their homes as a result of the mortgage crisis.
To date, public policy programs designed to stem the progression of the foreclosure crisis have been inadequate, and programs that focus on the unique needs of older Americans are needed.
What Explains Variation in Title Charges? A Study of Five Large Markets
What Explains Variation in Title Charges? A Study of Five Large Markets
Source: Urban Institute
Title charges include title insurance premiums and charges for settling a loan. Title charges vary considerably from a median of $1,971 in California to $625 in North Dakota. This report analyzes variation in settlement costs using data from over 3,000 FHA-insured, 30-year fixed-rate home purchase loans in five metropolitan areas. Even after controlling for metropolitan area, various characteristics of homebuyers, houses, neighborhoods, and settlement agencies, more than one-half of the variation in title charges remains unexplained. Substantial differences in title charges between settlement agents within a market suggest that consumers would benefit by shopping for settlement services.
Critical Housing Finance Challenges for Policymakers
Critical Housing Finance Challenges for Policymakers
Source: Joint Center for Housing Studies at Harvard University
This paper focuses on four critical policy challenges in the area of housing finance that were developed with input from the What Works Collaborative during the Fall of 2011. The four issues that are the focus of this paper are
- Mortgage lending to underserved groups;
- Mortgage financing for the evolving rental housing market;
- Mortgage lending in distressed neighborhoods; and
- The role of mortgage finance in supporting investments in sustainable housing.
The paper is divided into four separate sections devoted to each of these topics. For each policy challenge, the paper addresses the following questions: Why is this a critical issue for policymakers? What barriers and challenges may require public-sector involvement to address? What are key policy levers or private efforts that both research and future policy interventions may be built around? What are the key issues where research is needed to inform policymaking in this area, and what are examples of research projects on each issue?
Dynamics of Economic Well-Being: Participation in Government Programs, 2004 to 2007 and 2009 — Who Gets Assistance?
Dynamics of Economic Well-Being: Participation in Government Programs, 2004 to 2007 and 2009 — Who Gets Assistance?
Source: U.S. Census Bureau
Almost 45 million people, or 18.6 percent of the U.S. civilian noninstitutionalized population, participated in one or more major means-tested assistance programs each month in 2009. These statistics come from a new report that examines the participation and characteristics of people who received benefits from any of the major means-tested assistance programs including: Temporary Assistance for Needy Families, General Assistance, Supplemental Nutrition Assistance Program/Food Stamp, Supplemental Security Income, Medicaid and Housing Assistance. The statistics come from the 2004 and 2008 Panels of the Survey of Income and Program Participation and cover calendar years 2004 through 2007 and 2009. Internet address: <http://www.census.gov/prod/2012pubs/p70-130.pdf>
International Sales Continue to Climb in U.S. Market, Realtors® Report
International Sales Continue to Climb in U.S. Market, Realtors® Report
Source: National Association of Realtors®
Due to low prices and the relative weakness of the dollar, international buyers continue to identify the U.S. as a desirable place to own property and make a profitable investment.
According to the National Association of Realtors® 2012 Profile of International Home Buying Activity, total residential international sales in the U.S. for the past year ending March 2012 equaled $82.5 billion, up from $66.4 billion in 2011. Total international sales were evenly split between non-resident foreigners and recent immigrants.
FinCEN Assesses Suspicious Activity Involving Title and Escrow Companies
FinCEN Assesses Suspicious Activity Involving Title and Escrow Companies
Source: Financial Crimes Enforcement Network
Pressing forward in its efforts to address a wide range of criminal risks, particularly in the residential real estate market, the Financial Crimes Enforcement Network (FinCEN) today released its first targeted study analyzing reports indicating suspicious activities involving the Real Estate Title and Escrow Industry.
The study identified thousands of instances where financial institutions, particularly banks and Money Services Businesses (MSBs), filed suspicious activity reports (SARs) involving title and escrow companies, often in connection with mortgage fraud. FinCEN does not currently require title and escrow companies themselves to file SARs, but many have reported suspicious activities by annotating the Report of Cash Payments Over $10,000 Received in a Trade or Business (FinCEN Form 8300) that they are required to file.
"This first baseline study will help inform our ongoing efforts to identify regulatory gaps that criminals look to take advantage of," said FinCEN Director James H. Freis, Jr. "We can now more efficiently and effectively address those gaps and mitigate those risks through public awareness, support to law enforcement, or appropriate regulatory action."
+ Full Report (PDF)
Residual Market Property Plans: From Markets of Last Resort to Markets of First Choice – 2012
Residual Market Property Plans: From Markets of Last Resort to Markets of First Choice – 2012
Source: Insurance Information Institute
This report by Robert Hartwig, president of the Insurance Information Institute, and Claire Wilkinson analyzes the changes taking place within the residual property market, which consists of a myriad of different programs in place across the United States to provide insurance to high-risk policyholders who may have difficulty obtaining coverage from the standard market. So called residual, shared or involuntary market programs make basic insurance coverage more readily available. The report notes the still-burgeoning growth of the market, which now has a massive total exposure to loss that is approaching $900 billion. Despite attempts by certain states to reduce the size of their plans the fact of the matter is that this market of last resort remains the market of first choice for many vulnerable, high-risk coastal properties. The report focuses on the plans in Alabama, Florida, Louisiana, Massachusetts, Mississippi, New York, North and South Carolina, and Texas.
How Countrywide Used Its VIP Loan Program to Influence Washington Policymakers
How Countrywide Used Its VIP Loan Program to Influence Washington Policymakers
Source: U.S. House of Representatives (Oversight and Government Reform Committee)
House Oversight and Government Reform Committee Chairman Darrell Issa today released a new report following the Committee’s three year investigation into Countrywide Financial’s “Friends of Angelo” and “VIP Program” that issued discounted mortgages to influential Washington policy figures. The report finds that Countrywide used its VIP Program to aid its lobbying efforts as well as to strengthen its relationship with taxpayer backed Fannie Mae. Countrywide partnered with Fannie Mae in a strategic business alliance that also included joint lobbying efforts.
