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This Week in Washington

HUD details worst case housing needs

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This Week in Washington
Monday, August 14, 2017

The Department of Housing and Urban Development (HUD) has released a report finding that the number of very poor unsubsidized families struggling to pay their monthly rent and who may also be living in substandard housing increased between 2013 and 2015.

According to the report, “Worst Case Housing Needs,” in 2015, 8.3 million very low-income unassisted families paid more than half their monthly income for rent, lived in severely substandard housing, or both. 

Worst Case Housing Needs are defined as renters with very low incomes (below half the median in their area) who do not receive government housing assistance and who either paid more than half their monthly incomes for rent, lived in severely substandard conditions, or both.

“HUD’s estimate is part of a long-term series of reports measuring the scale of critical housing problems facing very low-income un-assisted renters,” HUD stated in a news release. “Based on data from the 2015 American Housing Survey conducted by the U.S. Census Bureau, the number of these ‘Worst Case Housing Needs’ increased from 2013 yet remain lower than the nearly 8.5 million households reported in 2011.”

The report made the following findings:

  • After a decline in “Worst Case Needs” from 2011 to 2013, the number of these very poor unsubsidized renter households increased between 2013 and 2015 to the second highest number of households recorded – 8.3 million.
  • The number of households with worst case needs have increased by 66 percent since 2001, with historic increases occurring between 2007 and 2011 when the combination of mortgage foreclosures, widespread unemployment and shrinking renter incomes dramatically expanded severe housing problems.
  • Although incomes continued to rise between 2013 and 2015, rents also increased nearly as fast. For the poorest renters, however, growth in rental costs outpaced income gains.
  • Although the production of rental housing is strong, the rapidly growing renter population is putting increasing pressure on the rental market, particularly on the inventory of affordable rental housing.
  • The number of households with worst case needs increased across all racial and ethnic groups. The prevalence of worst case needs during 2015 was 47 percent for Hispanic renters, 45 percent for non-Hispanic White renters, 37 percent for non-Hispanic Black renters and 41 percent for others.
  • Regionally, the South and West were home to most very low-income renters. These renters also had the highest prevalence of worst case needs and the lowest likelihood of receiving housing assistance. By metropolitan type, worst case needs were most prevalent in densely-populated urban suburbs, followed by central cities.

HUD Secretary Ben Carson called for taking a “more holistic look” at how government at every level can work with the private market to ease the pressure felt by un-assisted renters.

“Today’s affordable rental housing crisis requires that we take a more business-like approach on how the public sector can reduce the regulatory barriers so the private markets can produce more housing for more families,” Carson said.

HUD stated in a news release that the Trump administrative is seeking to “unwind the federal government’s role in the private mortgage market and ease the stress on rental markets.”

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12 USC Section 2605 or Section 6 is titled Servicing of mortgage loans and administration of escrow accounts. It pertains to qualified written requests, notices of transfer of servicing and the administration of escrow accounts.
An arrangement that involves a person who is in a position to refer business as part of a real estate settlement service and who has an interest in a settlement services provider.

In the arrangement, the person, who has either an affiliate relationship with or a direct or beneficial ownership interest of more than one percent in a settlement services provider, directly or indirectly refers business to that provider or influences a consumer to select that provider.
An arrangement that involves a person who is in a position to refer business as part of a real estate settlement service and who has an interest in a settlement services provider.

In the arrangement, the person, who has either an affiliate relationship with or a direct or beneficial ownership interest of more than one percent in a settlement services provider, directly or indirectly refers business to that provider or influences a consumer to select that provider.
A mortgage disclosure that lists all estimated charges and fees associated with your loan. In addition to fees and charges, it will list your loan amount, mortgage rate, loan term and estimated monthly payment. Your escrows due at closing for insurance and taxes will also be outlined. Mortgage lenders are legally required to provide a GFE within three days of receiving your application.
A mortgage disclosure that lists all estimated charges and fees associated with your loan. In addition to fees and charges, it will list your loan amount, mortgage rate, loan term and estimated monthly payment. Your escrows due at closing for insurance and taxes will also be outlined. Mortgage lenders are legally required to provide a GFE within three days of receiving your application.
Under RESPA Section 2605(e)(1)(B), a qualified written request is a written correspondence that includes: 1) the name and account of the borrower, or has enough information to allow the servicer identify that information; and 2) a statement of the reasons for the belief of the borrower that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower.

A QWR cannot be written on a payment coupon or other payment medium supplied by the servicer.
Under RESPA Section 2605(e)(1)(B), a qualified written request is a written correspondence that includes: 1) the name and account of the borrower, or has enough information to allow the servicer identify that information; and 2) a statement of the reasons for the belief of the borrower that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower.

A QWR cannot be written on a payment coupon or other payment medium supplied by the servicer.
12 USC Section 2609 or Section 10 is titled Limitation on requirement of advance deposits in escrow accounts. It governs escrow accounts including notifications and statements to borrowers. Section 10 also sets out penalties for those who violate the section.
RESPA Section 3 provides that a thing of value includes any payment, advance, funds, loan, service or other consideration

Regulation X says thing of value includes: monies, things, discounts, salaries, commissions, fees, duplicate payments of a charge, stock, dividends, distributions of partnership profits, franchise royalties, credits representing monies that may be paid at a future date, the opportunity to participate in a money-making program, retained or increased earnings, increased equity in a parent or subsidiary entity, special bank deposits or accounts, special or unusual banking terms, services of all types at special or free rates, sales or rentals at special prices or rates, lease or rental payments based in whole or in part on the amount of business referred, trips and payment of another person’s expenses or reduction in credit against an existing obligation.
A form used by a settlement or closing agent itemizing all charges imposed on a borrower and seller in a real estate transaction. This form represents the closing transaction and provides each party with a complete list of incoming and outgoing funds. RESPA requires the HUD-1 to be used as the standard real estate settlement form in all transactions in the U.S. involving federally related mortgage loans.
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