California's Contra-Costa Times investigated the federal program designed to aid renters in the current recession. While homeowners can stay in their homes for months without making mortgage payments and the Federal Government bends over backwards to help them residential renters are still finding it difficult to qualify for Federal aid.
Here's the Contra-Costa Times report:
"A federal stimulus program aimed at preventing tenants from being evicted because of the recession is arousing lots of interest but few are finding they qualify for aid.
The lead agency in distributing $3 million earmarked for Contra Costa has received 574 inquiries and 87 applications but has approved 16.
Most people who have expressed interest either earn too much or too little, said Jennifer Baha, director of program services with Shelter, Inc., in Martinez. The federal guidelines are clear: Applicants must be at or below 50 percent of the area median income but also must have an income of at least 120 percent of their rent.
"Many people are contacting us because they are desperate," Baha said. "But this isn't supposed to be long-term. You have to have a reasonable plan to get yourself out of your situation. You can't be unemployed and in an industry that is not currently hiring."
A Pittsburg medical billing clerk was one of the lucky 16. Arnold Burton, 49, lost his job in June, fell behind on his house payments and the bank foreclosed.
The grant program gave him $1,000 toward his December rent. Shelter, Inc. sent the money directly to the landlord. Burton said he used the money that would have gone to rent to pay PG&E bills, but he looked forward to covering his $1,062 rent in January.
Burton said he wants to stay in medical billing and plans to enroll at Los Medanos College to update his skills.
"I wantto get certification as a medical assistant and work for an office, hospital or a private practice," he said.
One unsuccessful applicant said he was told he was denied because he didn't have proof of previous income. Richmond resident Richard Langford, 50, has worked as a carpenter, handyman and landscaper and usually gets paid in cash. His initial appeal was rejected and he has filed a second.
Langford says he's behind on his $600 rent because work has fallen off this winter.
"I started getting behind four months ago and have never recovered," he said. "My mother has helped me with gifts. People are having a rough time of it."
Baja is aware of such problems.
"This program is not designed for everybody," he said. "HUD makes it clear that they have to be directly impacted by the economy. Some people need to realize that housing in California is too expensive."
Tuesday, December 29, 2009
Monday, December 14, 2009
U.S. Apartment Vacancy Rate Update
The U.S. apartment vacancy rate will remain weak according to this report from Reuters. This is good news for residential renters.
CBRE-EA, the market forecasting arm of real estate services company CB Richard Ellis, expects the U.S. apartment vacancy rate to fall to 7 percent in 2010, down from 7.3 percent in the third quarter and 7.4 percent in the second quarter 2009.
"Overall, the U.S. apartment market remains in uncharted waters with vacancies at high levels historically, amid continued job losses and a glut of housing for rent and for sale," Gleb Nechayev, CBRE-EA senior economist said. "While the economic outlook does call for job growth to resume next year, vacancy rates will remain at historically elevated levels in most markets."
The long-term vacancy rate for professionally managed U.S. apartments has been about 5 percent.
"We're a long way from that. It will be at least a couple of years before we move closely to a more normal level," Nechayev said.
The slump in demand has severely damaged the sector, which until last month had the highest delinquency rate among U.S. property types.
Apartment loan delinquencies rose to 7.4 percent in November, second only to hotels, which reached 7.8 percent, according to ratings agency Moody's Investors Services.
Apartments and hotels suffer downturns first, because of their short-term leases, but traditionally lead a rebound when an economy improves.
A glut of single-family homes and condominiums on the market has been a double-edged sword for apartment landlords, Nechayev said.
Lower home ownership and the reduced demand for houses has forced people to become renters, Nechayev said.
New households formed from immigration, divorce and graduation has helped counter the damaging effect from job losses.
"Without the growth in overall rental demand, the effect of job losses on apartments would be much more severe than it has been so far," Nechayev said.
But the housing supply will continue to compete with and mitigate demand for apartments, which actually has risen over the past two quarters he said.
CBRE-EA forecasts effective rents will drop to $1,147 in 2010, down 0.8 percent from the third quarter 2009.
Markets such Austin, Baltimore, Boston, Chicago, Denver, Los Angeles, Seattle, San Diego, and Washington D.C have reported more occupied than vacant apartments.
Landlords in those cities offered rent concessions to lure tenants or keep existing ones, Nechayev said.
CBRE-EA does not expect rents nationally to start growing in earnest until the second half of 2011. The average U.S. apartment rent has been falling for the past year, down to $1,156 in the third quarter.
"We still expect some weakness in rents and occupancy next year," Nechayev said. "All in all, 2010 should be a somewhat better year than 2009."
CBRE-EA, the market forecasting arm of real estate services company CB Richard Ellis, expects the U.S. apartment vacancy rate to fall to 7 percent in 2010, down from 7.3 percent in the third quarter and 7.4 percent in the second quarter 2009.
"Overall, the U.S. apartment market remains in uncharted waters with vacancies at high levels historically, amid continued job losses and a glut of housing for rent and for sale," Gleb Nechayev, CBRE-EA senior economist said. "While the economic outlook does call for job growth to resume next year, vacancy rates will remain at historically elevated levels in most markets."
The long-term vacancy rate for professionally managed U.S. apartments has been about 5 percent.
"We're a long way from that. It will be at least a couple of years before we move closely to a more normal level," Nechayev said.
The slump in demand has severely damaged the sector, which until last month had the highest delinquency rate among U.S. property types.
Apartment loan delinquencies rose to 7.4 percent in November, second only to hotels, which reached 7.8 percent, according to ratings agency Moody's Investors Services.
Apartments and hotels suffer downturns first, because of their short-term leases, but traditionally lead a rebound when an economy improves.
A glut of single-family homes and condominiums on the market has been a double-edged sword for apartment landlords, Nechayev said.
Lower home ownership and the reduced demand for houses has forced people to become renters, Nechayev said.
New households formed from immigration, divorce and graduation has helped counter the damaging effect from job losses.
"Without the growth in overall rental demand, the effect of job losses on apartments would be much more severe than it has been so far," Nechayev said.
But the housing supply will continue to compete with and mitigate demand for apartments, which actually has risen over the past two quarters he said.
CBRE-EA forecasts effective rents will drop to $1,147 in 2010, down 0.8 percent from the third quarter 2009.
Markets such Austin, Baltimore, Boston, Chicago, Denver, Los Angeles, Seattle, San Diego, and Washington D.C have reported more occupied than vacant apartments.
Landlords in those cities offered rent concessions to lure tenants or keep existing ones, Nechayev said.
CBRE-EA does not expect rents nationally to start growing in earnest until the second half of 2011. The average U.S. apartment rent has been falling for the past year, down to $1,156 in the third quarter.
"We still expect some weakness in rents and occupancy next year," Nechayev said. "All in all, 2010 should be a somewhat better year than 2009."
Thursday, December 10, 2009
American Dream 2: Default, Then Rent
We're not suggesting that homeowners default on their mortgages but this article from the Wall Street Journal offers some interesting possibilities:
PALMDALE, Calif. -- Schoolteacher Shana Richey misses the playroom she decorated with Glamour Girl decals for her daughters. Fireman Jay Fernandez misses the custom putting green he installed in his backyard.
But ever since they quit paying their mortgages and walked away from their homes, they've discovered that giving up on the American dream has its benefits.
Both now live on the 3100 block of Club Rancho Drive in Palmdale, where a terrible housing market lets them rent luxurious homes -- one with a pool for the kids, the other with a golf-course view -- for a fraction of their former monthly payments.
The housing bust has brought big changes to the 3100 block of Club Rancho Drive in Palmdale, California.
"It's just a better life. It really is," says Ms. Richey. Before defaulting on her mortgage, she owed about $230,000 more than the home was worth.
People's increasing willingness to abandon their own piece of America illustrates a paradoxical change wrought by the housing bust: Even as it tarnishes the near-sacred image of home ownership, it might be clearing the way for an economic recovery.
Thanks to a rare confluence of factors -- mortgages that far exceed home values and bargain-basement rents -- a growing number of families are concluding that the new American dream home is a rental.
Some are leaving behind their homes and mortgages right away, while others are simply halting payments until the bank kicks them out. That's freeing up cash to use in other ways.
Ms. Richey's family of five used some of the money to buy season tickets to Disneyland, and plans to take a Carnival cruise to Mexico in March. Mr. Fernandez takes his girlfriend out to dinner more frequently. "We're saving lots of money," Ms. Richey says.
The U.S home-ownership rate has charted its biggest decline in more than two decades, falling to 67.6% as of September from a peak of 69.2% in 2004. And more renters are on the way: Credit firm Experian and consulting firm Oliver Wyman forecast that "strategic defaults" by homeowners who can afford to pay are likely to exceed one million in 2009, more than four times 2007's level.
Stiffing the bank is bad for peoples' credit, and bad for banks. Swelling defaults could also mean more losses for taxpayers through bank bailouts.
Analysts at Deutsche Bank Securities expect 21 million U.S. households to end up owing more on their mortgages than their homes are worth by the end of 2010. If one in five of those households defaults, the losses to banks and investors could exceed $400 billion. As a proportion of the economy, that's roughly equivalent to the losses suffered in the savings-and-loan debacle of the late 1980s and early 1990s.
The flip side of those losses, though, is massive debt relief that can help offset the pain of rising unemployment and put cash in consumers' pockets.
For the 4.8 million U.S. households that data provider LPS Applied Analytics estimates haven't paid their mortgages in at least three months, the added cash flow could amount to about $5 billion a month -- an injection that in the long term could be worth more than the tax breaks in the Obama administration's economic-stimulus package.
"It's a stealth stimulus," says Christopher Thornberg of Beacon Economics, a consulting firm specializing in real estate and the California economy. "The quicker these people shed their debts, the faster the economy is going to heal and move forward again."
As the stigma of abandoning a mortgage wanes, the Obama administration could face an uphill battle in its effort to keep people in their homes by pressuring banks to cut their mortgage payments. Some analysts argue that's not always the right approach, particularly if it prevents people from shedding onerous debts and starting afresh.
"The effect of these programs is often to lead homeowners to make decisions that are not in their economic best interests," says Brent White, a law professor at the University of Arizona who has studied mortgage defaults.
Few places in the U.S. were better suited to attract true believers in home ownership than Palmdale. A farming community that expanded in the 1950s to accommodate the aerospace industry around nearby Edwards Air Force Base, the city more than doubled its population from 1990 to the present as it became the final frontier for Los Angeles-area workers looking to buy.
About half of Palmdale's 147,000 residents endure a daily commute that can extend to two hours or more one way. In return, they get a homestead in a high-desert locale of haunting beauty, with Joshua trees dotting the landscape, and real-estate developments locked into a master grid of streets with anonymous names such as Avenue O-8 or Avenue M-4.
The 3100 block of Club Rancho Drive, built by Beazer Homes mostly in 2002, captures the essence of Palmdale's appeal. Winding along the southern edge of the Rancho Vista golf course just south of Avenue N-8, its spacious homes, verdant lawns and imported birch and sycamore trees exude a sense of middle-class tranquility.
Club Rancho became a solid community of owner-occupiers, many of whom stretched their finances to the limit. As of the end of 2007, total mortgage debt attached to the 13 houses on the block for which records are available had reached $4.5 million.
Fast-forward to the end of 2009, and the picture changes radically. Thanks to a 50% drop in home prices, at least two owners on the block now owe between $60,000 and $160,000 more on their mortgages than their houses are worth. Four more homes have already passed through foreclosure into the hands of new owners.
In the process, the block's total mortgage debt has fallen 37%, to $2.7 million.
Much of Club Rancho also has converted to rentals, a shift mirrored across Palmdale. Five homes on the 3100 block are now occupied by renters, up from only two in 2007. In the past six months, at least three families have moved into those rentals after walking away from other homes.
Ms. Richey, the teacher, arrived in Palmdale in 1999. In 2004, she and her husband, Timothy, bought a two-story home on Caspian Drive, near Avenue O-8, with a no-down-payment loan. They took pride in the amenities they installed: a powder room with granite countertops, a backyard pool and play area, and the purple-and-turquoise fantasy playroom upstairs for their three daughters.
But the value of the house plunged to less than $200,000 in 2009. Their $430,000 mortgage, with its $3,700 monthly payment, began to look more like an unwanted burden. By May, amid troubles getting tenants for two rental properties she also owned, Ms. Richey decided the time had come to cut a deal with America's Servicing Co., a unit of Wells Fargo & Co. servicing the mortgage on the house.
After three months of wrangling, she says she finally received a modification approval. The new monthly payment: about $3,300, far more than she had hoped. A Wells Fargo spokesman confirmed the bank offered Ms. Richey a modification under the Obama administration's Making Home Affordable program, and said, "The Richeys turned down the lowest payment we could offer."
Ms. Richey and her husband had already been working on Plan B -- exploring the neighborhood's "For Rent" signs.
On one trip, they drove by the house at 3152 Club Rancho Drive. It was bigger than their house on Caspian, had a pool with three waterfalls, and boasted a cascading staircase that Ms. Richey says she could picture her daughters descending on prom night. The rent was $2,195 a month.
The situation presented Ms. Richey with a quandary now facing more than 10 million U.S. homeowners who owe more on their mortgages than their houses are worth.
On one hand, walking away from her home would be easy. California is one of 10 states that largely prevent mortgage lenders from going after the other assets of borrowers who default. But she also had to consider the negatives. Her credit could be tarnished for years and, perhaps most importantly, she feared her friends and neighbors might ostracize her.
"It was scary," she says, noting that people tended to keep such decisions to themselves for fear of being stigmatized. "It's still very hush-hush."
Tom Sobelman, whose family of four lives across the street from Ms. Richey, at 3127 Club Rancho Drive, sees mortgages as a moral as well as financial obligation. He's still paying the mortgage on an investment property he owns nearby, despite the fact that the rent is about $1,000 a month short of covering his costs.
Mr. Sobelman, 37, argues that people who choose to default are unfairly benefiting at the expense of taxpayers, who have put trillions of dollars at risk to bail out struggling banks. "All these people are gaming the system, and I'm paying for it," he says. "My kids are going to be paying it off."
Mr. Sobelman has plenty of company. In a recent study of people who owe more on their mortgages than their houses are worth, economists Luigi Guiso, Paola Sapienza and Luigi Zingales found that about four out of five believe defaulting on a mortgage is morally wrong if one can afford to pay it. But they also found that the people become 82% more likely to say they'll default if they know someone else who defaulted.
Moral or not, the individuals who want to shed their mortgage debts are quickly transforming the Palmdale real-estate market.
Adam Robbins, who runs the local Realty World franchise and manages about 80 properties, says about 90% of his prospective tenants are people in Ms. Richey's situation. So he and other rental managers are loosening rules to accept people who have been through foreclosures.
"Those are all good people," he says. "They just got bad loans or bought at the wrong time."
Ms. Richey and her family made the move to Club Rancho Drive in August, when she was already several months behind on the mortgage. With Mr. Robbins's help, she recently sold the house on Caspian Drive for $195,000, money that the bank will accept to settle the $430,000 mortgage debt. She's also considering walking away from the mortgages on her two rental properties.
Showing a visitor the personal touches in her new home, including a $1,800 dining set she bought with some of her newly available income, she notes the advantages of being a renter rather than an owner.
"You take a risk for the American dream," she says. "I don't have to worry about paying property tax, homeowners' insurance, the landscaping, cleaning the pool or any repairs."
Others on Ms. Richey's block have made similar moves. Mr. Fernandez, the firefighter, moved into 3139 in July, after stopping the $4,800 monthly payments on the home he owned around the corner on Champion Way.
Mr. Fernandez says he made four attempts to modify the larger of the two mortgages on his home, which add up to $423,000. Ultimately, he was offered a monthly payment that, together with back taxes, was higher than what he had been paying. Today he's working to partially reimburse his lenders, IndyMac Bank (now OneWest Bank) and American First Credit Union, by selling the home, which he expects to fetch about $300,000.
A spokeswoman for OneWest Bank said the bank "offered Mr. Fernandez the lowest payment possible under the [Federal Deposit Insurance Corp.] loan modification guidelines." A spokesman for American First said the company always seeks to help clients stay in their homes.
With an income of about $8,300 a month and a rent of $2,200, Mr. Fernandez says he now has the wherewithal to do things he couldn't when he was stretching to pay the mortgage. He recently went to concerts by Rob Thomas and Mat Kearney. He also kept his black BMW 6 Series coupe, which has payments of about $700 a month.
"I don't know if I'll buy another house again, because it's such a huge headache," he says.
—Ruth Simon contributed to this article.
Write to Mark Whitehouse at mark.whitehouse@wsj.com
PALMDALE, Calif. -- Schoolteacher Shana Richey misses the playroom she decorated with Glamour Girl decals for her daughters. Fireman Jay Fernandez misses the custom putting green he installed in his backyard.
But ever since they quit paying their mortgages and walked away from their homes, they've discovered that giving up on the American dream has its benefits.
Both now live on the 3100 block of Club Rancho Drive in Palmdale, where a terrible housing market lets them rent luxurious homes -- one with a pool for the kids, the other with a golf-course view -- for a fraction of their former monthly payments.
The housing bust has brought big changes to the 3100 block of Club Rancho Drive in Palmdale, California.
"It's just a better life. It really is," says Ms. Richey. Before defaulting on her mortgage, she owed about $230,000 more than the home was worth.
People's increasing willingness to abandon their own piece of America illustrates a paradoxical change wrought by the housing bust: Even as it tarnishes the near-sacred image of home ownership, it might be clearing the way for an economic recovery.
Thanks to a rare confluence of factors -- mortgages that far exceed home values and bargain-basement rents -- a growing number of families are concluding that the new American dream home is a rental.
Some are leaving behind their homes and mortgages right away, while others are simply halting payments until the bank kicks them out. That's freeing up cash to use in other ways.
Ms. Richey's family of five used some of the money to buy season tickets to Disneyland, and plans to take a Carnival cruise to Mexico in March. Mr. Fernandez takes his girlfriend out to dinner more frequently. "We're saving lots of money," Ms. Richey says.
The U.S home-ownership rate has charted its biggest decline in more than two decades, falling to 67.6% as of September from a peak of 69.2% in 2004. And more renters are on the way: Credit firm Experian and consulting firm Oliver Wyman forecast that "strategic defaults" by homeowners who can afford to pay are likely to exceed one million in 2009, more than four times 2007's level.
Stiffing the bank is bad for peoples' credit, and bad for banks. Swelling defaults could also mean more losses for taxpayers through bank bailouts.
Analysts at Deutsche Bank Securities expect 21 million U.S. households to end up owing more on their mortgages than their homes are worth by the end of 2010. If one in five of those households defaults, the losses to banks and investors could exceed $400 billion. As a proportion of the economy, that's roughly equivalent to the losses suffered in the savings-and-loan debacle of the late 1980s and early 1990s.
The flip side of those losses, though, is massive debt relief that can help offset the pain of rising unemployment and put cash in consumers' pockets.
For the 4.8 million U.S. households that data provider LPS Applied Analytics estimates haven't paid their mortgages in at least three months, the added cash flow could amount to about $5 billion a month -- an injection that in the long term could be worth more than the tax breaks in the Obama administration's economic-stimulus package.
"It's a stealth stimulus," says Christopher Thornberg of Beacon Economics, a consulting firm specializing in real estate and the California economy. "The quicker these people shed their debts, the faster the economy is going to heal and move forward again."
As the stigma of abandoning a mortgage wanes, the Obama administration could face an uphill battle in its effort to keep people in their homes by pressuring banks to cut their mortgage payments. Some analysts argue that's not always the right approach, particularly if it prevents people from shedding onerous debts and starting afresh.
"The effect of these programs is often to lead homeowners to make decisions that are not in their economic best interests," says Brent White, a law professor at the University of Arizona who has studied mortgage defaults.
Few places in the U.S. were better suited to attract true believers in home ownership than Palmdale. A farming community that expanded in the 1950s to accommodate the aerospace industry around nearby Edwards Air Force Base, the city more than doubled its population from 1990 to the present as it became the final frontier for Los Angeles-area workers looking to buy.
About half of Palmdale's 147,000 residents endure a daily commute that can extend to two hours or more one way. In return, they get a homestead in a high-desert locale of haunting beauty, with Joshua trees dotting the landscape, and real-estate developments locked into a master grid of streets with anonymous names such as Avenue O-8 or Avenue M-4.
The 3100 block of Club Rancho Drive, built by Beazer Homes mostly in 2002, captures the essence of Palmdale's appeal. Winding along the southern edge of the Rancho Vista golf course just south of Avenue N-8, its spacious homes, verdant lawns and imported birch and sycamore trees exude a sense of middle-class tranquility.
Club Rancho became a solid community of owner-occupiers, many of whom stretched their finances to the limit. As of the end of 2007, total mortgage debt attached to the 13 houses on the block for which records are available had reached $4.5 million.
Fast-forward to the end of 2009, and the picture changes radically. Thanks to a 50% drop in home prices, at least two owners on the block now owe between $60,000 and $160,000 more on their mortgages than their houses are worth. Four more homes have already passed through foreclosure into the hands of new owners.
In the process, the block's total mortgage debt has fallen 37%, to $2.7 million.
Much of Club Rancho also has converted to rentals, a shift mirrored across Palmdale. Five homes on the 3100 block are now occupied by renters, up from only two in 2007. In the past six months, at least three families have moved into those rentals after walking away from other homes.
Ms. Richey, the teacher, arrived in Palmdale in 1999. In 2004, she and her husband, Timothy, bought a two-story home on Caspian Drive, near Avenue O-8, with a no-down-payment loan. They took pride in the amenities they installed: a powder room with granite countertops, a backyard pool and play area, and the purple-and-turquoise fantasy playroom upstairs for their three daughters.
But the value of the house plunged to less than $200,000 in 2009. Their $430,000 mortgage, with its $3,700 monthly payment, began to look more like an unwanted burden. By May, amid troubles getting tenants for two rental properties she also owned, Ms. Richey decided the time had come to cut a deal with America's Servicing Co., a unit of Wells Fargo & Co. servicing the mortgage on the house.
After three months of wrangling, she says she finally received a modification approval. The new monthly payment: about $3,300, far more than she had hoped. A Wells Fargo spokesman confirmed the bank offered Ms. Richey a modification under the Obama administration's Making Home Affordable program, and said, "The Richeys turned down the lowest payment we could offer."
Ms. Richey and her husband had already been working on Plan B -- exploring the neighborhood's "For Rent" signs.
On one trip, they drove by the house at 3152 Club Rancho Drive. It was bigger than their house on Caspian, had a pool with three waterfalls, and boasted a cascading staircase that Ms. Richey says she could picture her daughters descending on prom night. The rent was $2,195 a month.
The situation presented Ms. Richey with a quandary now facing more than 10 million U.S. homeowners who owe more on their mortgages than their houses are worth.
On one hand, walking away from her home would be easy. California is one of 10 states that largely prevent mortgage lenders from going after the other assets of borrowers who default. But she also had to consider the negatives. Her credit could be tarnished for years and, perhaps most importantly, she feared her friends and neighbors might ostracize her.
"It was scary," she says, noting that people tended to keep such decisions to themselves for fear of being stigmatized. "It's still very hush-hush."
Tom Sobelman, whose family of four lives across the street from Ms. Richey, at 3127 Club Rancho Drive, sees mortgages as a moral as well as financial obligation. He's still paying the mortgage on an investment property he owns nearby, despite the fact that the rent is about $1,000 a month short of covering his costs.
Mr. Sobelman, 37, argues that people who choose to default are unfairly benefiting at the expense of taxpayers, who have put trillions of dollars at risk to bail out struggling banks. "All these people are gaming the system, and I'm paying for it," he says. "My kids are going to be paying it off."
Mr. Sobelman has plenty of company. In a recent study of people who owe more on their mortgages than their houses are worth, economists Luigi Guiso, Paola Sapienza and Luigi Zingales found that about four out of five believe defaulting on a mortgage is morally wrong if one can afford to pay it. But they also found that the people become 82% more likely to say they'll default if they know someone else who defaulted.
Moral or not, the individuals who want to shed their mortgage debts are quickly transforming the Palmdale real-estate market.
Adam Robbins, who runs the local Realty World franchise and manages about 80 properties, says about 90% of his prospective tenants are people in Ms. Richey's situation. So he and other rental managers are loosening rules to accept people who have been through foreclosures.
"Those are all good people," he says. "They just got bad loans or bought at the wrong time."
Ms. Richey and her family made the move to Club Rancho Drive in August, when she was already several months behind on the mortgage. With Mr. Robbins's help, she recently sold the house on Caspian Drive for $195,000, money that the bank will accept to settle the $430,000 mortgage debt. She's also considering walking away from the mortgages on her two rental properties.
Showing a visitor the personal touches in her new home, including a $1,800 dining set she bought with some of her newly available income, she notes the advantages of being a renter rather than an owner.
"You take a risk for the American dream," she says. "I don't have to worry about paying property tax, homeowners' insurance, the landscaping, cleaning the pool or any repairs."
Others on Ms. Richey's block have made similar moves. Mr. Fernandez, the firefighter, moved into 3139 in July, after stopping the $4,800 monthly payments on the home he owned around the corner on Champion Way.
Mr. Fernandez says he made four attempts to modify the larger of the two mortgages on his home, which add up to $423,000. Ultimately, he was offered a monthly payment that, together with back taxes, was higher than what he had been paying. Today he's working to partially reimburse his lenders, IndyMac Bank (now OneWest Bank) and American First Credit Union, by selling the home, which he expects to fetch about $300,000.
A spokeswoman for OneWest Bank said the bank "offered Mr. Fernandez the lowest payment possible under the [Federal Deposit Insurance Corp.] loan modification guidelines." A spokesman for American First said the company always seeks to help clients stay in their homes.
With an income of about $8,300 a month and a rent of $2,200, Mr. Fernandez says he now has the wherewithal to do things he couldn't when he was stretching to pay the mortgage. He recently went to concerts by Rob Thomas and Mat Kearney. He also kept his black BMW 6 Series coupe, which has payments of about $700 a month.
"I don't know if I'll buy another house again, because it's such a huge headache," he says.
—Ruth Simon contributed to this article.
Write to Mark Whitehouse at mark.whitehouse@wsj.com
Thursday, November 19, 2009
Government Favors Debt Slaves Over Renters
We knew it all along. The Wall Street Journal now confirms it. This article by Nick Timiraos recently appeared in the Journal.
During the housing boom, critics increasingly complained that the government devoted too many resources to homeownership and too few to more affordable options, such as renting. Now, during the bust, the government’s commitment to ownership has grown even larger, according to a new report from the Congressional Budget Office.
This year, the government devoted four times the amount of budgetary resources to homeownership as it devoted to rental housing, or around $230 billion in spending and tax breaks for homeowners compared to around $60 billion for renting, the CBO reported. Around two-thirds of Americans are homeowners, according to the Census Bureau, though the rate fell to around 67.5% earlier this year, from a peak of 69.2% in 2004.
The report notes that, until recently, most government support for homeowners came in the form of tax breaks that don’t require government spending but result in the government collecting less in taxes than what might be owed.
But recent efforts to help stabilize a fragile housing market means that government spending now accounts for around half of federal support for housing, including a $75 billion tab for the government’s loan modification programs and taxpayer money to keep Fannie Mae and Freddie Mac in the black. That doesn’t include aid that the government has agreed to give to state housing finance agencies through Fannie and Freddie, or any aid that the Federal Housing Administration may need in the future. FHA officials say the agency won’t need taxpayer money unless housing deteriorates further, but the agency last week said its capital cushion had fallen to very low levels.
Several top officials in President Obama’s administration have a background in supporting multifamily housing, and the administration has indicated that it would do more to support a balanced housing policy than others in the past.
But in an interview last week, Shaun Donovan, the secretary of the Department of Housing and Urban Development, said that the need to stabilize single-family housing remains the top priority, for now, of the federal government when it comes to housing policy.
“Given the fragility of where we are right now in the market, it’s important that we focus on ensuring that we recover to stability before we engage the kind of wide-ranging discussion” that would examine support for owning versus renting, Mr. Donovan said. “We need to have a healthy debate in this country about the balance between homeownership and rental. I think our immediate focus is around the immediate crisis.”
The Obama administration tipped its hand earlier this year about its willingness to challenge sacred cows when it suggested limiting some of the mortgage-interest deduction that some higher-income earners might be able to claim on their tax returns. Mr. Donovan, who previously served as New York City’s housing commissioner and worked before that as an assistant housing secretary in charge of multifamily, said that a top priority would be to ensure that “the federal government doesn’t discourage rental housing.”
During the housing boom, critics increasingly complained that the government devoted too many resources to homeownership and too few to more affordable options, such as renting. Now, during the bust, the government’s commitment to ownership has grown even larger, according to a new report from the Congressional Budget Office.
This year, the government devoted four times the amount of budgetary resources to homeownership as it devoted to rental housing, or around $230 billion in spending and tax breaks for homeowners compared to around $60 billion for renting, the CBO reported. Around two-thirds of Americans are homeowners, according to the Census Bureau, though the rate fell to around 67.5% earlier this year, from a peak of 69.2% in 2004.
The report notes that, until recently, most government support for homeowners came in the form of tax breaks that don’t require government spending but result in the government collecting less in taxes than what might be owed.
But recent efforts to help stabilize a fragile housing market means that government spending now accounts for around half of federal support for housing, including a $75 billion tab for the government’s loan modification programs and taxpayer money to keep Fannie Mae and Freddie Mac in the black. That doesn’t include aid that the government has agreed to give to state housing finance agencies through Fannie and Freddie, or any aid that the Federal Housing Administration may need in the future. FHA officials say the agency won’t need taxpayer money unless housing deteriorates further, but the agency last week said its capital cushion had fallen to very low levels.
Several top officials in President Obama’s administration have a background in supporting multifamily housing, and the administration has indicated that it would do more to support a balanced housing policy than others in the past.
But in an interview last week, Shaun Donovan, the secretary of the Department of Housing and Urban Development, said that the need to stabilize single-family housing remains the top priority, for now, of the federal government when it comes to housing policy.
“Given the fragility of where we are right now in the market, it’s important that we focus on ensuring that we recover to stability before we engage the kind of wide-ranging discussion” that would examine support for owning versus renting, Mr. Donovan said. “We need to have a healthy debate in this country about the balance between homeownership and rental. I think our immediate focus is around the immediate crisis.”
The Obama administration tipped its hand earlier this year about its willingness to challenge sacred cows when it suggested limiting some of the mortgage-interest deduction that some higher-income earners might be able to claim on their tax returns. Mr. Donovan, who previously served as New York City’s housing commissioner and worked before that as an assistant housing secretary in charge of multifamily, said that a top priority would be to ensure that “the federal government doesn’t discourage rental housing.”
Monday, October 26, 2009
Why the Rich Are Renting
An article in this week's Forbes Magazine notes that renting, in the current market environment, is a "startling good deal". The article adds that with rents falling, renting is a "better move" than buying in many areas of the country.
We've been saying for a while now that the number and demographic trend of residential renters will continue to grow as people realize more and more that home ownership does not represent a good investment.
The ATA is on the cutting edge of this trend. As we grow in influence, we will continue to be a significant force for Americans who rent their homes.
Here's a link to the Forbes Magazine article.
http://www.forbes.com/2009/10/23/real-estate-advisor-personal-finance-high-end-rentals.html?ref=patrick.net
We've been saying for a while now that the number and demographic trend of residential renters will continue to grow as people realize more and more that home ownership does not represent a good investment.
The ATA is on the cutting edge of this trend. As we grow in influence, we will continue to be a significant force for Americans who rent their homes.
Here's a link to the Forbes Magazine article.
http://www.forbes.com/2009/10/23/real-estate-advisor-personal-finance-high-end-rentals.html?ref=patrick.net
Friday, October 23, 2009
"It's A Fantastic Time To Be A Renter!"
Patrick Killelea, our friend at www.patrick.net, was recently interviewed by the Mortgage Calculator website. We agree with Patrick that "It's a fantastic time to be a renter."
Follow this link for the complete interview with Patrick:
http://news.mortgagecalculator.org/interview-with-patrick-killelea-of-patrick-net-its-a-fantastic-time-to-be-a-renter/
Follow this link for the complete interview with Patrick:
http://news.mortgagecalculator.org/interview-with-patrick-killelea-of-patrick-net-its-a-fantastic-time-to-be-a-renter/
Friday, October 16, 2009
What's Wrong With Being a Renter?
Check out this blog post by Mark Calabria at the Cato Institute. Right on, Mark!
A recent New York Times piece focusing on the financial health of the Federal Housing Administration (FHA), offered a couple of examples of borrowers who would not have gotten mortgages, but for FHA’s low downpayment and underwriting requirements.
Take for instance a Ms. Shimon, mentioned in the piece. If she had to come up with a larger than 3.5 percent downpayment, she “would still be a renter,” in the words of the New York Times. Yes, my reaction was probably the same as yours; no, not that, not a renter, anything but being a renter. I am trying to remember at what point in our history did being a renter become a social stigma, or some sort of disease to be cured?
Of course, the article does not explain why it would be bad if Ms. Shimon had stayed a renter, because apparently the New York Times assumes all decent, upstanding people own their own homes.
Now yes, there are dozens of academic studies that show owning your own home is associated with being a better citizen, better educational and health outcomes for your children, and greater savings on the part of owners. But it is important to remember that none of these studies show that homeownership causes these outcomes, just that on average, homeownership is associated with these outcomes. More importantly, the marginal homeowner, who would not have bought a home without some sort of subsidy, is likely to be quite different than the average homeowner.
Some, like my home-building friends, might justify ever-expanding homeownership because it creates construction jobs. But so does building apartments. If we had a shortage of apartments, then maybe encouraging people to buy homes would relieve pressure on the rental market. But the glut of apartments is almost as big as the glut in homes. Rental vacancy rates are near historic highs in much of the country. Even with declining home prices, in many places it still makes more financial sense to rent.
The federal government’s obsession with homeownership was one of the contributing factors to the financial crisis. It is time we recognized renting as a viable option for many households, and starting treating renters as if they were as equal citizens as anyone else.
A recent New York Times piece focusing on the financial health of the Federal Housing Administration (FHA), offered a couple of examples of borrowers who would not have gotten mortgages, but for FHA’s low downpayment and underwriting requirements.
Take for instance a Ms. Shimon, mentioned in the piece. If she had to come up with a larger than 3.5 percent downpayment, she “would still be a renter,” in the words of the New York Times. Yes, my reaction was probably the same as yours; no, not that, not a renter, anything but being a renter. I am trying to remember at what point in our history did being a renter become a social stigma, or some sort of disease to be cured?
Of course, the article does not explain why it would be bad if Ms. Shimon had stayed a renter, because apparently the New York Times assumes all decent, upstanding people own their own homes.
Now yes, there are dozens of academic studies that show owning your own home is associated with being a better citizen, better educational and health outcomes for your children, and greater savings on the part of owners. But it is important to remember that none of these studies show that homeownership causes these outcomes, just that on average, homeownership is associated with these outcomes. More importantly, the marginal homeowner, who would not have bought a home without some sort of subsidy, is likely to be quite different than the average homeowner.
Some, like my home-building friends, might justify ever-expanding homeownership because it creates construction jobs. But so does building apartments. If we had a shortage of apartments, then maybe encouraging people to buy homes would relieve pressure on the rental market. But the glut of apartments is almost as big as the glut in homes. Rental vacancy rates are near historic highs in much of the country. Even with declining home prices, in many places it still makes more financial sense to rent.
The federal government’s obsession with homeownership was one of the contributing factors to the financial crisis. It is time we recognized renting as a viable option for many households, and starting treating renters as if they were as equal citizens as anyone else.
Wednesday, October 14, 2009
Apartment Residents Told to Take Down American Flags
This is an outrage! The American Tenants Association supports the Oaks Apartment tenants who want to fly "Old Glory". Please check out this story which appeared today in KATU News:
By Melica Johnson KATU News and KATU.com Staff
Video
ALBANY, Ore. - At the Oaks Apartments in Albany, the management can fly their own flag advertising one and two bedroom apartments - but residents have been told they can't fly any flags at all. Jim Clausen flies the American flag from the back of his motorcycle. He has a son in the military heading back to Iraq, and the flag - he said - is his way of showing support. "This flag stands for all those people," said Clausen, an Oaks Apartment resident. "It stands for the people that can no longer stand - who died in wars. That's why I fly this flag."But to Oaks Apartment management, Clausen said, the American flag symbolizes problems. He was told to remove the red, white and blue from both of his rides, or face eviction. "It floored me," he said. "I can't believe she was saying what she was saying. "Even long-time residents like Sharron White, who has flown a flag on her car for eight years, has been told to take it down. White said management told her that "someone might get offended." "I just said to her 'They'll just have to get over it,'" White said.
Residents we talked to who had been approached to take down their flags all told us the same thing: that management told them the flags could be offensive because they live in a diverse community. Attempts to find out for ourselves why management would ban flags were unsuccessful. KATU wanted to talk to management at Oaks Apartments, but no one has returned our calls. The woman we were told had made the decision said she was "not going to answer any questions. "The mother of one soldier fighting in Iraq put up a poster in her son's apartment window when she learned of the ban. Her son's roommate said he'll risk eviction to make sure it stays.
Another Oaks Apartment resident, Judith Sherer, doesn't have a car. Instead she carries an American flag around the complex to protest the ban, and wonders if the flag pin she wears is next to be "singled out." "If I put it on and I walk outside, what's going to happen?" Sherer muses. "Am I going to be confronted by a manager about this? "We're told the ban includes sports flags and even flag stickers on cars.
By Melica Johnson KATU News and KATU.com Staff
Video
ALBANY, Ore. - At the Oaks Apartments in Albany, the management can fly their own flag advertising one and two bedroom apartments - but residents have been told they can't fly any flags at all. Jim Clausen flies the American flag from the back of his motorcycle. He has a son in the military heading back to Iraq, and the flag - he said - is his way of showing support. "This flag stands for all those people," said Clausen, an Oaks Apartment resident. "It stands for the people that can no longer stand - who died in wars. That's why I fly this flag."But to Oaks Apartment management, Clausen said, the American flag symbolizes problems. He was told to remove the red, white and blue from both of his rides, or face eviction. "It floored me," he said. "I can't believe she was saying what she was saying. "Even long-time residents like Sharron White, who has flown a flag on her car for eight years, has been told to take it down. White said management told her that "someone might get offended." "I just said to her 'They'll just have to get over it,'" White said.
Residents we talked to who had been approached to take down their flags all told us the same thing: that management told them the flags could be offensive because they live in a diverse community. Attempts to find out for ourselves why management would ban flags were unsuccessful. KATU wanted to talk to management at Oaks Apartments, but no one has returned our calls. The woman we were told had made the decision said she was "not going to answer any questions. "The mother of one soldier fighting in Iraq put up a poster in her son's apartment window when she learned of the ban. Her son's roommate said he'll risk eviction to make sure it stays.
Another Oaks Apartment resident, Judith Sherer, doesn't have a car. Instead she carries an American flag around the complex to protest the ban, and wonders if the flag pin she wears is next to be "singled out." "If I put it on and I walk outside, what's going to happen?" Sherer muses. "Am I going to be confronted by a manager about this? "We're told the ban includes sports flags and even flag stickers on cars.
Tuesday, October 13, 2009
Good News for California Tenants!
Governor Schwarzenegger recently signed two pieces of legislation benefiting California tenants.
The first, SB 290, sponsored by Sen. Mark Leno, makes the 60-days' notice requirement for tenant evictions permanent. This means that any tenant in the state who has lived in his or her rental for one year or more cannot be evicted with less than 60-days' notice in "no cause" evictions. And it means that tenant groups don't have to mobilize every couple of years to renew the legislation. However, this does not affect tenants protected by local "just cause" ordinances; those tenants cannot be evicted without cause.
The second bill, SB 120, sponsored by Sen. Alan Lowenthal, protects tenants in foreclosed or soon-to-be-foreclosed properties against utility shutoffs when the landlord or lender fails to pay utility bills. In particular, tenants in single-family homes now have the same protection as tenants in multi-family units. Utility companies (gas, electric, water, heat) are now required to give tenants notice that the utility is to be cut off for nonpayment, and to provide a procedure for the tenant or tenants to establish a payment account without having to pay the former landlord's arrearages.
Tenants in single-family homes in outlying communities were often forced to pay the former landlord's water bill to keep the water on. The new legislation also allows tenants who pay the bills, when these costs have been included in the rent, to either deduct the cost from their rent payments or sue the landlord for the cost of establishing service or paying the bills. And it prohibits utility companies from requiring large deposits if the tenant can show that she pays her rent on time. (Utility companies were frequently requiring both payment of the arrearages and a large deposit to keep utility service.) Utility services are required to establish and publicize procedures for tenants to deal with these situations; notice of those procedures should be delivered along with any shutoff notice.
We would hope that they also publicize them in their newsletters and on their websites as well.You can read SB 290 here and SB 120 here. And you can read more at the Tenants Together blog.
The first, SB 290, sponsored by Sen. Mark Leno, makes the 60-days' notice requirement for tenant evictions permanent. This means that any tenant in the state who has lived in his or her rental for one year or more cannot be evicted with less than 60-days' notice in "no cause" evictions. And it means that tenant groups don't have to mobilize every couple of years to renew the legislation. However, this does not affect tenants protected by local "just cause" ordinances; those tenants cannot be evicted without cause.
The second bill, SB 120, sponsored by Sen. Alan Lowenthal, protects tenants in foreclosed or soon-to-be-foreclosed properties against utility shutoffs when the landlord or lender fails to pay utility bills. In particular, tenants in single-family homes now have the same protection as tenants in multi-family units. Utility companies (gas, electric, water, heat) are now required to give tenants notice that the utility is to be cut off for nonpayment, and to provide a procedure for the tenant or tenants to establish a payment account without having to pay the former landlord's arrearages.
Tenants in single-family homes in outlying communities were often forced to pay the former landlord's water bill to keep the water on. The new legislation also allows tenants who pay the bills, when these costs have been included in the rent, to either deduct the cost from their rent payments or sue the landlord for the cost of establishing service or paying the bills. And it prohibits utility companies from requiring large deposits if the tenant can show that she pays her rent on time. (Utility companies were frequently requiring both payment of the arrearages and a large deposit to keep utility service.) Utility services are required to establish and publicize procedures for tenants to deal with these situations; notice of those procedures should be delivered along with any shutoff notice.
We would hope that they also publicize them in their newsletters and on their websites as well.You can read SB 290 here and SB 120 here. And you can read more at the Tenants Together blog.
Friday, September 11, 2009
Why Does The Government Hate Renters?
As you may know, it's been the American Tenants Association's position to allow residential renters to deduct a portion of rent payments in a fashion similar to that afforded homeowners' mortgage interest payment deductions. Washington Post business page blogger Ezra Klein makes some great points in support of phasing out the home mortgage interest deduction altogether.
Here's what Mr. Klein had to say:
"I'm looking into buying a place myself, and a big part of the incentive is the tax preference: The fact that my mortgage uses pre-tax money while my rent requires post-tax money is a huge difference, particularly over time. And what will boost me into that lush future? Well, the fact that I make a fair amount of money for someone my age. The fact that my grandparents put away a bit of money to help with my eventual down payment. The fact that my earning potential looks likely to rise, which reassures my bank. The government is in effect giving me a cash reward for being pretty well-off.
That's a rather dumb way to apportion resources. More to the point, it's not necessary. The economics and emotional rewards of owning a house are compelling enough without the mortgage deduction. If you want to give low-income homebuyers additional help, that would make a lot of sense, particularly given the long-term importance of assets in bolstering financial security. But giving it to everyone who buys a home of any size is simply a regressive attack on renters. Ripping the deduction out right now would be too disruptive, but you could certainly phase in a cap on future home purchases."
Here's the link to Mr. Klein's blog post:
http://voices.washingtonpost.com/ezra-klein/2009/09/why_does_the_government_hate_r.html?ref=patrick.net
Here's what Mr. Klein had to say:
"I'm looking into buying a place myself, and a big part of the incentive is the tax preference: The fact that my mortgage uses pre-tax money while my rent requires post-tax money is a huge difference, particularly over time. And what will boost me into that lush future? Well, the fact that I make a fair amount of money for someone my age. The fact that my grandparents put away a bit of money to help with my eventual down payment. The fact that my earning potential looks likely to rise, which reassures my bank. The government is in effect giving me a cash reward for being pretty well-off.
That's a rather dumb way to apportion resources. More to the point, it's not necessary. The economics and emotional rewards of owning a house are compelling enough without the mortgage deduction. If you want to give low-income homebuyers additional help, that would make a lot of sense, particularly given the long-term importance of assets in bolstering financial security. But giving it to everyone who buys a home of any size is simply a regressive attack on renters. Ripping the deduction out right now would be too disruptive, but you could certainly phase in a cap on future home purchases."
Here's the link to Mr. Klein's blog post:
http://voices.washingtonpost.com/ezra-klein/2009/09/why_does_the_government_hate_r.html?ref=patrick.net
Monday, August 17, 2009
Renting: The New American Dream
"It's time to accept that home ownership is not a realistic goal for many people and to curtail the enormous government programs fueling this ambition". So says University of Pennsylvania professor Thomas J. Sugrue in an outstanding article in the latest weekend edition of the Wall Street Journal. Here's the link to the full article:
http://online.wsj.com/article/SB10001424052970204409904574350432677038184.html
http://online.wsj.com/article/SB10001424052970204409904574350432677038184.html
Wednesday, July 15, 2009
Are You Ready For Home Ownership?
Los Angeles Times blogger Peter Hong offered the following in a recent blog post:
"In many depressed real estate markets, monthly mortgage payments have fallen below average area rents. Rents are falling to narrow the gap, but the National Apartment Association has begun a campaign to make consumers aware of the true costs of home ownership.
The group has put together an "are you ready for home ownership" quiz, filled with the kinds of basic questions seemingly ignored during the housing bubble. Examples: "Do you know how to calculate your debt-to-income ratio?" and "Have you factored in the total costs of owning a home beyond the mortgage payment?"
Perhaps even more useful than the quiz, which in the above link appears on the Indiana Apartment Association's website, are articles on the site that advise potential buyers on the impact of maintenance costs, taxes and 100% financing on long-term home ownership.
Yes, promoting renting is obviously in the interest of landlords, but putting out more information to prevent uninformed home purchases is surely helpful, isn't it ?"
We never thought we'd be agreeing with apartment owners but this financial education project appears to make a lot of sense.
"In many depressed real estate markets, monthly mortgage payments have fallen below average area rents. Rents are falling to narrow the gap, but the National Apartment Association has begun a campaign to make consumers aware of the true costs of home ownership.
The group has put together an "are you ready for home ownership" quiz, filled with the kinds of basic questions seemingly ignored during the housing bubble. Examples: "Do you know how to calculate your debt-to-income ratio?" and "Have you factored in the total costs of owning a home beyond the mortgage payment?"
Perhaps even more useful than the quiz, which in the above link appears on the Indiana Apartment Association's website, are articles on the site that advise potential buyers on the impact of maintenance costs, taxes and 100% financing on long-term home ownership.
Yes, promoting renting is obviously in the interest of landlords, but putting out more information to prevent uninformed home purchases is surely helpful, isn't it ?"
We never thought we'd be agreeing with apartment owners but this financial education project appears to make a lot of sense.
Monday, July 13, 2009
Rental Vacancy Rates Climbing
Rental housing vacancy rates have experienced a sharp increase over the last several months. Nationwide, the vacancy rate stands at 10.1%. Some major cities, however, have rates that work decidedly in tenants' favor. According to the United States Census Bureau, the top ten Metropolitan Statistical Areas with the highest vacancy rates are as follows:
Richmond, VA 23.7%
Dayton, OH 21.7
Detroit, MI 19.9
Memphis, TN 19.6
Phoenix, AZ 19.0
Indianapolis, IN 17.1
Cleveland, OH 16.8
Atlanta, GA 16.1
Las Vegas, NV 16.0
Austin, TX 15.8
If you live in one of these areas it may be time to renegotiate your lease. It certainly looks like you won't need to automatically accept rent increases at the time of renewal. You're in the driver's seat.
Richmond, VA 23.7%
Dayton, OH 21.7
Detroit, MI 19.9
Memphis, TN 19.6
Phoenix, AZ 19.0
Indianapolis, IN 17.1
Cleveland, OH 16.8
Atlanta, GA 16.1
Las Vegas, NV 16.0
Austin, TX 15.8
If you live in one of these areas it may be time to renegotiate your lease. It certainly looks like you won't need to automatically accept rent increases at the time of renewal. You're in the driver's seat.
Wednesday, May 20, 2009
Home Values Continue to Decline
Renters can rejoice that they were not caught up in this decade's real estate bubble.
A report in Reuters this week noted that 80% of homes across the country lost value during the past 12 months. The report, by the real estate tracking website Zillow, indicated that home values are expected to continue to decline.
You can read the full report by following this link:
http://www.reuters.com/article/ousiv/idUSN1339409420090514?ref=patrick.net
A report in Reuters this week noted that 80% of homes across the country lost value during the past 12 months. The report, by the real estate tracking website Zillow, indicated that home values are expected to continue to decline.
You can read the full report by following this link:
http://www.reuters.com/article/ousiv/idUSN1339409420090514?ref=patrick.net
Monday, May 11, 2009
ATA To Launch Nationwide Membership Drive
Scottsdale, AZ, May 11, 2009. The American Tenants Association (ATA), the voice of the country’s 95 million residential renters, said today it is mobilizing the thousands of local tenant organizations scattered throughout the United States in order to strengthen common efforts on behalf of residential tenants.
The ATA said it is developing a comprehensive database of tenants rights advocates and groups to increase the political, economic and cultural clout of tenants at the local, state and national levels.
“For too long, residential renters have been the nation’s political step children,” the ATA’s Executive Director William M. Deegan, said. “Renters are either routinely treated with benign neglect or trampled on by politicians more interested in serving the needs of the nation’s property owners. If we are not ignored in shaping public policy we are discriminated against. If we are not denied the right to basic human decency we are taxed to further the political agenda of the ruling class. The ATA is stepping up to say that these days are over. We are mobilizing and organizing tenants throughout the land to stop this blatant discrimination”, Mr. Deegan added.
Stan Dale, the ATA’s Director of Public Policy, said that the group is reaching out to similar organizations and tenant advocates with the objective of building political strength.
“Tenants tend to be poor, young families, minorities and senior citizens. Their collective participation in the political process is historically much lower than the privileged class. We will increase our political muscle by working with like-minded tenant advocates and groups throughout the country to get tenants into the voting booths. The ATA is leading the revolution in the way renters think about themselves and the way America views renters”, Mr. Dale said.
The ATA is serving as an umbrella group for all tenants associations by providing technical and consulting services through its growing list of supporters.
The American Tenants Association is the country’s only nationwide, grassroots organization representing America’s renters. Membership is free and is open to all residential renters and advocates of tenant rights.
The ATA said it is developing a comprehensive database of tenants rights advocates and groups to increase the political, economic and cultural clout of tenants at the local, state and national levels.
“For too long, residential renters have been the nation’s political step children,” the ATA’s Executive Director William M. Deegan, said. “Renters are either routinely treated with benign neglect or trampled on by politicians more interested in serving the needs of the nation’s property owners. If we are not ignored in shaping public policy we are discriminated against. If we are not denied the right to basic human decency we are taxed to further the political agenda of the ruling class. The ATA is stepping up to say that these days are over. We are mobilizing and organizing tenants throughout the land to stop this blatant discrimination”, Mr. Deegan added.
Stan Dale, the ATA’s Director of Public Policy, said that the group is reaching out to similar organizations and tenant advocates with the objective of building political strength.
“Tenants tend to be poor, young families, minorities and senior citizens. Their collective participation in the political process is historically much lower than the privileged class. We will increase our political muscle by working with like-minded tenant advocates and groups throughout the country to get tenants into the voting booths. The ATA is leading the revolution in the way renters think about themselves and the way America views renters”, Mr. Dale said.
The ATA is serving as an umbrella group for all tenants associations by providing technical and consulting services through its growing list of supporters.
The American Tenants Association is the country’s only nationwide, grassroots organization representing America’s renters. Membership is free and is open to all residential renters and advocates of tenant rights.
Thursday, May 7, 2009
Listen to Jon Lansner's Podcast!
Bill Deegan and Stan Dale of the American Tenants Association were recent guests of Jon Lansner on his real estate blog podcast. Mr. Lansner is the Orange County Register's real estate blogger and has a nationwide audience.
You can listen to the broadcast by following this link:
http://lansner.freedomblogging.com/tag/american-tenants-association/
You can listen to the broadcast by following this link:
http://lansner.freedomblogging.com/tag/american-tenants-association/
Tuesday, May 5, 2009
Think Green!
The Australian Alternative Technology Association has published a 16 page booklet entitled the Renters Guide to Sustainable Living. The booklet details how tenants can make positive changes to their home home to make it more comfortable, save money and reduce their environmental impact. The booklet offers tips for the whole house, showing room-to-room ideas on how to cut greenhouse gas emissions and is helpful for anyone looking to lighten their carbon footprint.
You can download the booklet for free by following this link:
http://www.ata.org.au/wp-content/sustainability/ata_renters_guide_sustainability.pdf
You can download the booklet for free by following this link:
http://www.ata.org.au/wp-content/sustainability/ata_renters_guide_sustainability.pdf
Saturday, May 2, 2009
ATA Fights Tucson Sales Tax on Rents
Scottsdale, Arizona, May 2, 2009. The American Tenants Association, the country’s only nationwide, grassroots advocate for the rights of residential renters, came out in support today of Tucson tenants fighting a proposed 2% sales tax on rents.
Calling the tax “regressive and discriminatory”, William M. Deegan, the ATA’s Executive Director, said that the tax falls too heavily on the poor, the elderly living on fixed incomes and young families. “This tax singles out those least able to afford it. At a time when everyone is being asked to cut back, it’s unfair for the city to load another financial burden on the backs of residential renters”, he noted.
Mr. Deegan indicated that the proposed rent tax is discriminatory because it is not assessed against property owners. “Renters pay for city services just as owners do. Our rents include payments for property taxes, garbage pick-up and water and sewer fees. To exclude property owners from the equation goes against every known concept of fairness”, he added.
The ATA says it has written to the Mayor and all members of the Tucson City Council to express its views. The City has until June 9 to adopt a final budget.
Noting that the rent tax is endemic in Arizona, Stan Dale, the ATA’s Director of Public Policy, said that the organization will launch an effort to eliminate discriminatory rent taxes throughout Arizona. “More than 25 Arizona cities have enacted a rent tax. This is blatant, institutionalized discrimination. The ATA will work to see that these taxes are eliminated”, Mr. Dale concluded.
Based in Scottsdale, the American Tenants Association serves as the voice for the more than 95 million Americans who rent their homes. Membership in the ATA is free and is open to all residential renters and advocates of tenants’ rights.
Calling the tax “regressive and discriminatory”, William M. Deegan, the ATA’s Executive Director, said that the tax falls too heavily on the poor, the elderly living on fixed incomes and young families. “This tax singles out those least able to afford it. At a time when everyone is being asked to cut back, it’s unfair for the city to load another financial burden on the backs of residential renters”, he noted.
Mr. Deegan indicated that the proposed rent tax is discriminatory because it is not assessed against property owners. “Renters pay for city services just as owners do. Our rents include payments for property taxes, garbage pick-up and water and sewer fees. To exclude property owners from the equation goes against every known concept of fairness”, he added.
The ATA says it has written to the Mayor and all members of the Tucson City Council to express its views. The City has until June 9 to adopt a final budget.
Noting that the rent tax is endemic in Arizona, Stan Dale, the ATA’s Director of Public Policy, said that the organization will launch an effort to eliminate discriminatory rent taxes throughout Arizona. “More than 25 Arizona cities have enacted a rent tax. This is blatant, institutionalized discrimination. The ATA will work to see that these taxes are eliminated”, Mr. Dale concluded.
Based in Scottsdale, the American Tenants Association serves as the voice for the more than 95 million Americans who rent their homes. Membership in the ATA is free and is open to all residential renters and advocates of tenants’ rights.
Wednesday, April 15, 2009
Take the Orange County Register Survey!
The American Tenants Association was the subject of a story recently in Jon Lansner’s Real Estate Blog on the Orange County Register’s website. The Orange County Register is one of California’s most influential newspapers.
Mr. Lansner discussed the ATA’s proposal for an “equivalent” mortgage interest tax credit for renters. As part of the article, Mr. Lansner included a survey to assess readers’ reactions to the idea.
We are pleased with the results of the survey – fully 73% of those who voted favor our proposal or believe it’s worthy of consideration.
You can read Mr. Lansner’s article and vote in the survey by following this link:
http://lansner.freedomblogging.com/2009/04/12/renters-tax-revolt-good-idea/18831/
Mr. Lansner discussed the ATA’s proposal for an “equivalent” mortgage interest tax credit for renters. As part of the article, Mr. Lansner included a survey to assess readers’ reactions to the idea.
We are pleased with the results of the survey – fully 73% of those who voted favor our proposal or believe it’s worthy of consideration.
You can read Mr. Lansner’s article and vote in the survey by following this link:
http://lansner.freedomblogging.com/2009/04/12/renters-tax-revolt-good-idea/18831/
Tuesday, April 7, 2009
ATA Calls IRS Tax Code "Discriminatory"
Scottsdale, AZ, April 7, 2009. The American Tenants Association (ATA), the country’s only nationwide, grassroots advocate for the more than 95 million Americans who rent their homes, called on Congress to end systemic tax policy “discrimination” directed at residential renters.
Citing the U.S. Tax Code’s mortgage interest deduction available only to homeowners, the ATA appealed to the nation’s lawmakers to pass legislation allowing tenants an “equivalent” tax credit pass through. The amount of the credit would be determined annually based on the average mortgage interest deduction benefit enjoyed by homeowners. The ATA currently estimates this amount to be $1,242.
William M. Deegan, the ATA’s Executive Director, said that “discrimination against renters must end.” Noting that “the poor, young families and retirees living on fixed incomes tend to rent their homes”, Mr. Deegan said that “it’s time for renters to be heard. The days of residential tenants being asked to move to the back of the tax policy bus are over.”
Stan Dale, the ATA’s Director of Public Policy, in referring to statistics complied by the non-partisan Tax Foundation, said that IRS data show the bulk of mortgage interest deductions are claimed by a relatively small fraction of Americans with incomes above average. Mr. Dale said that the mortgage interest deduction favors higher income taxpayers because of the progressive nature of the federal income tax. He added that “the mortgage interest deduction favors the rich” who tend to have more valuable homes and real estate speculators who prefer interest only loans.
Mr. Dale noted that President George W. Bush’s Advisory Panel on Federal Income Tax Reform in 2005 criticized the home mortgage interest deduction for encouraging the construction of larger homes and not necessarily broadening home ownership among middle income Americans.
Mr. Deegan said that the group will be “calling on Congress to lend a hand to the poor, the young and struggling retirees who rent” by passing the mortgage interest equivalent tax credit. “The millions of Americans who rent their homes demand to be treated equally. Congress can take the lead by enacting a tax policy that does not treat renters as second class citizens”, he concluded.
The American Tenants Association is the voice for the country’s residential renters. Membership is free and is open to all tenants and supporters of tenants’ rights.
Citing the U.S. Tax Code’s mortgage interest deduction available only to homeowners, the ATA appealed to the nation’s lawmakers to pass legislation allowing tenants an “equivalent” tax credit pass through. The amount of the credit would be determined annually based on the average mortgage interest deduction benefit enjoyed by homeowners. The ATA currently estimates this amount to be $1,242.
William M. Deegan, the ATA’s Executive Director, said that “discrimination against renters must end.” Noting that “the poor, young families and retirees living on fixed incomes tend to rent their homes”, Mr. Deegan said that “it’s time for renters to be heard. The days of residential tenants being asked to move to the back of the tax policy bus are over.”
Stan Dale, the ATA’s Director of Public Policy, in referring to statistics complied by the non-partisan Tax Foundation, said that IRS data show the bulk of mortgage interest deductions are claimed by a relatively small fraction of Americans with incomes above average. Mr. Dale said that the mortgage interest deduction favors higher income taxpayers because of the progressive nature of the federal income tax. He added that “the mortgage interest deduction favors the rich” who tend to have more valuable homes and real estate speculators who prefer interest only loans.
Mr. Dale noted that President George W. Bush’s Advisory Panel on Federal Income Tax Reform in 2005 criticized the home mortgage interest deduction for encouraging the construction of larger homes and not necessarily broadening home ownership among middle income Americans.
Mr. Deegan said that the group will be “calling on Congress to lend a hand to the poor, the young and struggling retirees who rent” by passing the mortgage interest equivalent tax credit. “The millions of Americans who rent their homes demand to be treated equally. Congress can take the lead by enacting a tax policy that does not treat renters as second class citizens”, he concluded.
The American Tenants Association is the voice for the country’s residential renters. Membership is free and is open to all tenants and supporters of tenants’ rights.
Monday, March 30, 2009
ATA Unveils "Rent-to-Own" Initiative
Scottsdale, AZ (PRWEB) March 29, 2009. The American Tenants Association (ATA), the country’s only nationwide residential tenants’ advocacy group, offered solutions today to the nation’s financial crisis that are designed to dovetail with the Obama Administration’s plan to rid banks of “toxic” mortgage assets.
The ATA’s initiative, entitled Performance Based Financing, uses long-term residential leases with purchase options that will have the effect of changing financial institutions’ classification of troubled assets to “performing” from “non-performing” while allowing millions of residential renters the opportunity to achieve home ownership.
Performance Based Financing, a concept created by Stan Dale, a graduate level adjunct professor at Pennsylvania’s Arcadia University and the ATA’s Director of Public Policy, is at its core a “rent-to-own” strategy. Mr. Dale indicated that the plan incorporates Black-Scholes financial options modeling to establish net present value and real options modeling to create a “bid/ask” marketplace for residential properties.
“Banks and financial institutions are being crushed by short sales, foreclosures and deed in lieu of foreclosures,” Mr. Dale said. “In addition, because of the Financial Accounting Standard Board’s ‘mark-to-market’ accounting principles, paper losses become real losses. This causes bank reserves to be more difficult to maintain and as a consequence credit more difficult to obtain,” Mr. Dale added.
Mr. Dale went on to say that “higher losses mean tighter credit which leads to failures resulting in more losses. It’s a never ending cycle.”
William M. Deegan, the ATA’s Executive Director, said that "Performance Based Financing requires no outlay of federal or private capital” other than the expense of administering the plan. “The Obama Administration’s Public-Private Investment Program, designed to clear banks of toxic assets, will require billions in public and private financings. Our plan, once established and implemented, will allow banks to switch currently non-performing mortgage assets to performing assets in the form of performance valued chattel mortgages without requiring a dime in taxpayer funding.”
Mr. Deegan added that “tenants who might not otherwise qualify for mortgage financing will be able to achieve home ownership” under the plan.
The group indicated that they would present their proposal to Congressional leaders and the Obama Administration in the weeks ahead.
“The beauty of Performance Based Financing is that everyone benefits; tenants, banks and the taxpayer,” Mr. Dale concluded.
The American Tenants Association serves as the voice for the more than 95 million Americans who rent their homes. Membership is free to all tenants and advocates of tenant rights.
The ATA’s initiative, entitled Performance Based Financing, uses long-term residential leases with purchase options that will have the effect of changing financial institutions’ classification of troubled assets to “performing” from “non-performing” while allowing millions of residential renters the opportunity to achieve home ownership.
Performance Based Financing, a concept created by Stan Dale, a graduate level adjunct professor at Pennsylvania’s Arcadia University and the ATA’s Director of Public Policy, is at its core a “rent-to-own” strategy. Mr. Dale indicated that the plan incorporates Black-Scholes financial options modeling to establish net present value and real options modeling to create a “bid/ask” marketplace for residential properties.
“Banks and financial institutions are being crushed by short sales, foreclosures and deed in lieu of foreclosures,” Mr. Dale said. “In addition, because of the Financial Accounting Standard Board’s ‘mark-to-market’ accounting principles, paper losses become real losses. This causes bank reserves to be more difficult to maintain and as a consequence credit more difficult to obtain,” Mr. Dale added.
Mr. Dale went on to say that “higher losses mean tighter credit which leads to failures resulting in more losses. It’s a never ending cycle.”
William M. Deegan, the ATA’s Executive Director, said that "Performance Based Financing requires no outlay of federal or private capital” other than the expense of administering the plan. “The Obama Administration’s Public-Private Investment Program, designed to clear banks of toxic assets, will require billions in public and private financings. Our plan, once established and implemented, will allow banks to switch currently non-performing mortgage assets to performing assets in the form of performance valued chattel mortgages without requiring a dime in taxpayer funding.”
Mr. Deegan added that “tenants who might not otherwise qualify for mortgage financing will be able to achieve home ownership” under the plan.
The group indicated that they would present their proposal to Congressional leaders and the Obama Administration in the weeks ahead.
“The beauty of Performance Based Financing is that everyone benefits; tenants, banks and the taxpayer,” Mr. Dale concluded.
The American Tenants Association serves as the voice for the more than 95 million Americans who rent their homes. Membership is free to all tenants and advocates of tenant rights.
Tuesday, March 24, 2009
Our Vision For The American Tenants Association
More than fifty years ago a handful of seniors concerned about the economic and social well being of an aging population founded the American Association of Retired Persons. Known today simply as AARP, they have grown to represent more than 40 million Americans over the age of fifty.
In the United States today there is one demographic group larger than senior citizens - residential renters. According to the Census Bureau there are more than 95 million of us.
The American Tenants Association was founded to serve as the voice for this under represented group.
Our vision is to create the ATA to be the leading advocate for residential tenants on issues of political, economic and social matters affecting our quality of life.
To borrow a phrase from AARP, we intend the ATA to “lead the revolution” in the way people view and live life as renters. Our intent is to create positive social change for our constituency.
As noted in our Mission Statement we will build value for our members through our advocacy, the information we provide and the consumer services and opportunities we will offer.
Thanks to all who have offered support of our efforts.
In the United States today there is one demographic group larger than senior citizens - residential renters. According to the Census Bureau there are more than 95 million of us.
The American Tenants Association was founded to serve as the voice for this under represented group.
Our vision is to create the ATA to be the leading advocate for residential tenants on issues of political, economic and social matters affecting our quality of life.
To borrow a phrase from AARP, we intend the ATA to “lead the revolution” in the way people view and live life as renters. Our intent is to create positive social change for our constituency.
As noted in our Mission Statement we will build value for our members through our advocacy, the information we provide and the consumer services and opportunities we will offer.
Thanks to all who have offered support of our efforts.
Thursday, March 19, 2009
Protecting Tenants From Irresponsible Landlords
Residential tenants throughout the United States are experiencing an increasing number of landlord foreclosures and bankruptcies. Renters who diligently paid their rent on time are finding themselves literally thrown out into the streets when the landlord’s mortgage is foreclosed. Financially troubled landlords are also deferring or neglecting basic maintenance services such as trash pick up. In many instances, the landlord is even neglecting to pay the water bills or common area electric bills resulting in utility shut offs. Because of these irresponsible actions tenants’ health and safety are being endangered.
One of the American Tenants Association’s most important goals is to elevate for public discussion the issue of landlord foreclosures and the denial of basic services in cases of landlord bankruptcies. In addition, tenants’ security deposits are at risk when the landlord declares bankruptcy.
Here’s a summary of our main objectives to address this problem.
· Require that tenant security deposits be held in legally segregated escrow accounts and not be co-mingled with landlord operating funds. Tenant security deposits shall remain the asset of the tenant subject to assignment in the event of damages.
· Require landlords to certify in writing at the time of lease signing that they are current on their mortgage, utilities and maintenance accounts.
· If landlord is unwilling to certify current status, rent payments will be held in escrow to be paid directly to mortgage holder and providers of tenant services through a legal escrow account.
· Require landlords to immediately notify tenants, in writing, if they become delinquent with mortgage, utilities or maintenance accounts.
· Require that tenants not be evicted from foreclosed properties until lease expiration. If no written lease, tenant shall have 90 days to vacate the property.
· If the landlord requires a credit report from the tenant, tenant shall have the right to the landlord’s credit report.
· Change the status of landlord to one of a fiduciary or trustee of tenants’ funds
The ATA is actively reaching out to progressive state legislators who understand the plight of tenants in this economic environment.
One of the American Tenants Association’s most important goals is to elevate for public discussion the issue of landlord foreclosures and the denial of basic services in cases of landlord bankruptcies. In addition, tenants’ security deposits are at risk when the landlord declares bankruptcy.
Here’s a summary of our main objectives to address this problem.
· Require that tenant security deposits be held in legally segregated escrow accounts and not be co-mingled with landlord operating funds. Tenant security deposits shall remain the asset of the tenant subject to assignment in the event of damages.
· Require landlords to certify in writing at the time of lease signing that they are current on their mortgage, utilities and maintenance accounts.
· If landlord is unwilling to certify current status, rent payments will be held in escrow to be paid directly to mortgage holder and providers of tenant services through a legal escrow account.
· Require landlords to immediately notify tenants, in writing, if they become delinquent with mortgage, utilities or maintenance accounts.
· Require that tenants not be evicted from foreclosed properties until lease expiration. If no written lease, tenant shall have 90 days to vacate the property.
· If the landlord requires a credit report from the tenant, tenant shall have the right to the landlord’s credit report.
· Change the status of landlord to one of a fiduciary or trustee of tenants’ funds
The ATA is actively reaching out to progressive state legislators who understand the plight of tenants in this economic environment.
Wednesday, March 18, 2009
The ATA’s Rent-To-Own Initiative
The balance sheets of U.S. banks are suffering under the weight of more than 1.5 million home mortgages that are seriously delinquent or in foreclosure. According to the Mortgage Bankers Association, this represents more than 11% of all residential mortgages. According to one recent study that applied Black-Scholes financial modeling techniques to the total inventory of U.S. residential mortgages, the value of troubled residential mortgages approaches $3.6 trillion.
As real estate values continue to fall due to the general economy, as banks tighten up mortgage underwriting requirements and as millions of adjustable rate mortgages come up for rate renewal, the number and value of mortgages heading for trouble will continue to rise.
The American Tenants Association, as a solution to the problem, has proposed a Performance Based Financing rent-to-own initiative. Designed to offer tenants the opportunity to become homeowners under special leases, our proposals also serve as a way for banks to relieve their books of troubled assets. By increasing home buying demand everyone benefits: tenants, banks, the nation and communities who will witness a stop to declining home values.
The ATA’s proposal will require a collaborative effort from among all interested parties. This includes financial institutions, the real estate community, governments at all levels and the ATA.
Performance Based Financing will work by allowing tenants, through the ATA and similar organizations, to rent foreclosed homes at a discounted net present value from participating banks, as well as Freddie Mac and Fannie Mae. The ATA and similar groups will educate potential renters of the advantages and benefits of the program, manage the program at the local level and provide community outreach efforts.
The methodology would be to use net present value and future financial value modeling to establish fair agreement for each individual property such that the properties’ value can be fixed at today’s measure. Using the derived modeling specific to each property, an individually tailored plan for Performance Based Financing can be put into place. Each completed rent-to-buy contract will resurrect the asset on the bank’s balance sheet, strengthen the community, and provide the opportunity for the renter to achieve home ownership. The ATA envisions programs of three, five, seven or ten years that will lead to closing and permanent financing. Rental payments, or a significant portion thereof, will be applied toward the prior agreed upon purchase price.
We will keep you informed of our implementation progress.
As real estate values continue to fall due to the general economy, as banks tighten up mortgage underwriting requirements and as millions of adjustable rate mortgages come up for rate renewal, the number and value of mortgages heading for trouble will continue to rise.
The American Tenants Association, as a solution to the problem, has proposed a Performance Based Financing rent-to-own initiative. Designed to offer tenants the opportunity to become homeowners under special leases, our proposals also serve as a way for banks to relieve their books of troubled assets. By increasing home buying demand everyone benefits: tenants, banks, the nation and communities who will witness a stop to declining home values.
The ATA’s proposal will require a collaborative effort from among all interested parties. This includes financial institutions, the real estate community, governments at all levels and the ATA.
Performance Based Financing will work by allowing tenants, through the ATA and similar organizations, to rent foreclosed homes at a discounted net present value from participating banks, as well as Freddie Mac and Fannie Mae. The ATA and similar groups will educate potential renters of the advantages and benefits of the program, manage the program at the local level and provide community outreach efforts.
The methodology would be to use net present value and future financial value modeling to establish fair agreement for each individual property such that the properties’ value can be fixed at today’s measure. Using the derived modeling specific to each property, an individually tailored plan for Performance Based Financing can be put into place. Each completed rent-to-buy contract will resurrect the asset on the bank’s balance sheet, strengthen the community, and provide the opportunity for the renter to achieve home ownership. The ATA envisions programs of three, five, seven or ten years that will lead to closing and permanent financing. Rental payments, or a significant portion thereof, will be applied toward the prior agreed upon purchase price.
We will keep you informed of our implementation progress.
Tuesday, March 17, 2009
Let's Enforce Legal "Specific Performance" Provisions
The bankruptcy of Irvine, California based Bethany Group is serving as the catalyst for the examination by the media of the issue of landlord foreclosures and denial of basic services.
Yesterday, MSNBC ran an article highlighting the difficulties experienced by tenants at the seven Bethany group properties in Arizona. The article recounted the loss of basic tenant services such as trash pick-up, maintenance neglect and water shut-offs. The story also noted that tenants are usually at risk for their security deposits in landlord bankruptcies. MSNBC quoted a representative of the court appointed receiver indicating that tenants continue to be responsible for rent payments under their leases even though they are being denied basic services.
The American Tenants Association proposals, as noted in my previous blog post and press release, will protect tenants security deposits by placing them in legal escrow accounts segregated from the day-to-day operating funds of the landlord.
Ongoing tenant obligations under their lease where the landlord is denying basic services, however, raise legal issues of “specific performance”. The MSNBC article quoted the receiver’s representative essentially threatening tenants with legal action if they attempt to break their lease even though they are not receiving services. The position of the ATA is that the legal concept of specific performance comes into play. Under this provision, the plaintiff (tenant) can compel the defendant (landlord) to perform according to the lease, i.e., provide a safe, clean, habitable environment.
Our continuing legislative efforts will include codification of specific performance equity provisions already available, in our opinion, under common law. These efforts will include enforcement provisions so that the law “has teeth” and tenants will be able to take advantage, if required, of the full legal remedies available to them.
You can view the MSNBC article through this link.
http://www.msnbc.msn.com/id/29697413/from/ET/
Yesterday, MSNBC ran an article highlighting the difficulties experienced by tenants at the seven Bethany group properties in Arizona. The article recounted the loss of basic tenant services such as trash pick-up, maintenance neglect and water shut-offs. The story also noted that tenants are usually at risk for their security deposits in landlord bankruptcies. MSNBC quoted a representative of the court appointed receiver indicating that tenants continue to be responsible for rent payments under their leases even though they are being denied basic services.
The American Tenants Association proposals, as noted in my previous blog post and press release, will protect tenants security deposits by placing them in legal escrow accounts segregated from the day-to-day operating funds of the landlord.
Ongoing tenant obligations under their lease where the landlord is denying basic services, however, raise legal issues of “specific performance”. The MSNBC article quoted the receiver’s representative essentially threatening tenants with legal action if they attempt to break their lease even though they are not receiving services. The position of the ATA is that the legal concept of specific performance comes into play. Under this provision, the plaintiff (tenant) can compel the defendant (landlord) to perform according to the lease, i.e., provide a safe, clean, habitable environment.
Our continuing legislative efforts will include codification of specific performance equity provisions already available, in our opinion, under common law. These efforts will include enforcement provisions so that the law “has teeth” and tenants will be able to take advantage, if required, of the full legal remedies available to them.
You can view the MSNBC article through this link.
http://www.msnbc.msn.com/id/29697413/from/ET/
Monday, March 16, 2009
ATA Offers Landlord Foreclosure Solutions
Scottsdale, AZ, (PRWEB) March 16, 2009. The American Tenants Association (ATA), the country’s only nationwide, grassroots residential renters advocacy group, offered solutions today to the growing problem of landlord foreclosures and disruptions in tenants’ basic maintenance and utility services.
Throughout the United States thousands of tenants are facing eviction and loss of basic services such as trash pick-up, water turn-offs and deferred maintenance because landlords have not been paying their bills.
“Even though our member tenants are making timely rent payments, some landlords have not been fulfilling their part of the bargain. Through mismanagement or outright fraud, they have diverted tenant funds to other uses and have left residential renters literally out in the cold,” the ATA’s Executive Director William M. Deegan said. “Required maintenance is also being deferred which threatens the health and safety of our member tenants,” Mr. Deegan added.
Because of this situation, the ATA said it would be calling on state legislatures to initiate actions to protect residential renters from irresponsible landlords.
The ATA’s proposals call for disclosure by the landlord that they are current on all obligations effecting tenant well being. This would include disclosures of the landlord’s credit status if the landlord is an individual and if requested by the landlord of the tenant. If the landlord is a corporate entity or an individual the landlord would be required to certify, in writing, that they are current on their underlying mortgage and basic services.
The group is also calling for a change in the legal status of all landlords to that of a fiduciary or trustee of tenant funds.
The ATA’s proposal calls for the establishment of legally restricted escrow accounts to hold that portion of the rent check designated to pay the mortgage, utilities, capital improvements and general maintenance. In this way, there will be reasonable assurance that the bills will be paid. In addition, the group is calling for civil and criminal sanctions if landlords fail to comply with their fiduciary responsibilities.
In situations where the landlord falls behind in any of these categories, the tenant shall have the right to immediate notice and legal standing to cause the landlord to comply with the state mandated regulations and terms of the lease.
The national advocacy group will also push for legislation that individuals or corporations that acquire residential properties through foreclosure be required to honor pre-existing tenant leases for a period not less than ninety days or through the term of the original lease, whichever is greater, in order for tenants to have sufficient opportunity to make alternative living arrangements. “Too frequently, tenants do not have enough time to find a suitable place to live,” Mr. Deegan noted.
Stan Dale, the ATA’s Director of Public Policy, said that in the weeks ahead, the group would be reaching out to legislatures throughout the United States to strengthen the laws and regulations designed to protect tenants or to propose new ones.
The ATA was created to fill the void that existed in protecting tenants’ rights. “Although there are many fine local and state groups advocating on behalf of tenants, the ATA’s sole objective is to focus that advocacy on the national level”, Mr. Dale said.
“Unfortunately, many of our country’s landlords are proving themselves to be irresponsible financial stewards. The ATA’s proposals will help landlords clean up their act and provide tenants the financial, health and safety protections they demand”, Mr. Deegan concluded.
The American Tenants Association serves as the voice for the more than 95 million residential renters in the United States. Membership is free to all tenants and advocates of tenants’ rights.
Throughout the United States thousands of tenants are facing eviction and loss of basic services such as trash pick-up, water turn-offs and deferred maintenance because landlords have not been paying their bills.
“Even though our member tenants are making timely rent payments, some landlords have not been fulfilling their part of the bargain. Through mismanagement or outright fraud, they have diverted tenant funds to other uses and have left residential renters literally out in the cold,” the ATA’s Executive Director William M. Deegan said. “Required maintenance is also being deferred which threatens the health and safety of our member tenants,” Mr. Deegan added.
Because of this situation, the ATA said it would be calling on state legislatures to initiate actions to protect residential renters from irresponsible landlords.
The ATA’s proposals call for disclosure by the landlord that they are current on all obligations effecting tenant well being. This would include disclosures of the landlord’s credit status if the landlord is an individual and if requested by the landlord of the tenant. If the landlord is a corporate entity or an individual the landlord would be required to certify, in writing, that they are current on their underlying mortgage and basic services.
The group is also calling for a change in the legal status of all landlords to that of a fiduciary or trustee of tenant funds.
The ATA’s proposal calls for the establishment of legally restricted escrow accounts to hold that portion of the rent check designated to pay the mortgage, utilities, capital improvements and general maintenance. In this way, there will be reasonable assurance that the bills will be paid. In addition, the group is calling for civil and criminal sanctions if landlords fail to comply with their fiduciary responsibilities.
In situations where the landlord falls behind in any of these categories, the tenant shall have the right to immediate notice and legal standing to cause the landlord to comply with the state mandated regulations and terms of the lease.
The national advocacy group will also push for legislation that individuals or corporations that acquire residential properties through foreclosure be required to honor pre-existing tenant leases for a period not less than ninety days or through the term of the original lease, whichever is greater, in order for tenants to have sufficient opportunity to make alternative living arrangements. “Too frequently, tenants do not have enough time to find a suitable place to live,” Mr. Deegan noted.
Stan Dale, the ATA’s Director of Public Policy, said that in the weeks ahead, the group would be reaching out to legislatures throughout the United States to strengthen the laws and regulations designed to protect tenants or to propose new ones.
The ATA was created to fill the void that existed in protecting tenants’ rights. “Although there are many fine local and state groups advocating on behalf of tenants, the ATA’s sole objective is to focus that advocacy on the national level”, Mr. Dale said.
“Unfortunately, many of our country’s landlords are proving themselves to be irresponsible financial stewards. The ATA’s proposals will help landlords clean up their act and provide tenants the financial, health and safety protections they demand”, Mr. Deegan concluded.
The American Tenants Association serves as the voice for the more than 95 million residential renters in the United States. Membership is free to all tenants and advocates of tenants’ rights.
Thursday, March 12, 2009
The FICO Fallacy for Renters
Homeowners with mortgages see their credit scores (FICO) go up when they make timely payments and keep their mortgages current.
Renters who pay their monthly rent on time receive no consideration. In fact, not owning a home and not having a mortgage may result in a lower FICO score. This is "credit score" discrimination. It should not be tolerated.
There are millions of renters whose credit scores may keep them from not only qualifying for a mortgage but may also result in "credit score" discriminated because of falsely low credit scores.
This may cause problems if they move into another rental property. It may keep them out of financing for cars and other essential items. It may unfairly burden renters with higher interest rates and more difficult financing plans because of the lower FICO scores.
This suggests that the credit reporting agencies have a responsibility to ensure that the credit profiles of renters are not adversely affected by their tenant status. A timely rental payment should reflect positively on a tenant's credit profile just as a timely mortgage payment improves the FICO score of the homeowner.
In its quest for tenants rights the American Tenants Association intends to delve into this inequity and work with credit reporting agencies and elected representatives to ensure that tenants are not discriminated against because of an unfair reporting method.
Wednesday, March 11, 2009
Let's See the Landlord's Credit Report!
With the growing number of tenant evictions due to landlord mortgage defaults and the loss of basic services such as water and timely refuse pick-up because landlords don’t pay their tax or municipal services bills, it might seem reasonable to conclude that tenants should ask to see a landlord’s credit score prior to signing an apartment or house lease. After all, most landlords require that the tenant’s credit be checked.
As part of our efforts on behalf of tenants, we will be drafting legislative initiatives calling for states to require that the portion of tenant rent payments applicable to the underlying mortgage payment, property management and utility bills be held in a separate legal escrow account for payment. In this way tenants can have reasonable assurance that these expenditures will be made and that they won’t face eviction or loss of services through no fault of their own.
Since a growing number of landlords are proving themselves to be inept financial managers it’s time tenants be protected from these irresponsible practices.
William M. Deegan
Executive Director
American Tenants Association
As part of our efforts on behalf of tenants, we will be drafting legislative initiatives calling for states to require that the portion of tenant rent payments applicable to the underlying mortgage payment, property management and utility bills be held in a separate legal escrow account for payment. In this way tenants can have reasonable assurance that these expenditures will be made and that they won’t face eviction or loss of services through no fault of their own.
Since a growing number of landlords are proving themselves to be inept financial managers it’s time tenants be protected from these irresponsible practices.
William M. Deegan
Executive Director
American Tenants Association
Tuesday, March 10, 2009
Welcome to the American Tenants Association
Welcome to the Website and Blog of the American Tenants Association!
The ATA was formed to serve as the voice and advocate for renters’ rights throughout the United States.
There are more than 95 million residential renters in our great country – it’s time our voice is heard!
Our nation is currently experiencing serious economic disruption. People are losing their jobs in record numbers, watching their savings and retirement accounts plummet and experiencing dramatic declines in home values. Renters have not escaped these disruptions. The mission of the ATA is to work with our elected representatives throughout the country and at all levels of government to ensure that tenants are not ignored and the nation’s leaders effectively address our problems.
One of our first tasks will be to aggressively fight for the rights of tenants in situations of landlord mortgage foreclosures. This is a growing epidemic all over the United States. We will be working with legislators throughout the country to find solutions to this serious issue.
Under the leadership of Stan Dale, our Director of Public Policy, we are also creating a “rent to buy” program whereby tenants occupying investment property under foreclosure or about to be can work with the lien holder to become new homeowners. We are excited about this endeavor and look forward to unveiling this program in the near future.
Check out our full legislative agenda elsewhere on our website.
The ATA is your organization! Membership is free to all residential renters and supporters of tenant rights. Feel free to offer your comments on our blog. Stay informed. And welcome aboard.
Best Regards,
William M. Deegan
Executive Director
American Tenants Association
The ATA was formed to serve as the voice and advocate for renters’ rights throughout the United States.
There are more than 95 million residential renters in our great country – it’s time our voice is heard!
Our nation is currently experiencing serious economic disruption. People are losing their jobs in record numbers, watching their savings and retirement accounts plummet and experiencing dramatic declines in home values. Renters have not escaped these disruptions. The mission of the ATA is to work with our elected representatives throughout the country and at all levels of government to ensure that tenants are not ignored and the nation’s leaders effectively address our problems.
One of our first tasks will be to aggressively fight for the rights of tenants in situations of landlord mortgage foreclosures. This is a growing epidemic all over the United States. We will be working with legislators throughout the country to find solutions to this serious issue.
Under the leadership of Stan Dale, our Director of Public Policy, we are also creating a “rent to buy” program whereby tenants occupying investment property under foreclosure or about to be can work with the lien holder to become new homeowners. We are excited about this endeavor and look forward to unveiling this program in the near future.
Check out our full legislative agenda elsewhere on our website.
The ATA is your organization! Membership is free to all residential renters and supporters of tenant rights. Feel free to offer your comments on our blog. Stay informed. And welcome aboard.
Best Regards,
William M. Deegan
Executive Director
American Tenants Association
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