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.
Monday, March 30, 2009
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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