Tag Archives: landlord associations

FHA Bailout Imminent? Chief Says “No Way!”

Reports of an FHA bailout were widespread this weekend after the House heard testimony from a former Fannie Mae exec that the agency is heading over a cliff, with $40 billion in projected losses that will have to be offset by taxpayer dollars to buffer a flailing mortgage market.

But the current FHA chief dismissed the analysis as unfounded.
At the same time, however he admits that a yet-to-be released audit will show a shortfall in reserves, below the legal limit for the agency.  In related reports, the agency’s loan default rate may be as high as 20%.
Still, the agency chief denies that FHA is in trouble.  He claims that reserves will rise, not fall short over the next two years as home prices continue to rebound. 
Speculation over FHA’s financial soundness is nothing new.  Many experts have predicted that the agency is playing it too risky by allowing low down payments when negative equity is eroding the housing market. One referred to the practice as “pseudo-subprime.”
Expert testimony concluded last week with recommendations that FHA increase down payment requirements to 10%, lower the (recently elevated) cap on loan amounts, and require lenders to co-insure FHA loans.
However, for now, lawmakers appear willing to look the the other way, and remain optimistic in the housing recovery.  As Congresswomen Maxine Waters puts it, “Without the FHA, there would be no mortgage market right now. 
See more on Real Estate Financing at AAOA.
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New Law Will Stick it to Landlords


So much for property rights.

A councilman in Prince George’s County, Maryland has come up with a way to stick it to landlords, by making them responsible for law enforcement against their tenants. 
The proposed law is part of the county’s new crime reduction program.  Under the rules, landlords, not police, are responsible for dispensing justice on unruly tenants. 
Forced Evictions
The new proposal requires that landlords evict tenants who have been ticketed for noise violations.  This includes any sort of noise that can be heard a short distance outside the rental property.  The evictions are at the landlords’ expense, in a county where the backlog can take several months to complete. 
Landlords who fail to comply will lose their rights to rent in the county.
Once a tenant has been evicted under this new law, they are to be blacklisted from any rentals in the county, possibly for as long as a year.  It is not clear whether the tenant actually has to be convicted of the noise ordinance violations before they are blacklisted. 
Landlords who rent to these black sheep may face penalties, increasing the already difficult burden of screening tenants, and creating possible liability for discrimination.
Opponents to the measure point out that law enforcement is not a landlord’s job, nor their responsibility.  But it appears many local residents feel that it is unruly tenants who are ruining their otherwise tranquil neighborhoods. 
This law is not unlike other measures proposed in small college towns around the country, where council members are experimenting with zoning restrictions that prohibit unrelated roommates, restrict the number of residents per property, limit parking rights, impose curfews, or beef up police patrols around rental properties.  In a neighborhood adjacent to the University of Colorado, a school that rates high on the party meter, the city attempted to discourage the barrage of raucous keggers and outdoor couch fires by prohibiting all residents of the neighborhood from setting any upholstered furniture on their porches, decks or lawns.
If the Maryland law does take effect, there is some controversy over whether it is constitutional to single out rental property owners. 
After all, the homeowner with the chronically barking dog is not being threatened with seizure of their property. 
See AAOA”s feature,  Landlord Too Lax on Noise Enforcement.
American Apartment Owners Association offers discounts on products and services for landlords.