February 11, 2010
Yet More Immergluck: The Accumulation of Lender-Owned Homes During the Mortgage Crisis
Dan Immergluck (Georgia Tech--Planning) strikes again, this time with The Accumulation of Lender-Owned Homes During the U.S. Mortgage Crisis: Examining Metropolitan REO Inventories, forthcoming in Housing Policy Debate. The abstract:
A key concern among policymakers and community developers in recent years has been the extent to which lender-owned homes, often called real estate owned or “REO” properties accumulate in different local housing markets during the mortgage crisis. This paper describes the accumulation of REO properties in 356 metropolitan statistical areas (MSAs) from August 2006 to August 2008. It examines differences in both changes and static levels of REO activity across MSAs and compares changes in REO levels to changes in home values over the same period. Special attention is paid to twelve large MSAs with substantial levels of REO as of August 2008. A model of REO volume at the metropolitan level is estimated which includes differences in state foreclosure legal processes and timing among the independent variables. Finally, cluster analysis is used to identify a simple typology of MSAs based on REO levels and home price changes.
November 02, 2009
Reiss on Subsidizing Mortgages of Small Multifamily Buildings
David Reiss (Brooklyn) has posted Landlords of Last Resort: Should the Government Subsidize the Mortgages of Privately-Owned, Small Multifamily Buildings? The abstract:
The absence of stable financing options has long caused difficulties for owners of small multifamily buildings. Despite the ongoing maturation of a secondary mortgage market for small multifamily mortgages, this housing stock continues to shrink due to abandonment, demolition, foreclosure and other causes. As these buildings house many low-income households, some have suggested subsidizing the financing costs for the owners of these buildings. Any proposal to subsidize these landlords to meet affordable housing goals, however, should be predicated on determinations that (i) it is an efficient means to provide housing to the neediest tenants and (ii) the multifamily mortgage market is subject to failures that make such government intervention appropriate.
This article first describes what little is known about small multifamily properties and their owners. It then describes the lending environment for real estate entrepreneurs over the last hundred years. Finally, it evaluates the role the government should play in the small multifamily mortgage sector. The article concludes that subsidizing owners of small apartment building is an inefficient and unwarranted affordable housing policy and that more direct subsidies to low-income households, such as housing vouchers, are preferable.