Shaun Donovan, HUD secretary

The U.S. government’s settlement against five big banks was supposed to benefit distressed homeowners, but many states cannot resist diverting the funds to make-up for budget shortfalls, the New York Times reported. When the government reached the estimated $25 billion settlement with banks over mortgage and foreclosure abuses, $2.5 billion was earmarked for states to prevent foreclosures, investigate fraud and alleviate general housing market woes. Now, 15 states have announced that they will be budgeting the money for items other than housing — although 27 states have agreed to use their entire distribution as intended. [more]

HUD Secretary Shaun Donovan

Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, is pushing for mortgage refinancing reform and supporting a proposed bill to eliminate certain refinancing barriers, according to DS News. The Federal Housing Administration convened with the Senate Banking Committee yesterday where Donovan made his case that lower fees, simpler underwriting guidelines and manual appraisals for borrowers would increase refinance opportunities for homeowners. [more]

From left: HUD Secretary Shaun Donovan and President Barack Obama

The Federal Housing Administration continues to experience “considerable risks” to its finances, and the Obama administration will continue to minimize the FHA’s exposure in the mortgage market, Reuters reported.

To create a more “robust private system of housing finance and protect the FHA fund for the future” the government must scale back the FHA’s mortgage presence, Housing and Urban Development Secretary Shaun Donovan told Congress today, according to Reuters. [more]

HUD Secretary Shaun DonovanControversy continues to swirl around the Federal Housing Administration, as lawmakers are accusing the agency of exacerbating its problems by downplaying the extent of its financial struggles.

The Wall Street Journal reported that lawmakers are concerned the agency will need a bailout, a belief that both University of Pennsylvania research and an independent audit confirmed in recent weeks, and want Department of Housing and Urban Development Secretary Shaun Donovan to come clean.

The independent audit found that projected losses on the $1.1 trillion in mortgages the FHA backs would leave just $2.6 billion in reserves, or 0.24 percent of the value of the agency’s insured mortgages, to cover losses over the next three decades. [more]

Department of Housing and Urban Development Secretary Shaun Donovan responded to a recent report by Harvard Joint Center for Housing Studies today on CNBC. The report shows that one in every four U.S. households is paying more than half their income on rent and middle-income Americans are struggling just as badly and those in a low-income bracket. Rents are rising, vacancies are falling and buyers simply can’t get credit, the report revealed.

Asked about helping the rental housing market and pushing homeownership, Donovan says, in the video above, that HUD didn’t have the luxury of prioritizing one over the other. “We’ve had the biggest increase in worst-case rental housing needs over a two-year period, 2007 to 2009,” he said, “in the history of looking at those numbers.”
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AARP, a seniors’ organization formerly known as the American Association of Retired Persons, has filed suit against the U.S. Department of Housing and Urban Development, alleging that the federal agency’s policy changes on reverse mortgages have led many older homeowners into foreclosure, according to the New York Times. Reverse mortgages, available to individuals 62 years or older, allow homeowners to borrow against the equity of their homes and defer repayment until the loan holder dies. But while reverse mortgages have been popular among elderly property owners, the AARP suit claims that changes made to the program in 2008 are a significant detriment to loan holders. Under the altered program, a surviving spouse of a reverse mortgage holder who isn’t named in the loan document is on the hook to pay off the loan in order to keep his or her own home. [more]

The Department of Housing and Urban Development will release $1 billion
in mortgage assistance to the unemployed this spring, after receiving
complaints from lawmakers and advocacy groups that HUD was stalling in
their efforts. More than 60 national consumer advocacy groups called on
HUD to implement a program that would pay up to $50,000 per eligible
borrower, Housingwire reported. The HUD money comes with a 0 percent
interest rate and seeks to help homeowners with mortgage payments for up
to 24 months. [more]

A joint program from U.S. Housing and Urban Development and Health and Human Services will help nearly 1,000 non-elderly Americans with disabilities leave nursing homes or other facilities to live independently, the agencies announced today. HUD is providing $7.5 million in rental assistance vouchers to help these individuals rent private apartments. Those receiving rental assistance through the program will also receive health and social supports — from HHS’ Centers for Medicare and Medicaid’s “Money Follows the Person” grant program — that will enable them to live independently. TRD [more]

The Obama Administration has allocated $73 million for housing counseling, the Department of Housing and Urban Development announced today, aimed at helping families find suitable and affordable homes while avoiding foreclosure. The funds will be given to more than 500 different home counseling programs across the country. HUD Secretary Shaun Donovan said that the organizations receiving the funds “assist families in making more informed choices before they purchase a home and counsel families facing foreclosure.” The $73 million funding marks a 22 percent increase over last year’s allocation of $60 million. TRD

From left: Mike Kelly, John Rhea, Michael Bloomberg and Shaun Donovan

New York City Housing Authority general manager Mike Kelly has been asked to temporarily lead the Philadelphia Housing Authority — with Mayor Michael Bloomberg’s blessing. Kelly, who has operated under commissioner John Rhea, will be responsible for “leading Philadelphia through [a] transition period,” Bloomberg said. The new role, for which he was recruited by Shaun Donovan, the secretary of Housing and Urban Development, comes after Kelly completed a mixed-finance transaction that brought $300 million in additional capital to the city agency, Bloomberg said. Kelly has previously worked with housing agencies in San Francisco, New Orleans and the District of Columbia. TRD

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