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Freddie Mac, the country’s largest backer of apartment loans, will offer low-cost loans to real-estate owners willing to keep their buildings affordable to middle-class families for years to come, the Wall Street Journal reported. The move could open up a new approach to creating and preserving middle-class housing. It uses market incentives rather than government subsidies to persuade real-estate companies to preserve units for the middle of the rental market, an area of concern for policy makers in recent years. “The supply of workforce housing is rapidly declining. There’s an urgent need to preserve what’s there and find ways that you can effectively create more,” said David Brickman, an executive vice president at Freddie Mac and head of its multifamily division. The initiative will offer lower interest rates to landlords who agree to rent the majority of units in a building at levels affordable to tenants making 80 percent or less of the area’s median income, a range that typically includes nurses, teachers and police officers. The units must remain affordable for the term of the loan, typically about a decade.

Last year, the two largest sources of American mortgage financing — federally backed Fannie Mae and Freddie Mac — began accepting home-purchase loans that carried no formal property appraisal, according to a commentary in the <em>Washington Post</em>. Instead, the valuations supporting the mortgages were performed by Fannie and Freddie in-house, using proprietary analytics and deep stores of property data. Only highly select loans were eligible for appraisal waivers, primarily those with sizable down payments (20 percent and up) plus previous appraisals on file. Buyers, refinancers and lenders were not permitted to request waivers: Fannie and Freddie were the ones that identified eligible properties and offered waivers at the application stage. Both companies had introduced the no-appraisal concept earlier for refinancings. The expansion to home-purchase loans was a big deal, though, because they’re considered riskier than refinancings, where borrowers’ credit and equity are well established and known to lenders. 

U.S. mall owners are fighting back after a bumpy start to the year — with more than 90 million square feet of retail space already slated to go back on the market in 2018, according to data from CoStar Group, CNBC.com reported. "2018 will be a difficult year for CBL," CBL Properties CEO Stephen Lebovitz said last week. He said that CBL's first-quarter financial results were hit hardest by a wave of bankruptcies and store closures to round out last year, which also flowed into the start of 2018. In the latest quarter, CBL's occupancy rate dropped slightly to 91.1 percent from 92.1 percent a year ago. CBL's portfolio remains the least productive in the mall space, with tenant sales on average of $376 per square foot. Next in line is Washington Prime Group, which said sales at its tier-one assets were $401 per square foot during the first quarter, while sales at tier-two centers were $286 per square foot. "Since 2014, we have had approximately 2.3 million square feet, or nearly 10 percent of inline space, succumb to the black-cloaked, scythe-wielding grim reaper of bankruptcy," WPG CEO Lou Conforti told analysts and investors last week. Read more. 

Occupancy issues are at the heart of many significant retail cases, as detailed in the ABI publication Retail and Office Bankruptcy: Landlord/Tenant Rights, available at the ABI Store. 

A bankruptcy trustee has filed a lawsuit against Paul Manafort in California alleging that he falsely claimed he was a creditor owed $2.7 million in a failed real estate deal with his former son-in-law, Reuters reported. The lawsuit, filed by trustee Thomas Casey on Thursday in the federal bankruptcy court in Santa Ana, California, adds to the legal challenges facing Manafort, who was head of Donald Trump’s presidential campaign for a few months in 2016. Manafort has been indicted for money laundering, tax evasion and other charges by a special counsel probing alleged links between the Trump campaign and Russia. Manafort has denied the charges and is preparing for trial. The California lawsuit relates to a $2.7 million deed of trust that Manafort recorded in Los Angeles County that positioned himself as a secured creditor in a luxury property he was developing in partnership with his former son-in-law, Jeffrey Yohai. The deed of trust was recorded Dec. 20, 2016, one day before the company that owned the property filed for bankruptcy protection to stave off foreclosure by lender Genesis Capital LLC, according to property and court records.

Owning real estate in limited liability companies is a legal and increasingly popular practice, but it also speaks to the growing role of LLCs in the nation’s housing market and some of their unintended consequences, according to a New York Times commentary. LLCs shield property owners from personal liability while obscuring their identities. But so much anonymity also enables money laundering, and it can mean that tenants struggle to hold landlords accountable, that cities fail to fix blight and that researchers can’t answer basic questions about the housing market. As much as people may want to keep their financial dealings private, the housing market has long been an unusually transparent place, according to the commentary. There is little good national data tracking the rise of LLCs. But in 2015, according to the Census Bureau’s Rental Housing Finance Survey, about 15 percent of all rental properties were owned by LLCs, limited liability partnerships or limited partnerships. That represented one-third of all rental units, and that can include single-family houses or apartment buildings.

*The views expressed in this commentary are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI.

Jeff Stollenwerck, a 15-year veteran of Sears Holdings Corp. and president of its real estate business, will soon be departing the U.S. department store operator, Reuters reported. Stollenwerck’s departure comes as billionaire Sears CEO Eddie Lampert said in a letter this week that his hedge fund, ESL Investments Inc., would be interested in acquiring the struggling retailer’s real estate, including its $1.2 billion in debt, Kenmore appliances brand and parts of its home services business. Stollenwerck was instrumental in Sears’ real estate financings and deals, which over the years included a spin-out of its 235 best properties into a publicly traded real estate investment trust, Seritage Growth Properties, some of which the retailer then leased back. Read more. 

Occupancy issues are at the heart of many significant retail cases, as detailed in the forthcoming ABI publication Retail and Office Bankruptcy: Landlord/Tenant Rights, available at the ABI Store. 

U.S. new-home sales surged in March, capping off a strong first quarter in a segment of the housing market characterized by solid buyer demand, the Wall Street Journal reported. Purchases of newly built single-family homes — a relatively narrow slice of all U.S. home sales — increased 4.0 percent from the prior month to a seasonally adjusted annual rate of 694,000 in March, the Commerce Department said yesterday. March’s rise comes on the back of a 3.6 percent increase in February and upward revisions for both January and February sales rates. The solid sales gains show a low unemployment rate and historically low layoff levels are supporting demand for housing, said Mark Vitner, senior economist at Wells Fargo.