The Department of Housing and Urban Development has extended a moratorium on evictions and foreclosures on home mortgages it insures against default, protecting many first-time home buyers, the New York Times reported. The moratorium will now run through Feb. 28. It had been set to expire at the end of the month. The foreclosure moratorium applies to mortgages backed by the Federal Home Administration, a division of the federal housing department. In recent years, F.H.A. guaranteed mortgages have become a major way for first-time buyers to acquire homes. The biggest underwriters of F.H.A. mortgages have been so-called nonbank lenders that are not affiliated with a major bank. HUD is also similarly extending the deadline for cash-strapped homeowners to seek a reprieve from making full mortgage payments for up to six months.
Blackwells Capital has made an unsolicited proposal to acquire the portion of Monmouth Real Estate Investment Corp. that it doesn’t already own in a transaction valued at about $3.8 billion, including debt, Bloomberg News reported. The all-cash offer at $18 a share was made Friday, and is the second time Blackwells has proposed acquiring the remaining interest in the industrial real estate investment trust. The offer price is a 6% premium to Monmouth’s closing share price on Friday, and about a 22 percent premium to the price on Dec. 1 when Blackwells made the previous offer, which was rebuffed. New York-based Blackwells has called on Monmouth’s board to create a special committee to review the proposal that excludes affiliates and members of the company’s founding Landy family, the people said. It has asked that the company engage in exclusive bilateral talks with Blackwells followed by a go-shop period if a deal can be reached, they said. Blackwells, which owns less than a 5 percent stake in Monmouth, believes the company is undervalued and has underperformed its peers. Blackwells believes there are several reasons for Monmouth’s underperformance, including its poor capital allocation and weak corporate governance, and could more effectively make the changes it needs as a private company. Chief among those concerns is the expensive financing it has taken on to fund its expansion over the years, and the company’s portfolio of securities in other REITs that have been a drag on earnings. Monmouth said last month that it had more than $10 million in unrealized losses on its securities portfolio during its fiscal fourth quarter. At the end of September, those investments included CBL & Associates Properties, which filed for bankruptcy protection in November, according to regulatory filings.
A growing percentage of U.S. homeowners are looking to delay making mortgage payments, the latest sign that the economic recovery is hitting a snag, Bloomberg News reported. In the first week of December, the proportion of mortgage borrowers that started seeking forbearance relief rose to its highest level since August, according to the Mortgage Bankers Association. And call volume at the companies that collect payments rose to the highest level since April, a sign of growing distress among homeowners, the trade group said yesterday. With long-term unemployment rates rising and COVID-19 cases surging, “it is not surprising to see more homeowners seeking relief,” Mike Fratantoni, chief economist at the MBA, said in a statement. The increasing number of homeowners that have started seeking mortgage forbearance comes even as the economy has shown signs of recovery, underscoring how uneven the turnaround is. U.S. household net worth reached a fresh record of $123.5 trillion in the third quarter, while almost 4 million workers have been unemployed for more than 27 weeks. Homeowners are delaying payments under a U.S. forbearance program that started in March and allows mortgage borrowers to take a break for as long as a year without penalty. The total percentage of loans that are in forbearance edged lower to 5.48 percent in the week ended Dec. 6, from 5.54 percent the week before. Yet the number of borrowers looking to enter forbearance rose to 0.12 percent of all the loans mortgage servicers collect payments for, the most since August, the MBA said.
The Consumer Financial Protection Bureau (CFPB) yesterday issued two final rules revising the definition of “qualified mortgages” that the bureau said would promote access to credit and transition the mortgage market away from a regulatory exemption given to Fannie Mae and Freddie Mac, <em>National Mortgage News</em> reported. The CFPB finalized one rule establishing a new general QM standard, which was unchanged from a June proposal. It adopted a pricing threshold to determine if loans can avoid liability under ability-to-repay requirements, replacing the current debt-to-income limit of 43 percent. The final QM rule would give lenders relief for loans capped at 150 basis points above the prime rate. The bureau said that it determined that a loan’s price is a strong indicator of a borrower’s ability to repay and is a “more holistic and flexible measure” than DTI alone.
Shareholders of Fannie Mae and Freddie Mac got a mixed reception at the U.S. Supreme Court on a lawsuit that seeks billions of dollars and could affect the push to end government control of the mortgage giants, Bloomberg News reported. Hearing arguments by phone yesterday, the justices considered whether investors can challenge the 2012 agreements that let the federal government collect more than $300 billion in profits from Fannie and Freddie. A ruling in the investors’ favor in the case would give them a chance to collect a massive settlement. Most justices directed tough questions at lawyers for both sides. Chief Justice John Roberts asked a government attorney to respond to the investors’ contention that “their stock was completely wiped out in a unique way.” But later Chief Justice Roberts told a lawyer for the investors that “this was a lifeline thrown to your client.”
Nile Niami, the brash real-estate developer known for his over-the-top megamansions, has placed one of his high-priced spec homes in bankruptcy, the Wall Street Journal reported. A company controlled by Niami filed for bankruptcy protection for a home the developer built in West Hollywood, records show. The property first came on the market for $55 million in early 2019, but the price was later reduced to $39.995 million. The property isn’t currently publicly listed for sale. The filing values the property at $30 million, and lists the company’s total liabilities at $59.244 million. Niami was facing the prospect of a foreclosure sale at the property, records show. In April, a limited-liability company tied to Canadian investor Lucien Remillard, one of his lenders and a longtime partner, filed a notice of default on the property.
The century-old, shuttered St. Patrick’s Catholic Church in downtown Raton, N.M. is up for sale. And what a “great value,” a real estate listing touts, with an asking price of $199,500. A dispute over St. Patrick’s and hundreds of other church properties is at the crux of three new lawsuits pending as the archdiocese’s chapter 11 bankruptcy reorganization enters its third year without a settlement, the Albuquerque Journal reported. The lawsuits allege that more than an estimated $245 million in property owned by the archdiocese was fraudulently transferred to its parishes or their trusts and should be available to help pay claims filed by nearly 380 victims of clergy sexual abuse. Lawyers for the archdiocese and its 94 parishes deny any fraud and argue in one court filing that the litigation is intended to strip parishes of assets that have “always been beneficially or legally owned by the Parishes.” A hearing set for today could decide whether the lawsuits, filed by attorneys for the victims, should be halted pending an appeal to the 10th Circuit Court of Appeals. One of the victims’ lawsuits lists the St. Patrick’s parcel in Raton as among more than 400 properties purportedly held by the archdiocese for the “beneficial interest” of its parishes. But the lawsuit says that the parishes’ interests weren’t recorded in title or county real estate records and that the $59 million worth of property should be part of the archdiocese bankruptcy estate. Lawyers for the parishes say the properties are held in trust “under canon law.”
