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11 Million Households Could Be Evicted Over the next Four Months

Submitted by ckanon@abi.org on
Every year, about 2.3 million American renter households receive eviction papers at some point. During the COVID-19 pandemic, we might see that many evictions in one month, Fast Company reported. Global advisory firm Stout, with input from the National Coalition for a Civil Right to Counsel (NCCRC), used census survey results and income data to develop a new eviction estimation tool that estimates how many households could be at risk of eviction as moratoriums end, courts reopen, and rent relief efforts fall short. More than 16 million renter households are at risk of eviction, according to the tool, and more than 11 million households could be served with eviction papers over the next four months. Since April, weekly census surveys have been asking Americans if they paid their last month’s rent on time and how confident they are that they’ll be able to pay next month, along with questions meant to assess employment status, food security, and other impacts of the COVID-19 pandemic. The Stout eviction estimation tool combines that with data about how rent-burdened Americans are by income level. With a heavier rent burden, there’s a greater chance that someone’s answer of having “moderate confidence” or “no confidence” that they can pay rent will actually translate to an eviction or more rent instability. In most of the U.S., there’s no right to counsel for housing court; on average, 90% of landlords are represented in court, but only 10% or less of tenants are, which Pollock says skews how likely tenants are to win eviction cases.

U.S. Companies Start Cutting Office Space

Submitted by ckanon@abi.org on
Corporate America is downsizing its real estate footprint as companies allow more employees to work from home, a growing threat to the bottom line of owners of traditional office buildings and a sign that companies are looking for ways to cut costs as a result of the coronavirus pandemic, Reuters reported. An analysis of quarterly earnings calls over the past week revealed more than 25 large companies plan to reduce their office space in the year ahead, a move designed to reduce the second-largest expense after payrolls at corporations. Analysts say that the plans to cut back on real estate are likely the first wave of cost-cutting measures to hit office workers as companies try to maintain margins going into what may be a long recession. So far, the majority of the 14.7 million U.S. jobs lost during the pandemic have been in hard-hit areas such as restaurants, travel and retailers. Reductions in office spending could likely be followed by layoffs and investments in technology that should help improve productivity with a reduced workforce. Morgan Stanley in June forecast that work-from-home policies will increase vacancy rates in office buildings. While companies tend to cut back on their real estate needs during typical recessions, the last four months of economic lockdown have shown that many workers can remain productive at home. As a result, the cutbacks that companies are making are more likely to be permanent, he said.
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More Than 1 in 3 Renters Did Not Pay July Rent on Time

Submitted by ckanon@abi.org on
Americans are struggling as a result of the coronavirus pandemic and the ensuing economic fallout. According to a report compiled by Apartment List, 36% of renters and 30% of homeowners did not make full on-time payments in July, Forbes reported. The startling numbers hint at the magnitude of the financial pain that tens of millions are experiencing. Even as the economy has widely reopened in the face of record numbers of COVID-19 cases, it's clear that the shock of mass layoffs and furloughs has left a lasting mark. All eyes are on the next stimulus plan that has been hinted at by leaders in both chambers of Congress. It's evident that any economic recovery plan needs to include provisions to keep Americans in their homes, or the results could be catastrophic. According to the latest data, the average household spends $1,674 a month on housing.
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Rural Real Estate Prices Rise as People Consider Leaving Cities

Submitted by ckanon@abi.org on
The COVID-19 pandemic has already changed the way Americans live, but its long-term repercussions may be with our world even after the virus is eventually controlled, NBC News reported. Recent data serves as a reminder of how consequential the coronavirus could be to the country’s future, even beyond health concerns. The most common word associated with the virus, through its rise and plateau and renewed rise, might be uncertainty — and that mood is reflected in a shift in how Americans are spending. The COVID crisis is challenging and changing long-held consumer patterns. The shifts happening during the pandemic are not only far-reaching, they potentially could endure long after a vaccine or treatment is found. New data that shows an even more enduring change could be coming: New attitudes about where people want to live, as people are interested in moving and there seems to be an increasing appeal in properties outside of cities. These figures, which compared this June to June 2019, found that homes in rural and suburban zip codes saw the biggest jump in average views per property.

Investors Try to Push Mysterious California Real Estate Empire Into Bankruptcy

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Backers of a California real-estate investment firm under investigation by the Securities and Exchange Commission have moved to push it into bankruptcy, hoping to shine a light on what happened to their money and determine a way to get it back, WSJ Pro reported. Professional Investors Security Fund Inc. was targeted Thursday in an involuntary chapter 11 filed in a San Francisco bankruptcy court by investors who put an aggregate of more than $5 million into the operation. The SEC began probing the business after the death of its founder in May, when lawyers working on his estate found there wasn’t enough money to pay investors unless money from new investors was used. As such cash recycling would be improper, lawyers sifting through the estate of founder Kenneth Casey instead shut off payments to investors, alerted the SEC and hired specialists to comb the books. The business continues to operate, collecting rents and managing residential and commercial properties in California’s wealthy Marin and Sonoma counties, some of America’s most expensive real-estate markets. But investors aren’t getting paid and many aren’t happy with the answers they’re getting. The involuntary petition, a procedure available to creditors, is designed to protect assets, said Debra Grassgreen, a partner with Pachulski Stang Ziehl & Jones LLP representing the investors. The involuntary bankruptcy proceeding, case No. 20-30579, has been assigned to Judge Hannah Blumenstiel.
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Mall Owner CBL Prepares to File for Bankruptcy Protection

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CBL & Associates Properties Inc., the owner of more than 100 shopping malls across the U.S., is preparing to file for bankruptcy, according to people with knowledge of the plans, Bloomberg reported. The company has been negotiating with its lenders in an effort to enter chapter 11 with a consensual restructuring agreement in place. The plans aren’t final, and elements could change. CBL, which operates mostly so-called Class B malls, has been hurt in part by struggles of retailers including Dick’s Sporting Goods Inc. and Ascena Retail Group Inc., among the landlord’s top tenants based on revenue at the end of 2019. CBL’s own financial distress shows the impact of retail-sector failures, which have come fast and furious in recent years. Shares of Chattanooga, Tenn.-based CBL plunged 11 percent after Bloomberg reported the bankruptcy preparations, and dropped an additional 18 percent. The mall owner said in June that the loss of income from stores withholding rent during the COVID-19 pandemic had forced it to skip an interest payment due on some of its more than $3 billion debt. It has a forbearance agreement with debt-holders that was extended until July 22. CBL bonds maturing in 2023 last traded around 25 cents on the dollar.
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Big Banks’ Request HUD Not to Weaken Redlining Rule

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Executives from the country’s four biggest banks — Bank of America, Citigroup, JPMorgan Chase and Wells Fargo — have asked the Department of Housing and Urban Development not to rewrite requirements to ensure they’re not accidentally discriminating against Black and Latino customers in their mortgage businesses, the New York Times reported. “HUD should acknowledge that Americans’ attention to racial discrimination is more pronounced and expansive,” Michael DeVito, Wells Fargo’s executive vice president for home lending, said in a letter to HUD Secretary Ben Carson on Tuesday. “People across the country have considered more closely that centuries of discrimination, segregation and economic disenfranchisement have lasting impacts today, including discriminatory effects in housing,” DeVito wrote. Although the banks stopped short of saying no policy change should ever be made, the request for a delay was unusual in the world of finance, where firms regularly seek fewer regulations. The proposed change would spare the banks from fines and legal fees by effectively reducing the number of lawsuits and government enforcement actions against them. It would also make it easier for banks to use algorithms and artificial intelligence to market, underwrite and price home loans without worrying whether those calculations accidentally discriminated against disadvantaged groups. But the banks may be realizing there’s more to the issue than the regulatory and legal considerations. The proposed rule governs the concept of “disparate impact,” in which a practice by a lender or housing provider creates an unequal playing field, even if unintentionally. Policies that have a disparate impact on disadvantaged groups are illegal under the Fair Housing Act of 1968.

House Financial Services Committee Hearing Today to Examine Mortgage Services' Implementation of the CARES Act

Submitted by jhartgen@abi.org on

The House Financial Services Subcommittee on Oversight and Investigations will hold a hearing at noon ET today titled "Protecting Homeowners During the Pandemic: Oversight of Mortgage Servicers’ Implementation of the CARES Act." For the full witness list, access to prepare testimony and a link to the live webcast of the hearing, please click here.