"Senator's Plan Would Boost Home Loan Bank System"
American Banker (09/08/98) P. 4; Bennett, Robert J.

M&T Bank Vice Chairman Robert J. Bennett comments on the need to adopt the Hagel Home Loan bank initiative in order for U.S. homebuyers to receive competitively priced home mortgages. The Senate may once again consider Sen. Chuck Hagel's (R-Neb.) proposal which would provide a more effective mission-focused Home Loan Bank System. Despite what Bennett calls political criticism, he asserts that the Hagel proposal is a pro-consumer, safety-and-soundless measure that would reinforce the capital structure of Home Loan banks. Broad-based support for the Hagel plan comes from the Federal Housing Finance Board, 12 Federal Home Loan banks, the Independent Banker's Association of America, and America's Community Bankers. Last year, the Home Loan Banks earned a total of $1.52 billion on average capital of $18 billion. Bennett also serves as a director of the Federal Home Loan Bank of New York.

"Housing Remains Rock Solid Investment, NAR Says"
PRNewswire (09/04/98)

The National Association of Realtors (NAR) reports that housing continues to be a good investment due to the fact that the industry has traditionally been unaffected by the volatile stock market. However, NAR President R. Layne Morrill cautions that the true return on a home investment should not be based solely on home appreciation, but should also factor in the amount leveraged. He adds, "Housing is not a quick-in, quick-out investment. However, when purchased for the long term, housing is one of the safest investments a consumer can make. In addition to the savings accumulated through a buildup of equity and the tax advantages, a home provides shelter." Indeed, the latest "State of the Nation's Housing" report from Harvard University's Joint Center for Housing Studies shows a substantial increase in the rate of return on housing the longer it is held. A homeowner who experiences an annual home appreciation rate of 5 percent and who contributed a down payment of 10 percent will typically receive a striking 94 percent return after owning the residence just three years.

"Home Mortgage Buyers Can Name Their Price Online"
Reuters (09/02/98)

Priceline.com and LendingTree Inc. have formed an alliance that will allow home buyers to name the price and terms of their mortgages over the Internet. Under the system, home buyers may access Priceline.com and indicate the price they are willing to pay for a mortgage. From there, LendingTree's software matches a buyer's criteria with qualified lenders such as PNC Bank Corp. who can most successfully meet the terms of the buyer. Both firms offer this type of service for other purchasing options such as automobiles, and this new agreement will allow them to offer home buyers a variety of options, according to Priceline.com Chairman and CEO Rick Braddock.

"Citibank Opens a New Community Lending Center in Harlem"
National Mortgage News (08/24/98) Vol. 22, No. 48; P. 21; Anderson, Kim Renay

Citibank recently opened its first Community Lending Center in Harlem in an effort to increase the city's 6 percent homeownership rate, one of the lowest in the country. One reason the city's homeownership rate is so low is that there is a limited housing stock, but the center's administrators say they will encourage landlords to convert rental properties into residences. The center will educate Harlem residents about owning a home and the steps needed to apply for a mortgage. "We feel there is a demand and market for homeownership," said Elizabeth Garza, vice president of community investment at Citibank. The center will be operated in conjunction with local community and non-profit organizations, and Fannie Mae will also be involved in the center by purchasing the loans provided by Citibank to first-time homebuyers. The center is part of Citibank's $115 billion commitment to assist low- to moderate-income families.

"Residents Want More Say in TIFs"
Illinois Real Estate Journal (08/17/98) Vol. 1, No. 17; P. 7; Fingeret, Lisa

Tax increment finance (TIF) districts are viewed by many community activist groups as an efficient method of restoring cities that are suffering from economic decline. But these groups also say there should be more resident involvement in the use of funds generated from TIF. "[Residents] have to be stakeholders in the economic development," said Jacqueline Leavy, executive director of the Neighborhood Capital Budget Group of Chicago. When TIF is implemented, estimated assessed value of properties freeze, and any taxes paid on property value increased are placed in a TIF fund to be used for economic development. These can be applied to both residential and commercial development, but are generally approved the same way in each. Critics of the current TIF process say there isn't enough involvement from residents. Because of this, control of the funds raised from TIF are often in the hands of private developers, which can be dangerous to the community, according to Jim Lemonides of the Greater North Pulaski Development Corp. To solve this problem, a number of community activists propose a checks and balances system in which developer plans are discussed before being implemented. So far no long-term effects of TIF have been recorded, although this type of tax relief is expected to keep areas affordable. But to succeed, they require strong organization and communication between city planners, developers, and community groups.

"Summer Wind Rouses Buyers"
Crain's New York Business (08/24/98) Vol. 14, No. 34; P. 6

New York's residential real estate market has been so hot that marketers are reaching out to potential local buyers even if many of them are on vacation. To reach the wealthy buyers, The Related Cos. is advertising heavily in popular vacation areas such as Martha's Vineyard and the Hamptons, in the hope of landing buyers when they return home. In a development in Central Park featuring luxury condos, 15 units have been sold so far at prices as high as $4 million.

"House Panel Approves Federal Disaster Bill"
Insurance Record (08/13/98) Vol. 64, No. 17; P. 33

The House Banking and Financial Services Committee has voted to approve an amended version of the Homeowners Insurance Availability Act (HR-219), which would create a system to allow eligible state programs to obtain federal reinsurance contracts from the U.S. Treasury. The contracts would be used to respond to market problems in the aftermath of a disaster. The Independent Insurance Agents of America approves of the legislation, saying that it will give millions of homeowners hope in finding affordable homeowners protection. The American Insurance Association and the Reinsurance Association of America opposed the bill on the grounds that private market alternatives would be better. They promoted HR-230 instead, saying that it would limit a federal role in the insurance market while boosting private market expansion.

"Officers Elected for 1999 C.A.R. Leadership Team"
California Real Estate (08/98) Vol. 78, No. 7; P. 54

President-elect Diana Bull will serve as president of the California Association of Realtors (CAR) during 1999. The new president-elect of the Realtor association will be Dick Gaylord. Gary Thomas, meanwhile, will remain the treasurer of CAR for another year. The three real estate professionals will begin their roles with CAR starting in November after the convention of the National Association of Realtors in Anaheim, Calif.

"Association Helps Residents Build Play Area"
Managers Report (08/98) Vol. 12, No. 8; P. 73; Davis, Eloise

Helping to fund a project is a good indication of one of the benefits of being a part of a community association. For homeowners in the Sierra Village Homeowners Association in Newhall, Calif., they will be able to build a play area for the community's kids as a result of the association's commitment to pay half the cost of the project. The board decided to come up with half of the cost primarily because the project had not been planned in their budget. The community will use one of its landscaped areas to create a play area the will include a jungle gym, slides, swings, and ropes.

"Kentucky Association Learns That Lower Flood Insurance Deductible Would Have Saved Them Money"
Managers Report (08/98) Vol. 12, No. 8; P. 62; Shepherd, Gail

Homeowners associations may want to reconsider their decision to raise their deductibles on their flood insurance, as a result of the change in the national flood insurance policies that took effect in 1997. The change involved bottom floors of high rises, and how flooding of these floors make the buildings more susceptible to damage. Because it did not have any flooding problems since 1989, Kentucky Commercial Services (KCS), manager of Harrod's Landing, raised its deductible from $1,000 to $5,000. And it just so happened that Louisville suffered its worst flood in 30 years two months after KCS raised its deductible. Seven buildings in Harrod's Landing were damaged. "We saved $7,000 on our premiums, but we had to pay out $35,000 on the deductibles," says Ed Cohen of KCS. In renewing its policy, KCS settled for a deductible of $500 this time.

Published: September 8, 1998

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