Housing Finances

The Supreme Court, in a defeat for labor unions, ruled Wednesday that Congress has the authority to deny food stamps to workers on strike. On a 5-3 vote, the justices rejected union arguments that the 1981 food stamp amendment was a cold-hearted move to punish dissident workers and give management an advantage in ending labor disputes.

WASHINGTON - President Obama nominated Democratic Rep. Mel Watt to be the top regulator for Fannie Mae and Freddie Mac, moving to replace a career bureaucrat who has been sharply criticized by liberals for not doing more to help troubled homeowners. But confirmation of Watt, a 20-year congressman from North Carolina, to be director of the Federal Housing Finance Agency is expected to be blocked by Senate Republicans. And the fight over the nomination could make it even more difficult for Republicans and Democrats to come together on legislation to overhaul the housing finance system and replace taxpayer-owned Fannie and Freddie.

More than most other housing officials in Orange County, Bob Pusavat is credited by affordable housing advocates with making innovative use of scarce resources to attack the shortage of housing for low-income families. And he's done it without creating community ill will. Pusavat, the county's manager of housing and community development and redevelopment, has aggressively sought state and federal funds to build low-income housing.

WASHINGTON — Buoyed by rising home prices, Fannie Mae reported a second-quarter profit of $5.1 billion and said that for the second straight quarter it did not need more federal bailout money for that period. The improving real estate market was the main driver of one of the most profitable quarters ever by Fannie, the huge housing finance company seized by the government in 2008 along with sister firm Freddie Mac as the collapse of the housing market pushed them near bankruptcy.

The Los Angeles City Council voted Wednesday to appropriate $14 million in community redevelopment funds to build and rehabilitate housing in quake-damaged areas of the city. In the same action, the council voted to set aside another $14 million for housing in areas affected by the civil unrest of 1992 and $18 million for citywide housing Council debate centered on how the redevelopment funds should be divided among areas of the city.

At a time when affordable housing was as scarce in Orange County as congestion-free days on the Santa Ana Freeway, local governments had stashed away almost $33 million that was supposed to be spent on housing, the state says. The money was in the coffers of some of the county's 17 redevelopment agencies in June, 1988, according to a report by the state Department of Housing and Community Development.

An increasingly popular way for local governments to raise money for the development of low- and medium-income housing is to put the touch on commercial developers. Cities throughout the nation have set up housing funds by charging fees for commercial development on the theory that new jobs increase the demand for affordable housing. The funds have been used for the construction or rehabilitation of low-cost housing.

A quarter-century after a coalition of activists filed a class-action lawsuit forcing government agencies to replace low-income housing lost in the construction of the Century Freeway, the battle is still raging. Never mind that the freeway, completed more than three years ago, is now a bustling thoroughfare and that thousands of affordable apartments have been built under a 1979 federal consent decree that ended the lawsuit.

In a move to ease the path to home ownership for low- and moderate-income families, the Federal National Mortgage Assn. last week announced a $10-million mortgage loan program for East and Southeast Los Angeles County residents. Officials said the program, which will be funded by Fannie Mae and administered through First Interstate Bank, will lower two of the biggest barriers facing prospective home buyers: down payment and credit history.

For Hector Huezo and his family, Los Angeles' new Casa Gloria apartment house has been a godsend. Where else could they find a sparkling three-bedroom, two-bath apartment for $353 a month? But for taxpayers, Casa Gloria has been a lesson in the high cost of low-cost housing. Each of its 46 apartments came with a $233,000 price tag, making the earth-toned building on a gritty stretch of Temple Street near Echo Park the most expensive affordable-housing project in California history.

WASHINGTON — A key federal regulator has rejected a push by the Obama administration to reduce the mortgage debt of millions of distressed homeowners. It's a setback for the White House, which wants to reduce foreclosures to help the economic recovery. Edward DeMarco, acting director of the Federal Housing Finance Agency, said Tuesday that allowing up to 2.6 million borrowers who owe more than their houses are worth to have their mortgage principal reduced would end up costing taxpayers money and could encourage additional defaults.

WASHINGTON — Two federal agencies with far-reaching influence over the mortgage market are working on a problem that could affect the ability of many consumers to obtain a home loan: How to encourage private lenders to ease up on their underwriting restrictions that go beyond what the agencies themselves require for mortgage approvals. Both the Federal Housing Finance Agency, which oversees giant investors Fannie Mae and Freddie Mac, and the Federal Housing Administration, which runs the low-down-payment FHA program, are considering steps they might take to persuade lenders to open the mortgage spigots a little wider.

With legislation to impose new regulations on Buy Here Pay Here dealers marching through the statehouse, California's used car industry is redoubling efforts to block their passage. But the insurgent opposition, which in recent weeks formed a new group to stop the three bills, will have to take its fight to Sacramento without the aid of one of the state's most powerful lobbies - new car dealers. The Coalition to Protect Our Freedom to Drive argues that the bills, which last month passed floor votes in their originating houses, would cost the state hundreds of millions of dollars in lost sales tax revenue and keep working families from gaining access to vehicles.

WASHINGTON - In a potential turning point for one of the biggest financial crisis bailouts, Fannie Mae reported a first-quarter profit and - for the first time since the government seized it in 2008 - does not need a quarterly infusion of taxpayer money. The $2.7-billion profit that the giant housing finance company posted Wednesday was its largest since the housing bubble burst in 2007 and is another signal that the real estate market finally might have hit bottom. "It's always hard to call a turn until everything is in the rear-view mirror," said Susan McFarland, Fannie Mae's chief financial officer.

WASHINGTON - Pressure is mounting on a key federal regulator to allow Fannie Mae and Freddie Mac to reduce loan principal amounts for struggling homeowners, after disclosures that a plan to do that was scuttled even though it was aimed at saving taxpayer money and helping to heal the housing market. Fannie Mae officials in 2009 supported principal reductions in some cases and crafted a pilot program that would have cost only $1.7 million to implement but could have provided more than $410 million worth of benefits to homeowners, according to internal company documents cited by two House Democrats.

WASHINGTON — Fannie Mae and Freddie Mac could save $1.7 billion by reducing the amount that some underwater homeowners owe on their mortgages, according to a preliminary analysis by the regulator for the seized housing finance giants. But a principal reduction program by the government-owned companies, which many economists, lawmakers and state officials have called for, would not solve the housing market's problems, the head of the regulating agency said Tuesday. In addition, it could encourage homeowners who are making their monthly payments to fall behind in order to reduce the principal on their loans, adding to the $188 billion in taxpayer money already pumped into the companies to keep them afloat, said Edward DeMarco, acting director of the Federal Housing Finance Agency.

WASHINGTON - President Obama nominated Democratic Rep. Mel Watt to be the top regulator for Fannie Mae and Freddie Mac, moving to replace a career bureaucrat who has been sharply criticized by liberals for not doing more to help troubled homeowners. But confirmation of Watt, a 20-year congressman from North Carolina, to be director of the Federal Housing Finance Agency is expected to be blocked by Senate Republicans. And the fight over the nomination could make it even more difficult for Republicans and Democrats to come together on legislation to overhaul the housing finance system and replace taxpayer-owned Fannie and Freddie.

The conference report on a bill appropriating just under $1.6 billion in fiscal 1986 for the House, Senate and congressional agencies was adopted by the House on a vote of 251 for and 164 against. The bill (HR 2942) received Senate approval on a non-record vote and became law. Among other outlays, it provides $95.8 million for the salaries and operating expenses of House committees ($4 million more than the 1985 level), $169.

In reaping a $25-billion profit on mortgage-backed securities, the Treasury Department showed that some bailout programs are able to make money. But taxpayers still are likely to end up tens of billions of dollars in the red from the federal government's unprecedented efforts to stabilize the financial system after the 2008 global credit crisis and the deep recession. Besides the $225-billion mortgage bond program, which began during the financial crisis to keep the housing finance market afloat, the bank bailout portion of the $700-billion Troubled Asset Relief Program was the only major program so far to turn a profit.

Pay for the top 15 executives at Fannie Mae and Freddie Mac will be cut 24% this year, led by plans to slash the total annual compensation for new chief executives of the housing finance giants to $500,000 from $6 million. Federal regulators issued the pay cuts in the wake of congressional outrage over salaries and bonuses at Fannie and Freddie, which were seized by the government in 2008 and have received about $183 billion in taxpayer money to cover huge losses in their mortgage portfolios.