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Parcels as an “Early Warning System” to address the Mortgage Mess. NGAC February 4, 2009 David J. Cowen, University of South Carolina Chair – National Research Council Study Member of FGDC Cadastral Subcommittee. Our Chair Hard At Work.
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February 4, 2009
David J. Cowen,
University of South Carolina
Chair – National Research Council Study
Member of FGDC Cadastral Subcommittee
Part of $200+ Million
Not – Confidential
1. Demonstrate that nine years ago the Clinton Administration called for an early warning system that could have monitored and maybe prevented the current mess
2. Explain the Home Mortgage Disclosure Act
3. Demonstrate that a parcel based system using data from local governments and the private sector could be used to implement such a system
John Snow’s Cholera Map
RealtyTrac’s Foreclosure Map
In April 2000, The National Task Force on Predatory Lending
(HUD-Treasury Task Force)
Chaired by Secretary Cuomo and Secretary Summers
Curbing Predatory Home Mortgage Lending
“Despite these gains, too many low- and moderate-income families have seen the dream of home ownership become a nightmare because of predatory or abusive lending practices. These practices are concentrated in the subprime mortgage market, where record numbers of Americans are refinancing their homes for consumer credit purposes. Subprime lending serves an important role, by providing loans to borrowers who do not meet the credit standards for the prime mortgage market. Some borrowers in the subprime market, however, may be particularly vulnerable to abusive lending practices.”
5. Early Warning Indicators. (p.117)
FHA will customize data from its Neighborhood Watch system to develop early warning indicators of emerging foreclosure "Hot Zones." This data will enable local officials and HUD approved counseling organizations to better target outreach to families at risk of foreclosure. FHA will also make available summaries of the appraised values of FHA properties to help local officials better assess real estate trends and spot possible patterns of appraisal abuse.This public information will include performance data on individual appraisers generated by the Credit Watch for Appraisers system and posted on the HUD website.
Enacted by Congress in 1975 and is implemented by the Federal Reserve Board's Regulation C. This regulation provides the public loan data that can be used to assist:
National Credit Union
Office of Thrift Supervision
Comptroller of the Currency
Nebraska Dept of Banking
1. An identification number;
2. The date the application was received;
3. The type of loan or application
4. The purpose of the loan or application
5. Whether the application was a request for preapproval and whether it resulted in denial or origination;
6. The property type
7. Whether the property securing the loan was owner-occupied;
8. The amount of the loan or application request
9. The action taken
10. Codes for the property location, by MSA or MD, by state, by county, and by census tract
11. The ethnicity of the borrower(s) or loan applicants)
12. The race of the borrower(s) or loan applicant(s);
13. The gender of the borrower(s) or loan applicant(s);
14. The gross annual income relied on in processing the application
15. For any loan sold, the type of entity that purchased the loan°
16. For higher-priced loans, any rate spread above the yield on the
comparable Treasury security that exceeds three percentage points for
first-lien loans and five percentage points for junior-lien loans;
17. Whether the loan was subject to HOEPA; and
18. Lien status (first lien, junior lien, or not home-secured)
The index ranges from .06 to 16.5 times the income of the applicant. While the average is a reasonable ratio of 2.1 there are 47
applicants (20%) that had loans approved for more than three times their income. These applicants are certainly candidates for predatory lending.
Las Vegas –
Parcel Property values
Zillow property value Trends
Cyber Homes – Neighborhood Level
Property Value Changes
1. While Epidemiologists at the CDC routinely utilize GIS to create modern day cholera maps and quickly put remedies in place to stop an epidemic - the federal agencies in charge of housing and finance have not seen the wisdom to utilize GIS tools and analysis to stem the pandemic in the spread of predatory lending practices, reverse redlining and foreclosures.
2. The Home Mortgage Disclosure Act provides the necessary regulatory authority to monitor and remedy abuses in the mortgage business. To be effective it needs a finer level of geographic detail and needs to be analyzed in near real time – rather than the annual basis at the census tract level.
3. The Federal Government ignored the recommendations of a 1980 National Research Council Study; The Need for a Multipurpose Cadastre that would have established a detailed parcel based system based on a digital representation of every tax parcel. Such a system linked to localproperty assessment data that would have enabled HUD and Treasury to monitor the system – in exactly the manner recommended in the 2000 report.
4. A set of recommendations outlined in the 2007 NRC report National Land Parcel Data: A Vision for the Future provides a blue print for how a parcel based system could be implemented – that would effective monitor and hopefully stem future epidemics associated with home financing