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Parcels as an “Early Warning System” to address the Mortgage Mess

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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Parcels as an “Early Warning System” to address the Mortgage Mess

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  1. 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

  2. Our Chair Hard At Work

  3. BUREAU OF THE CENSUS PERIODIC CENSUSES AND PROGRAMS • For an additional amount for ‘‘Periodic Censuses and 4 Programs’’, $1,000,000,000: Provided, That section 1106 of this Act shall not apply to funds provided under this heading. • NGAC Endorsed recommendation # 6 of the Parcel Report in October - why don't we push it? • RECOMMENDATION 6. Congress and the Bureau of the Census should explore potentialpolicy options, including modifications to Title 13, that would allow its digital data onbuilding addresses and their geographical coordinates to be placed in the public domainwhile also maintaining important privacy protections. If publicly available, these streetaddresses and coordinates could be used to assist in the development of parcel data inareas where parcel data sets do not exist.

  4. N.C. / S.C. Parcels :NC One Map & USGS National Map (It is possible!!!)

  5. Census versus Tele Atlas Address Points Part of $200+ Million Confidential Commercial Not – Confidential

  6. Objectives 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

  7. What is an early warning system ? John Snow’s Cholera Map RealtyTrac’s Foreclosure Map

  8. Was the Bush Administration Asleep? 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.” • http://www.huduser.org/publications/hsgfin/curbing.html

  9. Recommended an early warning system 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.

  10. Did the Federal Government Have the authority and information ?

  11. Redlining in Philadelphia - 1932

  12. The Home Mortgage Disclosure Act (HMDA) 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: • in determining whether financial institutions are serving the housing needs of their communities; • public officials in distributing public-sector investments so as to attract private investment to areas where it is needed; • and in identifying possible discriminatory lending patterns. • This regulation applies to certain financial institutions, including banks, savings associations, credit unions, and other mortgage lending institutions

  13. HMDA

  14. Federal Financial Institutions Examination Council (FFIEC)

  15. Members of the FFIEC Federal Reserve FDIC National Credit Union Office of Thrift Supervision Comptroller of the Currency Nebraska Dept of Banking ?

  16. 2000 task force report on curbing predatory lending • Most publicly available information about home mortgage lending is reported by lenders pursuant to the Home Mortgage Disclosure Act (HMDA) and the Federal Reserve Board’s Regulation C, which implements that act.

  17. HMDA Data 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)

  18. Census Tract Level Analysis

  19. Policy Map.com

  20. Parcels in 122.02

  21. 254 HMDA records for 112.02 in 2007

  22. Cross Tabulation of HMDA Datafor 254 records in CT 112.02

  23. Loan / Income Ratio 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.

  24. Local Comparable Sales – 2007 Early Warning

  25. Local Property Assessment Data – authoritative Source

  26. Price / Square Foot of Home Sales 2007

  27. Zillow.com Las Vegas – Parcel Property values

  28. Zillow and CyberHomes Zillow property value Trends Cyber Homes – Neighborhood Level Property Value Changes

  29. Early Warning System!!!!

  30. Contentions: 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.

  31. Contentions Continued 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

  32. Parcels for the Nation • Principles • Decentralized • Local/state governments who maintain parcels are the primary stewards of the data • These data are fed into a centralized GOOGLE/MS-VE environment using a standardized specification • Driven by individual interests • Instant public access to data • Incentives by Federal Private partnership • New suite of applications available to government and public • Standardization: Uses GOOGLE-type model of transit feed specification or plug-in (to GE or VE) update and maintenance tools

  33. The Parcel Feed Spec • Single specification for parcel data structure • Open source conversion tools for specification • Read • Write • Conversion from/to a range of GIS formats

  34. Why it makes sense • The Federal Government doesn’t want to get into the business of serving data, the private sector does it better • Millions of change occur every year in the parcel map • A GOOGLE/MS-VE environment to integrate parcels with images, road networks etc. is a multiplier • Doesn’t require centralized “coordination” • Enables a whole host of independent applications to be built that enables multiuse of parcel information (see iPhone apps).

  35. How to do it • Come up with a price per parcel that local/state governments find acceptable • Write an RFI to GOOGLE, MS, etc. to provide the infrastructure (i.e. PFS) to create the National Parcel Map • What part will they (private) pay • What is the Fed contribution • Cost of parcels already digital • Cost to digitize paper maps

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