District Line Daily: The Weak Case For Preserving Fannie Mae’s HQ

A morning roundup of news, opinion, and links from City Paper and around the District. Send tips and ideas to citydesk@washingtoncitypaper.com.

Neighbors and real estate developers have many reasons for wanting the Fannie Mae headquarters on Wisconsin Ave. NW to qualify for landmark status under the National Register of Historic Places’ criteria. Mention the matter to a local architect, though, and you might get an unenthusiastic response.

LEADING THE MORNING NEWS:

  • Howard University homecoming events will continue after unfounded active shooter reports. [DCist]

  • Body found near 23rd and P streets NW; no signs of foul play reported. [Post]

  • Architects considerably narrow plans for 11th Street Bridge Park. [WBJ]

  • Niko the sloth bear prepares for his National Zoo debut next month. [WTOP]

  • Could vacant office space be converted into housing? [GGW]

  • D.C. tops of the list of reported cases of STDs, according to the CDC. [WUSA9]

  • Alexandria wants Metro riders to come “Back 2 Blue” and give the line another try. [NBC4]

  • John Wall thinks he can break D.C.’s sports curse. [Post]

RECENT CITY PAPER STORIES TO HELP YOU MAKE SENSE OF YOUR DAY:

LOOSE LIPS LINKS, by Jeffrey Anderson (tips? jeff.anderson@washingtoncitypaper.com)

  • Vince Gray leads charge against consultant managing United Medical Center. [Post]

  • Deb Simmons: The last thing D.C. needs is a Waterways Management Commission. [Times]

  • But it does need an Office of Nightlife, says Brandon Todd. [DCist]

  • Phil Mendelson wrestles with paid family leave bills behind closed doors. [WAMU]

  • Council’s failure to phase out gas-powered leaf blowers frustrates Mary Cheh. [Fox5]

ARTS LINKS, by Matt Cohen (tips? mcohen@washingtoncitypaper.com)

  • The renovated Freer and Sackler Galleries confront their histories with style. [Post]

  • Virginia metal band A Sound of Thunder goes viral in Catalonia with a remixed version of its national anthem. [WAMU]

  • A D.C. musician remembers filling in as Jimi Hendrix’s drummer 50 years ago. [Post]

  • DJ Donnie Simpson celebrates his 40th anniversary in D.C. [NBC4]

YOUNG HUNGRY LINKS, by Laura Hayes (tips? lhayes@washingtoncitypaper.com)

  • The 2018 D.C. Michelin Guide is basically the 2017 D.C. Michelin Guide. [WCP]

  • And Post critic Tom Sietsema still doesn’t like it. [Post]

  • You can now book a bar car for a private party. [Eater]

  • Did you know D.C. is the America’s 7th best city for vegetarians? [DC Refined]

  • A Danish juice chain is coming to the former CVS at 15th and K Streets NW. [PoPville]

  • Next-level food delivery dishes to consider ordering. [Washingtonian]

HOUSING COMPLEX LINKS, by Andrew Giambrone (tips? agiambrone@washingtoncitypaper)

  • Staff writer Andrew Giambrone is on vacation. Housing Complex links will resume on Oct. 24.


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Closed Hedge Fund Appeals GSE Woes To SCOTUS

Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) are two companies in a conservatorship run by the Federal Housing Finance Agency. Since they’ve been placed into conservatorship, the government has taken all of their money and investors have filed multiple lawsuits in multiple jurisdictions claiming multiple forms of lawbreaking, only one of which has gained ground so far. That would be the breach of contract claims being remanded to Lamberth. Further, documents proving the government has been lying have been produced in the Federal Court of Claims and disseminated to other courts, some of which have been produced publicly.

Investment Thesis: Fannie Mae and Freddie Mac legal claims have now made their way to the doorstep of the Supreme Court. It remains to be seen if they are accepted or shown the door. Although I think that an administrative/congressional solution is put into place before the courts rule, I do think that the courts put pressure on that solution involving some sort of legal settlement. In the event Fannie and Freddie are recapitalized, preferred and common securities are worth more.

Knock, Knock, Is SCOTUS Home?

Generally speaking, 5% of certiorari will be granted. Odds are better for attorney-submitted petitions. I wasn’t able to find a statistical analysis on if there was a correlation behind higher dollar figure disputes or not. This one is in the hundreds of billions of dollars and is on the back of a split appeals court decision and was submitted by attorneys:

In effect, can a conservator can do whatever it wants with its conservatee’s money? Generally speaking, petitions require that there is a circuit split to hear a case. In this one, there isn’t a split regarding the rulings over FHFA having unlimited discretionary authority over the NWS. What there is, however, is a split on how to interpret 4617(F). The 11th and 9th circuit courts interpret it correctly and the petition hangs its hat on these as it knocks on the door of the Supreme Court:

Further, the DC Appeals court ruling uproots established solvency law:

Happy Halloween:

I think that the fact 4617(F) is interpreted differently in different jurisdictions lends itself positively to the Supreme Court’s willingness to hear this case. This case goes to the heart of solvency law and I find that this, along with the fact Ted Olsen’s name is on it, also contributes to the odds of this petition being granted.

Accountability Is What GSE Critics Can’t Stand

One of the more recent pieces of good news is that one of the most outspoken senators against Fannie and Freddie is now facing increasing scrutiny:

The parallels here are that Bob Corker publicly advocated shorting Fannie and Freddie and he had a position in Pointer Management, LLC, which did just that. In the case of Fannie and Freddie, the investing public has lost everything. The SCOTUS writ raises a lot of good questions. Is FHFA legally able to direct Fannie and Freddie’s profits wherever without cause without judicial review? Lower courts have said yes. These rulings have far-reaching implications in the event that the law HERA was based on (FDIA) is read in a similar fashion by future conservators.

In a conservatorship, a conservator would be able to overlook the conservatee’s capital structure and direct money wherever it wants until either it releases the conservatee or receivership commences. The problem here is that bondholders would be furious if the conservator front runs them by transferring all the conservatee’s money to a related party leaving the bondholders with pennies or perhaps nothing on the dollar. In effect, that’s what’s happening with Fannie and Freddie. All the money being taken out of them to pay the government has put their creditors at risk.

Accountability is important to those who don’t have the power to direct conservatorship cash flows or leverage their power to put together deals unavailable to the investing public. At the bottom, we need simple principles that we can rely on. The government shouldn’t be picking winners and losers because that gives too much power to the people picking and that’s just not fair to the rest of us:

That sounds awfully familiar. “That was before I got there,” said Melvin L. Watt who was and is still the director of FHFA. Is the fact that something happened during a prior administration reason to prevent the public from being able to see it or challenge it? Apparently so.

Under Seal, Under Wraps, But Not Unknown

There are still thousands of documents that judges have ordered plaintiffs to have access to in the Court of Claims. I anticipate that the government is waiting until the last possible second to fight the most recent order to compel. It’s the ultimate slow race.

It is as if there is an active code of omerta. Judge Sweeney in the court of claims originally filed the order about document production under seal. We will soon see it, however, as there are no redactions being made:

The best source to review the documents that have been made public as part of this discovery process is fanniefreddiesecrets.org.

Summary and Conclusion

I own 4050 shares of FMCCH, 21688 FMCCP, 7370 FMCCT, 741 FMCKO, 12885 FMCKP, 13135 FNMFN, and 5 FNMFO. These are preferred securities of Fannie and Freddie. I expect that sometime in the next 6 months based on Paulson’s commentary that we see a plan like Moelis put into place. It’s nice that Paulson puts out updates monthly. Even Paulson outlines the relevance of unsealing documents even though he sees an administrative solution:

One of the best things about what’s been happening since 2012 is that many good people have gotten together and fought for justice. The people who are fighting against it are finding that their plan to replace or eliminate Fannie and Freddie don’t amount to solutions for multiple reasons.

Fannie and Freddie serve to promote equal opportunity affordable housing and it is unsurprising that the plans that get rid of them increase inequality. Steven T. Mnuchin is no stranger to the mortgage market so we are in good hands. Melvin L. Watt wants a capital buffer. At the end of this year, the political football of ‘zero capital’ expires and something’s got to give.

I expect that as part of any recapitalization at least some preferred shareholders are given the opportunity to participate by converting their shares to commons on a par basis or better. As a non-litigating shareholder of the less liquid preferreds, I’m not sure to what extent I’ll get to play a part in that process. These are the things I think about. I continue to get asked about taking a position in commons or preferreds or buying some commons. Considering that commons are no longer at risk of losing everything because of an administrative solution, there’s certainly good cause to consider owning some of them. I simply think that what I’ve got is better because this recapitalization feels more like a restructuring than anything else.

Disclosure: I am/we are long FMCCH,FMCCP,FMCCT,FMCKI,FMCKO,FMCKP,FNMFN,FNMFO.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

Landmarking Fannie Mae Building Will Dilute Historic Preservation

Housing Fan Mae 59b04c89d93f2In July 1958, the Equitable Life Insurance Co. moved from 14th St. NW to a brand-new office building uptown. Constructed for the then-princely sum of $2.25 million, the company’s new headquarters spread out from a cupola-topped entrance in two long arms of red brick, set back from Wisconsin Avenue NW behind an ample lawn.

Only 13 years later, Equitable’s chairman Charles E. Phillips was dreaming of something grander for the site, which is across the street from the elite Sidwell Friends School in Tenleytown. “Insurance Firm Plans Big Complex,” announced the Washington Post in September 1971. Phillips hoped to raze the ’50s building and replace it with 1.2-million-square-feet of offices and shops connected by underground parking garages.

Phillips’ vision never came to pass, and the project faded from public memory, but there are clues as to why. In 1972, a group of Northwest residents called Citizens for City Living asked the zoning commission to ban all high-rise office construction west of Rock Creek Park, citing “commercial vandalism” of their neighborhoods. And before that, neighbor-hood activists blocked a proposed redevelopment of McLean Gardens, the residential complex directly to the south of Equitable.

In 1978, Fannie Mae bought the site from Equitable and moved in. Thirty-seven years later, in 2015, Fannie Mae announced that it would sell the campus and move downtown. Locals speculated about who might buy the property and worried that density and traffic would follow. “People were really hoping Sidwell Friends would buy it,” says Angela Bradbery, the current ANC commissioner for 3C-06. Their logic: A school has a milder impact than a big, mixed-use project.

A joint venture of Roadside Development and a Japanese homebuilder, NASH, wound up purchasing the site last year. Roadside plans a mix of residential units, stores (most notably, a Wegmans grocery), and possibly offices and a hotel. Several new buildings will be built, and the plans are still evolving. “A lot of the buildings haven’t been designed. We’re more at the massing level at this point,” says Richard Lake, a Roadside principal.

At no point did NASH-Roadside entertain tearing down the 1958 building. Lake has actually gone in the other direction: He filed an application in June to designate the building a historic landmark. He recently explained why to City Paper’s Andrew Giambrone. The 228,000-square-foot building is in excellent shape. Roadside is experienced in adaptive reuse of historic structures, and the tax credits that come with landmark status can be a tremendous financial boon to developers. Finally, landmarking offers the intangible but crucial benefit of community reassurance: There are fewer unknowns with an existing building than a still-undesigned one.

***

The National Register of Historic Places was set up in 1935 and expanded in the 1960s amid rising alarm over the destruction of architectural treasures like the original Penn Station in New York. To qualify for inclusion, buildings generally must be at least 50 years old and meet at least one of a few criteria of significance.

Fannie Mae’s application for landmark status cites its connection to a historical event—the growth of the insurance industry in 20th-century D.C.—and its embodiment of the Colonial Revival style of architecture. Prepared by a consultant group of architectural historians, the application chronicles in detail the history of insurance in America and the building’s Georgian Revival and Colonial Revival features. It will almost certainly meet with success at the D.C. Historic Preservation Review Board, which can add properties to D.C.’s own register and recommend buildings for the national one. Lake says his first presentation to the board got “extraordinarily positive” comments, and the D.C. Preservation League supports it.

Mention the matter to a local architect, though, and you might get a less enthusiastic response.

The Fannie Mae building, designed by Leon Chatelain Jr., possesses little architectural merit. Yes, it pays homage to the Virginia Governor’s Mansion in Williamsburg. But that building’s Georgian grace gets lost in translation. The pleasing symmetry of the sash windows becomes deadening in the Fannie Mae building, repeated ad nauseam down its long brick facade. The proportions are wrong, too. Projecting wings at either end appear bulky, overwhelming the central volume that ought to be dominant. Compare Fannie Mae with the Neo-Georgian sprezzatura of Edwin Lutyens’ British ambassador’s residence on Massachusetts Avenue NW, and you’ll see the difference immediately.

The case for landmarking Fannie Mae has serious weak points. How significant a historical event, really, is the growth of the insurance industry? Can Fannie Mae be considered a prime example of the Colonial Revival if it came well after the style’s peak, and if it expresses the style no more eloquently than countless schools and government buildings of the same era?

NASH-Roadside has practical reasons for wanting to keep the building. Converting an existing building to new uses has environmental benefits because it consumes less energy than demolishing it and starting over. And if Lake’s current idea comes to fruition, local residents will be able to picnic and watch performances on Fannie Mae’s lawn, to be reborn as a public space with shade-giving trees.

But this would all be feasible without a historic listing. The tax credits were only a secondary consideration, according to Lake. “The real issue is, it was going to get designated, in my opinion, in one way or the other,” he says. “Either by me, or by the community. I wanted the community not to think they were going to have a fight with us. … We felt the best way to preserve it and give everybody comfort is to make it historic.”

Comfort is the operative word here. Even proponents of the landmarking struggle to muster positive enthusiasm for the building, beyond the fact that it’s low-rise, set back from Wisconsin, and familiar.

One can hardly blame Lake for doing what he felt had to be done. But once it’s on the register, we’ll likely be stuck with the undistinguished facade of Fannie Mae forever, thanks to the prevailing “better the devil you know” attitude. The site abuts what the D.C. Comprehensive Plan designates a “Main Street Mixed Use Corridor,” stretching from 4000 Wisconsin Ave. NW up to Tenley Circle. In the future, in theory, this corridor might have extended farther south, enlivening Wisconsin with street-facing stores and restaurants or more housing. That possibility has dwindled.

Worse, landmarking a mediocre building of dubious significance in order to preempt community opposition sets a bad precedent. It signals that the preservation process can be co-opted to block changes that neighbors don’t like. This will make the public more skeptical of its value over time.

Affluent, transit-accessible Tenleytown needs to adapt with the rest of the city to ease a housing affordability crisis. The hundreds of residences that NASH-Roadside will build at Fannie Mae are part of the solution, and the plan has advantages for current area residents as well. Despite their concerns, Bradbery says, her neighbors “are excited about having a Wegman’s. They’re excited about a movie theater. They like the idea of a community gathering space.” This project could be a win for everyone, for now. But the landmarking process emerges worse for wear. 

Watch out for Microsoft Word DDE nasties: Now Freddie Mac menaced

Updated Malware exploiting Microsoft Word’s DDE features to infect computers has been lobbed at US government-backed mortgage biz Freddie Mac.

Well-crafted phishing emails were sent to staff promising free tickets to a Halloween event at a nearby Six Flags amusement park. If employees click through a link in the message, they’re receive an Office document to register and a prompt warning that the file wants to access data from other apps appears. If OK is clicked, a payload is downloaded from a Halloween-themed domain – sixflags-frightfest.com – for extra authenticity.

This payload is a Visual Basic script that tries to obfuscate its execution by pivoting through Microsoft Excel before unpacking a secondary payload that decodes another packed bunch of data that eventually turns into a generic nasty known as Cometsys or Cometer that appears to open a backdoor to receive further commands and siphon off internal data to its masterminds.

“Notice the above payload begins by modifying the registry for additional privileges,” explained network security firm Inquest on Tuesday.

“This is done in order to pivot execution through Microsoft Excel. Once modified, it later restores the registry setting to the previous value. This technique is generally used to mask execution chains in an attempt to hide from endpoint security solutions.”

It’s the latest in a series of cyber-attacks leveraging DDE, which seems to be popular again with malware developers. Microsoft still supports it, so expect to see more of this kind of attack.

Good intentions go bad

DDE is, frankly, ancient: it was introduced in Windows 2.0 back in 1987 and, at the time, it was a pretty good idea. The protocol allows Office files to share data so that, for example, you could embed an Excel spreadsheet in a Word document.

So far so good, but from a malware perspective, it’s an interesting way to evade security software. A clean file, such as the Word document used in the Freddie Mac case, can be spammed out and security filters will let it through, but the document can use DDE to pull in payloads and run them, if the user allows it.

That last point is crucial, and without victims carelessly clicking on OK buttons, the attack won’t work. Fooling people into clicking OK on dialogue boxes isn’t hard – most users, particularly non-technical ones, will just click OK to get on with what they are doing…

The software actually asks users twice to OK the data exchange. The first warning box asks if you’re OK bringing in linked files, and the second states there’s a problem and asks permission to execute commands via cmd.exe. For seasoned users, this should set off alarm bells. For non-savvy people in a hurry to go to Six Flags, it’s another whizzbang space-age technospeak jargon-pest to click through.

Not a bug but a feature

Analysis by security consultancy Sensepost last week showed that this second box, the more alarming one for users, can be hidden by tweaking the syntax in the exploit code. This means marks only have to click on one OK button to become infected. This makes infiltrating and spying on an organization a lot easier.

However, Redmond has made it clear that because the user needs to OK, this is a WONTFIX issue.

“Microsoft responded that as suggested it is a feature and no further action will be taken, and will be considered for a next-version candidate bug,” Sensenet claimed after alerting the Windows giant to the bypass.

That may change, however, if exploitation rates of DDE expand, and it’s looking like they are. On Tuesday, Brad Duncan from the Internet Storm Center wrote that he has already seen scumbags pushing Hancitor malware – also known as Chanitor or Tordal – using DDE. ®

Updated to add

“This technique requires a user to disable Protected Mode and click through one or more additional prompts. We encourage customers to use caution when opening suspicious email attachments,” a Microsoft spokesperson told The Register after this story was published.

The spokesperson also claimed that the file mentioned in the Inquest blog post would have been stopped by Windows’ builtin security. Let’s hope it nails whatever malware is lobbed around next.

Sponsored:
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Watch out for Microsoft Word DDE nasties: Now Freddie Mac menaced

Updated Malware exploiting Microsoft Word’s DDE features to infect computers has been lobbed at US government-backed mortgage biz Freddie Mac.

Well-crafted phishing emails were sent to staff promising free tickets to a Halloween event at a nearby Six Flags amusement park. If employees click through a link in the message, they’re receive an Office document to register and a prompt warning that the file wants to access data from other apps appears. If OK is clicked, a payload is downloaded from a Halloween-themed domain – sixflags-frightfest.com – for extra authenticity.

This payload is a Visual Basic script that tries to obfuscate its execution by pivoting through Microsoft Excel before unpacking a secondary payload that decodes another packed bunch of data that eventually turns into a generic nasty known as Cometsys or Cometer that appears to open a backdoor to receive further commands and siphon off internal data to its masterminds.

“Notice the above payload begins by modifying the registry for additional privileges,” explained network security firm Inquest on Tuesday.

“This is done in order to pivot execution through Microsoft Excel. Once modified, it later restores the registry setting to the previous value. This technique is generally used to mask execution chains in an attempt to hide from endpoint security solutions.”

It’s the latest in a series of cyber-attacks leveraging DDE, which seems to be popular again with malware developers. Microsoft still supports it, so expect to see more of this kind of attack.

Good intentions go bad

DDE is, frankly, ancient: it was introduced in Windows 2.0 back in 1987 and, at the time, it was a pretty good idea. The protocol allows Office files to share data so that, for example, you could embed an Excel spreadsheet in a Word document.

So far so good, but from a malware perspective, it’s an interesting way to evade security software. A clean file, such as the Word document used in the Freddie Mac case, can be spammed out and security filters will let it through, but the document can use DDE to pull in payloads and run them, if the user allows it.

That last point is crucial, and without victims carelessly clicking on OK buttons, the attack won’t work. Fooling people into clicking OK on dialogue boxes isn’t hard – most users, particularly non-technical ones, will just click OK to get on with what they are doing…

The software actually asks users twice to OK the data exchange. The first warning box asks if you’re OK bringing in linked files, and the second states there’s a problem and asks permission to execute commands via cmd.exe. For seasoned users, this should set off alarm bells. For non-savvy people in a hurry to go to Six Flags, it’s another whizzbang space-age technospeak jargon-pest to click through.

Not a bug but a feature

Analysis by security consultancy Sensepost last week showed that this second box, the more alarming one for users, can be hidden by tweaking the syntax in the exploit code. This means marks only have to click on one OK button to become infected. This makes infiltrating and spying on an organization a lot easier.

However, Redmond has made it clear that because the user needs to OK, this is a WONTFIX issue.

“Microsoft responded that as suggested it is a feature and no further action will be taken, and will be considered for a next-version candidate bug,” Sensenet claimed after alerting the Windows giant to the bypass.

That may change, however, if exploitation rates of DDE expand, and it’s looking like they are. On Tuesday, Brad Duncan from the Internet Storm Center wrote that he has already seen scumbags pushing Hancitor malware – also known as Chanitor or Tordal – using DDE. ®

Updated to add

“This technique requires a user to disable Protected Mode and click through one or more additional prompts. We encourage customers to use caution when opening suspicious email attachments,” a Microsoft spokesperson told The Register after this story was published.

The spokesperson also claimed that the file mentioned in the Inquest blog post would have been stopped by Windows’ builtin security. Let’s hope it nails whatever malware is lobbed around next.

Sponsored:
The Joy and Pain of Buying IT – Have Your Say

How Trump tax plan would alter mortgage-interest deduction

WASHINGTON — Each year, taxpayers subsidize America’s homeowners by roughly $70 billion, with the benefits flowing disproportionately to coastal areas with high incomes and pricey homes, from New York and Washington, D.C., to Los Angeles and Seattle.

The subsidy for homeowners comes in the form of a deduction from their taxes for the interest they pay on their mortgages. An affluent Seattleite, for example, would have saved an average of $4,025 in 2015, according to an analysis of IRS data released recently by the real-estate company Apartment List. In metro Los Angeles, the deduction was worth an average of $4,568, in San Francisco still more: $5,500.

But under President Donald Trump’s tax proposal, some Americans would likely be steered away from this tax break. Here’s why: Trump’s plan would double the standard deduction, which taxpayers can take if they don’t itemize deductions. The doubled standard deduction could exceed the savings many receive now from itemizing their expenses for housing, state and local taxes and related costs.

But the Trump plan would also eliminate many existing itemized deductions, including those for state and local taxes, so that some people who now itemize might end up paying more.

The president’s proposal would essentially marginalize the use of the mortgage-interest deduction, which is the government’s primary form of direct housing assistance: It distributes three times more money this way than it does in the form of vouchers for impoverished renters.

Trump administration officials say their tax plan is designed to benefit the middle class. Yet it’s not clear from the scant details of the framework released so far how many families would enjoy lower tax bills and how many would face higher bills.

Even though the Trump measure would preserve the mortgage-interest deduction, it’s confronting resistance from the real-estate industry because it would likely reduce the number of people seeking the deduction.

Estimates by the real estate firm Zillow suggest that under current law, taking the mortgage-interest deduction is worthwhile for someone buying a home today worth at least $305,000. But under the Trump plan, the comparable home value would jump to $801,000.

This has led the industry to push back against the plan.

“We don’t want to go backwards — we don’t want to lose what incentives that we have,” said Jamie Gregory, deputy chief lobbyist for the National Association of Realtors.

The National Association of Homebuilders says it might be open to eliminating the mortgage-interest deduction so long as homeownership was protected elsewhere in the tax code through the use of a possibly more generous tax credit. (A credit, which is subtracted from the amount of tax someone owes, is more generous than a deduction, which reduces the amount of income to be taxed.)

The advantage of moving to a credit is that more homeowners would be eligible to claim it than the 34 million who receive the mortgage-interest deduction, said Rob Dietz, the homebuilder association’s chief economist. But there are no signs that the idea of a credit has gained traction within Congress or the White House.

Trump proclaimed in June that his tax plan would accelerate economic growth to ensure that “hardworking Americans enjoy a fair chance at becoming homeowners.”

Chris Salviati, a housing economist at Apartment List, noted that the main effect of the mortgage-interest deduction is to enable people to spend more on homes rather than to increase ownership, which is near a 51-year low.

Though the benefits of tax breaks for housing skew most toward people in the top 20 percent of income, they also tend to help middle-class Americans. Roughly half the households in metro D.C. with incomes between $74,000 and $112,000 — a group that could be considered middle class in that area — take the mortgage-interest deduction and saved an average $2,530 in 2015. The average home price in the D.C. area is just below $400,000.

Areas with lower home values tend to benefit less from the deduction. A similar group of middle-income households in Indianapolis — where the average home cost around $140,000 — saved only $655 on average in 2015, and just 19 percent of them took the deduction. The savings for middle-income households are just $691 in Cleveland, $666 in Little Rock, Arkansas, and $673 in Memphis, Tennessee.

Yet the Apartment List analysis also indicates that Trump’s tax plan would do little for lower-income households. A mere 11 percent of households with income below 80 percent of the national median benefit from the mortgage-interest deduction or rental-housing vouchers.

The Reno/Sparks Association of REALTORS® Honors Angelica Reyes With Spotlight of Excellence Award

The Reno/Sparks Association of REALTORS (RSAR) has named REALTOR and RSAR member, Angelica Reyes, a recipient of the Spotlight of Excellence Award.RENO, Nev. – The Reno/Sparks Association of REALTORS® (RSAR) has named REALTOR® and RSAR member, Angelica Reyes, a recipient of the Spotlight of Excellence Award. The Spotlight of Excellence Award is a biannual honor that recognizes RSAR members who provide selfless and extraordinary service to the community, their clients and customers. The award is in its third year.

“The Reno/Sparks Association of REALTORS is proud to honor Angelica’s achievements in our industry and community,” said John Graham, 2017 RSAR President and REALTOR® with Re/Max Premier Properties. “Her inspiring spirit and dedication to her role as an industry leader are why we are excited to honor her work and commitment to our community.”

Reyes is a REALTOR® for RE/MAX Professionals. Reyes has been involved with Volunteers of America since 2014, where she helps organize Operation Backpack, a program that collects new backpacks and school supplies for homeless children served by the VOA Family Shelter, ReStart program and Washoe County School District’s Children in Transition program. Reyes earned the attention of Volunteers of America’s local advisory council, where she now serves as a member.

Reyes also volunteers with other organizations such as the National Association of Hispanic Real Estate Professionals and Real Estate Young Professionals Network, and is a past president of the Women’s Council of Realtors, Northern Nevada Chapter. Reyes is also a top producing agent at her firm.

“Angelica’s boundless energy, sunny optimism and dedication to community make her a community leader,” said Sandy Isham, senior development community relations officer for Volunteers of America, Northern Nevada. “We look forward to partnering with her for years to come as we work together to make the Reno-Sparks community a great place for everyone to call home.”

The Reno/Sparks Association of REALTORS® is an organization providing services to its members to ensure their success as real estate professionals, as well as protecting and promoting the consumer’s dream of homeownership. For more information visit www.rsar.net.

Remodeling Projects That Bring Joy

Homeowners and renters remodel, redesign, and restructure their home for a variety of reasons.

From April through August of 2017, Houselogic.com surveyed consumers about the last home improvement project that they had completed, and the satisfaction that the project gave them upon completion.

The “Joy Score” was calculated by combining the share who were happy and those who were satisfied when seeing their completed project, and dividing the share by 10 to create a ranking between 1 and 10. Higher Joy Scores indicate greater joy from the project.

The members of the National Association of Remodeling Industry (NARI), were asked to complete a cost survey of these professional remodeling projects to acquire a median. The National Association of Realtors also conducted a random survey of its members to determine the estimate of the likely recovery dollar value to the estimated cost of each project.

What Should FHFA Do With Fannie Mae?

The Federal Housing Finance Agency (FHFA) recently released FHFA’s Draft Strategic Plan for Fiscal Years 2018-2022, a plan produced by the Agency which accounts for the upcoming four years and details FHFA’s priorities as regulator and conservator of Fannie Mae and Freddie Mac. Following its release, FHFA has announced a request for input from Members of Congress, the public, and interested stakeholders.

net worth sweep Fannie Mae Freddie Mac
By User:AgnosticPreachersKid (Own work) [CC BY-SA 3.0], via Wikimedia Commons

As you well know, as shareholders of Fannie Mae and Freddie Mac, each of us will be directly impacted by the future decisions of FHFA and any action taken in regards to the GSEs. Given your stake in the Enterprises, I encourage all of you to review the draft plan and respond to FHFA through its request for input form, which you can access by clicking here, before the October 27 deadline. I have taken action by submitting my own comment through FHFA’s submission process, and encourage you to join me in doing the same.

In my submission, I encourage FHFA to allow Director Mel Watt to exercise his statutory authority under the Housing and Economic Recovery Act of 2008 (HERA) and end the GSEs’ woefully inadequate capital reserves by ending the Net Worth Sweep. As instructed under HERA, FHFA has guided the Enterprises back to a safe and solvent condition, accounting for future market liquidity and stability. A continued conservatorship and ongoing quarterly dividend payments will leave the Enterprises at danger’s doorstep in two short months, come January 1, 2018, when each entity is operating on zero capital.

As I reference in my submission to FHFA, the government has been paid back and there is no logical reason to continue the Net Worth Sweep, a practice that is counter to the interests of taxpayers and shareholders – a concern that has been echoed by Members of Congress, Director Mel Watt and Treasury Secretary Steven Mnuchin. As conservator, it is the Agency’s rightful duty to protect taxpayers from another bailout and to uphold the rule of law.

After nine long years of the GSEs in conservatorship, returning the entities back to their rightful owners – the shareholders — will be welcome, long awaited news for so many Americans. Like you, there are thousands of shareholders who have invested their hard earned money, retirement, pension funds and savings in the entities, and have been invested for years, fully expecting the government to hold up its end of the bargain and pay them back what they are rightfully and contractually owed. Shareholders and private capital are both critical in the long term health and success of the housing sector. The rippling effects of private capital loss to the market would be enormous. Not to mention, ignoring loyal, hardworking Americans and denying them of their assets is a direct conflict of shareholder rights, exemplifies an egregious practice of government overreach and too generous an exertion of government privilege. Within the next four years, FHFA must work with urgency to end the quarterly dividend payment, protecting taxpayers and lifting any future burden off their shoulders, and ensure that our government upholds its end of the bargain by allowing shareholders access to their funds after far too many years of waiting.

I encourage you all to let your voice be heard by FHFA through this process. You are welcome to draw from my submission, which can be found on the Investors Unite site as well. I want to thank each and every one of you for joining me in this fight and for tirelessly working to ensure an end to the conservatorship and Net Worth Sweep in a way that protects taxpayers, serves prospective homeowners and honors shareholders.

Former Fannie Mae Associate General Counsel Sara L. Todd Joins Thompson Hine in Washington, DC

WASHINGTON–(BUSINESS WIRE)–Thompson
Hine LLP
is pleased to announce that Sara L. Todd has joined the
firm’s Real Estate practice as counsel in Washington, D.C. She will
focus on expanding the firm’s commercial mortgage and warehouse lending
practices, with an emphasis on agency lending.

Todd joins the firm after spending over 10 years as Associate General
Counsel at Fannie Mae. Her role as counsel with Thompson Hine will allow
her to continue the multifamily housing and mortgage lending work she
pursued at Fannie Mae, where she was involved in most aspects of Fannie
Mae’s multifamily housing finance activities through its Multifamily
Mortgage Business, including lender contracts and loan documents for
first mortgage and mezzanine financing, as well as market-rate equity
investments and multifamily asset management.

Prior to joining Fannie Mae, Todd served as in-house counsel for a
low-income housing tax credit (LIHTC) syndicator, followed by a similar
role with a national LIHTC developer/syndicator. Before joining the
multifamily housing industry, she served as Assistant General Counsel
for a national publicly traded hotel company, where her responsibilities
included development and financing of new inns, as well as
implementation of a franchising and franchisee financing program. She
also has previous law firm experience with first mortgage and
participating mortgage lending, construction finance, and multifamily
housing development and finance matters.

Todd will advise on a broad range of real estate and corporate matters,
including mortgage financing, regulatory compliance, risk management and
low-income housing tax credit transactions. She will help clients
identify business and legal risks and develop creative, effective
solutions to enhance operating results and achieve performance goals.

“I was impressed by Thompson Hine’s Washington presence and the breadth
of its strong national real estate practice,” said Todd of her decision
to join the firm. “I was particularly attracted to the firm’s innovative
service delivery model, SmartPaTH, which will be a unique and valuable
tool to create efficiencies for clients and enhance the ability of
agency lenders to close and deliver loans efficiently.”

Todd is the most recent lawyer to join the Washington office. Recent
additions include former white collar prosecutor with the U. S.
Department of Justice, Sarah
M. Hall
, energy partner Marvin
Griff
from Husch Blackwell and a Government Contracts practice from
Cooley LLP led by Tom
Mason
and including Francis
E. “Chip” Purcell, Jr.
and Ray
McCann
. Also this year, Mark
Lunn
joined the firm’s International Trade practice group from
Dentons LLP.

“Sara’s extensive knowledge in the areas of agency lending and tax
credits offers enormous benefit to the firm’s clients,” said David
A. Wilson
, partner-in-charge of the Washington, D.C. office. “She
brings a new skillset to our Real Estate practice, and we are pleased to
be able to offer expanded service to our clients.”

About Thompson Hine LLP. Thompson Hine LLP, a full-service
business law firm with approximately 400 lawyers in 7 offices, was
ranked number 1 in the category “Most innovative North American law
firms: New working models” by The Financial Times. For 5 straight
years, Thompson Hine has distinguished itself in all areas of Service
Delivery Innovation in the BTI Brand Elite, where it has been
recognized as one of the top 4 firms for “Value for the Dollar” and
“Commitment to Help” and among the top 5 firms “making changes to
improve the client experience.” The firm’s commitment to innovation is
embodied in Thompson Hine SmartPaTH® – a smarter way to work
– predictable, efficient and aligned with client goals. Visit ThompsonHine.com
and ThompsonHine.com/SmartPaTH.