Comment Letters on 60-Day PRA Notice

Association Data, Inc
Date:

November 13, 2016

From:

Clifford J. Treese
President, ADI
720 N. Marquis Way
Mountain House, CA 95391-1288
clifford.treese@gmail.com
808-341-9192

To:

Federal Housing Finance Administration
Submission by Email Attachment sent to:



Re:
1.

Federal eRulemaking Portal: http://www.regulations.gov and
FHFA at RegComments@fhfa.gov

National Survey of Mortgage Originations, (No. 2016-N-06)
Summary:

Certain questions in the National Survey of Mortgage Originations “NSMO”) fail to
adequately and effectively recognize an important and growing segment of U.S.
ownership housing: community associations (condominiums, cooperatives and planned
communities).
As a result, data from the Survey with respect to community associations has nominal
heuristic and statistical value at best.
These comments below focus on Questions #60, #4, #7, #39 and #50 (in that order).
2.

Background on Community Associations:

As a form of housing, community associations represent the greatest extension of
homeownership since the housing reforms of the New Deal and the benefits provided
by the GI Bill after WWII.
The data provided next can be found in a more comprehensive form detail in the:


Community Association Fact Book 2015
http://www.cairf.org/research/factbook/default.aspx

The Fact Book goes into terminology and attributes of the three types of associations.

Comments on Certain Survey Questions in the
National Survey of Mortgage Originations, (No. 2016-N-06)
Community associations are housing management organizations that are an out-growth
of traditional subdivision and zoning controls.

Selected Community Association Data
21.1 Percent of U.S. population in
30–40 Percentage of community
community associations.
associations that are self-managed,
meaning they may use professional
assistance for specific projects, activities
and services, but do not employ a
professional manager or management
company.
$5.28 trillion Value of homes in
7,000–8,000 Community association
community associations.
management companies.
$85 billion Assessments collected from
95,000–100,000 Individuals employed by
homeowners. Assessments fund many
management companies.
essential association obligations,
including professional management
services, utilities, security, insurance,
common area maintenance, landscaping,
capital improvement projects, and
amenities like pools and club houses.

Treese/ADI Comments on NSMO Questions
November 13 ,2016
Page 2 of 7

Comments on Certain Survey Questions in the
National Survey of Mortgage Originations, (No. 2016-N-06)
Selected Community Association Data
$23 billion Assessment dollars
2,350,000 Community association board
contributed to association reserve funds
and committee members.
for the repair, replacement and
enhancement of common property, e.g.,
replacing roofs, resurfacing streets,
repairing swimming pools and elevators,
meeting new environmental standards
and implementing new energy-saving
features.
50,000–55,000 Community association
80,000,000 Hours of service performed
managers (includes onsite managers and annually by association board and
those who provide part-time support to a
committee members.
number of communities).
6,000–9,000 Large-scale associations,
$1.76 billion Estimated value of time
i.e., those meeting at least two of the
provided by homeowner board and
following three characteristics: a single,
committee members based on the
contiguous community with a general
Bureau of Labor Statistics estimate of
manager; a minimum of 1,000 lots and/or $22.55 per hour for volunteer time.
homes, and a minimum annual budget of
$2 million.
In the words of one commentator: "Community associations are the leading edge of a
fundamental transition in how Americans experience homeownership and community."
3.

Comments on Question #60

Treese/ADI Comments on NSMO Questions
November 13 ,2016
Page 3 of 7

Comments on Certain Survey Questions in the
National Survey of Mortgage Originations, (No. 2016-N-06)
Consideration should be given to breaking this Question into three parts:




Type of structure in which the home is located
Whether the home is in a Community Association (Yes or No)
Provide important detailed Community Association information

Consideration should be given to the type of housing structure:




Low Rise
Mid-Rise
High Rise



Manufactured/Mobile Home



Attached or Detached Home

Consideration should be given to important detailed Community Association
information:


Determine which of the three basic types of association
1. Condominium
[A further subset is a “site condominium” or “land condominium”]
2. Cooperative
3. Planned Community

Note: The Enterprises use the term “Planned Unit Development” or “PUD.” This is a
zoning term and it is antiquated when applied to a community association. The
Enterprises also default to the term “homeowners association” or “HOA” when
discussing community associations. Which of the three types is left to the reader’s
imagination when this term is used. HOA is especially useless despite having the
primary value of containing only three letters. See the Fact Book for definitions and a
comparative appendix.
Community Association Fact Book 2015
http://www.cairf.org/research/factbook/default.aspx

Treese/ADI Comments on NSMO Questions
November 13 ,2016
Page 4 of 7

Comments on Certain Survey Questions in the
National Survey of Mortgage Originations, (No. 2016-N-06)
Consideration should be given to these questions:


Two possible overlays to the three basic types of associations:
1. The unit in the association could be part of a master/umbrella association.
2. The association and all the homes could be part of special tax district or
special purpose district.



Is the home located in a mixed-use structure containing commercial, office, retail
or similar uses in additional to residential homes.

4.

Comments on Question #4

Consideration should be given to adding a final question:




The money needed to pay your community association fees.
The money needed to pay your master association fees.
The money needed to pay you special tax district fees.

Treese/ADI Comments on NSMO Questions
November 13 ,2016
Page 5 of 7

Comments on Certain Survey Questions in the
National Survey of Mortgage Originations, (No. 2016-N-06)
5.

Comments on Question #7

Consideration should be given to adding a category after “Housing Counselor”
and before “Other:”



6.

Community association disclosure documents
Community association management company
Community association board of directors
Comments on Question #39

Treese/ADI Comments on NSMO Questions
November 13 ,2016
Page 6 of 7

Comments on Certain Survey Questions in the
National Survey of Mortgage Originations, (No. 2016-N-06)
Consideration should be given to adding a final question:


7.

Pay a community association special assessment.
Pay a special tax district assessment or pay-off.
Comments on Question #50

Consideration should be given to adding a final question:



Community association management company.
Community association board of directors.

Treese/ADI Comments on NSMO Questions
November 13 ,2016
Page 7 of 7

David J. Reiss
Professor of Law

November 10, 2016
Federal Housing Finance Agency
400 Seventh Street SW., 8th floor
Washington DC, 20219

Re:

Proposed Collection; Comment Request:
National Survey of Mortgage Originations, (No. 2016-N-06)

To Whom It May Concern:
The Federal Housing Finance Agency has issued a request for comments on the National
Survey of Mortgage Originations (NSMO). I write to support this proposed collection, but
also to raise some concerns about its efficacy.
The NSMO is very important to the health of the mortgage market. We need only look at the
Subprime Boom of the late 1990s and early 2000s to see why this is true: subprime
mortgages went from “making up a tiny portion of new mortgage originations in the early
1990s” to “40 percent of newly originated securitized mortgages in 2006.”1 During the
Boom, subprime lenders like Countrywide changed mortgage characteristics so quickly that
information about new originations became outdated within months.2 Policymakers and
academics did not have good access to the newest data and thus were operating, to a large
extent, in the dark. The information in the NSMO will therefore not only help regulators, but
will also assist outside researchers to “more effectively monitor emerging trends in the
mortgage origination process . . ..” (81 F.R. 62890)
The FHFA is also looking for comments on ways “to enhance the quality, utility, and clarity
of the information collected.” (81 F.R. 62890) While I am no expert on survey design, I
worry that the length of the NSMO will try the patience of many a borrower and that those
who do complete the survey will look very different from the typical borrower. Given that
the NSMO is intended to solicit otherwise unavailable information from borrowers, it is
worrisome that the typical respondent will not be representative of the typical borrower. I
1

David Reiss, Regulation of Subprime and Predatory Lending, INTERNATIONAL ENCYCLOPEDIA OF HOUSING
(2010).
2
See generally FINANCIAL CRISIS INQUIRY COMMISSION, FINANCIAL CRISIS INQUIRY REPORT 105 (2011)
(“Countrywide was not unique: Ameriquest, New Century, Washington Mutual, and others all pursued loans as
aggressively. They competed by originating types of mortgages created years before as niche products, but now
transformed into riskier, mass-market versions”)

AND HOME

ONE BOERUM PLACE • BROOKLYN, NEW YORK 11201 • 718 - 780 - 0636 • FAX: 718 - 780 - 0367
DAVID.REISS@BROOKLAW.EDU

wonder if there would be some way to further incentivize survey-takers to spend the half an hour
it will take to collect the relevant documents and complete the survey itself. I also wonder
whether survey respondents could choose to take a shorter version of the survey, if they are not
willing to answer the 93 questions contained in the full survey. Getting answers to ten questions
from 12,000 respondents (and some smaller number of responses to the full survey) could be
more valuable than getting answers to 93 questions from 6,000 of the most diligent respondents.
Notwithstanding this concern, there is no question that this “collection of information is
necessary for the proper performance of FHFA functions . . ..” (81 F.R. 62890) Given the likely
changes to the federal role in the mortgage markets over the next four years, the NSMO can
provide critical insight into whether homeowners feel that that market serves their needs.

Sincerely,

David Reiss

2