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HUD Secretary on the future of homeownership in America – video

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HUD Secretary Shaun Donovan on CNN

Over the weekend, the Housing and Urban Development Secretary Shaun Donovan sat down at CNN to discuss the future of homeownership in America. Right off the bat, it was notable that since Donovan was nominated, the number of foreclosures has nearly doubled in America, Obama himself has called housing the “biggest drag on the economy” and only 36% of Americans polled approve of Obama’s handling of the housing crisis. Clearly, Donovan has a tremendous challenge given the decline in the housing market. He calls it the “most serious crisis we’ve had in housing since the depression.”

Donovan unfortunately used the tired line of alluding to “Bush did it” as he claimed 30 straight months of falling home prices prior to Obama taking office, noting the current administration has improved housing (although all signs point to a tiny blip of improvement, but continued decline in recent months). “We are making progress,” Donovan said.

What progress has the Obama administration made in housing?

Despite years of our reporting the complete failure of HAMP, one of our nation’s largest blemishes in economic history, Donovan claimed that “tens of thousands” of people are getting permanent loan modifications each month (but doesn’t mention the tens of thousands of others who are not being granted modifications).

Rather than discuss methods of repair or make mention of HAMP, Donovan places blame on the servicers’ inability to process modifications. We have reported on widespread servicer failure, however, Donovan glossed over the finer point that the government has injected itself into the process and doesn’t have an answer as to which way to move forward.

Shifting to a 20% down system

Congress is considering a proposal to require 20% down on all home loans which Donovan won’t directly disagree with, rather said, “we can’t overcorrect that we go so far in the other direction that we cut off homeownership for people who really can be successful homeowners.”

“I think that we need to look at for those who have been successful, if you have a credit score that’s good, if we know you can be a suc homeowner, we have to have ways to get people access to homeownership that are less than 20% down” which is why FHA still offers low down payment loans, Donovan said.

Donovan takes an anti-investment stance

We are highly disappointed that the Obama Administration is continuing the stance that they are the arbiters of good versus bad and reading between the lines, we heard Donovan take an anti-investment position as he separates them from homes of primary residence and alludes to homeownership almost as a right, also alluding that real estate investment homes are subject to being rejected as less than worthy.

Donovan said, “when we modify loans that we are picking folks who really are trying to do the right thing. We check can they afford to be in their home today?” He says if they can afford to live in the home today, then maybe they won’t help them, rather focus on the “real” troubled homeowners. If the government sees their role as economy corrector, we find it egregious that any government official, much less the HUD Secretary, to ignore preventative measures and to continue cherry picking which homeowners to help based on some arbitrary and unmeasurable metric of whether or not a homeowner deserves help.

The dreamy American dream

Despite homeownership dipping to 66% nationally, Donovan notes evidence that homeownership helps communities by improving neighborliness, and even a child’s performance in school and that “homeonwership will continue to be an important part of the american dream and we can’t cut it off for folks who really can be successful homeowners.”

Donovan says they are working toward “common sense write-downs” and that they are “working with all state AGs and 10 fed agencies” to settle mortgage servicing problems (like the robo-signing debacle), but we urge our readers to note that any White House involvement in the mortgage probes have failed as AGs have noted their hands are tied due to lack of paper trails and government infighting over who is in charge is not being improved or influenced by any supposed White House involvement and negotiations continue to break down.

Donovan’s ultimate answer to fixing housing?

“Today is not the time to discuss eliminating the mortgage deduction” but that it is time to buy as “housing is more affordable than it has been in a generation.” Some agree, some disagree, but his statement that “if you look at most of the important indicators of where the housing market is going, they are improving” is completely incorrect (as evidenced in multiple real estate sectors).

Donovan ends the interview by not committing to when he thinks home prices will hit bottom but infers that when shadow inventory declines, prices will improve and some believe it will happen this year. We do not believe a recover will begin this year and we’ll be lucky if it begins in 2012, but either way, we agree that in some areas, affordability is a factor in purchasing (for buyers that can actually obtain a loan, that is).

Interview reveals ugly side of the Administration

We want to support anyone in the Presidential office and have tremendous respect for the job, but lightly put, we are disappointed. Obama calls housing the worst part of the economy, but Donovan can’t name any current or past actions taken to legitimately fix housing.

Yes, Donovan says homeownership is still a continuing part of the American Dream and that it’s not dying, but his relatively evasive speech and spin away from the current administration and himself were notable. We are disappointed to see a continued stance that lacks prevention and continued back patting prior to it being deserved. Donovan’s assertion that the government is in the role to arbitrarily and subjectively determine which homeowners “deserve” modifications not based on qualifications, but based on whether or not the government thinks the owner is nobly living the American Dream is appalling. Housing is a mess and if the HUD Secretary doesn’t think so, we’re in real trouble.

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26 Comments

26 Comments

  1. Joe Loomer

    July 6, 2011 at 6:34 am

    The Spin Doctors are out in force. Donovan's making the rounds, which means watch your wallets, here it comes.

    Navy Chief, Navy Pride.

  2. sfvrealestate

    July 6, 2011 at 2:09 pm

    Lani, what role would you like to see govt play in housing?

  3. Misty Lackie

    July 6, 2011 at 8:22 pm

    Yes it is a mess but do we really need or want govt to play anymore of role in this? Seems like they messed it up enough and were one of the major reasons it got to this point. I would have more confidence in a faster recovery if govt stepped out of the way and let the free market work things out.

  4. Kurt Novak

    July 10, 2011 at 2:02 pm

    Non-profits and government agencies receive millions of dollars from HUD to improve neighborhoods. These organizations pay fat salaries to their employees and overimprove the few homes they actually rehabilitate, so they have to sell them for less than they spent on the rehab.

    Give the money to small, for profit real estate investors and landlords. They will create 10 times more housing units than the government can for the same amount of money.

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Opinion Editorials

Declutter your quarantine workspace (and brain)

(EDITORIAL) Can’t focus? Decluttering your workspace can help you increase productivity, save money, and reduce stress.

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It’s safe to say that we’ve all been spending a lot more time in our homes these last few months. This leads us to fixate on the things we didn’t have time for before – like a loose doorknob or an un-alphabetized bookshelf.

The same goes for our workspaces. Many of us have had to designate a spot at home to use for work purposes. For those of you who still need to remain on-site, you’ve likely been too busy to focus on your surroundings.

Cleaning and organizing your workspace every so often is important, regardless of the state of the world, and with so much out of our control right now, this is one of the few things we can control.

Whether you’re working from a home office or an on-site office, take some time for quarantine decluttering. According to The Washington Post, decluttering can increase your productivity, lower stress, and save money (I don’t know about you, but just reading those three things makes me feel better already).

Clutter can cause us to feel overwhelmed and make us feel a bit frazzled. Having an office space filled with piles of paper containing irrelevant memos from five years ago or 50 different types of pens, has got to go – recycle that mess and reduce your stress. The same goes with clearing files from your computer; everything will run faster.

Speaking of running faster, decluttering and creating a cleaner workspace will also help you be more efficient and productive. Build this habit by starting small: try tidying up a bit at the end of every workday, setting yourself up for a ready-to-roll morning.

Cleaning also helps you take stock of stuff that you have so that you don’t end up buying more of it. Create a designated spot for your tools and supplies so that they’re more visible – this way, you’ll always know what you have and what needs to be replenished. This will help you stop buying more of the same product that you already have and save you money.

So, if you’ve been looking to improve your focus and clearing a little bit of that ‘quarantine brain’, start by getting your workspace in order. You’ll be amazed at how good it feels to declutter and be “out with the old”; you may even be inspired to do the same for your whole house. Regardless, doing this consistently will create a positive shift in your life, increasing productivity, reducing stress, and saving you money.

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Opinion Editorials

How to ask your manager for better work equipment

(EDITORIAL) Old computer slowing you down? Does it make a simple job harder? Here’s how to make a case to your manager for new equipment to improve your productivity.

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better equipment, better work

What is an employee to do when the work equipment bites.

Let’s be frank, working on old, crappy computers with inefficient applications can make the easiest tasks a chore. Yet, what do you do? You know you need better equipment to do your job efficiently, but how to ask the boss without looking like a whiner who wants to blow the department budget.

In her “Ask A Manager” column, Alison Green says an employee should ask for better equipment if it is needed. For example, the employee in her column has to attend meetings, but has no laptop and has to take a ton of notes and then transcribe them. Green says, it’s important to make the case for the benefits of having newer or updated equipment.

The key is showing a ROI. If you know a specific computer would be a decent upgrade, give your supervisor the specific model and cost, along with the expected outcomes.

In addition, it may be worth talking to someone from the IT department to see what options might be available – if you’re in a larger company.

IT professionals who commented on Green’s column made a few suggestions. Often because organizations have contracts with specific computer companies or suppliers, talking with IT about what is needed to get the job done and what options are available might make it easier to ask a manager, by saying, “I need a new computer and IT says there are a few options. Here are my three preferences.” A boss is more likely to be receptive and discuss options.

If the budget doesn’t allow for brand new equipment, there might be the option to upgrade the RAM, for example. In a “Workplace” discussion on StackExchange.com an employee explained the boss thinks if you keep a computer clean – no added applications – and maintained it will perform for years. Respondents said, it’s important to make clear the cost-benefit of purchasing updated equipment. Completing a ROI analysis to show how much more efficiently with the work be done may also be useful. Also, explaining to a boss how much might be saved in repair costs could also help an employee get the point across.

Managers may want to take note because, according to results of a Gallup survey, when employees are asked to meet a goal but not given the necessary equipment, credibility is lost.

Gallup says that workgroups that have the most effectively managed materials and equipment tend to have better customer engagement, higher productivity, better safety records and employees that are less likely to jump ship than their peers.

And, no surprise, if a boss presents equipment and says: “Here’s what you get. Deal with it,” employees are less likely to be engaged and pleased than those employees who have a supervisor who provides some improvements and goes to bat to get better equipment when needed.

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Opinion Editorials

How to build a company culture while working remotely

(OPINION EDITORIAL) It seems that even a post COVID-19 world will involve remote work, so how can you build and maintain a strong work culture that ensures growth and satisfaction?

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culture remotely

New startups and existing companies are starting to transition to a fully remote (or nearly fully remote) model, but what does this mean for work culture? If you’re not careful, your work culture could easily become diminished as you transition to a remote environment, and if you’re building a company from the ground up, you may not have a strong culture to begin with.

Culture isn’t something you can afford to give up, so how can you build and maintain your company culture while working remotely?

The importance of a strong work culture

Maintaining a strong, consistent company culture is vital, even if your company is operating remotely. With a strong work culture, you’ll enjoy benefits like:

  • Better recruiting potential. A company with strong work culture will seem more attractive to talented candidates. The best people in the industry will want to work at a place with a great team and a great set of values.
  • Like-minded teammates. Establishing a consistent work culture allows you to selectively hire, then maintain employees who are like-minded. Employees with similar goals and mentalities, even if they come from different backgrounds, will be able to collaborate more efficiently.
  • Smoother communication. A strong foundational work culture that establishes goals, values, and beliefs within an organization can enable smoother, more efficient communication. Staff members will be on the same page with regard to high-level priorities, and will be able to exchange information in similar patterns.
  • Lower stress and less turnover. Better work cultures generally mean lower stress for employees, and accordingly, less employee turnover. Of course, this assumes you’re hiring good fits for the organization in the first place.
  • A better public reputation. Your work culture can also boost your public reputation—especially if you emphasize core values that are important to your target audience.

How to build company culture remotely

Traditionally, you can use in-person team-building sessions, regular meetings, and workplace rules to establish and maintain your company culture, but while working remotely, you’ll need to employ a different set of tactics, like:

  • Hiring the right candidates. Building a great culture starts with hiring. You have to find candidates who fit with your organization, and already share your core values. If someone doesn’t agree with your high-level approach, or if they don’t like your rules or workflows, they aren’t going to do their best work. These same considerations should be applied to your third party hires as well; agencies and freelancers should also fit into your values.
  • Hosting virtual team-building events. You can’t host in-person team-building events, but that doesn’t mean that team-building is inaccessible to you. Consider hosting a video conference to introduce your team members to each other, or bond over a shared event. You could also host virtual game nights, or provide team lunches to celebrate wins. Any excuse to engage with each other in a non-work context can help employees feel more connected and part of the team, and there are plenty of options to make it work virtually.
  • Streamlining communication. Good communication is both a constituent factor and a byproduct of effective company culture. If you want your culture to thrive, you have to set good standards for communication, and encourage your employees to communicate with each other consistently and openly. People need to feel heard when they speak, and feel comfortable voicing their opinions—even if they don’t agree with their superiors. There should also be easily accessible channels for communication at all levels. Over time, this foundation will help your employee communication improve.
  • Improving transparency. Workplace transparency is important for any employer, but it’s especially important for remote businesses trying to build or maintain a strong culture—and it’s challenging if you’re operating remotely. If you’re open and honest about your goals and how you operate, employees will feel more trusted and more engaged with their work. Strive to answer questions honestly and disclose your motivations.
  • Publishing and reiterating company core values. One of the biggest factors responsible for making a company culture unique is its set of core values. Spend some time developing and refining your list of core values. Once finished, publish them for all employees to read, and make time to reiterate them regularly so employees remember them.
  • Making employees feel valued. Finally, and perhaps most importantly, make your employees feel valued. Take the time to show your appreciation however you can, whether it’s through a simple thank-you message or an occasional cash bonus, and be sure to listen to employee feedback when you get it.

Building a work culture in a remote environment is more challenging, and requires consideration of more variables, but it’s certainly possible with the right mentality. Spend time setting your priorities, and make sure you’re consistent in your execution.

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