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HomeMy Public PortalAbout04. 2009-10 CalHFA ReportCalifornia Housing Finance Agency Opening Doors. Funding Possibilities -- California Housing Finance Agency Annual Report OPENING DOORS.FUNDING POSSIBILITIES. In 2009 and 2010, California faced historic challenges: continued disruption in our state’s housing market, high unemployment, and an extremely difficult overall economic climate. These issues had a deep and lasting impact on the families that the California Housing Finance Agency is here to serve. These challenges also led to a fundamental change in the mindset at CalHFA. We affirmed that our responsibilities are twofold. Not only should we continue to open doors for California families purchasing their first home or renting an affordable apartment; we also need to focus ahead and lay the foundation for future possibilities. In other words, CalHFA concentrated on Opening Doors. Funding Possibilities. This phrase became more than an idea at CalHFA; it became the Agency’s philosophy, and fittingly, the title and theme of our 2009-2010 annual report. This report, Opening Doors. Funding Possibilities., uses an articulation strategy of more than numbers, facts and charts; it tells an innovative story of what home really means to Californians. This meaning is illustrated throughout the pages of the document with images that could have been borrowed from any photo album in any family home … a proud, young family ready to move into their first real home … a set of grandparents, enjoying the peace of mind that comes with an affordable payment … a single mother and her daughter, feeling the pride of independence. Opening Doors. Funding Possibilities. stresses that home is more than a roof and four walls. Home means stability; it means partnerships, ownership, community, assurance, reliability. The California Housing Finance Agency mirrors these adjectives, beliefs and values throughout the various divisions of the Agency: Homeownership, Mortgage Insurance, Multifamily, Financial Services and Support Services. This report shows that through these tough times, CalHFA encouraged and promoted homeownership and affordable rental housing. Homeownership prepared for new initiatives for the 2010-2011 year, assisted in large part by the U.S. Treasury allocating more than $1 billion in bond financing for CalHFA to help first-time homebuyers at a time when home prices in California have fallen dramatically, making homeownership much more affordable. CalHFA’s Mortgage Insurance and Loan Servicing divisions responded to the twin problems of high unemployment and disruption in the real estate market through loss mitigation and foreclosure alternative programs, helping keep delinquencies and foreclosure rates lower then they otherwise would have been. California Housing Finance Agency Opening Doors. Funding Possibilities -- California Housing Finance Agency Annual Report In our Multifamily division, one of the Agency’s greatest successes for opening doors and funding possibilities for mentally ill Californians was our partnership with other agencies to provide housing for those who are homeless or in danger of becoming homeless. Using funding from the Mental Health Services Act, CalHFA’s Multifamily division closed 20 loans for nearly $38 million that financed 1,145 units of rental housing, including 395 units for mentally ill homeless Californians. These examples and stories are compiled and formatted in an easily replicated style. In fact, this year, CalHFA’s annual report was offered primarily online with a goal of maintaining creativity and innovation while achieving a very cost effective delivery. While the Governor’s Office and the Legislature received hard copies, other target audiences, including CalHFA’s investors, business partners, state libraries and the media all received disks of the report (Attachment A). The general public could easily access the report online through the CalHFA web site. This electronic delivery method expanded our reach substantially while reducing printing costs by 70 percent. The success of Opening Doors. Funding Possibilities. annual report is measurable based on the positive feedback we received to the approach, design and content. Readers especially appreciated the electronic version of the annual report and the easy accessibility. The objective of our annual report was to illustrate, not only through numbers, but with real stories and real people, that these years of market disruptions have tested CalHFA’s ability to adapt, innovate and take new directions. The report uses an honest strategy to demonstrate that we understand fully that our success will be inextricably tied to our ability to adapt to changes in the market – many that may not even be visible to us today. With an eye on the future, Opening Doors. Funding Possibilities represents CalHFA’s determination to take on new responsibilities and create new products to meet the needs of California’s families. With a team of employees committed to assisting our state, the California Housing Finance Agency will continue to help open doors to homes for families and fund possibilities to enhance the health and economic future of our state. / California Housing Finance Agency Annual Report FUNDING POSSIBILITIES. OPENING DOORS. Marketing Information TABLE OF CONTENTS 2 Chairman and Executive Director’s Message 3 Members of the Board 4 Homeownership 6 Special Lending 8 Mortgage Insurance 10 Multifamily 12 Financial Services 14 Support Services 16 Dedication Chairman and Executive Director’s Message Members of the Board Homeownership Mortgage Insurance Multifamily Asset Management Financial Services Support Services CONTENTS n 2009-2010, California faced historic challenges: continued disruption in our state’s real estate market, high unemployment, and an extremely difficult overall economic climate. These issues have a deep impact on the California families that the California Housing Finance Agency is here to serve. This led to a fundamental change in our mission: we focused much of our attention in 2009-2010 on assisting borrowers and preparing to take on an increasing role in helping California families remain in their homes. We call this multifaceted program “Keep Your Home California.” In June, the U.S. Department of the Treasury approved California’s plan to use nearly $700 million – later increased to nearly $2 billion – from the federal government’s “Hardest Hit” program to assist homeowners struggling to meet their mortgages and stay in their homes. The Agency was also in charge of distributing more than $15 million specifically directed to counseling agencies. The primary objective of the program is sustainable homeownership. As administrator of this federal program, CalHFA is focused on helping as many families as possible and leveraging this funding to maximize its benefits for California borrowers. This funding will directly help at least 100,000 families and indirectly help every Californian. Preventing foreclosures will not only benefit the families directly impacted, it will help stabilize neighborhoods, communities and the entire California economy. The disruption in the bond markets, particularly for new real estate-backed bonds, limited our ability to fund mortgages for first-time homebuyers in 2009-2010. The Agency’s staff worked throughout the year to develop new strategies and loan programs to be launched in the 2010-2011 fiscal year, allowing CalHFA to resume its traditional role of helping California families purchase their first homes. The New Issue Bond Program also contributed $1.4 billion toward that opportunity. In addition to the Hardest Hit program, the U.S. Department of the Treasury also stepped in to provide liquidity to state housing finance agencies impacted by the significant disruption in the financial markets, including $5.4 billion for California. The financing assistance included $3.8 billion for credit support that decreased uncertainty and significantly reduced the funding costs for the agency. Additionally, the assistance will allow CalHFA to issue $1.6 billion in new bonds to finance loans for first-time homebuyers and for affordable rental housing. While business remained challenging this past year, CalHFA continued to help California families open doors to homes and fund possibilities for the future. Through these tough times, CalHFA encouraged and promoted homeownership and affordable rental housing. In 2009- 2010, CalHFA provided a total of more than $4 million to more than 600 borrowers for assistance with down payments or closing costs. CalHFA helped 470 borrowers stay in their homes by approving modifications on mortgages financed by CalHFA. One of the Agency’s greatest successes this year was our partnership with other agencies to provide housing for mentally ill Californians who are homeless or in danger of becoming homeless. Using funding from the Mental Health Services Act, CalHFA’s Multifamily division closed 20 loans for nearly $38 million that financed 1,145 units of rental housing, including 395 units for mentally ill homeless Californians. In addition, CalHFA’s Multifamily division assisted the State Treasurer in using funds from the American Recovery and Reinvestment Act to help boost the state’s economy. These years of market disruptions have tested our ability to adapt, innovate and take new directions. Today, CalHFA is performing new tasks and creating new products to meet the needs of California’s families. With a team of employees committed to assisting our state, CalHFA will continue to help open doors to homes for families and fund possibilities to enhance the future of our state. Peter N. Carey Acting Board Chairman L. Steven Spears Executive Director ven Spears Peter N. Carey Acting Board Chairman L. Steven Spears Executive Director MEET THE MEMBERS OF THE BOARD Peter N. Carey, CalHFA Acting Board Chair, President/CEO, Self-Help Enterprises; L. Steven Spears*, Executive Director, California Housing Finance Agency, State of California; Dale E. Bonner, Secretary, Business, Transportation & Housing Agency, State of California; Cathleen Cox*, Acting Director, Office of Planning & Research, State of California; Michael A. Gunning, Vice President, Personal Insurance Federation of California; Paul C. Hudson, Chairman/CEO, Broadway Federal Bank; Jonathan C. Hunter, Managing Director, Region II, Corporation for Supportive Housing; Lynn L. Jacobs, Director, Department of Housing & Community Development, State of California; Barbara Macri-Ortiz, Law Office of Barbara Macri-Ortiz; Ana J. Matosantos*, Director, Department of Finance, State of California; Jack Shine, Chairman, American Beauty Development Co.; Ruben A. Smith, Partner, Adorno Yoss Alvarado & Smith Professional Corporation. Not pictured Bill Lockyer, State Treasurer, Office of the State Treasurer, State of California *Non-voting (Members listed from left to right) CalHFA’s Homeownership division opens doors for low and moderate income, first-time homebuyers in California by providing low-interest rate, home loan financing. While FY 2009-2010 was an economically challenging time for California families, Homeownership prepared for new initiatives for the 2010-2011 year, assisted in large part by the U.S. Treasury allocating more than $1 billion in bond financing for CalHFA to help first-time homebuyers at a time when home prices in California have fallen dramatically, making homeownership much more affordable. ownershiphome Accomplishments: Subordinate and Special Loan Programs California Homebuyer’s Downpayment Assistance Program – assisted 329 borrowers with subordinate mortgages totaling $2.5 million School Facility Fee – assisted 275 borrowers with grants totaling $1.6 million Approved 287 localities (522 active Affordable Housing Partnership Program loan programs) Assisted other divisions of CalHFA by reassigning homeownership staff Assisted in the development of the new Homeownership Loan Origination Project Completed new product development research Outreach Conducted 24 outreach webinars with a total of 812 attendees Participated in 152 statewide affordable housing events with 14,006 attendees Training Conducted 145 training webinars Participated in seven outreach events Conducted 14 in-person training events Despite the struggles in the housing markets, the Agency continued to foster its relationships with loan officers and real estate agents, offering various training and outreach sessions. Gary Braunstein Acting Director of Homeownership The Mortgage Insurance division supports the Agency’s mission of opening the door to homeownership by providing innovative mortgage insurance programs at affordable, below-market rates. CalHFA Mortgage Insurance works to ensure that investors who provide funds for these mortgages are protected against losses when borrowers cannot meet the financial requirements of their mortgage. With California’s economy facing the twin problems of high unemployment and disruption in the real estate market, the Mortgage Insurance division responded rapidly through loss mitigation and foreclosure alternative programs, helping keep delinquencies and foreclosure rates lower than they otherwise would have been. CalHFA’s Portfolio Management works with outside servicers of the Agency’s portfolio and oversees the maintenance, preparation for market, and sale of all conventional loan foreclosed properties. The division works with servicers to encourage loan modifications for families struggling financially, helping borrowers navigate through their possibilities. When families are unable to sustain homeownership, the division works with its partners to resolve claim issues related to those situations. insurancemortgage Accomplishments: Approved 470 loan modifications for borrowers, assisting those California families in their efforts to remain in their homes Completed 244 loan modifications for borrowers during the fiscal year Developed and implemented two different loan modification programs to help CalHFA borrowers keep their homes Trained new personnel to fill expanding role in Agency Managed claims and approvals for short sales and other properties owned by the Agency This division works with servicers to encourage loan modifications for families struggling financially. Charles McManus Director of Single Family Portfolio Management and Mortgage Insurance multifamily The Multifamily division provides financial support for new housing developments, special needs projects and the preservation of existing rental housing for very low and low income families. In FY 2009-2010, the Multifamily division partnered with the U.S. Department of the Treasury for its New Issue Bond Program, which facilitates access to tax-exempt bonds for the financing of family and senior affordable housing developments for both for-profit and nonprofit developers. Through the New Issue Bond Program, $380 million will be devoted to help finance multifamily housing developments, providing quality, affordable homes for families throughout the state. Multifamily also continued its ongoing commitment to its role in the Mental Health Services Act, working with developers and builders to finance homes for Californians living with mental illness. Accomplishments: Closed seven CalHFA loans for $16.5 million, totaling 427 units of rental housing Assisted Tax Credit Allocation Committee in closing 74 projects containing 4,915 housing units, using $477 million in American Recovery & Reinvestment Act-allocated funds Closed 20 Mental Health Services Act loans for $37.9 million. These loans financed 1,145 units, of which 395 were for mentally ill homeless Issued loan commitments on an additional 60 Mental Health Services Act projects for $94.9 million. This will fund 3,089 units, of which 877 will be for mentally ill homeless CalHFA helps provides financial support for new housing developments, special needs projects and the preservation of existing rental housing for very low and low income families. Bob Deaner Director of Multifamily The Asset Management division plays a key role in preserving and maintaining affordable housing for the Agency. The division manages the multifamily housing portfolio throughout the life of the loans – typically 30 to 40 years – and protects CalHFA’s real assets from loss. In addition, it collaborates with building owners and managers to make sure properties are well operated, fiscally sound, clean and safe for tenants over the long term. multifamily asset management Accomplishments: Launched a pilot Prepayment Program that permits multifamily projects with seven or fewer years remaining on their CalHFA mortgage to prepay their loan – 51 projects are eligible Oversaw more than 550 multifamily loans for a total of 40,000 multifamily units Capitalized Operating Subsidy funds for four Mental Health Services Act projects to house mentally ill Californians, with more than 20 additional projects in the pipeline Committed $2 million in Pre-80 Earned Surplus funds to assist portfolio Section 8 properties Margaret Alvarez Director of Asset Management Asset Management works with building owners and managers to ensure that various types and sizes of properties are fiscally sound. servicesfinancial The Financing division supervises the capital used to finance CalHFA’s affordable housing programs. It also handles CalHFA’s outstanding debt obligations and non-mortgage investments. The division regularly evaluates various alternatives for generating low-cost capital, including balancing risk versus benefit. Because of CalHFA’s tax-exempt issuance authority, the Agency is able to offer affordable housing opportunities to California families in a way the general market cannot. Bruce Gilbertson Director of Financing Accomplishments - Financing: Replaced liquidity for $3.5 billion of variable rate bonds with liquidity provided by Freddie Mac and Fannie Mae through the Temporary Credit and Liquidity Program Issued $1.39 billion of bonds under the federal government’s New Issue Bond Program Securitized $326.8 million of Federal Housing Administration insured loans into Government National Mortgage Association mortgage-backed securities Sold $255.6 million of the Government National Mortgage Association securities and realized a net premium of $10 million Sold $95 million of Multifamily loans and used $87 million in proceeds to redeem variable rate debt obligations and auction bonds Negotiated with swap counterparties to terminate $237.8 million of swap notional and received higher collateral thresholds to reduce the collateral postings Reduced swap notional total to $3.42 billion, compared to $4.23 billion last year The Fiscal Services division safeguards the Agency’s cash and investments and works with borrowers to service loans. In accordance with federal and state requirements, the division reports pertinent financial information that is critical in the management of CalHFA’s programs. Fiscal Services works with an independent accounting firm every year to prepare the Agency’s financial data audit. Accomplishments - Fiscal Services: Loans purchased or funded by Loan Accounting – $98 million $36.8 million for 21 Bay Area Housing Plan loans $22.8 million for 19 Mental Health Services Act Program loans $20.2 million for seven Residential Development Loan Program loans $13.4 million for Multifamily construction draws $2.4 million for 329 CHDAP loans $1.5 million for eight HELP loans $769,000 for eight single-family first mortgages $162,000 for one Multifamily loan Assisted in the securitization of 2,586 FHA loans into Government National Mortgage Association mortgage-backed securities Coordinated bond debt service and redemption payments totaling $711 million Paid swap payments of $199 million Completed CalHFA and CaHLIF financial audits Completed Phase 1 of Fiscal Services Re-Platforming Project The Loan Servicing division is in charge of servicing the Agency’s portfolio of single-family home loans. The division receives and processes payments, manages delinquencies, and communicates with existing CalHFA borrowers. Accomplishments - Loan Servicing: Seamlessly moved staff and operations to new building in West Sacramento Continued implementation of CalHFA Loan Modification Program which began in May 2009 Completed 84 modifications Completed 130 short sales Rhonda Barrow Housing Finance Chief A number of divisions at CalHFA work together to support the business needs of the Agency. The Administration division supports the infrastructure of the Agency’s operations, including human resources, operating budget, establishing policies, employee training, maintaining facilities and procuring office equipment. servicessupport Accomplishments – Administration: Managed the hiring, promoting, transferring and reclassification of 52 CalHFA employees Installed a robust, technically advanced phone system for the Loan Servicing division Instituted a new budget development process Coordinated the relocations of Sacramento Agency personnel and operations to new office locations Saved $257,000 on the acquisition of new Loan Servicing work stations The Information Technology division implements and maintains technology systems for the Agency in order to improve service to partners and borrowers, and keep CalHFA on the competitive edge of the mortgage industry. Accomplishments - Information Technology: Implemented a new Debt Management system which automates business processes, eliminates duplicate data and centralizes the information that supports debt management functions Implemented a new Multifamily Loan Origination system which provides a streamlined and systematic approach to processing reports, Multifamily transactions and loans from origination to the point of transfer to Asset Management Implemented the Fiscal Services Re-Platforming Project Phase 1, Part 2 which reprograms the Agency’s Legacy applications with the new Fiscal Services General Ledger Continued development of the Homeownership Loan Origination project Developed the technical infrastructure for the new West Sacramento location for Loan Servicing, Portfolio Management and “Keep Your Home California” staff Developing and securing the technical infrastructure for the new 500 Capitol Mall headquarters Howard Iwata Director of Administration and Acting Director of Fiscal Services The Office of General Counsel manages the legal affairs of CalHFA by providing counsel on day-to-day operations and the Agency’s strategic initiatives. The office also supports all of CalHFA’s lending and insurance programs. Accomplishments – Office of General Counsel: Assisted Financing staff in negotiating collateral posting agreements with major swap counterparties, as part of a strategy to maintain Agency liquidity Assisted Single Family loss mitigation and disposition of the REO Program Supported the Agency’s major strategic projects The Legislative division works with various state and federal legislative, hous- ing, business and other interest groups to identify and maximize opportunities to meet the housing needs of low and moderate income families in California, and to further the long-term business objectives of the Agency. Accomplishments – Legislation: Worked to secure funding for a second round of federal foreclosure counseling dollars Secured legislation authorizing $878 million in special bond cap allocation Secured U.S. Treasury approval for CalHFA’s Hardest Hit Fund proposal, which will assist approximately 100,000 California homeowners suffering a financial hardship The Marketing division uses advertising, promotion and public relations to in- crease awareness of and accessibility to the Agency’s products among lenders, real estate agents, builders, developers, localities and homebuyers. Accomplishments – Marketing: Secured earned media placements worth $230,000, reaching more than 13 million Californians The CalHFA Leads Program Call Center responded to 16,981 incoming calls Launched the “Keep Your Home California” web site Won Creative Award for the 2008-09 Annual Report Managed CalHFA web site, which attracted more than 3 million views, and initiated a social media campaign Switched Enews providers, saving $18,000 annually Launched a CalHFA mobile apps site Thomas Hughes General Counsel Diane Richardson Director of Legislation Kenneth Giebel Director of Marketing Abe Tsadik Alicia McDonald Alyssa Norris Amy Golonka Ana Espinoza Andrea Berry Andrea Fulton Andrew Lee Angela Ellison Angela Sagaral Angela Dare Angelique Castillo- Piliotis Anna Nguyen Bahiyah Hillary Barbara Laroa Barry Meidinger Ben Lunetta Ben Viado Bob Bastien Bob Deaner Brandon Dobson Brandy Kollenborn Brian Anderson Bronwyn Mednick Bruce Gilbertson Bryce Andrews Carole Adams Carr Kunze Carrie Wylie Castalia Roman Catherine Dolph Catherine Relyea Celeste Hock Chalena Nanthaveth Charlotte Moore Cherissa Lee Chris Healy Chris Penny Christina Beck Christina Garcia Christina Meza Christine Caldwell Christopher Dickey Christopher Johnson Chuck McManus Cindi Mahoney Claire Crowson Cleo Williams Cora Brooks Corinna Pereira Cynthia Davidson Dai Thai Dakota Neal David St. Cyr Deborah Romano Debra Starbuck Denise Cabelera Denise Clark Diane Richardson Donna Allison Douglas Colby Douglas Kincaide Duncan Dungworth Ed Beltejar Eden Saldana Edith Hodges Elaine Brown Elisa Nieves Elizabeth Andrade Enoch Yeung Eric Ball Eric Johnson Eric Riegert Erica Guerra Erica Hedglin Evan Gerberding Evelia Franco Exer Toney Ezzard Fleming Fernando Narvaez Gail Tateyama Gary Braunstein Gilbert Mar Gina Saldivar Greg Carter Greg Skubal Gregory Ricard Guy Motter Heather Espinoza Helen Villagomez Henry Sharp Howard Iwata Isabelle Bellet Janet Louie Jason Weaver Jean-Terson Delva Jeffrey Slaton Jennifer Beardwood Jennifer Giron Jennifer Reeves Jennifer Silva Jim Foley Jim Liska Jim Morgan Jim Poile Jim Rengstorff JoAnn Artiaga Joe Lenihan Joe Moroni John Herman John Maio John Matheny John Ottinger John Tumminelli JoJo Ojima Jon Demaree Josie Hernandez Juan Riggins Judy Fong Julie Fussner Julie Thornton Kandy Wemken Karen Morris Kathleen Cook Kathy Leavitt Kathy Phillips Kathy Weremiuk Katie Miner KC Campbell Kelli Alten Kelly Jordan Kelly Sacco Kelvin King Ken Giebel Kevin Brown Kevin James Kimberly Johnson Kimberly Ogg Kristine O’Daly Kristy Morrow Larry Miller Laura Whittall-Scherfee Laurie Andrade Leah Pears Leanne Walker Leila Feinstein Lesli Faulk Liane Morgan Lilly Voravongsa Linda Mellor Linda Swinton Linn Warren Liz Hogan Loretta McGrath Lori Hamahashi Lucille Stanko Lynard Khan Lynda Stovall Lynn Ringor Marc Victor Margaret Alvarez Maria Jimenez Maria Norbeck Marian Grant Marianne Cooper Mariar Wong Marilyn Alvarado Marisa Fogal Marites Antonio Martha Pozdyn Martin Espinoza Mary Oller Mary (Frankie) Harper Meihong Guan Melissa Flores Michele Arnoux Michelle Lee Michelle Novoa-Castillo Miguel Mejia Mikki Mauldin Ming Lee Misty Miller Molly Charles Molly Ellis Nancy Santucci Nanette Guevara Nicholas Ojima Nick Kufasimes Nicole Galiano Nicole Slaton Nicole Temple Oksana Glushchenko Orysia Riesen Pam Ellis Pam Vinson Pam Wilson Pamela Evans Pamela Russell Paul Laroa Paul Steinke Pauline Yu Peter Buck Rae Parda Ralph Palmer Ranae Harkins Rangeela Dharan Rebecca Anderson Rebecca Forest Reggie Wong Rene Ingram Renie Alarcon Rhonda Barrow Rich Walline Richard Dewey Rick Okikawa Bobbie Angulo Robin Monk Roger Kollias Ronald Carter Rosalinda Rafanan Roxanne Reyes Russel Howell Ruth Vakili Sabrina Saxton CalHFA Sally Omdahl Sandra Gallagher Sandy Casey-Herold Sandy Huang SangChol Thompson Scott Sequira Selsa Castellari Shai Leib Sharyl Silva Shelby Banks Sheila Felder Sherri Kerth Sheryl Angst Smyra Bailey Stan Sowers Stephanie Alstrom Stephen Beckman Steve Adams Steve Pogozelski Steve Spears Sue Diurni Summer Kalwani Susan Cortvriendt Susan Murtishaw Susan Wagner Suzanne Ledesma Suzanne Uppinghouse Tammy Gauthier Tammy Moreno Tammy Yu Tanishia Hodge Tauna Bradell Ted Nishimoto Teresa Creamer Teresa Glenn Thelma McIntosh Therese Volk Tim Hsu Tom Armstrong Tom Dennis Tom Freeburger Tom Hughes Tom Nann Tony Sertich Trish Hoehne Trisha Vo Venita Ashley Victor James Victoria West Wendy Ng William Lee Wisheena Vercher Ying Lu The California Housing Finance Agency does not discriminate on any prohibited basis in employment or in the admission and access to its programs or activities. 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