Simons Nomination Coming

With the clock running down, President Clinton is expected to nominate Larry Simons to run the HUD multifamily restructuring program before the Senate adjourns for the August recess.This means the nomination could be handed down this week, a reliable source has told MortgageWire. The nomination is considered critical because the permanent restructuring program cannot be gotten under way on Oct. 1 unless the president appoints a director to run the Office of Multifamily Housing Assistance Restructuring. Mr. Simons, who was the Federal Housing Administration commissioner in the Carter administration, is coming out of retirement to run OMHAR, which will oversee and manage the restructuring of hundreds of FHA-insured multifamily properties that receive excessive federal rent subsidies. The fledgling mortgage restructuring program got a boost last week when the IRS ruled that the creation of a second mortgage does not represent debt forgiveness even if the soft second carries a below-market interest rate. The restructuring program depends on the creation of a second mortgage, and the ruling assures that owners will not get hit with an income tax bill if they participate in the HUD program.