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2006 Consent Order with Fannie Mae Lifted“I am pleased to announce that OFHEO has lifted its 2006 Consent Order with Fannie Mae. This action reflects two years of hard work by Fannie Mae in remediating their problems. OFHEO will continue its ongoing oversight of the Enterprise, including of items that were remediated under the Order. I want to express appreciation for the work done by OFHEO’s Office of Compliance and the Office of Examination in oversight of the remediation effort. May 6, 2008
Bernanke: Let’s Fight ForeclosuresFederal Reserve Chairman Ben Bernanke warned late Monday that the federal government should do more to stave off home foreclosures that threaten credit markets and the economy, even as a Fed survey showed the percentage of banks tightening credit for consumers and businesses reached historic highs. Underscoring Bernanke’s point that credit markets are fragile, the Fed’s latest quarterly lending survey for the three-month period through April 17 showed: May 6, 2008
Mortgage SurvivorsZena Collins knew she had a serious problem when she could no longer afford electricity. The mortgage payment on her Gaithersburg house had jumped about $500, to $2,000 a month, not counting taxes and insurance, after her adjustable interest rate increased. When she bought the house in 2000, she was a pension administrator. By the time her company decided to cut her job, she was bringing home $5,200 a month. In April 2006, she managed to secure a similar job — but not a similar salary. So there she was, earning less but paying more for her house. And that’s when the lights went out. May 6, 2008
Count to Five Before You Send the Last CheckMany people look forward to the day they own their homes free and clear. But gathering the money to pay off the mortgage is only part of the process. It’s also important to make sure all the paperwork is in order.Here are five common questions to which homeowners should know the answers before they mail that final check. May 6, 2008
For Loan Seekers, Preparation Is More Important Than EverOne of the reasons many subprime loans have failed is because of weak underwriting, a new study suggests. Underwriting is the process by which a lender decides whether a borrower is a good risk. It involves looking carefully at the paperwork provided by the borrower, including the signed loan application, bank account statements, paycheck stubs, tax returns, and profit-and-loss statements if the borrower is self-employed, and reviewing the property appraisal obtained by the bank. May 6, 2008
Doubts Raised on Big Backers of MortgagesAs home prices continue their free fall and banks shy away from lending, Washington officials have increasingly relied on two giant mortgage companies — Fannie Mae and Freddie Mac — to keep the housing market afloat. But with mortgage defaults and foreclosures rising, Bush administration officials, regulators and lawmakers are nervously asking whether these two companies, would-be saviors of the housing market, will soon need saving themselves. May 6, 2008
Witnesses: Mortgage Lenders Abusing Court SystemMortgage lenders are abusing the bankruptcy court system by pursuing unjustified foreclosures against struggling homeowners, piling on questionable fees and misstating the amounts owed, witnesses alleged at a congressional hearing on Tuesday. The result is a systemic breakdown that increases foreclosures, raises the number of families losing their homes and threatens the integrity of the legal system, the witnesses told the Senate Subcommittee on Administrative Oversight and the Courts. May 7, 2008
BUSH ADMINISTRATION IMPLEMENTS A TARGETED, FINANCIALLY RESPONSIBLE PLAN TO HELP HOMEOWNERSThe Bush Administration’s plan will give the Federal Housing Administration (FHA) greater flexibility to insure mortgages and reduce monthly payments for borrowers with adjustable rate mortgages - without forcing taxpayers to foot the bill. Expanding FHASecure, the government-backed mortgage refinancing product, creates a more viable option for American families who are in the right house but the wrong mortgage, and will help break the cycle of price depreciation and foreclosure. May 7, 2008
Fannie Loses $2.2 Billion As Home Prices FallFannie Mae, one of the main sources of mortgage funding and a barometer of the housing market, yesterday reported that home prices fell faster than it expected during the first quarter, contributing to a $2.2 billion loss for the company. The company had been predicting that the toll from defaults and foreclosures would worsen this year, and yesterday it revised its forecast to predict even higher credit losses ahead. May 7, 2008
Lenders Pressed to Hurry HelpTreasury officials met with about 10 leading mortgage firms yesterday to figure out why they have not helped more distressed homeowners, pressing the lenders to do better. At the closed-door session, Treasury staff members reviewed legal and financial issues identified by the industry as difficulties in addressing the foreclosure crisis, including how to modify mortgages when homeowners have two loans. The meeting lasted longer than the six hours scheduled for it. May 7, 2008
Countrywide Admits Mistakes, Not WrongdoingMortgage lender Countrywide Financial Corp., which is under investigation for inflating certain borrowers’ fees, acknowledged Tuesday that it has made errors and pledged to take steps to improve its operations. Steve Bailey, chief executive for loan administration at Countrywide, told a Senate panel that the company’s employees have made mistakes “from time to time.” He said the company will hire an outside auditor to review its actions in cases involving homeowners who have filed for bankruptcy court protection. May 7, 2008
Mortgage Crisis Seeps to Prime LoansThe first concrete evidence that delinquencies on mortgage bills have spread well beyond those with subpar credit shows that even prime borrowers have increasingly fallen behind on their house payments. The figures remain relatively small so far. But if they rise further, delinquencies on prime loans — given only to those with good credit — could prolong the housing crisis. About 2.3% of prime loans were 60 days’ past due in February, the highest level in at least a decade, according to data from FirstAmerican CoreLogic LoanPerformance. That’s up from 1.4% a year ago. Some economists, such as Brian Bethune of Global Insight and Dean Baker of the Center for Economic and Policy Research, say they think delinquencies on prime loans have likely risen further since then. May 9, 2008
House OKs $15B for States to Buy, Fix Foreclosed PropertiesThe House on Thursday approved sending $15 billion to states to buy and fix up foreclosed property.The measure, passed 239-188, is part of a sweeping housing package Democrats are pushing to prevent more foreclosures and help homeowners and communities deal with the fallout from the mortgage meltdown. The House was expected to vote later Thursday on a homeowner rescue bill that would let strapped homeowners refinance into government-backed mortgages. May 9, 2008
HUD EXTENDS COMMENT PERIOD ON PROPOSED MORTGAGE REFORMSThe U.S. Department of Housing and Urban Development today announced that it is extending the public comment period on the Bush Administration’s proposed reforms to the real estate settlement process. The comment period for the Department’s proposed rule to simplify and improve the process of obtaining mortgages and reducing settlement costs under the Real Estate Settlement Procedures Act (RESPA) will be extended 30 days until June 12, 2008. May 9, 2008
Looking Past the Capital CityThe recent opening of the Washington Nationals’ baseball stadium culminated a decade of panoramic change in the District, one in which downtown and an array of long-forlorn neighborhoods blossomed. So what is Washington’s next horizon? If the city has purged much of the blight that helped make it a symbol of urban dysfunction, what is it aspiring to now? The answer, voiced by a wide range of District officials, planners and developers, is nothing less than transcending Washington’s primary identity as the nation’s capital and ever-proper home to the federal government. May 9, 2008
Questions of Rent Tactics by Private EquityPrivate investment firms have been amassing what may seem like unusual stakes in New York real estate: they have bought hundreds of apartment buildings with thousands of rent-regulated units across the city that produce decidedly meager returns. As regulatory filings and promotional materials show, the companies expect to generate higher returns quickly by increasing rents after existing tenants vacate their units. Their success depends upon far higher vacancy rates than are typical in rent-regulated apartments in New York. May 9, 2008
Ethics Panel Says N.O. Developer Can Run City Agency May 9, 2008
Hang Tight — It Can’t Be This Bad ForeverI’ll admit it: When home prices were soaring in my neighborhood, it made me feel really smart. Like so many millions of homeowners, we concluded that we chose the right house in the right neighborhood at the right time. And as the years went by, and all of us on the block could count our home appreciation month by month, all this paper equity made us feel financially secure — as in “Now we know how we’re going to pay our college tuition bills down the road.” But as they say, easy come, easy go. Home prices in our neck of the woods have been falling just as they’ve been falling around the country. May 12, 2008
A New System to Prepare for the Next CrisisLast week, I discussed what I see as a serious weakness in the way the mortgage system deals with default risk. Essentially, interest rate risk premiums collected from borrowers that are not needed to meet current losses are paid as income to investors and not reserved to meet future losses. Because major default episodes occur infrequently, perhaps every 12 to 15 years, the system is never adequately prepared for one when it happens. It certainly was not prepared for the one we are now in.The remedy is to reserve a much larger portion of the risk-based dollars paid by borrowers. May 12, 2008
Appraisal Changes Face ResistanceA legal brawl is breaking out over how homes are appraised, at what cost and by whom. The outcome could directly affect how much you pay for your next piece of real estate and how much money you can borrow. The fight centers on an unusual agreement reached in March among Fannie Mae, Freddie Mac, their federal regulator and New York Attorney General Andrew M. Cuomo. The agreement took the form of an out-of-court settlement under which Cuomo terminated an investigation of the mortgage-finance giants’ appraisal practices in exchange for their adoption of a far-reaching “home valuation code of conduct” covering all loans they buy or package into investments. May 12, 2008
Losing a Home, Then Losing All Out of StorageThe foreclosure crisis is hitting yet another American locale: the self-storage center. As they lose their homes, people are turning to these humble cinderblock and sheet-metal boxes to store their stuff. But some people cannot keep up with their storage bills any better than they could handle their mortgage payments, and storage companies are auctioning off their property for a pittance. A cottage industry has developed to profit from these lost and abandoned items. The other day in this Chicago suburb, Stephanie Donahou and her son Marcus had only a moment to decide whether to bid on a unit in default. They could see a couch, a sewing machine, a fish tank, a washer and dryer, lots of Christmas wrapping paper, a television and other trappings of daily life. May 12, 2008
Mortgage-Free, but Not Free From the Temptation to BorrowThis is a story about the other homeowners. Not the ones who are having trouble making their mortgage payments and getting all the attention lately. No, this is about the homeowners who do not owe any money on their primary residences because they have paid off their loans. They are the ones, generally, who did not get caught up in the home buying frenzy earlier in this decade. And they are the ones the banks would love to serve. According to the Census Bureau, of the some 75 million people who reported owning their own homes in 2006, approximately 32 percent said they had no mortgage. The median value of a mortgage-free residence in 2006 was $140,400, the Census Bureau found. May 12, 2008
Nine Houses Lost, Investor Reflects on ‘Stumbles’A California man who has defaulted on nine homes and expects banks to foreclose on all of them, forcing him into bankruptcy, says he now considers it a mistake to have invested in the real estate market. Shawn Forgaard, a 37-year-old software company project manager, bought one home for his family to live in and nine more as investments. He stands to lose all the investment houses in the mortgage meltdown but says he has come away wiser from the experience. May 12, 2008
The Problem With PaulsonWhen President Bush announced in May 2006 that he was naming Hank Paulson as Treasury secretary, the appointment was greeted with great fanfare—and relief—in both Washington and New York. The two previous secretaries of the Treasury had proved to be problematic, to say the least. Paul O’Neill, the former head of Alcoa, was prone to rash statements that sent the markets reeling. John Snow, the accomplished chairman of the railroad company CSX, was considered ineffectual in government, and rumors swirled for months about when he would be replaced. May 12, 2008
Housing Bill A Fair BailoutBush jumped to help bankrupt bank, but now won’t help homeowners? The housing bill the House of Representatives approved Thursday should be good news for large segments of the economy and the population of Volusia and Flagler counties. But don’t celebrate yet. President Bush is threatening to veto it. He says the bill, which may entail a $2.4 billion federal bailout of bad mortgages, “will reward speculators and lenders.” Bush never raised that objection when the Federal Reserve, using taxpayer money, tendered a $30 billion bailout of Bear Stearns, the nearly bankrupt investment bank, in March. But that’s how absurd the congressional debate about the housing bill got this week. May 12, 2008
New Law Helps Wisconsin Victims of Abuse Void Rental Contracts Without PenaltyLittle things, such as gas cards and movie passes, can brighten the day for victims of domestic abuse. Bigger gestures, such as a new statewide law to protect victims during a time of crises, also are appreciated. Last month, the Safe Housing Act went into effect in Wisconsin. The two-pronged law provides escape for domestic abuse victims while breaking down barriers that prevent them from calling 911. It’s so new, some landlords don’t know about it yet, said Tory Thayer, domestic abuse program coordinator for the Center Against Sexual And Domestic Abuse. May 12, 2008
Regulators Under Fire For Ignoring Red FlagsSheila Bair logged onto her e-mail account recently and got a pop-up ad offering a $175,000 home loan with monthly payments of only $400. “I thought, ‘Oh no, it’s coming back already,’ ” said Mrs. Bair, the Federal Deposit Insurance Corp. chairman who had spotted problems with abusive and risky mortgages long before the mortgage crisis broke out last year. The pop-up on the screen took her back several years to the time she first saw trouble brewing. The ads had been the warning flags: pop-ups, spam e-mails and junk-mail fliers offering loans at extraordinarily easy terms and low rates without explaining that the payments would eventually shoot up to unaffordable levels — a practice that will be banned in the future. May 12, 2008
The Faces of ForeclosureThe faces of foreclosure are many. From the couple moving out of state, who got caught in the downward spiral of the housing market with two house payments, to the investor with medical bills forced to sell his business and lose his home. We tell the stories of some of those involved in the 2,528 foreclosure suits filed in 2007. Vicki and Eric Lee were excited about the possibility of moving to Tennessee. They figured they would take a negative - Eric’s job being caught in the downsizing at Chris-Craft - and make it a positive. May 12, 2008
Housing Authority Wants to Knock Down Six Big SitesThis much Maliki Bey has always known: The high-rise apartment he calls home is also an exercise in social policy. “I don’t want to lose it,” he said. But time, money and political support are running out for much of the city’s, and the nation’s, public housing. The Columbus Metropolitan Housing Authority wants to tear down six of its largest and oldest public-housing communities and give the residents Section 8 vouchers so they can rent privately owned places. The five-year plan hinges on approval from the U.S. Department of Housing and Urban Development, which regulates public housing and issues the vouchers. Nearly 1,700 units, or about half the CMHA-owned total, would disappear, including historic Poindexter Village. May 12, 2008
Lenders Offer Little Help in ForeclosuresThree times, Thomas and Tracy Barboza found a path out of foreclosure. Three times, their lender failed to help them. Unable to afford their mortgage, the Barbozas are trying to sell their home. They have received three offers since last summer. But because the offers - between $220,000 and $225,000 - are less than their $320,000 mortgage, their loan company, Countrywide Home Loans, would have to sign off on the deal and accept a loss. Countrywide has either rejected or ignored the offers and foreclosure seems imminent. “It’s like they want things to go sour,” Tracy Barboza said, sitting at the kitchen table of their home, stripped bare of other furniture after they moved into an apartment in anticipation of a sale. May 12, 2008
No Down Payment? No ProblemYou probably thought nothing-down mortgage loans disappeared in the wake of the American subprime lending crisis, which has ensnarled much of the world in a credit crunch. They didn’t. Even more surprising, many Americans can still buy homes with nothing down thanks in large part to the federal government and a legal loophole that lets builders and bankers ensure a steady stream of asset-challenged borrowers for taxpayer-insured loans. With quietly expanded powers, the Federal Housing Administration is already offering the next-best thing to nothing down on a house: a payment of just 3.0 percent will get practically any American with a pulse and a job a mortgage of up to $729,000, at least until the end of this year. May 13, 2008
NY: State Lawmakers Grapple with Foreclosure BillsA move to stop home foreclosures for one year now heads to the state Senate, which also is considering separate foreclosure legislation proposed by Gov. David Paterson. With the number of foreclosures rising statewide, the Assembly, controlled by Democrats, last week passed legislation that would impose the foreclosure moratorium. The Senate’s Republican majority seems unlikely to pass the bill, though it may offer more support to Paterson’s foreclosure proposals. Paterson’s multifaceted bill, introduced earlier this month in both the Senate and Assembly, would require lenders to send notice to borrowers 60 days before beginning foreclosure, and would mandate that the lender and homeowner meet to attempt a settlement. May 13, 2008
Message-Leaving Landlord Guilty In Housing Discrimination CaseA local family said that, after more than a year, they have gotten the justice they were seeking. The situation began last year after a landlord in Chester County told them they couldn’t rent a house because they are black. The family contacted Harry Hairston and the NBC 10 Investigators. Late last week, the Pennsylvania Human Relations Commission found the landlord guilty of housing discrimination based on race. May 13, 2008
Bruning Takes Housing Discrimination Fight to CNNNebraska Attorney General Jon Bruning defended his refusal to prosecute housing discrimination cases on CNN’s “Lou Dobbs Tonight,” again couching his stance in the nationwide debate over illegal immigration.Bruning said tonight that Nebraska taxpayers don’t want to see him representing illegal immigrants. May 13, 2008
Mortgage Applications Rise In Latest Week: MBAMortgage applications rose for a second consecutive week, fueled by a jump in demand for home refinancing loans as interest rates dropped, an industry group said on Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended May 9 climbed 2.9 percent to 674.4. May 14, 2008
Road Home Slows Insurance Claim PayoffsRichard Barker reached a $60,000 settlement for wind damage on a home near Six Flags on Dec. 12, but his eastern New Orleans client hasn’t seen a dime of the insurance money five months later because the Road Home hasn’t signed off on the paperwork. Hundreds of homeowner insurance settlements are on hold because of a bottleneck at the Road Home program, and more are piling up every day, plaintiffs and defense attorneys say, because of the state’s diligent checks to make sure that people aren’t being overpaid and insurance companies aren’t being subsidized. May 14, 2008
FBI Warns of Escalating Mortgage FraudThe sinking housing market is fertile ground for mortgage fraud, the FBI warns in a new report. The agency said Tuesday that reports of suspected mortgage fraud rose 31% to 46,717 from 35,617 in the previous fiscal year ending Oct. 31. In the first half of fiscal 2008, there were more than 33,000 such reports, quickening the pace of mortgage fraud for this fiscal year, an FBI spokesman said. Last month, the Treasury Department put the mortgage-fraud damage for calendar year 2007 at nearly 53,000, a 42% jump. May 14, 2008
Gut Check: Foreclosure’s FalloutIt was almost like watching a train wreck in slow motion. Beginning in late 2005, people who had purchased homes at the peak of the housing bubble started getting hit with a double whammy: Declining real estate values and rising monthly payments on adjustable-rate mortgages. U.S. home foreclosure filings have been rising ever since. In the first quarter of this year, foreclosures jumped 23 percent over the prior quarter and were more than double year-earlier as more overextended borrowers failed to make timely payments. Many of them were defaulting on “subprime” loans issued to borrowers with poor credit histories. May 14, 2008
Foreclosure Filings Continued to Climb in AprilMore U.S. homeowners fell behind on mortgage payments last month, driving the number of homes facing foreclosure up 65 percent versus the same month last year and contributing to a deepening slide in home values, a research company said Tuesday. Nationwide, 243,353 homes received at least one foreclosure-related filing in April, up 65 percent from 147,708 in the same month last year and up 4 percent since March, RealtyTrac Inc. said. May 14, 2008
California Foreclosure Sales Top 1,000 Per DayMore than 1,000 homes per day were sold in foreclosure auctions in California last month, according to ForeclosureRadar Inc. of Discovery Bay, a foreclosure information company that says it tracks every California foreclosure with daily auction updates. Notices of Default — the filings for the first step in California’s foreclosure process — increased to set a new record of 44,101 new filings for a month, according to ForeclosureRadar’s figures. Notices of Trustee Sale, which are issued approximately three months following a Notice of Default, increased 7.8 percent in April surpassing the previous record with a total of 29,892 new filings. May 14, 2008
Foreclosures Take Toll on Mental HealthOn a brisk day last fall in Prineville, Ore., Raymond and Deanna Donaca faced the unthinkable: They were losing their home to foreclosure and had days to move out. Yet just before lunch on Oct. 23, the Donacas closed all their home’s doors except the one to the garage and left their 1981 Cadillac Eldorado running. Toxic fumes filled the home. When sheriff’s deputies arrived at about 1 p.m., they found the body of Raymond, 71, on the second floor along with three dead dogs. The body of Deanna, 69, was in an upstairs bedroom, close to another dead retriever. For more than two decades, the couple had lived in their three-level house, where the elms outside blazed with yellow shades of fall and their four golden retrievers slept in the yard. The town had always been home, with a lazy river and rolling hills dotted by gnarled juniper trees. May 15, 2008
Freddie Mac Loses $151M as Home Loans FalterMortgage finance company Freddie Mac’s (FRE) first-quarter loss widened to $151 million as the U.S. housing market worsened, though the results were not as poor as expected. Freddie Mac also said Wednesday it plans to raise $5.5 billion in new capital. Shares of Freddie Mac, the second-largest buyer and backer of home loans, rose. As a result of the planned stock sale, Freddie Mac’s federal regulator, the Office of Federal Housing Enterprise Oversight said it would reduce the capital cushion the company has to maintain. May 15, 2008
Luxury ForeclosuresFor sale: Spacious home outfitted with six bedrooms, 5 1/2 baths, granite countertops, stainless-steel kitchen appliances, a three-car garage, exercise room and wet bar — all for $875,000 in the Red Cedar West subdivision of Leesburg where houses once sold for $1-million-plus. “I thought I’d try to take advantage of the low prices in the foreclosure market,” said Ryan Magazine, who owns a Leesburg carwash and signed a contract on the foreclosed property as an upgrade to his previous home. “Right now is a great opportunity to get a house.” May 15, 2008
Collateral Foreclosure Damage for Condo OwnersBarbara Sanz has never missed a mortgage payment, but the plunge in real estate is punishing condominium owners like her anyway. Four years ago, she bought her first condo in a glassy new Miami tower when the building was filling up. Now nearly one in six residents in the 43-story building is battling foreclosure and their contributions to the building association are shrinking. Each of the remaining owners has had to chip in an extra $1,000 assessment and $50 more a month for cable and Internet. That is on top of Ms. Sanz’s $450 monthly maintenance fee. May 15, 2008
Judge Says Countrywide Officers Must Face Suit by ShareholdersDirectors and officers of Countrywide Financial, the beleaguered mortgage lender, must answer shareholder accusations of insider trading and an overall failure to monitor lending practices that led to the company’s collapse, a federal judge in California has ruled. Rejecting the arguments of Countrywide executives and directors that they were unaware of lax loan operations that led to ballooning defaults, Judge Mariana R. Pfaelzer of Federal District Court in Los Angeles ruled Tuesday that she found confidential witness accounts in the shareholder complaint to be credible and that they suggested “a widespread company culture that encouraged employees to push mortgages through without regard to underwriting standards.” May 15, 2008
Out Without WarningAmmone Phavone didn’t understand why a sheriff’s deputy was on her doorstep with an eviction order. She scurried inside to get her lease. She told him she’d always paid her rent. Unfortunately, the landlords hadn’t paid the mortgage. They’d lost the Baltimore rowhouse to foreclosure months earlier, and now the lender - finally able to take official possession - was making sure it was empty. A real estate agent acting as the lender’s representative was just as surprised to find Phavone there last month as she was to hear that she’d have to leave. “I cannot move out today,” she said, standing on her doorstep, clutching her lease. May 15, 2008
10 Worst Foreclosure StatesThe foreclosure crisis continues to gather steam, as April filings—defined as default notices, auction sale notices, and bank repossessions—spiked almost 65 percent from the same month last year, according to RealtyTrac’s most recent U.S. Foreclosure Market Report. May 15, 2008
U.S. Judge Sends Ground Rent Suit Back to StateA federal judge said yesterday that he thought Maryland’s ground rent law had been due for an overhaul because ground rent holders were able to eject homeowners for overdue rents and gain the entire value of their houses. “Let’s be perfectly clear,” U.S. District Judge Andre M. Davis said during a hearing on a challenge to ground rent reform. “There’s no question that the windfall of being able to take these houses cried out for legislative change.” May 20, 2008
HUD CHARGES PENNSYLVANIA OWNERS WITH VIOLATING FAIR HOUSING ACTThe U.S. Department of Housing and Urban Development announced today that it has charged the owner of Lofts at the Mill in Scranton, Pennsylvania, its leasing agent and property manager, and management company, Normandy Holdings, LLC, with violating the Fair Housing Act for refusing to rent to families with children by publishing discriminatory Internet and newspaper ads. The Fair Housing Act makes it unlawful for a housing provider to refuse to rent to families because they have children and to make, print or publish, in print or on-line, any statement or advertisement that states a preference for single people or couples without children. May 19, 2008
HUD LAUNCHES AD CAMPAIGN TO FIGHT LENDING DISCRIMINATIONThe U.S. Department of Housing and Urban Development announced today that it has launched a national public service announcement (PSA) campaign that will educate the public, especially minorities, about their rights under the lending provisions of the federal Fair Housing Act. The centerpiece of the bilingual campaign is a television PSA featuring Dennis Haysbert, who is best known for his role as President Palmer in the Emmy award-winning television series “24.” May 20, 2008
Homeowner Rescue Plan Gets Senate Panel’s NodProfits from government-sponsored mortgage giants Fannie Mae and Freddie Mac, instead of taxpayers, would back up a home loan rescue for up to 500,000 strapped borrowers under a plan approved by a key Senate committee Tuesday to pull the nation out of a housing crisis. Democrats and Republicans banded together to push the plan through the Senate Banking Committee on a 19-2 vote, boosting the chances for a broad election-year housing aid package. May 21, 2008
Doors Close, Doors Open, and the Homeless Trudge OnThe old brick building that sits behind a tall iron fence at East 30th Street and First Avenue has been a haven for the lost since 1931. From that year until 1984 it operated as Bellevue Psychiatric Hospital, and now its ivy-covered walls house some 600 homeless men, along with the main intake center for homeless men citywide. Soon, the building will provide more luxurious shelter: In March, the city’s Economic Development Corporation announced plans to convert it into a hotel and conference center. May 21, 2008
The Risks of Rescuing BorrowersWhen the Senate Banking Committee approved on Tuesday legislation to help suffering homeowners refinance costly loans, lawmakers said they had found a way to rescue the housing market without requiring taxpayers to foot the bill. By forcing the nation’s two largest buyers of home loans — Fannie Mae and Freddie Mac — to hand over hundreds of millions of dollars each year, lawmakers said they were creating a fund that the government could tap to refinance as much as $85 billion in troubled home loans. May 21, 2008
Hit by Housing Slump, Credit Crunch, Mortgage Brokers Struggle to SurviveHome buying and refinancing are good for mortgage brokers, who match borrowers with loans. Less buying and refinancing is bad. A 2 1/2 year housing slump paired with increasingly restrictive borrowing rules and a shift to lenders handling more of their own loans? Very bad. “Each week it’s harder,” said Charles J. DiPino, co-owner of Universal Trust Mortgage in Columbia, which is fighting to keep business level. “Mortgage brokers are facing an extreme uphill battle.” May 21, 2008
Baltimore: City Bill Addresses Evictions if a Landlord is in ForeclosureRenters who face eviction in Baltimore because their landlords are in foreclosure would be notified and would have more time to move under a bill advanced yesterday by a City Council committee. Officials with Mayor Sheila Dixon’s administration, which sponsored the measure, said the bill is intended to prevent tenants from being notified of a foreclosure for the first time when a sheriff’s deputy arrives to evict them. The proposal, which was approved unanimously by a council committee and is expected to win full approval this year, could prove particularly important if the number of foreclosures continues to rise, proponents said. May 21, 2008
Any Help From Foreclosure Bill Too Little, Too Late for MichiganGiven all the rhetoric about congressional attempts to help homeowners facing foreclosure, it’s hard to know whether the current plan is so pathetic it will help only a small fraction of people in trouble, or whether it’s so comprehensive it could drag down the federal budget to the tune of billions of dollars. But the plan is voluntary on the part of lenders — they have to agree to write down home loans to as little as 85% of market value — and that puts suspicion heavily on the side of any help in this bill being too little for homeowners, and too late. May 21, 2008
Home Deal Leaves Investors Facing ForeclosureThe nationwide credit crisis has left thousands of homeowners across the nation in foreclosure. Austin has been luckier than most cities. In Austin, foreclosure typically is tied to an opportunity to refinance or make a new investment. Two local homeowners decided to take that chance by using their good credit to make some extra money and help a friend in the process. Now those families are fighting foreclosure. In 2006, Reggie Allen bought a home at 2000 Short Summer Drive for $178,400, partly because he thought it would be a good investment and partly to help a friend. May 21, 2008
When Foreclosure Crisis Is A BlessingMatthew and Zoila Toth just bought a home in Stockton in order to save money. By recently buying a foreclosure property in the Country Club area of west Stockton, the young couple, with a young son, was able to move from a $1,100-a-month apartment into a $132,000 home carrying a monthly mortgage and insurance payment of $950. “The house was so cheap, we even had a little money to do upgrades,” Matthew Toth said. “It’s a great property.” From the couple’s perspective, the foreclosure crisis has been a blessing. May 21, 2008
Why Web Activity Can Harm Your BusinessCan your company be held responsible for illegal activities committed by users of your Web site? For the most part, the answer is no. But in what may turn out to be a landmark case, the U.S. Court of Appeals in California last month held that the operator of a roommate-matching Web site could be sued for user postings that may have violated fair-housing laws. First, a little background. When Congress passed the Telecommunications Act of 1996, it expressly provided that Web site operators were not to be treated as publishers of the content users add to their sites. May 21, 2008
Public Housing Eviction OK, Court SaysThe St. Paul Public Housing Agency can proceed with eviction proceedings against a woman who admitted she smoked crack cocaine in her apartment and allegedly let her guests do the same, the Minnesota Court of Appeals said Tuesday. The three-judge Appeals panel reversed and remanded a lower-court ruling that put a stop to the eviction action against Deanna Ewig, 53. The lower court ruled last year that Ewig had “a disability” under the federal Fair Housing Act because she was addicted to cocaine. Thus, the lower court said, the agency’s attempt to evict her was discriminatory. May 21, 2008
Proposed Change to Water Law Riles LandownersA proposal backed by environmentalists to change one word in the Clean Water Act and subject tens of millions more acres of land to new federal oversight has ranchers and farmers fuming. “It’s a huge grab for more federal intervention in our lives, and we don’t need that,” says Montana cattle rancher Randy Smith says. Smith sometimes diverts water on his 20,000-acre spread for the sake of his animals or crops. He worries that doing so under a new law will mean lots of paperwork, lawyers and site visits rather than a few scrapes of a backhoe. May 22, 2008
Leaky New Orleans Levee Alarms ExpertsDespite more than $22 million in repairs, a levee that broke with catastrophic effect during Hurricane Katrina is leaking again because of the mushy ground on which New Orleans was built, raising serious questions about the reliability of the city’s flood defenses. Outside engineering experts who have studied the project told The Associated Press that the type of seepage spotted at the 17th Street Canal in the Lakeview neighborhood afflicts other New Orleans levees, too, and could cause some of them to collapse during a storm. May 22, 2008
Housing Industry Adapts to Not-So-Retiring Baby BoomersAre you a baby boomer? Statisticians consider anyone born from 1946 to 1964 to be one. The first of the baby boomers are now turning 62, just old enough to start collecting Social Security and qualifying for reverse mortgages. In 2029, those baby boomers born in 1964 will turn 65. But for all these baby boomer Americans, retirement looks a whole lot different than it did for their parents, according to Gene Warren, president and chief executive of Thomas, Warren and Associates. Warren, an economist who specializes in the study of retirement, helps developers and communities figure out how they’re going to attract future retirees. May 22, 2008
Twentysomething, College-Educated And Moving Back InWhen Melissa Jenkins received her college diploma last year, she was ready to get on with life — and move in with her parents. The 23-year-old from North Reading, Mass., was saddled with student loans from her years at Saint Anselm College in New Hampshire and felt she had no solid career prospects. “It didn’t make sense for me to move out on my own,” she said. “I didn’t have the appropriate funds. I was searching for a career path.” Nearly half of students graduating this spring are expected to move back home, said Susan Shaffer, co-author of “Mom, Can I Move Back in With You? A Survival Guide for Parents of Twentysomethings.” Their number has remained pretty consistent since the dot-com bust, a result of financial and social pressures unknown to previous generations, she said. May 22, 2008
NEW HANO BOARD CHAIR INTRODUCED AT BOARD MEETINGThe HUD-appointed Housing Authority of New Orleans Board Chairman C. Donald Babers officially handed the housing agency over to Diane Johnson, a seasoned public housing and community development expert, to serve as the new HANO Chairperson. Johnson, a career HUD employee, began her official duties today. “I will never forget the incredibly strong families I’ve met on this journey. The people who, with God’s grace, endured Hurricane Katrina’s wrath and survived,” said Babers, as he led his final board meeting today. “It was my desire to make a positive difference and I hope those families will continue to believe that a new, better day is coming for them and future generations in this great city.” May 22, 2008
Domestic Violence Victims HomelessAn ABC investigation has found that the public housing shortage is forcing women in relationships involving severe domestic violence to wait as long as two years for permanent accommodation. The South Australian Women’s Housing Association has more than 500 women and their children on a public housing waiting list. Last month the Domestic Violence Crisis Centre received 196 calls from women in need of emergency accommodation. May 22, 2008
Housing Crisis Hits The HouseGuess one could say Rep. Laura Richardson is in touch with people. Yup, that’s right, Richardson definitely feels the pain of the common man—especially when it comes to the recent housing crunch. That’s becaused Richardson, (D-Calif.) finds herself dealing with her own foreclosure these days after she couldn’t make the payments on her $535,000 Sacramento home, according to Capitol Weekly, a California newspaper. The house was purchased by Richardson in January of 2007 and inevitably lost equity as the housing market softened. But in the end, as the congresswoman fell behind on payments, she owed more than $600,000 in loans and late fees, the newspaper reported. So what happened? May 22, 2008
Foreclosure.com Unveils ‘Get Rich Buying Real Estate Foreclosures’ CD/DVD Instructional CourseForeclosure.com — regarded as the most reliable and comprehensive source for nationwide distressed real estate data — today announced the release of its first-ever instructional CD and DVD course entitled, “Get Rich Buying Real Estate Foreclosures.” The comprehensive six-CD educational audio training course is packed with the latest information, secrets, expert tips and other invaluable resources that ensure first-time and experienced real estate investors alike are successful. It also includes a bonus DVD with “In the Field” one-on-one instruction from Foreclosure.com Founder, President and CEO, Brad Geisen, which shadows him throughout various investment property inspections. During the home site tours, he reveals foreclosure buying strategies, in-depth analysis and every thing you need to know to spot great foreclosure deals and flip them fast for huge profits. May 22, 2008
Home Price Index Posts Largest Drop in 17-year HistoryThe government says U.S. home prices posted a first-quarter decline bigger than any in the 17-year history of the data. The Office of Federal Housing Enterprise Oversight (OFHEO) says home prices fell 3.1% in the first quarter compared with a year ago. The index also fell 1.7% from fourth quarter 2007 to the first quarrter of 2008, largest quarterly price drop on record. The report says prices fell in the first quarter in 43 states. Eight states had quarterly price declines of more than 3% and two — California and Nevada —saw prices decline more than 8%. May 23, 2008
City Backs Tax SalesBaltimore is defending its practice of selling houses that have tax liens for unpaid water bills and other municipal fees, denying accusations by a major national bank that the city is responsible for a recent increase in mortgage foreclosures. The city defended the city’s tax-sale practices in federal court filings this week as part of a groundbreaking lawsuit filed by Baltimore against Wells Fargo Bank. The city alleges in U.S. District Court that the bank exploited African-American families in Baltimore by offering them higher-interest loans than they offered white buyers, stripping them of equity through refinancings and charging them excessive points and fees May 23, 2008
State Approves Shoreline ProjectThe state Board of Public Works approved yesterday a marina, observation piers and a shoreline project for the Villages at Swan Point, a Charles County development, over the objection of Gov. Martin O’Malley, who expressed concern about the negative environmental impact on the Chesapeake Bay and the area’s wetlands. O’Malley didn’t state his reason for voting against the wetlands license for the project during the public meeting, saying he would explain his position in a letter he plans to write to the board. The other members, Treasurer Nancy K. Kopp and Comptroller Peter Franchot, voted for the license. May 23, 2008
In Search of A Fix for Jumbo LoansWhen the housing crisis hit last summer, it became very hard for borrowers to land the jumbo loans they needed to buy homes in high-priced areas, like California and New York. So as part of the Economic Stimulus Act, Congress tried to get funds for jumbo loans flowing again by temporarily raising the dollar limits for mortgages that Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) can buy. The two government-sponsored entities (GSE’s) had previously only been permitted to buy so-called conforming loans of up to $417,000, and then resell them on the secondary market. May 23, 2008
Home Loan Failures Rise for 37th Straight Month, Extending RecordHome loan failures in San Diego County continued to set new records in April, the 37th consecutive month of year-over-year increases for both foreclosures and notices of default. There were 1,413 residential foreclosures in April countywide, a 35 percent increase from March but a rise of 169 percent over April 2007, DataQuick Information Systems reported Wednesday. In comparison, March foreclosures were down nearly 21 percent from February but up 141 percent over the previous year. March had a foreclosure rate of 34 homes per day compared with 47 per day in April. May 23, 2008
Five Facing Charges in Foreclosure Scam CaseIt was promoted to struggling, mostly Hispanic homeowners as a way to beat foreclosure. But prosecutors say it turned out to be a gigantic scam that tricked 400 property owners into paying fees and rents to a San Diego-based group that did nothing to prevent lenders from taking back their homes. Police recently arrested four San Diegans and have issued an arrest warrant for a fifth suspect in connection with the foreclosure rescue scheme, prosecutors said yesterday. The suspects face more than 100 felony charges of conspiracy, grand theft and deceitful practices as foreclosure consultants. May 23, 2008
Number of Homeless An ‘Obscenity’A major overhaul of homeless crisis services and targets for reducing the number of people without a home are among the recommendations of a much-anticipated Federal Government report. Prime Minister Kevin Rudd released the green paper at a homelessness conference in Adelaide yesterday, describing the fact that 100,000 people are homeless in Australia each night as “a national obscenity”. The paper urged radical change in the Commonwealth and state-funded Supported Accommodation Assistance Program, one of the main mechanisms for homeless support. May 23, 2008
What Ever Happened to (the Good Kind of) States’ Rights?In February, the day after his infamous encounter at Washington’s Mayflower Hotel, Eliot Spitzer, then the governor of New York, published a remarkable opinion piece in The Washington Post. He wrote that several years earlier, state attorneys general noticed a spike in predatory lending that the federal government was doing nothing about. When the states tried to rein in abusive mortgage lenders, the Bush administration finally did something. The Office of the Comptroller of the Currency issued rules nullifying state predatory lending laws over the objection of all 50 state banking superintendents. May 23, 2008
Housing Complaints Increase, but Fewer Charges are FiledThe federal government is filing fewer housing discrimination charges even as consumer complaints against landlords, real estate agents and mortgage brokers have risen steadily. Most renters and buyers who seek help from the U.S. Department of Housing and Urban Development are unlikely to get relief for their complaints, which can include alleged discrimination by landlords and sellers based on race, religion, sex or disability. The agency is throwing out a growing number of complaints, federal data show. May 27, 2008
Skipped Dues Crunch Home AssociationsA modest housing tract, set amid pecan trees here in suburban Phoenix, faces big problems: About 40% of its homeowners aren’t paying their association fees, leaving neighbors with higher assessments and reduced services. “We’re looking at a very deep hole,” says Kent Miller, president of the Los Arbolitos Homeowners Association in Avondale. “I don’t know how we’re going to get out of it. We’ve put liens on all the (delinquent) properties, but it doesn’t do any good.” May 27, 2008
In Md., a Neighborhood VanishesA few miles off Interstate 270, in the heart of bustling Montgomery County, a once-thriving neighborhood has taken on the feel of a ghost town. Half the homes are vacant, their windows broken or boarded up. Driveways are strewed with debris. “No Trespassing” and “Beware of Dog” signs dot trees. Banging sounds come from empty houses where burglars pry copper pipes from the walls. The culprit is not foreclosure but the imminent arrival of the six-lane intercounty connector that will slice through the Derwood neighborhood. This week, highway workers demolished a brick house and will soon raze five more on Garrett Road. May 27, 2008
Looser Credit on the Way In ‘Declining’ Markets?Could the mortgage industry scrap its controversial practice of listing hundreds of local real estate markets as “declining” — and restricting lending there through higher down payments or credit scores? The two biggest players in the home mortgage field, Fannie Mae and Freddie Mac, did precisely that last week. Reversing its policy of penalizing buyers in troubled real estate markets with five-percentage-point higher down payments, Fannie Mae switched to a policy of requiring the same minimum down payments irrespective of location. Freddie Mac spokesman Brad German said his company will be “suspending” its declining-markets policy indefinitely, too. May 27, 2008
Born of Need, Shaped by NurturingIn the midst of the Great Depression, 5,700 families applied to live in 885 Prince George’s County townhouses and apartments built to make work for unemployed men. The new community, Greenbelt, was one of three suburbs around the country built by the federal government as an experiment in creating walkable, attractive places for the working poor. There, they could live in dignity and create a community through cooperation. During World War II, the government added another 1,000 townhouses for workers. Both those and the original art deco cinder-block and brick buildings are part of what’s now known as Old Greenbelt. The area includes an art deco structure that was built as an elementary school and is now a community center, as well as Roosevelt Center, a cluster of stores, restaurants, offices and a movie theater around a central plaza. May 27, 2008
Contractors Are Kept Busy Maintaining Abandoned HomesThe house on East 24th Street was the worst of the six that David Law and Trey McCallister worked on the other day here. The front door had been kicked in so many times that the dead bolt was exposed and bent. Trash littered the front and back yards. A copper pipe was gone. “Somebody has been trying to destroy this place,” said Mr. McCallister, eyeing the door. But the two men have seen far worse as they go from one deserted house to another in northern Florida, where the foreclosure crisis has struck particularly hard. Mortgage companies hire contractors like these men to inspect and maintain houses that once-proud owners can no longer afford and no one else wants. These days, business is brisk. May 27, 2008
Tenants Roiled by Challenges on ResidencyMore than a year after buying Stuyvesant Town and Peter Cooper Village in Manhattan for a record-breaking $5.4 billion, Tishman Speyer Properties has accused hundreds of rent-stabilized tenants of living somewhere other than their apartments, a tactic that residents and their lawyers say is part of an aggressive attempt to drive out low-rent tenants to make way for high-rent ones. Since December 2006, when Tishman Speyer began the process, about 800 rent-stabilized leases have been denied renewal because the landlord believed the tenants had a primary residence elsewhere, according to the company. More than 4 in 10 of those cases were later dropped, while 3 in 10 ended with tenants giving up their apartments. May 27, 2008
Disparity in Road Home Distribution Raises QuestionsMortgage lender Carol Johnson has seen her clients and neighbors, mostly black middle-class folks, struggle to return to New Orleans from their post-Katrina exile, while the city’s more affluent areas are buoyed by the sounds and sights of rebuilding. Johnson believes the disparity has much to do with the way the Road Home relief program works. So she was angered but not surprised recently when she scanned a map produced by demographer Greg Rigamer, one showing how different parts of the city fared in the allocation of Road Home grants. May 27, 2008
HUD Negotiation Allots Smaller Grants for Lower Income FamiliesWalter Leger remembers the night in 2006 when he gave a federal housing official a tongue-lashing and persuaded the feds to let the state count land value in calculating Road Home recovery grants. “It was a shouting match….No, actually, it was no match. I lost it, and he just listened,” said Leger, who chairs the LRA’s housing task force and saw his Arabi home destroyed in Hurricane Katrina.This little-known episode of internal wrangling would turn out to be critical in determining who got more or less money from Road Home. The U.S. Department of Housing and Urban Development, which holds considerable authority in deciding how the storm relief program is administered, ceded ground after Leger lost his temper, allowing land as well as building value to be used in setting pre-storm property values. May 27, 2008
Plenty of ‘For Sale’ signs but not many salesLike spring flowers, the “For Sale” signs are sprouting in front yards all over the country. But anxious sellers are facing the most brutal environment in decades, with a slumping economy, falling home prices and rising mortgage foreclosures. And even the faint promise of better days ahead might not come true, given all the headwinds the housing industry is facing at the moment. “This is going to be another difficult spring,” said Mark Zandi, chief economist at Moody’s Economy.com. “I think we are at the beginning of the end of the housing downturn, but it is going to be a long and painful end.” May 27, 2008
New York Slow to Act on Housing CrisisWith the state’s mortgage crisis still worsening, the Legislature and Gov. David Paterson have yet to reach agreement on ways to address the problem in New York. Some housing experts warned Thursday that lawmakers are running out of time to act, saying New York now has 157 new foreclosure proceedings every day. The legislative session is scheduled to end in late June. “It would be a scandal for the Legislature to end the session without passing subprime lending and foreclosure legislation,” said Sarah Ludwig, co-executive director of the Neighborhood Economic Development Advocacy Project in New York City. May 27, 2008
Three Landlords in Discrimination Cases Agree to TrainingThree of 29 property management companies accused of discriminating against African-American testers during a Cedar Rapids Civil Rights Commission housing audit have settled, closing the investigation without admitting any guilt. Valley View Apartments, Kelley Property Management and Oakland Court & Gardens have agreed to pay to send one employee directly associated with leasing property to three training sessions in the next three years, said Michelle McMurray, the Cedar Rapids Civil Rights Commission staffer who coordinated the audit. It’s a variation of a settlement agreement being offered to all 29 companies facing complaints. May 27, 2008
For One Woman, A New Life is Found at Mary’s HouseEmmy Kimori found in Mary’s House a safe harbor from the fiery lake of hell. Kimori, a likeable, slightly built woman, recently got her life on track, graduating from a nursing program and landing a job at a long-term elderly care facility in Methuen, Mass. She did this while living at Mary’s House, a supported-housing apartment building for women who otherwise would be homeless, located at 123 West Pearl St. Kimori has lived there since 2003 after escaping unfathomable abuse from her husband, she said. She was living within walking distance of Mary’s House with her husband. May 27, 2008
Katrina Trailer Kids May Face Lifelong AilmentsThe anguish of Hurricane Katrina should have ended for Gina Bouffanie and her daughter when they left their FEMA trailer. But with each hospital visit and each labored breath her child takes, the young mother fears it has just begun. “It’s just the sickness. I can’t get rid of it. It just keeps coming back,” said Bouffanie, 27, who was pregnant with her now 15-month-old daughter, Lexi, while living in the trailer. “I’m just like, ‘Oh God, I wish like this would stop.’ If I had known it would get her sick, I wouldn’t have stayed in the trailer for so long.” May 28, 2008
Online Real Estate Agents Get Equality with Traditional BrokersIn a win for online discount real estate brokers, the Justice Department and the National Association of Realtors announced a settlement Tuesday that will let Internet brokers use the same for-sale home listings used by traditional bricks-and-mortar brokers. The Justice Department says the proposed antitrust settlement will create more competition among traditional and discount brokers, while giving consumers more choices. “Today’s settlement prevents traditional brokers from deliberately impeding competition,” says Deborah Garza, deputy assistant attorney general in the Justice Department’s antitrust division. May 28, 2008
Choosing Bankruptcy to Stay AfloatDanielle Lancaster makes $28,000 a year as a bank employee in Richmond. She owes almost twice that on her credit cards, student and car loans. Add to that day-care expenses for her 2-year-old daughter, rent and utilities, and she uses up every cent she brings in. She has cut costs any way she can, suspending luxuries such as restaurant meals and movies. But that didn’t stop her car from getting repossessed. “I work to live,” she said. “I see my check, and it’s gone right away.” Lancaster is 26 and bankrupt. May 28, 2008
The Fading of the Mirage EconomySuddenly, it seems, we’re getting hit from all directions. Energy and food prices are soaring. The housing market continues to collapse. Government revenue is falling, and taxes are rising. Airlines are jacking up fares and fees while reducing service. Banks are pulling credit lines. Auto companies are cutting production once again. Even investment bankers are losing their jobs. The tendency is to see these as separate developments, each with its own causes and dynamic. Fundamentally, however, they are all part of the same story — the story of the global economy purging itself of large and unsustainable imbalances that for a time allowed many Americans to think they were richer than they really were. May 28, 2008
Landowners Getting Trampled in Gas Rights RushUnsuspecting property owners around the country are getting trampled in an old-fashioned land rush by natural gas companies and speculators trying to lock up long-ignored drilling rights quickly and cheaply. Stories of fast-talking industry representatives using scare tactics to strong-arm people into signing lowball leases are popping up in rural areas and suburbs from New York to West Virginia to parts of Indiana and Texas. All sit atop largely untapped natural gas deposits made suddenly viable _ and valuable _ by soaring prices and improved drilling techniques. May 28, 2008
Shuttered Homes, Thriving WildlifeFor a while, the two-story house with the burgundy shutters at Copeland Drive and Strasburg Street in Manassas appeared to be growing wheat in the yard. Rangy, hip-high green stalks swayed in the breeze, their bushy yellow tips glowing in the late afternoon light. In one especially thick stand of the suburban savannah was visible a hollowed-out den, where a large mammal was apparently bedding down for the night. It was a pastoral scene Carl Berry could do without. He lives two doors down from the house, which he said was abandoned about six weeks ago by a family that used to keep the property tidy. Now there’s a real estate agent’s lockbox on the door, rain-sopped newspapers in the driveway and, until repeated complaints brought it down, uncut grass so unruly it was attracting other occupants. Such as rats. May 28, 2008
Resources Scarce, Homelessness Persists in New OrleansMayor C. Ray Nagin recently suggested a way to reduce this city’s post-Katrina homeless population: give them one-way bus tickets out of town. Mr. Nagin later insisted the off-the-cuff proposal was just a joke. But he has portrayed the dozens of people camped in a tent city under a freeway overpass near Canal Street as recalcitrant drug and alcohol abusers who refuse shelter, give passers-by the finger and, worst of all, hail from somewhere else. While many of the homeless do have addiction problems or mental illness, a survey by advocacy groups in February showed that 86 percent were from the New Orleans area. Sixty percent said they were homeless because of Hurricane Katrina, and about 30 percent said they had received rental assistance at one time from the Federal Emergency Management Agency. May 28, 2008
In Housing, the Strong Turn WeakAmerica’s home-buying season, when for-sale signs sprout like dandelions, is shaping up to be even worse than expected this year, with prices falling, sales slowing and few signs of a turnaround emerging. Two reports released on Tuesday captured the bleak picture. One showed that home prices nationally fell 14.1 percent in March from a year earlier. The other showed sales of new homes, although up slightly in April, remained mired near their lowest levels since 1991. While Wall Street is growing hopeful that the economy may dodge a recession, many economists warn that the pain in the housing market may last for several years. Even markets that once seemed immune to the slump, like Seattle, are weakening. Prices nationwide might fall as much as 10 percent more before a recovery takes hold, economists said. May 28, 2008
Lead Tied to Criminal BehaviorTwo new studies of young adults who grew up in poor, inner-city neighborhoods in Cincinnati have found that childhood exposure to lead is linked to a significant loss of critical brain matter and to an increased risk of criminal behavior. Researchers followed hundreds of children from the womb into their 20s and found an average loss of 1.2 percent in the volume of gray matter in the brain by the time they reached adulthood. That sounds minor, but researchers at the University of Cincinnati said the losses were concentrated in brain regions responsible for critical “executive” functions, such as impulse control, emotional regulation, judgment and the anticipation of consequences. That squares with previous research linking childhood lead exposure to behavioral problems. The research found that the losses were greater - 1.7 percent - among males. May 28, 2008
New Town Springing Up in Quake-hit ProvinceWith as many as 14 million earthquake survivors in urgent need of housing, China is beginning to rebuild from scratch. It is doing so in places like this mountain plain in Sichuan province, where workers are erecting a new town of blue-roofed homes for 20,000 people. Construction got underway here late last week, less than three miles from Beichuan, a town wiped out in the 7.9-magnitude quake. Fields of wheat and corn have been overrun with earth-moving equipment as construction crews assemble long rows of cookie-cutter houses with walls of Styrofoam sandwiched between two pieces of sheet metal. Builders vow the new homes will be ready by the end of June. May 28, 2008
4 Reasons Housing Won’t Recover QuicklyA recent cartoon in The New Yorker magazine depicts a small cottage with frightened-looking little pigs staring out of three windows. At the front door stands a wolf in slacks, a tie and suspenders, intoning, “I’m not huffing and puffing. I’m foreclosing.” The cartoon titillates with a strange combination of poignancy and humor. The key to its poignancy is one of timing: Even a year ago we wouldn’t have been so bathed in news of housing’s woes — including foreclosures — to have related to the about-to-be-ousted pigs. But now, there clearly is so much awry in the world of housing and homebuilding that I’m betting it’ll take far longer for a recovery than even most confirmed bears — or wolves — expect. May 28, 2008
Moving Day Looms at FEMA Trailer ParksThe federal government has plenty of reasons to move hundreds of families out of trailers they have occupied since Hurricane Katrina — the start of a new hurricane season, concerns about toxic fumes and the need for residents to find permanent homes — but some people worry they’ll have nowhere to go once they lose their subsidized housing. The Federal Emergency Management Agency wants to close its last six trailer parks by Sunday, the first day of hurricane season. Those parks, all in Louisiana, are all that remain of the 111 the agency built and operated in the state after the August 2005 hurricane. May 29, 2008
Housing Market Just Gets UglierWith home prices falling at their fastest pace in at least 20 years, economists warned Tuesday that further declines are likely yet to come. Prices sank 14.1% in the first three months of this year compared with the first quarter of last year, according to S&P/Case-Shiller’s national index. That’s the sharpest drop in the history of the index, which was created in 1988. May 29, 2008
Renting Out Your Vacation Home Can Have Tax Advantagest’s not unusual for vacation home buyers to overestimate the amount of time they’ll spend at their homes, says Christine Karpinski, director of the owner community for HomeAway.com, a vacation-rental website. For many people who bought vacation homes during the housing boom, she says, “The honeymoon phase is over.” But long after the honeymoon ends, you still have to pay the mortgage, insurance premiums, property taxes and maintenance costs. You could sell the home. But if you’re a recent buyer, you’ll probably lose money if you do. May 29, 2008
Plan to Remake Tysons Corner Envisions Dense Urban CenterThe transformation of Tysons Corner from a car-dominated tangle of offices, malls and auto dealers into a livable city will start moving ahead in the coming weeks. Fairfax County leaders and landowners are unveiling sweeping proposals to build densely packed high-rises, miles of new streets, and enough parks, schools, police stations and firehouses to serve an entirely new place. The results could determine the future not only of Virginia’s mightiest jobs hub, but also what happens across the country. Urban-renewal leaders are looking to Tysons as a model. May 29, 2008
A Stadium Plan That Won’t Pay OffA soccer stadium in Anacostia would be a splendid addition to Washington’s resurgence as a sports town. But the city has no business paying for such a facility or grabbing riverfront parkland to build it. Not all sports facilities are born alike. Over the past decade, as it has gone from zero major league sports teams to five, the District has learned that entertainment venues can be powerful engines of economic development. It’s hard to walk around Washington’s East End without seeing how Abe Pollin’s sports arena inspired block after block of development, creating a bustling neighborhood of theaters, museums, restaurants and shops. At the city’s southern edge, the Nationals’ new baseball stadium, not two months into operations, is raking in far more tax dollars than anticipated. May 29, 2008
New Tests End Arsenic Scare, And Fort Reno Park ReopensOfficials reopened Fort Reno Park in Northwest Washington yesterday, saying recent extensive tests have found no unsafe levels of arsenic in the soil there. The 33-acre field, a popular site for sports and concerts in the Tenleytown neighborhood, was abruptly closed to the public May 14 after the U.S. Geological Survey said soil samples showed arsenic levels of as much as 1,100 parts per million — about 25 times the limit of 43 parts per million set by the U.S. Environmental Protection Agency. May 29, 2008
Racial Shift in a Progressive City Spurs TalksNot every neighborhood in this city is one of those Northwest destinations where passion for espresso, the environment and plenty of exercise define the cultural common ground. A few places are still described as frontiers, where pioneers move because prices are relatively reasonable, the location is convenient and, they say, they “want the diversity.” Yet one person’s frontier, it turns out, is often another’s front porch. It has been true across the country: gentrification, which increases housing prices and tension, sometimes has racial overtones and can seem like a dirty word. Now Portland is encouraging black and white residents to talk about it, but even here in Sincere City, the conversation has been difficult. May 29, 2008
As Home Prices Drop Low Enough, a Committed Renter Decides to BuyFor the last few years, I have been an evangelist for renting. I’ve told my sister-in-law and her husband that they would be crazy to abandon their reasonably priced one-bedroom rental in Brooklyn. When two of my colleagues were moving to Los Angeles, I e-mailed them a spreadsheet that helped persuade them not to buy a house there. That same spreadsheet was the basis for an article in 2005, when I argued that “renting has become a surprisingly smart option.” Last spring — like any good evangelist, comfortable with repetition — I wrote a similar article. May 29, 2008
Former Press Secretary’s Book Criticizes Failed Federal Response to KatrinaA photo of President Bush staring out the window of Air Force One during a flyover of New Orleans two days after Hurricane Katrina devastated the city became an unintentional symbol of the administration’s “botched” response to the disaster, former White House press secretary Scott McClellan says in his controversial memoir. “Many within the administration were in denial about the administration’s responsibility for Katrina,” and allowed the “institutional response to go on autopilot,” McClellan writes in “What Happened: Inside the Bush White House and Washington’s Culture of Deception.” The book, which had been scheduled for release Monday, was being sold by bookstores on Wednesday after the publisher moved up its release. May 29, 2008
Hurricane High-risk Areas Have Lost ResidentsAfter decades of breakneck growth in high-risk areas, the summer hurricane season is starting with fewer Americans in harm’s way. The number of people who live in coastal areas that are most vulnerable to wind and water has fallen slightly since 2000, reversing a boom that brought tens of thousands of homes and high-rises to low-lying regions from Texas to Georgia, a USA TODAY analysis shows. About 2.1 million people live full-time in those areas, down less than 1% over the past eight years. May 30, 2008
Rates on 30-year Mortgages Average 6.08%, An 11-week HighRates on 30-year mortgages jumped this week to the highest level since mid-March as investors began to worry about what the Federal Reserve will do to combat growing inflation pressures. Freddie Mac, the mortgage company, reported Thursday that 30-year fixed-rate mortgages averaged 6.08% this week. That was up from 5.98% last week. It was the highest level for 30-year mortgages in 11 weeks; they averaged 6.13% the week of March 16. May 30, 2008
Housing Cuts Are Proposed to Help Close Budget GapThe chairman of the New York City Housing Authority painted a bleak financial picture of the agency at a City Council hearing on Thursday, saying that without increased government aid the authority would raise rents for some tenants and eliminate hundreds of community centers and resident programs.The agency — the largest public housing authority in the United States, with 406,000 residents in 2,600 buildings — has made deep cuts in its spending and its work force in recent years to contend with ever-growing budget gaps. May 30, 2008
Lose Homes, Pay More TaxSome of the biggest losers in the real estate slump are not purchasers of mansions they could not afford. They are buyers of second homes — or third ones, for that matter — who are sitting on a tax time bomb. Many of these people will lose their properties in foreclosure and then stagger into bankruptcy under the weight of a sizable tax bill. While Congress has granted some tax relief to people who lose their primary homes, there is no such aid for those who fall behind on payments on a getaway condo in Las Vegas, a retirement home on the Florida coast or an old house that they are renting out for income. Bankruptcy lawyers say they are seeing a wave of foreclosures among owners of second homes in such a position, owners who thought they had found sound advice for financial security. May 30, 2008
NEW STUDY FINDS CONSUMER CONFUSION LEADS TO HIGHER CLOSING COSTSMany American consumers overpay by thousands of dollars in total closing costs when they purchase their homes, according to a new nationwide report from the Urban Institute. The study found that there are significant and unsupported variations in loan charges, title fees and other closing costs charged to homebuyers, and that minority borrowers pay hundreds of dollars more in total loan origination fees than do non-minority homebuyers. May 30, 2008
VA Still Has Zero-down Home LoansNothing down. To a first-time buyer who doesn’t have a lot (or any) cash for a down payment, mortgage loans that allowed you to skate by without having any skin in the game were a fast ticket to homeownership over the past decade. Thousands of home buyers chose a 100 percent mortgage to grab their piece of the American dream, neatly side-stepping the single biggest obstacle to homeowners: cash for a down payment. Too bad the credit crunch has almost completely wiped zero-down mortgage loans off the table. May 30, 2008
Third Party to Sort Out Levee SeepageWater persistently seeping out of the 17th Street Canal near the repaired levee and floodwall indicates serious flaws in the design, not only of that levee section but of much of the multibillion-dollar 100-year hurricane protection for the region, a California engineering expert and outspoken critic of the Army Corps of Engineers has repeatedly charged. For months, corps engineers have said the water puddling outside the levee near the infamous 17th Street Canal breach does not threaten the levee or repaired flood walls. Now, on the eve of the third hurricane season since Katrina, the local levee district wants to know who is right, and it has called in an independent team of engineers to figure it out. May 30, 2008
Bear Stearns Shareholders Approve BuyoutBear Stearns Cos. shareholders on Thursday approved JPMorgan Chase & Co.’s $2.2 billion buyout of the investment bank whose wagers on subprime mortgages made it the largest corporate casualty of the global credit crisis. The widely anticipated “yes” vote at Bear Stearns’ midtown Manhattan headquarters means the company will officially become part of JPMorgan Chase by Friday. JPMorgan Chase confirmed that Bear Stearns’ shareholders approved the deal, and said it would release the vote tally later. May 30, 2008
Mass. Foreclosure Deeds Rose 187.5 Percent in AprilMassachusetts foreclosure deeds “soared to their highest recorded level in April,” the Warren Group, publisher of Banker & Tradesman and local real estate data, said today. Foreclosure deeds rose 187.5 percent in April, from 464 in April 2007 to 1,334, said the Warren Group, which added that there has not been more than 1,334 deeds recorded in a single month since the firm began tracking deeds in 2005. May 30, 2008
Eminent Domain Suit in City to AdvanceA Chancery Court judge Thursday denied the city’s motion to dismiss a suit filed by 10 south Wilmington business owners who claim a plan to take their properties by using eminent domain is unconstitutional. Wilmington attorney Andrea Rhen told Chancellor William B. Chandler the suit should be dismissed because the case was not “ripe,” meaning the city has not condemned any of the properties yet — and might never do so. The city also argued that Chancery Court was the wrong place for the property owners to fight the city’s plan and that they had failed to adequately state their claim in the suit. May 30, 2008
Mass. to Borrow Up to $1.27b for HousingMassachusetts will borrow as much as $1.27 billion over the next five years to make housing more affordable across the state. Governor Deval Patrick signed the state’s biggest-ever housing bond authorization bill in a ceremony yesterday at an affordable housing complex in Allston. The legislation gives the state permission to borrow the money over five years. The bonding authority includes $500 million to update state-owned public housing developments. Another $220 million will support the state’s Affordable Housing Trust Fund. The rest of the bonding authority will be spread across other housing programs. May 30, 2008
Commentary: In These Days of Increased Foreclosures, More Emphasis on Discrimination in Housing NeededAccording to most accounts, America is in the midst of a housing crisis. Homeowners are losing their property at record rates, and poor and low-income citizens are struggling to find affordable housing. Competition for rental housing has increased. So too has the number of alleged housing discrimination complaints. Unfortunately, federal action on those complaints has gone down. May 30, 2008
Gazette Opinion: Ignoring law costs city $400KThe taxpayers of Billings will be picking up a $400,000 settlement of a lawsuit that resulted after the City Council rejected its own attorney’s best advice and denied Rimrock Foundation permission for a construction project in the North Park area. The issue first brought to the council in January 2006 is a special review allowing two fourplex housing units for a community residential facility to be built on a 1.6-acre tract on North 17th Street. The undeveloped site is in a mixed-use area with two-story apartment complexes across the street, Rimrock client housing on one side, single-family residences on the other side of the block as well as a day treatment center serving mentally ill individuals. May 30, 2008
Rush to Pass Foreclosure Crisis BillsCalifornia’s efforts to address the foreclosure crisis advanced in fits and starts as lawmakers rushed to beat a deadline today for state Assembly and Senate bills to be approved by their house of origin. Consumer advocates said overall they were disappointed that many bills appeared to have been diluted, while banking industry representatives said they fear that too much legislation could harm the market. “There was a very strong and ambitious package of reform that was introduced that was commensurate to the scope of the problem,” said Paul Leonard, director of the California office of the Center for Responsible Lending. “Now it’s going through a weakening legislative process.” May 30, 2008
LaTourette Addresses Foreclosure ProblemWhile city service departments across Lake County begin to address mowing the lawns of vacant, foreclosed properties during warm-weather months, municipal leaders are continuing to address the ways in which those same properties have become weeds in their communities. To find out what’s being done at the federal level about the foreclosure crisis, some of those city and county leaders looked to U.S. Rep. Steven C. LaTourette, who gave the keynote address Thursday at the Coalition for Housing & Support Services of Lake County’s fourth annual Report to the Community in Wickliffe. May 30, 2008
Major Subprime Lending Reform for California Passed by State AssemblyThe California State Assembly yesterday passed a package of three bills, almost exclusively with the votes of Democratic members, that are being hailed as the most comprehensive and far reaching state legislation dealing with mortgage and lending reform in the country. AB 1830 by Assemblymember Ted Lieu (pictured above presenting the bill) is the centerpiece of Assembly Democrats to address the mortgage crisis that has led to hundreds of thousands of foreclosures, tightened credit markets internationally, and contributed heavily to the State budget deficit. May 30, 2008
In Foreclosure City, Signs of Life Amid Low PricesIn some areas of California, so many foreclosed homes are available to buy on the cheap that real estate agents are discouraging prospective sellers from even putting their houses on the market. Perhaps the most extreme example of this is Stockton, about 85 miles east of San Francisco, where roughly three of every four homes for sale are in or on the path to foreclosure. The city’s resale market is “pretty much gone,” said Cameron Pannabecker, owner of Cal-Pro Mortgage Inc. June 2, 2008

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