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As Disputes Escalate, So Can the Legal BillsBeware the homeowners association squabble that escalates. Back-fence grousing over parking restrictions, architectural rules or allegations of cronyism can grow into civil war, and homeowners — the source of all money in the association — can end up paying big legal bills, no matter which side wins. One long-running fight in Montgomery County shows why homeowners who serve as directors of their association had better pay strict attention to the details of good governance. People can be surprisingly dogged about how their dues are spent, how elections are held (even for thankless board-of-director jobs), and about how the rules are made, changed and enforced. June 2, 2008
A New Way to Tackle ForeclosuresOver the past several weeks, I have discussed a proposal for a new type of mortgage insurance called mortgage payment insurance. Under MPI, insurers would guarantee investors’ timely receipt of mortgage payments after the borrower defaults, as well as protect against loss if the loan goes to foreclosure. Even though the insurer assumes almost the entire risk of default, because MPI would reduce the interest rate on high-risk loans, such loans would cost the insurer less than traditional mortgage insurance. Because no insurers offer MPI, at this point it is just a proposal. The idea came from a friend of mine, lawyer Igor Roitburg, who has a patent pending. I have an interest in that patent. June 2, 2008
What You Need to Know to Get a MortgageGetting a mortgage used to be as easy as choosing the right color paint for a new home. Don’t have stellar credit? No problem. No verified income? Step right over here. High debt-to-income ratio? Sign on the dotted line anyway. “Two years ago, we had a meeting where a mortgage broker said, ‘If you have pulse, I can get you a mortgage.’ ” said Klara Madlin, the president of the Manhattan Association of Realtors and owner of Klara Madlin Real Estate. “And I thought, ‘We’re in trouble.’ ” Most people have heard about foreclosures’ becoming more common because borrowers cannot pay the escalating rates on their mortgages. But what about those looking to get a mortgage now, either as a first-time buyer or someone hoping to sell a place and move on? What challenges face them? June 2, 2008
In New Sale, Starrett City Would Stay AffordableThe owners of Starrett City, a 34-year-old housing complex on Jamaica Bay in Brooklyn, have reached an agreement with federal, state and city officials on the sale of the 140-acre enclave under guidelines that would ensure that it remains a haven of housing affordable to working and middle-class families. The agreement would not only allow for the sale of the nation’s largest federally subsidized housing complex, but also end a bitter battle that pitted the longtime owners of the complex against residents, tenant advocates and many elected officials. The sale will start this week, and the owners hope to sign a contract by Sept. 1, although it is unclear how high the bidding will go given the slowing economy. June 2, 2008
Plenty of ‘For Sale’ Signs But Actual Sales LaggingLike 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.” June 2, 2008
Credit HistoryWhen Mike Aubele and Todd Wetzelberger put the Union Square house they’d just renovated on the market, they hoped the Baltimore historic property tax credit would pique buyer interest. It did. They had a contract in 22 days. The estimated tax credit for the buyer - an exact figure won’t be known until after settlement later this month - is $60,000 spread over a decade, or $6,000 a year shaved off the annual tax bill, Aubele said. “That’s a way in this market to compete,” said Wetzelberger. June 2, 2008
Comiskey Park Project in Mid-City VanishesA project billed as a televised tale of post-Katrina recovery has failed to deliver on its $10 million promise to build a new community center in Mid-City, but a company led by a California man has collected more than $1.2 million in Louisiana state income tax credits for money it claims it spent on the unfinished documentary series, according to state records. Under Louisiana’s film tax credit program, a limited liability company formed by Damon Harman, executive of Los Angeles-based DNA Creative Media, was awarded the credits that allowed it to recoup 25 percent of the money it spent on the project. The company then sold the credits for cash, records show. June 2, 2008
They’re Getting Away From It All, To The U.S.Peter Oh, a Seattle real estate agent, is planning to open a showroom to market 21 condominium buildings in the Puget Sound region. But he’s not looking for a storefront location in downtown Seattle, nor is he planning to locate among the many new high-rises in nearby Bellevue across the lake. Instead, he’s creating a marketing office 5,000 miles away — in South Korea. “My competition already sold one-third of a building out of a mini-sales center in South Korea,” Oh says, referring to marketing efforts by Shin Young, a developer selling a 334-unit Los Angeles condo building, The Residences @ Bixel. June 2, 2008
Las Vegas Called ‘Mortgage Fraud Ground Zero’In the shadow of Sunrise Mountain, where Rolling Hills Drive turns into Gold Mine Drive, a plain two-story home sits unoccupied, like thousands of other houses here in southern Nevada. Some of these empty homes have “for sale” signs. Others bear signs saying “foreclosure.” Authorities say hundreds of them, including this one on Rolling Hills Drive, should have a different sign out front, one that reads “fraud.” Prosecutors contend this house was sold last year to a straw buyer as part of a sprawling mortgage fraud perpetrated by a husband-and-wife team involving 277 properties in greater Las Vegas. June 3, 2008
June is National Homeownership MonthThis year’s theme — “Back to Basics” — is designed to underscore the importance of having strong, common-sense fundamentals as a way to maintain a sustainable housing market. Many of those basics were ignored in the lead-up to the housing bubble. HUD’s Federal Housing Administration is at the center of the Administration’s efforts to help qualified homeowners refinance into safer, more affordable mortgage products. Over 200,000 families are already using FHA to keep their homes. June 3, 2008
City Official Seeks Zoning Change for Homeless ShelterA Baltimore City Council member is hoping to correct the zoning status of an emergency shelter run by a nonprofit organization and change the zoning at another site so the group can expand to a new location, according to the councilman. Councilman Bernard C. “Jack” Young said he introduced legislation in 2002 meant to give Project PLASE the proper zoning for a 4,200-square-foot emergency shelter at 2031 St. Paul St., but for some reason the bill did not pass. Young said yesterday that he thought it had passed - as did officials at Project PLASE. June 3, 2008
FEMA Trailers Could Be Used AgainThe Federal Emergency Management Agency may again use travel trailers to house disaster victims, although only as a last resort and for no longer than six months, according to a draft disaster housing report. James McIntyre, a FEMA spokesman, said the draft is now being reviewed by Secretary Michael Chertoff of the Department of Homeland Security. He expressed hope that members of Congress, who complain that they were promised a report in time for the June 1 start of the hurricane season, will be briefed about the report in the next few days. Although FEMA Director David Paulison has said that he didn’t want to use trailers again after complaints of health problems linked to high formaldehyde levels in some trailers, the agency says it might not have any choice. June 3, 2008
Color of MoneyA Dispatch analysis of the most recent federal Home Mortgage Disclosure Act data shows that in Ohio, from 2004 through 2006, black borrowers at all income levels were far more likely to receive loans with high interest rates than white borrowers. In fact, black borrowers with incomes above $100,000 were likelier to receive high-rate mortgages than whites with incomes below $40,000, the analysis found. June 3, 2008
Foreclosures Taking Hamptons by SurprisePaul Brennan never handled a short sale - and barely ever used the phrase - until about six months ago. But since then, Prudential Douglas Elliman, where Brennan isThe Hamptons regional manager, has handled about 10 short sales across the South Fork, he said. In a “short sale,” homeowners who want to avoid foreclosure agree with their banks to sell their homes for less than the mortgage amount. “It is a new phrase for me,” said Brennan, who has worked in real estate inThe Hamptons for nearly 30 years. June 3, 2008
Homeowners Associations: Villians Or Victims in Foreclosure Crisis? [Housing Tracker]“We’re always in a race to the courthouse steps.” Florida Lawyer Bob Tankel, who represents hundreds of homeowner associations. Homeowner associations can impose liens and foreclose on properties that don’t pay dues. So Tankel says he urges homeowner associations to quickly foreclosure on homes before lenders can because the homeowner association’s liens are subordinate to the lender claims. June 3, 2008
Blight of US Home Foreclosures May Take Years to HealThe economic blight of mounting home foreclosures in some American communities could take years to heal, according to government officials and housing advocates. Tens of thousands of financially stretched Americans face the prospect of having their homes repossessed in coming months, more than two years after the property bubble burst, triggering one of the deepest housing market slumps in decades. Rising foreclosures have acted as a drag on economic growth and some cities are struggling to cope with increased trash and crime tied to abandoned properties and, in some cases, entire streets. June 3, 2008
Ed McMahon’s Home in Danger of ForeclosureFor years, Ed McMahon promised wealth, comfort and happiness as a pitchman for the American Family Publishers’ sweepstakes. Now, he could use some of that cash himself. The former sidekick to Johnny Carson on the Tonight show is in danger of losing his multimillion-dollar Beverly Hills home to foreclosure. Documents show that McMahon is nearly $644,000 behind in payments on a $4.8 million mortgage loan he got in 2005. Countrywide Home Loans Inc. filed the notice of default on Feb. 28, with the amount owed to “increase until your account becomes current,” according to documents obtained by Celebtv.com. June 5, 2008
Nostalgia May Trump New Housing in MontgomeryI n an era of $4, $5 or even $8 gas, the imperative to live closer to work, use transit and walk to shops will grow with each spike in the price at the pump. So when the owner of a 1930s garden-apartment complex that is next door to the Metro tracks and one block from downtown Silver Spring proposes to replace some cramped, outdated housing with a denser development, including nearly 300 moderately priced units, you might expect to hear hurrahs. You’d be wrong. Rather than embrace the addition of much-needed housing to the new downtown that Montgomery County taxpayers have spent hundreds of millions of dollars to develop, the county planning board has taken the first step toward declaring the Falkland Chase apartments a historic property that could not be demolished. The board’s final vote on the historic designation is set for next week. June 5, 2008
Housing Downturn is A Boon for Some RentersRenters may be the biggest winners in the current housing slump, especially in places like Florida, Las Vegas and Southern California, that have thousands of vacant for-sale and foreclosed homes and condos on the market. Apartment vacancies are edging up in many areas of the country as frustrated sellers instead try to rent out their homes and condos in once red-hot housing markets. And that is making it harder for landlords to raise rents. In the toughest markets, apartment owners are even offering lease incentives to snag renters. June 5, 2008
Foreclosure Glut Helps Habitat for Humanity Expand in MichiganThe spike in home foreclosures is creating new opportunities for local Habitat for Humanity chapters to affordably obtain and then rehabilitate residential properties, instead of building them. Habitat for Humanity Oakland County, for one, plans to start rehabilitating its first house in the coming months. That’s a departure from Habitat’s model in Oakland County, said Sally LePla, Habitat Oakland’s executive director. And it’s a model about which she has mixed feelings. “The sad thing about a foreclosure home is that a family was living there, and now they’re not. Those are vacant properties and they are homes standing empty,” she said. At the same time, good financial stewardship requires the organization to at least look at the possibilities. June 5, 2008
End Discriminatory ZoningShould live-in drug and other treatment centers in Baltimore be allowed to locate in residential areas without any advance approval from the community? As a matter of fairness and federal law, the answer is yes. Although the issue has been batted around for years, a Justice Department investigation should persuade the City Council to do the right thing and change the city’s discriminatory zoning policies. June 5, 2008
Record Foreclosures Won’t Ease SoonWith homes entering foreclosure at a record rate, economists see no letup in the surge of homeowners who are losing their properties for failure to pay their mortgage. For the first quarter of the year, the rate of new foreclosures hit 0.99%, the highest point since record-keeping began in 1979, the Mortgage Bankers Association said Thursday. And the delinquency rate — reflecting those at least 30 days behind on their bills and at risk of sinking into foreclosure — reached 6.35%. That was another record. June 6, 2008
Bank of America Wins Approval to Buy CountrywideThe Federal Reserve on Thursday approved Bank of America’s (BAC) purchase of distressed subprime mortgage lender Countrywide Financial (CFC). In a statement, the federal regulatory said it considered many comments for and against the company buyout and “has considered carefully the financial factors of the proposal.” Charlotte-based Bank of America, which announced its $4 billion acquisition of the Calabasas, Calif.-based mortgage lender in January, has faced much criticism for Countrywide’s large exposure to subprime home loans that were offered to borrowers despite their shaky credit. Countrywide lost about $1.6 billion in the last six months of 2007, and the company faces numerous investigations and lawsuits related to its lending practices. Bank of America has said it will tighten those lending standards. June 6, 2008
Homeless Make Themselves VisibleAsking for spare change is easier. Bumming a smoke is less gut-wrenching. Standing in traffic, trying to catch the gaze of drivers who fiddle with their radio buttons to avoid looking into the eyes of a homeless person, is less intimidating than standing up for yourself. Which is what Xavier J. Bannister was doing yesterday in asking for a place in a neighborhood he considers his own as much as those who own property there. June 6, 2008
About 1 in 11 Mortgageholders Face Loan ProblemsAbout 1 in 11 American mortgages were past due or in foreclosure at the end of March, according to a report released on Thursday, a figure that is rising fast as home prices fall and the job market weakens. The first three months of 2008 marked the worst quarter for American homeowners in nearly three decades, according to the report, issued by the Mortgage Bankers Association. The rate of new foreclosures and past-due payments surged to their highest level since 1979, when the group first started collecting the data. All told, about 8.8 percent of home loans were past due or in foreclosure, or about 4.8 million loans. That is up from 7.9 percent at the end of December. (About a third of American homeowners do not have mortgages.) June 6, 2008
Overdue Home Loans Up 70% in Md.The number of Maryland homeowners behind on their mortgage payments jumped a record 70 percent in the past year as a protracted housing slump and months of sharply tightened credit continue to take their toll. Delinquencies have not hit all-time highs in the state - the share of loans with late payments was larger at the end of the 1990s and in the early part of this decade, because of fraudulent property-flipping schemes in Baltimore. But housing counselors and Maryland leaders are alarmed by how quickly the mortgage situation has been worsening statewide, despite a low unemployment rate and high household income. June 6, 2008
Trailers in N.O. must go by July 1New Orleans officials will begin cracking down on residents still living in travel trailers as of July 1, requiring property owners to request an extension from the city if they need to continue living in temporary quarters. Starting in July, city zoning ordinances that prohibit people from living in trailers on private property - unless in a designated trailer park - will go back into effect, according to a news release issued Thursday by Mayor Ray Nagin’s office. Those ordinances were waived after Hurricane Katrina, when thousands of residents needed to live in the tiny metal boxes because their homes flooded. June 6, 2008
Equity in Americans’ Homes Falls to Historic LowThe equity Americans have in their most important asset — their homes — has dropped to its lowest level since the end of World War II. Homeowners’ portion of equity slipped to 46.2 percent in the first quarter from a revised 47.5 percent in the previous quarter. That was the fifth quarter in a row below the 50 percent mark, the Federal Reserve said Thursday. The total dollar value of equity also fell for the fourth straight quarter to $9.12 trillion from $9.52 trillion in the fourth quarter, while Americans’ total mortgage debt rose to $10.6 trillion from $10.53 trillion. June 6, 2008
City to Help Owners Keep Their HomesIf you’re falling behind on mortgage payments, confused about the terms of a home loan or worried you could lose your house in foreclosure, Mayor Nutter wants to help. Nutter yesterday announced a series of initiatives to help people in danger of mortgage foreclosure, among them a city hot line for financial counseling. Just call 215-334-HOME. Nutter has recorded a public-service announcement for radio and television to tell people about the program. He urged people to ask for aid if they are in danger of losing their house. “There is help for you,” he said yesterday. “Do not suffer in silence.” According to the Philadelphia Unemployment Project, there were 6,237 foreclosure filings in 2007, compared with 5,288 in 2006. The city estimates that there will be 8,500 filings this year. June 6, 2008
More Utahns Are Losing Homes to ForeclosureThousands more Utahns are falling behind on their mortgages this year than last and more are losing their homes to foreclosure, but the state’s share of problem loans remains well below the national average, a new report shows. In the state, 3.81 percent of 431,570 mortgages were at least 30 days past due in the first quarter, up from 3.05 percent in the same quarter in 2007, the Mortgage Bankers Association reported Thursday in its National Delinquency Survey. Utah’s delinquency rate remains well below the state’s high of 5.3 percent in 2003 and is the nation’s 11th lowest. June 6, 2008
Gentrification Turns to Fear in Crime-Riddled NeighborhoodThe Trinidad neighborhood for the past several years has been one of the last opportunities in the city for families and others to buy affordable homes in an up-and-coming neighborhood. However, a surge in violent crime in the Northeast neighborhood has residents wondering whether their big move was a big mistake, also a predicament in other major cities. “After 8:30 at night, we have to be inside,” said Ricky Boyd, 26, who two years ago moved to Staples Street Northeast with his wife and toddler. June 6, 2008
Mortgages With No Money Down Still AvailableDespite the bursting of the housing bubble, it’s still possible to buy homes with no money down. In fact, it’s possible to borrow up to 105 percent of the purchase price, leaving the buyer with more debt than the house is worth. It might sound like a pitch from a late-night infomercial. But the offer comes from Freddie Mac and Fannie Mae, two government-chartered companies with potentially conflicting mandates to uphold prudent lending standards and make homeownership more attainable. Freddie Mac says its “HomePossible” mortgages can help buyers with limited credit or savings, including teachers, firefighters and members of the military. June 9, 2008
Never Pay In Advance To Fix Your CreditPicture this: You’re eager to take advantage of today’s troubled real estate market and buy a foreclosed house at a fire-sale price. But you don’t have much money for a down payment. And your credit files are scuffed up with late payments. What you need is a service that can help put it all together — linking you into lists of available foreclosures, credit repair and even low-down-payment mortgage financing. June 9, 2008
Amid Housing Mess, A New Boom is StartingLenders stung by the housing bust are slashing prices dramatically to rid themselves of an unprecedented number of foreclosed properties, sparking bidding wars in some places that harken back to the market’s go-go years and may signal the bottom is near. The trend is most dramatic in many parts of California, Florida, Nevada and Arizona, where prices skyrocketed during the housing boom and are now falling precipitously. Sales of foreclosures, vacant new homes and other distressed properties now dominate some markets, causing grief for individual homeowners who need to sell for other reasons, like a job in a new city. June 9, 2008
NIMBY Paranoia Still Lives and Thrives HereSomeone once said, “The more things change, the more things stay the same.” How true that statement is when you consider the current trend to socialize and include physically and mentally handicapped persons as a part of a neighborhood environment. Group home environments have become the alternative to institutionalization and have a proven track record of success for both the individuals who live in the home and the neighborhood that embraces community charity. It hasn’t been that long ago when some neighborhoods had deed restrictions that discriminated against minorities. I remember the times when minorities were systematically denied and refused housing opportunities in certain areas, neighborhoods and communities. However, today, because of the Civil Rights and Fair Housing laws, minorities can purchase homes and live in areas of their affordable choice. June 9, 2008
Progress Toward Mortgage Industry Reform is Slow in CaliforniaAs the worst foreclosure crisis since the Great Depression drags down the California economy, the Legislature is making only limited progress this year on proposals for sweeping changes in the home mortgage industry. Amid fanfare this winter, lawmakers held televised news conferences and introduced an unprecedented number of bills that would more heavily regulate mortgage bankers, brokers and servicers and tighten lax lending practices that put unqualified people into houses they couldn’t afford. June 9, 2008
Judge Ruled Wisely on Affordable HousingTowns should not be able to reject affordable housing because they’ve reached their minimum requirement. Superior Court Judge John Sweeney was right in his ruling that municipalities should not be allowed to reject planned developments because they include affordable housing and the municipality already meets its assigned affordable housing quota under state requirements. Affordable housing is not a punishment put upon towns. Unfortunately, towns that hit their minimum requirement of affordable housing and then try to keep any more affordable units from being built treat it as punishment. June 9, 2008
Coast housing: Insurance Remains Critical IssueRepublican Gov. Haley Barbour and President Bush are getting blasted by some heavy hitters in Congress over the delay in post-Katrina housing. Rep. Maxine Waters, D-Calif., is concerned about the lack of affordable housing for victims of the storm that hit Aug. 29, 2005, and that there still is no discernable housing strategy in case of a new storm. Mississippi’s 2nd District Congressman Bennie Thompson, D-Bolton, said Wednesday the state has made “poor use” of federal emergency funds and Congress should have more control over how disaster aid is spent. The representatives can cause grief because both chair powerful panels. June 9, 2008
Foreclosures Become Forgotten Burdens in NeighborhoodsNot long after the house next door to Amy Selheimer’s just outside the Newark, Del., city limits went through foreclosure, she approached a civic association member about its increasingly unkempt yard. Selheimer was told that she and her neighbors could take turns mowing the lawn, so that’s what she and a neighbor did. They also mulched and kept a car parked in the driveway to deter vandals, until a real estate agent took over upkeep of the property. Across the USA, neighbors, homeowner association leaders and public officials are finding themselves cleaning up the mortgage-crisis mess, literally, as houses fall vacant during transition to a new owner. June 10, 2008
How HUD Mortgage Policy Fed The Crisisn 2004, as regulators warned that subprime lenders were saddling borrowers with mortgages they could not afford, the U.S. Department of Housing and Urban Development helped fuel more of that risky lending. Eager to put more low-income and minority families into their own homes, the agency required that two government-chartered mortgage finance firms purchase far more “affordable” loans made to these borrowers. HUD stuck with an outdated policy that allowed Freddie Mac and Fannie Mae to count billions of dollars they invested in subprime loans as a public good that would foster affordable housing. June 10, 2008
F.H.A. Faces $4.6 Billion in LossesThe Federal Housing Administration expects to lose $4.6 billion because of unexpectedly high default rates on home loans, officials said Monday. Brian D. Montgomery, the F.H.A. commissioner, attributed the unanticipated losses primarily to the agency’s seller-financed down payment mortgage program, which has suffered from high delinquency and foreclosure rates in recent years. Housing officials said the agency was also hurt by poor performance in its traditional mortgage portfolio. Deteriorating economic conditions led some of its core clients — first-time buyers, minorities and lower-income owners — to default, they said. June 10, 2008
Four Homebuilders to Pay $4.3M to Settle Pollution CaseFour of the nation’s largest homebuilders have agreed to pay $4.3 million in fines for failing to control runoff at construction sites in 34 states and the District of Columbia. Centex (CTX) agreed to pay $1.49 million, KB Home (KBH) $1.19 million, Pulte Homes (PHM) $877,000, and MDC Holdings’ (MDC) Richmond American Homes $795,000, the government said in a statement. The four builders are among the top 10 builders in a home construction industry crippled by the U.S. credit crunch and accounted for 124,000 home closings in 2006, the government said. The settlements with the Environmental Protection Agency and the Justice Department, announced Wednesday, also require the companies to develop improved pollution prevention plans for storm water run-off at all of their construction sites. June 12, 2008
BUSH ADMINISTRATION RENEWS EFFORT TO ADDRESS RISKY LOANS ON GOVERNMENT-BACKED MORTGAGESThe Bush Administration today renewed its efforts to address risky government-backed seller-funded downpayment assistance loans that are significantly more likely to lead to foreclosure. HUD’s Federal Housing Administration (FHA) will reopen the public comment period on a proposed rule that would ban seller-funded downpayment assistance on mortgage transactions insured by the FHA. The proposed rule will be re-published in the Federal Register and comments will be accepted for 60 days following publication. The rule can also be viewed on FHA’s website. June 12, 2008
Housing Slump Helps the Draw of Fixer-Upper TVThe housing market is collapsing, but television shows about housing are booming. The audiences for HGTV and TLC, the two channels with the most so-called property programming, have grown steadily over the last three years. The reason appears to be their shift in focus away from buying real estate as speculative sport to more educational and emotional shows. “If anything, there’s more interest than ever before, because of what’s going on in the market,” Jim Samples, the president of HGTV, said. June 12, 2008
Baltimore Area Home Sales Fall 30% from A Year AgoLocal home sales continued their plunge in May, dropping 30 percent from a year earlier as the average price ticked up modestly. It was the ninth straight month that sales fell at least 30 percent in the Baltimore metropolitan area, a downward acceleration kicked off by sharp tightening by lenders. About 2,100 homes changed hands — half as many as in May 2005, near the peak of the housing boom, according to new data from Rockville-based Metropolitan Regional Information Systems Inc. June 12, 2008
FEMA Gives Away Katrina DonationsIn March, the Federal Emergency Management Agency gave away $85 million of donated items and household supplies originally intended for Katrina victims. The Louisiana agency that deals with government surplus was offered the goods but turned them down. “Somewhere in this big bureaucracy, links weren’t made,” said Adam Sharp, spokesman for Sen. Mary Landrieu, whose office is scrambling to track FEMA’s discards and possibly reroute them to UNITY of Greater New Orleans, which desperately needs goods for formerly homeless people it has placed in subsidized apartments. “If the supplies just have been moved from one warehouse to another, we hope to get some of them moved back to FEMA so that they can be re-offered to Louisiana and given to UNITY,” he said. June 12, 2008
Housing Pain Spreads: Foreclosures Jump Nearly 50%The number of U.S. homeowners swept up in the housing crisis rose further last month, with foreclosures up nearly 50% compared with a year earlier, a foreclosure listing company said Friday.Nationwide, 261,255 homes received at least one foreclosure-related filing in May, up 48% from 176,137 in the same month last year and up 7% from April, RealtyTrac Inc. said. One in every 483 U.S. households received a foreclosure filing in May, the highest number since RealtyTrac started the report in 2005 and the second-straight monthly record. June 13, 2008
Fish Chow Down on Mosquito Larvae in Foreclosed PoolsAuthorities in Arizona are stepping up a program to put mosquito-gobbling minnows into the stagnant pools of foreclosed or abandoned homes to prevent an outbreak of West Nile virus.Public health workers in Maricopa County, which includes the cities of the Phoenix valley, are breeding thousands of so-called mosquitofish to gobble up larvae that thrive in the green pools of abandoned homes across the county. The tiny, silvery fish are being offered to residents and municipal authorities across the parched desert county, which has tens of thousands of swimming pools, and one of the highest foreclosure rates in the United States. June 13, 2008
Md. Couple Indicted In Fraud ProbeFederal authorities charged a Prince George’s County couple yesterday with running a $35 million foreclosure rescue operation that duped lenders and unsuspecting homeowners facing foreclosure in what prosecutors described as one of the largest mortgage fraud schemes in Maryland history. Joy Jackson, president of Metropolitan Money Store of Lanham, and her husband, Kurt Fordham, were arrested yesterday in North Carolina, U.S. Attorney Rod J. Rosenstein said at a news conference at U.S. District Court in Greenbelt. Jackson, 40, and Fordham, 38, are charged with conspiracy to commit mail and wire fraud, six counts of money laundering, and 15 counts of mail fraud to obtain money and property from homeowners and lenders. June 14, 2008
Data on Housing Relief QuestionedBanks and mortgage firms are providing questionable information about the number of subprime mortgage borrowers they are helping and the rate at which homeowners are falling into foreclosure, according to the top regulator for the nation’s largest banks. Those details are crucial for regulators to gauge the severity of the housing crisis and evaluate the effectiveness of the steps lenders are taking to address the problems. John C. Dugan, comptroller of the currency, which oversees national banks, said his agency found “significant limitations with the mortgage performance data reported by other organizations and trade associations.” June 13, 2008
A Question Mark Looms Over 3 Expensive Projects June 13, 2008
30-Year Mortgage Rates Rise to Highest Level Since FallRates on 30-year mortgages jumped to the highest level in nearly eight months, reflecting increased concerns about what the Federal Reserve might do to battle inflation. Freddie Mac, the mortgage company, reported yesterday that 30-year fixed-rate mortgages averaged 6.32 percent this week. That was up sharply from 6.09 percent last week. It was the highest level for 30-year mortgages since they averaged 6.33 percent for the week of Oct. 25. Analysts attributed the big jump to increased concerns in financial markets that the Federal Reserve might be preparing to start raising interest rates in order to make sure that inflation does not get out of control. June 13, 2008
US Foreclosure Filings Surge 48 Percent in MayThe number of U.S. homeowners swept up in the housing crisis rose further last month, with foreclosure filings up nearly 50 percent compared with a year earlier, a foreclosure listing company said Friday. Nationwide, 261,255 homes received at least one foreclosure-related filing in May, up 48 percent from 176,137 in the same month last year and up 7 percent from April, RealtyTrac Inc. said. One in every 483 U.S. households received a foreclosure filing in May, the highest number since RealtyTrac started the report in 2005 and the second-straight monthly record. Foreclosure filings increased from a year earlier in all but 10 states. Nevada, California, Arizona, Florida and Michigan had the highest statewide foreclosure rates. June 13, 2008
73,000 Homes Lost to Foreclosure in MayThe housing crisis grew worse in May, as more than 73,000 American families lost their homes to bank repossessions, up a staggering 158% from the 28,548 households that were dispossessed in May 2007. Foreclosure filings of all kinds, including default notices, notices of sheriff’s sales and bank repossessions, were up 48% from May 2007, according to the latest release from RealtyTrac, the online marketer of foreclosed properties. Filings increased 7% from April. June 13, 2008
That ‘New Shower Curtain Smell’ Gives Off Toxic Chemicals, Study FindsVinyl shower curtains sold at major retailers across the country emit toxic chemicals that have been linked to serious health problems, according to a report released Thursday by a national environmental organization. The curtains contained high concentrations of chemicals that are linked to liver damage as well as damage to the central nervous, respiratory and reproductive systems, said researchers for the Virginia-based Center for Health, Environment & Justice. June 13, 2008
Anatomy of A Meltdown: The Credit Crisis—Part I. The BoomThe black-tie party at Washington’s swank Mayflower Hotel seemed a fitting celebration of the biggest American housing boom since the 1950s: filet mignon and lobster, a champagne room and hundreds of mortgage brokers, real estate agents and their customers gyrating to a Latin band. On that winter night in 2005, the company hosting the gala honored itself with an ice sculpture of its logo. Pinnacle Financial had grown from a single office to a national behemoth generating $6.5 billion in mortgages that year. The $100,000-plus party celebrated the booming division that made loans largely to Hispanic immigrants with little savings. The company even booked rooms for those who imbibed too much. June 16, 2008
Anatomy of A Meltdown: The Credit Crisis—Part II. The BustThe mortgage executives who gathered in a blond-wood conference room in Southern California studied their internal reports with growing alarm. More and more borrowers were falling behind on their monthly payments almost as soon as they moved into their new homes, indicating that some of them never really had the money to begin with. “Nobody had models for that,” said David E. Zimmer, then one of the executives at People’s Choice, a subprime lender based in Irvine. “Nobody had predicted people going into default in their first three mortgage payments.” June 16, 2008
After Mortgage-Related Losses, AIG Ousts ChiefAmerican International Group, which has lost billions on bad bets on the mortgage market, on Sunday named former Citigroup executive Robert Willumstad to replace the insurer’s besieged chief executive.Willumstad, 62, will take over from Martin Sullivan, 53, effective immediately, the company said. Stephen Bollenbach, the former chief executive of Hilton Hotels, will be named AIG’s lead director. AIG named Willumstad chairman of the board in fall 2006, about a year after Willumstad left his post as president and chief operating officer at Citigroup. June 16, 2008
Don’t Drag That Mortgage With You Into Old AgeIt would have shaken my dear, deceased grandmother to her financial core. The headline read: “Mortgages No Longer a Stigma in Retirement.” That was the finding of the third annual “Affluent Boomers at 60” survey conducted by Bell Investment Advisors. Baby boomers, the survey revealed, are in no rush to pay off their mortgages. This attitude of keeping a mortgage years or even decades into one’s retirement is a major shift from what Big Mama, a child of the Great Depression, taught me. She always stressed that I should aim to pay off my mortgage before I retire, getting rid of the most significant expense in my budget. June 16, 2008
Understanding Your Credit History Is the First Step Toward a Higher ScoreI have heard from numerous readers who were confused by a recent column on how to clean up your credit history (also known as a credit report) and credit score. So I’ll try to clarify. First, your credit history also includes personal factual information, such as your name, Social Security number, current address, and how long you have lived at your current address and past addresses.Your credit history is primarily a list of the financial activity in your life. It lists all of the credit accounts you have ever opened and how long they have been open, including credit cards, mortgages, home-equity loans, student loans, car loans, personal loans (provided that those were reported to the credit reporting bureaus), layaways and any other type of credit or lending account you might have. June 16, 2008
Equity Losses Aren’t Felt Evenlys a homeowner, seller or buyer, what should you make of the Federal Reserve’s latest report on Americans’ declining home-equity positions? Panic? Mild concern? No big deal? The dollar losses involved were huge and sobering. On a national basis, they document the personal financial impact of falling home prices, especially in the frothiest boom markets of California, Florida, the mid-Atlantic states and New England. But it’s important to keep the Fed’s numbers in perspective. They may not reflect your housing situation, your neighborhood, or where you want to buy or sell. It all depends on when you bought, and where. June 16, 2008
In the U.K., a Different Standard For Broker TransparencyFor perspective on institutional practices, nothing beats seeing how those practices differ elsewhere. Recently, I looked at how mortgage brokers and the lenders they deal with operate in the United Kingdom. I have had invaluable help from Richard Hobson, a broker in the United Kingdom for many years who is now a broker in the United States. The basic economics of the industry are essentially the same on both sides of the Atlantic. Assuming that the lender is satisfied that the broker is properly licensed or certified, the arrangement between them is simple. In effect, the lender says to the broker: “Here are my prices and eligibility requirements; you bring me an eligible customer, and I’ll make the loan.” June 16, 2008
FHA EXTENDS FINANCING FOR IMMEDIATE PURCHASE OF FORECLOSED HOMESIn an effort to stabilize declining home values in certain neighborhoods, the Bush Administration today announced a temporary policy that will extend government-backed mortgage insurance and allow for the immediate sale of vacant foreclosed properties. For one year, the Federal Housing Administration (FHA) will insure foreclosed properties marketed and sold by property disposition firms on behalf of lenders. The properties, which must purchased by owner-occupants, will no longer be subject to the customary 90-day waiting period. “A glut of foreclosed and abandoned homes harms neighborhoods, frustrates homebuyers and delays a community’s recovery,” said Brian D. Montgomery, Assistant Secretary of Housing-Federal Housing Commissioner. “The action we take today will allow homebuyers to purchase these homes in much greater numbers and ease the excess supply of unsold homes in neighborhoods across the country.” June 16, 2008
36,000 Lowans Homeless as Floodwaters RecedeMarie Welton figures her daughter will have to bulldoze her flooded home here. She worries about the survival of her own business, a children’s hair salon, as people recover from epic flooding that put 1,000 blocks underwater. “They say we’re going to be resilient. They say we’ll overcome this,” Welton, 52, said Sunday, but Iowans’ can-do spirit “is going to keep going down before it comes up.” June 16, 2008
It’s Time for Lenders to be Held Accountable for TacticsWhen the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was passed by the GOP Congress and signed by President Bush, supporters hailed the measure as a victory for “personal responsibility.” Three years later, the bill has managed to dent the number of bankruptcies filed in the U.S. — from 1.6 million in 2004 to 850,912 in 2007, according to the nonpartisan American Bankruptcy Institute. That number is great for the banks, but in the wake of the U.S. subprime-mortgage and home-foreclosure wakeup call, you can’t argue that either U.S. lenders or consumers are exhibiting more personal responsibility. June 16, 2008
Don’t Be A Victim of ‘Foreclosure Rescue’ SchemesTennessee consumers are suffering from the national mortgage foreclosure crisis. According to the Federal Reserve in St. Louis, we could see up to 34,000 foreclosures in Tennessee this year, based on figures from late 2007. If you are behind on your payment and facing possible foreclosure, watch out for “foreclosure rescue” or “mortgage rescue” schemes. Some homeowners start receiving phone calls, mail, and even personal visits from representatives of these businesses as soon as they miss a single payment. June 16, 2008
Leader Alleges Aboriginal DiscriminationAn Aboriginal leader is calling for workers support for a civil disobedience campaign to fight racial discrimination. Foundation for Aboriginal and Islander Research Action, (FAIRA) chair Les Malezer also wants a new national Aboriginal body set up to wrest money from the federal government so indigenous people can fix their own problems. “We are hoping the workers will get behind the Aboriginal peoples in Australia and start a bit of a movement,” Mr Malezer said in Adelaide, ahead of a SA Unions forum on Monday night. June 16, 2008
Housing Woes Add to Family’s StrugglesThe Thompson family bought two mobile homes in Chesterfield County, only to find out that the trailer park was to be closed. Now they are desperately seeking a new place to live. When Joshua and Christopher Abt-Barnett purchased two aging mobile homes in a Chesterfield County trailer park with the help of their mother and stepfather, it was supposed to be a fresh start for the family. It ended up being an enormous complication — yet another problem for a down-on-their-luck family. June 16, 2008
Real Estate Agents Court Gen YJacky Teplitzky used to turn to all the time-tested tools to drum up business for her New York-based real estate firm, Prudential Douglas Elliman. Billboards. Mailings. Advertising. Not anymore. The brutal real estate slump has made Teplitzky and other agents so hungry for business that many have decided to go after a group not known for its home-buying habits: Twentysomethings. And to try to connect with them, agents are unleashing a new breed of marketing tactics, from posting homes for sale on YouTube to building snazzy Facebook pages. June 17, 2008
Hope Now Tries to Speed Home Foreclosure Aid ProcessA mortgage industry alliance plans to announce Tuesday that it’s reached agreement with lenders and loan servicers to develop a standardized process for helping homeowners at risk of foreclosure. The move by the Hope Now alliance involves uniform guidelines that lenders and servicers have agreed to abide by, such as issuing a decision within 45 days on whether to modify a homeowner’s loan. The plan follows complaints that the Hope Now alliance, which was set up to aid troubled homeowners, has been slow to help enough people. June 17, 2008
Bankruptcy Rising Among SeniorsSwamped by debt and rising medical bills, elderly Americans have been seeking bankruptcy-court protection at sharply faster rates than other adults, a study to be released Tuesday indicates. From 1991 to 2007, the rate of personal bankruptcy filings among those ages 65 or older jumped by 150%, according to AARP, which will release the new research from the Consumer Bankruptcy Project. The most startling rise occurred among those ages 75 to 84, whose rate soared 433%. June 17, 2008
Anatomy of A Meltdown: The Credit Crisis, Part III—The BubbleJackie Pons, the affable superintendent of the Leon County school district in Tallahassee, was worried about his $30 million. One Wednesday last November, he got on a conference call with Florida officials and financial advisers representing cities, towns and school boards throughout the state. The officials hoped to calm nerves. Localities had started to pull huge sums of money — billions of dollars — out of their accounts in a state-run investment pool, panicking that the fund was vulnerable to the financial alarm sweeping the nation over the collapse of the housing market. June 18, 2008
Mortgage Lenders Pledge More Help For HomeownersMajor mortgage lenders have agreed to streamline and speed up the process for assisting distressed homeowners, according to new guidelines set to be released today. The guidelines will address the complaints of homeowners and housing counselors that even as foreclosures climb, lenders remain difficult to work with and can take months to approve a request or even acknowledge that a homeowner has asked for help. In the meantime, borrowers fall further behind in their payments and grow more frustrated. June 17, 2008
Public Housing Residents Face Loss of Their Community CentersThe community center at Parkside Houses, a public housing complex in the Bronx, has one floor, four rooms and many uses. Adults work on their résumés on one of 10 computers or play Scrabble on Friday nights. Teenagers congregate around the pool tables in the game room or train for competition as part of the Parkside Knights track and field team. But the center, on the ground floor of a red-brick building across from a wooded stretch of the Bronx River Parkway, is really a children’s place. After school on Thursday, about a dozen children sat in the multipurpose room making Father’s Day cards out of construction paper and buttons while several boys and girls played chess and video games down the hall. They ate turkey and cheese sandwiches. They got help with their homework. June 17, 2008
Rent Board Gives Landlords and Tenants a Chance to VentSeven score and eight years ago, when he was stumping for the Republican presidential nomination, Abraham Lincoln wowed the crowd in the Great Hall at Cooper Union in the East Village. Historians consider it a decisive moment. Fast-forward to Monday, when the following un-Lincolnesque but oh-so-New York lines were spoken in that place: “You guys shut up. You’ll get your chance.” The speaker was Marvin Markus, the chairman of the New York City Rent Guidelines Board, which regulates the rents for the city’s one million rent-stabilized apartments. He was presiding at the second of two scheduled public hearings that gave landlords and tenants a microphone and three minutes. A landlord who had the microphone was discussing tenant turnover in her buildings when someone in the audience yelled, “You haven’t made repairs!” June 17, 2008
Many Say They Still Need Trailers as Eviction Date ApproachesBobbie Banks had hoped her family would be back in her Lower 9th Ward home by now. Instead, she’s still living in a cramped mobile home in front of the unfinished frame — with no clear plan for getting it built. She’s spent $105,000 of her Road Home and loan money on a contractor who tells her he can’t finish the house without more money — money she doesn’t have. Then at the beginning of June, she got the notice that trailers would no longer be allowed in the city after July 1, unless the resident gets an extension. June 17, 2008
For Cities, All Foreclosure Politics are LocalJust two months ago, Aaron Brokenbough had no clout and little say when lenders moved to foreclose on his home. His Philadelphia row house was scheduled for a sheriff’s sale, the end of the road for most homeowners who are behind in mortgage payments. That was before a Philadelphia court decided to step in with this unusual order: Sheriff’s sales cannot go forward without a last-ditch effort by the lender and homeowner to work out a deal. June 17, 2008
Albany Attacks New YorkAttacking Wall Street is almost a national pastime. But who would have guessed that one of the most anti-investor responses to the housing downturn would be enacted in New York State? Within days, Governor David Paterson is expected to sign a bill destined to wreak further havoc on the value of the mortgage-backed securities held by New York financial houses. This is like the French attacking pinot noir. Last month, the state Assembly overwhelmingly passed a bill allowing judges to prevent foreclosure on a subprime borrower for one year while lowering the monthly interest rate. Judges can then extend the foreclosure prohibition — and the low rate — for up to three years. Senate sponsor Frank Padavan is now negotiating with the Governor to complete a bill by Monday’s scheduled end of the legislative session. June 17, 2008
More Loan Forgiveness SoughtA new law to give tax relief to homeowners who refinance a mortgage doesn’t go far enough for some.The Mortgage Forgiveness Debt Relief Act of 2007 gives a tax break to a homeowner when the mortgage lender forgives debt used to buy or improve a home. Now, a group is lobbying to extend those breaks to cover money received in a mortgage refinancing that is later used to pay medical bills, education loans or other nonhome costs. Critics said the effort rewards people who use their homes as piggybanks by using the equity to secure loans. Advocates of the change, though, said it is needed to help those now facing foreclosure who have been hurt by subprime loans and falling housing prices. June 17, 2008
STATEMENT BY HUD SECRETARY STEVE PRESTON ON THE HOPE NOW ALLIANCE’S NEW MORTGAGE ASSISTANCE GUIDELINESU.S. Department of Housing and Urban Development Secretary Steve Preston released the following statement today regarding the HOPE NOW Alliance’s adoption of new guidelines to help homeowners more quickly obtain the assistance they need to avoid foreclosure. The new uniform guidelines will enable servicers working with HOPE NOW to reach homeowners more quickly about the status of their applications, and whether they have been approved for assistance. June 18, 2008
Ed McMahon’s 90210 Mortgage CrisisWith sweeping canyon views, gated access and nearby homes owned by the likes of Britney Spears, Ed McMahon’s house above Beverly Hills looks like the symbol of a life well paid. That is why it came as a shock when Mr. McMahon, best known as Johnny Carson’s sidekick, confirmed this month that he was facing foreclosure. He quickly became a national symbol of an overspent borrower struggling with the mortgage crisis. But Mr. McMahon had an advantage over the average homeowner: he could go on “Larry King Live” to talk about his pligh June 18, 2008
New Look Planned for Pier at South Street SeaportConceding the failure of the South Street Seaport pier as a “festival marketplace” — these days, it is not much more than a waterfront mall — its owners plan to replace it with a mixed-use project including a 42-story, 495-foot apartment and hotel tower, wrapped in a terra-cotta exoskeleton and rising from new pilings in the East River. Though other high-profile developments along the East River have foundered, most notably Frank Gehry’s Guggenheim Museum and Santiago Calatrava’s apartment tower of stacked cubes, the seaport plan speaks to the undiminished allure of riverfront sites and of developers’ faith that megaprojects can inject new life into, and create profit out of, areas where other visions have failed. June 18, 2008
Community Viewed as A Draw to CityFor two years, Quinhon N. Goodlowe had been searching for her first home. The Lombard Middle School teacher found it in the Townes at Orchard Ridge, a new community to which she plans to move in July. Goodlowe said she had a difficult time finding affordable housing in a city neighborhood where she felt safe. At Townes at Orchard Ridge she found a new house in a new community that matched her income. Townes at Orchard Ridge is being built on the sites of the former Freedom Village Apartments and Claremont Homes public housing complex in Northeast Baltimore. The new community, which is still under construction, will include two- and three-story townhouses, duplexes and a 77-unit, four-story apartment building. June 18, 2008
May Housing Starts Sink to 1991 LowHousing starts slid 3.3 percent in May to their lowest level in more than 17 years, while permits for future construction also fell, signaling more weakness ahead for the battered U.S. housing sector.The Commerce Department on Tuesday said housing starts set an annual pace of 975,000 units in May, the lowest since March 1991. Economists polled before the report were expecting a 980,000 unit rate. The April starts figure was revised downward to 1.008 million from the 1.032 million originally reported. June 18, 2008
Withering Tax Credits Put Crimp on HousingThe turmoil in the financial markets is undermining the major source of public funding for the construction of low-rent apartments, increasing the cost of some Boston-area affordable housing projects and leaving others on the drawing board. more stories like thisThe problem is a collapse in the value of the tax-forgiveness credits, which the federal government lets developers sell to raise money. In Dorchester, plans for 152 apartments for low-income families at the former Franklin Hill housing project were salvaged by $6.5 million in additional city and state funding, increasing the total cost by 12 percent, after proceeds from a tax-credit sale fell short of expectations. In Jamaica Plain, the planned redevelopment of the former Blessed Sacrament Church complex is simply on hold because the project’s tax credits can’t be sold. June 18, 2008
D.C. Region’s Foreclosure Rate SoarsThe Washington region now has one of the fastest-growing foreclosure rates in the nation, as 15,613 homes went into foreclosure during the one-year period ending in February, an analysis to be released today has found. Although communities have felt the effects of the housing crisis for months, the report reveals that foreclosures in the Washington region have been increasing at a surprisingly quick pace, outstripping those of most major metropolitan areas. Over the past year, the number of foreclosures per 10,000 homes jumped from 23 to 131 locally, while the national average increased from 58 to 87. June 19, 2008
Paulson To Urge New Fed PowersTreasury Secretary Henry M. Paulson Jr. plans to call today for the Federal Reserve to be given new, explicit powers to intervene in the workings of Wall Street firms to protect the financial system, adapting his vision of how the financial world should be regulated to reflect the lessons of the collapse of Bear Stearns. “Our nation has come to expect the Federal Reserve to step in to avert events that pose unacceptable systemic risk,” Paulson plans to say in a speech today, according to prepared remarks obtained by The Washington Post. But the central bank “has neither the clear statutory authority nor the mandate to anticipate and deal with risks across our entire financial system.” June 19, 2008
Court Offers Homeowners Help Avoiding ForeclosureHomeowners in New York who face foreclosures would be offered help by the courts to save their homes or at least make the overall process easier under a new program announced on Wednesday by the state’s chief judge. The program calls for the creation of a new section of the court charged with helping borrowers and lenders reach speedy settlements. Homeowners would be notified almost immediately that they face a foreclosure proceeding; they would receive a list of legal and foreclosure counselors who can help them; and they would be invited to court for a settlement conference. Parts of the program would be voluntary. The court would encourage, but not require, a settlement conference, and lenders would still be able to foreclose. June 19, 2008
Fallout From Bad Loans Rocks Regional BanksIn Ohio, the Panic of 1907 drove the Fifth National Bank into the arms of the Third National Bank, creating the singularly named Fifth Third Bank of Cincinnati.But today Fifth Third and other regional banks across the nation are being shaken to the core by a 21st century financial crisis. For many of them, things are going from bad to worse. Home mortgages and other loans that the banks made in good times are souring so fast that many of the lenders are scrambling to prop themselves up. If the pain worsens — and many analysts say it will — some of these banks, like Fifth Third’s predecessors, may eventually seek out suitors, most likely large national rivals. June 19, 2008
Jury Indicts Four More in Mortgage Fraud ProbeA widespread probe of mortgage fraud resulted yesterday in grand jury indictments against four Maryland residents, less than a week after federal prosecutors here accused eight other people of bilking homeowners and banks of more than $35 million in an unrelated mortgage scheme. In the latest indictments, Cheryl Brooke, 51, and Michael K. Lewis, 56, of Upper Marlboro; his brother, Earnest Lewis, 59, of Takoma Park; and Winston Thomas, 42, of New Carrollton, are accused of conspiracy to commit wire fraud and wire fraud in connection with a scheme in which they offered to help homeowners stave off foreclosure. Instead, they defrauded mortgage lenders and the homeowners, the 12-count indictment says. June 19, 2008
Cost of Gas is Influencing Housing PurchasesIn his hunt for a new home, Demetrius Stroud crunched the numbers to find out that, with gas prices climbing, moving near an Amtrak station is the best thing for his wallet. Stroud was looking in Elk Grove., Calif. — about 85 miles away from his job in the San Francisco Bay Area — because homes there are more affordable. But with gas at $4.50 and a car that gets about 22 miles per gallon, Stroud would be pumping $560 a month into his tank. So instead he made an offer on a home near the train station in Davis, which will shave $160 off his commuting costs. June 19, 2008
Washington Mutual Ending Two Mortgage TypesWashington Mutual Inc. said Wednesday it would stop offering two types of complex mortgage products, the latest change to its mortgage business intended to help it recover from the mess in the mortgage and credit markets. The nation’s largest thrift said it would no longer offer negative amortizing loan products or WaMu Mortgage Plus loans. The switch follows WaMu’s decision in late 2007 to shutter its subprime mortgage operations and cease buying mortgages from brokers. The thrift continues to struggle with costs associated with delinquent borrowers and rising foreclosures, and in April agreed to a $7 billion cash infusion from private investors. June 19, 2008
Ethics Watchdog Wants Probe of Long Beach Congresswoman’s Foreclosure WoesA legal ethics watchdog group Wednesday called on the House Ethics Committee to investigate Rep. Laura Richardson (D-Long Beach) for actions surrounding the foreclosure of her Sacramento home and defaults on her homes in San Pedro and Long Beach. William Marshall, a spokesman for Richardson, called the complaint “pretty mean-spirited. It rehashes old news.” He said the House ethics counsel last week met with the congresswoman and said her ethics statement met House rules. Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, acknowledged that the chances for an investigation were slim because members of Congress must ask for the probe, and the committee has shown little interest lately in investigating representatives. June 19, 2008
Historic District Housing DisputeWhile work continues on the inside, construction on the outside at 416 Moss Street has come to a halt after objections by the Calcasieu Historical Preservation Society. The issue went before council members Wednesday night. Brian Beverly told council members, “I personally don’t believe that the Calcasieu Preservation Society should oversee any new construction — period.” Beverly represents the home’s owners, Bula and Ron Davis, who in the middle of construction amended their plans with the Zoning and Planning Commission. The amendments included metal windows, metal doors, 8 inch rather than the recommended 5 inch siding, as well as closed soffits. All of the changes are not supported by most of the homeowners living in the Charpentier Historic District, nor or they compliant with the standards set by the Calcasieu Historical Preservation Society. June 19, 2008
FHA REACHING OUT TO 675,000 AT-RISK HOMEOWNERS IN SECOND PHASE OF DIRECT MAIL CAMPAIGNThis week, HUD’s Federal Housing Administration (FHA) is mailing hundreds of thousands of letters to homeowners at risk of losing their homes through foreclosure and urging them to consider a safer, more affordable alternative to the high-cost mortgages they are currently paying. The first round of 280,000 letters was mailed in February. FHA’s public awareness campaign will continue through September, ultimately reaching 850,000 distressed homeowners. “This letter might be the most important piece of mail many of these families will receive all year,” said HUD Secretary Steve Preston. “This information could not only help save their current home, it could help provide them with long term financial security. This outreach campaign will ensure families are aware of the safe mortgage alternative offered by FHA.” June 20, 2008
Burst Levees Force a Town to Consider Its FutureFirst came the urgent news from a volunteer circling in a helicopter. The pounding Mississippi River had burst a 150-foot-wide hole in a levee, sending water gushing along a new path toward this small city and sweeping at least one empty house off its foundation. ven as the gash widened to 550 feet, water ripped open two more holes, one after the next, in a nearby levee. An inner levee, a second layer of protection, continued to guard much of Winfield on Thursday evening. But more than 250 homes in the region were flooded. “I don’t know if we’re going to be able to save it,” Andy Binder, of the Lincoln County Emergency Operations Command, said of the northeast section of Winfield, population 877. “In some areas, I can’t even tell we have levees anymore.” June 20, 2008
Board Backs Rise in Rent Up to 8.5%The board that regulates rents for New York City’s one million rent-stabilized apartments approved its highest rent increases in years at a raucous meeting on Thursday, angering tenants who said high rents were forcing the poor and working class out of the city. At a meeting punctuated by ear-splitting whistle-blowing and shouting matches between sign-waving tenants and landlords, the city’s Rent Guidelines Board authorized rent increases of up to 4.5 percent on one-year leases and 8.5 percent on two-year leases. The board also took the unusual and controversial step of authorizing a supplemental rent increase that affected only tenants who have lived in their apartments for six years or more. Owners of buildings with those tenants have the option of charging them the approved increases, or a $45 monthly increase for one-year leases or $85 for two-year leases, whichever is greater. June 20, 2008
Real Estate Mess Hurts Those in Field TwiceShelly Butterfield, 53, has more than 20 years of experience in the mortgage industry, in roles ranging from lending officer to regional manager of a lending company. She’s accustomed to the rhythms of her commission-based work, hustling in busy months to prepare for slow winters, keeping her eye on a shifting lending landscape so she knows what products are available to different clients. She’s also accustomed to making a handsome wage: $80,000 a year — or more, if she pushes herself. The money goes far in her hometown of Puyallup, Wash., a small rural community near Tacoma. June 20, 2008
White House Threatens Veto of Foreclosure RescueAdministration officials said they oppose the inclusion of $4 billion in the measure to help states buy and rehabilitate foreclosed properties, and a plan to have government-sponsored mortgage giants Fannie Mae and Freddie Mac pay for the rescue. They announced those and other objections as two GOP senators said they would try to block the package until a committee can investigate how much Countrywide Financial Corp. and other lenders stand to gain from it. House and Senate Republicans are voicing reservations about the bill in light of allegations that Senate Banking Committee Chairman Christopher J. Dodd, D-Conn., one of its architects, and Senate Budget Committee Chairman Kent Conrad, D-N.D., got cut-rate home loans through a VIP program at Countrywide, a leading subprime lender at the center of the mortgage meltdown. June 20, 2008
Foreclosures’ Collateral Damage: RentersAn increasing number of renters in Cleveland and Cuyahoga County face expensive evictions because banks have foreclosed on their landlords, a report has found. Policy Matters Ohio, a liberal think tank based in Cleveland, estimates there were 3,918 foreclosures on rental properties in Cuyahoga County last year, a 29 percent increase over 2006. Two-thirds of those foreclosures occurred in Cleveland, where more than half of the city’s households are renters. The study, written and researched by David Rothstein, calculated that these hasty foreclosure-related evictions can cost families on average $2,500 in moving expenses, lost security deposits and new security deposits. “They don’t have the opportunity to shop around for the best housing deal,” Rothstein said. June 20, 2008
FHA Calls for an End To Seller-Funded Down-Payment CharitiesWhat’s wrong with down-payment “gift” programs in which all or most of a home buyer’s equity stake comes from the seller, funneled through a third party? And why is the federal government determined to ban them? Here’s how these programs work: Say you want to buy a house, but you don’t have the cash for a down payment. You sign up with a third-party intermediary, typically a tax-exempt charitable organization that advertises its specialty. The seller of the house sends a contribution to the organization roughly equal to the money you need. The intermediary pockets a fee of $400 to $600 and passes along the balance for the down payment. June 24, 2008
To Avoid Student Turnover, Parents Get Rent HelpIn some of Flint’s elementary schools, half or more of the students change in the course of a school year — in one school it reached 75 percent in 2003. The moves are usually linked to low, unstable incomes, inadequate housing and chaotic lives, and the recent rash of foreclosures on landlords is adding to the problem, forcing renters from their homes. The resulting classroom turmoil led the State Department of Human Services to start an unusual experiment, paying some parents $100 a month in rent subsidies to help them stay put — a rare effort to address the damaging turnover directly. June 24, 2008
City Said to Drive Residents AwayBaltimore’s heavy-handed use of eminent domain and persistently high property taxes have forced residents and businesses to flee the city in the last half-century and contributed to the decline of neighborhoods, a Loyola College economist argues in a report published yesterday. Stephen J.K. Walters, in “Baltimore’s Flawed Renaissance,” writes that the city’s pervasive poverty, high crime rate and decaying housing is a direct result of “hostility to private property rights and a resulting flight of capital that has largely drained the city of its economic lifeblood.” June 24, 2008
Communities Suffer as Foreclosure Rate RisesAs mortgage defaults and foreclosures continue to rise, the impact is spreading well beyond those who are losing their homes. In communities across the country, msnbc.com readers report that local governments are coping with shrinking tax rolls, lenders are saddled with more foreclosed homes than they can sell and empty homes in many neighborhoods are being vandalized. June 24, 2008
Lawmakers to Take Last Shot at Housing BillPresident Bush and Congress have settled their differences on terrorist surveillance and Iraq war money. Now attention turns to a potential housing rescue, probably the last major initiative with any chance of passing before lawmakers scatter to campaign for re-election. Bush has threatened a veto. But lawmakers in both parties say the housing legislation is a political imperative, and negotiators see the makings of a summertime bargain. June 24, 2008
Homeowners Fight for Their Mortgage RightsBeset by financial problems in 2002, Eunice Anderson fell months behind in the mortgage payments on her four-bedroom ranch in Redford Township, Mich., near Detroit. Anderson, 48, a medical insurance auditor, says she was unable to refinance or negotiate a relief plan with her lender, Countrywide Financial (CFC). Facing foreclosure, she filed a Chapter 13 bankruptcy petition that let her keep her home while she paid more than $11,000 in debt. June 26, 2008
New-home Sales Decline Again; Prices Also DropSales of new homes tumbled for the sixth time in seven months in May, while median prices kept plunging, underscoring the depth of the nation’s housing woes. The Commerce Department reported Wednesday that new homes sold at a seasonally adjusted annual rate of 512,000 units in May, down 2.5% from April. The median price of a new home sold last month fell to $231,000, down 5.7% from a year ago. The report on new home activity in May followed reports Tuesday that showed record home price drops in April, indicating that the nation’s housing slump is not only deepening but also widening to include previously untouched parts of the country. June 26, 2008
New Faces Join Ranks of Nation’s HomelessTime is running out for Tracy Mosely. A single mother of five, Mosely is on the brink of homelessness after the house she’s rented for a year fell into foreclosure and was sold at auction. Mosely, a part-time restaurant hostess, came up with $500 for a security deposit on another place. But she says all the landlords she’s contacted want $1,000 or more. She doesn’t have it. Lying on her bed in Florissant, Mo., flipping through the newspaper, seeking a place to move her family, Mosely says she’s not sure if she has weeks or days before she’ll be evicted. She may wind up, she says, in a homeless shelter. June 26, 2008
Delinquencies Rise at Fannie Mae, Freddie MacIn a sign of continuing trouble in the housing market, mortgage delinquency rates doubled over a 12-month period at Fannie Mae and Freddie Mac, the two industry giants reported yesterday. In April, 1.22 percent of the conventional home loans that Fannie Mae guarantees were past due by at least three months or were in foreclosure. That was up from 1.15 percent in March and about twice the rate recorded in April 2007. Freddie Mac said its delinquency rate was 0.81 percent in April, up from 0.77 percent in March. The rate was 0.4 in April of last year. June 26, 2008
FHA AND MINNESOTA HOUSING FINANCE AGENCY SIGN AGREEMENT TO HELP MORE MINNESOTANS ACCESS SAFER GOVERNMENT-INSURED MORTGAGESHUD’s Federal Housing Administration and the Minnesota Housing Finance Agency (HFA) today announced a first-of-its-kind agreement to promote safer, affordable government-insured mortgages. The Memorandum of Understanding (MOU) forges a working relationship and commitment by the federal and state government to help Minnesotans continue to access safer and more secure FHA-insured mortgages. June 26, 2008
HUD ACCEPTS $350 MILLION MISSISSIPPI PLAN TO PRODUCE THOUSANDS OF AFFORDABLE HOUSING UNITS FOR WORKING FAMILIESU.S. Housing and Urban Development Secretary Steve Preston today accepted a $350 million plan by the State of Mississippi to produce thousands of affordable housing units for working families who continue to experience a chronic housing shortage in the State. Mississippi’s Long Term Workforce Housing Plan will provide grants and loans to local communities, nonprofit organizations and private developers to produce approximately 12,000 affordable homes in Hancock, Harrison, Jackson, and Pearl River counties. Mississippi’s final plan was provided to HUD for its review on May 30th. The funding to support the plan is part of $5.4 billion in Community Development Block Grant (CDBG) assistance the Department allocated to Mississippi following the Hurricanes of 2005. June 26, 2008
Poughkeepsie Seeks Foreclosure SolutionsIn 2005, when Denise Bolds was looking to refinance her four-bedroom Victorian home in the Hudson Valley town of Poughkeepsie, she was intrigued by a mailing that said she’d been “pre-selected” for a loan program that could lower her monthly payments. A single mom, Bolds lives with her 66-year-old mother and 17-year-old son, a high school senior who is headed for college. The program supposedly offered a “fixed-rate” loan with attractive terms, she said, which would help make ends meet on her salary as a social worker. June 26, 2008
States File Lawsuits Against CountrywideCountrywide Financial Corp.’s shareholders cleared the way Wednesday for the company to be taken over by Bank of America Corp., even as officials in two states filed lawsuits claiming the distressed mortgage lender misled borrowers into taking on risky home loans. The timing of the lawsuits in California and Illinois as Countrywide prepared to close the books after nearly 40 years underscored the company’s dramatic shift over the past 12 months as the mortgage and housing markets soured, inducing its slide from the nation’s largest originator and servicer of home loans to easy pickings for a takeover. June 26, 2008
New-home Sales, Prices Tumble FurtherSales and prices of new homes fell again in May, the government reported Wednesday, underscoring the depth of the nation’s housing woes. New homes were sold at a seasonally adjusted annual rate of 512,000 units in May, down 2.5 percent from the April level and 40 percent from a year ago. The median price of a new home sold last month fell to $231,000, down 5.7 percent from last month. The figure was down 26 percent from a year ago, when the median price of a new home was $311,300. June 26, 2008
Foreclosure Rescue Stalls in SenateA foreclosure rescue plan that has broad bipartisan support stalled in the Senate on Wednesday in a dispute over taxes. However, leaders said they were optimistic they could pass the measure before Congress breaks for a weeklong July 4 vacation. Democrats and many Republicans were pushing for quick approval of the bill, which would allow the government to back $300 billion in new, cheaper mortgages for debt-ridden homeowners facing foreclosure. June 26, 2008
Interfaith Housing Responding to Mortgage CrisisForeclosure. The word is heavy with dread and its impact is being felt well beyond what some would consider normal places. Jasmine Brewer, Fair Housing coordinator for the Winnetka-based Interfaith Housing Center of the Northern Suburbs, says that requests for counseling were once limited to certain areas of Evanston but that now she receives calls from other communities: Morton Grove, Skokie and Wilmette among them. On average, foreclosure activity increased between 30 and 40 percent in 2006 and has continued to climb. June 26, 2008
Commission Hears of Discrimination in Building TradesThe 15-member commission named by Mayor Nutter to increase minority participation in the city’s construction industry held its first public hearing yesterday, hearing tales of discrimination and pleas for help. “I’ve faced all kinds of discrimination on the job site. It’s just crazy,” said Shenecqua Butt, a Philadelphia Housing Authority tenant who’d successfully completed a program to become a union carpenter. Butt and fellow PHA resident and carpenter Tanya Mitchell said they’d been given precious little work and often faced harassment on job sites. June 26, 2008

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