July

“

Paulson, Banks Urge New Market for Mortgage LoansThe Bush administration and federal banking regulators joined with the nation’s four largest banks Monday to endorse a new way to pump money into the battered U.S. mortgage market. Treasury Secretary Henry Paulson unveiled a set of best practices designed to encourage banks to issue a debt instrument known as a covered bond. The administration hopes these bonds will replace some of the mortgage financing that has disappeared as investors incurred billions of dollars of losses on mortgage-backed securities. Covered bonds are issued by banks and are backed by cash flows from mortgages or other types of debt. July 29, 2008
Housing Bailout Act Has Help For More Than Just Struggling OwnersAre you planning to buy a house this year? Are you frustrated because you can’t deduct property taxes? Are you a retired homeowner who needs extra cash? Over the weekend, the Senate approved housing bailout legislation that’s primarily designed to help troubled homeowners and slow the rate of foreclosures. But the legislation, which President Bush is expected to sign this week, also includes provisions that could help families who are in no danger of losing their homes. Here’s a look at some money-saving provisions tucked deep inside the housing bill: If you answered “yes” to any of those questions, keep reading. July 29, 2008
The Extreme Reality Makeover ShowSymbolic to our era like a sledgehammer to drywall, the biggest house that ABC’s “Extreme Makeover: Home Edition” ever made over — a sprawling, four-bedroom starter castle, a three-car garage mahal with a turret and all — has gone into foreclosure, in the ‘burbs south of Atlanta. The house will be auctioned off, according to the Atlanta Journal-Constitution, next Tuesday on the steps of the Clayton County Courthouse. The Harpers had used their home as collateral on a $450,000 loan from JPMorgan Chase and fell in arrears, the newspaper reported. He ran a home security business; she mommed at home. Happy to be on television back then, they declined to be interviewed last week, when a news crew showed up from local station WSB, wanting to know wha’ppen. July 29, 2008
Fannie, Freddie On a TightropeThe collapse in the stock prices of Fannie Mae and Freddie Mac earlier this month, followed by an equally dramatic rebound, underscored the vulnerability of today’s agitated markets to panic and the mercurial behavior of global traders. Financial experts said the drop, nearly 50 percent in a week, was precipitated by a series of alarming reports from analysts and in the media and was then turbocharged by a surge in short selling, bets made by investors that the shares would fall. July 29, 2008
Fed to Clamp Down on Exotic and Subprime LoansWith no end in sight to the turbulence in the housing and financial markets, the chairman of the Federal Reserve said on Tuesday morning that it would issue new lending rules next week to restrict exotic mortgages and high-cost loans for people with weak credit. The chairman, Ben S. Bernanke, also said that the Fed was considering extending its program of low-cost overnight loans to the nation’s largest investment banks into next year. The lending program, which is supposed to be temporary, began in March in response to liquidity problems on Wall Street during the near-collapse of Bear Stearns, which was sold to JPMorgan Chase to avert going into bankruptcy. July 8, 2008
Mortgage Fears Send Global Shares DownAs U.S. home prices decline and Washington struggles to end the economic malaise, Wall Street is starting to send a sobering message: The worst is yet to come. One of the strongest warning signs came as the week began, when shares of the most important U.S. mortgage companies, Fannie Mae and Freddie Mac, plummeted. After falling almost continuously over the past month, in just one day Freddie Mac tumbled another 18 percent and Fannie Mae lost 16 percent amid concerns that the companies would need to raise billions of dollars in fresh capital. With renewed prospects for turmoil in the financial markets, global stocks fell Tuesday from Sydney to Stockholm. July 8, 2008
62% of St. Bernard, New Orleans Homes Being RebuiltOf the flooded areas in St. Bernard and Orleans parishes, 62 percent of homes have been rebuilt or are under renovation, according to a University of New Orleans study released Monday. That’s a jump from UNO’s 2007 flood zone survey, which found 35 percent of homes had been renovated or work was in progress. “It’s encouraging,” said Peter Yaukey, the study’s director, noting that UNO’s survey in the spring of 2006 found only about 15 percent of houses being rebuilt. The most recent survey found the highest percentage of intact houses in a segment of the Carrollton neighborhood, where 95 percent of homes were renovated or being worked on. On Monday, Jamal Brown, 14, rode his bike near a part of Dante Street in that neighborhood. July 8, 2008
A Cry to Help Save Homes in Maryland July 8, 2008
Foreclosures’ Financial Strains Take Toll on KidsShelby and millions of other young people have become the largely overlooked victims of a real estate crisis that’s led to record foreclosures, sinking home prices and rising numbers of families straining to pay mortgage bills as adjustable-rate loans grow more costly and home equity shrinks. Children and teenagers are enduring a variety of consequences — forced to move and say goodbye to friends, leaving behind schools and teachers, and losing the ability to take family vacations or take part in summer camps because of the financial strain. July 9, 2008
Rebuilding in New Orleans Quickens PaceMore homes are being rebuilt in the areas that were hardest hit by Hurricanes Katrina and Rita three years ago, a sign that the region continues to make strides, a new study shows. A survey of 2,435 homes in Orleans and St. Bernard parishes showed 62% of homes had either been rebuilt or are in the process of being renovated, according to the University of New Orleans study. Last year, 35% of the homes in those areas had significant reconstruction. In 2006, that number was 15%, said Peter Yaukey, chairman of the university’s geography department and the study’s author. The report each year analyzes where residents in the region are rebuilding and is considered a barometer of the overall health of the post-Katrina reconstruction effort. July 9, 2008
Housing Secretary Expresses Concerns With Mortgage Billhe nation’s top housing official yesterday criticized elements of a legislative package that aims to dramatically expand the Federal Housing Administration’s role in responding to the mortgage crisis.Taxpayers could end up absorbing “preventable and foreseeable losses” if the final bill does not include initiatives that the administration has long advocated, Housing and Urban Development Secretary Steve Preston said in a call with reporters. The legislation, passed by the House and pending in the Senate, would allow distressed borrowers to trade mortgages with rising payments for more affordable FHA loans if their lenders forgive a portion of the debt. July 9, 2008
Mortgage Lender Faces Rush to WithdrawTime is running out for IndyMac Bancorp, one of the faded darlings of the subprime era. On Tuesday, IndyMac, one of the nation’s largest independent mortgage lenders, faced what amounted to a run on the bank. As depositors rushed to withdraw money, IndyMac’s share price, already in a free fall, spiraled even lower. The stock, which fetched $50 in 2006, at the height of the housing boom, plunged 38 percent to 44 cents. In two years, more than $3 billion of shareholder value has been wiped out. A once high-flying offshoot of Countrywide Financial, IndyMac confronts an uncertain future. In a regulatory filing on Tuesday, IndyMac, which is based in Pasadena, Calif., said it had largely stopped making loans and would shut its retail and wholesale lending businesses. In all likelihood, IndyMac will undergo an orderly bankruptcy or be sold, analysts said. July 9, 2008
Housing Market Slump Seen Stretching FurtherSigns are emerging that the U.S. housing market’s long slump is likely to fester through the summer, and the real estate market may not recover for at least another year. The latest report, the National Association of Realtors’ pending home sales index, slipped by 4.7 percent in May to the third-lowest reading on record. The decline “suggests we are not out of the woods by any means,” said the trade group’s chief economist Lawrence Yun. The bad news came as the regulator for Fannie Mae and Freddie Mac tried to reassure investors that an accounting rule change wouldn’t force the government-chartered mortgage finance companies to raise tens of billions in capital to offset losses. July 9, 2008
Pluses In Housing Crisis for MidwestParts of the Midwest experienced a modest population resurgence last year as the nation’s housing crisis disrupted a long-term migration by Americans to the Sun Belt, a USA TODAY analysis of new Census data shows. Chicago and St. Paul were among the cities that saw their populations grow during the 12 months ending July 1, 2007, after declining the previous year, according to figures released today. Cincinnati; Indianapolis; Wichita; Kansas City, Mo.; Springfield, Mo.; Ann Arbor, Mich.; and Rockford, Ill., were among the Midwestern cities where growth, though modest, accelerated from 2005 to 2007 July 10, 2008
Findings on Katrina Trailers Went Undisclosed, Maker SaysA leading U.S. trailer manufacturer failed to disclose to Hurricane Katrina evacuees or the government its internal findings that formaldehyde in some units exceeded a federal health standard by as much as 45 times in 2006, its chairman acknowledged to Congress yesterday. Jim Shea, chairman of Gulf Stream Coach, which built 50,000 trailers for the Federal Emergency Management Agency for $520 million, said his company decided that its results were “irrelevant information” because FEMA already knew about high formaldehyde levels. The agency and the company were working together to improve ventilation, he said, and FEMA later turned down company offers to conduct more tests. July 10, 2008
Foreclosure Filings Surged 53 Percent in JuneThe number of homeowners stung by the rout in the U.S. housing market jumped last month as foreclosure filings grew by more than 50 percent compared with June a year ago, according to data released Thursday. Nationwide, 252,363 homes received at least one foreclosure-related notice in June, up 53 percent from the same month last year, but down 3 percent from May, RealtyTrac Inc. said. One in every 501 U.S. households received a foreclosure filing last month. Foreclosure filings increased from a year earlier in all but 11 states. Nevada, California, Arizona, Florida and Michigan continued to have the highest foreclosure rates. July 10, 2008
U.S. Weighs Takeover of Two Mortgage GiantsAlarmed by the growing financial stress at the nation’s two largest mortgage finance companies, senior Bush administration officials are considering a plan to have the government take over one or both of the companies and place them in a conservatorship if their problems worsen, people briefed about the plan said on Thursday. The companies, Fannie Mae and Freddie Mac, have been hit hard by the mortgage foreclosure crisis. Their shares are plummeting and their borrowing costs are rising as investors worry that the companies will suffer losses far larger than the $11 billion they have already lost in recent months. Now, as housing prices decline further and foreclosures grow, the markets are worried that Fannie and Freddie themselves may default on their debt. July 11, 2008
Loan-Agency Woes Swell From a Trickle to a TorrentThe word began spreading across Wall Street trading desks on Monday morning: Fannie Mae and Freddie Mac, the giant companies at the heart of the nation’s housing market, might be in trouble. The tumult, which continued on Thursday, started with a cautionary analyst’s report, one that might have caused few ripples in normal times. But these are not normal times. Within minutes, the price of the companies’ shares was plunging, sending shock waves through the financial markets, the economy and Washington. Fannie Mae and Freddie Mac are so big — they own or guarantee roughly half of the nation’s $12 trillion mortgage market — that the thought that they might falter once seemed unimaginable. But now a trickle of worries about the companies, which has been slowly building for years, has suddenly become a torrent. July 11, 2008
For Short Sellers, It Doesn’t Get Much BetterBlood is in the water, and short sellers, often viewed as the sharks of Wall Street, are circling. As shareholders of Fannie Mae and Freddie Mac watched their investments plunge in value Thursday, short sellers, who bet against stocks, could count their winnings. Considered smart money by some, short sellers have wagered against Fannie and Freddie in growing numbers as the mortgage crisis has worsened. Many of them have profited handsomely as the companies’ shares have tumbled roughly 70 percent this year. July 11, 2008
Rangel Rents Apartments at Bargain RatesWhile aggressive evictions are reducing the number of rent-stabilized apartments in New York, Representative Charles B. Rangel is enjoying four of them, including three adjacent units on the 16th floor overlooking Upper Manhattan in a building owned by one of New York’s premier real estate developers. Mr. Rangel, the powerful Democrat who is chairman of the House Ways and Means Committee, uses his fourth apartment, six floors below, as a campaign office, despite state and city regulations that require rent-stabilized apartments to be used as a primary residence. July 11, 2008
Some Metro Prices Drop to 3-year Lows July 11, 2008
Nine Tied to Finance FraudThe Maryland attorney general is accusing nine people of bilking distressed homeowners in a foreclosure rescue scheme and seeking to recover equity the state says was siphoned off. According to a complaint filed in Baltimore Circuit Court, the defendants promised to help homeowners behind on their mortgages avoid foreclosure if they temporarily transferred ownership of their homes. The defendants then recruited “straw buyers” to purchase the homes and used the new mortgages to pay themselves “exorbitant and unreasonable fees,” thereby stripping the homes of equity. The straw buyers then failed to make payments on the new mortgages, the complaint said. The straw buyers received $5,000 to $10,000 per transaction. July 11, 2008
Foreclosure Filings Surged 53 Percent in JuneThe number of homeowners stung by the rout in the U.S. housing market jumped last month as foreclosure filings grew by more than 50 percent compared with June a year ago, according to data released Thursday. Nationwide, 252,363 homes received at least one foreclosure-related notice in June, up 53 percent from the same month last year, but down 3 percent from May, RealtyTrac Inc. said. One in every 501 U.S. households received a foreclosure filing last month. Foreclosure filings increased from a year earlier in all but 11 states. Nevada, California, Arizona, Florida and Michigan continued to have the highest foreclosure rates. July 11, 2008
Foreclosure Filings Surged 53 Percent in JuneThe number of homeowners stung by the rout in the U.S. housing market jumped last month as foreclosure filings grew by more than 50 percent compared with June a year ago, according to data released Thursday. Nationwide, 252,363 homes received at least one foreclosure-related notice in June, up 53 percent from the same month last year, but down 3 percent from May, RealtyTrac Inc. said. One in every 501 U.S. households received a foreclosure filing last month. Foreclosure filings increased from a year earlier in all but 11 states. Nevada, California, Arizona, Florida and Michigan continued to have the highest foreclosure rates. July 11, 2008
New Orleans to Begin Citing Residents of FEMA TrailersResidents living in FEMA trailers across the city could be cited within the next few weeks for not vacating the temporary structures. Last month, Mayor Ray Nagin set a July 1 deadline to vacate the trailers or city officials would begin enforcing an ordinance that fines residents for parking trailers on their property. The ordinance was waived after Hurricanes Katrina and Rita in 2005. City inspectors will hand out warnings to those still in trailers or help residents file for extensions, said Edward Horan, the city’s zoning administrator. Residents still in violation after 15 days will trigger a hearing process and could be fined up to $500, he said. Daily fines could follow. July 14, 2008
U.S. Moves to Support Fannie Mae, Freddie MacThe Treasury Department and Federal Reserve on Sunday laid out plans to provide a financial lifeline to troubled mortgage giants Fannie Mae (FNM) and Freddie Mac (FRE), underscoring alarm about their deteriorating outlook and determination to provide a strong federal backstop. Treasury Secretary Henry Paulson wants Congress to approve a three-part plan to shore up the huge companies: giving Treasury authority to take an ownership position in the firms if needed; temporarily increasing their existing line of credit at Treasury, currently $2.25 billion; and giving the Fed a role in setting capital requirements and other standards. July 14, 2008
Why the Crisis of Confidence at Freddie Mac and Fannie Mae?Just a decade ago, mortgage packagers Fannie Mae (FNM) and Freddie Mac (FRE) were the gold-plated giants of the home loan industry. Their stocks soared, and no blue-chip portfolio was complete without them. Now, in the clearest sign yet of the nation’s deep financial troubles, investors fear that Fannie Mae and Freddie Mac — which exist to keep the mortgage market running smoothly — are sinking into the same credit crisis that claimed the corporate lives of Countrywide Financial, Bear Stearns and dozens of other institutions. The latest victim: IndyMac Bank, which regulators closed late last week in one of the largest bank failures in U.S. history. July 14, 2008
Fed Set to Crack Down on Shady LendingConfronted by record foreclosures, the Federal Reserve is ready to give U.S. home buyers more protection from the types of shady lending practices that have contributed to the country’s housing crisis. Chairman Ben Bernanke and his central bank colleagues were expected to approve a plan Monday that would crack down on dubious lending practices that have hurt many of the riskiest “subprime” borrowers — people with tarnished credit histories or low incomes. July 14, 2008
Fannie, Freddie Deflected Risk WarningsThough the implosion of investor confidence in Fannie Mae and Freddie Mac last week was sudden, the worries driving it have been the subject of countless warnings over many years. From a Washington think tank to the halls of Congress, from the Treasury to the Federal Reserve, from the Clinton to the Bush administrations, critics of the government-sponsored mortgage giants have long argued that they were allowed to operate with financial cushions that were too thin to support their far-reaching financial risks. July 14, 2008
Workers Shaken by Fannie, Freddie WoesFor years, Fannie Mae and its smaller rival, Freddie Mac, were destination workplaces in the Washington region. With a booming housing market and the implicit backing of the federal government, employees enjoyed high pay, bonuses and the promise of a prosperous retirement, thanks to the companies’ high-flying stock prices. Internally, it was considered near-betrayal for employees to sell their stock. A year ago, when both stocks were trading at about $60 per share, such loyalty made sense. Today, it looks like a mistake. July 14, 2008
Analysts Say More Banks Will FailAs home prices continue to decline and loan defaults mount, federal regulators are bracing for dozens of American banks to fail over the next year. But after a large mortgage lender in California collapsed late Friday, Wall Street analysts began posing two crucial questions: Just how many banks might falter? And, more urgently, which one could be next? The nation’s banks are in far less danger than they were in the late 1980s and early 1990s, when more than 1,000 federally insured institutions went under during the savings-and-loan crisis. The debacle, the greatest collapse of American financial institutions since the Depression, prompted a government bailout that cost taxpayers about $125 billion. July 14, 2008
Despite Lifelines, Concerns Linger on Mortgage GiantsThe federal government’s assistance plan for Fannie Mae and Freddie Mac steadied the financial markets yesterday but failed to end concern about the future of the mortgage finance giants. The plan, announced Sunday evening after an intense weekend of behind-the-scenes negotiations, arrested the steep declines that the companies’ stock had been experiencing over the past week. The government’s backing also allowed Freddie Mac to successfully sell $3 billion in debt securities, a sign that investors still had confidence in the firms, analysts said. July 15, 2008
Banking Stocks Take a LashingBanking stocks suffered some of their worst losses in a generation yesterday as investors’ confidence in the U.S. financial system continued to erode despite the dramatic initiative by the federal government Sunday evening to bolster mortgage giants Fannie Mae and Freddie Mac. Some banks have become increasingly vulnerable because of the risky approach they have used to raise money after traditional sources of finance on the credit markets evaporated last summer, according to banking executives and regulators. Outside branches of California-based IndyMac Bancorp, people lined up as early as 4 a.m. yesterday to withdraw money after the bank shuttered its doors last week, becoming the third-largest bank in U.S. history to fail. July 15, 2008
Shipping Containers Become Distinctive Housing on Land July 15, 2008
Scramble Led to Rescue Plan on MortgagesThe Bush administration hastily arranged the dramatic Sunday evening rescue of Fannie Mae and Freddie Mac after Wall Street executives and foreign central bankers told Washington that any further erosion of confidence could have a cascading effect around the world, officials said on Monday. Treasury Secretary Henry M. Paulson Jr. and other top officials were warned, after Fannie and Freddie lost nearly half their stock market value on Friday morning, that any more turmoil threatened to reduce the value of trillions of dollars of the companies’ debt and other obligations, which are held by thousands of domestic and foreign banks, pension funds, mutual funds and other investors, government officials said. July 15, 2008
Fed Sets Rules Meant to Stop Deceptive Lending Practices July 15, 2008
HUD CHARGES PUERTO RICO HOMEOWNER ASSOCIATION WITH DISCRIMINATING AGAINST DISABLED HOMEOWNER July 15, 2008
States Battle Mortgage Foreclosure ThreatFrustrated by the slow pace of federal relief, states around the country are pouring hundreds of millions of dollars into their own programs to stem the rising tide of home foreclosures. Some state political leaders complain that federal efforts to avert foreclosures have fallen far short. North Carolina Gov. Mike Easley said in a statement this month: “We have all been looking to the federal government to step in and do something about these foreclosures, and they have done nothing. So we decided we would do it on the state level.” July 18, 2008
New Orleans Homeless Camp ClearedInhabitants of a New Orleans tent city that attracted donations, drugs and despair for nearly a year were cleared Thursday by a nonprofit group, which says it now must find lasting solutions to a doubling of homelessness since Hurricane Katrina devastated the city. The encampment under a stretch of freeway overpass known as the Claiborne Avenue bridge was erased during an all-night operation by UNITY of Greater New Orleans, which used the promise of shelter beds to get the 46 men and women to move. As people gathered their belongings, their mattresses and tents were disposed of in the morning light. July 18, 2008
Fannie Mae, Freddie Mac Spent Millions on LobbyingFor years, mortgage giants Fannie Mae and Freddie Mac tenaciously worked to nurture, and then protect, their financial empires by invoking the political sacred cow of homeownership and fielding an army of lobbyists, power brokers and political contributors. New attention is being focused on the bruised mortgage companies as the Bush administration presses its rescue plan to Congress. Some lawmakers have challenged the plan’s open-ended nature and expressed fears of a potential big taxpayer bailout in an election year. July 18, 2008
Home Auctions Surge Nearly 47% Since 2003In a sign of just how broad the real estate downturn has become, revenue from resdential real estate sold at live auction grew about 5% last year and is up almost 47% since 2003, according to the National Auctioneers Association. Auctioneers say that much of their current business is being driven by home builders reducing inventory, and individuals who can’t afford to wait out the real estate doldrums. Despite the soft real estate market, Beazer Homes USA (BZH) recently sold 26 beachfront condos on the Jersey Shore in 75 minutes. July 18, 2008
Citigroup Posts $2.5 Billion Loss on Fresh Write-DownsA year into the tight credit market, and the losses keep coming. Citigroup said Friday morning that it lost $2.5 billion, or 54 cents a share, in the second quarter. The loss was largely caused by $7.2 billion of write-downs of Citigroup’s investments in mortgages and other loans and by a weakness in the consumer market, which cost Citigroup $4.4 billion in credit losses and $2.5 billion to increase reserves. But the chief executive, Vikram Pandit, positioned the $2.5 billion loss as progress. Last quarter, the financial conglomerate lost $5.1 billion. July 18, 2008
Little Foreclosure Relief Seen From Housing BillAfter a year of debate, Congress appears close to passing a bill intended to stem the rising tide of home foreclosures and stabilize the shaky housing market. But even if the bill wins final passage — far from a certainty — the most optimistic forecasts suggest it would help only about 400,000 of the estimated 3 million homeowners who will likely lose their homes in the next year. Prospects for the bill have been complicated by the mortgage meltdown’s latest chapter — the severe turmoil surrounding Fannie Mae and Freddie Mac, the government-sponsored companies that provide much of the capital to the mortgage market. A Bush administration plan to help prop up the two faltering enterprises has been tacked on to the housing bill, generating some backlash from congressional Republicans. July 18, 2008
A Look at Congress’s Long-Promised, Long-Delayed Mortgage ReliefAfter six months of haggling and political gamesmanship, a massive housing relief bill is heading for final approval. Although it has hundreds of pages and contains dozens of initiatives, including revamping federal oversight of the mortgage giants Fannie Mae and Freddie Mac, the centerpiece is a $300 billion program, called Hope for Homeowners, designed to provide refinancing lifelines to as many as 400,000 homeowners in deep trouble on their loans. July 21, 2008
New Regulator in Rescue Plan Spurs DebateWhen the Treasury secretary, Henry M. Paulson Jr., orchestrated a rescue effort for the nation’s two largest mortgage finance companies last week, most of the attention was focused on the infusion of cash and credit that the government would provide. But his plan also relies on the creation of a new regulatory agency to control the companies more tightly over the long term and to limit the risk they pose to the country’s financial system. Under the measure, Congress would lose some of its authority to oversee the companies, Fannie Mae and Freddie Mac, including the right to determine how much capital they must keep as a cushion against losses. That role would shift to the new regulator, which would be called the Federal Housing Finance Agency; the director of the agency would be appointed by the president and confirmed by the Senate. July 21, 2008
Low Rent, East Side Location: See Landlord, if You’re FamousA rent-stabilized apartment in New York is a precious find. Which could explain the indignation that greeted the disclosure that Representative Charles B. Rangel was occupying four of them in the luxurious Lenox Terrace towers in Harlem, where Gov. David A. Paterson also has one. Throughout the city, the well-connected (or just plain lucky) have been able to snare such prizes and retain them over the years. But few rental buildings in the city have been as hospitable to public officials, past and present, as the Rudin Management Company’s high rise at 215 East 68th Street, where a shouted, “Good morning, your honor!” could turn every head in the lobby. July 21, 2008
Road Home Security Bolsters Police WorkPeering into a flood-damaged Lower 9th Ward house that should have been empty, four officers found squatters. There were two men — armed with a semiautomatic handgun and a civilian version of military’s M16 assault rifle. A drug stash was nearby. The intruders would ultimately find themselves in the custody of New Orleans police and National Guard troops at the close of the mid-May episode, more than two and a half years after Hurricane Katrina left the house in shambles. But the officers who got them to surrender were sent out by a program that few would associate with gun-toting law enforcement: the Road Home. July 21, 2008
Economy Hobbles Calif. TownThe chummy, fast-talking Golovich also earned a good living in this waterfront suburb an hour’s drive northeast of San Francisco. As Vallejo grew, his contracting business, Randu Originals Ceramic Tile, hauled in millions of dollars in sales over the years. The jobs kept coming. The economy kept booming. Traffic filled Tennessee Street outside his showroom. Not now. The mortgage crisis, the limping economy and a recent bankruptcy filing by Vallejo — the first municipality to do so since Desert Hot Springs, Calif., in 2001 — have hobbled this town of 120,000. Golovich’s business is hurting. Jobs and phone calls from customers have dried up. He’s cut his staff and fleet of trucks in half, to six employees and four vehicles. July 22, 2008
Mortgage Crisis Reverses Tide of Urban RenewalOn Reservoir Hill, just north of downtown, one of this city’s most hopeful revitalization projects is falling apart. Over the past two years, 95 properties have fallen into foreclosure. On one dismal street, three blocks of apartment buildings and rowhouses — many freshly renovated — stand vacant, their doors and windows boarded over to ward off thieves. Eighteen months ago, Reservoir Hill was a prime example of the progress that cities across the country have made reclaiming blighted neighborhoods as a nationwide housing boom helped lure homeowners and chase away crime. Now the mortgage crisis threatens to reverse those gains as foreclosures multiply, house prices plunge and vacancies rise. July 22, 2008
HUD CHARGES NEVADA HOMEOWNERS’ ASSOCIATION WITH DISCRIMINATING AGAINST A HOMEOWNER WITH A DISABILITYhe U.S. Department of Housing and Urban Development announced today that it has charged Arbors Owners’ Association, Inc., of Las Vegas, NV, and its management agent, First Columbia Community Management, Inc., with violating the Fair Housing Act by allegedly refusing to provide a disabled homeowner a parking space close to his condominium. The Fair Housing Act requires housing providers to make reasonable accommodations in their rules and procedures, such as assigning a parking space, when the accommodation is necessary for a person with a disability to fully enjoy his or her home. July 22, 2008
Given a Shovel, Americans Dig Deeper Into DebtThe collection agencies call at least 20 times a day. For a little quiet, Diane McLeod stashes her phone in the dishwasher. But right up until she hit the wall financially, Ms. McLeod was a dream customer for lenders. She juggled not one but two mortgages, both with interest rates that rose over time, and a car loan and high-cost credit card debt. Separated and living with her 20-year-old son, she worked two jobs so she could afford her small, two-bedroom ranch house in suburban Philadelphia, the Kia she drove to work, and the handbags and knickknacks she liked. Then last year, back-to-back medical emergencies helped push her over the edge. She could no longer afford either her home payments or her credit card bills. Then she lost her job. Now her home is in foreclosure and her credit profile in ruins. July 22, 2008
For Sale, Forever: 5 Reasons Your House Still Hasn’t SoldThe brick townhouse is a bright eight-year-old end unit with a list of upgrades - $10,000 in plantation shutters alone - and tasteful decor. Outside, it has a deck screened for privacy; inside, it has a big kitchen island. It’s also in a convenient location, all likely pluses. However, condos and apartments recently replaced the trees that were behind it and a dozen other townhouses are for sale in this Owings Mills complex, including three end units. All factors likely to limit its appeal. The house has been on and off, but mostly on, the market for more than a year with more than one agent. The current listing agent, Len Bernhardt, a Coldwell Banker veteran of 48 years, believes many would-be buyers are waiting out sellers in the hope that sellers will blink first. July 22, 2008
Long-distance Commuters’ Road to NowhereFor Dollie Kinkead, the economic turmoil gripping the country translates into an 80-mile drive each work day from a house she can’t sell to a job she thinks she’s lucky to have. For Danny Jesse, it means living with his parents and enduring a commute that is at times so costly and brutal that he would rather spend the night in his car. For Brian and Ronda Mitchell, the combination of high gas prices and a housing market downturn has forced them to make the difficult choice to allow the home they have owned for seven years to go into foreclosure. July 22, 2008
Woes Afflicting Mortgage Giants Raise Loan RatesMortgage rates are rising because of the troubles at the loan finance giants Fannie Mae and Freddie Mac, threatening to deal another blow to the faltering housing market. Even as policy makers rushed to support the two companies, home loan rates approached their highest levels in five years. The average interest rate for 30-year fixed-rate mortgages rose to 6.71 percent on Tuesday, from 6.44 percent on Friday, according to HSH Associates, a publisher of consumer rates. The average rate for so-called jumbo loans, which cannot be sold to Fannie Mae and Freddie Mac, was 7.8 percent, the highest since December 2000. July 23, 2008
Hill Budget Chief Weighs Odds, Cost Of Rescue PlanThe Bush administration’s plan to prop up troubled mortgage-finance giants Fannie Mae and Freddie Mac is likely to cost taxpayers less than $25 billion, Capitol Hill’s chief budget analyst said yesterday. But there is an outside chance that a further collapse in the housing market could require an infusion of $100 billion or more. In a letter to lawmakers, Peter R. Orszag, director of the Congressional Budget Office, also said there is “a significant chance — probably better than 50 percent” — that federal officials would never have to use the authority to lend the firms money or buy their stock. July 23, 2008
Bank Investors Expect Less as Losses MountAfter the last week brought another round of woeful quarterly results from the industry, capped by news on Tuesday of multibillion-dollar losses at the Wachovia Corporation and Washington Mutual, that question is nagging banking executives and their investors. Kenneth D. Lewis, the chief executive of Bank of America, insisted this week that the industry was turning the corner, after his company reported a mere 41 percent drop in profit. Many investors seem to see signs of hope in red ink that once would have shocked them. July 23, 2008
Foreclosure in CourtMaryland’s highest court will convene today for a hearing on changes to foreclosure rules that would conform with new legislation that gives homeowners more notification and a longer waiting period before their homes are sold. The hearing by the Court of Appeals follows a top judiciary subcommittee meeting yesterday in which officials discussed further reforms and changes to help ease a foreclosure crisis that is engulfing the state and country. While the proposed rules address the issue of giving homeowners greater notice to allow them to settle debts and potentially avoid foreclosure, the regulations should also be clearer on homeowners’ rights and responsibilities in the interim, said Linda M. Schuett, an Annapolis attorney and vice chairwoman of the Standing Committee on Rules of Practice and Procedure, which met yesterday. July 23, 2008
Huge Housing Bill Set to Become LawThe House yesterday easily approved legislation that seeks to slow the steepest slide in house prices in a generation, rescue hundreds of thousands of homeowners at risk of foreclosure and reassure global markets that mortgage-finance giants Fannie Mae and Freddie Mac will not be allowed to fail. The Senate plans to vote on the bill within days and send it to President Bush. The White House announced that Bush would sign the measure, Washington’s most ambitious response to a housing crisis that has pushed more than 1.5 million families into foreclosure and shattered investors’ confidence in some of the nation’s largest financial institutions. July 24, 2008
Thousands Flock for a Chance at Loan ReliefThe homeowners started lining up at 4 a.m. yesterday, some, like Patricia Ephraim, coming for a second or third day. Ephraim, who lives in Silver Spring, was among the thousands of distressed borrowers drawn to downtown Washington yesterday by a promise of help from the Neighborhood Assistance Corporation of America. The Boston housing advocacy group set up tables and offices staffed with about 300 housing counselors at the Capitol Hilton. They worked with the homeowners to prepare budgets and submit proposals to their lenders for lower mortgage payments. A line of people clutching folders of their financial documents snaked around the outside of the hotel. July 24, 2008
No Sign Yet of A Bottom in Home PricesWhen will home prices stop falling? The answer is critical to millions of American homeowners who are watching their home equity melt away or are unable to move because falling values have sent potential buyers to the sidelines. Even if you don’t own a home, the question is central to your chance of getting a good night’s sleep if you’re worried about your job, your bank account or the investment in your 401(k). It’s not an easy question. Forecasting the direction of any financial market relies heavily on the collective psychology of millions of buyers and sellers — a notoriously unreliable bunch. But the current housing market is vulnerable to a variety of other variables that make calling the bottom even tougher. July 24, 2008
Woman Kills Herself Before ForeclosureA 53-year-old wife and mother fatally shot herself shortly after faxing a letter to her mortgage company saying that by the time they foreclosed on her house that day, she would be dead. Police said that Carlene Balderrama used her husband’s high-powered rifle to kill herself Tuesday afternoon, shortly after faxing the letter at 2:30 p.m. The mortgage company called police, who found Balderrama’s body at 3:30 p.m. The auction was scheduled to start at 5 p.m. and interested buyers arrived at the property in Taunton, about 35 miles south of Boston, while Balderrama’s body was still inside, according to Taunton police chief Raymond O’Berg. July 24, 2008
Grim Housing Data Stifle Market RallyA days-long rally in the U.S. stock market came to an abrupt halt yesterday after the release of disappointing home sales and joblessness figures reignited worries about the economy, particularly financial services. “It’s a one-two punch,” said Doug Roberts, chief investment strategist at Channel Capital Research in New Jersey. “In the past few days, we had some positive news. It was like everyone was breaking out the bubbly. This is like the hangover.” July 25, 2008
Housing Bill Has Something for Nearly EveryoneIf you are ignoring the housing bailout bill because you think it benefits only troubled homeowners, you may miss out on a windfall. The bill, expected to be passed by the Senate in the next few days and then signed by President Bush, does offer incentives to certain overextended borrowers and their mortgage lenders. But it also includes many handouts to first-time homebuyers, longtime homeowners, returning veterans and senior citizens seeking to tap their home equity without getting hit with big fees. Millions of people have the potential to benefit in some way. July 25, 2008
To Fight Poverty, Tear Down HUD July 26, 2008
Senate Passes Housing Aid BillCongress approved mortgage relief for 400,000 struggling homeowners Saturday as part of an election-year housing plan that also aims to calm jittery financial markets and bolster the sagging economy. President Bush said he would sign it promptly, despite reservations. The measure, regarded as the most significant housing legislation in decades, lets homeowners who cannot afford their payments refinance into more affordable government-backed loans rather than losing their homes. July 28, 2008
Housing Rescue Bill May Fall Short; Who Benefits?Is it a remedy for the worst housing slump the nation has suffered in decades? Or merely a taxpayer-funded bailout that will fail to reverse the plunge in home prices, the surge in foreclosures and the grave threat that overhangs the economy? The housing act, which won final approval in Congress on Saturday and which President Bush has said he will sign, is historic in its sweep and ambition. It aims to provide relief to homeowners, incentives to buyers, guidance to lenders and oversight to vital government-sponsored entities, such as Fannie Mae and Freddie Mac. July 28, 2008
Housing Bill Won’t ‘Perform Miracles’Even as a huge bipartisan majority in the Senate voted yesterday to send a sprawling housing bill to the White House, economists, consumer advocates and other analysts said the package of programs for struggling homeowners and shaken mortgage lenders is unlikely to relieve the foreclosure crisis that is driving the nation toward recession. “This is not the end of the housing crunch,” said Jared Bernstein, a senior economist at the Economic Policy Institute. “Housing prices have already fallen 15 percent and they need to fall 10 percent more. This bill isn’t going to change that equation.” July 28, 2008
Home Prices Fall Again In May; Off 15.8% From Year EarlierHome prices continued to drop in May, and economists warned that more declines are likely before the housing market turns around. The median price of a single-family home in May was 15.8% lower than in May 2007, according to the widely followed Standard & Poor’s/Case-Shiller index of 20 metropolitan areas. It was the largest annual drop for the index since it was created eight years ago. Nationally, home prices are back to where they were in August 2004, and overall, there hasn’t been a month-to month increase in prices for the index since August 2006. July 30, 2008
County, State Partner on Plan For Those Facing ForeclosureGov. Martin O’Malley and Prince George’s County Executive Jack B. Johnson agreed yesterday to help hundreds of residents in danger of losing their homes. Under a memorandum of understanding, the state Department of Housing and Community Development will provide $2.5 million and Prince George’s will give $1.5 million to develop a program that encourages local banks to refinance loans to county residents facing foreclosure. The money will be used to insure the bank loans, state officials said. July 30, 2008
U.S. Reports Drop in Homeless PopulationThe number of chronically homeless people living in the nation’s streets and shelters has dropped by about 30 percent — from 175,914 to 123,833 — from 2005 to 2007, Bush administration officials said on Tuesday. Housing officials say the statistics, which are collected annually from more than 3,800 cities and counties, may reflect better data collection and some variation in the number of communities reporting. But officials also attribute much of the decline to a policy shift promoted by Congress and the administration that has focused federal and local resources on finding stable housing for homeless people suffering from drug addiction, mental illness or physical disabilities, long deemed the hardest to help in the homeless population. July 30, 2008
Iowans Washed Out of Homes Find Their Future Hard to GraspSeven weeks after this river town went under water in the biggest flood ever recorded here, city officials on Tuesday provided a first glimpse of their redevelopment plan to increasingly restless and frustrated residents, many thousands of whom remain displaced from the wreckage of their homes. In three information sessions, city officials and their consultants showed residents a framework for rebuilding that begins with public comment and culminates in a report to the state by the end of the year. So far, specifics are few. City leaders called for “sustainable” neighborhoods, better transportation and reinvestment in downtown, but emphasized that they were still in the information-gathering stage of the plan, which will be shaped by how much federal money is available for long-term recovery. July 30, 2008
U.S. Won’t Release Land in Conservation ProgramAmid improving harvest expectations for this year, the United States agriculture secretary, Ed Schafer, said Tuesday that he would not lift penalties for farmers who plant crops on land set aside for conservation. cent.Bakers and livestock owners had mounted an intense lobbying effort to erase the penalties in order to increase the harvest and lower high crop prices. The pressure intensified in June after floods washed away farm fields in the Midwest, leading to fears of a poor harvest. But Mr. Schafer said recent forecasts indicated a larger crop than had seemed likely in the days and weeks after the flooding. In addition, he said that corn prices had plummeted 25 percent from record highs earlier this year, while soybean prices were down 14 percent. July 30, 2008
Rescue is Quirk of TimingHundreds of thousands of struggling homeowners may get the help they need to stave off foreclosure from the federal housing bill that Congress passed last week. But for hundreds of thousands more, people like Veronica Peterson, it comes too late. Peterson is waiting for the eviction notice that will force her out of the $545,000 house she bought in Columbia two years ago. The 45-year-old single mother of three and home day care operator couldn’t keep up with her mortgage payments, based on adjustable interest rates of 8 1/4 and 11 1/4 percent. The house has already been foreclosed on. The eviction notice, coming any day now. July 30, 2008
U.S., 4 Banks Favor ‘Covered Bonds’The Bush administration and federal banking regulators joined with the nation’s four largest banks yesterday to endorse a new way to pump money into the battered U.S. mortgage market. Treasury Secretary Henry M. Paulson Jr. unveiled a set of best practices designed to encourage banks to issue a debt instrument known as a covered bond. The administration hopes these bonds will replace some of the mortgage financing that has disappeared as investors have incurred billions of dollars of losses on mortgage-backed securities. “As we are all aware, the availability of affordable mortgage financing is essential to turning the corner on the current housing correction,” Paulson said in launching the new effort. July 30, 2008
Potentially Disruptive Lender Rule Is DelayedThe board that sets accounting rules for U.S. corporations yesterday postponed by a year a plan that could require banks and other financial services companies to raise mountains of new capital to protect themselves against financial exposures not currently reflected on their balance sheets. The Financial Accounting Standards Board took the action at the urging of federal regulators concerned about the potential impact on Fannie Mae and Freddie Mac, the mortgage funding giants, and lenders that provide credit for businesses and consumers. July 31, 2008
In Prince William, A Spike in Home SalesHome sales in Prince William County have surged in recent months, a dramatic turn that suggests prices have dropped low enough to lure buyers to the Washington area’s most devastated housing market. The number of sales in the county have been climbing since March, with the steepest rise last month, when sales jumped 83 percent compared with the same time a year earlier, according to George Mason University’s Center for Regional Analysis. The trend contrasts sharply with nearly every other county in the region, where sales sank. July 31, 2008
HUD CHARGES WISCONSIN LANDLORDS WITH DISCRIMINATING AGAINST FAMILIES WITH CHILDRENThe U.S. Department of Housing and Urban Development announced today that it has charged the owners and property manager of a Wisconsin rental property with housing discriminating for refusing to rent certain apartments to families with children. HUD alleges that the Joseph Peltz Trusts Numbers 1 and 2 and Rebecca Peltz, owners of an eight-unit apartment building in West Allis, and the on-site property manager, Crystal Sahr, unlawfully required tenants with children to rent apartments on the building’s first floor or excluded them entirely. The Fair Housing Act makes it unlawful for a housing provider to refuse to rent to families because they have children or impose different terms or conditions on families with children. July 31, 2008
New Orleans House Gutting Program Under A MicroscopeAmid questions over whether crews hired to gut homes and cut grass for elderly and poor residents actually did the work, New Orleans officials have launched a review of a City Hall program that records show has been billed for more than $1.8 million by 32 subcontractors, including $134,000 by a firm controlled by Mayor Ray Nagin’s brother-in-law. The site inspections mark the first time the city has examined the work of firms hired by the nonprofit New Orleans Affordable Homeownership Corp., which administered the city’s Home Remediation Program from late 2006 to July 2007. To qualify, owners had to meet age or income thresholds and show that the property was their primary residence. July 31, 2008
Hedge Funds Investing in Delinquent MortgagesGuess who holds your mortgage now? It’s your friendly neighborhood hedge fund. Dozens of hedge funds, private equity groups and other investors have plunged into the beaten-down mortgage market in recent months, buying tens of thousands of distressed loans and foreclosed properties around the country. They hope to profit from the woes of banks and other investors holding mortgages that have plummeted in value as home values sink and defaults soar. July 31, 2008

“