September

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Charting Their Rise Out of DebtWhile the government tries to figure out how to bail out Wall Street, I’ve been working this year on ways to bail out three military families from debt that was crushing their spirits. These families — unlike many major institutions — didn’t wait for a handout. Instead, they cut their expenses, ended their addiction to credit, and took responsibility for their poor money-management decisions. The couples agreed to participate in this year’s Color of Money Military Challenge and to expose their financial situations in exchange for help with their money woes. September 29, 2008
PRESTON ALLOCATES NEARLY $4 BILLION TO STABLIZE NEIGHBORHOODS IN STATES AND LOCAL COMMUNITIES HARD-HIT BY FORECLOSUREU.S. Housing and Urban Development Secretary Steve Preston today allocated a total of $3.92 billion to all states and particularly hard-hit areas trying to respond to the effects of high foreclosures. HUD’s new Neighborhood Stabilization Program (NSP) will provide targeted emergency assistance to state and local governments to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight within their communities. HUD plans to host a national housing summit in Washington, DC on October 7-8, as well as a series of regional conferences to explain the details of this new program to governors, mayors, county executives and other State and local leaders. September 29, 2008
Neighborhood Stabilization Program GrantsHUD’s new Neighborhood Stabilization Program will provide emergency assistance to state and local governments to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight within their communities. The Neighborhood Stabilization Program (NSP) provides grants to every state and certain local communities to purchase foreclosed or abandoned homes and to rehabilitate, resell, or redevelop these homes in order to stabilize neighborhoods and stem the decline of house values of neighboring homes. September 29, 2008
A Bill Encouraging to Distressed Homeowners, but Its Reach Is UnclearThe $700 billion bailout package developed by Congress is primarily intended to put financial institutions on a firmer footing. That, consumer experts said, can only be positive for most Americans. The package should ease tight credit, hold down interest rates and prevent a sharp rise in unemployment. But it does not go as far as some Democrats and consumer advocacy groups would have liked in helping distressed homeowners. The legislation does take steps to help some troubled borrowers modify their mortgages. As part of the package, the Treasury Department would purchase problematic mortgage-related assets. The bill would also set up a program to assist homeowners by encouraging the companies that service the mortgage-related assets the Treasury owns to take advantage of the Hope for Homeowners program. September 29, 2008
In a Town Apart, the Pride and Trials of Black LifeHidden in the theme-park sprawl of greater Orlando, a few miles from the shiny, the loud and the gargantuan, lies a quiet town where the pride and complications of the African-American experience come to life. Eatonville, the first all-black town to incorporate in the country and the childhood home of Zora Neale Hurston, is no longer as simple as she described it in 1935: “the city of five lakes, three croquet courts, 300 brown skins, 300 good swimmers, plenty guavas, two schools and no jailhouse.” It is now a place of pilgrimage. Alice Walker, Toni Morrison and Ruby Dee have come to the annual Zora! Festival in Eatonville to pay their respects to Hurston, the most famous female writer of the Harlem Renaissance. September 29, 2008
Tending the Boulevards of Broken DreamsThe lawn mower’s whine disrupts the morning peace of Coconut Drive like an alarm clock no one remembers setting. It rises and falls and rises again, as the angry machine cuts across the front-lawn jungle of an attractive house with great location and move-in potential. Abandoned, in other words. Three years ago, sold for $660,000; today, a ghostly parcel of failure. The lawn mower returns the grass to short uniformity, then growls toward the back yard, passing a two-car garage housing forsaken gardening tools, a basketball hoop no longer conjuring jump-shot dreams and a door leading to a kitchen with a granite-counter island. Now it begins to clear around an in-ground pool brimming with viscous water the color of cash. September 29, 2008
In U.S. History 1978—The New York City Crisis: Centralization by DefaultAs chairman of the Senate Banking Committee, U.S. Senator William Proxmire accepted the duty of guiding the 1978 New York City Loan Guarantee Bill through Senate floor debate. Yet he was firmly convinced that the bill was a dangerous precedent. “This legislation could seriously alter the nature of our federal system,” he warned the Senate on June 29. ” I regret that the Congress has not weighed more heavily the full implications of providing long-term federal guarantees to New York City. September 29, 2008
The Cost of Government Financial Interventions, Past and PresentIn response to ongoing financial turmoil that began in the subprime mortgagebacked securities market, the federal government has intervened with private corporations on a large scale and in an ad hoc manner three times from the beginning of 2008 through September 19, 2008. The firms affected were Bear Stearns, Fannie Mae and Freddie Mac, and AIG. Another large investment bank, Lehman Brothers, sought government intervention, but none was forthcoming; subsequently, the firm soughtbankruptcy protection. September 29, 2008
Weakened Gustav Spared New Orleans, Gulf CoastHurricane Gustav was downgraded to a tropical depression Tuesday morning, but Gulf Coast officials were still assessing damage and flooding conditions and were not ready yet to talk about allowing almost 2 million evacuees to return home. “New Orleans is coming along,” Mayor Ray Nagin told CNN early Tuesday. “We’re not out of the woods, but very close.” The storm spared New Orleans from major damage Monday, but high water tested rebuilt levees well into the night. It was the first test of the levees since Hurricane Katrina, which devastated the region. Water spilled over several levees, some of which are still under repair, but the city’s pumps were working, according to the Army Corps of Engineers. September 2, 2008
Study: Bankruptcies Soar for Senior CitizensFirst came the health problems. Then, unable to work, Ada Noda watched the bills pile up. And then, suffocating in debt, the 80-year-old did something she never thought she’d be forced to do. She declared bankruptcy. While the bankruptcy filing rate for those under 55 has fallen, it has soared for older Americans, according to a new analysis from the Consumer Bankruptcy Project, which examined a sampling of noncommercial bankruptcies filed between 1991 and 2007. September 2, 2008
New Orleans Levees Tested As Gustav Lashes Gulf CoastHurricane Gustav smashed into Louisiana’s Gulf Coast on Monday, unleashing torrential rains and 110-mph winds that sent waves of water splashing over this city’s levees. But early indications were that the weakened storm caused far less damage than feared, and New Orleans appeared to have avoided a disaster on the scale of Hurricane Katrina three years ago. September 2, 2008
Elevator Failures at Housing for the ElderlyRichard Petty remembers the day he took the stairs to get to his 25th-floor apartment. “I had to take breaks,” Mr. Petty said. “I’m not a young man.” Mr. Petty, 75, has heart problems and prostate cancer. He lives in public housing, on the top floor of a 25-story building in Weeksville, Brooklyn, called Kingsborough Extension. He did not climb the stairs by choice. Kingsborough Extension, a 184-unit red-brick building of public housing for the elderly, has two elevator cars, but Mr. Petty and other residents say the elevators break down so often that the building has become an unofficial walk-up. September 2, 2008
Waiting for the Big OneSevnety years ago, death came howling on the ocean. Long Island’s hurricane of 1938 — back in the years before the government gave names to storms — pushed a 15-foot surge and battering waves ahead of it that flooded parts of Westhampton Beach, Southampton and Montauk. More than 50 people were killed, and hundreds of houses were washed away or ruined. The storm hit land at the lightly populated East End on Sept. 21 and then traveled on to do even more damage in Connecticut and Rhode Island. September 2, 2008
The Luck of the LandlordsThe slumping housing market hit Teresa Walsh hard. Seeking a better life for her two daughters, Walsh put her house in Menlo Park, Calif., on the market and moved to Bethesda. She found a five-bedroom, three-bath house on Christy Drive for rent and expected that her home in California would sell. When it didn’t after two months, Walsh was in a tough situation. Due to surgery in June, she was out of work. She was paying the mortgage in California and the rent in Bethesda. To make ends meet, she did what a growing number of people have done the past two years: She became a landlord. September 2, 2008
After a Few Months in D.C., It’s Not Just The Rental Options That StinkI didn’t begin looking for an apartment in Washington until a few weeks before I was supposed to start work. First, I hit Craigslist. The experience was depressing. I didn’t know Washington. I didn’t want to live with strangers. I didn’t even necessarily want to leave Brooklyn. And I didn’t have much money. Each click made me more nerve-racked. Spend $1,400 to $2,000 for a one-bedroom in Dupont Circle or Adams Morgan — the only two places I had even faintly heard about? Or $600 or more to live with four or five strangers? The D.C. rental market is tough, even for a lifelong New Yorker like me. September 2, 2008
Renters in Foreclosed Buildings Get A BreakDrugs and dead animals, barricades and biker gangs — Cook County sheriff’s deputies executing forcible eviction orders have run into bizarre and dangerous situations. Recently, they’ve encountered a new type of disturbing scenario — renters who are learning for the first time from an eviction crew that they are living in a building in foreclosure. Today, members of the sheriff’s eviction team will be trained on new procedures designed to stop eviction of renters from buildings in foreclosure. September 2, 2008
Bon Jovi Plans to Build Low-Income Housing in NewarkRocker Jon Bon Jovi will join Newark Mayor Cory Booker and Gov. Jon Corzine today to announce plans to build 51 units of low-income special-needs housing.

The Genesis Apartments will be a project of HELP USA, one of the nation’s leading providers of job training and housing assistance for the homeless and victims of domestic violence, and Bon Jovi’s Philadelphia Soul Charitable Foundation. Located at Oriental Street and Mt. Pleasant Avenue, the environmentally friendly housing will feature a geothermal heating system, 2,500 square foot community center along with residential and support services for homeless people with AIDS. September 2, 2008
Assembly Approves Foreclosure Bill to Assist RentersRenters caught up in the foreclosure meltdown could gain some much-needed assistance if a bill authored by Assembly Majority Leader Alberto Torrico (D-Newark) becomes law. AB 2586 was approved by the state Assembly 43-28 and now goes to the Governor for his consideration. AB 2586 improves California´s notification laws dealing with renters living in homes that are in foreclosure and requires new owners of the units to return renters´ security deposits. One in every five foreclosed homes is occupied by renters, according to some reports. In the second quarter of this year, 121,341 default notices were filed in California. Families are being forced out of their homes, frequently with little notice. Often renters don´t know their homes are in danger because California´s inadequate notification laws are aimed at owners, not tenants. September 2, 2008
Some Struggling Homeowners Find Way to Dodge ForeclosureAt night, Margaret Jones would lie in bed, unable to sleep, her heart galloping. Each time she came home, she feared the worst: a padlock on her door and a sign declaring her home in foreclosure. She was months behind on her adjustable-rate mortgage, which she’d become unable to pay as the rate climbed from 7% in 2004 to 12% this year. Her three-bedroom house, she was told, would be auctioned on July 1. “My blood pressure was through the roof,” says Jones, 45, a nurse in North Lauderdale, Fla. “I can see why some people commit suicide. You just want it to go away.” September 3, 2008
Gustav Damage May Hit Up to $10 BillionHurricane Gustav packed less of an economic punch than expected, leading analysts to estimate insured damage at between $2 billion and $10 billion. But Gustav is one of only many storms that could wreak havoc on the U.S. this year. Hurricane Gustav packed less of an economic punch than expected, leading analysts to estimate insured damage at between $2 billion and $10 billion. But Gustav is one of only many storms that could wreak havoc on the U.S. this year. September 3, 2008
Haitians Stranded as Hanna Strikes, 21 DeadHaitian families scrambled onto rooftops and screamed for help Tuesday in a city flooded by Tropical Storm Hanna, as U.N. peacekeepers and rescue convoys tried in vain to reach them. By Tuesday night, Hanna claimed 21 lives in Haiti, including 12 dead in the state containing the cutoff city of Gonaives, said Marie Alta Jean-Baptiste of the country’s civil protection office in Port-au-Prince, the capital. Iris Norsil, 20, managed to flee Gonaives on Haiti’s western shore and told The Associated Press that people there were isolated by muddy floodwaters as evening fell, seeking refuge on rooftops as wind gusts drove horizontal sheets of rain. September 3, 2008
No Easy Road HomeThe sky was royal blue between the puffy clouds, and the sun was so hot that marbles of sweat were rolling down the face of the Louisiana state trooper as he told the people he encountered at an interstate roadblock that, sorry, it was just way too dangerous for them to be going home now. This news seemed incredible to some folks who had been driving all night, had run out of gas and money, and just wanted to go home. But such are the ironies of a hurricane’s aftermath: Even on a beautiful day, bad weather can foil you. The reason you can’t go home, officials tell you over and over on the radio, is your home has no power — but neither does the motel room where you took shelter, so what’s the difference? September 3, 2008
HUD READIES DISASTER ASSISTANCE FOR GULF HURRICANE VICTIMSU.S. Housing and Urban Development Secretary Steve Preston today announced HUD is ready to speed federal disaster assistance to hurricane-ravaged counties throughout the Gulf Coast and provide support to homeowners and low-income renters forced from their homes following Hurricane Gustav. This assistance includes foreclosure relief for families whose damaged homes are insured through the Federal Housing Administration (FHA) living in presidentially declared disaster areas. A presidential disaster declaration triggers a variety of federal assistance including grants for temporary housing and home repairs, low-cost loans to cover uninsured property losses, and other programs to help individuals and business owners recover from the effects of the disaster. September 3, 2008
Rehabbing Starts Today for East Baltimore HomesNear the intersection of East Chase and McDonogh streets in East Baltimore, most rowhouses have shattered windows, boarded-up doors and weedy lots. The sign on the vacant corner grocery has faded. These are among the 150 or so homes that are left after hundreds more were razed and residents displaced in the first phase of a huge urban renewal project just north of Johns Hopkins Hospital. East Baltimore Development Inc., the private nonprofit group transforming more than 100 acres of the Middle East neighborhood into a biotechnology park, housing, shops and offices, is now taking on its first big housing rehab project. September 3, 2008
Rebuilt New Orleans Homes at Risk Without Required ElevationThousands of homes in New Orleans are at risk from floods because local officials let their owners skirt rebuilding requirements aimed at preventing massive losses and billions in costs to taxpayers.In New Orleans, city records show at least 2,300 homeowners — many in areas obliterated by Hurricane Katrina and imperiled again this month as Hurricane Gustav strained at the city’s levees — escaped requirements that they elevate their homes. September 19, 2008
Though Developers Built It, The Tenants Did Not ComeIt’s the office building with the million-dollar views, a 360-degree panorama that looks out at Nationals Park, the Anacostia River, the Capitol Dome, the Washington Monument, the National Cathedral and the Old Post Office. But 19 months after Lerner Enterprises announced in March 2007 that its shiny 10-story complex at 20 M St. SE, a block north of the baseball stadium, was “substantially complete,” it remains substantially empty. The only tenant, a Wachovia Bank branch, occupies a section of the ground floor but has yet to open. In many ways, the Lerner building — owned by the Bethesda real estate family that also owns the Nationals baseball team — is symbolic of the emerging district around the ballpark. Sleek new buildings with offices, condos, apartments and retail space have popped up all over. But many remain empty, seeking tenants in a sluggish economy. September 19, 2008
A Bid to Rescue HomeownershipAs soon as I heard about the federal government’s takeover of Fannie Mae and Freddie Mac, I began wondering what this will mean for homeowners long-term. First, to fully understand the importance of these two companies and their bailout, you have to appreciate how they helped millions of people become homeowners. Fannie and Freddie don’t directly lend money to individuals. Instead, they were created to establish a regular flow of money to lenders who actually make home loans. The institutions buy loans from mortgage lenders — commercial banks, savings institutions and credit unions. That in turn allows those institutions to make additional home loans. September 19, 2008
NCRC—HELP Now: For Homeowners and the EconomyOver the weekend, the United States Congress and the United States Department of Treasury proposed a $700 billion bailout of Wall Street. These proposals represent the latest and most expensive of a series of interventions that fail to address the core problem undermining the financial system and destabilizing the economy: the foreclosure crisis. The National Community Reinvestment Coalition (NCRC) opposes a bailout that does not address the real problem: the foreclosure crisis that is having devastating effects on homeowners on Main Street- NOT on Wall Street. September 23, 2008
More Americans Strain to Meet Housing CostsA growing number of Americans are struggling to pay for housing, despite a steep drop in home prices. Last year, 38% of homeowners with mortgages spent 30% or more of their before-tax income on housing — the threshold the government defines as unaffordable, according to an analysis of Census data done for USA TODAY by the Joint Center for Housing Studies at Harvard University. And 15% of homeowners without mortgages and half of all renters had trouble meeting housing costs, the analysis found. September 23, 2008
U.S. Names Chairmen at Fannie Mae, Freddie MacThe federal government has named chairmen to oversee beleaguered mortgage finance companies Fannie Mae and Freddie Mac, which were seized earlier this month. The Federal Housing Finance Agency named John Koskinen to be Freddie Mac’s non-executive chairman. Koskinen, a corporate restructuring expert, spent two years directing planning for the “Year 2000” computer conversion, and also worked as the District of Columbia’s chief administrator. The housing agency named Philip Laskawy, formerly head of accounting firm Ernst & Young, to the same role at Fannie Mae. September 23, 2008
Virginia Home Sales Rise, but Area Jobless Rate Also GrowsHome sales in Fairfax County rose 10.7 percent last month, the county’s first double-digit increase in a year and a half, according to the most recent data from the company that tracks local real estate listings. The flurry of sales activity suggests that prices have dropped low enough to lure buyers to the Washington area’s largest county. But the uptick in sales is not widespread throughout the region, and unemployment data for August show a steady slowdown in the region’s economy. September 23, 2008
“Is this the United States Congress or the Board of Directors of Goldman Sachs?” Rep. Dennis Kucinich Rejects $700 Billion BailoThe House is set to vote today on a $700 billion emergency bailout plan for the financial industry. The proposed legislation was forged during a marathon negotiating session over the weekend between lawmakers from both parties and Treasury Secretary Henry Paulson. The 110-page bill would authorize Paulson to initiate what is likely to become the biggest government bailout in US history, allowing him to spend up to $700 billion to relieve faltering banks and other firms of bad assets backed by home mortgages, which are falling into foreclosure at record rates. September 30, 2008
Loan Costs Soar as Access TightensIf the credit markets are truly the lifeblood between Wall Street and the economy, that artery suffered a major shock Monday. Unnerved by the House of Representatives’ unexpected blockage of the proposed $700 billion financial bailout plan, credit markets constricted further as investors got even pickier about to whom they would lend money and gravitated to only the safest borrowers, including the U.S. government. September 30, 2008
Fed Makes Billions Available to Battle Credit CrisisThe Federal Reserve and foreign central banks agreed to pump billions of dollars into the global financial system Monday to unlock tight lending that threatens to unhinge the U.S. economy. The Fed said the action is intended to “expand significantly” the cash available to financial institutions in an effort to relieve the worst credit crisis since the Great Depression. In taking the action, the Fed cited “continued strains” in the demand for short-term funding. September 30, 2008
Fannie, Freddie Disclose Subpoenas, InvestigationsAdding to their woes, mortgage finance giants Fannie Mac (FNM) and Freddie Mac (FRE) are facing a federal grand jury investigation into their accounting practices. The mortgage finance companies said Monday that a federal grand jury in New York is investigating accounting, disclosure and corporate governance issues at Washington-based Fannie and McLean, Va.-based Freddie. September 30, 2008
Book Review: ‘Chain of Blame’ Brings Subprime Mess to LifeThere’s no time like the present to read this one. Talk about a whopping tale — and it happens to be true.In Chain of Blame, authors Paul Muolo and Mathew Padilla, both seasoned financial journalists, skillfully lead readers through the quagmire of what went wrong inside the nation’s subprime-lending firms that led to the current mortgage and credit crises. September 30, 2008
They Just Don’t Get ItThat is the technical economic term that best sums up a day in which the House of Representatives refuses to pass a $700 billion rescue plan pushed by the White House and congressional leaders from both parties, Wachovia is taken over in a deal that will have the government potentially owning 10 percent of Citigroup, a few European banks fail, the Federal Reserve and other central banks are forced to inject an additional $300 billion into the global banking system, the Dow Jones industrial average plunges 778 points, and investors everywhere rush to the safety of gold and short-term Treasury bills. September 30, 2008
‘Is My Money Safe?’ and Other Questions to AskFor all of you on Main Street who have been watching the turmoil on Wall Street for the last few weeks, Monday’s shockwaves rattled even the most steadfast. The day began with the announcement that another big bank — Wachovia — had been taken over, just days after Washington Mutual collapsed and was sold. In early afternoon, the House rejected the bailout package for the financial industry. Stocks plunged, with the Dow ending the day down nearly 778 points in the worst single-day drop in two decades. What is a regular investor to make of it all? What about people who have money in bank accounts? Below are some answers to questions that are probably on your mind. September 30, 2008
Fixing Elevators: For the City, and on the SideMore than a dozen members of the New York Housing Authority’s elevator staff — including the official who directs all safety inspections — also work second jobs for private companies in the elevator industry, according to interviews and city records. The employees, including three managers and nearly half the inspection staff, say their second jobs do not conflict with their duties maintaining the 3,300 elevators in the authority’s 2,600 buildings. Tenant complaints and inspection records indicate that the authority’s elevators are among the worst maintained in the city. September 30, 2008

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