October

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“Bridge Loan to Nowhere”: Public Outcry Forces House to Reject $700 Billion BailoutOn Monday, the House voted 228-to-205 against authorizing the largest government intervention in the financial market in US history. The measure would have granted the Treasury unprecedented authority and 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. As the economic crisis worsens and spreads across the globe, Democracy Now! speaks with Robert Johnson, former chief economist of the Senate Banking Committee, and Bruce Marks, the founder and CEO of NACA, the Neighborhood Assistance Corporation of America. October 1, 2008
Home Prices Hint at StabilizationBig-city home prices in July were down 16.3% from a year earlier, but the decline in prices appears to be slowing. The Standard & Poor’s/Case-Shiller 20-city housing index released Tuesday showed the largest 12-month decline since it began in 2000. Home values in all 20 cities fell year-over-year. Las Vegas and Phoenix reported year-over-year declines of nearly 30%. Miami reported a decline of 28.2% from July 2007. October 1, 2008
FDIC Deposit Insurance Limit Could Bump Up to $250,000Savers who are frustrated with limits on federal deposit insurance could find temporary relief in the $700 billion financial rescue package pending on Capitol Hill. Lawmakers are considering adding a provision to the bailout bill that would temporarily increase the federal deposit insurance limit to $250,000 from $100,000. On Tuesday, presidential nominees John McCain and Barack Obama spoke out in favor of the increase. October 1, 2008
HUD ENCOURAGES TEXAS AND LOUISIANA LANDLORDS TO LIST VACANCIES IN THE NATIONAL HOUSING LOCATOR SYSTEM TO HELP DISPLACED FAMILIESThe U.S. Department of Housing and Urban Development is appealing to landlords in Texas and Louisiana to list their vacant properties on HUD’s National Housing Locator System (NHLS). Working with federal and private housing databases, HUD uses this web-based system to offer thousands of displaced families referrals to longer term housing. More than 50,000 apartments and single-family homes are currently available through the NHLS in Texas, Louisiana, Arkansas, Oklahoma and New Mexico. This includes approximately 240 units within a 300-mile radius of Harris County. Several landlords hoping to help hurricane victims have asked HUD how to get their properties listed in the NHLS. Landlords and property owners can obtain advice and assistance on how to add available units to the National Housing Locator by calling (703) 667-9420 x114. October 1, 2008
Failed Deals Replace Real Estate BoomAfter seven years of nonstop construction, skyrocketing rents and sales prices, and a seemingly endless appetite for luxury housing that transformed gritty and glamorous neighborhoods alike, the credit crisis and the turmoil on Wall Street are bringing New York’s real estate boom to an end. Developers are complaining that lenders are now refusing to finance projects that were all but certain months or even weeks ago. Landlords bewail their inability to refinance skyscrapers with blue-chip tenants. And corporations are afraid to relocate within Manhattan for fear of making the wrong move if rents fall or a flagging economy forces layoffs. October 1, 2008
Hopkins Expands Homeownership ProgramA program that encourages Johns Hopkins employees to buy homes in certain Baltimore neighborhoods has been expanded, with the amount of the largest grants set at nearly seven times the previous cap. The “Live Near Your Work” program, which had offered up to $2,500 to help with down payments and closing costs, now offers up to $17,000, depending on the neighborhood. Much of the added funding comes from a grant from the Rouse Company Foundation. October 1, 2008
Recovery Cottages Have Yet to Go UpPublic officials say they have made progress on an alternative housing program in the seven months since Gov. Bobby Jindal stripped the project from the Louisiana Housing Finance Agency and gave it to the Louisiana Recovery Authority. But through two governors, two contracts with the same builder and a change in the state agency responsible for oversight, none of the projected 500 or so Louisiana Cottages have been built; and there are no groundbreakings scheduled for Louisiana’s $75 million share of the $400 million pilot program that Congress authorized in 2006. October 1, 2008
Senate Approves BailoutThe Senate last night easily approved a massive plan to shore up the U.S. financial system, but the measure faces a tougher test tomorrow in the House, where leaders will try to reverse the stunning defeat the legislation suffered earlier this week. As the Bush administration issued fresh warnings that Congress’s failure to act would have dire consequences for the economy, the Senate revived the package the House defeated Monday and voted to approve it, 74 to 25. October 2, 2008
State Discount Mortgage Unit Moves to Increase Interest RateSqueezed by the tightening credit markets, a New York State agency that provides subsidized mortgages to first-time home buyers stopped offering discounted interest rates this week and started looking for new sources of funds. Officials at the State of New York Mortgage Agency said on Wednesday that they had decided this week to raise their interest rates because they were struggling to borrow money to finance the purchase of mortgages. The agency postponed the sale of $250 million in bonds this week because of turmoil in the credit markets, said Priscilla Almodovar, the president and chief executive of the mortgage agency. October 2, 2008
HUD TO HOST NATIONAL HOUSING SUMMIT IN WASHINGTONFederal, state, and community leaders from around the nation will be gathering in Washington next week for a two-day national Summit on Housing sponsored by the U.S. Department of Housing and Urban Development. HUD Secretary Steve Preston invited key housing and finance staffs from state, city and county government, as well as representatives from the banking and housing industries, non-profit organizations, and foundations to address the country’s urgent and long-term housing issues. October 2, 2008
Foreclosures on Million-dollar Homes Surgen 2003, Robert Provost snapped up a $2.5 million villa with its own boat dock in Sarasota, Fla. A finance chief for an auto-sales chain, Mr. Provost earned more than $250,000 a year and had an impeccable credit history. Then he lost his job. Mr. Provost missed one $10,500 mortgage payment, then another. This month, the 53-year-old put his house, a five-bedroom with sweeping views of an intercoastal waterway, on the market for $3.4 million. But the listing has thus far attracted little interest. Mr. Provost says he expects to receive a notice of default from the bank — the first step to foreclosure — in the next month or two. October 2, 2008
Towns That Could Be Hit Hardest by CrisisHow many former Lehman Brothers bankers or AIG executives are likely to be buying a Park Avenue apartment or a home in Darien, Conn., this year? Most likely answer: not many at all. As anyone who works on Wall Street, invests in the stock market, or just reads the newspapers knows, the past few weeks for the financials sector have been as ugly as Frankenstein’s sister. People have seen their net worth eviscerated, if not obliterated completely. October 2, 2008
Bank of America To Modify Mortgages From CountrywideBank of America has agreed to rework the terms of up to 400,000 distressed mortgages nationwide starting Dec. 1 to settle lawsuits and investigations pending against one of its subsidiaries. The settlement could be the largest in predatory lending history. It could save $8.7 billion for customers of Countrywide Financial, the nation’s largest mortgage lender before it was hobbled by subprime loans and bought by Bank of America. October 7, 2008
Failure This Big Wasn’t Born YesterdayIf you’re mad as hell about what’s happening to our economy and need to stay mad to keep from wailing, read the October selection for the Color of Money Book Club. Two years ago, Gary Weiss wrote “Wall Street Versus America: The Rampant Greed and Dishonesty That Imperil Your Investments.” The subtitle was changed for the paperback edition last year. Now the book is called “Wall Street Versus America: A Muckraking Look at the Thieves, Fakers, and Charlatans Who Are Ripping You Off” (Portfolio, $14.95). I like the revision, given current events. October 7, 2008
Financial Crisis Takes a Toll on Already-Squeezed CitiesAfter the layoff of 160 full-time and part-time city workers, the slashing of recreation programs and a call for volunteers to shelve books at the branch libraries (open two days a week now instead of six), the people of Duluth, Minn., thought they had seen the worst of a bad year for the municipal budget. To help close a gap of more than $6 million that yawned open over the summer, the artsy shipping city on Lake Superior had considered selling its prized Tiffany stained-glass window depicting Longfellow’s American Indian character Minnehaha, a one-of-a-kind work donated by a civic group more than 100 years ago. And some even pushed forward with plans to sell valuable beachfront property along the lake. The city had options, things were looking up. October 7, 2008
Hurricane Ike Produces 76,000 Damage Claims So FarMore than 76,000 damage claims from Hurricane Ike have been filed with the Texas-backed windstorm insurance association, which expects to pay billions of dollars to policy holders for losses.Texas Windstorm Insurance Association general manager Jim Oliver cautioned Wednesday that the final figure will depend on whether claims are determined to be wind or flood damage. The association says it will pay for wind damage, but not storm surge damage, which it considers to be flooding. “We are going to look at every single claim individually,” Oliver said. “That is going to make the process slow.” October 9, 2008
Credit Crisis Threatens New Orleans’ RecoveryA prolonged recession and a tight credit market would cripple New Orleans’ still-fragile recovery from Hurricane Katrina, delaying or eliminating road work, new construction and repairs to homes and businesses that have stood empty since 2005. The city’s infrastructure plans should stay on track, but a real estate expert calls it a “terrifying” scenario: A lack of sufficient credit would smother companies trying to start up or expand, and with them the new jobs needed to grow the area’s economy. It would choke the flow of cash that developers need to build new homes and first-time homeowners need to buy them. And it would make it tough for the city to sell bonds to finance rebuilding projects on its appointed timeline. October 9, 2008
Fannie, Freddie Become Hot Topic in CampaignThey long have been political hot potatoes inside the Beltway, but suddenly Fannie Mae and Freddie Mac have become pawns in the 2008 presidential campaign. During Tuesday’s debate, Republican presidential nominee Sen. John McCain (Ariz.) charged that the mortgage finance giants “lit this fire” under the economic crisis. He said Democratic presidential nominee Sen. Barack Obama (Ill.) and “his cronies” encouraged the companies to make risky loans. And he claimed that he took a stand two years ago to rein them in. October 9, 2008
HUD CHARGES ALABAMA LANDLORDS WITH DISCRIMINATIONThe U.S. Department of Housing and Urban Development (HUD) today announced that it has charged two Tallassee, Alabama landlords with violating the Fair Housing Act for allegedly forcing white tenants to move out of their house after the owners saw the couple talking with black neighbors in their front yard. In February 2008, Melissa Jones, her fiancé, and their child moved into a property owned by Wilber and Julie Williams.” While Jones’ African-American neighbors were visiting with her in the front yard, the Williamses drove by and witnessed the gathering. “Later that day, Ms. Williams called Ms. Jones and allegedly said, “Those people need to leave. “I don’t want those people on my property.” According to the HUD charge, Ms. Williams intimidated and coerced Ms. Jones during another phone call. October 9, 2008
Obama Camp Says McCain Mortgage Plan Won’t WorkSen. Barack Obama’s campaign criticized Sen. John McCain’s mortgage bailout plan yesterday, saying it would cause the government to lose money by paying too much for bad loans. The Arizona Republican’s proposal to spend $300 billion in federal funds to buy distressed mortgages was a highlight of Tuesday’s presidential debate, and it seemed to catch Obama off guard. At first, the Illinois Democrat’s campaign said that he had made similar proposals and that there was nothing new in McCain’s remarks. October 9, 2008
A Rising Tide of ‘Underwater’ HomeownersThe relentless slide in home prices has left nearly one in six U.S. homeowners owing more on a mortgage than the home is worth, raising the possibility of a rise in defaults — the very misfortune that touched off the credit crisis last year. The result of homeowners being “underwater” is more pressure on an economy that is already in a downturn. No longer having equity in their homes makes people feel less rich and thus less inclined to shop at the mall. October 9, 2008
Experts Skeptical About McCain Mortgage PlanOrdering the government to buy up bad mortgages to cut homeowners’ monthly payments might sound good, but experts are skeptical. They say the plan John McCain is promoting is unlikely to solve the housing crisis that’s pushing the economy toward recession. One big problem: The vast majority of the toxic home loans that are clogging financial markets and freezing up credit have been sliced, diced and repackaged into complex investments that the government would be hard-pressed to unravel and buy. October 9, 2008
Sheriff Tells Deputies Not to Help In ForeclosuresThe sheriff here said Wednesday that he’s ordering his deputies to stop evicting people from foreclosed properties because many people his office has helped throw out on the street are renters who did nothing wrong. “We will no longer be a party to something that’s so unjust,” a visibly angry Cook County Sheriff Tom Dart said at a news conference. October 9, 2008
Coastal Rebuilding Awash in DebateIt’s late afternoon in this Gulf Coast community and the Mockingbird Café is abuzz: Businessmen nurse pints of local beer, a group of middle-school-age girls huddle around their homework, latte-drinkers peck at laptops. Barely a hint anywhere of the 30-foot storm surge and raging winds of Hurricane Katrina three years ago that shredded shops in the downtown area, tore up streets and decimated homes. Gustav and Ike last month again flooded homes and ravaged local beaches. October 10, 2008
Pitt’s First ‘Make It Right’ Homes Complete in La.The first homes in Brad Pitt’s Make It Right rebuilding project are complete, and some three years after Hurricane Katrina devastated New Orleans, 68-year-old grandmother Gloria Guy was on hand to give the actor a big hug. Pitt, his partner Angelina Jolie and their family of six children privately toured the hard-hit Lower 9th Ward district earlier this week. The celebrity couple bought a home in New Orleans about a year after Katrina struck and became involved in launching the project to help rebuild the city’s hardest-hit neighborhood. October 10, 2008
Home Builders, Broker Charged With TheftThey promised to deliver brick-front colonials in a sparkling new subdivision in Upper Marlboro, homes on as much as an acre of land for as little as $370,000. Instead, the home builders and the mortgage broker pocketed payments from 11 buyers and left them empty-handed, Glenn F. Ivey, state’s attorney for Prince George’s County, said yesterday. The builders and broker are accused of collecting about $1 million for homes that were never built in what was to be the Kings Grant subdivision. October 10, 2008
HUD TO HOST THREE REGIONAL HOUSING SUMMITSThe U.S. Department of Housing and Urban Development will host three regional housing summits across the country to help launch HUD’s new Neighborhood Stabilization Program (NSP). HUD is inviting key State, city and county leaders to address the country’s urgent and long-term housing issues including how to deal with abandoned foreclosed properties within their communities. NSP provides nearly $4 billion in 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 summits in Los Angeles (October 10th); Columbus, Ohio (October 14th); and Orlando, Florida (October 16). October 10, 2008
HUD CHARGES NEW YORK CO-OP WITH DISCRIMINATING AGAINST FAMILY OF A DISABLED CHILDThe U. S. Department of Housing and Urban Development announced today that it has charged The Townsend House Corp., a private cooperative in New York City, with housing discrimination for refusing to allow a family to obtain an animal that provides emotional support for their autistic child.The Fair Housing Act makes it unlawful to refuse to make reasonable accommodations in rules, policies, practices, or services, when such accommodation may be necessary to afford a person with disabilities equal opportunity to use and enjoy a dwelling. October 10, 2008
Promises of Help Added to WoesTwo women beset with health and financial problems were facing imminent foreclosure on their Ellicott City homes when they thought rescue was at hand. Betty J. Bullock, 63, had poor eyesight and diabetes for years and lived on about $800 a month in Social Security. She had no savings and hadn’t worked since 1997. Griselda Mason, 68, also had vision problems and trouble walking, which limited her ability to work. She fell behind on mortgage payments, which ruined her credit and brought the threat of foreclosure.Then the promises of help came in the mail. October 10, 2008
Mortgage Rates Drop Below 6 PercentRates on 30-year mortgages fell below 6 percent this week, recording the first decline in three weeks.Freddie Mac, the mortgage company, reported Thursday that 30-year, fixed-rate mortgages averaged 5.94 percent this week, down from 6.10 percent last week. It marked the first decline since rates fell on Sept. 18 to 5.78 percent, a seven-month low. October 10, 2008
Obama Details Plan to Aid Victims of Fiscal CrisisSenator Barack Obama proposed new steps on Monday to address the economic crisis, calling for temporary but costly new programs to help employers, automakers, homeowners, the unemployed, and state and local governments. In an address here, Mr. Obama, the Democratic presidential nominee, proposed giving employers a $3,000 tax credit for each new hire to encourage job creation. He said he would seek to allow Americans of all ages to borrow from retirement savings without a tax penalty; to eliminate income taxes on unemployment benefits; and to double, to $50 billion, the government’s loan guarantees for automakers. October 14, 2008
The Homes Are Familiar, the Buyers Much Less SoSomeone left the back-door light on at 3407 Bruckner Boulevard one recent afternoon, but no one yet lives in this large, red-brick dwelling in the Bronx neighborhood south of Pelham Bay Park. The house is part of Waterbury Estates, which is described on the answering machine of its sales office as new luxury two-family homes. This particular house, however, could soon be a group residence for six mentally disabled adults. Such a switch in intended occupants is becoming a familiar local story. Just last month, Community Board 10 narrowly supported another group home in Throgs Neck, to the south. Around the same time, Throgs Neck residents discovered another nearby group home, as well as the news about the proposed use for the house on Bruckner Boulevard. October 14, 2008
States Warned About Impending Mortgage CrisisMore than five years ago, in April 2003, the attorneys general of two small states traveled to Washington with a stern warning for the nation’s top bank regulator. Sitting in the spacious Office of the Comptroller of the Currency, with its panoramic view of the capital, the AGs from North Carolina and Iowa said lenders were pushing increasingly risky mortgages. Their host, John D. Hawke Jr., expressed skepticism. Roy Cooper of North Carolina and Tom Miller of Iowa headed a committee of state officials concerned about new forms of “predatory” lending. They urged Hawke to give states more latitude to limit exorbitant interest rates and fine-print fees. “People out there are struggling with oppressive loans,” Cooper recalls saying. October 14, 2008
Greenspan Pegs Housing Recovery to Early 2009Former Federal Reserve chairman Alan Greenspan said the U.S. housing market will begin to recover in the first half of 2009, according to an article he wrote for Emerging Markets magazine published on Friday. Greenspan wrote that the recent slowing in the rate of decline in U.S. home prices is the first positive note in the year-long trauma and that eventually, frozen credit markets will thaw “as frightened investors take tentative steps toward reengagement with risk.” “More conclusive signs of pending home price stability are likely to become visible in the first half of 2009,” he wrote. October 14, 2008
HUD AWARDS MORE THAN $21 MILLION IN GRANTS TO FIGHT HOUSING DISCRIMINATIONThe U.S. Department of Housing and Urban Development today awarded $21.8 million to Fair Housing, and other non-profits agencies in 37 states and the District of Columbia to assist people who believe they have been victims of housing discrimination. “These Fair Housing Initiatives Program grants will help us continue our efforts to educate the public, the housing industry, real estate professionals and financial institutions about their rights and responsibilities under the Fair Housing Act,” said Kim Kendrick, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity. “Our local partners are critical not only in enforcing the law but in reinforcing the message — housing discrimination is illegal and HUD will take action to eliminate it.” HUD awarded $500,000 to Howard University Law School to organize and operate a fair housing legal-clinic education program. October 21, 2008
From Door to Door, Foreclosure Knocks HereAt times, this stretch of 118th Avenue in South Jamaica, Queens, feels not so much like a neighborhood but a memory of one. A red-brick house with overgrown weeds in the yard is boarded shut. A house with a dirty awning has a thick chain looping out from a hole in the door where a deadbolt once was. On the front window of a vacant property around the corner, someone has taped a sign warning that the water supply has been shut off and antifreeze added to the sinks and toilets.Newton and Ronda Whyte have gotten used to living next door to no one. “Every two or three houses it’s empty,” said Ms. Whyte, 36, a nurse assistant. “It’s not a good feeling. You see the weeds growing tall and the junk mail piling up.” October 19, 2008
A Program to Keep the Roof Over Your Head — but It Will Cost You in the Long RunFor homeowners trying to renegotiate their loans under the government’s new HOPE for Homeowners program, please read the paperwork carefully — because once again, you’ll be stuck with a costly mortgage deal. HOPE for Homeowners, nicknamed H4H, became law this summer to help keep homeowners from defaulting on their mortgages and going into foreclosure. Lenders who voluntarily allow borrowers to refinance under H4H are required to reduce the size of the mortgage to a maximum of 90 percent of the home’s current appraised value. Additionally, they are only allowed to put people in 30-year, fixed-rate loans. October 20, 2008
Green Tax Breaks, and a Government Site Named DSIREGiven the economic battering we’re withstanding, anyone of sound mind is thinking twice before buying as much as a cheap sweater, not to mention expensive home improvements. But recessions don’t last forever. At their worst, they always look like the start of a dark new era, but even then, somewhere in the background, the business cycle keeps chugging, building traction toward an eventual recovery. Now may not be the time to invest in your house, but it’s a very good time to plan. October 20, 2008
The Strangers Next DoorAs dusk sets in on Macdougal Street, the rats who inhabit No. 43 lope out into the shadows, two, three, four at a time. They make their home on this otherwise elegant block in a vacant four-story building at King Street, directly across the street from the Cooke Center Academy, a private high school whose students hang out on the closed-off street. Neighbors call the structure many things: a blight, a menace, a mystery. The building, an 1846 red brick row house, is boarded up and covered in graffiti, its once-grand cornice in poor condition, the paint on the doors of its cracked Greek Revival entryway peeling off in crimson flakes the size of thumbnails. A weathered violation notice from the city’s Department of Buildings, dated Aug. 1, flaps on the door. October 20, 2008
Taking a FallWith the real estate market slowdown, what once made sense when it came to pricing a house no longer holds true. Across the Baltimore region, as in the rest of the country, the average sales price of houses continues to drop. In September, the average sales price in the Baltimore metropolitan area dipped more than $21,000 from the prior month to about $296,000, according to Metropolitan Regional Information Systems. Compared to a year ago, home prices were down almost 6 percent overall - retreating to figures not seen since 2005. That price drop was the largest since the housing slump began. October 20, 2008
8,800 Road Home Properties to Return to Private HandsActor Wendell Pierce and trumpeter Terence Blanchard have come back to their old neighborhood, Pontchartrain Park, and are poised to take over one of every nine properties there — so they can build and sell affordable homes. On Monday, the New Orleans Redevelopment Authority will vote on an agreement to transfer 114 abandoned and vacant properties to Pierce and Blanchard’s Pontchartrain Park Community Development Corp. It’s a big moment for the star of HBO’s cop drama “The Wire,” the Grammy-winning musician and some of their childhood buddies and fellow investors, who want to return New Orleans’ first middle-class black subdivision to its pre-Katrina glory. October 20, 2008
States Act for Renters Caught in Foreclosure TrapTita Mendoza and her husband moved into their Miami Beach condo in June and have been dutifully paying the $1,800 rent on time every month. And yet, they could be evicted any day now. Last month, the Mendozas were served with court papers notifying them that their landlord was being foreclosed on, meaning the couple could be turned out on the street. October 20, 2008
Homeless Numbers ‘Alarming’More families with children are becoming homeless as they face mounting economic pressures, including mortgage foreclosures, according to a USA TODAY survey of a dozen of the largest cities in the nation. Local authorities say the number of families seeking help has risen in Atlanta, Boston, Denver, Minneapolis, New York, Phoenix, Portland, Seattle and Washington. October 21, 2008
Democracy Now!: Grassroots Effort Helps New York Mother Avoid ForeclosureJocelyne Voltaire, a resident of Queens Village, New York, saw her home go up for auction after a mortgage company foreclosed. She had made a fifty percent down payment twenty years ago, but recently saw her mortgage payments skyrocket under a predatory loan scam. Her mortgage is controlled by the company Litton Mortgage, an affiliate of the Wall Street giant Goldman Sachs. Voltaire had fallen behind on her payments in part because she no longer had the support of her son, a former Marine who served in the Iraq war. She was told her of son’s death just weeks after being informed of the foreclosure. October 21, 2008
HUD AND ALASKA HOUSING FINANCE CORPORATION AGREE TO INCREASE ACCESSIBLE HOUSINGThe U.S. Department of Housing and Urban Development (HUD) and the Alaska Housing Finance Corporation (AHFC) today signed an agreement that will create more housing for persons with disabilities. As part of the Voluntary Compliance Agreement announced today, AHFC agreed to make five percent of its housing stock fully accessible. The Agreement is the result of a HUD review of AHFC in September 2006 that included an accessibility inspection of housing units, administrative offices and common areas, and an analysis of, the agency’s policies and procedures. HUD also reviewed AHFC’s management of applicant waiting lists, applications, maintenance records, and reasonable accommodation requests. October 21, 2008
Green Tax Breaks, and a Government Site Named DSIREGiven the economic battering we’re withstanding, anyone of sound mind is thinking twice before buying as much as a cheap sweater, not to mention expensive home improvements. But recessions don’t last forever. At their worst, they always look like the start of a dark new era, but even then, somewhere in the background, the business cycle keeps chugging, building traction toward an eventual recovery. Now may not be the time to invest in your house, but it’s a very good time to plan. October 21, 2008
Surrounded by Ruins, Mortgage Market Remains IntactEverybody knows how severe and painful the global financial breakdown has been, with banks unwilling to lend even to other banks. But what about mortgages and real estate? Can you still get a home loan with less than 20 percent or 30 percent down? Or with a credit score below 720? Absolutely. It would be a big stretch to label housing the sunny side of the market at the moment, but there’s a lot more light there than in most other financial sectors. October 21, 2008
To Avoid Sublet Headaches, Cover All Your Legal BasesSo you landed a spot on the next dating reality show, but you still have to pay rent during the two months of taping. Why not sublet? Although subletting can be a great way for a renter to recoup money during a long vacation, the arrangement can be risky and complicated, with rules varying by state and landlord. First, check your lease to see whether it allows subleasing. Don’t try to fly under the radar or you may violate your lease and find yourself homeless or in court. October 21, 2008
Prepay a Mortgage? It DependsHOMEOWNERS with an aversion to debt are sometimes tempted to pay down their mortgages before they come due. That can be a misguided approach, some financial counselors say, if borrowers can instead put that money into relatively safe investments that produce a higher rate of return than the interest rate they are paying on their mortgages. In the current financial environment, however, prepaying on a mortgage might make sense. With the securities markets plunging early this month, there have been few well-paying safe harbors for investors, making early mortgage payments more enticing than might otherwise be the case. “As usual, a lot of this depends on your risk appetite,” said Jonathan M. Satovsky, chief executive officer of Satovsky Asset Management, a financial counseling service based in Manhattan. October 21, 2008
Fannie, Freddie CEOs discuss foreclosuresThe new chief executives of Fannie Mae and Freddie Mac are trying do more to stop the home foreclosures hammering the housing market, but said it still might take years for real estate to recover in some cities. “I don’t think there is any magic bullet in regards to overbuilt markets” like Miami and parts of California, Nevada and Arizona, said Freddie Mac CEO David Moffett at the Mortgage Bankers Association’s annual convention Monday. October 21, 2008
Lenders Help More Homeowners Avoid ForeclosureThe deep economic crisis has more lenders willing to change mortgages or repayment schedules for homeowners at risk of default, to stem their potential losses from foreclosures. More than 3 million U.S. homeowners have received — or are expected to receive — more affordable loans through ongoing programs initiated over the last 15 months. But even outside the formal programs, says David Kittle, chairman-elect of the Mortgage Bankers Association, lenders are more willing now than a few months ago to agree to changes in monthly payments. In some areas that have a high number of subprime loans or foreclosures, he says, some lenders are even going door-to-door to contact homeowners. October 22, 2008
Protests and Hecklers Have Mortgage Bankers Longing for Good Old DaysIt was just another business-as-usual day at the annual convention of the nation’s mortgage bankers: a few panels, a few presentations and an attempted abduction of Karl Rove. Mr. Rove, the Republican strategist and former adviser to President Bush, was accosted onstage during a convention panel here on Tuesday morning by a protester who tried to handcuff and arrest him “for treason.” Mr. Rove tried to elbow her away before she was taken offstage. No one was injured and no arrests were made, but the stage-storming was just the latest outburst at an event that usually packs all the excitement of a mortgage calculator. On Monday, another panel was interrupted by protesters demanding a moratorium on foreclosures, and hecklers screamed at attendees through bullhorns outside. October 22, 2008
Healthy Lawns vs. Clean Water?Maneuvering slowly between rows of rosemary and not-yet-blooming poinsettias that fill his main greenhouse, Alfred H. Krautter, owner of Sprainbrook Nursery here and a proponent of organic gardening, seems an unlikely agitator. But Mr. Krautter, 73, spelled out why he is opposed to legislation that would regulate the use of lawn fertilizer in Westchester — legislation that proponents say is essential for keeping the water supply safe. “Organic fertilizers are the answer to our environmental problems, they are not the problem,” he said. “To do away with organic fertilizers will be a disservice to people in Westchester and in particular the ones who have worked so hard to do what’s right for the environment.” October 22, 2008
A Matter of Life and DebtThis week, credit has begun to loosen, stock markets have been encouraged enough to reclaim lost ground (at least for now) and there is a collective sigh of hope that lenders will begin to trust in the financial system again. But we’re deluding ourselves if we assume that we can recover from the crisis of 2008 so quickly and easily simply by watching the Dow creep upward. The wounds go deeper than that. To heal them, we must repair the broken moral balance that let this chaos loose. Debt — who owes what to whom, or to what, and how that debt gets paid — is a subject much larger than money. It has to do with our basic sense of fairness, a sense that is embedded in allof our exchanges with our fellow human beings. October 23, 2008
PRESTON ACCEPTS $10 MILLION INDIANA DISASTER RECOVERY PLANU.S. Housing and Urban Development Secretary Steve Preston today accepted a $10 million disaster plan from the State of Indiana to recover from severe storms, tornadoes and flooding earlier this year. Indiana intends to use the funding provided through HUD’s Community Development Block Grant (CDBG) Program to acquire and demolish substantially damaged residential properties contained within a flood plain or floodway and to redevelop the area into permanent green space for community use. “These funds will help Indiana to redevelop flood-prone areas into attractive green spaces and open areas in some of the State’s most affected counties,” said Preston. “HUD will continue to work very closely with Governor Daniels and his staff to support long-term sustainable recovery throughout the State.” October 23, 2008
Who’s Looking Out for the Mortgages?The recent wild fluctuations seen in the stock market’s performance haven’t just freaked out banking customers. It’s also worrying those with mortgages, like Steve Seffens of Westminster. “How can I find out if my bank and my mortgage company are sound?” Seffens asked. “I found PNC Bank on the FDIC Web site - the information was not useful, unless you’re a financial analyst, and I couldn’t even determine if PNC is insured under the FDIC. October 23, 2008
ALABAMA VOICES: Fight Predatory LendersIt’s report card time again, and a nationwide coalition of consumer groups recently handed out its grades. We’re failing. Alabama recently received three Fs on the Small Dollar Loan Products Scorecard issued by the Consumers Union, National Consumer Law Center and the Consumer Federation of America. The report card places Alabama near the bottom of all states in protecting citizens from predatory lending practices. October 23, 2008
Foreclosure Filings Rose 71% in Third Quarter as Prices FellU.S. foreclosure filings increased 71 percent in the third quarter from a year earlier to the highest on record as home prices fell and stricter mortgage standards made it harder for homeowners to sell or refinance, RealtyTrac said. A total of 765,558 U.S. properties got a default notice, were warned of a pending auction or were foreclosed on in the quarter, the most since records began in January 2005, the Irvine, California-based seller of default data said in a statement today. Filings rose 3 percent from the second quarter and fell 12 percent in September from August as state laws created to keep people in homes slowed the pace of defaults. October 23, 2008
Low-cost Housing to be Legacy of 2010 GamesUp to 36 units of affordable housing will be built in Saanich as part of the legacy of the 2010 Olympic Games. The announcement came yesterday from the provincial government and the Vancouver Olympic Organizing Committee, in a followup to a Tuesday announcement from Premier Gordon Campbell. The Saanich units are part of 156 units to be completed in six communities around the province. At the conclusion of the 2010 Games, temporary modular housing units from the Olympic and Paralympic Village at Whistler will be dismantled, removed and set up again as permanent affordable, housing suites. October 23, 2008
Looks Like That ‘Black Tax’ is Still Hanging AroundA report this month about apartment-hunting discrimination in Hampton Roads re-opened an old wound for me. It was spring 1983 and I was moving from St. Petersburg, Fla., where they did not even have a baseball team, to work for Newsday in Long Island, N.Y. The company put me up in a hotel for a week to find an apartment, but after five days, I was coming up empty. Using Newsday’s classified ads, I would find apartment listings and call to verify availability. But once I showed up, I would be told the apartment had been rented. I was also told either that there were no waiting lists or that there was a list but vacancies were rare. October 23, 2008
54,000 Empty New Properties in Málaga ProvinceThe number comes from the Ministry for Housing, and has been doubted by real estate promoters. The latest study from the Ministry for Housing shows that there are 54,000 newly built homes in Málaga province which remain unsold on the market. Local promoters however doubt the number, which they say is closer to 25,000. October 23, 2008
County Considers Housing ProgramAs the federal government looks to buy up foreclosed homes, Sarasota County leaders are hoping to avoid many foreclosures altogether with a unique new program to help struggling homeowners. County administrator Jim Ley laid out an aggressive foreclosure prevention program Wednesday that would divert money from affordable housing programs toward the growing ranks of troubled mortgages — more than 8,000 foreclosures in Sarasota County so far this year. Ley’s rough sketch proposal is to take money earmarked for groups like Habitat for Humanity and programs that provide down payment assistance to new homeowners and help existing homeowners. October 23, 2008
Fla. No. 2 in the Nation for ForeclosuresFlorida’s housing market continues to be pummeled by the housing crisis. The Sunshine State ranked second, only to Nevada, in the number of homes going into default last month, according to the latest report from RealtyTrac. A 9 percent month-over-month increase in foreclosure activity helped Florida’s foreclosure rate leapfrog foreclosure rates in Arizona and California, according to the California-based company, which tracks foreclosure properties. October 23, 2008
FHFA Second Quarter Mortgage Metrics Report ReleasedThe Federal Housing Finance Agency’s (FHFA’s) Mortgage Metrics Report for the second quarter of 2008 was released today. The report presents key performance data on 30.6 million first lien residential mortgages with outstanding balances totaling $4.5 trillion serviced on behalf of Fannie Mae and Freddie Mac for the first and second quarters of 2008. The FHFA Mortgage Metrics Report summarizes data provided by Fannie Mae and Freddie Mac (also called the Enterprises) and gives a comprehensive view of their efforts to assist borrowers, including forbearance plans, short sales, deeds in lieu, assumptions, and charge-offs in lieu of foreclosure. The report focuses on the delinquencies, loss mitigation actions, and foreclosure data reported by more than 3,000 approved servicers. October 23, 2008

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