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Foreclosures Jump 30 Percent in 3rd QuarterAs Congress and the White House continue to work toward solutions to help embattled homeowners, home foreclosure filings took a big jump in the third quarter, according to the latest data from real estate Web site RealtyTrac. Foreclosure actions were reported on more than 446,000 properties the three months ended Sept. 30, up 30 percent from the second quarter and double last year’s third quarter. That brings the overall foreclosure rate to one in every 196 U.S. households. November 1, 2007
Foreclosure Filings Rise in Michigan and Across U.S.Foreclosure filings rose nationwide in the third quarter and Michigan ranked fifth among states, with filings up 56.3% from the second quarter. Michigan had 43,786 foreclosure filings on 29,655 properties for the three months ending Sept. 30. That’s a 78.6% increase over the same quarter in 2006, according to figures released Thursday by RealtyTrac Inc. of Irvine, Calif. RealtyTrac reports various foreclosure and pre-foreclosure actions, such as default notices, auction sale notices and bank repossessions, so the number of filings exceeds the number of foreclosed properties. Michigan had one foreclosure filing of some kind for every 102 households, or nearly double the national rate, during the quarter. November 1, 2007
Fed Slices Rates to Avoid A DownturnThe Federal Reserve cut a key interest rate yesterday, continuing its campaign to keep the troubled housing market from causing a broad economic downturn. But the central bank also said it was worried that rising energy prices would lead to higher inflation — a hint that it won’t necessarily cut rates further in the coming months. The rate cut will make it cheaper for consumers to borrow money via credit cards, auto loans and many home mortgages, and make it easier for companies to expand by taking on debt — effects the Fed is hoping will stimulate the economy. Markets rallied on the news, but many analysts interpreted the fine print of the Fed’s statement to indicate that they should not assume the central bank will keep cutting rates. November 1, 2007
Helping Frantic HomeownersIt was one of Zach Urban’s most trying days as a housing counselor: A woman arrived on his doorstep so distraught over the thought of losing her townhouse that he feared she might harm herself. Sherie Zamora sought Urban’s help when she temporarily lost her job and couldn’t get relief from her mortgage company. She said Urban was calm and reassuring as they developed a plan. But as she left his office, he gave her some suicide prevention hot line numbers. November 1, 2007
Deal Leaves Debris at The CurbThe mound of rotted drywall and moldy planks piled recently outside the wrecked house in Algiers looked more or less identical to the countless heaps that have littered the New Orleans landscape since Hurricane Katrina. But as volunteers with the Episcopal Diocese’s disaster response team soon learned, this batch of gutted debris bore one important difference: Unlike the piles they had tirelessly deposited on curbsides across town during the past two years, a trash crew would not be coming to pick up this one. The heap festered for days as complaints rolled in from neighbors, including a mom who said her toddler had tried to jump into the garbage, said Katie Mears, director of the church’s recovery office. November 1, 2007
Foreclosures: Moving on UpForeclosure filings climbed during the third quarter of 2007 with no relief in sight, according to a report released Thursday. The report by RealtyTrac, an online marketer of foreclosure properties, showed the number of filings rose 30 percent from the previous quarter and nearly doubled from a year earlier. “Given the number of loans due to reset through the middle of 2008, and the continuing weakness in home sales, we would expect foreclosure activity to remain high and even increase over the next year in many markets,” James J. Saccacio, chief executive of RealtyTrac said in a statement. November 1, 2007
Can Tenant Break Lease Because of Illness?Q: We rent a single-family house and have a two-year lease. A month into the lease, the owners told us they’ll be selling the property, and sure enough, we’ve had droves of real estate agents and potential buyers traipsing through our home. My wife has a serious medical condition (she’s in a wheelchair and uses a ventilator) and needs peace and quiet so she can rest, but with this commotion it’s impossible. The landlord refuses to be reasonable. We want to leave, but do we have grounds to break our lease? November 1, 2007
U.S. Treasury, Loan Servicers to Target BorrowersOver 200,000 troubled borrowers will receive notices from mortgage servicers advising them to seek new loan terms before they face foreclosure under a plan announced on Wednesday by U.S. Treasury Secretary Henry Paulson. Under the plan, borrowers who have missed a payment will get a one-page letter offering advice and help under the letterhead of HOPE NOW, the Treasury-sponsored initiative.“The housing and mortgage market decline is still unfolding. Resetting ARM rates are one factor which will play out over the next 18 months,” Paulson told reporters after meeting with representatives of the home loan industry. November 1, 2007
New York Says Appraiser Inflated Value of HomesThe New York attorney general, Andrew M. Cuomo, accused an appraisal company yesterday of inflating the value of homes under pressure from Washington Mutual, one of the nation’s largest mortgage lenders. The case, filed in New York Supreme Court in Manhattan, accuses a subsidiary of the First American Corporation of defrauding homeowners and investors who bought securities backed by loans that were underwritten with the appraisals it conducted. The case centers on a central tenet of mortgage lending — determining the value of homes that secure loans. It is an area that many housing specialists have said was rife with abuse and conflicts of interest. The lawsuit also signals that Mr. Cuomo, who was secretary of Housing and Urban Development in the Clinton administration, intends to move as aggressively against the mortgage industry as he has done with college loan providers. November 2, 2007
Ground Rent Owners Sue Md.Dozens of Maryland’s largest holders of ground rents sued the state yesterday, seeking compensation that could exceed $400 million, contending that ground rent reform laws effectively seized their property. The 23-page lawsuit, filed in Anne Arundel Circuit Court, alleges that the laws make ground rent leases worthless by making it too costly and cumbersome to collect rent or seize houses if rents aren’t paid. The laws effectively are an unconstitutional taking of property for public use without just compensation, the suit contends. The new system “will prevent land owners from receiving the rents owed on their leases and make it impossible for them to sell their properties at anywhere near their prior fair market value, if at all,” the lawsuit alleges. November 2, 2007
30-Year Mortgage Rates Fall SharplyRates on 30-year mortgages fell to the lowest level in five months as evidence mounted that the economy is slowing down. Freddie Mac, the mortgage company, reported Thursday that 30-year, fixed-rate mortgages dipped to 6.26 percent this week, down from 6.33 percent last week. It was the lowest level since 30-year mortgages were at 6.21 percent the week of May 17. Analysts attributed this week’s decline to further evidence that the steep slump in housing is getting worse and other parts of the economy are slowing as well. November 2, 2007
Foreclosures Jump 30 Percent in 3rd QuarterAs Congress and the White House continue to work toward solutions to help embattled homeowners, home foreclosure filings took a big jump in the third quarter, according to the latest data from real estate Web site RealtyTrac. Foreclosure actions were reported on more than 446,000 properties the three months ended Sept. 30, up 30 percent from the second quarter and double last year’s third quarter. That brings the overall foreclosure rate to one in every 196 U.S. households. The rise in foreclosures was widespread, with 45 out of the 50 states reporting higher levels than last year. But the highest concentrations were a handful of housing markets; California Arizona, Florida, Nevada, Ohio, Texas and Michigan made up more than half of the total. November 2, 2007
Number of U.S. Homes Facing Foreclosure DoublesA soaring number of U.S. homeowners struggled to make mortgage payments in the third quarter, with properties in some stage of foreclosure more than doubling from the same time last year, a mortgage data company said Thursday. A total of 446,726 homes nationwide were targeted by some sort of foreclosure activity from July to September, up 100.1% from 223,233 properties in the year-ago period, according to RealtyTrac. The current figure was 33.9% higher than the 333,731 properties in foreclosure in the second quarter. November 2, 2007
Good Time to Take Out a MortgageWhen the Federal Reserve meets and changes rates we all have questions: What does it mean to me? Will my mortgage rate go up or down? Is this a good time to refinance? Bankrate is here to help. We’ve looked at five categories — mortgages, home equity loans, auto loans, credit cards and certificates of deposit — to determine if the Fed’s moves made you a winner or a loser. Here’s a look at mortgages: November 2, 2007
Investors Find Silver Lining in Real Estate MarketThe news about the U.S. housing market has been pretty bad — foreclosures are up at twice last year’s rate, affecting one in every 196 households. But for an intrepid group of investors and prospective homeowners, foreclosures spell opportunity. “When we get this wave of foreclosures due to the collapse of the subprime, more consumers start looking at foreclosed real estate auction markets as an avenue for taking advantage of the market,” said Crystal Wright, a representative of Hudson & Marshall, one of the largest real estate auction firms for foreclosed properties. “It’s the silver lining in a depressed real estate market for the average real estate buyer.” November 2, 2007
Employer-Assisted Plan Helps Family Get New HomeCindy Howard summed it up in three little words: “It’s my home,” she said. Outside her small brick ranch in Huntington Station yesterday, the new homeowner faced a phalanx of TV cameras, photographers, reporters, company executives and Long Island’s State Senate majority delegation, who claimed credit for making possible what she had never thought possible. “This was the only way in the world I could buy a home,” said Howard, 49, one of the first 12 workers to benefit from the $25-million Home Ownership and Economic Stabilization for Long Island Program, obtained by the delegation last year. November 2, 2007
A 70 Year Old Father of 11 Thrown Out of His Home Ends Up Sleeping in a FieldA year ago, court marshals arrived at Michael’s home in Attard and blocked him out of his home. As he turned around to face the street - his new home - he saw all his belongings, his tools, his pets, and everything else in the house being thrown out. That night Michael, a 70 year old widower and father of 11, had nowhere to go, and slept in a field. Then, a friend told him to seek help at YMCA. He is now one of the 23 residents at ‘Dar Niki Cassar’, YMCA’s homeless shelter in Valletta. November 2, 2007
What’s Behind the Race Gap?High-cost subprime mortgages have often been framed as loans that catered to people with blemished credit records or little experience with debt. There has been less attention paid to the concentration of these loans in neighborhoods that are largely black, Hispanic, or both. This pattern, documented in federal loan records, holds true even when comparing white middle-income or upper-income neighborhoods with similar minority ones. Consider two neighborhoods in the Detroit area. One, located in the working-class suburb of Plymouth, is 97 percent white with a median income of $51,000 in 2000. To the east, a census tract in Detroit just inside Eight Mile Road has a very similar median income, $49,000, but the population there is 97 percent black. November 5, 2007
FEMA Quietly Closing N.O. Trailer SitesShirley Hitchens took a few deep breaths. Sitting inside her FEMA trailer, worry consumed her. The walls started to close in. So she walked outside to get some fresh air. Her feet crunched on the gravel driveway of her trailer park. She took a seat on a well-worn kitchen chair just past the entrance. Hitchens, 59, fretted because she doesn’t know where she and her son will be living next month. Now they’re living in Central City, at A.L. Davis Park at Washington Avenue and LaSalle Street. But in mid-October, she found a notice on her trailer door from FEMA headlined, “A.L. Davis Playground Temporary Housing Site Is Closing November 18, 2007.” Basically an eviction notice, it offered the services of a caseworker and two apartment-search Web sites, both of them nonfunctional. Shifting to another FEMA park was not an option. November 5, 2007
Low-Cost Housing Eliminated, But Nothing Built in Its PlaceOne night in February 2005, a letter was slipped under the door of the studio apartment in Arlington County where 81-year-old Margot Gelhard had lived for 25 years. It was written in Spanish, so at first she didn’t realize it was an eviction notice. The apartment building had been sold and was going to be torn down and replaced with luxury condominiums. Gelhard said she was so distressed the day she moved that she was taken out in an ambulance and hospitalized. The building was demolished. November 5, 2007
Realtor Discourages Use of Outside LendersThe founder of Long & Foster, the Washington region’s largest residential real estate brokerage, struck a nerve last week when he urged his thousands of agents to recommend the company’s in-house mortgage lender more often and stop working with outside lenders such as Bank of America. In an e-mail to all Long & Foster agents and managers, P. Wesley Foster Jr. chastised his workers for funding mortgages through Bank of America more than 2,200 times last year and through Wells Fargo instead of using Long & Foster’s affiliate, Prosperity Mortgage. This comes at a time when home sales have slowed significantly. November 5, 2007
Home Sellers Seek Miracle in Tough MarketCari Luna is Jewish by heritage and Buddhist by religion. She meditates regularly. Yet when she and her husband put their Brooklyn, N.Y., house on the market this year and offers kept falling through, Luna turned to an unlikely source for help: St. Joseph. The Catholic saint has long been believed to help with home-related matters. And according to lore now spreading on the Internet and among desperate home-sellers, burying St. Joseph in the yard of a home for sale promises a prompt bid. After Luna and her husband held five open houses, even baking cookies for one of them, she ordered a St. Joseph “real estate kit” online and buried the three-inch white statue in her yard. “I wasn’t sure if it would be disrespectful for me, a Jewish Buddhist, to co-opt this saint for my real-estate purposes,” says Luna, a writer. She figured, “Well, could it hurt?” November 5, 2007
Neighborly ChallengeThe care Elgin resident Juan Leon has taken in maintaining his Wilcox Avenue home the past six years is evident, from the nicely painted trim of his front porch to the well-kept appearance of his front yard where a “FOR SALE” sign now stands. But for all his work, Leon faces a problem not of his own doing. “The neighbors left about three weeks ago,” Leon said. “They lived there for about six or seven years, now nobody does.” November 5, 2007
Exploding ARMS Fuel Home Foreclosure Explosion, Senator SaysU.S. Senator Amy Klobuchar and U.S. Representative Keith Ellison say exploding arms have contributed to an explosion in the number of home foreclosures across the nation. Millions of home owners, they say, are seeing huge increases in monthly home bills because of adjustable rate mortgages, aka, exploding arms. “What’s happening is the chickens have come home to roost,” Sen. Klobuchar said. When homeowners can’t keep up with the increased payments, homes go into foreclosure. “It’s really just a problem that we’ve got to get our hands around quickly,” Rep. Ellison said. November 5, 2007
Low-Cost Housing Dries Up in Beaufort CountyWith housing prices often growing faster than wages in southern Beaufort County, teachers and service sector workers are putting down roots farther and farther away from Hilton Head Island and Bluffton.Meanwhile, a leading provider of affordable housing, Habitat for Humanity, is working on the first of more than 140 homes in Ridgeland in Jasper County. That’s because inexpensive or donated land for Habitat houses has dried up in Beaufort County. “The sad thing is we’re not building in Beaufort County, but the need is so desperate for affordable housing,” said Patricia Wirth, executive director of Hilton Head Regional Habitat for Humanity. November 5, 2007
Elder Abuse: Silent shameIn 2002, an unattended resident was found dead in a bathtub, cockroaches bobbing in the water, the nursing call cord tied out of reach and the call lights turned off at the breaker box at the now-closed Jackson Center in Milwaukee, said William Hanrahan, a former state assistant attorney general targeting elder abuse and now a Dane County Circuit Court judge. Even in the presence of state investigators in Medicaid Fraud Unit jackets, caregivers were still shouting at patients, Hanrahan said, adding, “It was almost absurd how horrible the place was.” Nursing homes, increasingly serving the most poor, frail and ill, operate under heavy federal and state regulation, while assisted living facilities, still mostly private pay, have lighter state rules. Elder advocates say the state falls short in both areas. November 5, 2007
A New Arena in the Fight Over Smoking: The HomeJill and Joanie Shockley just want to breathe clean air in their homes. Neighboring tenants want to smoke in theirs. The Shockleys are sisters who live down the hall from each other in an apartment complex in a suburb of St. Paul, where tobacco smoke from other units wafts daily into their homes. “It’s frustrating,” said Joanie Shockley, 59. “I like to have my grandchildren come over, and I don’t like for them to be exposed to people smoking.” The Shockleys are part of a growing movement to restrict smoking in apartments and condominiums that is having some success. November 5, 2007
Beazer Warns of Charges, Suspends DividendBeazer Homes USA (BZH), beset by turmoil in the housing industry that has caused its number of home closings to plunge, warned Monday that it expects to record pretax charges of $230 million in its fiscal fourth quarter. It also said it is suspending its quarterly dividend to reduce costs. The home builder said it is unable to provide a full, audited report of its results for the quarter ended Sept. 30, but wanted to provide some preliminary data to investors. The company is currently in the midst of restating financial results for several prior-year periods. November 6, 2007
Borrowers Face Dubious Charges in ForeclosuresAs record numbers of homeowners default on their mortgages, questionable practices among lenders are coming to light in bankruptcy courts, leading some legal specialists to contend that companies instigating foreclosures may be taking advantage of imperiled borrowers. Because there is little oversight of foreclosure practices and the fees that are charged, bankruptcy specialists fear that some consumers may be losing their homes unnecessarily or that mortgage servicers, who collect loan payments, are profiting from foreclosures. November 6, 2007
Citi Expects Huge Write-DownCharles O. Prince III is walking out of Citigroup Inc.’s doors with potentially millions in his pocket, leaving behind a bank that many believe needs serious therapy. Not only are investors worried about the $8 billion to $11 billion the bank expects to slash on its investments, they’re also concerned that Prince’s successor as CEO may not administer the bitter medicine many say the bank needs to revive. Citigroup Inc. shares fell $1.83, or 4.8 percent, to $35.90 yesterday. November 6, 2007
Tortuous Short Sales: Cheaper Purchases That Aren’t Always Worth ItEveryone talks about finding alternatives to foreclosure. What people don’t talk about is how difficult they can be to pull off. Take, for example, the “short sale,” which can happen when a home’s value has fallen below what the seller owes on the mortgage. In theory, everyone wins, at least compared with a foreclosure. A financially strapped seller suffers less credit-history carnage, the lender loses less money than if it were to take possession and have to resell the house in a weak market, and the buyer gets a really good deal. However, buyers thinking about acquiring a home this way should understand that it can be a long road to a short sale. November 6, 2007
What Price justice? In N.O., $1 BillionA new justice complex — a massive public works project quietly planned in recent months by the Nagin administration and key law enforcement leaders — would take at least seven years to build and cost about $1 billion, according to a Federal Emergency Management Agency document that outlines the scope of the extensive project. The concept, still lacking concrete financing, calls for new jail buildings designed not only to lock up criminal offenders awaiting trial but also to provide rehabilitative services. November 6, 2007
Critics Cite Red Tape in Rebuilding of LouisianaIf rebuilding anything in this storm-scarred place could possibly qualify as simple, surely it would be the administration building in City Park. The two-story structure, built in 1992, does not have any of the features that can complicate restoring public buildings. No special historic, environmental, cultural or political significance. No history of poor maintenance or other damage (aside from the five feet of water that filled it after the levees failed). No need to be merged, moved or reimagined in response to changes after Hurricane Katrina. Yet after almost two years of federal inspections and studies and reviews filling more than 90 pages, the administration building has been neither repaired nor replaced. And there are dozens of similarly incomplete projects at the park, hundreds in the city, thousands across the state of Louisiana. November 6, 2007
Rebuilding New Orleans, Post-Katrina Style November 6, 2007
American Financial to Be AcquiredAmerican Financial Realty Trust of Jenkintown, which strived to become the preferred landlord of leading banks and other financial institutions, announced yesterday that it was being bought for $1.1 billion in cash and stock by Gramercy Capital Corp., a New York commercial real estate finance company. Gramercy also agreed to assume $2.3 billion of American Financial’s debt. Under terms of the merger agreement, Gramercy will acquire all of American Financial’s common stock for $5.50 a share, plus 0.12096 shares of Gramercy common stock. The ratio means that American Financial shareholders will own about 31 percent of Gramercy’s outstanding shares. November 6, 2007
New Residential Sites Near United Center Crave Stores, ServicesStanding in the shadow of the United Center is a community many Chicagoans might never have heard of — Westhaven. No longer home to the Henry Horner Homes, a major public housing site, the Near West Side neighborhood is quickly becoming a mixed-income community with condos and town houses sprouting next to board-ups and a refurbished Touhy-Herbert Park hosting its first Little League in 40 years. Now it needs retail, everything from dry cleaners to coffee shops to restaurants, community advocates said at a news conference Monday. Already, there are hopeful signs. November 6, 2007
Insurance is Expensive, but Losing Home to Quake Could Cost Far MoreThe 5.6 earthquake that rattled the Bay Area on Tuesday offered the most powerful reminder since the 1989 Loma Prieta quake that Mother Nature can shake your home and your finances off their foundation at any moment. That’s a wake-up call many Californians would be wise to heed, experts say. Only about 12 percent of the state’s homeowners have purchased earthquake insurance, down from 20 percent a decade ago. It’s even lower in the Bay Area, even though our history is scarred by the devastating 1906 and Loma Prieta quakes, according to the California Earthquake Authority.Homeowners give many reasons for passing up quake coverage. Premiums are expensive. Deductibles are too high. The government will bail out victims. Insurance companies might fold if disaster struck. And many Californians are simply in denial. November 6, 2007
Black Atlantans Often Snared by Subprime LoansBlack Atlantans of all income groups were much more likely than whites to take out high-interest “subprime” mortgages when buying a home, making them more vulnerable in the ongoing mortgage meltdown. Nearly half of blacks who bought a house in 2005 or 2006 ended up with a high-interest mortgage, compared with 13 percent of white home buyers, according to an Atlanta Journal-Constitution analysis of federal mortgage data. The disparity was striking, even in a comparison of home buyers with similar incomes. Among black home buyers making more than $100,000 a year, 41 percent got a subprime mortgage, compared with 7 percent of whites in the same income category. November 6, 2007
Downturn Takes Toll in Worcester, Mass.Foreclosures and pre-foreclosure sales are weighing down the real estate market in Worcester, Mass. This working-class bedroom community of Boston is feeling the full effects of the downturn in housing and credit squeeze on borrowers. “About 20% of the sales we’re doing are short sales,” says David Shortsleeve, a broker at Coldwell Banker. (A short sale is when a lender lets a homeowner sell a property for less than the value of the mortgage to avoid foreclosure.) November 6, 2007
BREAKING THE MOLD: New Construction Materials Block Moisture, Make Homes More ResistantThere are better ways to build a house, especially if you want to keep mold under control, Charles Perry believes. “Mold is a huge issue for my clients, especially lenders, since they have 80% exposure to the problem through” the “mortgage, compared with the homeowner’s 20% equity,” said Perry, principal of Environmental Assurance Group, a lending and real estate consulting firm, in West Hartford, Conn.So when some clients suggested that Perry make the year-round house he was planning to build on the site of a lakeside summer cottage in Chesterfield, N.H., a showcase for mold-resistant construction techniques and products, he agreed. “I said I’d be happy to do it but that, because this was my house, I’d establish the ground rules.” November 6, 2007
Low-Income Housing Development OpensShawn Lewis never dreamed that he could afford to move his wife, Amanda, and their four children into a new three-bedroom home in a nice neighborhood in the borough. The 34-year-old sous-chef was recently hired at Edinboro University of Pennsylvania and has been commuting to work from the downtown Erie apartment he shares with his family. But in a few weeks, the Lewises will move into just such a home on Scots Glen Drive, a new development of Erie’s Housing and Neighborhood Development Service. “When we first found out about it, we couldn’t believe it was real for the price,” Amanda Lewis said. November 6, 2007
Property Management Presents OpportunitiesIf 2 million or more homeowners will end up in foreclosure during the housing downturn, as some have estimated, still others will find themselves in something more like purgatory. They are the owners of homes and condominiums who are still able to make their mortgage payments, but who would sell in a heartbeat — if only they could get what they see as a fair price for their home. Some are retirees who have downsized, while others are starting new families and have moved into larger homes. There are job seekers who have moved to other cities and couples looking to sell vacation homes they don’t have time to enjoy. November 6, 2007
Foreclosure Looms for FarmworkersFor a while, Alberto Ramirez seemed to be living the American dream. Despite being a strawberry picker with an annual salary of $14,000 a year, he purchased a spacious Hollister home where he hoped to raise his family. But Ramirez and his wife Rosa quickly discovered they were in over their heads, and the dream is about to end. The Ramirezes, who purchased the home with their friends Jesus Martinez and his wife, are about to lose the house, said their attorney Alison Lawton. The foreclosure was originally scheduled for Monday, but it was canceled at the last minute and will likely be rescheduled. November 6, 2007
Landlord Rents Trouble When He Posts an AdIn June I brought you what I figured would be the first and last installment of landlord Daniel Bader’s run-in with the fair housing people of Orange County and the state. Come to find out, they’re just warming up. The housing people say Bader, 55, discriminated when he ran two Craigslist ads to rent a 430-square-foot space above his apartment in Newport Beach. Together, the building has about 1,300 square feet, he says. The ads ran in the summer of 2006 and said the upstairs space would be “well-suited for 1 or 2 professional adults” and “perfect for 1 or 2 professional adults.” Housing officials say that language discriminated against families with children. November 6, 2007
Gov’t Settles With Past Freddie Mac CEOThe government on Tuesday reached a $16.4 million settlement with Freddie Mac’s former CEO for his role in the mortgage finance company’s multibillion-dollar accounting scandal. Leland Brendsel, who was ousted in 2003, agreed to pay $2.5 million in fines to the government, give back $10.5 million in salary and bonuses to Freddie Mac and to waive claims against the company for compensation worth $3.4 million. The settlement “represents a satisfactory conclusion to the enforcement actions” arising from the government’s investigation of Freddie Mac, James B. Lockhart, director of the Office of Federal Housing Enterprise Oversight, said in a prepared statement. November 7, 2007
Tales of Woe Play Out at Record Foreclosure AuctionsAmy Smith looked lost wading through the investors swirling outside the Gwinnett County courthouse. Most clutched clipboards. Smith held a sippy cup. Her husband pushed their 20-month-old son in a stroller as their 7-year-old daughter played in a nearby patch of grass. The Smiths were about to lose their Loganville home. They’d come to see who would buy it. “We just wanted to find out how long we’ve got before we have to get out,” said Smith’s husband, who asked not to be identified. Their eldest child, 11-year-old Kiki, suffers from a rare bone disease that has required three operations so far. Medical bills have topped $100,000 and, even with insurance, the Smiths owe more than $10,000. Those bills mounted as monthly payments on their adjustable rate mortgage shot up — from $1,000 to $1,400 — on the home they bought for $159,000 in 2004. November 7, 2007
HUD Creates Blueprint for Preserving Affordable HousingHistoric preservationists and affordable housing advocates are often at odds when it comes to developing strategies to preserve older housing while providing affordable housing opportunities for working families. In fact, there is a prevailing myth that the cost of historic preservation actually prices many working families out of many urban neighborhoods. Today, the U.S. Department of Housing and Urban Development and the Advisory Council on Historic Preservation announced a blueprint that seeks to challenge this myth and employ historic preservation as a tool to not only preserve historic homes but keep them affordable in the process. November 7, 2007
Bernanke Praises Organizations That Provide Micro-LoansFederal Reserve Chairman Ben Bernanke, who has been devoting a lot of time lately to the credit crisis that has roiled global financial markets, found a smaller subject to focus on Tuesday. He sang the praises of organizations that provide tiny loans to people struggling to start their own businesses. He said this movement, known as microfinance, had helped people all over the globe to start their own businesses and improve their lot in life. He said more people can be helped in the future as organizations providing the loans improve their operating techniques. While microfinance has gained the most attention in poor nations, Bernanke said it also had a role to play in the United States through such organizations as Accion Texas. November 7, 2007
For Citigroup’s New Head, Focus Is Subprime TangleUntil Sunday, Robert E. Rubin collected over $18 million a year as Wall Street’s ultimate hands-off executive. On Monday, he had to roll up his sleeves. Mr. Rubin, who was named Citigroup’s chairman after the departure of Charles O. Prince III, has moved quickly to deal with the turmoil that has engulfed the banking giant. He expressed the board’s commitment to Citigroup’s dividend, its existing strategy, and to tackling a raft of problems related to the subprime mortgage mess. Yesterday, the bank established a subprime portfolio unit to help manage exposure to its riskiest securities, which have had write-downs so far of $10 billion to $13 billion. To run the unit, the bank named Richard A. Stuckey Jr., who in 1998 helped it unwind the bad bets of the Long-Term Capital Management hedge fund. November 7, 2007
Jefferson Parish Plans to Spend $1.1 Million to Enforce Building Codes November 7, 2007
House Overrides Veto of Water Resources BillThe House voted Tuesday to override President Bush’s veto of a water resources bill that authorizes about $7 billion in coastal protection and hurricane protection projects for Louisiana. The Senate is likely to follow suit, perhaps as early as today. It would mark the first override of a veto by President Bush. His rejection of the $23 billion Water Resources Development Act, which he called too expensive, was only the fifth in the almost seven years of his presidency. The vote was 361-54, well above the two-thirds majority needed to negate a presidential veto, with all seven members of the Louisiana delegation voting to override. The original bill passed 381-40. November 7, 2007
Building Hope in BrooklynSuddenly, the little porticos are everywhere in Brooklyn - signs of life at homes that were once vacant, and symbols of hope in a neighborhood where drugs were once sold fearlessly in the daylight. They are the signatures of Arundel Habitat for Humanity, which is concentrating its efforts on five blighted blocks in the South Baltimore community. Reasoning that a home is only as good as the neighborhood it’s in, the group is buying and rehabbing homes at a rapid rate to turn around a neighborhood on the brink. November 7, 2007
40 State Agencies Committ to Participate in Nationwide Mortgage Licensing SystemThe Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR) announce that, to date, 40 state agencies have committed to participate in the Nationwide Mortgage Licensing System (NMLS), scheduled to launch on January 2, 2008. Furthermore, seven states plan to begin using the NMLS as soon as it goes live in less than 60 days. They include Idaho, Iowa, Kentucky, Massachusetts, Nebraska, New York and Rhode Island. The NMLS is a web-based system that will allow state-licensed mortgage lenders, mortgage brokers, and loan officers to apply for, amend, update or renew a license online for all participating state agencies using a single set of uniform applications. November 7, 2007
Big Dig House Finds a BuyerIt looks like foo dogs ward off evil spirits after all. Despite Greater Boston’s dismal real estate market, ex-Modern Continental executive Paul Pedini has found a buyer just 18 days after putting his $2.1 million “Big Dig House” up for sale in Lexington. Pedini built the house in 2005 with old steel beams, recycled concrete and other materials from the Big Dig, which Modern Continental oversaw. November 7, 2007
AL: Prattville Changes Housing RulesThe Prattville City Council defined how many non-related adults can live in homes zoned as single-family dwellings, and civil liberty attorneys fear it will lead to racial profiling. In a unanimous vote Tuesday evening, City Council members amended the definition of the term “family” under the city’s zoning ordinance in an effort to limit the number of people who may legally reside in homes zoned R-1, single-family homes to four people. Without this new ordinance, the city can’t do anything to enforce its zoning laws as to how many people may live in a home because the law has no definition of what constitutes a family, said Prattville Mayor Jim Byard. November 7, 2007
Foreclosure Debate DominatesWith a record number of foreclosures facing real estate agents, it wasn’t surprising that much of the focus of the Real Estate and Law Summit was helping them navigate the difficult environment. “Prices aren’t where they were and that has reflected on the courthouse steps,” Michelle Gilbert of Tampa’s Kass, Shuler, Solomon, Spector, Foyle & Singer, P.A., told attendees Tuesday at the Sarasota Hyatt. “The whole state of Florida is backed up.” At the end of October, 307 foreclosure cases had been filed in Manatee County, bringing the year’s total to 1,881, an all-time record. Getting court dates for foreclosures used to take a short period of time. Now some areas, including Florida’s west coast, are experiencing waits of six months or more. November 7, 2007
Toronto: Low-income HousingA portion of new housing built in Toronto should be set aside for low-income families, says a city report to be released today that seeks to boost the supply of affordable rental and homeownership options. “Some of us believe the bylaws need to be changed,” said Councillor Giorgio Mammoliti, chairman of the affordable housing committee that will release the report for public discussion. A city council debate is expected in 2008. Under so-called inclusionary zoning rules in Vancouver and several U.S. cities, developers include some units for low-income residents, often in exchange for added building height and density. Toronto’s official plan supports construction of affordable housing, but so far lacks inclusionary zoning powers. November 7, 2007
Council Approves 106-unit ComplexA 106-unit apartment building for limited-income residents is slated for Ellicott City, thanks to a complicated Howard County Council compromise on a touchy zoning bill. The Residences at Ellicott Gardens will be built on land zoned for office commercial on Route 108 near the Route 104 intersection. It is intended to meet the housing needs of single adults and couples, though some children could live there too, officials have said. November 7, 2007
Jackson Seeks Solutions to California’s ‘Foreclosure Crisis’The Rev. Jesse L. Jackson visited a black neighborhood in Los Angeles Tuesday in an effort to find solutions to the “foreclosure crisis” sweeping through minority communities in Southern California.Jackson, working with the Los Angeles Neighborhood Housing Services and the LA NeighborWorks Center, are urging homeowners at risk of foreclosure to call for help at 888-995-HOPE. In California, according to community leaders and real estate experts, one out of 88 homeowners is in foreclosure. In Los Angeles, a family loses their home to foreclosure every hour. November 7, 2007
Suit Reveals Foreclosure Rescue “Scam”Arthur and Joanne Taylor were days away from losing their Westville home to foreclosure when a man came knocking on the door. He had a plan to save them. Alex Ortner and his real estate company ended up making at least $25,000 off the family in a buy-back scheme now being challenged in New Haven U.S. District Court. After getting slapped with a lawsuit filed in October by attorney Gary Sklaver, Ortner said he won’t be making the same offer to desperate homeowners anymore. November 7, 2007
Veterans Make Up 1 in 4 HomelessVeterans make up one in four homeless people in the United States, though they are only 11% of the general adult population, according to a report to be released Thursday. And homelessness is not just a problem among middle-age and elderly veterans. Younger veterans from Iraq and Afghanistan are trickling into shelters and soup kitchens seeking services, treatment or help with finding a job. The Veterans Affairs Department has identified 1,500 homeless veterans from the current wars and says 400 of them have participated in its programs specifically targeting homelessness. November 8, 2007
Many D.C. Veterans Homeless, Study SaysAs many as 195,800 military veterans were homeless on any given night last year, and there are “troubling” indications that many service members returning from Iraq and Afghanistan could eventually face the same fate, according to a study being released today. The report, from the National Alliance to End Homelessness, found that veterans make up a quarter of the United States’ homeless population and that the District has a particularly high rate, with an estimated 7.5 percent of the nearly 32,000 veterans in the city living on the streets, in shelters or in assisted housing. November 8, 2007
Staying At The PlazaThe homeless man in a stocking cap stood up, setting his plate of chicken on the concrete steps of the gazebo at Duncan Plaza, across the street from City Hall. A stranger was approaching. “Can I see your ID, please?” Jesse Arbuthnot said, identifying himself as a leader of a group called Homeless Pride, a name spray-painted on the sidewalk next to him. “This is a movement,” said Arbuthnot, 45. This burgeoning rights movement has staked a claim on a growing encampment that sits in the shadow of City Hall. Before the watchful eyes of city officials, the homeless camp has tripled over the past few months, to the point where it’s now sleeping roughly 150 a night — a size that seems to threaten its very existence, as it’s now garnering the attention and annoyance of public officials. November 8, 2007
HUD Reports Drop in Number of Chronically Homeless Persons Living on Nation’s StreetsFor the first time ever, the U.S. Department of Housing and Urban Development is reporting a nearly 12 percent decrease in the number of chronically homeless persons living on the nation’s streets. HUD’s analysis found that more than 20,000 persons moved from the streets into transitional and permanent supportive housing between 2005 and 2006. According to data from 3,900 cities and counties across the country, HUD found that more than 1,500 communities reported a reduction in the number of long-term homeless persons over a one-year period. HUD’s analysis indicates there were 155,623 chronically homeless individuals in 2006, down from 175,914 from the year before - an 11.5 percent decrease. November 8, 2007
N.Y. Subpoenas Freddie, FannieNew York Attorney General Andrew M. Cuomo’s subpoenas to government-sponsored lenders Fannie Mae and Freddie Mac sent another shock into the home mortgage industry where he said conflicts of interests are costing consumers thousands of dollars because of inflated appraisals. Cuomo said yesterday that he wants to know about loans Fannie Mae and Freddie Mac purchased from banks, including Washington Mutual Inc. The subpoenas also seek to find out how the government-sponsored companies handle appraisals to see if lower-income homebuyers were stuck with loans based on inflated appraised values. November 8, 2007
Homeowners’ Reduced Equity May Slow SpendingAs his wedding day approached last spring, Marshall Whittey found that his money could not keep pace with the grandiosity of his plans. But rather than scale back, he chose instead, like millions of homeowners across the country, to borrow against the soaring value of his home. But now, in an ominous portent for the national economy, Mr. Whittey has grown tight with his money. His home is worth far less than it was a year ago, and his equity has evaporated. And like many other involuntary adopters of a newly economical lifestyle, he can borrow no more. November 8, 2007
GrrridlockTraffic, apparently, hits a nerve. In the wake of Mayor Bloomberg’s proposal to calm Manhattan traffic through a plan called congestion pricing, the City section asked its readers to offer their own solutions for easing the borough’s traffic woes. More than a hundred responded, proposing ideas ranging from the wonky to the off-the-wall. Ban cabs. Ban private cars. Close streets. Add lanes. Here are 20 of their suggestions, with assessments by two local experts on traffic: Jeffrey Zupan, a senior fellow for transportation at the Regional Plan Association in New York, and John Falcocchio, a professor of transportation planning at Polytechnic University in Downtown Brooklyn. November 8, 2007
Mortgage Woes Pile Up; Morgan Stanley Sees $3.7B LossFallout from the meltdown in the subprime mortgage industry continued to wreak havoc on Wall Street Wednesday, as three big financial institutions revealed new financial and legal problems, and shares of the USA’s leading banks and brokerage firms sank. Morgan Stanley (MS) announced new subprime-related losses, while Merrill Lynch (MER) and Citigroup (C) began to grapple with the regulatory and legal consequences of their recent announcements of bigger-than-expected write-downs. November 8, 2007
Troubled Homeowners Run Into New ObstacleStruggling homeowners seeking mortgage relief from their lenders say they are hearing a tough message: We can’t help you unless you first fall behind on payments. That is putting borrowers in a bind, given that defaulting on a mortgage triggers all kinds of headaches. Consider Sharon Cooper of Lynn, Mass., who wants to sell her home. The problem: She now owes more than the house is worth, so she asked her lender to allow a “short sale” — selling it for less than the amount due, and forgiving the rest — to avoid foreclosure. November 8, 2007
White Still Hopes to Stop ProjectDespite the City Council’s three-month delay of an ordinance prompted by a proposed high-rise building near Rice University, Mayor Bill White declared Wednesday that his determination to block the project has not wavered. White said his message to the developers of the project at 1717 Bissonnet was clear: “You’d better stop this thing, because I’m going to stop it unless you stop it.” The comment drew cheers and applause from residents of adjoining neighborhoods who packed the council chamber Wednesday. November 8, 2007
Foreclosure Scam Triggers PleaA Springboro man faces up to 20 years in prison and a fine of up to $250,000 after pleading guilty to one count of mail fraud for falsely promising help to Cincinnati and Dayton homeowners concerned about foreclosure. Operating under the name American Foreclosure Group LLC, Randall Webb promised to negotiate with lenders for strapped homeowners in exchange for a $600 to $700 fee. Instead, he filed bankruptcy on behalf of clients, sometimes without their knowledge or consent. November 8, 2007
Washington Can Ease Mortgage CrisisTreasury Secretary Henry Paulson proclaimed recently that the housing crisis is the “most significant current risk to our economy.” That is good, because admitting you have a problem is the first step in any recovery. But for foreclosed home owners in Michigan and around the country — and for property owners seeing their assets drop in value — it is not terribly comforting to hear the president’s top economic adviser recognize a problem that has been in the headlines for months. Home owners want some help. And fast. November 8, 2007
A Race Against ForeclosureAs Bill Griffin was negotiating with the Morton family and two restaurateurs to buy pieces of his business, Wachovia Bank notified him that they were about to foreclose on his Southside Village properties. The bank has staked a claim to any rents Griffin collects as well as to all of the property Griffin owns, including equipment inside the businesses. The buyers of Morton’s Gourmet Market and the Fred’s Restaurant and Tasting Room directly across South Osprey Avenue say they were unaware of the foreclosure proceedings. November 8, 2007
Foreclosure Victims Should Get Help, Institute SaysForeclosure rates continue to increase nationwide, with California, Nevada, Florida and Arizona still leading the rest of the country with home loans that have soured since the housing market began its slowdown almost 18 months ago. In response, federal and state officials have proposed laws that would regulate the lending industry more tightly than in the recent past, to put a stop to underwriting practices that many in the housing industry have criticized as abusive or predatory. November 8, 2007
Banks Fight Home Loan Bankruptcy BillMortgage lenders are fighting lawmakers’ efforts to enable bankrupt borrowers to reduce the size of their home loans, arguing this change would magnify the housing crisis by driving up interest rates.The House Judiciary Committee put off a vote Wednesday evening on a bill by Rep. Brad Miller, D-N.C., and Rep. Linda Sanchez, D-Calif., that would allow home mortgages on primary residences to be modified in bankruptcy court. Doing so, advocates say, could help as many as 600,000 homeowners avoid foreclosure. November 8, 2007
Memphis Housing Authority Accused of Banning Worship ServicesA California-based group, “Advocates for Faith and Freedom”, is suing the Memphis Housing Authority on claims that the organization banned worship services. The group says it is fighting on behalf of the Healing Hearts Outreach Ministries, a non-profit organization that sponsors weekly worship services. At least two of the Sunday services were held at the Barry Towers and the Paul Borda Towers in Downtown Memphis. November 8, 2007
Ohio To Get Aggressive with Subprime Mortgage LendersOhio’s governor and attorney general said Thursday they would issue subpoenas and take other aggressive measures against subprime mortgage lenders. The subpoenas could lead to possible prosecution against lenders under antitrust and civil rights laws, as well as the Consumer Sales Practices Act. November 9, 2007
Wachovia, Capital One Say Credit Conditions WorsenThe U.S. credit crisis deepened on Friday as Wachovia Corp reported a $1.1 billion loss on subprime mortgage-related debt in October, while Capital One Financial Corp said more customers are missing payments. Shares of both lenders fell, as did broader market indexes on expectations that write-downs and bad loans will mount. “This is now worse than Long-Term Capital (Management),” said Jack Malvey, chief global fixed-income strategist at Lehman Brothers Inc., referring to the hedge fund whose 1998 collapse threatened to unhinge global financial markets. “This is a painful lesson in financial engineering.” November 9, 2007
Stocks Open Lower on Deepening Credit WorriesStocks slid sharply in early trading today after another large bank said it would write down the value of some of its assets, reigniting fears of a credit squeeze. The Dow Jones industrial average opened down 160 points, or 1.2 percent, and remained lower at 10 a.m. Wachovia said today that it would lose $1.1 billion on bad bets on mortgage-backed securities and that it would set aside up to $600 million for loan losses in the fourth quarter. That adds to the $1.3 billion in losses and write-downs the bank announced last quarter, making Wachovia the latest prominent victim of the collapse in the subprime loan market. The bank’s shares dipped nearly 4 percent, to $38.83, the lowest level since 2003. November 9, 2007
Want A Second Mortgage? Good Luck!The common practice of homebuyers with shaky credit taking out second mortgages for downpayments is ending because there’s no investor demand for securities backed by such loans. The availability of second-mortgage financing for subprime borrowers has all but disappeared, according to a trade publication’s survey last month of more than 1,000 mortgage bankers and brokers. November 9, 2007
Con Artists Circle Over Homeowners On The EdgeAt the Legal Assistance Foundation of Metropolitan Chicago, the phone calls come nearly every day from yet another financially desperate homeowner who’s become the victim of a “foreclosure rescue” scam. “This has become the No. 1 problem in terms of calls we’re getting and cases we’re filing,” says Daniel Lindsey, supervising attorney for the foundation’s Home Ownership Preservation Project. And it’s clearly a nationwide problem that’s likely to get worse. The Better Business Bureau has received complaints from every state and has issued an alert to warn consumers to be cautious about foreclosure-rescue companies. November 9, 2007
Fed Sees Rough RideTroubled subprime mortgages and falling new-home construction numbers are likely to bog down the U.S. economy over the next six months, but it could rebound by spring, Federal Reserve Chairman Ben S. Bernanke said yesterday. Testifying before the Joint Economic Committee of Congress, the Fed chief also acknowledged that he’s caught between contradictory pulls: If he cuts interest rates more to spark the economy, that could worsen the threat of rising inflation from a weakening dollar and sky-high energy prices. The Fed’s dual mission is to thwart rising prices, or inflation, while keeping the economy growing. November 9, 2007
East Bank Levee Authority Approves Orleans Levee District Millage IncreaseThe east bank regional levee authority authorized a millage increase of slightly less than one-third mill on Thursday to cover a $725,000 deficit in the Orleans Levee District’s general fund. The unanimous vote to roll forward from 9.33 to 9.64 mills will cost the owner of a $274,000 home in New Orleans an extra $5.87 in property taxes yearly over and above the previous rate, according to calculations by the district’s chief financial officer. November 9, 2007
California, Florida Lead Metros in Home ForeclosuresMore homeowners across the USA are having trouble making mortgage payments on time, but borrowers in metro areas of California, Florida and other once-booming housing markets are accounting for the biggest spikes in foreclosure filings, according to a mortgage research company.An analysis of foreclosure activity in the nation’s 100 largest metropolitan areas during the three months ended Sept. 30 shows seven cities in California and five each in Florida and Ohio were among the top 25 metro areas with the highest foreclosure rates, according to a study released Wednesday by RealtyTrac. November 15, 2007
Table: Foreclosure Filings in Third QuarterAn analysis of foreclosure activity in the nation’s 100 largest metropolitan areas during the three months ended Sept. 30 shows seven cities in California and five each in Florida and Ohio were among the top 25 metro areas with the highest foreclosure rates, according to a study released Wednesday by RealtyTrac. November 15, 2007
Subprime Fallout Hits Big Money Market FundsBank of America (BAC), stung by the fallout in subprime mortgages, acted Tuesday to safeguard a bedrock investment of ordinary Americans: money market mutual funds. The bank said it planned to set aside $600 million to cover potential losses in its money market funds and an institutional cash management fund. The crisis in subprime mortgages has jolted the market for the short-term securities that money funds invest in. Even so, assets in money funds recently hit a record $3 trillion. November 15, 2007
Squalor, Crime Follow Wave of ForeclosuresEighty-five bungalows dot the cul-de-sac that joins West Ontario Avenue and East Ontario Avenue in Atlanta. Twenty-two are vacant, victims of mortgage fraud and foreclosure. Now house fires, prostitution, vandals and burglaries terrorize the residents left in this historic neighborhood called Westview Village. “It’s created a safety hazard. And if we have to sell our house tomorrow, we’re out of luck,” said resident Scott Smith. “Real estate agents say to me ‘We’re not redlining you, but I tell my clients to think twice about buying here.’” November 15, 2007
Fenty Unveils Housing Plan For Low-Income, HomelessMayor Adrian M. Fenty announced last night a wide-ranging plan to provide permanent housing for the city’s chronically homeless, to preserve affordable housing by making it harder for landlords to convert buildings into high-priced condos and to help fund 500 townhouses affordable to low- and moderate-income workers. The proposals were presented to more than 500 Washington Interfaith Network members, who elicited a promise from Fenty during his 2006 mayoral campaign to fund, build and preserve 14,000 affordable housing units over a four-year period. Included in that goal is the creation of 2,500 units for the chronically homeless that would come with supportive social services. November 15, 2007
Unbuilt Homes Breed Blame GameAs the state housing board promises progress on a long-delayed residential hurricane recovery program, public- and private-sector officials continue to point fingers over why there has yet to be a groundbreaking in the 10 months since Louisiana secured a $75 million federal grant for the planned 530-unit project. At the same time, Mississippi officials have placed almost 500 residents in alternative housing units. More than 3,000, and as many as 6,000, units are planned along the Mississippi coast, depending on need and the per-unit cost to that state’s $281 million version of the program. November 15, 2007
Homeless Worries on Minds of Many AmericansNearly a third of Americans have at one point worried about becoming homeless and many more are taking in friends and relatives needing a home, a survey found. The homelessness issue has touched more than those who are living on the streets, according to a Gallup poll released Wednesday. “People are worried even though it might not ever happen to them,” said Michael Stoops, acting executive director of the Washington-based National Coalition for the Homeless. “When people read the news and read about bankruptcies, home foreclosures and auto plants being closed, they worry that they may be next.” November 16, 2007
Ripple Effect is Feared From ForeclosuresForeclosures on subprime home loans made to borrowers toward the end of the housing bubble will erase billions of dollars in value from neighboring properties, according to a report released yesterday by a nonprofit group. The Center for Responsible Lending used its findings to call for Congress to enact stronger protections for borrowers facing foreclosure - such as giving bankruptcy courts the authority to allow borrowers to continue making payments - and to take steps to prevent predatory lending practices. November 16, 2007
Housing Costs Driving Away MarylandersHigh housing prices are pushing Maryland residents to move farther from Washington and, in some cases, to neighboring states such as Pennsylvania and West Virginia, according to a new study released by the Maryland Department of Planning. “It’s clear workforce housing is a significant issue in Maryland, and particularly in central Maryland,” said Mark Goldstein, an economist with the Maryland Department of Planning. November 16, 2007
Foreclosures Hit a Snag for LendersA federal judge in Ohio has ruled against a longstanding foreclosure practice, potentially creating an obstacle for lenders trying to reclaim properties from troubled borrowers and raising questions about the legal standing of investors in mortgage securities pools. Judge Christopher A. Boyko of Federal District Court in Cleveland dismissed 14 foreclosure cases brought on behalf of mortgage investors, ruling that they had failed to prove that they owned the properties they were trying to seize. November 16, 2007
Lawsuit Questions City Landfill’s OwnershipTwenty-six years ago, Doretha Walker paid $6,000 for four adjoining lots of land in a section of far eastern New Orleans that was christened “Flowerdale” by the mappers who plotted it years earlier. It was an investment. Each year, Walker, 77, paid the small property tax bill, hoping that the subdivision would one day become a reality, and that she, or perhaps her children or granddaughter, might turn it for a profit. Walker held onto the land, although Flowerdale was never built. Instead, according to a lawsuit filed in Civil District Court on Wednesday, property owned by Walker and hundreds of other investors became part of the Old Gentilly Landfill, the construction debris dumping ground that grew into the busiest landfill in the state shortly after it opened in the weeks after Hurricane Katrina. November 16, 2007
A New Loan SchemeNo act of the past decade has brought greater national attention and acclaim to North Carolina lawmakers than their groundbreaking efforts to attack predatory mortgage lending. The original 1999 reform legislation (which requires unbiased financial counseling before borrowers can be sold certain types of “high cost” loans) and its progeny have saved thousands of North Carolina families from the financial ruin and indignities that accompany losing one’s home. The law has served as a model for several other states. A 2007 update targeting the subprime industry will help further. November 16, 2007
Housing Authority Told to Return St. Thomas FamiliesInside a federal courtroom Wednesday, the Housing Authority of New Orleans handed over a list of nearly 3,000 names of public housing residents who once lived at the St. Thomas development, which was demolished in 2000 to make way for a mixed-income neighborhood. The hearing was yet another legal skirmish between HANO and housing advocates, who hauled the agency into court after a month-long wait for the correct addresses of former St. Thomas families who were promised preferential treatment for River Garden homes built on a site that once held barracks-style brick buildings. Attorneys for the Greater New Orleans Fair Housing Action Center said that HANO violated a legal agreement in June when it delivered only a partial list of St. Thomas families that was riddled with errors. November 16, 2007
First American to Shut Down 84 Limited Partnerships in Florida and Will Pay $5 millionThe U.S. Department of Housing and Urban Development and two Florida regulators today announced a legal settlement with First American Title Insurance Company for alleged violations of the Real Estate Settlement Procedures Act (RESPA) and similar state laws. HUD, the Florida Department of Financial Services (DFS), and the Florida Office of Insurance Regulation (OIR) claim First American made payments to scores of affiliated partnerships based on the referral of business to the title company.Under the terms of the settlement agreement announced today, First American will shut down 84 partnerships and pay $5 million to the U.S. government and the State of Florida. November 19, 2007
How Congress Can Rein In Opportunistic Steering by BrokersOne of the important objectives of the mortgage legislation winding its way through Congress is to prevent brokers from steering borrowers to costlier loans, according to the bill’s sponsor, Rep. Barney Frank (D-Mass.). Such steering sounds like one of those things no one could support. Why do brokers do it? So they can collect rebates from lenders. Lenders pay rebates on high-rate loans, just as they charge points on low-rate loans. (One point is 1 percent of the loan amount.) Points are upfront payments to the lender, and rebates are upfront payments from the lender. A rebate retained by the broker is called a yield spread premium, or YSP. November 19, 2007
House OKs Mortgage ProtectionsThe House approved legislation yesterday to strengthen consumer protections for mortgage borrowers as Congress seeks to curb the lending abuses that contributed to the subprime-mortgage crisis. The measure, approved 291-127, would require lenders to ensure potential borrowers have the ability to repay their mortgages and strengthen oversight of mortgage brokers. It now goes to the Senate. November 19, 2007
Traders Wary of Fannie’s Mortgage MathFannie Mae’s bookkeeping is drawing scrutiny from Wall Street — again. Three years after a stunning accounting scandal that forced it to restate earnings by $6.3 billion, the giant government-sponsored company that buys and sells home loans is on the defensive over a change in how it calculates potential losses from the growing mortgage crisis. The fear among investors is that a new accounting methodology masks the number of bad loans held by Fannie, downplaying potential losses. November 19, 2007
Many Sex Offenders are Often homelessThousands of convicted sex offenders are reporting to police that they are homeless, raising concerns that their lack of a permanent address could make them difficult to track, a USA TODAY analysis shows.Sex offenders, who are required to register with police and often barred by law from living near places where children gather, list addresses such as a tent, “near a bike path,” “behind a cemetery” or “woods behind Wal-Mart.” November 19, 2007
Goldman Sachs Rakes in Profit in Credit CrisisFor more than three months, as turmoil in the credit market has swept wildly through Wall Street, one mighty investment bank after another has been brought to its knees, leveled by multibillion-dollar blows to their bottom lines. And then there is Goldman Sachs. Rarely on Wall Street, where money travels in herds, has one firm gotten it so right when nearly everyone else was getting it so wrong. So far, three banking chief executives have been forced to resign after the debacle, and the pay for nearly all the survivors is expected to be cut deeply. November 19, 2007
Becoming Your Parents’ Mortgage LenderQ: Our parents own their house free and clear, and it is worth about $400,000. Dad is 79, and Mom is 77; both are in fairly good health. They receive Social Security and a modest pension. We would like to assist them financially. They both like to travel, but their limited resources deny them this pleasure. Do you have any suggestions? November 19, 2007
Bits of Bad News Obscure A Big Truth About WealthWith the daily bad news about the state of the housing market, it’s easy to lose sight of some larger economic realities: Despite declining prices in many markets, homeowners still control near-record equity holdings, just under $11 trillion. In its latest quarterly “flow of funds” statistical report, the Federal Reserve calculated that U.S. homeowners’ equity accounts totaled $10.9 trillion in mid-2007. That was the difference between total home mortgage debt ($10.1 trillion) and the total market value of home real estate (about $21 trillion). November 19, 2007
Will Bad Mortgages Hurt the GOP?Tim Walberg was one of the rare Republican success stories in 2006. After defeating Joe Schwarz, the moderate GOP incumbent congressman in his rural southwestern Michigan district, he went on to narrowly beat Democrat Sharon Renier with just 50% of the vote. Walberg, a fiscal conservative, ran on a platform of limited government, tax cuts and strong support of the war in Iraq. Last Thursday, to the delight of Democrats, Walberg lived up to his conservative ideals — voting against a bill in the House that tightens restrictions against predatory lending. The measure, which garnered the support of 64 Republicans in passing 291-127, would force lenders to apply for licenses and require them to verify the ability of borrowers to repay loans. November 19, 2007
Top 10 Foreclosure Markets for 2007With nationwide foreclosures on the rise, many investors are looking to pick up properties for less than market value. A recent NuWire poll showed investors consider foreclosed properties a greater opportunity than any other type of alternative investment. But investors need to study before committing to buying a foreclosed property just because it’s a great deal. Many markets are shrinking in both job and population growth. While buying a foreclosed home could be an excellent investment, investors need to make sure they buy into a market that will continue to see demand for houses and rental properties. November 19, 2007
FEMA Still Trying to Move Evacuees Out of TrailersTrailers and hotel rooms provided by the Federal Emergency Management Agency were supposed to be temporary housing until evacuees from hurricanes Katrina and Rita could find more permanent places to live. But 26 months and more than $2 billion of rental assistance payments later, more than 45,000 evacuee families are still living in travel trailers and mobile homes in Louisiana, FEMA statistics show. At its peak, FEMA provided housing to more than 92,000 families, said Michael Wiener, a spokesman for the agency. Currently, almost 30,000 families are living in FEMA-provided apartments, duplexes and houses. November 19, 2007
For Many Kids, Lead Threat is Right in Their Own HomesSo she was puzzled — and scared — last February when, over the course of just a few days, Miguel began acting oddly: He was clumsy, irritable and high-strung. She took him for a checkup and four days later got a bold-faced letter from the city health department that said Miguel was “probably lead-poisoned.” Pediatricians ring alarm bells when a child’s blood tests show lead levels above 10 ug/dL (micrograms per deciliter) of blood. A microgram is a millionth of a gram; a deciliter is one-tenth of a liter. November 26, 2007
Housing Woes Have Domino EffectIf you haven’t yet felt the impact of the nation’s credit crisis, just wait. Chances are, you won’t have to wait long. So far, the turmoil may feel a bit remote for average people: Failed mortgage lenders. Gargantuan write-downs by banks. Foreclosures for people who couldn’t really afford the mortgages they got. What about the rest of us? Are we in danger? No one knows for sure, but quite likely, yes. As the credit crisis seeps into farther-flung corners of the economy, more of us will find it harder — and costlier — to borrow money. The value of the funds in our retirement accounts could shrink. People with subpar credit will likely find it more difficult to qualify for auto and home-equity loans. Even consumers who make the cut may need higher credit scores and more documentation. November 26, 2007
At Home, But Not in Their OwnAt 48, Sheryl Bottner is still a renter, and she’s proud of it. In fact, she has no intention of buying a home. Not now. Not ever. Ask her about the “American Dream” of homeownership, and she is resolute in her response. “I have heard that from my friends for several years,” she said. “I had to look at them and say, ‘That’s your American dream. That’s not my American dream.’ ” The run-up in home prices during the real estate boom — and now the housing market’s dramatic reversal — have sparked a new breed of resident in the Washington area, one more commonly found in New York: the renter by choice. November 26, 2007
Home-buying Program ContinuesA popular state home-buying assistance program that critics complained contributes to suburban sprawl has been renamed and retooled to encourage home shoppers to live closer to where they work.Smart Keys for Employees is the latest name for the on-again, off-again purchasing assistance program offered in a variety of forms for much of the past 10 years by the Maryland Department of Housing and Community Development. November 26, 2007
Fieldstone Mortgage Files for BankruptcyColumbia-based Fieldstone Mortgage Co. has filed for Chapter 11 bankruptcy protection, blaming a sharp increase in delinquent mortgage payments and the overall downturn in the credit markets, according to documents filed with the U.S. Bankruptcy Court for the District of Maryland. The subprime lender’s largest creditors include Morgan Stanley, which has a $38.5 million claim, HSBC’s Household International Inc., with a $23.3 million claim, and Countrywide with a $10.4 million claim, the filing said. November 26, 2007
SJC: Landlord Cannot Deny Tenant Despite ‘Harmful’ Lease ClauseA property-management company should not have refused to rent to a potential tenant in a subsidized housing program, even where a termination provision in the program’s lease might put an economic burden on the landlord, the Supreme Judicial Court has found. The company argued that the Department of Housing and Community Development had no authority to require a landlord to use the program’s lease, which contained the termination clause, because the statute creating the program did not mandate a particular form of lease. November 26, 2007
City Fights Fallout From ForeclosureColumbus will spend about $5.5 million next year to deal with problems rippling out from the rise in home foreclosures. It will board up windows and pull weeds around vacant houses, rehab some that can be sold again and tear down others that can’t. It will enforce a new law that police hope will stop thieves from stripping pipes and wires out of empty buildings. November 26, 2007
Foreclosures to Have ‘Profound’ Impact, Report WarnsMounting home foreclosures will have “profound” effects on the economy next year, reducing job growth, bleeding billions of dollars in tax revenues and hitting consumer spending — but shouldn’t push the country into a recession, according to a report Tuesday. Financial analysis firm Global Insight, in an study for the National Conference of Mayors, predicted at least 1.4 million homes will enter foreclosure next year. That will worsen the already sharp housing downturn, with ripple effects on hiring and spending. November 27, 2007
Why He Moved Into My Car, and Why I Let HimThe reward, the most perfect parking place in the city, turned out to be a mixed blessing. Whenever I thought about using my car, I also thought about someone taking my spot. There was only one solution. I stopped driving altogether. To avoid temptation, I avoided my car, walking the long way home from work each day from the subway. I did this for months. As a result, I didn’t know that a man had moved into my car. I discovered him Thanksgiving morning. I had finally decided that owning a car but never using it was ridiculous. For the inaugural drive, I planned to head out to New Jersey to my parents for the holiday. I woke up early to beat the traffic, and walking to my car in the predawn light, I could hear my footsteps crunching on the first frost of the season. November 27, 2007
In Hospice Care, Longer Lives Mean Money LostHundreds of hospice providers across the country are facing the catastrophic financial consequence of what would otherwise seem a positive development: their patients are living longer than expected. Over the last eight years, the refusal of patients to die according to actuarial schedules has led the federal government to demand that hospices exceeding reimbursement limits repay hundreds of millions of dollars to Medicare. The charges are assessed retrospectively, so in most cases the money has long since been spent on salaries, medicine and supplies. After absorbing huge assessments for several years, often by borrowing at high rates, a number of hospice providers are bracing for a new round that they fear may shut their doors. November 27, 2007
Senators’ Attitude on Housing Relief: What’s the Rush?Thousands of Americans may be losing their homes to foreclosure or facing hefty mortgage-payment resets, but the Senate appears to be in no rush to help. The House has passed several major housing-relief measures in recent weeks, but the Senate hasn’t passed even one. On the eve of its two-week Thanksgiving recess, the House approved by a bipartisan vote the most sweeping reforms of the national mortgage system in more than two decades. Meanwhile, the Senate stalled legislation that would strengthen the Federal Housing Administration’s mortgage programs, a key resource for homeowners who need to refinance out of adjustable-rate loans into more affordable fixed-rate ones. November 27, 2007
Saturday Deadline to Schedule Road Home AppointmentsWith a Saturday deadline looming for Road Home applicants to make appointments, the program still has not heard from more than 16,000 people who filed initial applications but never followed up. All applicants who haven’t had a first appointment must schedule one by Saturday and meet with Road Home staff by Dec. 15 — or be eliminated from the program. November 27, 2007
Subprime Cards’ High Fees Can Add to Debt TroublesAfter incurring debt problems, Rosemary Potter of Pinon Hills, Calif., decided this year to try to repair her credit. She didn’t qualify for a standard credit card, so she signed up for what’s called an Imagine Gold Card, hoping to use it to raise her credit score. It didn’t turn out as she’d hoped. For a modest $300 credit line, she was hit with a $150 annual fee, plus late fees and over-the-limit fees. After she’d had the card a few months, her credit score was still blemished, so she canceled it. November 27, 2007
Report: Foreclosures to Hit Metro AreasRising foreclosures will lead to billions of dollars in lost economic activity next year in the nation’s major metropolitan areas, but homeowners and financial institutions have the ability to work together to contain the effects, according to a report compiled for the U.S. Conference of Mayors. The report was released Tuesday ahead of a meeting of mayors from across the country in Detroit, where they hope to create policy recommendations to help address the nation’s housing crisis. November 27, 2007
The Foreclosure Auction: Where One Dream Ends … And Another BeginsThe yellow envelopes scattered on a table were all that were left of the homeownership dreams of a dozen families in DuPage County. Nothing in those envelopes showed how they settled into those homes or what their hopes were for the future before a job loss or high medical bills or any number of financial woes forced them to leave after a foreclosure. The envelopes just contained cold numbers: address, amount owed to lender, overdue taxes, liens, legal fees, other costs. Those fees determined the opening bids for the homes. November 27, 2007
Disabled Woman Sues Luxury Apartment DeveloperA disabled black woman has filed a housing discrimination lawsuit against a prominent developer, charging she was unfairly disqualified from renting at a luxury apartment building in downtown Brooklyn. Yvette Woodard, 44, filed a lawsuit on Oct. 10 that claims her housing application for a unit at the CourtHouse was rejected by Two Trees Management after an overly intensive check into her finances, medical history and personal life that revealed a late telephone payment and an outstanding cable bill of $1.61. November 27, 2007

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