Howard Law Fair Housing News Digest

Mortgage Crisis Seeps to Prime LoansThe first concrete evidence that delinquencies on mortgage bills have spread well beyond those with subpar credit shows that even prime borrowers have increasingly fallen behind on their house payments. The figures remain relatively small so far. But if they rise further, delinquencies on prime loans — given only to those with good credit — could prolong the housing crisis. About 2.3% of prime loans were 60 days’ past due in February, the highest level in at least a decade, according to data from FirstAmerican CoreLogic LoanPerformance. That’s up from 1.4% a year ago. Some economists, such as Brian Bethune of Global Insight and Dean Baker of the Center for Economic and Policy Research, say they think delinquencies on prime loans have likely risen further since then. May 9, 2008
House OKs $15B for States to Buy, Fix Foreclosed PropertiesThe House on Thursday approved sending $15 billion to states to buy and fix up foreclosed property.The measure, passed 239-188, is part of a sweeping housing package Democrats are pushing to prevent more foreclosures and help homeowners and communities deal with the fallout from the mortgage meltdown. The House was expected to vote later Thursday on a homeowner rescue bill that would let strapped homeowners refinance into government-backed mortgages. May 9, 2008
HUD EXTENDS COMMENT PERIOD ON PROPOSED MORTGAGE REFORMSThe U.S. Department of Housing and Urban Development today announced that it is extending the public comment period on the Bush Administration’s proposed reforms to the real estate settlement process. The comment period for the Department’s proposed rule to simplify and improve the process of obtaining mortgages and reducing settlement costs under the Real Estate Settlement Procedures Act (RESPA) will be extended 30 days until June 12, 2008. May 9, 2008
Looking Past the Capital CityThe recent opening of the Washington Nationals’ baseball stadium culminated a decade of panoramic change in the District, one in which downtown and an array of long-forlorn neighborhoods blossomed. So what is Washington’s next horizon? If the city has purged much of the blight that helped make it a symbol of urban dysfunction, what is it aspiring to now? The answer, voiced by a wide range of District officials, planners and developers, is nothing less than transcending Washington’s primary identity as the nation’s capital and ever-proper home to the federal government. May 9, 2008
Questions of Rent Tactics by Private EquityPrivate investment firms have been amassing what may seem like unusual stakes in New York real estate: they have bought hundreds of apartment buildings with thousands of rent-regulated units across the city that produce decidedly meager returns. As regulatory filings and promotional materials show, the companies expect to generate higher returns quickly by increasing rents after existing tenants vacate their units. Their success depends upon far higher vacancy rates than are typical in rent-regulated apartments in New York. May 9, 2008
Ethics Panel Says N.O. Developer Can Run City Agency May 9, 2008
Witnesses: Mortgage Lenders Abusing Court SystemMortgage lenders are abusing the bankruptcy court system by pursuing unjustified foreclosures against struggling homeowners, piling on questionable fees and misstating the amounts owed, witnesses alleged at a congressional hearing on Tuesday. The result is a systemic breakdown that increases foreclosures, raises the number of families losing their homes and threatens the integrity of the legal system, the witnesses told the Senate Subcommittee on Administrative Oversight and the Courts. May 7, 2008
BUSH ADMINISTRATION IMPLEMENTS A TARGETED, FINANCIALLY RESPONSIBLE PLAN TO HELP HOMEOWNERSThe Bush Administration’s plan will give the Federal Housing Administration (FHA) greater flexibility to insure mortgages and reduce monthly payments for borrowers with adjustable rate mortgages - without forcing taxpayers to foot the bill. Expanding FHASecure, the government-backed mortgage refinancing product, creates a more viable option for American families who are in the right house but the wrong mortgage, and will help break the cycle of price depreciation and foreclosure. May 7, 2008
Fannie Loses $2.2 Billion As Home Prices FallFannie Mae, one of the main sources of mortgage funding and a barometer of the housing market, yesterday reported that home prices fell faster than it expected during the first quarter, contributing to a $2.2 billion loss for the company. The company had been predicting that the toll from defaults and foreclosures would worsen this year, and yesterday it revised its forecast to predict even higher credit losses ahead. May 7, 2008
Lenders Pressed to Hurry HelpTreasury officials met with about 10 leading mortgage firms yesterday to figure out why they have not helped more distressed homeowners, pressing the lenders to do better. At the closed-door session, Treasury staff members reviewed legal and financial issues identified by the industry as difficulties in addressing the foreclosure crisis, including how to modify mortgages when homeowners have two loans. The meeting lasted longer than the six hours scheduled for it. May 7, 2008
Countrywide Admits Mistakes, Not WrongdoingMortgage lender Countrywide Financial Corp., which is under investigation for inflating certain borrowers’ fees, acknowledged Tuesday that it has made errors and pledged to take steps to improve its operations. Steve Bailey, chief executive for loan administration at Countrywide, told a Senate panel that the company’s employees have made mistakes “from time to time.” He said the company will hire an outside auditor to review its actions in cases involving homeowners who have filed for bankruptcy court protection. May 7, 2008
2006 Consent Order with Fannie Mae Lifted“I am pleased to announce that OFHEO has lifted its 2006 Consent Order with Fannie Mae. This action reflects two years of hard work by Fannie Mae in remediating their problems. OFHEO will continue its ongoing oversight of the Enterprise, including of items that were remediated under the Order. I want to express appreciation for the work done by OFHEO’s Office of Compliance and the Office of Examination in oversight of the remediation effort. May 6, 2008
Bernanke: Let’s Fight ForeclosuresFederal Reserve Chairman Ben Bernanke warned late Monday that the federal government should do more to stave off home foreclosures that threaten credit markets and the economy, even as a Fed survey showed the percentage of banks tightening credit for consumers and businesses reached historic highs. Underscoring Bernanke’s point that credit markets are fragile, the Fed’s latest quarterly lending survey for the three-month period through April 17 showed: May 6, 2008
Mortgage SurvivorsZena Collins knew she had a serious problem when she could no longer afford electricity. The mortgage payment on her Gaithersburg house had jumped about $500, to $2,000 a month, not counting taxes and insurance, after her adjustable interest rate increased. When she bought the house in 2000, she was a pension administrator. By the time her company decided to cut her job, she was bringing home $5,200 a month. In April 2006, she managed to secure a similar job — but not a similar salary. So there she was, earning less but paying more for her house. And that’s when the lights went out. May 6, 2008
Count to Five Before You Send the Last CheckMany people look forward to the day they own their homes free and clear. But gathering the money to pay off the mortgage is only part of the process. It’s also important to make sure all the paperwork is in order.Here are five common questions to which homeowners should know the answers before they mail that final check. May 6, 2008
For Loan Seekers, Preparation Is More Important Than EverOne of the reasons many subprime loans have failed is because of weak underwriting, a new study suggests. Underwriting is the process by which a lender decides whether a borrower is a good risk. It involves looking carefully at the paperwork provided by the borrower, including the signed loan application, bank account statements, paycheck stubs, tax returns, and profit-and-loss statements if the borrower is self-employed, and reviewing the property appraisal obtained by the bank. May 6, 2008
Doubts Raised on Big Backers of MortgagesAs home prices continue their free fall and banks shy away from lending, Washington officials have increasingly relied on two giant mortgage companies — Fannie Mae and Freddie Mac — to keep the housing market afloat. But with mortgage defaults and foreclosures rising, Bush administration officials, regulators and lawmakers are nervously asking whether these two companies, would-be saviors of the housing market, will soon need saving themselves. May 6, 2008
Couple’s Suit Accuses Real Estate Firm of Bias Against ChildrenThe apartment sounded beautiful: a converted carriage house on a quiet lane in Brooklyn Heights, with a deck. Jamie Katz and Lisa Nocera were excited. There was only one catch: Dr. Nocera, an emergency-medicine physician, was expecting. The broker at Brown Harris Stevens would not show them the apartment because the owners did not want to rent to a family with children, the couple said.A year later, in 2007, now with baby in tow, the couple were shown an apartment in a brownstone in Park Slope, perhaps the city’s most child-centric neighborhood, by another Brown Harris Stevens Brooklyn broker. They loved it. They passed a credit check. Then the broker called with bad news. There was a problem with lead paint; the owner would not rent to families with children, they said. April 28, 2008
Pain of Foreclosures Spreads to the AffluentThis wooded town of roughly 60,000 on Long Island Sound — home to dozens of hedge funds, many millionaires and more than a few billionaires — is one of the wealthiest enclaves in the country. But even Greenwich is not immune to the wave of home foreclosures sweeping the nation. On Stanwich Road, for example, a house worth $2.6 million is close to going on the block. On Hettiefred Road, the owner of a 2,720-square-foot, four-bedroom colonial featuring a luxury kitchen, swimming pool and tennis court, has been threatened with foreclosure for months. Several dozen other owners in Greenwich have received foreclosure notices this year. April 25, 2008
In Housing Market, It’s The Worst of Times and Best of TimesHome sellers, brace for some grim news. The spring home-buying season now underway is widely expected to be the worst since the 1980s. Many would-be buyers lack strong enough credit to get a mortgage. Home values are sinking. And in front yards around the country, “For Sale” signs are as ubiquitous as garden weeds. The median price of an existing home in March was 7.7% less than it was a year ago, the National Association of Realtors reported this week. “Sellers are having to capitulate,” says Mark Zandi, chief economist for Moody’s Economy.com. “If you’re a seller, it is the worst season since the early 1980s.” April 25, 2008
Bucking the Trend, Md. House Prices Edge UpUnlike their neighbors across the Potomac, home sellers in the Maryland suburbs saw the value of their properties rise in 2007, if only by a smidgen. The median sales price of single-family houses and townhouses in seven Maryland counties gained 1.4 percent, inching up to $374,000 in 2007 from $369,000 in 2006, according to a Washington Post analysis of government sales data. Prices for condominium units rose 1 percent, to $255,000 from $251,000. (The median is the point at which half the sales prices were higher and half were lower.) April 25, 2008
Look Closely at Mortgage Broker FeesLooking to get a mortgage or refinance an existing one? If you have the credit score to make it work, you shouldn’t have trouble finding people who really, really want your business. The trick is deciding who should get it. Christopher Cruise, a mortgage trainer in Silver Spring and a board member of the National Association of Responsible Loan Officers, suggests that you look carefully at the fees the mortgage broker or lender plans to charge. April 25, 2008
Too Many Seniors Can’t Stay Home, Can’t Afford to LeaveMany seniors say the provincial budget failed them. They say there’s not enough support for them to stay in their homes and not enough help to move out. Premier Ed Stelmach’s government hiked spending on seniors by 11.6 per cent, but the increase is aimed at existing programs. Although the budget swelled for seniors by $46 million to $438 million, there are no new programs or benefits. April 25, 2008
Government Got What It Asked for in Housing Bust: Caroline BaumIn its rush to hold hearings, assign blame and seek redress for the collapse of the housing market, the U.S. Congress has looked every which way but inward. No wonder. Homeownership-for-all has been a goal of policy for so long lawmakers have forgotten the role they played in the current spate of no-doc'' loans gone bad. From legislation to root out discrimination in mortgage lending, to the resultant relaxation of lending standards, to the tax-advantaged status of housing,the aggressive pursuit of homeownership as a benchmark for success is at the root of the problems we’re seeing today,” says Mark Zandi, chief economist at Moody’s Economy.com. April 25, 2008
Minorities’ Housing Hardships Heft of TalkSharon White Bear’s voice quaked as she recalled the humiliation of being denied a home loan because her credit score was too low when she moved to Fargo. “They said, ‘Well, because of this number, you know, we wouldn’t be able to help you,’ and basically we were done,” said White Bear, a surgical technician and Arikara from the Fort Berthold Reservation in western North Dakota. “So I got up and I left feeling pretty low that day,” she said, breaking into tears. Seven years later, White Bear is still living in the same two-bedroom apartment, but now another loan option is available for her and other American Indians living off reservations in North Dakota. April 25, 2008
Couple’s Suit Accuses Real Estate Firm of Bias Against ChildrenThe apartment sounded beautiful: a converted carriage house on a quiet lane in Brooklyn Heights, with a deck. Jamie Katz and Lisa Nocera were excited. There was only one catch: Dr. Nocera, an emergency-medicine physician, was expecting. The broker at Brown Harris Stevens would not show them the apartment because the owners did not want to rent to a family with children, the couple said.A year later, in 2007, now with baby in tow, the couple were shown an apartment in a brownstone in Park Slope, perhaps the city’s most child-centric neighborhood, by another Brown Harris Stevens Brooklyn broker. They loved it. They passed a credit check. Then the broker called with bad news. There was a problem with lead paint; the owner would not rent to families with children, they said. April 25, 2008
Is Inclusionary Zoning Providing Our Much Needed Affordable Housing?Now that the housing markets are softening, it’s worth stepping back and looking at what we can learn from this insane boom-bust cycle. Specifically — despite the madcap development rush in the Bay Area — where are we in terms of providing affordable housing? Sitting in San Francisco, where a studio apartment with a shared bathroom down the hall runs you around $900, it doesn’t look so good. Though housing prices in many areas may have dropped, rents have continued to shoot upwards. In the cities or along transit lines, there is still a shortage of affordable housing. April 25, 2008
Capital Facing Housing ShortfallThe extent of the shortfall will be highlighted at the launch of the city’s new four-year homelessness strategy. But councillors have warned that the strategy will fall short without significant investment. They say without new homes, people in need will have to rely more on temporary accommodation. Housing Associations in Edinburgh currently build about 500 homes each year. Unless the rate of build increases, there will be a significant shortfall in the council’s target of 12,000 new affordable homes in a decade. April 25, 2008
Fannie, Freddie Get Relief On Affordable-Loan QuotasThe government yesterday said Fannie Mae and Freddie Mac will face no penalty for failing to meet certain federal affordable-housing quotas in 2007 because market conditions made those requirements unattainable. The two federally chartered mortgage-finance companies, whose ties to the government give them commercial advantages, are required to devote certain percentages of their business to funding loans for various categories of borrowers, such as homebuyers with low to moderate incomes and those in poor neighborhoods. April 25, 2008
Fannie, Freddie Get Relief On Affordable-Loan QuotasThe government yesterday said Fannie Mae and Freddie Mac will face no penalty for failing to meet certain federal affordable-housing quotas in 2007 because market conditions made those requirements unattainable. The two federally chartered mortgage-finance companies, whose ties to the government give them commercial advantages, are required to devote certain percentages of their business to funding loans for various categories of borrowers, such as homebuyers with low to moderate incomes and those in poor neighborhoods. April 25, 2008
Apartment Sector Momentum Slows, S&P ReportsAccording to Standard & Poor’s most recent results for the S&P/GRA Commercial Real Estate Indices (SPCREX), the apartment sector has reported an annual price gain of 5.8 percent from last January. However, from December to January, the growth rate was 0.6 percent. “While prices were up slightly for December to January, the momentum has slowed and will continue to do so,” David Blitzer, managing director and chairman of the Index Committee at Standard & Poor’s, tells MHN. “I can’t tell whether we’re going to see prices flatten out of if there is a real risk of a sharp decline, but I certainly don’t see any boom times.” April 25, 2008
Lawmakers set to write mortgage bailout billA U.S. House of Representatives panel that writes rules for the financial services industry is due on Thursday to outline a new federal program that could buy $300 billion in troubled home loans. The plan conceived by Rep. Barney Frank, chairman of the House Financial Services Committee, would give the Federal Housing Authority fresh funds and a new directive to catch home loans headed for foreclosure. April 24, 2008
Foreign Buyers Snap Up U.S. Real EstateReal estate agents are increasingly courting foreigners to buy homes in the USA — hiring agents fluent in other languages, marketing to foreign buyers and in some cases, offering to pay the airfare and hotel bills of foreign shoppers who buy a home. The agents are eager to win the business of foreign investors who are swooping in to buy property in the USA as home prices plummet and the dollar’s weak value produces eye-popping deals for international buyers. April 24, 2008
Make Way for TomorrowIn a few weeks, big machines will move into this patch of woods. The trees will be felled and the earth will be leveled for the intercounty connector, an 18.8-mile toll road that will link Interstate 270 in Montgomery County and the Interstate 95/Route 1 corridor in Prince George’s County. But for a few final hours yesterday, under the trees off U.S. Route 29 in Silver Spring, researchers with gentle, knowing hands swept and screened the fragile remnants of lives lived more than a century ago. They gleaned what was left to gather from a 19th-century African American homestead that has been called one of the most intact archaeological sites in Maryland. April 24, 2008
Making a Home Away From Home for Hurricane VictimsIt was not long after Hurricane Katrina, in late 2005, that local governments all over Louisiana started saying no to clusters of the tinny white shelters now known, infamously, as FEMA trailers. They did not ban all the trailers, of course; just the ones for people who did not own land, who had no place else to go, who were mainly poor and black and from New Orleans’s toughest neighborhoods. Just the trailers for the hurricane’s most desperate victims. April 24, 2008
Some Have Burning Desire to Escape from Their DebtsSome folks celebrate their last home mortgage payment by setting fire to their loan agreement. Lately, people behind on their mortgages are setting fire to their homes. In what appears to the latest symptom of the U.S. mortgage and credit crisis, insurers, law enforcement agencies and state agencies nationwide have reported a jump in the past year in home and automobile fires set by owners unable to pay their debts. The numbers are small but are leading the insurance industry to scrutinize more closely what seem to be routine blazes. April 24, 2008
Help for Low-Income Residents SoughtAffordable housing advocates circulated a petition yesterday aimed at convincing Mayor Adrian M. Fenty and D.C. Council members to add $15 million to a program that helps create housing for low-income residents. As council member Marion Barry (D-Ward 8) chaired an oversight hearing of the Housing and Urban Affairs Committee, a clipboard with the petition attached made its way around the room. Barry told the 75 people gathered that he will request $30 million more for the program than is budgeted when the council begins revising the spending plan proposed by Fenty (D) next week. April 24, 2008
Foreclosure-Relief Plan GainsA House panel Wednesday approved $15 billion in loans and grants for local governments to purchase the growing number of foreclosed homes throughout the country. The House Financial Services Committee voted 38-26 in favor of the bill, part of a broader package of housing legislation being pushed this week by House Democrats to address the housing crisis. Earlier Wednesday the panel voted to provide legal protection in certain circumstances for mortgage servicers that work with borrowers facing foreclosure. Passage came despite the opposition of some panel Republicans, who argued that using federal funds to buy foreclosed homes could encourage foreclosure. April 24, 2008
A School for Kids Living in Povertyteacher tries to shush her young students, telling them to be “as quiet as a mouse.” The familiar idiom sounds harmless, but it might carry a different meaning for children whose families can’t afford garbage service. Their home could be plagued with rats. If they live in a shelter, with disruptive bed checks throughout the night, children often come to school sleep-deprived. Uncertain of where they’ll be living the next week and traumatized by aspects of homelessness, impoverished students and their parents might view education strikingly different than middle-class families. April 24, 2008
Study: Help for Subprime Borrowers Falls ShortEfforts to aid beleaguered borrowers are still falling short as 70% of homeowners who are two months behind on their mortgages still aren’t getting help, a new report released Tuesday found. Of those borrowers receiving help, only one in three completed a workout within 45 days. Slow assistance is partly why the number of homeowners facing foreclosure increased 16%, the State Foreclosure Prevention Working Group found in its survey of mortgage servicers. The group is made up of representatives of 11 state Attorneys Generals, two state banking departments and the Conference of State Bank Supervisors. The report included 13 of the 20 largest mortgage servicers, representing 58% of all subprime mortgage loans serviced. April 23, 2008
HUD CHARGES LOUISIANA COUPLE WITH HOUSING DISCRIMINATIONThe U.S. Department of Housing and Urban Development today announced it is charging a Louisiana couple with racial discrimination in connection with the sale of a privately owned townhome. HUD claims Reggie and Kimberly Collier complained to a local real estate firm showing the home and threatened to deny the new owners utilities after they observed an African-American woman viewing the property. The African-American woman was, in fact, a sales agent representing prospective homebuyers who were white. The Fair Housing Act prohibits discrimination against persons in the sale or rental of housing because of race or color. Such discrimination includes interfering with the sale of a property and refusal to provide housing-related services. April 23, 2008
Triple-A FailureObscure and dry-seeming as it was, this business offered a certain magic. The magic consisted of turning risky mortgages into investments that would be suitable for investors who would know nothing about the underlying loans. To get why this is impressive, you have to think about all that determines whether a mortgage is safe. Who owns the property? What is his or her income? Bundle hundreds of mortgages into a single security and the questions multiply; no investor could begin to answer them. But suppose the security had a rating. If it were rated triple-A by a firm like Moody’s, then the investor could forget about the underlying mortgages. He wouldn’t need to know what properties were in the pool, only that the pool was triple-A — it was just as safe, in theory, as other triple-A securities. April 23, 2008
City Asks For Muscle To Address ‘Slumlords’D.C. Mayor Adrian M. Fenty is pressing for widespread changes that would give the city more power to punish landlords of neglected buildings, including the authority to quickly impose civil and criminal penalties when owners refuse to make repairs. Fenty (D) also wants to allow the city to conduct quicker housing inspections, make immediate repairs at poorly maintained properties and provide more aid to tenants displaced from unsafe buildings. The proposed changes to District law, submitted to the D.C. Council this week by interim Attorney General Peter J. Nickles, are the latest in a series of recent efforts by council members and the Fenty administration to crack down on abusive landlords. April 23, 2008
Montgomery Aims to Make Green Homes MandatoryNew homes built in Montgomery County would have to meet federal energy efficiency standards under innovative legislation approved yesterday by the County Council over the objections of builders who said that the mandate would drive up costs for consumers. The measure, meant to reduce energy consumption by 15 to 30 percent, is part of a far-reaching environmental initiative. It includes property tax credits for residents who switch to renewable energy, a requirement that residents disclose utility costs when they sell a home and a plan to get county officials to trade in their government-issued sport-utility vehicles. April 23, 2008
Bush Pledges to Sustain Aid to Gulf CoastAs he closed a two-day summit of North American leaders in New Orleans, President Bush turned his attention Tuesday to the needs of Louisiana parishes still struggling to rebound from Hurricane Katrina. After meeting privately with about two dozen local, state and federal leaders over lunch at a French Quarter restaurant, Bush said that even with $120 billion of taxpayer money allocated so far to rebuild the Gulf Coast, the federal government remains committed to providing more for the recovery. April 23, 2008
Shiller: Housing slump may exceed DepressionAn influential economist who long predicted the housing market bubble cautioned Tuesday that the slump in the U.S. housing market could cause prices to fall more than they did in the Great Depression and bailouts will be needed so millions don’t lose their homes. Yale University economist Robert Shiller, pioneer of the widely watched Standard & Poor’s/Case-Shiller home price index, said there’s a good chance housing prices will fall further than the 30 percent drop in the historic depression of the 1930s. Home prices nationwide already have dropped 15 percent since their peak in 2006, he said. April 23, 2008
‘Hope Now’ Program Falling Short, Study ShowsEfforts to aid beleaguered borrowers are still falling short as 70 percent of homeowners who are two months behind on their mortgages still aren’t getting help, a new report released Tuesday found. Of those borrowers receiving help, only one in three completed a workout within 45 days. Slow assistance is partly why the number of homeowners facing foreclosure increased 16 percent, the State Foreclosure Prevention Working Group found in its survey of mortgage servicers. April 23, 2008
Renters the Forgotten Victims in ForeclosuresA legislative subcommittee studying the housing and mortgage crisis was told Tuesday the state needs to make changes to protect renters who are too often the forgotten victims when a home is foreclosed.Sen. Warren Hardy, R-Las Vegas, said most often renters get no notice the home they live in is in the process of being seized. In Nevada, a significant number of the property owners in financial trouble purchased the second home as a rental property. April 23, 2008
Two-Thirds of California Defaults End in Foreclosure: ReportBorrowers in California — always the Golden State, but now also the center of possibly the worst housing crisis since the Great Depression — are finding loan workouts increasingly tough to come by as price depreciation has put millions upside down on their existing mortgage debt. Among homeowners in default, only an estimated 32 percent emerged from the foreclosure process by bringing their payments current, refinancing, or selling the home and paying off what they owed during the first three months of 2008; the rest — that’s more than two-thirds of troubled borrowers — ended up losing their homes on courthouse steps throughout the state. April 23, 2008
We All Pay the Cost of Predatory Lenders’ SuccessesA recent report showing minorities are more likely to be targeted by predatory lenders is disturbing, especially in a county where minority and foreclosure numbers are high. Given the numbers, we should all be the most concerned about predatory lending, period, which has become a problem for all races of lower income levels throughout the country. The Colorado Department of Regulatory Agencies studied more than 236,000 home loans in 2006 in Colorado to determine by race the numbers of subprime loans. April 23, 2008
Protesters Taking Aim at ForeclosuresAbout two dozen people who have had their homes foreclosed upon protested at the Orange County Courthouse on Tuesday, saying a foreclosure task force appointed by Gov. Charlie Crist hasn’t gone far enough to help them or end predatory lending practices. “There were some good things … but the recommendations were too heavy on education and didn’t include enough about the reform of the predatory lending industry,” said Carolyn Patmon, whose Orlando home of 38 years was paid off until she took out a home equity loan in 2001 to add a room. Now she is at risk of losing her home after missing seven payments on an adjustable rate mortgage that escalated to $950 a month. April 23, 2008
Domestic Abuse Increases Chance of Trouble Finding Homes, Study SaysDomestic violence survivors are more likely to face roadblocks to housing than the general public in D.C. despite an anti-discrimination law passed by D.C. Council last year, according to a study by a nonprofit civil rights organization. The study conducted by the Equal Rights Center found that 9 percent of applicants linked to domestic violence were denied housing outright and 56 percent were subject to adverse terms, not given appointments, or not told about additional listings. “How far do we have yet to go to reach where we should have already been years ago?” said Rabbi Bruce Kahn, executive director of ERC. April 23, 2008
Foreclosure Notices Go WildMore homes went into default statewide and in Colusa, Sutter and Yuba counties during the first three months of this year, according to a real estate information firm. Notices of default in California jumped to their highest level in more than 15 years, DataQuick Information Systems, of La Jolla, reported Tuesday. Statewide notices of default filings increased 143.1 percent in the first quarter of 2008 from the same period a year ago. The notices sent by lending institutions, which mark the first step in foreclosure proceedings, totaled 113,676 in California. April 23, 2008
Foreclosure Could be a BoonA troubled plan to build upscale condominiums and a marina on waterfront property on Bridge Street near downtown Hampton is headed to foreclosure in a few weeks for the second time. But the action may mean the project finally gets completed. The first developers, a group of 15 investors, pitched the project in 2004 as Hampton was laying out ambitious plans for residential projects in and around downtown. By December 2006, the project was headed to foreclosure because Gabarino Construction was owed $287,000 for work it had done. But the project’s developer, Dwight Wolf, worked out a deal to temporarily save the 15 investors’ stake. April 23, 2008
Bank Files Foreclosure Lawsuit Against Riverfront ComplexRedevelopment plans for the Las Olas Riverfront retail and entertainment complex on the New River in downtown Fort Lauderdale are stalled because the property owner and its lender are locked in a court case over money. Wachovia Bank sued Las Olas Riverfront Holdings LLC on March 14 to seize the property through Foreclosure. The lender claims in court papers that Las Olas Riverfront Holdings defaulted on monthly payments on a $22 million mortgage taken out last September. April 23, 2008
N.Y. Judge Finds Homeowner Liable for LoanDeclining to halt a foreclosure sale, a Long Island, N.Y., judge has been left with the “unhappy result” of a loan that should not have been taken for which the homeowner is nevertheless responsible. The case of Alliance v. Dobkin, 10625/06, is illustrative of the nationwide mortgage lending crisis: An increasing number of borrowers who agreed to onerous loan terms to finance homes they could not otherwise afford now are facing foreclosure. April 23, 2008
120 New Affordable Apartments in LEED Certified Building on 116th StreetMayor Michael R. Bloomberg today announced the completion of the Kalahari, a 249-unit mixed-income development on 116th Street in Harlem designed and built to the U.S. Green Building Council’s LEED Certification standards, the nationally accepted benchmark for the design, construction and operation of high-performance ‘green’ buildings. Twenty-five percent of the building’s energy comes from renewable sources such as solar and wind. The Kalahari offers 120 homes affordable to moderate- and middle-income households. The Kalahari was developed by Full Spectrum of NY and L&M Development Partners through the Department of Housing Preservation and Development’s (HPD) Cornerstone program which builds multifamily, mixed-income housing on City-owned land. April 23, 2008
Bush Picks New HUD SecretaryPresident Bush chose SBA Administrator Steve Preston yesterday to lead the government’s housing agency at a time of crisis in the industry, praising him as a skilled manager. Democrats hailed Preston as a problem-solver. If confirmed by the Senate, Preston would replace Housing and Urban Development Secretary Alphonso R. Jackson, who announced his resignation last month amid a criminal investigation and allegations of political favoritism. Jackson’s last day on the job was yesterday, and he sat in the Roosevelt Room to hear Bush announce his successor. Bush called Jackson “a decent man … a dedicated man … a compassionate man” and added, “America is a better place because of your service.” April 22, 2008
Renters Can’t Escape Housing Foreclosure CrisisOn a chilly night after work last November, Christopher and Jenell Chow relaxed, watching the evening news while their children scampered around their rented two-story stucco home. Someone knocked at the door. An officer was standing on the doorstep, eviction papers in hand. That’s when the Chows learned that the North Las Vegas home they’d rented for two years was in default. They had 30 days to move out and find a new home for their five children, Jenell’s live-in mother, their two black Labs and a cat. The stress was severe: Jenell says she suffered a miscarriage the day before they moved out. April 22, 2008
A New View of Vacant HousesWhen Chris Pannell walks down the Prince William County street she has called home for all of her 39 years, she’s dismayed by what she sees — vacant houses — and delighted by what she says she doesn’t see — illegal immigrants. “I will take coming down here and looking at 10 empty houses any day over what we had before,” says Pannell, a title examiner, as she and her neighbor, Allison Kipp, 42, amble past lifeless houses. This stretch of Lafayette Avenue in the Manassas area is a fairly gloomy scene. “For Sale” signs flap outside two of the 30 1960s-era red brick starter homes on the block. Eight others appear to be vacant. Few cars are parked on the street. The worn sidewalks are deserted. But to Pannell and Kipp, it is a tableau of hope. And victory. April 22, 2008
Panel Questions Law as Solution to Homeless ColonyCouncilwoman Shelley Midura on Monday summarized why Mayor Ray Nagin’s administration wanted a new public habitation law to move vagrants to a bunkhouse at the New Orleans Mission. “What you’re saying is that we need a way to round them up and get them into the bunk beds. Is that a fair statement?” Midura asked Anthony Faciane, deputy director of neighborhood stabilization for the city’s Office of Recovery Development and Administration. That was fair, he told the council’s Housing and Human Needs Committee. April 22, 2008
How Golf Transformed A Blighted NeighborhoodFor years, the East Lake housing project here was one of the worst places in America — crumbling and crime-ridden. Today, it has been transformed by a businessman who brought his passion, his money and, of all things, his love for the game of golf. Eva Davis moved into the East Lake Meadows housing project in 1971. It wasn’t long before murder and mayhem became a way of life. “Two guys got in a fight right across in front of my house,” she said. “I saw one peep his head around the corner. Pow, pow, pow. It was just like you was in a Western movie. April 22, 2008
The New HUD Nominee and the Katrina Housing CrisisOn Friday, President Bush announced his nominee to replace outgoing Housing and Urban Development Secretary Alphonso Jackson, who resigned while under investigation for illegal partisanship and cronyism in the provision of contracts. Jackson was also criticized by low-income housing advocates for pushing a plan to tear down public housing complexes in New Orleans that were barely damaged by Hurricane Katrina and replace them with mixed-income developments with less room for the poor — a plan that’s now faltering due to the credit crunch. April 22, 2008
Affordable Housing Hard to Find in New MexicoNew Mexico has found itself ranked low on another list — this one for affordable housing. Despite San Juan County scoring a decent grade in the regional report, local housing officials claim the area is in the middle of a troubling trend. The state is facing an affordable housing crisis with lower income families having to work an average of 2.5 jobs just to pay rent. According to the 2008 Colorado College State of the Rockies Report Card, released earlier this month, nearly 60 percent of New Mexico’s 33 counties earned “D’s” and “D minuses” — the lowest scores possible. April 22, 2008
Women’s Right to Land and HousingWomen’s right to land and housing has been major concern of the women’s movement in India for over two decades. Globally, women’s land rights are becoming an area of increasing urgency. In most societies, women have historically managed the unpaid care economy and fulfilled the responsibilities of cooking, cleaning, family care, collection of fuel, fodder, water, kitchen gardening, poultry and animal husbandry and provided food and nutritional security. As women’s contribution to the economy and society at large remains unrecognised, largely underpaid and mostly unpaid, the need for women to be able to secure land and property has become even more critical. April 22, 2008
Foreclosure Prevention Act Gets Mixed Reaction from Multifamily IndustryThe Foreclosure Prevention Act of 2008 (S. 2636), recently passed by the Senate, has received mixed reaction from the multifamily industry. The Act provides $3.92 billion in emergency funding to enable states and cities to work with local nonprofits to acquire and rehabilitate foreclosed homes. “The passage of the Foreclosure Prevention Act will help mitigate the growing problems brought on by the foreclosure crisis,” says Doris W. Koo, president and CEO of Enterprise Community Partners. “Productive occupancy of foreclosed homes will help stimulate economic activity and help prevent further loss of home equity in struggling neighborhoods. April 22, 2008
Condo Associations in Eye of Foreclosure StormAt the Fountains of Tamarac, the condo association has no insurance, a couple of unit owners are cutting the community’s grass themselves, and 90 percent of the unit owners aren’t paying their maintenance fees. Even two banks, both of whom acquired their condos out of foreclosure, haven’t paid their dues. Condo President Cesar Gonzalez views the start of hurricane season with dread. ”We’re hurting really bad,” he said. “I don’t know if I can handle the stress.” April 22, 2008
Housing-Credit Woes Spur Calls for More Federal RegulationA heavier federal hand is reaching into American life as politicians in both parties demand an overhaul of government financial regulation and more protection for homeowners in the face of mortgage woes and a weakening economy. This rush to regulate also was apparent in the recent crackdown on the airlines, resulting in thousands of grounded flights for safety inspections as the government beefs up its enforcement of existing laws. There have been mounting proposals for tougher government rules to address climate change. High corporate salaries have come under attack on Capitol Hill, as have oil industry profits and rising food costs. April 21, 2008
In a Rush to Cut and Run? Learn to Love the House You’re In.The housing market has some homeowners up in arms. Sure, if you’re trying to sell your house to get out of financial difficulties, or because you have already bought another place and carrying two mortgages is killing you financially, we can understand why you’re not happy. What doesn’t make much sense to us are the dozens of readers who say they are ready to hand over their property to the lenders simply because their home doesn’t work for them anymore. April 21, 2008
Putting a Big Squeeze On Condo LoansIf you own or plan to buy a condominium, an ominous new phase of the mortgage-credit squeeze could be looming for you. As a result of underwriting changes by the giant mortgage investors Fannie Mae and Freddie Mac, plus severe new restrictions by private mortgage insurers, getting a loan on a condo unit — or even refinancing one you already own — could be tougher than you imagine. April 21, 2008
The House That Green BuiltTO illustrate the confounding nature of green building, Lindsay Suter, a Connecticut architect, likes to start with a question: Between a stone and plastic foam insulation, which one is green? “You’ll go, ‘Of course, Lindsay, the stone is a natural product,’ ” said Mr. Suter, who was trained at the Yale School of Architecture, where he now teaches part time. But it’s the context and the big picture, he said. Sure, the insulation may be a petrochemical. But the stone may be tumbled Brazilian marble that in shipping would have used a great deal of fuel. The insulation, he said, “will pay you back year after year after heating season after heating season after cooling season with the benefits of its performance.” April 21, 2008
Bush Picks New HUD SecretaryPresident Bush chose SBA Administrator Steve Preston yesterday to lead the government’s housing agency at a time of crisis in the industry, praising him as a skilled manager. Democrats hailed Preston as a problem-solver. If confirmed by the Senate, Preston would replace Housing and Urban Development Secretary Alphonso R. Jackson, who announced his resignation last month amid a criminal investigation and allegations of political favoritism. Jackson’s last day on the job was yesterday, and he sat in the Roosevelt Room to hear Bush announce his successor. Bush called Jackson “a decent man … a dedicated man … a compassionate man” and added, “America is a better place because of your service.” April 21, 2008
You Need Not Pay to Recover Unclaimed PropertyIt is that time of year when the Maryland comptroller’s office issues its list of unclaimed property in local newspapers. And scam artists are hot on its trail. This year, the list of 66,000 accounts worth more than $46 million first appeared in various newspapers April 3 and will continue to run through April 23. The list gives the property owner’s name, address (if there is one), and a reference number for unclaimed property. People who believe they might be a match can call the Unit of Unclaimed Property at 410 -767-1700 or 800-782-7382. Claim forms can be requested over the phone or downloaded from a Web site, www.marylandtaxes.com. April 21, 2008
1 Mortgage. 2 Lenders Demanding Money. It Doesn’t Add Up.Q: We refinanced our home loan in March with an online lender. Within a couple of weeks, we received a letter from another mortgage company, advising us that our May payment was to be made to it. I contacted the original lender and was told that the loan was not sold. The representative said that if and when that occurs, we would receive a “goodbye letter.” That has not happened. We now have May payment invoices from both lenders and only two weeks to go until the payment is due. We contacted the second lender. It insists that it owns the loan. What should we do? We do not want this to hurt our good credit rating. April 21, 2008
The Word Is Out About BloomingdaleBloomingdale could be the friendliest neighborhood you’ve never heard of. Some real estate agents, and even some residents, consider it part of LeDroit Park, but the Bloomingdale Civic Association, established in 1921, says the two-block-wide strip in Northwest Washington between Florida Avenue and the McMillan Reservoir makes up a neighborhood in its own right. On a recent spring afternoon, Alice Bullock sat on a chair on her stoop while her great-grandchildren played on the sidewalk. Bullock, who rented her house on Randolph Street for $125 a month before buying it with her husband for $1,600, can’t remember how long it has been her home now — 35 years? 40? April 21, 2008
If You Walk Away, Expect to PayIf you thought buying a new home was expensive, wait until you see how much it costs you to back out of the deal. Some buyers have compelling reasons to want out of a home sale agreement. How can you buy if you no longer qualify for a mortgage, or if you haven’t been able to sell your old home? Who wouldn’t walk away from a deal that’s worth $50,000 or $100,000 less than when the contract was signed? With appraised values coming in below the contract price, buyers have to come up with more cash to follow through on such a deal. Sometimes walking away from a purchase is the least painful, most financially prudent option. April 21, 2008
Cape Town, South African: Families Fear Defective Homes Will CollapseA number of families in Roosendal, Delft, fear for their lives and are having sleepless nights because their homes have such serious defects they could collapse at any moment. The houses were built in the early 1990s by the apartheid-era Divisional Council. In Ertjiebos street, one house has collapsed and has had to be rebuilt, while the foundations of another have given way, bringing down the walls of two rooms. “It used to be a three bedroomed house, but now I have only part of the bathroom, one bedroom and the kitchen,” said owner Rachel Simons. April 21, 2008
Lawmakers May Cut, Change Affordable Housing ProgramHousing advocates are bracing themselves for a trust fund raid at a time they say affordable housing is needed more then ever as low- and moderate-income residents deal with a lingering economic slowdown. Florida lawmakers are wrangling over how to fill gaps in the state $65.5 billion budget. So they have their eye on a $333 million pot of money sitting in a trust fund that is supposed to provide housing support for the state’s neediest residents. How much will get shifted to fill other holes in the state budget will be determined as House and Senate negotiators meet in the next few weeks. April 21, 2008
Housing Sense in Congress?Presidential candidates insist that Washington needs fixing, and we in the commentariat love to expose hypocrisy, pork-barreling and gridlock. So it feels awkward to admit the truth about the subprime meltdown. First Congress produced a timely and well-crafted stimulus. Now it is working on proposals to help homeowners, and with one ugly exception, the recommendations are sound. April 21, 2008
Debt May Be a Factor in Suspicious House, Car FiresSome folks celebrate their last home mortgage payment by setting fire to their loan agreement. Lately, some people behind on their mortgages are simply setting fire to their homes. In what appears to be the latest symptom of the nation’s mortgage meltdown and credit crisis, insurers, law enforcement officials and state agencies nationwide report a jump in home and automobile fires in the last year believed to have been set by owners unable to pay their debts. The numbers are small, but they’re leading the insurance industry to scrutinize more closely what seem to be accidental blazes. April 21, 2008
As HUD Chief Quits, a Look at Close TiesMost of the time, the prominent men hovered in different orbits and different cities. Yet for years now, their lives have converged here on this resort island of white beaches and rippling sea. There was William Hairston, a local builder whose wife is active in Republican circles here. There was Michael R. Hollis, an Atlanta lawyer, entrepreneur and presidential history buff who vacations here. And there was President Bush’s housing secretary, Alphonso R. Jackson, who golfed and socialized here and led the federal agency that gave hundreds of thousands of dollars in business to friends and acquaintances, including Mr. Hairston and Mr. Hollis. April 18, 2008
HUD AND VA TO PROVIDE PERMANENT HOUSING FOR AN ESTIMATED 10,000 HOMELESS VETERANSU.S. Department of Veterans Affairs Secretary James B. Peake and U.S. Housing and Urban Development Deputy Secretary Roy A. Bernardi today announced $75 million to provide permanent supportive housing for an estimated 10,000 homeless veterans nationwide. Bernardi and Peake made the announcement with Mayor Michael Bloomberg at a newly renovated housing program for homeless veterans in Queens and emphasized the Federal and local government’s partnership to house and support America’s homeless veteran population. April 18, 2008
Energy BoostFor Tony Clifford, president of Standard Solar, the threats of climate change and high energy prices have been great for business. His Gaithersburg firm, which installs solar panels for homes, has tripled its revenue in the past year and raised new funds for expansion. Last week, he got another piece of good news. The Senate agreed to extend solar and wind energy tax breaks as part of a housing bill that is likely to win approval in the House. An elimination of the tax incentives would have been a blow to Clifford’s business, forcing him to cut his staff of 20 and tell subcontractors he no longer needed them. April 18, 2008
High-Rise Approved in Error Before CrashThe high-rise building under construction on the East Side where a crane collapse last month killed seven people did not conform with zoning regulations and was approved in error, the city’s buildings commissioner said on Thursday at a City Council hearing. Later, in a clarification, the commissioner, Patricia J. Lancaster, told reporters that the Buildings Department should not have approved the building as proposed. But she left open the possibility that it might have been properly approved in a different configuration. April 18, 2008
Sign Law Still ToothlessThe “We Buy Houses” signs plastered illegally across the city drive Robert Strupp crazy. It is not merely that they are ugly. Strupp, with the Community Law Center in Baltimore, sees them as neighborhood destabilizers that make it easier for real estate predators to find prey - but it is not just that, either.No, it is that the city has yet to enforce a nearly two-year-old law allowing citizens who tear them down to take them to city officials so the authorities can fine the sign owners. Regulations have not been put into place to make it possible. April 18, 2008
Freshwater Diversion Plans DelayedAs it courses through south Louisiana at the highest level in 11 years, the Mississippi River is bringing an estimated 900,000 tons of sediment — enough to fill 45,000 dump trucks lined up from New Orleans to Houston — past the state’s disappearing wetlands and into the Gulf of Mexico. This year’s flood has disrupted commerce and led to heightened levee security, but it also represents a critical juncture in the state’s mission to save the coast. April 18, 2008
FBI Looking at More Mortgage Fraud CasesFBI Director Robert Mueller on Wednesday described a “tremendous surge” in mortgage fraud investigations that he said has diverted agents from other cases and is expected to keep growing. At a Senate hearing, Mueller said the FBI is investigating an estimated 1,300 mortgage fraud cases — including 19 into sub-prime lending practices by U.S. financial institutions. That’s up from three months ago, when FBI officials said they were investigating 14 companies for possible fraud or insider trading violations in connection with loans made to risky borrowers, and investments spun off of those loans. April 18, 2008
For Sale: Land Next to ‘Hollywood’ SignThe world-famous “Hollywood” sign that has been used by TV and movie directors in more scene-setting shots than a film student could ever count was first erected in 1923 to promote real estate in the fledgling capital of celluloid. Eighty-five years later, some fear the sign and the hillside on which it sits are threatened by, yes, a real estate deal. An investment group that owns 138 sage-covered acres above and to the left of the 45-foot-high, steel-and-concrete H put the land up for sale last month for $22 million. April 18, 2008
Segregation, Housing Prejudice Fade but Still ‘Have Ways to Go’When President Lyndon Johnson signed a law banning housing discrimination in April 1968 - a week after the assassination of the Rev. Martin Luther King Jr. - he said the Fair Housing Act “proclaims that fair housing for all … is now a part of the American way of life.” Forty years later, there is no argument that fair housing is part of American law. But, in Asheville at least, there are still differences between the law on the books and reality on the street. Housing patterns in Asheville and the rest of Buncombe County show there is still substantial segregation by race, although there is less than there was shortly after the law was signed. April 18, 2008
Michigan County Treasurers Warn of Foreclosure Bail-Out ScamCounty treasurers throughout the state were warning property owners not to fall for a fake foreclosure bail-out that has hit homeowners in recent months. “I don’t know where it started, but there are e-mails going out (to treasurers) all over the state, and they’re all saying the same thing,” said Saginaw County Treasurer Marvin D. Hare. “We’re concerned about it.” The scammers are targeting property owners whose land is in danger of foreclosure for delinquent property taxes, Hare said. April 18, 2008
Minorities More Likely to Get Subprime LoansBlacks and Hispanics have been more than twice as likely as whites to take out subprime loans and possibly become victims of predatory lending, according to a study released Monday by the Colorado Civil Rights Division. The study, using information on loans made in Colorado in 2006, found that 43.1 percent of blacks and 42.8 percent of Hispanics who took out loans received subprime loans, while 20.2 percent of whites did. The disparity was not as great in El Paso County - 36.9 percent for blacks, 35.7 percent for Hispanics and 21 percent for whites - but still was significant, officials said. April 18, 2008
HUD Threatens to Pull FundingFederal officials are vowing to pull funding from the Nebraska Equal Opportunity Commission, the state agency that investigates housing discrimination cases. But Attorney General Jon Bruning said late Thursday that his office and the commission have reached “an understanding” that should resolve the problems threatening the NEOC’s federal funding. The U.S. Department of Housing and Urban Development said that in part because of Bruning’s past refusal to prosecute NEOC discrimination cases, it would stop sending the agency $2,400 for each case it handles, said Anne Hobbs, the commission’s executive director. April 18, 2008
‘Harlem is not for sale!’Hundreds lined Harlem’s 125th Street on April 13 in a protest against real estate developers and banks that are forcing out the people of this historic Black neighborhood. The protesters formed a human chain, called Hands Across Harlem, from east to west along this major and famous street, the backbone of the community. Led by the Coalition to Save Harlem, Black community and political leaders—including revolutionaries with many decades in the struggle—insisted that Harlem has been and will belong to the people, not to greedy landlords or billionaire mayors. April 18, 2008
Alberta, Canada: Affordable Housing for Aboriginals Passes Appeal BoardAn affordable housing development for aboriginals on the north side is now official after the city’s subdivision and development appeal board approved a technical waiver Thursday. A citizen appeal of the developer’s waiver request necessitated the hearing. Board members voted 3-3 on the waiver, but city bylaws dictate tie votes are decided in favour of the waiver applicant. As a result, a series of six four-townhouse units and one five-townhouse unit known as Koh Koonoon (Blackfoot for “Our Home”) will be built on the former site of Ducan Industries at 1102 5 Ave. N. beginning in May, officials said last week. April 18, 2008
Attorney General Sues Foreclosure FirmsAttorney General Lori Swanson on Thursday sued six out-of-state foreclosure consulting companies who she claims defrauded Minnesota homeowners out of thousands of dollars. Swanson, who filed the suits in Hennepin County District Court, is also seeking injunctions to stop the companies from operating in Minnesota. The suits allege the companies violated state law by collecting large fees before performing the services they were contracted to complete. April 18, 2008
2 Arrested in Alleged Foreclosure FraudMichael D. Henschel of Van Nuys, who has had a long history of legal run-ins, was arrested Thursday by Los Angeles County authorities, who accused him of operating foreclosure scams that took in hundreds of homeowners, costing some their houses. Henschel, 59, faces 71 federal charges, including forgery and conspiracy counts, in an alleged scheme to defraud homeowners from 2000 to 2004. Canoga Park resident Alan Mitchell, 70, also was arrested and faces 32 charges. Scammers posing as foreclosure specialists are becoming increasingly common in California, with some blatantly posting fraudulent offers online, said Los Angeles County Sheriff’s Det. Chris Christopher, who arrested the pair and has tracked them for years. April 18, 2008
Momentum Builds for Foreclosure ReliefCongress isn’t done debating how best to stem the foreclosure crisis, but one near-certainty has emerged: Lawmakers will pull together a housing bill that expands Washington’s role in helping troubled borrowers. Key legislators, Bush administration officials, banking regulators and the presidential candidates have lined up behind the idea of letting the Federal Housing Administration back new loans for homeowners at risk of foreclosure. April 18, 2008
Housing Bailout: Helping Hand or Handout?Even as home prices jumped earlier in the decade, conservative lenders in Vermont resisted high-cost, exotic loans. Today, as a massive U.S. housing bubble bursts, the state’s mortgage delinquency rate is less than 3%, while values are still stable. In Nevada over the same period, home buyers gorged on unconventional loans, with 30% of Las Vegas borrowers taking out higher-cost subprime products in 2006. The state’s delinquency rate is above 7%, home prices have plummeted, and in some areas, a majority of borrowers owe more than their homes are worth. April 17, 2008
Rates on 30-year Mortgages Unchanged but Other Rates DropRates on 30-year mortgages were unchanged this week but other rates showed declines. Freddie Mac, the mortgage company, reported Thursday that 30-year fixed-rate mortgages averaged 5.88 percent this week, where they have been for the past three weeks. The 30-year rate, which had been at 5.85 percent the week of March 27, edged up slightly to 5.88 percent the following week and has stayed at that level, remaining below the 6 percent level for five straight weeks. April 17, 2008
Hints of Fear in the Land of MansionsYou could have a pretty good time checking out the merchandise if you’re looking for a place to hang your hat in Greenwich: Mel Gibson’s manse on 75 acres with the walk-in fireplace and the two-handed Scottish claymore sword hanging above the mantel (asking price $39 million); Leona Helmsley’s 40 acres, which just went on the market for $125 million; the stunning 10-acre property overlooking Long Island Sound being sold, most likely, as a $34 million teardown. On the other hand, who knows? The rich may be different, but judging from the chatter of real estate agents touring open houses on Tuesday, maybe not all that different as the house-selling season staggers off to an uncertain start. April 17, 2008
Bargain Hunters Boost Home Sales in Some MarketsHome prices are sinking. Banks are seizing properties from owners who can’t pay their mortgages. Yet for Amber Gilmore, the miserable housing market has never looked better. After searching for a home for more than a year, Gilmore and her fiancé found one in foreclosure. Once the bank cut the asking price by more than $100,000, the first-time home buyers eagerly sealed the deal for $230,000. April 17, 2008
States Tackle Foreclosures In Absence of Federal HelpThis month alone, Philadelphia’s sheriff delayed foreclosure auctions of 759 homes at the city council’s urging. Maryland extended the time it takes to complete a foreclosure. State leaders in Ohio recruited more than 1,000 lawyers to aid distressed borrowers. Frustrated by the slow pace of federal action on behalf of struggling homeowners, some states and cities have struck out on their own to stem an alarming rise in foreclosures that has depressed home prices in most parts of the country and eroded local governments’ revenues as property taxes and utility bills go unpaid. April 16, 2008
Foreclosures Push States to Try a Mix of SolutionsAs the federal government debates responses to the foreclosure crisis, states are experimenting with a broad range of solutions, including emergency loans and agreements to limit high interest rates. The result is a rapidly changing patchwork of local approaches, some far-reaching, others modest, according to a survey issued Tuesday by the Pew Charitable Trusts. Among other measures, 20 states have created intervention programs, 13 have set up counseling hot lines, 14 have assembled task forces and 9 have established funds for emergency loans or refinance loans, totaling $450 million. April 16, 2008
HUD CELEBRATES FIRST-EVER FAIR HOUSING EDUCATION IN AMERICA DAYThe U.S. Department of Housing and Urban Development today announced its first-ever “Fair Housing Education in America Day” to be held on Wednesday, April 16, 2008. Designed for 4th through 6th grade students, this national education project will give teachers, parents and their children a basic understanding of the landmark Fair Housing Act. This year marks the 40th anniversary of the Fair Housing Act. To mark this occasion, HUD’s Office of Fair Housing and Equal Opportunity (FHEO) and its fair housing partners will encourage schools across the country to instruct younger children about fair housing opportunities. Using a lesson plan developed by HUD, instructors will help to educate young people and to promote the principles of equal opportunity in housing. April 16, 2008
Rate of Home Foreclosures Expected To Get WorseThe nation’s already alarming pace of home foreclosures is poised to accelerate through the rest of the year, according to RealtyTrac, which reported Tuesday that foreclosure filings jumped 57% in March from March 2007. The report painted a grim picture of growing numbers of people unable to make their mortgage payments. Bank repossessions more than doubled in March. Foreclosure filings surged 57% last month from March 2007, with one in every 538 households receiving a foreclosure filing during the month, RealtyTrac said. Nevada, California and Florida were the states hardest hit. In total, more than 234,000 homes were in some stage of foreclosure in March. April 16, 2008
Attempting to Heal a Fractured Mortgage MarketA federal regulator said yesterday that it has “significant supervisory concerns” about the conditions of Fannie Mae and Freddie Mac, two government-sponsored housing finance companies that own or guarantee trillions of dollars of mortgages. Both companies have suffered financially from the meltdown in the housing market and remain vulnerable to further declines, but Freddie Mac’s problems run deeper, the regulator said. Freddie Mac still has some ineffective internal controls, has invested in poorly underwritten loans and lacks “sufficient executive management depth,” the Office of Federal Housing Enterprise Oversight said in an annual report to Congress. April 16, 2008
Brokers Feel A Pulse in U.S. Home MarketWhile the data says “no end in sight” for the U.S. housing crisis, real estate agents are beginning to see signs of life among people looking for homes to buy around the United States. It’s too early to talk of a trend, but lower house prices and mortgage rates are bringing buyers out of hibernation, at least in some markets. Provided sellers are prepared to cut prices, buyers are willing to bid, real estate agents say. “If you’re not going for pie-in-the-sky type of numbers and price your house accordingly, I think that they’ll go pretty quickly,” said Victoria Hanbury Howard, a real estate broker at Coldwell Banker in Washington. April 16, 2008
Big Tax Breaks for Businesses in Housing BillThe Senate proclaimed a fierce bipartisan resolve two weeks ago to help American homeowners in danger of foreclosure. But while a bill that senators approved last week would take modest steps toward that goal, it would also provide billions of dollars in tax breaks — for automakers, airlines, alternative energy producers and other struggling industries, as well as home builders. The tax provisions of the Foreclosure Prevention Act, which consumer groups and labor leaders say amount to government handouts to big business, show how the credit crisis, while rattling the housing and financial markets, has created beneficiaries in the power corridors of Washington. April 16, 2008
Mortgage Payments A WorryOne in 7 mortgage holders worry that they might soon fail to make their monthly payments and even more fret that their home’s value is shrinking, according to a poll showing widespread stress from the nation’s housing crisis. In an ominous snapshot of how the sagging real estate market and sour economy are intersecting, the Associated Press-AOL Money & Finance poll also found that 60 percent said they definitely will not buy a home in the next two years. April 16, 2008
Housing Crisis Hits Too Close to HomeLet’s be clear here: We’re not talking about people who foolishly bought more house than they could afford, or took out a subprime mortgage that they didn’t understand or gambled that an adjustable rate loan that started low wouldn’t ever, duh, adjust upward. We’re not talking about any of those self-inflicted, foreclosure-inducing stab wounds that have contributed to the current housing crisis. We’re talking about someone’s house possibly being seized over what started out as a $173 water bill. April 16, 2008
Rep. Frank Threatens Tough Mortgage RulesCongressional Democrats and President Bush will agree on a bill to help half a million or more struggling homeowners get into lower cost mortgages, but it won’t be through the bankruptcy courts, the chairman of the House Financial Services Committee predicted Tuesday. Efforts to let bankruptcy judges rewrite mortgages for strapped borrowers won’t make it through Congress this year, Rep. Barney Frank, D-Mass., told The Associated Press in an interview. April 16, 2008
Foreclosure Hits The Big Guys, TooHardly lived-in 9,400-square-foot Henderson home has 19 rooms, including eight bedrooms. The house and lot feature a mammoth kitchen and entryway, four fireplaces, and a pool and spa. Remarkably, three of the seven houses in the high-end neighborhood off Sunridge Heights Parkway have been in foreclosure. The house at 821 was built on one of five lots purchased in the middle of 2003 by a company named Phoenix Properties & Development of Henderson. It was sold to another investor, a company by the name of Park Place West. At one point the house was assessed at $3.8 million. More loans were made. A pool was put in. And then, nothing. No more work. No more payments. April 16, 2008
Foreclosure Glut Further Depresses Housing PricesThe traditional spring home-buying season is off to its worst start in 20 years, data released Tuesday show, with sales so weak that foreclosures now account for more than one-third of all market activity.Nearly 38% of Southern California homes sold in March had been foreclosed at some point in the prior year, up from 8% in March 2007, DataQuick Information Systems said. In Riverside County, more than half of all sales were foreclosures. That’s helping to drive prices even lower, DataQuick said, because foreclosures typically sell at a 15% discount to surrounding properties. April 16, 2008
Foreclosure Aid Hinges on Eligibility, How Many Are HelpedShould the federal government bail out a homeowner who lied about her income, bought a house far bigger than she could afford and now, predictably, cannot make the payments? What about someone with a terrible credit record who has repeatedly missed mortgage payments? Should the government agree to pay off the lender if that mortgage fails? The Bush administration says no, which is one reason the White House opposes an ambitious Democratic plan to defuse the nation’s housing crisis by sharply relaxing eligibility standards for federal mortgage insurance. Under the proposal, lenders would be encouraged to wipe out a portion of the debt on troubled loans in exchange for a promise that the government would pay off the mortgage if the borrower can’t. April 16, 2008
Anger, Anxiety Mark Foreclosure ForumDespite state lawmakers efforts to ease the tensions surrounding the housing marking, struggling Prince George’s County homeowners at an April 10 mortgage-counseling forum still expressed anxiety and apprehension. Over 200 middle-aged county residents packed the hot cafeteria of Perrywood Elementary School in Upper Marlboro to get information. Maryland Sen. Ulysses Currie (D-Dist. 25), who hosted the meeting with a number of housing officials from the both the state and county, repeatedly had to quiet audience members who anxiously pushed forum panelists to cut their comments short and open up the floor to questions. April 16, 2008
City Council Expected To Approve Harlem RezoningThe City Council’s zoning committee is expected to approve a proposal to rezone 125th Street in Harlem Wednesday. The plan gained support of Manhattan Democratic Councilwoman Inez Dickens on Tuesday, just before it was approved by the City Council’s subcommittee on zoning. The new proposal calls for smaller buildings and reserves almost half of the proposed housing for low- and middle-income families. April 16, 2008
Groups Want Tougher Housing RescueDemocrats crafting a broad government housing rescue are under pressure from liberal groups to push more aggressive measures that would force lenders to let homeowners facing foreclosure restructure their mortgages. A growing chorus of labor, civil rights and consumer advocates say Democrats’ plans won’t do enough to prod loan servicers to work with strapped borrowers rather than letting them slip into default. They are leaning on House Democratic leaders to resurrect a proposal — dropped before the Senate passed a housing measure last week — that would allow bankruptcy judges to lower mortgage rates or principal for bankrupt homeowners. April 15, 2008
Report Highlights Fannie, Freddie RisksA deep recession could force mortgage-finance titans Fannie Mae and Freddie Mac to require a federal bailout large enough to hurt the U.S. government’s top-grade credit rating, Standard & Poor’s warned Monday. A lower credit rating would mean higher borrowing costs for the U.S. government and could lead to a flight from Treasury securities, which investors _ including foreign governments _ consider to be virtually risk-free. The financial stress Fannie and Freddie may face poses a far larger risk to the government than the $29 billion in mortgage assets taken on by the Federal Reserve to avoid the bankruptcy of investment bank Bear Stearns Cos, the credit rating agency said. April 15, 2008
Even Renters Aren’t SafeON a cold evening in March, Desiree Dookhoo was at home in Ozone Park, Queens, studying for a nursing exam, when she heard someone trying to open her front door. She demanded to know who was there and threatened to call the police. “It’s Richard from the bank,” a voice answered. “Your landlord has lost the house.” Many renters may believe that they have avoided the chaos of the subprime loan crisis and the mortgage meltdown simply by renting and not buying, but they may not be as insulated as they think. Buildings with tenants are going into foreclosure as well. April 15, 2008
Housing Woes Won’t End Soon, Poll SuggestsA growing majority say they won’t buy a home anytime soon, the latest sign of increasing pessimism about the nation’s housing crisis, a poll showed Monday. The Associated Press-AOL Money & Finance poll found that more than a quarter of homeowners worry their home will lose value over the next two years. One in seven mortgage holders fear they won’t be able to make their monthly payments on time over the next six months. April 15, 2008
Mortgage Payments A WorryOne in 7 mortgage holders worry that they might soon fail to make their monthly payments and even more fret that their home’s value is shrinking, according to a poll showing widespread stress from the nation’s housing crisis. In an ominous snapshot of how the sagging real estate market and sour economy are intersecting, the Associated Press-AOL Money & Finance poll also found that 60 percent said they definitely will not buy a home in the next two years. That was up from 53 percent who said so in an AP-AOL poll in September 2006. Eleven percent were certain or very likely to buy soon, down from 15 percent two years ago. April 15, 2008
High Water, Construction Could Prove Dangerous to Levee StabilityWith the Mississippi River again creeping up its banks, authorities are scrambling to stop nearby construction and demolition because the work could undermine levees during this vulnerable period of high water. Pile driving, excavation and other dirt-moving procedures are never allowed within 1,500 feet of a river levee unless the Army Corps of Engineers determines it’s no threat to levee stability. Even then it must be permitted by the appropriate levee district, officials said. April 15, 2008
Foreclosures Continue to Soar, Worst Is Not OverThe onslaught of homes facing foreclosures has yet to ebb, a research report showed Tuesday, with bank repossessions skyrocketing last month as more troubled homeowners mailed in their keys and walked away. And the worst isn’t over: the wave of adjustable-rate loans resetting to higher rates will crest in May and June. And that’s expected to push more homeowners into default and foreclosure in the third and fourth quarters of this year, according to RealtyTrac Inc. of Irvine, Calif. April 15, 2008
Foreclosure Activity Increases 5 Percent in March According to RealtyTrac(R) U.S. Foreclosure Market ReportRealtyTrac(R) (http://www.realtytrac.com), the leading online marketplace for foreclosure properties, today released its March 2008 U.S. Foreclosure Market Report(TM), which shows foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 234,685 propertiesnationwide during the month, a 5 percent increase from the previous month and a 57 percent increase from March 2007. The report also shows one in every 538 U.S. households received a foreclosure filing during the month. April 15, 2008
Senate Housing Bill- More Grief for HomeownersSocialists across the nation are rejecting a U.S. Senate housing bill that offers little help to struggling homeowners facing foreclosure, while providing tens of billions for banks, financial institutions and big corporations. The bill (Foreclosure Prevention Act) passed in the Senate this past week by a vote of 84-12 and has been sent to the House. The vote was clearly a major setback for millions of homeowners and a big win for banks and big businesses. There is a major provision in the housing bill that will likely exacerbate the housing crisis and will cause hundreds of thousands of working families to lose their homes; the measure provides a $7,000 tax credit for people who will buy foreclosed properties and will provide huge tax breaks for big businesses; an estimated $25 billion. April 15, 2008
Housing Woes in U.S. Spread Around GlobeThe collapse of the housing bubble in the United States is mutating into a global phenomenon, with real estate prices swooning from the Irish countryside and the Spanish coast to Baltic seaports and even parts of northern India. This synchronized global slowdown, which has become increasingly stark in recent months, is hobbling economic growth worldwide, affecting not just homes but jobs as well. In Ireland, Spain, Britain and elsewhere, housing markets that soared over the last decade are falling back to earth. Property analysts predict that some countries, like this one, will face an even more wrenching adjustment than that of the United States, including the possibility that the downturn could become a wholesale collapse. April 14, 2008
A Tough Initiation to D.C.When Jessica Otto thinks back to eight months ago, when she arrived in Washington, she still sounds bewildered. “I had no idea what to expect,” she said. Renting a place on a limited budget in the Washington area is already hard enough. Most young college grads can’t afford more than $1,000 a month, and even most basement apartments and studios cost more than that in the neighborhoods young people are attracted to. Searching from out of town and having never lived in this city makes it even trickier. Many new arrivals are ignorant — or apprehensive — about cheaper neighborhoods like Petworth, Brookland and Takoma, so that leaves living with roommates. And those roommates are going to want to meet you — and compare you to the 10 or 20 other applicants they’ve got. April 14, 2008
Walking Out of a Mortgage And Into Years of HurtThe country’s two largest sources of mortgage money have a blunt warning for anyone thinking about joining the growing “walkaway” trend, in which homeowners stop making payments and months later send the house keys back to their lender: You will feel the pain. On March 31, Fannie Mae sent out new guidelines to lenders aimed at walkaways and other foreclosure situations. The giant investor will now prohibit foreclosed borrowers from getting another mortgage through it for five years unless there are “documented extenuating circumstances.” In those cases, the mortgage prohibition is for three years. April 14, 2008
Troubled U.S. Homeowners Fall Prey to ‘Rescue’ ScamsAmong the byproducts of the U.S. housing crisis is a surge in scams that cheat people out of their money, their homes, or both, under the guise of offering to rescue them from foreclosure. “There is a lot of money to be made if you are good at committing fraud,” said Debra Zimmerman, an attorney at Los Angeles-based Bet Tzedek Legal Services, which provides free legal assistance to stricken homeowners. “Foreclosure rescue scams are big business right now.” Groups like Zimmerman’s say that as soon as borrowers end up in foreclosure — a matter of public record in the United States — they are bombarded with calls, leaflets and knocks on the door from people armed with fraudulent offers of help. April 14, 2008
Foreclosure PoliticsWith foreclosures running at about 20,000 per week, at least 100,000 more families are likely to lose their homes before Congress passes a relief bill. And even then, the measure may fail to stanch the problem unless Congress comes up with something that is significantly better than proposals currently in either chamber. To produce a worthy relief package, lawmakers will first have to scrap most of the provisions in a bill passed last week by the Senate. April 14, 2008
Home Buyers NeededOur politicians are devising economic stimulus measures to encourage consumers to spend more. These measures will cost taxpayers $200 billion or more. This is not money well spent. The problem is not too little consumer spending; the problem is too few home buyers. Many argue that we don’t need government intervention to bring the buyers back; we just need the market to work its magic through lower prices. April 14, 2008
Paying in Full Upfront Leaves You With Nothing but HopeQ: DEAR TIM: My kitchen cabinet remodel has turned into a disaster. I contracted the job through a national home-center chain, which demanded that I pay in advance for the entire job. There are numerous issues, and the granite top is sagging in the middle of my sink. My complaints are going unanswered. The installer will not come back, and my calls to the home center are getting me nowhere. Is it time to call a lawyer? Should I sue to get my money back? What went wrong? I trusted the large national company. — Andy E., Lexington, Ky. April 14, 2008
Sizing Up the Utilities, if Carbon Caps Take HoldFederal regulations over the next few years could limit the carbon emissions of these companies, and Wall Street analysts have begun compiling lists of potential winners and losers, based on that possibility. All of the leading presidential candidates say they favor such measures, and some kind of legislation affecting utilities is likely at some point after the November election, Citi Investment Research said in a January report. If “carbon caps” — limits on carbon emissions — eventually become law, the winners may include operators of nuclear power plants (which don’t emit carbon), while the losers may include power companies that mainly burn coal, analysts say. Beyond that, who wins and who loses will depend on the details of possible future regulations, which can’t be predicted with certainty. April 14, 2008
Apartment Rental Costs Are All Over The MapA curious thing happened during 2007 while the mortgage market was imploding: Median apartment rental prices in major cities shifted dramatically, dropping by up to nine percent in some markets — Phoenix — and rising as much as 14.6 percent in others — San Francisco — according to data released from Newton, Mass.-based Investment Instruments Corporation. April 14, 2008
Dual Benefits of Green Choices: They Help the Earth and Your WalletAnother year, another Earth Day. Looking back, is there anything you did in the past year to shrink your carbon footprint? In our house, we’ve continued to replace incandescent bulbs with compact fluorescent bulbs. We’ve turned down the heat at night and piled on the fleece during the day. We recycle batteries, paper, metals, glass and plastics. We scrape our plates instead of washing them before we put them in the dishwasher, and we turn off the water while brushing our teeth. April 14, 2008
Protecting BorrowersNews stories have highlighted the effects of the subprime meltdown on borrowers throughout North Carolina. While much of the focus has been on practices that many would construe as predatory lending, state legislation went into effect April 1 to regulate another set of practices, ones that consumer advocates have described as “predatory loan servicing.” This term encompasses several practices that harm borrowers, including loan servicers illegally charging borrowers extra fees, not crediting borrowers’ payments or charging borrowers for insurance they already have. The new law makes progress in regulating loan servicing, but it fails to address all the predatory loan servicing practices that harm borrowers. April 14, 2008
Foreclosure Fiasco Traps Renters, TooWaiting out the mortgage market meltdown by renting instead of buying is backfiring on some Metro Detroit families. Renters are being ejected from homes owned by landlords now caught up in the state’s foreclosure fiasco. Leases protect renters from a bevy of unfair actions by their landlords. But when a property’s mortgage or taxes go unpaid, those rights can be voided. In Michigan, as long as the home loan predates the rental agreement, the foreclosing entity — be it bank or tax collector — isn’t required to honor the lease. In many cases, they’re choosing not to. April 14, 2008
Colorado Lawmakers Unveil Foreclosure BillState lawmakers have announced a plan to “stem the tide” of foreclosures in Colorado without government bailouts. The so-called “American Dream Protection Act of 2008” would give homeowners more opportunities to save their homes from foreclosure. “It’s better for everyone, better for the lender, the borrower and the people of Colorado if we keep people in their homes, and that’s what we’re trying to do here,” said Rep. Mark Ferrandino, D-Denver. April 14, 2008
Letter on Status on Maryland Mortgage Bills from Phillip Robinson, Civil Justice, Inc.Today Governor O’Malley signed emergency legislation to create meaningful change Maryland’s 200 year old foreclosure process, close loopholes in the Protection of Homeowners in Foreclosure Act to prevent against foreclosure rescue scams, and put a stop to mortgage fraud that affects everyone directly or indirectly. These measures are the first steps toward preserving homeownership for the near- and far-term in Maryland. In the last four days of the legislative session, there remains two other bills that need your immediate attention or unintended consequences may occur. April 4, 2008
40 Years After King’s Death: Progress, but Not PerfectHe concluded, “Like anybody, I would like to live a long life….But I’m not concerned about that now. I just want to do God’s will. And He’s allowed me to go up to the mountain. And I’ve looked over. And I’ve seen the promised land. I may not get there with you. But I want you to know tonight, that we, as a people, will get to the promised land.” So where are we, as a people? How far, or near, is the promised land? On the 40th anniversary of his martyrdom, local activists reflect on how the suburbs reflect — and refract — King’s mountaintop vision. April 4, 2008
Foreclosures Hitting Rural Communities Hard TooThe end came in a blink outside the Merced County courthouse. Only six people showed up for the foreclosure auction, Janice Pimentel and her son Nick included. By chance, the Pimentels’ dairy farm was the first property offered. The auctioneer, a young man in aviator sunglasses and blue jeans, read their address and paused for bids. When none came, the Joe T and Janice R Pimentel Dairy Farm, 21 years in the life of the family, officially became the property of its main creditor, a local lender. April 4, 2008
Neighbors, City Tried to Find Family A HomeNine years after City Hall started slapping her family home with health and building code violations, six months after it was declared unlivable and six days after officials moved to demolish it, Lucille Salvaggio still struggled Thursday to grasp her plight. “I don’t like to be rushed!” the 67-year-old woman wailed as she hung her frail body over the wrought iron fence in front of 1356 Magazine St., on the day before a wrecking crew is scheduled to raze it. “The house is worn out and should be torn down. But why not give us time to clear out the things?” she cried. “I can’t even find my mama’s wedding pictures.” April 4, 2008
400 of ‘Most Vulnerable’ Homeless to Get ApartmentsIn an ambitious effort to end chronic homelessness in the District, city officials yesterday announced plans to move 400 of the “most vulnerable” people into apartments by Oct. 1. Mayor Adrian M. Fenty said those residents, many of them living on the streets during the day and in shelters at night for more than a decade, will receive permanent housing with extensive social services, including medical care, mental health counseling and drug and alcohol rehabilitation. Under the “Housing First” plan, issues such as mental illness and substance abuse will not bar the chronically homeless from being placed in permanent housing, city officials said. April 4, 2008
New Housing Bill Criticized As Scant Help for DistressedFor anyone hoping to buy a home, sell one or hold onto the one they have, the $15 billion housing bill unveiled in the Senate yesterday may mean nothing more than a bit of extra cash in the pocket. The housing bill, hastily cobbled together by Republican and Democratic leaders, would allow state and local property tax deductions this year of up to $1,000 for families and $500 for individuals who now can’t deduct that money. It also aims to spur demand for homes by providing a $7,000 tax break, split over two years, to anyone who buys a foreclosed home within a year of the bill’s enactment. April 4, 2008
Late Payments on Consumer Loans at 16-year HighMore Americans have fallen behind on consumer loans than at any time in nearly 16 years, as credit problems once concentrated in mortgages spread into other forms of debt. In a quarterly study, the American Bankers Association said the percentage of loans at least 30 days past due rose to 2.65% in the fourth quarter from 2.44% in the third quarter, and from 2.23% a year earlier. The rate of delinquencies was the highest since a 2.75% rate in the first quarter of 1992. It provides a fresh sign the nation’s economy is slowing, and may be in recession. April 4, 2008
What Is Predatory Lending?At the center of the housing crisis, we’re told, is someone called the “predatory lender.” He gulled poor people into taking mortgages “designed to fail,” as Hillary Clinton has put it, and as the housing market collapsed, he enjoyed the resulting foreclosures. The predatory lender sucks the life out of the American dream, and only new regulations can stop him. Such is the myth driving the housing debate in Washington, where both Democrats and Republicans are rushing toward a mortgage bailout. Of course there are unscrupulous mortgage brokers and bankers, just as there are unscrupulous politicians. They earned their fees by deceiving people into taking foolish subprime loans. Then, as “securitized” mortgages, the bad debt was unloaded onto investors. April 4, 2008
Lenders Buried By Foreclosures Let Late Borrowers Stay in HomesBanks are so overwhelmed by the U.S. housing crisis they’ve started to look the other way when homeowners stop paying their mortgages. The number of borrowers at least 90 days late on their home loans rose to 3.6 percent at the end of December, the highest in at least five years, according to the Mortgage Bankers Association in Washington. That figure, for the first time, is almost double the 2 percent who have been foreclosed on. April 4, 2008
Legacies of the RiotOn the night of April 4, 1968, someone tossed a brick through the plate-glass window of the Peoples Drug Store at 14th and U streets in Northwest. Within minutes, looters had picked the store clean; within an hour, stores up and down the street had met the same fate. The ensuing three-day riot, touched off by the assassination of Martin Luther King, Jr., left 12 dead, caused $354 million in damages and ultimately drove hundreds of thousands of people out of the city. April 4, 2008
Short of GreatnessAlphonso Jackson, secretary of housing and urban development, has submitted his resignation, effective April 18. Good. It was time for Jackson to leave. His lapses in ethical judgment had become a distraction for the administration he serves and for the $32 billion agency he oversees — a department that for years has never received the care, respect or attention it deserves from the executive branch.The longtime public servant leaves under a cloud: allegations of cronyism, a major lawsuit by the Philadelphia Housing Authority alleging retaliation and an FBI investigation of a HUD contract in New Orleans. The timing of his resignation, and responses to it by some members of Congress and political pundits, would suggest that the nation’s No. 1 man for “housing” had somehow failed the nation in this current financial and real estate debacle that sent the country’s economy into a tailspin. April 4, 2008
King and Kerner: An Unfinished AgendaAmerica has had much to reflect upon during the approach of the interrelated 40th anniversaries of the final report of the Kerner Commission, the assassination of the Rev. Martin Luther King Jr., and the round of riots that followed in Washington, Baltimore, Chicago and well over 100 other cities across the nation. We have heard Sen. Barack Obama’s insightful speech on race and the reactions it provoked. Today, unfortunately, Dr. King’s dream remains deferred. April 3, 2008
Sweeping Bills Passed To Help HomeownersMaryland lawmakers passed some of the nation’s most ambitious legislation to control the housing crisis yesterday by toughening oversight of the mortgage-lending industry and establishing preemptive measures to help people at risk of foreclosure. Taken together, Maryland’s bills are among the most sweeping in the country as legislatures from California to Florida consider proposals to stem the escalating rate of foreclosures. April 3, 2008
Unsold Homes Tie Down Would-Be TransplantsDr. Michele Morgan migrated last fall from Detroit to Phoenix, taking a job as a psychiatrist. She expected her husband, Sam Kirkland, to soon join her, since he was accepting an early retirement package from his employer, General Motors. But he cannot move, he says, because he has not been able to sell the four-bedroom family home. “As things now stand,” said Mr. Kirkland, who is 51 and intends to seek work in Phoenix, if he ever gets there, “my wife might decide to give up her job in Phoenix and come back to Detroit for a while, until we can sell the house.” April 3, 2008
McCain and Clinton Ads Spar Over How to Solve Home Mortgage CrisisSenators John McCain and Hillary Rodham Clinton released dueling advertisements Wednesday that highlighted how the housing crisis has come to dominate the presidential race, with Mrs. Clinton using a version of her red-phone commercial to question Mr. McCain’s ability to handle the souring economy. In the advertisement, the Clinton campaign again portrays a family asleep in the middle of the night when the phone rings, meant to evoke a national crisis. The narrator then intones, “John McCain just said the government shouldn’t take any real action in the housing crisis; he’d let the phone keep ringing.” April 3, 2008