Bo McCarver’s weekly housing news compilation – 10/29/2008

Administration of the $700 billion bailout has already taken new and questionable turns. While the “Main Street versus Wall Street” argument reverberates along campaign trails, foreclosure rates continue to rise and new home prices plunge as the recession hardens and becomes a general depression.

Meanwhile, Texas lawmakers have blasted FEMA for being callous and ineffective in dealing with Hurricane Ike. Galveston begins to reopen sectors of the city but it appears to be favoring affluent residents: upscale neighborhoods are reopened while public housing molds and rots.

For a pdf version of the full articles, plus contextual articles in social, environmental and political areas, contact Bo McCarver at bmccarver@austin.rr.com

Which candidate’s plan would best ease the mortgage crisis?
McCain and Obama differ on solutions, which could echo FDR’s during the Great Depression.

By Ben Arnoldy      Christian Science Monitor     October 26, 2008
STOCKTON, CALIF. Nick Terlouw sprays green paint from a garden hose as if he were watering the lawn. The browned-out grass, dead from neglect, turns golf-course luscious in less than 15 minutes. Then it’s off to the next lawn for Mr. Terlouw, one of the few people in Stockton – America’s foreclosure capital – making serious green out of the bust.

Sometime soon, Terlouw may be visiting the homes of Kevin Smith and Eddie Chavez. These Stocktonians might be in the throes of foreclosure before the next president is sworn in.

Both candidates have ambitious plans for helping struggling homeowners like Mr. Smith and Mr. Chavez. But the candidates differ over how to get lenders to modify loans and over who should ultimately foot the bill for the losses.

Home Prices Plunge Record 16.6 Percent In August: S&P
Reuters      October 28, 2008
NEW YORK – Prices of U.S. single-family homes plunged a record 16.6 percent in August from a year earlier, according to the Standard & Poor’s/Case-Shiller Home Price Indices.

The composite index of 20 metropolitan areas fell 1.0 percent in August from July, S&P said in a statement on Tuesday.

S&P said its composite index of 10 metropolitan areas declined 1.1 percent in August from July for a 17.7 percent year-over-year drop, also a record.

The acceleration in decline, however, was only moderate in August, S&P said.

U.S. Vows More Help for Homeowners
By Vikas Bajaj        New York Times      October 23, 2008
With foreclosures mounting, Bush administration officials said Thursday that they were preparing to step up efforts to help struggling homeowners.
A senior policy maker told a Senate committee that the administration was working on a plan under which the government would offer to shoulder some of the losses on loans that are modified.

Scope of $700 billion bailout bill continues to widen
The Treasury may back risky mortgages and include other industries in its financial rescue effort.
By Peter Grier       Christian Science Monitor       October 27, 2008
WASHINGTON – The US government’s $700 billion financial rescue effort is only a few weeks old – but it’s already morphed into something far broader and more ambitious than its designers originally intended.

AG offers proposal for struggling homeowners
By News 8 Austin      October 24, 2008
Texas Attorney General Greg Abbott has a plan to help homeowners keep their property.

At this point, state law only gives homeowners 20 days to fix a default.
Abbott proposed the Texas Foreclosure Deferment Act Thursday, which would give qualified homeowners 45 days to cure a loan default.

FEMA ‘insensitive’ toward Ike victims, Texas officials say
By Janet Elliot        Houston Chronicle       October 27, 2008
AUSTIN – State leaders today accused FEMA of insensitivy and foot-dragging in providing trailers and money to help hard-hit areas of southeast Texas recover from Hurricane Ike.

More than six weeks after the hurricane, fewer than 200 trailers are available for people to live in on their property while their homes are being repaired, said Kevin Hamby, general counsel of the Texas Department of Housing and Community Affairs.

Federal Emergency Management Agency officials had promised 300 trailers a week, he said. The state agency estimates that 3,000 to 6,000 trailers are needed.

As a result, many people are living in tents and personal campers on their property. The federal agency has offered to pay for displaced residents to stay in hotels and motels, but few rooms are available in the hard-hit area.

Frustration mounts as shelter closing looms
By Rhiannon Meyers and Leigh Jones      Galveston County Daily News      October 22, 2008
GALVESTON – As city officials prepare to close a Red Cross tent shelter this weekend, more than 400 people still living there are becoming increasingly frustrated, angry and worried they won’t have places to live come Monday.

About three dozen residents gathered outside the shelter Tuesday morning and demanded answers to questions about what would happen to them when the shelter closes.

Statements about shelter, housing appear untrue
By Rhiannon Meyers and Leigh Jones       Galveston County Daily News       October 22, 2008
Gregory Hall has slept on a cot in the Red Cross tent shelter at Alamo Elementary School for 21 days.

Formerly a resident of the Oleander Homes federal housing project, Hall is among 422 people who are still living at the shelter. He’s also an unusual case, according to statements issued Friday by city and Galveston Housing Authority officials.

City Manager Steve LeBlanc said during a news conference Friday that most still living in the shelter were not Galveston residents but people who’d come here to work after Hurricane Ike.

At the same time, housing authority Executive Director Harish Krishnarao said people displaced from housing authority property had already been set up with new places to live.

All that was news to Hall, who said he had no idea where he would go when the shelter closes Sunday.

FEMA is clearing neighborhoods that can be ‘green’
Galveston County Daily News       October 22, 2008
Q: The yellow tags in four Galveston subdivisions – Colony Park, Palm Circle, Havre Lafitte and parts of Fish Village – were cleared quickly.

At least some of those areas are affluent. Some modest neighborhoods that appear to have sustained less damage still have yellow tags.

Is there a reason those neighborhoods were cleared first?

A: When Federal Emergency Management Agency substantial damage inspectors arrived in Galveston, the city provided them with the information collected from the initial damage assessment of the island’s 24,000 structures.

County delays FEMA temporary housing measure
By Chris Paschenko       Galveston County Daily News      October 24, 2008
County commissioners delayed Wednesday a vote that could have started the process of placing homeowners, who were displaced from Hurricane Ike, into temporary federal housing.

Meanwhile, city of Hitchcock commissioners approved a measure that would set up Federal Emergency Management Agency housing strictly for workers employed with the city of Galveston and Galveston County.

Future unclear for GHA residents
By Rhiannon Meyers       Galveston County Daily News      October 26, 2008
GALVESTON – In a shabby hotel room near a fast-food restaurant, Franjetta Jones has been sleeping alongside her two children, 6 and 9 years old, for two weeks.

The nursing assistant lived in Magnolia Homes – a federally subsidized housing project on island’s East End – before Hurricane Ike shoved 10 feet of salty bay water through her front door.

She’s one of the lucky ones – she found a hotel while most of her neighbors have been staying in tents behind Alamo Elementary School, she said. Still, she can’t help but wonder what happens when the federal government stops paying for her hotel room. She was told by the Federal Emergency Management Agency that she was approved for a trailer, but no one told her when she’ll get it or where it will go.

She wonders when the Galveston Housing Authority will tell her she can come back home.

Homeowners didn’t receive coverage they paid for
By Laura Elder      Galveston County Daily News    October 22, 2008
Some homeowners around the county paid a Pasadena agent premiums for windstorm insurance only to find out after Hurricane Ike battered their homes that they weren’t insured, state regulators allege.

Fraud units with the Texas Department of Insurance are investigating a former American National Insurance Co. agent who they allege collected premiums from about 75 consumers but never sent the money to the Texas Windstorm Insurance Association.

Officials to open new island shelter
By Leigh Jones       Galveston Daily News      October 24, 2008
GALVESTON – State officials will open a new shelter on the island Sunday, just in time to take in residents now staying at the Red Cross shelter, City Manager Steve LeBlanc announced during Thursday’s city council meeting.

City officials are closing the Red Cross shelter because the Federal Emergency Management Agency will no longer foot the bill after Saturday.

State plans massive new office complex along Texas 130 corridor
By Kate Alexander        Austin American-Statesman       October 27, 2008
State of Texas officials are scouting land along the Texas 130 corridor in eastern Travis County for a new office complex for thousands of state workers.
The master-planned campus could save the state money, improve working conditions for 9,000 state employees and put valuable downtown Austin properties on the tax rolls for the city, county and school district, said Edward Johnson, executive director of the Texas Facilities Commission.

No specifics are yet available as to where the campus could be, Johnson said. But the state is looking at buying 250 to 300 acres along Texas 130 that is easily accessible by car and public transportation and has the needed utility infrastructure.

Local apartment market headed for a slowdown
By Shonda Novak        Austin American-Statesman      October 24, 2008
The apartment market in Central Texas is turning in renters’ favor, a new report said.

And it looks like the trend will hold for the foreseeable future as a wave of new complexes comes online, further reducing occupancy rates, the report said.
The region’s apartments were 91.4 percent occupied in the third quarter, down from 94.1 percent in the year-ago quarter and 91.6 percent in the second quarter of this year, according to Austin Investor Interests LLC, which tracks the market.