Bo McCarver’s weekly housing news compilation – 1/20/2009

A year ago, the business pages of Texas’ daily newspapers uniformly ran stories saying the national downturn in housing was not affecting local markets and that their particular economies were immune. Now, only cities with large military bases can boast of a stable housing market.

A new report asserts that nationwide, Black and Latino communities are taking a beating from the housing meltdown.

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

Housing Starts Probably at Record Low: U.S. Economy Preview
By Timothy Homan       Bloomberg News       January 18, 2009
Jan. 18 (Bloomberg) — American builders probably broke ground in December on the fewest houses on record as sales and credit dried up, economists said before reports this week.

Housing starts fell 2.7 percent last month to an annual rate of 605,000, the lowest level since the Commerce Department started compiling data in 1959, according to the median estimate in a Bloomberg News survey. Building permits, a sign of future projects, also probably dropped to a record low.

Borrowers doubling down on mortgage applications
By Dina ElBoghdady      Washington Post      January 20, 2009
WASHINGTON – As mortgage interest rates continue to fall to new lows, a growing number of borrowers are applying to more than one lender to increase their chances of getting approved for refinancing.

Anecdotal evidence suggests that only about half of the borrowers trying to refinance are getting approved, down from 60 to 70 percent during previous refinancing booms, said Doug Duncan, chief economist at mortgage financier Fannie Mae. As a result, borrowers are getting frustrated and anxious.

Freddie, Fannie Force Borrowers to Waive Legal Rights
By Mary Kane       Washington Independent          January 16, 2009
When the government announced in November that it would use mortgage giants Fannie Mae and Freddie Mac to streamline loan modifications for possibly hundreds of thousands of borrowers, officials billed the idea as a fast-track program to fight foreclosures. What no one mentioned is that homeowners would have to sign away their rights to sue, if they wanted to get those loans modified.

Communities Foreclosed
By Valeria Fernández         Color Lines       January 19, 2009
As soon as he told her they wouldn’t be able to pay the mortgage, Ruben Loera’s wife’s heart clenched. She started packing away the angels and pulling down the paintings. Five months later and one step away from foreclosure, half-empty boxes are piled in a corner of the living room in their home in Maryvale, a suburb of Phoenix, Arizona.

Loera had been hearing tales of people losing their houses, but he never thought it would happen to his family. “I had to make a decision: I pay the house, or I feed my kids,” said Loera, who migrated legally to the United States from Mexico almost 30 years ago and has a daughter and a son, ages 17 and 11.

Loera’s story is common these days. Although many families are experiencing foreclosures, job losses and increased debt, community advocates say that Latinos and Blacks are feeling the effects most acutely. These two communities are bearing the brunt of high unemployment rates, a disproportionate rate of receiving subprime mortgages and greater risk of foreclosures.

“People are getting hit from all sides,” said Heidi Shierholz, an economist at the Economic Policy Institute, a Washington-based nonpartisan think tank. “It’s not just their income. Any wealth [that] families had is getting erased, too.”

Mortgage-fraud cases are flooding into Tarrant County district attorney’s office
By Melody McDonald        Fort Worth Star-Telegram       January 18, 2009
FORT WORTH – Three years ago, it was rare for a Tarrant County prosecutor to see a case alleging mortgage-loan fraud.

Now, the district attorney’s office is covered up in them.

“We have been hit with a tsunami of mortgage fraud,” said Joe Shannon, chief of the economic-crimes unit of the Tarrant County district attorney’s office.

Investigators estimate that they have identified more than $42 million in mortgage scams in Tarrant County. The district attorney’s office now has an investigator who works full time on such cases. Last week alone, seven new cases were referred to the economic-crimes unit.

And the FBI doesn’t even consider Texas to have a “significant mortgage-fraud problem.” That designation goes to California, Florida, Michigan, Nevada and Utah, among other states.

According to the FBI, the number of mortgage-fraud suspicious-activity reports nationwide jumped from about 7,000 in 2003 to more than 62,000 last year.

Strategy for a retired couple as home value falls
By Ann Marsh       Los Angeles Times         January 16, 2009
Ellen and Ray Bluemel are retired and healthy, and figure their eight grandchildren will help them stay active for many more years. The question is whether their assets, damaged by plummeting real estate values, will last as long as they do.

Foreclosures up a record 81% in 2008
Filings continued to soar through the end of the year – and there’s no relief in sight for 2009.

CNN Money        January 16, 2009
NEW YORK  — U.S. foreclosure filings spiked by more than 81% in 2008, a record, according to a report released Thursday, and they’re up 225% compared with 2006.

A total of 861,664 families lost their homes to foreclosure last year, according to RealtyTrac, which released its year-end report Thursday. There were more than 3.1 million foreclosure filings issued during 2008, which means that one of every 54 households received a notice last year.

“Clearly the foreclosure prevention programs implemented to date have not had any real success in slowing down this foreclosure tsunami,” said James Saccacio, CEO of RealtyTrac in a statement.

Residential foreclosure postings rise in county
By Dawn Cobb       Denton Record      January 16, 2009
Residential foreclosure postings in Denton County rose for the upcoming February auction, surging past the 500 mark for the fourth time in 13 months.

A total of 540 residential foreclosures were filed, up from the 479 posted for the January auction. However, the numbers are down from last year, when 566 residential postings were listed for the February 2008 auction, according to reports from Foreclosure Listing Service Inc. an average on postings, that’s pretty much where it’s going to be for the next six months to a year.”

Downturn reflected in real estate, new construction
By Matthew Stoff       Nacogdoches Daily Sentinel        January 16, 2008
According to conventional wisdom, Nacogdoches is both cursed and blessed never to feel the highest highs or lowest lows of national economic trends.

It would seem that now at least, Nacogdoches is lucky to be insulated from the recent market implosions that have rattled the nation. But year-end figures of real estate sales and building permits were down in 2008, significantly in certain areas, indicating that the region is not totally immune to shock.

Local industry experts said an 8.2 percent overall drop in 2008 real estate sales could have been much worse, given the national situation. Yet national figures were not vastly different from local ones. A national real estate trade group said national home sales were down 8.6 percent through October of 2008.

Austin area foreclosures rise for February auction
Austin American-Statesman          January 16, 2009
Foreclosure postings for the Feb. 3 auction were up 24 percent in Central Texas, according to a new report from Foreclosure Listing Service Inc.

The situation isn’t as bleak as that sounds. Lenders typically back off on foreclosures during the holidays, and that traditionally leads to a jump in February, when they return to regular practices, said George Roddy, president of the company.

Postings for Travis County were up 22 percent, to 413, from a year ago. They rose 8 percent in Williamson Count to 293.

Hays and Bastrop County both had high increases, but the actual number of postings was relatively small.

Bastrop postings were up 88 percent to 45, and Hays postings rose 107 percent to 89.

About 40 percent of the properties posted for foreclosure change hands at the auction, and most of those are repossessed by the lenders. About 10 percent are purchased by investors.

To Avert Blight, City Will Repair and Resell Vacant Homes
By Manny Fernandez        New York Times      January 16, 2009
New York City will spend $24 million in federal financing to rehabilitate and resell 115 foreclosed homes, one of the most aggressive steps city officials have taken in years to prevent vacant foreclosed properties from becoming a blight on neighborhoods, Mayor Michael R. Bloomberg announced on Wednesday.

The city will use the money to take control of foreclosed properties owned by lenders that have failed to be sold at auction. The city has already overseen the purchase of the first four empty homes – two on Staten Island, one in the Bronx and one in Queens – and renovations are scheduled to begin by this spring.

Perry: FEMA should hand over reins, funds
By T.J. Aulds         Galveston County Daily News      January 17, 2009
GALVESTON – The governor’s commission on disaster recovery still has about three months to present its recommendations to Gov. Rick Perry and the state legislature, but there already seems to be a consensus for an initial plan of action. When it comes to disaster response, dump FEMA.

“FEMA needs to get out of the delivery business and into the accounting business,” Perry said after addressing his appointees Friday at the Galveston Island Convention Center.

Perry added his voice to a chorus of panel members and elected officials calling for the Federal Emergency Management Agency to take a back seat when it comes to disaster response and concentrate on just writing the checks. On-the-ground response would be left to state authorities.

City gets $5 million loan from FEMA
By Leigh Jones        Galveston County Daily News       January 14, 2009
GALVESTON – The city has been approved for a $5 million loan from the Federal Emergency Management Agency to help ease a cash flow crisis caused by Hurricane Ike.

But the funds will not be enough to stop a 3 percent pay cut for city employees or stave off a possible round of layoffs this spring, city officials say.

Taking out a loan from the federal government does not change the fact that the city needs to provide service levels to match the community’s needs, City Manager Steve LeBlanc said.

FEMA property buyouts aren’t quick and easy
By Margaret Toal      Beaumont Enterprise       January 16, 2009
In the real estate market, homeowners have to compete with each other to make the sale. And that’s what is going to happen when the owners of houses flooded by Hurricane Ike try to get a federal buyout of their property.

The homeowners – all of them, Galveston included -will have to compete in steps, almost like an “American Idol” competition.
First they have to apply.

Then they have to win approval on a local level before moving up to the state round.

If they pass the state round, they move up to the federal level, where they have a direct chance to win the buyout.

Orange County Judge Carl Thibodeaux said the process could take three years.
And, Thibodeaux said, not everyone who had severe damage in Hurricane Ike will be able to apply or qualify.

Few houses may qualify for mitigation grants
By Leigh Jones       Galveston County Daily News       January 16, 2009
GALVESTON – Few of the houses city leaders are hoping to raise out of the way of the next Ike-like flood will qualify for Hazard Mitigation Grant Program funds, the city’s mitigation expert told a room full of hopeful homeowners Wednesday.

The federal government requires any house seeking elevation funds must meet a cost-benefit analysis that proves it will cost less to raise it than it will to pay out claims on future flood damage.

Because Hurricane Ike was such an unusual storm, statistically unlikely to happen again any time soon, most houses behind the seawall will not qualify for elevation funds, Jeff Ward told the crowd of several hundred that attended an informational meeting about the program.

Nonprofit wants to use two more downtown Dallas buildings for housing
By Roy Appleton and Kim Horner       Dallas Morning News        January 20, 2009
As one affordable housing project takes shape downtown, its developers are targeting two other buildings near the city’s core to increase rental options for those with limited means.

Construction of 206 residences will soon bring life to a vacant office tower at 511 N. Akard St. City Walk at Akard’s opening is planned for July.

The nonprofit Central Dallas Community Development Corp. also wants to convert the Dallas Plaza Hotel just south of downtown into a 316-unit complex.
And corporation officials have been talking with Dallas County Commissioner John Wiley Price about acquiring the now-vacant Bill Decker jail on Stemmons Freeway to create more than 200 apartments.

“We’re committed to providing high-quality housing to some of the poorest people in Dallas,” said Larry James, chairman of the development corporation board. “It’s affordable housing, workforce housing, permanent supportive housing for the formerly homeless.”