Bo McCarver’s weekly housing news compilation – 3/10/2009


The recession slowly seeps into Texas as mortgage defaults climb within a sagging economy that is increasingly characterized by layoffs and unemployment.

As the breadlines grow, Texas receives the distinction of being dead last in a new assessment of child homelessness in the 50 U.S. states: 23 percent of the Texas’ children live in poverty,

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

$75-billion housing plan unveiled
Program aims to help 9 million homeowners refinance or modify mortgages.

By Maura Reynolds       Los Angeles Times       March 4, 2009
Reporting from Washington — The Obama administration today released details of its $75-billion plan to stabilize the housing market by helping as many as 9 million homeowners refinance or modify their mortgages.

“Two weeks ago, the president laid out a clear path forward to helping up to 9 million families restructure or refinance their mortgages to a payment that is affordable now and into the future,” Treasury Secretary Tim Geithner said in a news release. “Today, we are providing servicers with the details they need to begin helping eligible borrowers.”

The administration’s “Making Home Affordable” housing plan has two main parts — one aimed at prudent homeowners who would like to refinance into a lower rate, and another aimed at struggling homeowners seeking a way to lower burdensome monthly mortgage payments.

Details of the eligibility requirements for both programs have been posted on the government’s economic recovery website: http://www.financialstability.gov.

House approves mortgage bankruptcy overhaul
By Kevin Drawbaugh         Reuters        March 5, 2009
WASHINGTON – Bankruptcy judges could cut the mortgage debt of homeowners in bankruptcy court as a last resort to avert foreclosure, under a bill approved by a 234-191 vote on Thursday in the U.S. House of Representatives.

Seen by Democratic supporters as vital to stabilizing the crumbling U.S. real estate market, the so-called “cramdown” bill has been opposed by bankers, despite amendments made this week to limit its scope, including one restricting it to existing primary residence mortgages, not future loans.

The Senate was expected to consider its own version of the House bill soon, but chances of passage are uncertain there.

One in five U.S. mortgage borrowers are underwater
By Jonathan Stempel         Reuters      March 4, 2009
NEW YORK – One in five U.S. homeowners with mortgages owe more to their lenders than their properties are worth, and the rate will increase as housing values drop in states that have so far avoided the worst of the crisis, a new study shows.

About 8.31 million properties had negative equity at the end of 2008, up 9 percent from 7.63 million at the end of September, according to the study, released Wednesday by First American CoreLogic. The percentage of “underwater” borrowers rose to 20 percent from 18 percent.

Another 2.16 million properties could go underwater if home prices fall another 5 percent, the study shows.

Report: More than 1 in 5 Dallas-area homeowners owe more than house is worth
By Steve Brown        Dallas Morning News      March 4, 2009
The number is growing of Dallas-area residents who owe more than their house is now worth.

At the end of 2008, more than one in five Dallas-area homeowners were underwater with their mortgages, according to a report released Wednesday by First American CoreLogic.

That’s slightly higher than the U.S. average but is well below the percentage of homeowners who have negative equity in other harder-hit states, the California-based mortgage analyst said.

In Nevada, for instance, about 55 percent of homeowners with mortgages owe more than their house is valued. And in Michigan, Arizona and Florida, it’s about a third of home borrowers.

State activists, homeowners push for 90-day grace period on foreclosures
By Marcus Funk      Dallas Morning News       March 6, 2009
AUSTIN – North Texans who fear they may lose their homes joined community organizers Thursday to push lawmakers for a three-month grace period on foreclosures and mandatory mediation between lenders and homeowners.

Currently, a bank can legally foreclose after one missed payment and 20 days, although that rarely happens.

But the community activist group ACORN and 300 supporters at the Capitol said a 90-day wait would help bankers and homeowners negotiate and reach agreements.

They also hope that bills such as one that requires pre-purchase financial counseling will keep Texans in their homes.

Mortgage Fraud Case Poses Federal Quandary
By Michael Powell       New York Times      March 7, 2009
Waver Brickhouse, gray-haired and soft-spoken, has come undone twice during the nation’s housing crisis.

In 2005, she fell behind on her mortgage payments and turned to a so-called rescue firm, which, court papers allege, tricked her into signing away the deed to her Brooklyn home. She says the company, Home Savers Consulting, secretly sold her home, with the help of a mortgage from IndyMac Federal Bank, and ran up huge new debts.

Now broke, deeply embarrassed and facing the loss of her small row house in the Brownsville neighborhood, Ms. Brickhouse, 69, faces a new problem. She must convince the Federal Deposit Insurance Corporation, which last year took control of IndyMac, now insolvent, that her mortgage payments should not include at least $150,000 tacked on by fraud.

To assume these new costs, she says, would break her in two.

Ex-Leaders of Countrywide Profit From Bad Loans
By Eric Lipton       New York Times     March 3, 2009
CALABASAS, Calif. – Fairly or not, Countrywide Financial and its top executives would be on most lists of those who share blame for the nation’s economic crisis. After all, the banking behemoth made risky loans to tens of thousands of Americans, helping set off a chain of events that has the economy staggering.

So it may come as a surprise that a dozen former top Countrywide executives now stand to make millions from the home mortgage mess.

Can Green Buildings Pass Payback Tests?
By Saquib Rahim         Climatewire       February 27, 2009
It’s been sold as the ultimate no-brainer climate investment: Make a building that’s more energy efficient, and you’ll pocket the savings while avoiding harmful emissions.

With buildings accounting for 40 percent of the country’s greenhouse gas emissions, the “green” building has also gotten a look from Obama administration policymakers hoping to shrink the nation’s carbon footprint.

Now a group of builders has issued a report arguing that the green-building vision may be more of a myth. You can make a building more energy efficient, the group says, but it won’t come cheap, and it could take decades to pay off.

Doubts Raised on Credibility of NAIOP Energy Efficiency Study
U.S. Green Building Council, Among Others, Voices Concerns Over the Study Released Last Week

By Andrew Burr       Co-Star       March 8, 2009
Real estate and energy efficiency professionals have called into question the credibility of a study released last week by NAIOP, the Commercial Real Estate Development Association, which challenged the economic feasibility of developing office buildings with progressive energy efficiency goals.

Using energy models, the report found that 30 percent and 50 percent improvements in energy efficiency over code were not financially feasible for most new, Class A office construction. Developers striving for the 30 percent target would not recoup the cost of their initial energy efficiency investments within a 10-year period, while the 50 percent target was far beyond their reach, the study said.

Homeowner group sues man over metal roof
West Austin resident says roof is energy-efficient.

By Asher Price       Austin American-Statesman        March 10, 2009
Joe Sigal put a metal roof atop his West Austin house in 2007 to cut energy use and improve the home’s look. Now it has landed Sigal in court, facing a suit by a homeowners association that says he violated its rules.

Sigal, who owns the Art on 5th gallery, had lived in his house for more than five years when he decided to replace the composition roof with a metal one.
“It’s energy-saving; it looks better; it improves the neighborhood,” said Sigal, who lives alone in the house, which has about 3,900 square feet and was built in 1998.

But the Treemont Homeowners Association, which filed suit against Sigal in September in Travis County District Court, says Sigal did not ask its permission before erecting the roof, which it says violates a rule barring “galvanized steel sheet” on roofs. No court date has been set.

$322,000 in Bexar housing pay deemed ‘questionable
By Josh Baugh        San Antonio Express-News       March 10, 2009
Six Housing Authority of Bexar County employees – including two former executive directors and a former executive manager – received more than $322,000 in “questionable pay,” and the agency’s former auditor failed to notify the board of commissioners of various accounting problems, according to a recently completed audit.

The overpayments stemmed from a policy – “not ‘advertised’ to most employees” – allowing staff to sell back certain unused time off. At the board’s behest, the firm Garza/Gonzalez & Associates conducted a forensic audit that reconstructed employee-leave buyback from July 2003 to June 2008. The audit also found that the payments were made under policy amendments that were never approved by the housing authority’s board.

Galveston demolition on hold
Lawsuit delays plans to tear down some public housing

By Roma Khanna and Robert Stanton       Houston Chronicle      March 4, 2009
GALVESTON – The Galveston Housing Authority has halted plans to demolish two public housing projects on the Island after Lone Star Legal Aid in Houston filed a complaint to stop the demolition, a housing official said today.

If the issue is not quickly resolved, the suit could jeopardize plans to rebuild public housing on the Island, and the city could lose $60 million in federal funding to rebuild, said Harish Krishnarao, the housing authority’s executive director Krishnarao said the complaint was filed Monday with the U.S. Department of Housing and Urban Development to halt the demolition of Oleander Homes and Palm Terrace. In its complaint, the legal aid group wants the housing authority to justify its decision to demolish the projects, he said.

Meanwhile, the housing authority will move forward with plans to renovate two other public housing developments, Cedar Terrace and Magnolia Homes, Krishnarao said.

Complaint halts planned public housing demolition
By Rhiannon Meyers      Galveston County Daily News       March 4, 2009
The plan to demolish two public housing developments was stymied Wednesday when Lone Star Legal Aid filed a complaint with the U.S. Department of Housing and Urban Development.

The Galveston Housing Authority is trying to circumvent proper procedures by moving forward with the demolition of two public housing developments without written approval from the federal housing department, Lone Star Legal Aid claimed.

The organization, which provides free legal services to low-income people, asked that the federal housing department cease and desist the demolition until the housing authority secures written approval from the federal government, according to the complaint.

More than 750 county residents seek buyouts
By T.J. Aulds       Galveston County Daily News      March 5, 2009
More than 750 property owners whose houses were ravaged by Hurricane Ike have applied to Galveston County to have their properties purchased with federal grant money, a consultant told county commissioners Wednesday.

Almost 90 percent of the applicants for hazard mitigation buyouts are from the Bolivar Peninsula.

The number of those interested in buyouts is expected to rise. Friday is deadline for residents in unincorporated parts of the county to apply for either buyouts or elevation grant funds that will be managed by the county.

Investors snapping up housing on island
By Laura Elder      Galveston County Daily News      March 8, 2009
GALVESTON – A large part of the island’s multifamily housing stock is changing hands as investors find the post-Hurricane Ike market to be buyer friendly.

Interest by investors in the island’s apartment and condominium scene has translated to hundreds of units, most damaged by Hurricane Ike storm surge, undergoing renovations and repairs.

Bargain prices on some properties are driving the trend, said Zvi Levin, president of Davie, Fla.-based Lavish Holding Corp.

Groups work to provide new housing options for Ike
By Leigh Jones       Galveston County Daily News      March 8, 2009
Storm, city leaders had simple shotgun houses shipped to the island and set them up on the outskirts of the city to provide housing for thousands of displaced residents.

After Hurricane Katrina, architects designed cottages that could be sold as kits and quickly built as temporary or permanent housing.

Nothing like the shotgun house or the “Katrina Cottage” has emerged after Hurricane Ike, leaving Galveston residents with few affordable rebuilding options.

But several groups are working on housing solutions designed to keep middle-class families on the island and fill neighborhoods now marred by vacant lots and abandoned houses.

Tenants Wary of Clustering of Homeless
By Julie Bowman        New York Times       March 3, 2009
Henry Perry just cannot get used to the 10 p.m. curfew notice posted since October in the Bronx apartment building where he has lived since 1963. Or the sign-in sheet, where the newer residents dutifully log comings and goings. Or the 24-hour security guard seated at a desk in the lobby.

“She came when the homeless people did,” Mr. Perry, a wiry, gray-haired man of 68, nodded at the guard last week.

Twenty-one of the 50 units in Mr. Perry’s five-story brick building are now occupied by homeless families as part of a Bloomberg administration program that has turned dozens of apartment buildings throughout the city, most of them in the Bronx, into de facto homeless shelters. Known as cluster-site housing, the program contracts with nonprofit agencies to temporarily place families in apartments; it has swelled in two years to 1,503 apartments from 1,092, at an estimated cost of $59 million this year.

Homeless kids suffer in Texas
State ranked worse in U.S. in how faltering children handled

By Linda Stewart Ball       Associated Press       March 9, 2009
DALLAS – Texas is the worst place in the nation for homeless children and the faltering economy will push even more families with little ones into the streets, according to a new report.

A study by the National Center on Family Homelessness  released Tuesday placed Texas 50th – last of all states – in how homeless children fare.

The ranking considered four areas: the percentage of homeless children; their overall well-being; risk factors for homelessness, such as poverty and foreclosure rates; and what the state is doing to address the problems.

Getting Bigger by Getting Smaller
By Abe Levy      San Antonio Express-News      March 8, 2009
A few megachurches in San Antonio have grown so large at their main campuses that their leaders are embracing a reverse movement.

Rather than make their voluminous auditoriums even bigger, they are creating smaller, community-based congregations.

These offshoots help relieve crowded sanctuaries, shorten members’ commutes and spread church ministries into untapped territories.

Two of the three megachurches that have opened satellites – Oak Hills Church and Bandera Road Community Church – are taking the approach a step further, using it to reshape their identities. They’re traversing once-rigid church fencelines and entering a new period of collaboration.

Both dropped plans in recent years to build even bigger and more expensive sanctuaries, opting instead for satellites.