Bo McCarver’s weekly housing news compilation – 10/20/2009

Seeking to provide mortgages to a huge wait-list of first-time homeowners refused by private banks, the Obama Administration has initiated a program in hope of jump-starting the faltering housing industry. Meanwhile, analysts note that the big banks are profiting while mortgage defaults skyrocket, thanks to federal bailouts.

The GAO has examined FEMA’s performance and released recommendations that include having the agency engage in actual construction in storm-devastated areas.

In Galveston, a full-blown NIMBY protest has erupted as the housing authority unveils plans to replace units destroyed by Hurricane Ike.

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

InU.S. launches aid for state, local housing agencies

Reuters Oct 19, 2009

WASHINGTON – The Obama administration on Monday launched a new program to help state and local housing finance agencies provide hundreds of thousands of affordable mortgages and further stabilize the depressed U.S. housing market.

The program, described as temporary by the Treasury, the Department of Housing and Urban Development and the Federal Housing Finance Agency, will use government-sponsored mortgage finance giants Fannie Mae and Freddie Mac to provide temporary financing for housing finance agencies hurt by gridlock in the credit markets.

The move is the latest attempt by the Obama administration to prop up the faltering U.S. housing market, by restarting a source of financing for first-time and low-income homebuyers that has all but dried up.

Foreclosures Force Ex-Homeowners To Turn to Shelters

By Peter Goodman   New York Times October 18, 2009

CLEVELAND — The first night after she surrendered her house to foreclosure, Sheri West endured the darkness in her Hyundai sedan. She parked in her old driveway, with her flower-print dresses and hats piled in boxes on the back seat, and three cherished houseplants on the floor. She used her backyard as a restroom.

The second night, she stayed with a friend, and so it continued for more than a year: Ms. West — mother of three grown children, grandmother to six and great-grandmother to one — passed months on the couches of friends and relatives, and in the front seat of her car.

But this fall, she exhausted all options. She had once owned and overseen a group home for homeless people. Now, she succumbed to that status herself, checking in to a shelter.

“No one could have told me that in a million years: I’d wake up in a homeless shelter,” she said. “I had a house for homeless people. Now, I’m homeless.”

41 people in 4 states charged in mortgage fraud

Associated Press Oct. 15, 2009

NEW YORK — A mortgage fraud crackdown announced today resulted in the arrests of dozens of people, including six lawyers, seven loan officers and three mortgage brokers in four states.

Thirty-one people were arrested in New York, Pennsylvania, Ohio and North Carolina. They were among 41 people charged with engaging in mortgage fraud scams that defrauded lenders out of more than $64 million in home mortgage loans.

Of the 10 other defendants, one was expected to surrender later today, four were previously charged and five remained at large.

Foreclosures rise. Big banks show profits. How can that be?

The bailouts helped the banks, but they’re also benefiting from improvements in the housing market and overall economy.

By Mark Trumbull   Christian Science Monitor   October 15, 2009

It’s an anomaly of the great credit bust. Big banks in the US are reporting profits even as their borrowers are going into foreclosure at a record pace.

The stark disconnect came into the spotlight Thursday. The number of foreclosure filings rose 5 percent in the third quarter to a record level, RealtyTrac reported. The firm says foreclosure-related actions occurred on 1 in every 136 US housing units during the quarter.

Meanwhile Citigroup, a banking behemoth that has received massive federal support during the financial crisis, reported net income for the quarter of $101 million.

Is Foreclosure Relief Failing?

By Andy Kroll   Mother Jones Octoer 14, 2009

Is the Obama administration’s signature foreclosure relief program succeeding? Absolutely, according to Treasury Secretary Timothy Geithner, who last Thursday trumpeted the news that 500,000 mortgages had been modified—on a trial basis—under the Home Affordable Modification Program, a month ahead of the administration’s November 1 benchmark for reaching this goal. A day later, however, the Congressional Oversight Panel (COP) reached a far different conclusion when it released its own evaluation of the Treasury Department’s foreclosure prevention efforts. According to the financial watchdog, the efficacy of HAMP is very much in doubt, and the program may wind up doing little to assuage the growing foreclosure mess.

Tarrant foreclosure filings up 35 percent from a year ago, but down from October

By Sandra Baker   Fort Worth Star-Telegram October 15, 2009

A high number of Tarrant County homeowners risk losing their residences to foreclosure in November as postings in the Metroplex inched toward an annual record, the Foreclosure Listing Service said Thursday.

For the Nov. 3 auction, 1,814 postings were filed in Tarrant County, up 35 percent from November 2008, but down 8 percent from October, figures show.

Home sales drop again

Wichita Falls Record-News October 18, 2009

Existing-home sales here, along with sales volume, dropped again in September, according to the monthly report from the Wichita Falls Association of Realtors Multiple Listing Service, which likely is the result of consumer sentiment, broker Danny Steed said.

“The September local MLS home sale numbers, although down somewhat from last month and last September (’08), are probably indicative of local consumer sentiment more than anything else. We are still showing a very stable housing market when it comes to balanced inventory of affordable homes, extremely low interest rates and properties holding their values. September even showed an average home sales price increase of 6 percent over August, and an increase of 15 percent over September last year,” Steed explained.

Developers’ bust proves a boon for land trusts

By Peter Fimrite   San Francisco Chronicle October 19, 2009

Smartsville, Yuba County — The frog eluded the grasp of Erik Vink, who scrambled after it along the rocky shore of the Yuba River where chinook salmon were thrashing around in the riffles.

It was a joyous day for the boyish Vink, the project manager for the San Francisco-based Trust for Public Land, as he recently toured the 595 acres of oak woodlands and 2 miles of river in the Sierra foothills that he and his colleagues had just agreed to purchase and forever preserve.

The chaparral-covered land 15 miles outside of Marysville had been slated to be bulldozed for homes. But the bottom dropped out of the economy and the plan to build homes was yanked, allowing the trust to swoop in with a $4 million offer that was quickly accepted.

Report: FEMA must have role in post-storm housing recovery

By Mike Smith   Beaumont Enterprise October 18, 2009

Federal Emergency Management Agency officials might want to enter the construction business to speed up the post-disaster housing recovery process in stricken areas, a federal report concludes.

The recommendation is one of a set of suggestions made in a report by the U.S. General Accountability Office that examines FEMA’s response to Hurricanes Katrina and Rita in 2005.

The GAO is an arm of the federal government that investigates public spending.

Some Ike victims facing eviction

By Leigh Jones   Galveston County Daily News October 18, 2009

GALVESTON — About 20 Galveston County residents are facing evictions because the Galveston Housing Authority failed to pay their October rent.

Some people in the Disaster Housing Assistance Program blame problems on overworked case managers who lose important paperwork and provide incorrect information.

Housing authority officials don’t deny that some people have been kicked out of the program by mistake, but they said 20 problems among 2,900 cases is not an excessive number. All mistakes are being corrected, and rent will be paid retroactively for anyone who legitimately qualifies for the program, officials said.

Galveston Housing Authority unveils new public housing plan

By Leigh Jones   Galveston Daily News October 20, 2009

GALVESTON — Galveston Housing Authority officials on Monday unveiled plans to replace 569 public housing units torn down on four sites after Hurricane Ike with 340 new apartments, town houses and patio homes.

The other 229 units needed to replace what was lost could be scattered through the rest of the island’s urban core, housing authority Executive Director Harish Krishnarao said.

The scattered site recommendation is a shift from Krishnarao’s initial plan to rebuild all units on the now-vacant sites at Oleander Homes, Palm Terrace, Cedar Terrace and Magnolia Homes. The housing authority board decided to demolish all four developments after they flooded during Ike, which made landfall last year.

Meeting on housing plan ends in shouting match

By Leigh Jones   Galveston County Daily News October 20, 2009

GALVESTON — The public meeting hosted by the Galveston Housing Authority on Monday ended in a shouting match between people who support the plan to rebuild 569 public housing units and those who oppose it.

Encouraging poor people to live in Galveston is a bad idea, opponents of the plan, who were mostly white, said. But without public housing, the island’s nurses, teachers aids and service industry workers will have nowhere to live, supporters of the plan, who were mostly African-American, said.

Regulator rejects windstorm insurance rate increase

Beaumont Enterprise October 19, 2009

State insurance regulators cut coastal homeowners a break by rejecting a request from Texas Windstorm Insurance Association to hike rates 10 percent, the Houston Chronicle reported online.

The association, which insures thousands of policyholders who can’t find coverage in the private market, asked permission to increase rates for homeowners and businesses. The state-backed insurer must seek approval before it can boost rates 5 percent or more.

In an order denying the increase, Insurance Commissioner Mike Geeslin noted that the rate should reflect how lawmakers revamped the association’s funding this year by allowing it to issue securities to raise funds, the Chronicle reported.

Wimberley asks for attorney general’s opinion on water protection powers

Opinion could have implications across Hill Country.

By Asher Price   Austin American-Statesman October 18, 2009

An upcoming opinion by the state attorney general on whether Wimberley can regulate development in areas outside its city limits could have implications across the Hill Country.

The City Council wants to enact construction rules in the city’s extraterritorial jurisdiction — an area outside the city but subject to some city rules — to limit pollution from oil washing off driveways or from fertilizer washing off yards, among other things. The rules could require setbacks from waterways, detention ponds to capture pollutants or silt fences to prevent construction materials or eroding soils from washing into streams.

Texas AG files lawsuit against four people selling residential lots without water, sewage facilities

By Stephanie Sanchez   El Paso Times October 15, 2009

El PASO — Attorney General Greg Abbott announced today that he has filed a lawsuit against four people for allegedly selling residential lots on the far West Side without water and sewage facilities.

The lawsuit identified the defendants as Homero R. Galindo, Rosella A Galindo, Nahum Prieto and Rosella Prieto. They are accused of dividing an eight-acre plat into four lots and selling them without obtaining approval from El Paso County Commissioners Court. The approval process would ensured the lots had water and sewage facilities.

Montrose? Planned?

Houston Chronicle October 9, 2009

We were surprised that the American Planning Association recently named Montrose one of its “10 Great Neighborhoods” for 2009. Montrose is a great place. But does it, as the association writes, “highlight the roles that planners and planning play in creating communities of lasting value”?

We think that planning helped make Montrose what it is. But much of what’s great about that funky urban neighborhood had nothing to do with planning — and in fact, arose in spite of it.

It may surprise you to hear that Montrose was planned. Not publicly, by city officials of course: Houston’s not that kind of town. But in the 1910s and ’20s, private developers made many important decisions, such as laying out a pedestrian-friendly street grid, that gave the neighborhood good bones.

As New York Adds Housing for Poor, Market Subtracts It

By Manny Fernandez   New York Times October 14, 2009

Mayor Michael R. Bloomberg is closing in on a milestone: building or preserving 165,000 apartments and homes for low-, moderate- and middle-income families, the goal of a $7.5 billion housing plan he announced in 2002 and expanded in 2005.

It has already financed the creation or preservation of 94,000 units, including 72,000 for low-income households, city officials say.

But those efforts have been overwhelmed by a far larger number — the 200,000 apartments affordable to low-income renters that New York City has lost during the mayor’s tenure.

The shrinking supply of these apartments, highlighted by researchers at New York University, illustrates not only the increasing strain that housing costs have had on this city of renters, but also the limits of the mayor’s success in providing the city’s poor with reasonable places to live. While the mayor’s plan has put thousands of low-income families in new or rehabilitated buildings and helped stabilize neighborhoods, it has been nearly drowned out by the twin waves of gentrification and rent deregulation.

Full story at: http://www.nytimes.com/2009/10/15/nyregion/15housing.html?_r=1&hp