Bo McCarver’s Weekly Housing News Compilation – 1/27/2010

Home construction and sales of existing homes sagged in December while revised federal programs toughened on riskier home loans but provided for earlier intervention for homeowners facing missed mortgage payments. Little relief is seen for the housing industry in the near-term while the general economy remains mired in recession.

In Galveston, homeowners accuse lenders of stalling to restructure troubled mortgages.

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

Inflation stays controlled, home starts decline in Dec.

Associated Press Jan. 20, 2010

WASHINGTON — The housing market remains a significant risk to the economy, data today showed, as bad weather across much of the country hit the construction industry.

The Commerce Department said construction of new homes and apartments fell 4 percent in December to a seasonally adjusted annual rate of 557,000 from an upwardly revised 580,000 in November. Applications for future projects, however, increased strongly as the industry ramps up for the spring selling season.

The results for new home construction were lower than the 580,000 forecast by economists surveyed by Thomson Reuters and were led by declines of 19 percent in the Northeast and Midwest. Construction fell 1 percent in the West, but rose more than 3 percent in the South.

Full story at: http://www.chron.com/disp/story.mpl/business/6825850.html

Existing-home sales take nose dive in December

By Tony Pugh        McClatchy Newspapers January 25, 2010

Washington — After increasing for three straight months, existing-home sales took a steeper-than-expected dive in December, as spooked first-time homebuyers put the brakes on purchases, fearing that a generous government tax credit would expire at the end of November.

Total sales of single-family homes, townhomes, condominiums and co-ops fell 16.7 percent, from a seasonally adjusted rate of 6.5 million units in November to 5.4 million in December, the National Association of Realtors reported Monday.

“December’s plunge in existing-home sales is payback for the $8,000 first-time homebuyer’s tax credit,” which had been set to expire Nov. 30, said Patrick Newport, an economist at IHS Global Insight.

Full story at: http://www.mcclatchydc.com/251/story/83000.html

Feds find dubious home tax credit claims from Texas

By Steve McGonigle        Dallas Morning News January 26, 2010

Federal inspectors scouring tax returns that contain a credit for first-time homebuyers have found something curious about claims from Texas.

Nearly 1,000 were filed by people employing a special taxpayer identification number primarily used by illegal immigrants, who are not entitled to the credit.

The Texas filings represented nearly one-third of the 3,200 suspicious homebuyer credit claims submitted by noncitizens around the country. The value of the credits from all the noncitizen claims was $20.8 million, a U.S. Treasury Department inspector general said.

Texas’ total was almost double that of similar suspicious filings from California, a state estimated to have nearly twice as many illegal residents.

Full story at: http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/012610dnprohomebuyers.3e8cbc2.html

Underwater, but Will They Leave the Pool?

By Richard Thaler       New York Times January 24, 2010

MUCH has been said about the high rate of home foreclosures, but the most interesting question may be this: Why is the mortgage default rate so low?

After all, millions of American homeowners are “underwater,” meaning that they owe more on their mortgages than their homes are worth. In Nevada, nearly two-thirds of homeowners are in this category. Yet most of them are dutifully continuing to pay their mortgages, despite substantial financial incentives for walking away from them.

A family that financed the entire purchase of a $600,000 home in 2006 could now find itself still owing most of that mortgage, even though the home is now worth only $300,000. The family could rent a similar home for much less than its monthly mortgage payment, saving thousands of dollars a year and hundreds of thousands over a decade.

Full story at: http://www.nytimes.com/2010/01/24/business/economy/24view.html?em

FHA to provide early relief to homeowners

By Renae Merle      Washington Post January 23, 2010

The Federal Housing Administration, facing rising losses associated with its flagship mortgage insurance program, announced Friday an expansion of its efforts to help distressed homeowners avoid foreclosure, saying that borrowers no longer need to miss a mortgage payment to be eligible for assistance.

In the past, borrowers with FHA loans did not qualify for mortgage relief unless they had missed at least two payments. Now borrowers who are at risk of becoming delinquent, or facing “imminent default,” will also qualify. Borrowers could have interest rates lowered to reduce payments or have payments suspended for a limited period, according to an FHA statement.

But to be eligible for early relief, homeowners must show they lost a job, had a reduction in income or faced some other life change. This effort is separate from the federal foreclosure relief program, Making Home Affordable, which has struggled to reach many borrowers. [End of story: http://www.washingtonpost.com/wp-dyn/content/article/2010/01/22/AR2010012204610.html?wprss=rss_print/asection]

FHA tightens rules for riskier borrowers

By Robert Selna       San Francisco Chronicle January 21, 2010

Government-backed mortgages, which have boomed in the Bay Area during the credit crisis and allowed many first-time buyers to get into the housing market, will be a bit tougher to obtain following reforms introduced Wednesday.

The Federal Housing Administration allows buyers to make a down payment of just 3.5 percent instead of the standard 20 percent in exchange for paying mortgage insurance premiums to the FHA. The program gained popularity in recent years as subprime lending collapsed, but it also became fraught with defaults and low reserves – prompting calls for change from Congress and elsewhere.

Full story at: http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2010/01/21/MN631BKUV4.DTL

Why did feds target local mortgage company?

By Eric Dexheimer Austin American-Statesman January 21, 2010

Last week, investigators for the U.S. Department of Housing and Urban Development sent out subpoenas to more than a dozen mortgage companies whose recent lending records merited further scrutiny, according to the agency. On the list was an Austin-area company, Alethes LLC, of Lakeway.

So how did the local company get on HUD’s list? Some clues can be found by delving into a database maintained by the federal housing agency. For starters, after a bit of digging, you can learn that Alethes borrowers have defaulted at a rate of about four times higher than the national average.

A spokesman for the company, meanwhile, said it was a victim of loose lending policies approved by the government.

Full story at: http://www.statesman.com/blogs/content/shared-gen/blogs/austin/investigative/entries/2010/01/21/why_did_feds_target_local_mort.html?cxntfid=blogs_focal_point

Home financing aid available for El Paso families

By Vic Kolenc       El Paso Times January 20, 2010

EL PASO – Home financing and down-payment assistance are now available to low- and moderate-income El Paso families through a $24.5 million bond-financing program announced Wednesday.

The El Paso Housing Finance Corp., an independent agency created by the El Paso City Council, has issued new bonds to provide mortgage loans at 5.25 to 5.375 percent interest. Down-payment and closing costs assistance of 3 percent of a loan amount are part of the program.

Buyers cannot have owned a home in the last three years, unless a home is in a targeted area. The annual income limit is $66,010 for a family of three or larger, and $80,360 if a home is in a targeted area.

The financing is available through Rocky Mountain Mortgage, GECU and Patriot Mortgage.

Interested borrowers should e-mail or call El Paso Housing Finance Corporation Executive Director Adrian Duran at duranax@elpasotexas.gov or 541-4476. [End of story: http://www.elpasotimes.com/ci_14231581]

Banks refusing deals to avoid home foreclosures

By Laura Elder       Galveston County Daily News January 24, 2010

Property owners hoping to avoid foreclosure by selling their houses for less than they owe on them are watching deals disintegrate as lenders stall or renege on agreements to accept so-called short sales.

Despite federal efforts to stem foreclosures, buyers, borrowers and real estate agents across the county are watching in dismay as banks drag their feet or decline to accept a sale price on a property that falls short of the amount owed and forgive the balance, even when it would benefit lenders.

Full story at: http://www.galvnews.com/story.lasso?ewcd=921679b0abcb701a

GHA denies records request

By Rhiannon Meyers       Galveston County Daily News January 24, 2010

GALVESTON — The Galveston Housing Authority has asked the Texas attorney general to allow it to withhold reports from two federal mediators it commissioned to research public opinion about its redevelopment plan.

The Galveston Open Government Project, a self-styled watchdog group critical of the Galveston Housing Authority, in December submitted a request under the Texas Open Records Act for two reports written by federal mediators. The housing authority asked the mediators to investigate problems it was having selling its plan to rebuild public housing on the island. The mediators met with different stakeholders in an attempt to reach a consensus on public housing redevelopment to avoid litigation, the housing authority’s lawyer, Robert Bastien, said in a Jan. 12 letter to the attorney general.

The housing authority is seeking to withhold those reports, which it claims are confidential because of potential litigation.

Full story at: http://www.galvnews.com/story.lasso?ewcd=f6bff2892c2176ee

Upper Valley homeowners oppose proposed development

By Darren Meritz        El Paso Times January 25, 2010

EL PASO — Some homeowners of an Upper Valley neighborhood are fighting the proposed development of a new apartment complex that could create a more urban landscape near Mitzi Bond elementary.

About a dozen homeowners in the area have petitioned elected officials asking they deny a rezoning permit to Esco Properties, a development company that is planning to build a 114 unit, $6 million apartment complex on five acres of undeveloped land near Charl Ann Street and Lindberg Avenue.

Esco Properties owner, Enrique Escobar, said the apartment complex will add value to the area with new jobs and will ease the city’s apartment shortage.

Homeowners opposed to the apartment complex development say nearby streets and schools are ill equipped to handle the population the apartments would attract. [End of story: http://www.elpasotimes.com/newupdated/ci_14264631]

No permit for failed wall

By Jennifer Hiller and Vianna Davilla        San Antonio Express-News January 26, 2010

Centex, the Texas-based developer that Pulte Homes acquired last year, did not have a permit for “an improperly constructed retaining wall” that collapsed Sunday, causing damage to at least three homes and forcing the evacuation of dozens of families, according to city officials.

The city announced the disclosure a little more than an hour after Pulte officials met with the Northwest Side homeowners in a closed meeting Monday night. It also said fill dirt on which the homes in The Hills of Rivermist were built was not properly compacted.

“We’re still trying to figure out all that went wrong with it,” said Roderick Sanchez, director of the city’s Planning and Development Services Department.

Full story at: http://www.mysanantonio.com/news/No_permit_for_failed_wall.html

Stimulus dollars help residents weatherize their homes

Lubbock Avalanche-Journal January 21, 2010

Federal stimulus money will help drop utility bills at hundreds more Lubbock area homes this year.

City and county agencies will receive more than $8 million to buttress low-income housing against the elements and improve heating and cooling.

Federal sources would have contributed roughly $200,000 in a normal year. This year, though, all funding will put the city over $5 million.

The surge in federal weatherization funding should help more residents like Valentina Carrizales, a 77-year-old retired custodian whose small and tidy home city contractors sealed against the elements last fall.

Full story at: http://lubbockonline.com/stories/012110/loc_552701006.shtml

Homeless under highway told to vacate

By Peter J. Holley       San Antonio Express-News January 23, 2010

As the sun rose early Saturday, residents of a makeshift tent city beneath Interstate 37 downtown were already busy packing their belongings in anticipation of an eviction by police.

Friday night, police told the dozen or so residents who have been living in the muddy campground near the intersection of Nolan Street to leave by morning or face citation or possible arrest.

Full story at: http://www.mysanantonio.com/news/Homeless_under_I-35_bridge_told_to_vacate_by_end_of_the_day.html

Group trying to bring order to giveaways for homeless

By Alex Branch      Fort Worth Star-Telegram January 23, 2010

FORT WORTH — Volunteer groups have flooded the streets for years around the homeless shelters on weekends and holidays to hand out free food.

And free shirts. Free coats. Free blankets.

So many free items are available that homeless people are known to drop half-eaten plates of food and other garbage on the ground and dart across the street — sometimes in front of traffic — to see what the next group is offering.

The result can be such a chaotic mess that Near Eastside Neighborhood Association members have launched a renewed effort to bring order and coordination to the mass giveaways. The group has created a Web site, www.streetfeeding.com, and has printed color brochures directing charity groups to Unity Park, a fenced, grassy space with picnic tables and trash cans.

The short-term goal is to create a clean, safe and organized way to help the homeless, organizers say. The long-term vision is creating an atmosphere that focuses on mentoring and relationship building rather than handouts.

Full story at: http://www.star-telegram.com/metro_news/story/1915651.html

Program helps families of homeless veterans

By Regina Dennis     Waco Tribune-Herald January 24, 2010

For the men and women who fight to protect their country, it can sometimes be difficult to admit when you need help.

“Being a soldier, the core, basic thing you are taught is that when you have a problem, you suck it up and keep going because you have to keep fighting for your life and for your fellow soldiers’ lives,” said Timothy Pridey, 30, an Army veteran who served in Iraq. “It’s hard to show weakness and break down to say you need help.”

But Pridey found himself at that breaking point last year when he, his wife and their three children suddenly found themselves homeless. With no family help and little cash, Pridey turned to social workers at the Waco Veterans Affairs Medical Center for help and quickly received a housing voucher through the VA’s Veterans Assistance Supportive Housing Program to move his family into an apartment.

Full story at: http://www.wacotrib.com/news/content/news/stories/2010/01/24/01242010wachomelessvet.html