Tuesday Report, November 16, 2010
Special to the Texas Low Income Housing Information Service
Effects of the stagnant economy ripple through public policies as lawmakers contemplate ending tax breaks on mortgage interest while low municipal bond rates shrink funds for affordable housing.
Meanwhile, FEMA has extended by a year the deadline for Hurricane Ike victims to vacate their trailers.
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Lenders face lawmaker wrath over foreclosures
By Dave Clarke and Joe Rauch Reuters November 14, 2010
Banks under fire over their foreclosure practices face twin hearings in Congress this week, at which they will come under renewed pressure to find ways to keep borrowers in their homes.
The hearings on Tuesday and Thursday will include the first appearances by executives from major lenders like Bank of America and JPMorgan Chase since the furor over sloppy foreclosure paperwork erupted in September.
Banks are accused of having used “robo-signers” to sign hundreds of foreclosure documents a day, a fiasco that has reignited public anger with banks that received billions of dollars in taxpayer aid during the financial crisis.
Lenders will be pressed on whether the paperwork problems are further evidence that modifying loans is a better alternative to eviction.
Full story at: http://www.reuters.com/article/idUSTRE6AD1TG20101114
Voices of Foreclosure Speak Daily About Desperation and Misery
By Nelson Swartz New York Times November 16, 2010
SIMI VALLEY, Calif. — If the mortgage mess had an address, it could be 450 American Way.
This enormous white building, nestled among the hills about 40 miles north of Los Angeles, used to be a warehouse for Bugle Boy jeans. Today, it contains a sea of beige cubicles that seem to stretch on forever.
Inside the complex, 4,000 employees of Bank of America face a daily tide of desperation and misery.
To many Americans, financial giants like Bank of America seem like foreclosure machines. First, the argument goes, banks gave people mortgages they could not afford. Now, lenders are foreclosing as fast as they can, sometimes without even reviewing the paperwork.
But for employees here like Brenda Seymore, the foreclosure crisis is more complicated than that. She joined as a temporary worker in 2009 and was hired full time a year ago, as one of the employees who together field 50,000 calls a day. She finds herself caught between frustrated, anxious homeowners many months behind on their mortgage payments, and investors who hold mortgages and do not necessarily want to modify the loans, or reduce the amount of money homeowners owe.
Homeowners hit with foreclosure notices during loan modification efforts
By Rick Rothacker Charlotte Observer November 10, 2010
Union County homeowner Barry Lancett signed two agreements with Wells Fargo this year to modify the terms of his mortgage but still received a disturbing piece of paperwork: a foreclosure notice.
“A deputy comes to your door and delivers it in front of the community,” said Lancett, who later avoided foreclosure but is still dealing with lingering issues. “It was humiliating, to say the least.”
His experience is one of the biggest frustrations for struggling homeowners – getting hit with a foreclosure proceeding at the same time a loan modification is being worked out with a bank.
Recent laws and regulations in North Carolina are supposed to prevent this, but officials say they’re still getting complaints from consumers. Now it’s an issue coming under scrutiny from attorneys general investigating allegations that lenders mishandled foreclosure-related paperwork.
Taking Aim at the Mortgage Tax Break
By David Kocieniewski New York Times November 12, 2010
By proposing to curtail the tax deduction for mortgage interest, the president’s deficit commission is sounding an alarm.
The home mortgage deduction is one of the most widely used and expensive tax subsidies. More than 35 million Americans claim it, and the federal government estimates it will cost the Treasury $131 billion in forgone revenue in 2012. Its size, popularity and link to the emotionally charged American notion of homeownership has made it so politically sacrosanct that there are serious doubts whether Congress will even entertain the idea.
But by raising the specter of ending one of the most cherished tax breaks, the commission is trying to jar the public into recognizing the magnitude of the nation’s budget deficit and some of the drastic steps that might be needed to close it.
Low Rates Hurt Bonds for Housing
By Diana Henriques New York Times November 9, 2010
It is not just retired savers who are struggling with a sharp reduction in their investment income as interest rates hover near zero. Hundreds of affordable housing projects across the country are feeling the pain, too.
That sets them apart from most borrowers in the municipal bond market, who see today’s low rates as a rare spot of cheer amid shrinking tax revenues and rising pension costs.
But this battered collection of public borrowers is learning that low rates can be a two-edged sword — one that can slice their credit ratings to the bone, as detailed in a report to be released Tuesday by Standard & Poor’s Ratings Services.
By Jennifer Hiller San Antonio Express-News November 16, 2010
After a few years of feeling down-market pain, things are looking up — or at least no longer dreary — for the luxury home market.
While it’s not all diamonds and caviar for homes priced above the half-million-dollar mark, 2010 has seen more house sales and the local market appears to finally have shaken off the loss of the AT&T headquarters to Dallas — a move that produced a flood of luxury homes in 2008 just as the economy faltered.
The new AT&T buyers: Mexican nationals seeking safety in San Antonio from the ongoing violence from drug cartels.
They’re buying homes largely in North Side gated communities, and some of them are looking for trophy properties.
“As far as high-end real estate, the Mexican nationals have already replaced AT&T,” said Jason Glast, a real estate agent with the Phyllis Browning Co. who estimates that 20 percent of his business this year has come from Mexican nationals relocating their families here.
1,200 Ike ‘slab’ cases settled for $72 million
By Chris Paschenko Galveston County Daily News November 15, 2010
A District Court judge Monday approved a $72 million settlement of a class-action lawsuit involving 1,200 claims related to Hurricane Ike. The majority of the cases against the Texas Windstorm Insurance Association stemmed from Ike’s Sept. 13, 2008, landfall in Galveston County. Storm surge inundated Bolivar Peninsula and much of Galveston and the bayshore-area. The hurricane swept about 3,600 peninsula structures from their foundations, leaving nothing behind but a slab or pilings. Judge Susan Criss of Galveston’s 212th District Court approved the settlement of 1,200 individual claims for slab cases from a class size of roughly 2,600 members, who were represented by more than 50 law firms.
Full story at: http://galvestondailynews.com/story/190886
FEMA trailer deadline extended
By Ian White Galveston Daily News November 12, 2010
GALVESTON — Families living in 17 FEMA trailers on Galveston Island have been given an extra 12 months before risking eviction. They also will have a new landlord. The city council voted Thursday to extend the Federal Emergency Management Agency’s Jan. 7, 2011, floodplain elevation deadline for a year after the agency’s local assistance director told members it could be done if the trailers were handed to a private nonprofit organization.
Full story at: http://galvestondailynews.com/story/190010