Bo McCarver’s weekly news compilation 1-4-2010

Special to the Texas Low Income Information Service

The house sales stimulated by tax credits for first-time homebuyers last year have been wiped-out by recent drops in sales prices. As the market returns to rational terms that preceded the Bush Era, Bank of American comes to terms with the lending excesses of Countrywide while Republicans rethink privatizing Fannie Mae and Freddie Mac that are now running in the red.

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

GOP gets cold feet on ending bailout of Fannie Mae and Freddie Mac

Republicans want to privatize Fannie Mae and Freddie Mac, the mortgage giants at the heart of the financial meltdown. But bad news on house prices has them delaying grand plans.

By Gail Russell Chaddock Christian Science Monitor December 29, 2010

Washington — A new drop in the housing market is giving Republicans pause on plans to privatize home mortgage giants Fannie Mae and Freddie Mae.

Throughout the financial reform debate in 2010, Republicans argued that majority Democrats should include Fannie and Freddie in the discussions, since the vast public-private entities securitized the mortgages that were at the epicenter of the crisis. Republicans pledged to end the taxpayer bailout of Fannie and Freddie.

With Republicans taking control of the House next year, privatizing Fannie and Freddie is still a top priority, but the timetable is slipping. Standard & Poor’s Case-Shiller Home Price Index, released Tuesday, showed that home prices fell in all 20 metro areas surveyed, wiping out nearly all the gains from the $8,000 federal tax credit for first-time home buyers, which expired on April 30.

Full story at: http://www.csmonitor.com/USA/Politics/2010/1229/GOP-gets-cold-feet-on-ending-bailout-of-Fannie-Mae-and-Freddie-Mac

BofA settles Countrywide related claims for $2.8 billion

By Rick Rothacker         Charlotte Observer January 3, 2011

CHARLOTTE, N.C. — Looking to resolve one of its major mortgage headaches, Bank of America Corp. today said it has paid $2.8 billion to settle claims related to soured Countrywide Financial Corp. mortgage loans.

The agreements with mortgage giants Freddie Mac and Fannie Mae reduce some of the uncertainty facing the nation’s biggest bank over its mortgage liability. But Bank of America still faces claims from other investors who bought questionable home loans from Countrywide and the Charlotte bank during the housing boom.

Investors cheered the move, sending Bank of America shares up more than 6 percent today to $14.15. The shares haven’t been above $14 since August.

Full story at: http://www.mcclatchydc.com/2011/01/03/106128/bofa-settles-countrywide-related.html

When will housing come back in California? Five experts offer their views

Foreclosures in the state are still high. Sales of new homes are at historic lows. And millions of homeowners are underwater on their mortgages. So what’s the outlook for 2011 and beyond?

By Alejandro Lazo          Los Angeles Times January 1, 2011

As housing recoveries go, this one is in need of a cure.

Homeownership — and the buying and selling of residences — is an economic keystone that carries overwhelming weight in Californians’ personal sense of financial well-being.

But the momentum of the state’s housing rebound has faltered, with sales falling and prices softening despite bargain-basement interest rates. Foreclosures in California are still high. Sales of new homes are at historic lows. The construction sector is in the doldrums. And millions of the state’s homeowners owe more on their mortgages than their properties are worth.

Real estate historically has helped give a boost to economies exiting a recession, but the severity of this bust is nearly unprecedented: Californians have lost $1.73 trillion worth of equity in their homes since prices peaked in 2007, according to Moody’s Economy.com.

Full story at: http://www.latimes.com/business/la-fi-cover-housing-recovery-20110102,0,4012744.story

Housing Pain Pits Neighbor Against Neighbor in Florida

By Dan Fitzpatrick        Wall Street Journal December 31, 2010

LAUDERHILL, Fla.—Few things agitate Sid Schulman, who often shoots the breeze with other retirees and flirts with women friends at their condominium complex here.

But it galls him when neighbors stop paying their mortgages and maintenance fees, and leave the cost of community upkeep to others. “I am paying for these guys,” said the 75-year-old sitting poolside, a diamond stud in his left ear.

Last year, he took matters into his own hands. Near the mailbox of each condo building he posted a list of residents delinquent on their maintenance fees, with the message “Pay up or move out” and the same in Spanish, Pague O Mudese. He also tried, unsuccessfully, to get the cable company to cut off service to nonpayers.

Full story at: http://online.wsj.com/article/SB10001424052748703326204575616340542578852.html?mod=WSJ_hp_MIDDLENexttoWhatsNewsSecond

Report: FEMA hasn’t tried to recoup $643 million

By Michael Kunzelman        Associated Press January 3, 2011

NEW ORLEANS — The Federal Emergency Management Agency hasn’t tried to recoup about $643 million in improper payments made to victims of Hurricane Katrina and other disasters in the wake of a judge’s order more than three years ago, according to a government audit issued Monday.

The improper payments have gone uncollected for more than three years because FEMA hasn’t given its final approval to a new process for recovering the money, auditors found in a report by the Department of Homeland Security‘s inspector general‘s office.

The federal agency has distributed more than $7 billion in disaster assistance payments since hurricanes Katrina and Rita struck the Gulf Coast in 2005. An estimated 160,000 applicants received about $643 million in improper payments resulting from fraud, FEMA errors or other mistakes.

Full story at: http://www.mysanantonio.com/news/article/Report-FEMA-hasn-t-tried-to-recoup-643-million-934805.php

Ike-damaged, condemned houses on chopping block

By Amanda Casanova        Galveston County Daily News January 1, 2011

GALVESTON — At the beginning of the summer, a house slammed by Hurricane Ike’s winds and storm surge stood precariously on wooden stilts near the shoreline.

Six months later, the same spot was clean — the crumbling structure had been removed.

The house is one of about 25 building demolitions that have taken place since the summer of 2009 at a cost of about $50,000.

“Demolition is just one of the tools we have available to us,” Wendy O’Donohoe, director of planning and community development, said. “Rehabilitation is an important goal of the community. If there is a situation where it is a blight and we can address the issue, then it’s an opportunity to allow the neighborhood to continue to recover.”

Before Hurricane Ike, the city was razing about 10 to 15 buildings a year.

After the storm mangled buildings and electrical fires gutted other structures, the city needed more funds to address the problems.

Full story at: http://galvestondailynews.com/story/201942

Downtown Austin properties undervalued, appraiser says

Travis County’s purchase price of lot far exceeded the appraised value, following a pattern.

By Mark Toohey         Austin American-Statesman December 30, 2010

Travis County’s purchase Wednesday of a vacant downtown lot for millions more than its appraised value followed a familiar pattern.

The county’s purchase price earlier this year of another downtown property was 30 percent more than its appraised value. And the city this year was poised to buy a downtown lot for five times its appraised value, although the deal fell through for reasons other than cost.

Patrick Brown, chief appraiser in Travis County, said this week that he has found mounting evidence that downtown commercial properties have been significantly undervalued for years — meaning the owners have received what has amounted to years of significant tax breaks.

“We have admitted as much,” Brown said. “Our commercial land values have been low the last several years.”

Full story at; http://www.statesman.com/news/local/downtown-austin-properties-undervalued-appraiser-says-1153154.html

Housing development opens in Elsa

By Lindsay Machak           McAllen Monitor January 3, 2011

A new beginning was what Virginia Casares envisioned when she saw a new housing development being constructed off of FM 107.

Casares, 21, of Elsa, her husband and two children had been living with her family before they became some of the first tenants to move into the new housing community called Maeghan Pointe.

The family moved into their new three-bedroom home on New Year’s Day.

“It’s a new start for a new year,” she said.

About a dozen families kicked off 2011 by moving boxes into the 80-unit development.

Full story at: http://www.themonitor.com/news/opens-45883-development-elsa.html

Far East Dallas residents welcome all neighbors – including homeless

By Nancy Visser        Dallas Morning News December 31, 2010

For Amanda Buckley, the perfect neighborhood is one that needs her.

When she and her husband, Clay, shopped for a house, they weren’t interested in a suburban escape. Instead, they found Casa View Haven, a 1950s neighborhood in Far East Dallas, where the houses are small but have good bones and big yards. Where there’s property crime, schools that could be better and neighbors in need. Where they could make a difference.

A year after starting the Casa View Haven Neighborhood Association, the Buckleys and other like-minded residents have reached beyond the typical homeowner issues to help the needy in their neighborhood and beyond.

They’re welcoming the homeless being placed in Far East Dallas apartments through a program that has brought angry protests in other parts of town.

Full story at: http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/122910dnmethaven.6e1df9.html