Bo McCarver’s weekly news compilation, 3-8-2011

Tuesday Report, March 8, 2011

Special to the Texas Low Income Housing Information Service

The Obama Administration’s program to help homeowners avoid foreclosure in on the Congressional chopping block. The effort has proven expensive and difficult to administer through reticent lenders who saw little profit in renegotiating troubled loans. Lenders who received federal bailouts have proven to be the worse “foot draggers” in negotiating short sales.

In Galveston, the city has finally moved to rebuild public housing destroyed by Hurricane Ike.

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

White House plan to help borrowers could die in House

Washington Post March 3, 2011

The Obama administration’s main initiative to help struggling borrowers avoid foreclosure could soon be killed in the House, where many Republican lawmakers have complained about the program’s lackluster results.

The initiative, known as the Home Affordable Modification Program, or HAMP, aims to reduce borrowers’ monthly payments to affordable levels. When it was launched in March 2009, the administration projected that it would prevent 3 million to 4 million foreclosures before it expired in December 2012.

But the program is far off track, having permanently modified about 521,000 mortgages as of December. Republican lawmakers say the results are not worth the cost, which is why a House Financial Services subcommittee considered killing the program and three others at a hearing Wednesday.

Full story at: http://www.washingtonpost.com/wp-dyn/content/article/2011/03/02/AR2011030206637.html?wprss=rss_print/asection

Banks drag feet on short sales, survey finds

Los Angeles Times March 8, 2011

Response times are long and many of the offers don’t end with a sale, says the California Assn. of Realtors poll.

Banks are dragging their feet when considering so-called short sales, an increasingly prevalent type of real estate transaction in which lenders allow homes to be sold for less than what is owed on them, according to a survey of California real estate agents.

Nearly two-thirds of the 2,150 respondents to the California Assn. of Realtors’ survey of member agents said banks took longer than 60 days to respond to short sale offers and that fewer than three out of every five offers ultimately resulted in a sale.

The response times are much longer than those specified in government guidelines for banks who agreed to participate in programs that help troubled borrowers when they accepted a share of the $700-billion Wall Street rescue.

Full story at: http://www.latimes.com/business/la-fi-short-sales-20110307,0,6800709.story

Home prices falling to level of 1890s

In real terms, home prices today are comparable to 120 years ago.

Christian Science Monitor March 3, 2011

NOTE… Be sure to bookmark the Scary Housing Dashboard for a real-time view of the eleven housing markets now reaching for new price lows.

While many have become convinced that a bottom to the national home price decline was seen during 2010, there is growing evidence to the contrary, including eleven of twenty markets tracked by S&P/Case-Shiller reaching for new lows and multiple home price index sources showing generally that prices have all but retraced the distortive effects of the federal first-time homebuyer program.

Further, while nominally (i.e. not adjusted for inflation) home prices may have gone a long way into correction territory, in real terms (i.e. inflation adjusted), national home prices are still significantly elevated (possibly by as much as 15%-20%) above long-run norms.

Some years back, Yale Professor Robert Shiller produced a long-run nominal home price index for the U.S. by fusing together data that had been gathered from a number of historical archives.

Shiller then adjusted the index for inflation revealing the very interesting fact that, in real terms, prices for U.S. homes changed very little over the span from 1890 to the mid-1990s

Full story at: http://www.csmonitor.com/Business/Paper-Economy/2011/0303/Home-prices-falling-to-level-of-1890s

Coping With Chicago’s Foreclosure ‘War Zones’

Huffington Post March 3, 2011

Bryan Esenberg’s job is to tend the graveyard of Chicago’s housing boom.

Esenberg works for a local nonprofit that steps in to prevent abandoned buildings mired in the foreclosure process from falling apart while mortgage companies, lenders, owners and investors grapple over who is responsible.

Once, he was called in because the entire facade of an abandoned house had fallen onto the sidewalk, he said. In another case, a young family was stuck in a house with a basement full of raw sewage after the landlord had walked away.

In the first such case he handled, Esenberg said, a homeowner had just packed up and left after getting a foreclosure notice. “But then the bank never foreclosed,” said Esenberg, who works with Neighborhood Housing Services of Chicago. “So three years down the line, there’s just this house that’s been completely abandoned.”

As of last year, there were roughly 15,000 vacant buildings in Chicago, 85 percent of which were caught in some stage of the foreclosure process, according to city figures.

Full story at: http://www.huffingtonpost.com/2011/03/02/chicago-vacant-reo-property_n_829343.html

First-time buyers turn fussy about ‘move-in ready’ homes

Stricter loan requirements and cable TV have helped make purchasers extra picky, experts say.

By Kenneth Harney       Los Angeles Times March 6, 2011

Picky, picky, picky. Are today’s first-time home buyers passing up great deals because they insist on flawless “move-in ready” houses requiring little or no changes — even at the starter-home price levels at which shoppers traditionally have been willing to factor future fix-ups and renovations into their offers?

Or are they simply reflecting market realities? They see record inventories of houses sitting unsold, they have plenty to choose from, and they may not have the money, time or inclination to do fix-ups after making the purchase.

Full story at: http://www.latimes.com/business/realestate/la-fi-harney-20110306,0,6735339.story?track=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+latimes%2Fmostviewed+%28L.A.+Times+-+Most+Viewed+Stories%29

Affordable housing overwhelmed

Agencies describe a “perfect storm” of conditions pushing more to the edge of poverty.

By Coleen O’Connor       Denver Post Feb. 13, 2011

Record growth in the number of low-income Americans who now pay more than half their monthly income for rent — a 20 percent increase described in a federal report delivered last week to Congress — is mirrored in the daily realities of communities across Colorado.

It’s evident in places like Jefferson County, where about 18,000 people live on incomes of $20,000 or less.

According to federal guidelines, affordable rental housing at that income level is about $480 in monthly rent, and “there are no rental units in this county for that amount,” said Linda Barringer, program director for housing and family services at The Family Tree in Wheat Ridge.

There are about 5,000 units of subsidized or Section 8 housing in Jefferson County, “which leaves about 13,761 units of some kind of affordable housing that is needed,” said Barringer.

Families forced to pay more than half their income for rent are left with little money for things like transportation and food, she said, so they’ll depend on local food banks.

Full story at: http://www.denverpost.com/news/ci_17375036

GHA now seeking master developer

By Amanda Casanova Galveston County Daily News March 7, 2011

GALVESTON — The Galveston Housing Authority is looking for a master developer to oversee most of the reconstruction of public housing units damaged in Hurricane Ike, moving forward in its plan to rebuild 569 homes on the island.

A request for quotation application should be available online Friday, said Betty Massey, of the housing authority board of commissioners.

“What we’re looking for is mixed-income, mixed-housing types,” she said. “They will be privately owned, privately managed and privately maintained.”

The master developer would manage rebuilding 282 to 479 public housing units at Magnolia Homes, Cedar Terrace and any other new sites the authority acquires.

Excluded from the developer are the 50 scattered sites and another 40 units already in construction at Palm Terrace.

Full story at: http://galvestondailynews.com/story/216402

Apartment developer meets with neighbors

By Hayley Kappes Galveston County Daily News           March 4, 2011

LEAGUE CITY — A developer is proceeding with a plan to build apartments for low- to moderate-income adults 55 and older after addressing concerns from nearby homeowners. 

Stuart Shaw, president

of Austin-based apartment developer Bonner Carrington, in April obtained a resolution from League City council members that supported his plan to build the 176-unit Mariposa Apartment Homes on FM 517 east of Calder Road in the Bay Colony Planned Unit Development.

The land is zoned for multifamily housing.

Shaw said he halted the project to meet with neighbors who complained the apartments would attract crime, decrease property values and compound traffic congestion.

Full story at: http://galvestondailynews.com/story/215814

Homeless tent city set for move

Lubbock’s so-called tent city will have a new home within the coming weeks.

By Kellie Bramlet Lubbock Avalanche-Journal March 3, 2011

The more than 20 homeless residents of the tent city will move from the city property at the corner of Broadway and Avenue Q to property owned by Link Ministries at 13th Street and Avenue A.

At last week’s meeting of the committee on homelessness, Link Ministries Executive Director Les Burrus offered the land the nonprofit had received as a donation to help in whatever way possible.

After a meeting of city representatives, Carpenter’s Church directors and the residents of the tent city on Tuesday night, the unanimous conclusion was the land at 13th Street and Avenue A would better house the tent city, Burrus said.

“We are thrilled to be a part of a solution,” he said.

Full story at: http://lubbockonline.com/local-news/2011-03-03/homeless-tent-city-set-move?v=1299168366