Bo McCarver’s weekly news compilation, 8-23-2011

Depressed home sales nationwide signal that the end of the recession is nowhere near. Record low interest rates at 3.75 percent mean little as incomes shrink and living expenses rise.

In Texas, the head of TDHCA resigns amid accusations of slow progress in addressing housing losses from Hurricane Ike. Meanwhile, conservatives on Galveston Island continue to stall efforts rebuild lost public housing on the mainland.

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

Housing bust derails path to assisted living for some

By Harris Meyer       Kaiser Health News         August 22, 2011

When her 86-year-old mother, a retired nurse with Alzheimer’s disease, started wandering away from her Tallahassee, Fla., home in 2007, LuMarie Polivka-West knew it was time to move her mother and her 94-year-old father into an assisted-living facility.

But because of the collapse in the real estate market, she couldn’t sell her parents’ house quickly to pay for a $3,200-per-month assisted-living apartment. For another year, while waiting for the house to sell, Polivka-West and her two brothers each contributed $600 a month to help their parents afford the assisted-living unit.

“It was a significant cost to me and my brothers,” said Polivka-West, the senior director of policy at the Florida Health Care Association, a nursing home trade group. As for her parents, “It didn’t cause them anxiety, just us,” she said. “We didn’t let them know.”

In the fourth year of a depressed real estate market, experts say thousands of people remain unable to move into senior housing because they can’t sell their homes quickly or for the prices they need. The upshot: greater pressure on families to pay for parents’ and grandparents’ placements, or to take over the care themselves.

Full story at: http://www.mcclatchydc.com/2011/08/22/121583/housing-bust-derails-path-to-assisted.html

Head of State Housing Agency Resigns

By Becca Aaronson        Texas Tribune       August 18, 2011

The head of the Texas agency that oversees programs to help low-income households has turned in his resignation. Michael Gerber was the longest-serving executive director of the Texas Department of Housing and Community Affairs.

“He felt it was perhaps time to take a break,” said Gordon Anderson, spokesman for the agency. Given that it is a “tough job” with “long hours required,” Anderson said, Gerber resigned so he could spend more time with his two daughters.

Texas Watchdog originally reported the news, alongside accusations that the agency “failed to handle billions of federal dollars to rebuild homes in the wake of Hurricane Ike and oversees a federal stimulus program plagued by questions of fraud and mismanagement.” According to the non-profit investigative website, the housing agency has been looking into cases of “alleged fraud and bad workmanship,” and has taken away funding from some of the groups originally contracted to help weatherize homes.

Full story at; http://www.texastribune.org/texas-state-agencies/housing-and-community-affairs/head-of-state-housing-agency-resigns/

What do interest-rate lows mean for borrowers?

By Lauren Young and Beth Pinsker         Reuters         August 20, 2011

NEW YORK – As the stock market plummeted yet again on Thursday, interest rates on 10-year Treasury notes dipped below 2 percent to the lowest levels in 70 years.

For traders, Treasuries represented an obvious safe haven from stocks, and the frenzied buying drove down the yield.

But what does that mean for you? It could very well spark a borrowing bonanza for consumers, especially in the mortgage market.

“It’s a good time to be on the buyer’s side of the credit equation,” says John Ulzheimer, president of consumer education at SmartCredit.com.

While Ulzheimer says “historic lows” is a tired and overused term, he’s still amazed by what’s going on now. “In all my years in this business, I’ve never seen mortgage rates at 3.75 percent,” he says.

Full story at: http://www.reuters.com/article/2011/08/19/us-treasurybonds-consumers-idUSTRE77H6XC20110819

Tarrant foreclosure postings drop again, but troubled loans on rise

By Sandra Baker       Fort Worth Star-Telegram      August 22, 2011

Foreclosure postings in Tarrant County have dropped for the seventh straight month when compared to year-ago numbers, but the number of troubled loans keeps going higher, according to the latest monthly Foreclosure Listing Service report.

“Upside-down postings have surged 34 percent over the past year, with 28 percent of the homes posted so far this year involving homes in this no-win situation,” said George Roddy Sr., president of the Foreclosure Listing Service. “Whether you call it upside-down or under-water, it means the same thing – trouble.”

Of the homes posted so far this year for foreclosure, Roddy found that 4,210 homeowners in Tarrant County were upside-down in their mortgages, a 44 percent increase from the same period of 2010. The percentage far surpassed Dallas County at 9 percent and Collin County at 8 percent. Denton County saw a 2 percent decline of the number of upside-down loans, or those that owe more than the property is worth.

Full story at: http://www.star-telegram.com/2011/08/22/3305640/tarrant-foreclosure-postings-drop.html

Central Texas home sales soar 32 percent in July

By Shonda Novak      Austin American-Statesman        August 18, 2011

Home sales in Central Texas jumped 32 percent in July compared with the same month last year, the Austin Board of Realtors said today. The median sales price dropped 11 percent, indicating a shift in demand from higher- to lower-priced homes.

In a report released today, the Board of Realtors said 1,973 homes were sold compared with 1,499 in July 2010. The median sales price for July was $196,750.

“The increase in sales compared to the drop in price shows that Austinites are hunting for bargains,” said Judith Bundschuh, chair of the local board.

The home-sales picture was bleaker on the national front, where home sales fell 3.5 percent in July to a seasonally adjusted annual rate of 4.67 million homes, the National Association of Realtors said today. The third decline in four months suggests the depressed housing market won’t help the U.S. economy recover this year. The national median price fell in July to $174,000.

Full story at: http://www.statesman.com/blogs/content/shared-gen/blogs/austin/theticker/entries/2011/08/18/central_texas_home_sales_soar.html

Association continues opposition to housing

Galveston County Daily News        August 18, 2011

GALVESTON — The Galveston County Apartment Association is studying options for opposing the Galveston Housing Authority’s plans to develop mixed-income housing on the island.

“We have a lot of vacancies in existing facilities,” Don Mafrige, treasurer of the association, said. “Where are the people coming from to fill up all these new units?” 

Mafrige said no legal challenge could be mounted until the housing authority has a specific plan for the mixed-income developments.

“We don’t understand how the council could approve the money without a plan,” Mafrige, a former city council member, said.

Last week, the association presented a resolution urging the Galveston City Council not to release any money to build additional tax credit or mixed-income apartments or units on Galveston Island.

The council, in a split vote, released $25 million in federal recovery funds to the housing authority, which is proceeding with plans to rebuild 569 units of public housing destroyed by Hurricane Ike in 2008.

Forty of those units were built at The Oaks IV in the 4100 block of Avenue H. The housing authority is planning another 50 units on scattered sites. The agency has found a private partner, McCormack Baron Salazar, of St. Louis, to build mixed-income developments. 

Each will have a mix of public housing, tax-credit and market rate units. 

Mafrige said the association is concerned that as many as 1,500 additional units could be added to a soft market.

Paula Neff, chair of the housing authority’s board, said the agency would not move forward until it had hard evidence about the housing market. McCormack Baron Salazar is expected to release its marketing study soon.

End of story: http://galvestondailynews.com/story/251226

Austin housing authority spends thousands trying to kill bedbugs

By Andrea Ball          Austin American-Statesman       August 20, 2011

The Housing Authority of the City of Austin has spent nearly $40,000 over the past year fighting bedbugs in 15 of its 19 facilities.

Since September 2010, the authority has been treating the insects, whose bites leave itchy red welts on the skin. Over the past year, 166 of the housing authority’s 1,928 units have been treated for bedbugs, said Sylvia Blanco , vice president of housing and community development for the agency.

“There are peaks and valleys,” Blanco said. “It also depends on the season, but right now we’re having a spike because people are trying to get out of the heat. They’re staying indoors, and sometimes they’re bringing the bugs with them.”

Bedbug infestations in recent years have increased dramatically all over the country. The bugs have wreaked havoc in all kinds of buildings: luxury hotels, department stores and private homes, to name a few. Locally, they’ve hit student apartments around the University of Texas and the Austin State Supported Living Center, which houses people with intellectual disabilities. Austin Travis Integral Care has spent $14,000 over the past year battling the bugs in seven of its 46 properties for people with mental illness.

Full story at: http://www.statesman.com/news/local/austin-housing-authority-spends-thousands-trying-to-kill-1765223.html

Granbury homebuilder facing 5-year sentence for mortgage fraud

Fort Worth Star-Telegram       August 20, 2011

The owner of Sycamore Custom Homes is the 11th person to plead guilty in connection with a mortgage fraud scheme, and five more are awaiting trial. Robert Bruce Keaffaber, 51, of Granbury, admitted that he conspired to commit mail fraud, federal officials announced. The plea came in U.S. courts for the Eastern District of Texas. Here’s how the scheme worked. On loan documents, Keaffaber and others had the purchase price of the homes overstated. When the loans were funded, the excess money was used as kickbacks, prosecutors say. Keaffaber faces up to 5 years in federal prison and restitution of more than $200,000. Others who have pleaded guilty were other homebuilders, recruiters of homebuyers, a home seller, a loan processor and mortgage broker. They all are awaiting sentencing.

End of story: http://blogs.star-telegram.com/crime_time/2011/08/granbury-homebuilder-facing-5-year-sentence-for-mortgage-fraud.html

Developer pledges $25,000 to effort to help East Austin residents pay delinquent taxes

By Juan Castillo        Austin American-Statesman        August 23, 2011

A campaign to help low-income families in East Austin afford to stay in their homes might get help from a local development group, which is pledging a $25,000 contribution if the campaign can raise the same amount on its own.

East Austin Conservancy, a group headed by former Austin City Council member Raul Alvarez, will announce today the pledge from Spring Austin Partners, developer of the Spring condominium high-rise downtown.

In June the conservancy launched Preserve Eastside Affordability, a campaign to raise $50,000 to help at least 20 longtime homeowners in the Govalle and Johnston neighborhoods pay delinquent property taxes and to slow the displacement of families in East Austin caused by gentrification. Developer Perry Lorenz, a partner in Spring who is involved in several new developments in East Austin, said the contribution would come from $125,000 the developers pledged for affordable housing when they built the Spring project.

Full story at: http://www.statesman.com/news/local/developer-pledges-25-000-to-effort-to-help-1775676.html