Housing News Clips – November 2011

Tuesday Report, Nov. 1, 2011

Special to the Texas Low Income Housing Information Service

As retribution for sleazy mortgage deals, federal housing authorities contemplate forcing major banks to cut mortgage debts by up to $25 billion. Critics say the deal does not bring justice for the abuses by the mortgage industry.

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

Analysis: Mortgage probe may open new path for housing relief

By Aruna Viswanatha and Rick Rothacker        Reuters      October 28, 2011

A controversial weapon could be deployed soon in the U.S. fight against the housing crisis as states and top banks near a deal in their dispute over mortgage abuses — cutting the mortgage debt owed by homeowners.

Five major banks could be required to commit roughly $15 billion to reduce principal balances for struggling homeowners and modify loans in other ways under a proposed deal to settle allegations linked to the “robo-signing” scandal.

That amount would be part of broader sanctions that could total $25 billion, small change for the giants of Wall Street but potentially sowing the seed for a new approach to tackling the housing crisis.

Settlement talks continue with the banks, state attorneys general and some federal agencies over foreclosure shortcuts and other abuses. A deal could be struck within a month, according to people familiar with the matter.

Full story at: http://www.reuters.com/article/2011/10/28/us-usa-housing-probe-idUSTRE79R4KT20111028

Freddie Mac CEO, 3 Chairmen To Step Down

Associated Press       October 26, 2011

Freddie Mac CEO Charles E. “Ed” Haldeman Jr. will resign within the next year, according to the government regulator that oversees the mortgage giant.

The Federal Housing Finance Agency also said Wednesday that Freddie Mac will lose its chairman of its governing board and two other board members in the coming months. The departures amount to the biggest leadership shake-up for the agency since it was taken over by the government in 2008.

Haldeman, 62, has served as CEO since August 2009. He guided Freddie as it struggled under the weight of mounting loan defaults and uncertainty about its very existence in the mortgage industry. He also brought stability to the mortgage giant after his predecessor, David Moffett, resigned in frustration over strict oversight in 2009, and the firm’s CFO committed suicide.

Full story at: http://www.npr.org/2011/10/26/141736982/freddie-mac-ceo-3-chairmen-to-step-down

Reverse mortgages appeal to younger homeowners

By Linda Stern        Reuters       October 27, 2011

The typical reverse mortgage borrower isn’t who you think she is. Instead of the elderly woman you may be picturing, think of a married couple who is a bit younger.

New reverse mortgage applicants tend to be clustered around ages 62 and 63, according to Peter Bell, president of the National Reverse Mortgage Lenders Association. And they are as likely to be couples as singletons.

That’s a change from 15 years ago, when the recently widowed 75-year-old woman was their most common applicant.

In a typical reverse mortgage arrangement, a homeowner will borrow money against the equity in his home, but not have to make any payments on it until the home is sold.

The new younger borrowers often pay off these loans more quickly than the elderly borrowers of yore. They use them as a transitional way to fund retirement, says Bell — living off of reverse mortgage income during the early retirements and then selling their homes, paying off loans and downsizing later.

Full story at: http://www.reuters.com/article/2011/10/27/us-column-personalfinance-idUSTRE79P7F620111027

Public Participation:  More than an “Orgy of Public Process”

Michael Hooper        The Next American City       Oct 25th, 2011

Over the past two years, a growing number of voices have criticized the role of public participation in urban planning. These voices include Andrés Duany, the architect and New Urbanist, who has decried America’s “absolute orgy of public process.1  They also include Tom Campanella, who argues in essays in Planning magazine and the journal Places that, “it’s a fool’s errand to rely upon citizens to guide the planning process.”2, 3  A position justified, Campanella claims, because, “most folks lack the knowledge to make intelligent decisions about the future of our cities.” Criticism of participation is not new, but the increasingly strident tone of anti-participation sentiment should worry citizens and policy makers alike. In fact, there are good reasons to encourage participation in public processes, perhaps now more than ever.

Full story at: http://americancity.org/buzz/entry/3187/

Council to vote on $25M for GHA

By Amanda Casanova       Galveston County Daily News      October 28, 2011

GALVESTON — The city council is waiting until Nov. 10, the same day as a state deadline, to approve an agreement with the Galveston Housing Authority for a $25 million allocation that will rebuild public housing on the island.

The council voted Thursday to defer the agreement until a final plan for a controversial mixed-income development is available. The council must approve the agreement on Nov. 10 or lose the federal funding.

While in August, a divided council approved releasing the $25 million in federal funds to the housing authority, council members said Thursday they still have questions on how some of the 569 public housing units lost in Hurricane Ike will be rebuilt.

Full story at: http://galvestondailynews.com/story/267694

Arlington housing voucher applications begin Tuesday

By Alex Branch       Fort Worth Star-Telegram      October 29, 2011

The Arlington Housing Authority will open its Housing Choice voucher program to new applications at 8 a.m. Tuesday, the first time the agency has sought people for the waiting list in about five years.

Only applications filed electronically will be accepted, a measure that an increasing number of housing agencies nationally have used to keep the process orderly. In some cities, unruly crowds and stampedes were reported when people applied in person.

The Fort Worth Housing Authority accepted only electronic applications this year for the program, also known as Section 8.

Full story at: http://www.star-telegram.com/2011/10/28/3483147/arlington-housing-voucher-applications.html

Buckner Family Place celebrates opening of new apartments for single moms

By Kathleen Thurbner       Abilene Reporter        October 30, 2011

Eleven-year-old Keyana wants to be just like her mom.

The middle child doesn’t remember much about what life was like before.

She looks at her mom now and sees the respiratory therapist who recently earned a degree and is able to fully provide for Keyana and her two siblings.

For mom Nekeidra Butler, her children’s foggy memories of the nights they spent in hotels after they were left without a home is a blessing. She wants them to be grateful for what they have now. But, she’s also glad they’ve been able to focus on the good things — the education she attained, their home and the provision of Buckner Family Place when they were running out of other places to turn.

“I remind them, ‘Remember when we didn’t have these things?'” Butler said, sitting in the office at Buckner Family Place, which will celebrate Tuesday the opening of six new apartments for moms like Butler.

Full story at: http://www.mywesttexas.com/top_stories/article_4661fb73-b36d-51c1-a113-fdd892f5bbcd.html

Tent City breathes sigh of relief, has work ahead after council decision

Tent City residents are breathing a sigh of relief after Lubbock’s City Council gave a vote of approval for the East Lubbock homeless encampment.

By Adam D. Young        Lubbock Avalanche-Journal        October 30, 2011

Tent City residents are breathing a sigh of relief after Lubbock’s City Council gave a vote of approval for the East Lubbock homeless encampment.

Tent City resident and spokesman Cliff Van Loan said he and other residents were pleasantly surprised Thursday when the council overturned a Planning and Zoning Commission decision to disallow rezoning of the Tent City along Avenue A. The vote was 6-0.

“We had been in kind of a state of chaos until last week,” he said. “Now, there’s a sense of relief. The mood has lightened. Tent City is going to be here for a while.”

Link Ministries, which operates the shelter, had appealed the Planning and Zoning decision not allowing a change in the zoning of the area from a commercial and heavy manufacturing district to a specific-use district.

Full story at: http://lubbockonline.com/local-news/2011-10-29/tent-city-breathes-sigh-relief-has-work-ahead-after-council-decision?v=#.Tq3gS3O0zw4

What the Costumes Reveal

By Joe Nocera      International New York Times       October 31, 2011

On Friday, the law firm of Steven J. Baum threw a Halloween party. The firm, which is located near Buffalo, is what is commonly referred to as a “foreclosure mill” firm, meaning it represents banks and mortgage servicers as they attempt to foreclose on homeowners and evict them from their homes. Steven J. Baum is, in fact, the largest such firm in New York; it represents virtually all the giant mortgage lenders, including Citigroup, JPMorgan Chase, Bank of America and Wells Fargo.

The party is the firm’s big annual bash. Employees wear Halloween costumes to the office, where they party until around noon, and then return to work, still in costume. I can’t tell you how people dressed for this year’s party, but I can tell you about last year’s.

That’s because a former employee of Steven J. Baum recently sent me snapshots of last year’s party. In an e-mail, she said that she wanted me to see them because they showed an appalling lack of compassion toward the homeowners — invariably poor and down on their luck — that the Baum firm had brought foreclosure proceedings against.

Full story at: http://www.nytimes.com/2011/10/29/opinion/what-the-costumes-reveal.html?_r=1

Tuesday Report, November 8, 2011

Special to the Texas Low Income Housing Information Service

The first of an expected flood of federal lawsuits has been filed against Allied Home Mortgage for fraudulent practices. The company’s CEO is laying low and avoiding the press. The elements of the fraud charges are typical of loan practices used by Bank of American and other mortgage behemoths.

In Galveston, the housing authority finally moves on a mixed-income plan to rebuild public housing units lost in Hurricane Ike three years ago.

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

Allied Home Mortgage Is Sued Over Bad Loans

Associated Press      November 3, 2011

The federal government sued one of the nation’s largest privately held mortgage brokers on Tuesday, saying its decade-long lending practices amounted to fraud and cost the government hundreds of millions of dollars and forced thousands of American homeowners to lose their homes.

The lawsuit in United States District Court in Manhattan sought unspecified damages and civil penalties and named as defendants Allied Home Mortgage Corporation; its founder, Jim Hodge; and Jeanne Stell, the company’s executive vice president and director of compliance.

Joe James, a company spokesman, said he was aware of the lawsuit but had not yet seen it. He declined further comment.

At a news conference, Preet Bharara, the United States attorney based in Manhattan, said Allied had carried out its fraud through its authority to originate mortgage loans insured by the Department of Housing and Urban Development, or HUD.

Full story at: http://www.nytimes.com/2011/11/02/business/us-sues-allied-home-mortgage-over-lending-practices.html?_r=1&src=rechp

Official from HUD visits isle

By Amanda Casanova        Galveston County Daily News         November 2, 2011

GALVESTON — A U.S. Department of Housing and Urban Development official, who works in fair housing and equal opportunity, visited with island organizations and officials Tuesday.

Sara Pratt, deputy assistant secretary for enforcement and programs, met with representatives from organizations, such as Gulf Coast Interfaith, the League of United Latin American Citizens and other nonprofit groups, to talk about the island’s plan for public housing.

Despite some criticism, the Galveston Housing Authority plans to build a mixed-income community of public housing, tax-credit and market-rate units as part of the rebuild of 569 public housing units destroyed in Hurricane Ike.

Another 40 public housing units were built at The Oaks IV. The housing authority has said it would build a minimum of 50 scattered site units.

“(Pratt) was interested in a general status report of the rebuilding of public housing,” Galveston Mayor Joe Jaworski said. “Everyone is anxious about ‘where are the jobs for these people (when they move back)?’ To hear HUD come in and tell us to keep an eye on the whole development of the island and find ways to talk about economic opportunities, it’s very refreshing.”

Full story at: http://galvestondailynews.com/story/269378

Controversial mixed-income plan approved

By Amanda Casanova       Galveston County Daily News        November 8, 2011

GALVESTON — The Galveston Housing Authority Board of Commissioners set in motion a long-criticized plan Monday with the approval of a master plan for a mixed-income community on the island.

The board unanimously approved the plan for a controversial mixed-income development that will rebuild some of the 569 public housing units destroyed in Hurricane Ike.

Master developer McCormack Baron Salazar’s plan, which is a mix of public housing, tax-credit and market-rate units, boasts 282 public housing units in the mixed-income community with 64 public housing units at Magnolia Homes, 50 at Cedar Terrace, 128 at Oleander Homes and a proposed 40 units built at a universal design development, a building the housing authority would have to acquire.

The blend of units at each development would be split at a 40-20-40 percent ratio of mixed-income, tax-credit and public housing units at each site. The proposal has generated criticism that the market rate units would flood the island’s already soft housing market.

Full story at: http://galvestondailynews.com/story/270662

GHA chair resigns; Massey appointed

By Amanda Casanova      Galveston County Daily News         November 8, 2011

GALVESTON — Galveston Housing Authority Chairwoman Paula Neff resigned Monday from the board of commissioners.

Neff said she was stepping down from the board responsible for governing the housing authority because of health reasons.

“I was already missing some meetings, and I didn’t want to be in a position where I was holding the agency back,” she said. “It’s a full-time position (to be on the board).”

Neff’s resignation came the same day the board was scheduled to consider approving a master plan for a mixed-income community that will rebuild some of the island’s public housing destroyed by Hurricane Ike.

The plan to build a mixed development of public housing, tax-credit and market-rate units has spurred debate on the island about the mixed-income community. 

Neff said Monday the plan was far enough along for her to submit her resignation.

Full story at: http://galvestondailynews.com/story/270666

Audit raises questions about buyout program

By Michael A. Smith       Galveston County Daily News        November 3, 2011

GALVESTON — Damage assessments used to qualify five West End beach houses for a controversial $25 million buyout program instituted here after Hurricane Ike appear to be questionable, according to a Texas Division of Emergency Management audit.

Findings of the three-month review, made public Tuesday through a letter from state to federal officials, concur with allegations a group of West End homeowners began lodging with the city of Galveston more than two years ago.

The report seems to have spelled the end of a program that divided residents, pitted neighbors in the 12-house Sands of Kahala Beach subdivision against one another and spawned several lawsuits.

It was unclear Wednesday, however, whether there would be legal ramifications for homeowners who supplied the apparently questionable damage repair estimates, or the city, which accepted and used them to determine eligibility in the Federal Emergency Management Agency Hazard Mitigation Grant program.

Full story at: http://galvestondailynews.com/story/269526

Housing program in Fort Worth gives veterans a leg up

By Alex Branch       Fort Worth Star-Telegram      November 5, 2011

FORT WORTH — In May, Eric Gardner loaded his belongings into his Dodge Ram pickup and drove from Arlington to Fort Worth.

The 50-year-old former Army National Guardsman parked outside the Salvation Army shelter on East Lancaster Avenue and walked through the front door.

“I need some help,” he announced.

Gardner had lost his warehouse job and, soon afterward, his apartment. His unemployment check was not enough to pay rent and keep his truck, which he figured he would need to have any hope of finding a new job. He had health problems, including diabetes, hypertension and severe acid reflux that made it hard to keep food and liquids down.

Gardner got the help he needed and today is on the verge of moving into a home as the first client accepted into the Salvation Army’s housing program for veterans. It is the organization’s first such program in Texas.

Full story at: http://www.star-telegram.com/2011/11/04/3501572/housing-program-in-fort-worth.html#my-headlines-default

Tuesday Report, November 15, 2011

Special to the Texas Low Income Housing Information Service

In Vegas, the entrepreneurial spirit bounds: pot growers have converted vacant, foreclosed homes into grow houses.

After three years of arguing and dithering, Galveston is turning back $25 million in federal funds intended to rebuild public housing destroyed in Hurricane Ike. Perry takes the opportunity to blame federal rules for the forfeit.

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

Mortgage Settlement: Many Are Left Behind

By Asron Glantz           New York Times         November 10, 2011

Sometime next month, Raul Peña will give up his East Oakland home. Mr. Peña, a 40-year-old dishwasher, used a subprime loan from Countrywide Financial to buy his two-bedroom house for $359,000 in 2005. He is in the process of selling it in a short sale for just $100,000.

Mr. Peña is the kind of borrower that an $8.7 billion national settlement with Countrywide in 2008 was intended to help.

Announcing the settlement that October, Jerry Brown, then the California attorney general, called it “the biggest loan modification in American history.” He said it would provide $3.4 billion in relief to Countrywide borrowers in California who, like Mr. Peña, were sold creative financial products that ended up driving them into debt. But no loan-modification help ever reached Mr. Peña or many other troubled homeowners like him, a situation consumer advocates and legal experts said showed that the settlement had failed to deliver.

“There is a significant gap between the relief promised to homeowners and what was actually delivered to them. And the mechanisms needed to hold the bank accountable just weren’t there,” said Shum Preston, a spokesman for Kamala Harris, California’s current attorney general.

On Sept. 30, Ms. Harris pulled out of negotiations for a new, even larger national settlement with the nation’s largest mortgage servicers, citing concerns that that deal would also fail to help homeowners adequately.

Full story at: http://www.nytimes.com/2011/11/11/us/mortgage-settlement-many-are-left-behind.html?_r=1&src=rechp

In foreclosure-plagued Vegas, empty homes go to pot

A surge in marijuana grow houses is linked in part to the region’s mortgage crisis.

By Ashley Powers       Los Angeles Times        November 12, 2011

Reporting from Las Vegas— The Ballard house was as unassuming as any in the stucco outskirts of Las Vegas: a two-story box the color of an oatmeal cookie. Police charged inside one night searching for a domestic violence suspect. Instead, they smelled something skunky.

Marijuana. Lots of it.

Two-foot-tall plants fought for space in a hallway, police later testified. Half a dozen jars of buds hid in a closet. The master bedroom was something of a jungle, with two Ballard children, ages 8 and 9, asleep on the bed.

The home — with four bedrooms and 61 plants — was one of the smaller alleged grow operations authorities have dismantled this year. At another home, authorities seized 878 plants worth an estimated $2.6 million.

Las Vegas has a pot home problem. And like many of the region’s maladies, it’s tied to the housing slump.

Full story at: http://www.latimes.com/news/nationworld/nation/la-na-pot-homes-20111113,0,574959.story

Retiring Without a Home Loan

By Janet Morrisey        New York Times       November 13, 2011

IT has long been an element of the American dream for a homeowner to burn the mortgage note and celebrate, as soon as he or she is able to pay it off. Conventional wisdom held that this would help pave the way for a debt-free retirement.

But in today’s shaky economy, many financial advisers are suggesting that homeowners wait.

“I think paying off the mortgage would probably be a poor decision financially right now,” said Gibran Nicholas, the chairman and chief executive of the Certified Mortgage Planning Specialist Institute, which trains and certifies financial planners who provide mortgage and real estate equity advice.

The decision, he says, depends upon cash flow and returns.

Debra Shultz, a managing director of the Manhattan Mortgage Company, says that homeowners approaching retirement must ensure that they have enough cash flow to cover daily expenses. Once the mortgage is paid off, she noted, “you can’t take it back unless you refinance and cash out again.”

And refinancing as a retiree could be difficult. “Their qualified income might drop, which might inhibit them from refinancing and qualifying,” she said.

Full story at: http://www.nytimes.com/2011/11/13/realestate/mortgages-retiring-without-a-home-loan.html?_r=1&src=rechp

Perry’s office blames feds for delays in hurricane recovery program

By Brenda Bell      Austin American-Statesman        November 9, 2011

In the latest volley of a years-long skirmish with the federal government over how Texas is handling $3.1 billion in hurricane disaster recovery grants, Gov. Rick Perry’s office has again blasted the U.S. Department of Housing and Urban Development for delays in getting the money to communities stricken by storms in 2008.

“The primary reasons that Texas’ expenditures rate is not faster are due to HUD’s delayed guidelines and bureaucratic micromanaging of the state’s recovery efforts,” wrote Kathy Walt, Perry’s deputy chief of staff, in a letter to HUD Assistant Secretary Mercedes Marquez last week.

The letter follows a reprimand last month from Marquez, who questioned the state’s ability “to adequately administer” the deluge of federal funds for new housing and infrastructure projects “in a timely manner.”

Full story at: http://www.statesman.com/news/statesman-investigates/perrys-office-blames-feds-for-delays-in-hurricane-1957638.html

$25M going back to state

By Amanda Casanova       Galveston County Daily News        November 11, 2011

GALVESTON — With the Galveston Housing Authority unable to make requested changes Thursday to an agreement with the city for a $25 million allocation in federal funds, the money will go back to the state for reallocation.

The city council voted 4-3 on Thursday, the same day as a state deadline, in favor of releasing the funds that would help build back public housing to the housing authority with stipulations the public housing units not be built in a mixed-income community and that work start in six months and finish in 18 months.

Under the Texas Open Meetings Act, the housing authority could not call a public meeting in time for Thursday’s state deadline to accept the changes to the contract.

Council members Elizabeth Beeton, Chris Gonzales, Steve Greenberg and Rusty Legg voted for the agreement change. Mayor Joe Jaworski, council members Linda Colbert and Dianna Puccetti voted against.

The funds will be returned to the Texas General Land Office and then go to the Houston-Galveston Area Council, where the money could be directly earmarked for the housing authority or reallocated to other cities.

Full story at: http://galvestondailynews.com/story/271282

Beside the Point: Planning What’s Affordable

Council tweaks mammoth Downtown plan

By Michael King        Austin Chronicle       November 10, 2011

Sitting in for City Hall Hustle (currently enjoying his no doubt idyllic honeymoon) is roughly like trying to do so for Arnett Cobb. It can be done, one supposes, but the results are unlikely to sound the same. Nevertheless, we’ll try to maintain the city politics bandstand here for a couple of weeks until the return of Hustling reinforcements.

The most prominent business at the Nov. 3 City Council meeting was (as last week’s Hustle anticipated) the long-awaited and much delayed Downtown Austin Plan. After several hours of discussion, council tweaked the plan a bit and adopted it – but on first reading only, meaning nothing’s set in stone, and they’ll still be rehashing it for at least another week or two.

Weighing in at nearly 200 pages, the DAP didn’t actually gain the floor until just before the evening’s music and proclamations – long enough for speakers to begin pointing out what’s wrong with it.

Full story at: http://www.austinchronicle.com/news/2011-11-11/beside-the-point-planning-whats-affordable/

Pushing Haven option, Council mulls more restrictions on homeless residents

By Michael Barajas       San Antonio Current        November 10, 2011

Kenneth Smith and I sit at a table in the center of Prospects Courtyard, the front doorstep to downtown’s sprawling Haven for Hope homeless services campus, as the late-afternoon sun starts to fall and the cold sets in. With the faint smell of alcohol on his breath, he ruminates quietly of the coming nightfall – violence, drugs, danger, another night of just trying to survive. “Shit’s gonna break loose,” he says. “It’s gonna break loose in here real soon.”

A messy divorce and an on-the-job injury pushed Smith to the streets over a year ago, he says. At 55, he speaks tirelessly of wanting work: construction, work as a garbage man, bussing tables, anything. A punishing job market and homelessness, complete with its physical and mental scars, have kept him in and out of Prospects and on the streets, sometimes begging downtown’s workers, tourists, and residents for food and cash, anything they can spare. Tears well up in Smith’s eyes as he lifts up his right sweatshirt sleeve to sport a poorly healing gash. Attacked and stabbed by a band of men two weeks back, he says, he lost his backpack and nearly all of his belongings, along with the $109 he’d managed to save up. He shakes his head recounting the day-to-day, saying he’s exhausted and sometimes contemplates hurting himself. Outreach workers at the Courtyard say that like many living on the streets, Smith shows signs of mental illness, possibly schizophrenia.

Full story at: http://sacurrent.com/news/pushing-haven-option-council-mulls-more-restrictions-on-homeless-residents-1.1229675

Tuesday Report, November 22, 2011

Special to the Texas Low Income Housing Information Service

The home mortgage industry continues to drift toward more government dominance, even though conservatives and Obama claim to desire the opposite. Meanwhile, banks continue to screw mortgage holders who seek to refinance.

The Harris County Housing Authority is now the subject of a federal investigation into the high salaries awarded to its top executives.

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

Government’s role in housing finance a difficult balance

By Zachary A. Goldfarb       Washington Post        November 21, 2011

It’s a rare area of agreement between Republicans and the Obama administration: The government should reduce its outsize role in making sure that people can buy homes.

And yet, in the past three months, these officials and others in Washington have taken steps that expand the government’s support of the housing market.

The reason is that the economy and the housing market, in particular, remain weak. Officials are worried that withdrawing government support for housing could make it more difficult for people to buy homes, reducing demand and sending housing prices even lower.

In September, the Federal Reserve announced it would resume purchasing mortgage investments, which flood the mortgage markets with money and reduce interest rates on home loans.

In October, the Obama administration joined with federal regulators to announce a new plan to enable more “underwater” borrowers, who owe more on their loans than their properties are worth, to refinance at today’s low rates if they have government-backed loans.

And this month, Congress and President Obama signed off on a bill that would increase the size of a mortgage that borrowers can obtain from the Federal Housing Administration.

None of these steps is likely to expand the government’s footprint significantly. But the moves are making the mortgage system more reliant on the federal government — and thus harder to wean from Washington’s help — contrary to the stated wishes of both the administration and Republicans.

Full story at: http://www.washingtonpost.com/business/economy/governments-role-in-housing-finance-a-difficult-balance/2011/11/21/gIQAQ4BZjN_story.html?hpid=z4

Bank Excuses on Foreclosure Growing Stale

By Michael Powell          New York Times       November 14, 2011

The Bank of America lawyer laid down a patented rhetorical move heard in courts across America. Your Honor, this Orange County, N.Y., homeowner — a New York City police officer — didn’t make enough money to qualify for a mortgage modification. He didn’t send us the right documents.

He didn’t, he didn’t, he didn’t, and so we should be allowed to foreclose.

Justice Catherine M. Bartlett of New York State Supreme Court cut off the lawyer. You, she said, are telling me lies.

“Bank of America got a bailout, and this is an outrage, how this man has been treated,” she said. “Hard-working, middle-class Americans are trying to make it, trying to refinance with your bank.”

Either bank officials show up in person, the justice said, or I’m going to order them “here in handcuffs.”

Full story at: http://www.nytimes.com/2011/11/15/nyregion/patience-grows-thin-for-banks-foreclosure-excuses.html?src=rechp

F.H.A. Audit Sees Possible Bailout Need

By Annie Lowrey        Reuters       November 16, 2011

WASHINGTON — Chances are nearly 50 percent that the Federal Housing Administration will need a bailout next year if the housing market deteriorates further, the agency’s independent auditor said in a report released Tuesday.

The F.H.A., which offers private lenders guarantees against homeowner default, has just $2.6 billion in cash reserves, the report found, down from $4.7 billion last year.

The agency’s woes stem from the national foreclosure crisis. In the last three years, the F.H.A. has paid $37 billion in insurance claims against defaulting homeowners, shrinking its cash cushion.

The auditors determined the agency’s level of supplemental cash reserves by projecting losses on its mortgage portfolio and counting them against expected premium revenue. This year, the audit found that the F.H.A. supplemental reserve was less than one-quarter of a percentage point of its current portfolio: $2.6 billion against a $1.1 trillion mortgage portfolio, as of Sept. 30. Legally, the housing agency is required to keep a 2 percent cash buffer, a target it has not met since 2008.

Full story at; http://www.nytimes.com/2011/11/16/business/economy/auditor-says-fha-could-need-bailout.html?_r=1&src=rechp

Why home prices won’t bottom out

Watching the U.S. home market struggle to rebound is like listening to children in the back of a car. No, we’re not there yet.

By John Wasik          Reuters        November 17, 2011

The National Association of Realtors reported that ten real estate markets are “leading the nation toward a general recovery and stability of the housing sector,” but myriad problems are going to weigh down the housing market for months to come.

The lingering malaise in the economy has triggered a new wave of defaults and foreclosures. After five straight quarterly drops, foreclosures nationwide shot up 14 percent from the second to third quarter this year, according to data released by Realtytrac, the foreclosure information service (see link.reuters.com/kaw94s), in October.

Full story at: http://www.reuters.com/article/2011/11/16/us-usa-housing-prices-idUSTRE7AF1Z820111116

High-End Hits the Auction Block

Long associated with desperate sellers and foreclosed homes, auctions are now selling mansions and luxury estates.

Wall Street Journal         November 18, 2011

Calabasas, Calif. — Last Friday, about 60 people gathered at a 10,300-square-foot French Chateau-style home in a gated community of this wealthy suburb of Los Angeles. Nibbling on fruit salad and croissants, the visitors meandered through the home’s large kitchen, checked out the view of the rolling hills or peeked into the movie theater with stadium seating while it played “Pretty in Pink.”

They had all gathered to see this seven-bedroom, seven-bath mansion, which was rented by singer Britney Spears between roughly 2008 and 2010, sell to the highest bidder. The home had previously been on the market for as much as $10.8 million; bidding would start at $4.5 million.

“I’m starting to get butterflies,” confessed Regina Leon, who owns the home with her husband Jose “Pancho” Leon, a builder and founder of a money-order company. After several of her girlfriends mentioned they were coming by, Ms. Leon had decided at the last minute to cancel her hair appointment to stay to watch the action unfold. Mr. Leon said he wasn’t worried, though he admitted he’d gotten only about four hours of sleep the night before.

Full story at: http://online.wsj.com/article/SB10001424052970204190504577040233236729196.html?mod=WSJ_hpp_editorsPicks_2

Highest income-inequality tract in America is gentrifying

By Tony Pugh        McClatchy Newspapers         November 21, 2011

CINCINNATI — The nation’s newfound concern for income inequality and economic justice is old hat on the streets of Cincinnati’s Over-the-Rhine neighborhood. For the last 40 years, crime, resident flight, unemployment and inadequate housing have made this poverty-stricken area the city’s most downtrodden and feared neighborhood.

So when a new Census Bureau report found that from 2005 to 2009, a segment of Over-the-Rhine — Census Tract 17 — had the highest income inequality of more than 61,000 communities nationwide, it seemed to make perfect sense.

The increasing concentration of wealth among the nation’s highest earners while most Americans tread water financially has become a rallying point for Occupy Wall Street protests nationwide and a potent talking point for cable news commentators.

A recent report by the Congressional Budget Office found that incomes for the top 1 percent of earners grew 275 percent from 1979 to 2007, while earnings for the 60

percent of Americans in the middle of the income scale grew only 40 percent.

The picture becomes muddier, however, when the problem is studied at the community or census-tract level. Here, income inequality as measured by the Census Bureau’s American Community Survey refers only to the range of household incomes in a small geographic area. The wider the gap between high and low earners, the higher the level of income inequality for that tract.

Full story at; http://www.mcclatchydc.com/2011/11/21/130921/highest-income-inequality-tract.html

Gingrich acknowledges Freddie Mac consulting fees

By Kay Henderson          Reuters         November 16, 2011

URBANDALE, Iowa – Republican presidential candidate Newt Gingrich acknowledged on Wednesday that he had received consulting fees from troubled mortgage giant Freddie Mac for providing “strategic advice.”

Campaigning in Iowa, Gingrich said he did not believe he was contracted by the government-controlled housing finance giant as a friendly voice who would avoid criticizing it.

“I was approached. I was glad to offer strategic advice and we did it for a number of companies and Gingrich Group was very successful,” he told reporters.

He was reacting to a Bloomberg News story that said he had been paid between $1.6 million and $1.8 million in consulting fees from two contracts with Freddie Mac, the nation’s second-largest provider of mortgage funds.

Full story at: http://www.reuters.com/article/2011/11/16/us-usa-campaign-gingrich-idUSTRE7AD24S20111116

Feds to investigate county housing agency salaries

By Mike Morris        Houston Chronicle        November 22, 2011

Federal officials on Monday said they will look into salaries paid to Harris County Housing Authority executives after a Houston Chronicle analysis showed the agency pays its leaders more than many of the nation’s largest housing authorities.

U.S. Sen Charles Grassley, R-Iowa, sent a letter Monday to the Department of Housing and Urban Development, criticizing the authority’s salaries and asking for data on its policies and spending.

The letter from Grassley, who has been critical of compensation at housing authorities nationwide, blasts CEO Guy Rankin‘s “outrageous” $242,008 salary and blames “lax oversight” by HUD and “local authorities.”

Grassley also asks HUD to explain how it will enforce a law, passed last week, that limits the federal money that can be paid to housing authority employees to a “Level IV” federal executive pay scale, which this year is $155,500. Executives could be paid more, but the money would have to come from nonfederal revenues.

Full story at: http://www.chron.com/news/houston-texas/article/Feds-to-investigate-county-housing-agency-salaries-2281321.php

Isle seeks $122M for housing

By Amanda Casanova        Galveston County Daily News      November 20, 2011

GALVESTON — The city of Galveston will submit a funding application to the state for about $122 million in specific housing programs paid for with Round 2 Community Development Block Grants.

Cities in the county are preparing for the second round of grants earmarked for Hurricane Ike recovery.

The application for the federal funds related to Ike recovery is due Dec. 9. The Galveston City Council will consider the application Dec. 1.

The city is asking for $107 million for general housing programs and another $7.3 million each for a single-family rental program and a multifamily rental program.

Under state guidelines, at least 90 percent of the funds must benefit low- to moderate-income households.

Full story at: http://galvestondailynews.com/story/273402

244-unit apartment complex breaks ground Friday

By Allison Miles       Victoria Advocate        November 17, 2011

A new apartment complex will soon offer Victoria residents one more potential place to call home.

AHC Construction breaks ground on the 244-unit apartment complex Friday.

The yet-to-be-named community, at the corner of Ben Wilson Street and Houston Highway, will contain one and two-bedroom apartments that average about 900 square feet, said Will Harper, a principal with Allen Harrison Co., the developer and general contractor for the project.

AHC Construction is a subsidiary of Allen Harrison.

The upscale community will include a resort-style pool, fitness and business centers and a clubhouse, Harper said. For an added monthly fee, residents can purchase on-side parking garage space.

Full story at: http://www.victoriaadvocate.com/news/2011/nov/17/am_apartment_111811_158848/?business

Criminalizing homelessness downtown advances

San Antonio Current          November 17, 2011

A bolstered “aggressive panhandling” ordinance is destined for a speedy approval at Council this Thursday, expanding a radius of no-fly zones around ATMs, bus stops, and busses from 25 to 50 feet, while also adding to the list restaurants, outdoor patio and dining areas, public parking garages and pay stations, parking meters and converted “donation station” meters collecting change for Haven for Hope. The City’s Public Safety Committee took up the item Tuesday after it stalled in Council earlier this month when downtown’s District 1 Councilman Diego Bernal, a former civil rights attorney, attempted to change the panhandling language already written into city code which prohibits people from asking for cash or “another thing of value.” The language, he feared, was overly broad, possibly criminalizing behavior like asking for food, a cigarette, clothing, blankets, or maybe even a job.

Full story at: http://sacurrent.com/news/the-queque-science-fair-sa-teacher-petitions-the-tceq-despite-headlines-fracking-not-out-of-the-woods-yet-1.1232991

Tuesday Report, November 29, 2011

Special to the Texas Low Income Housing Information Services

Housing wasn’t news last week; after years of mortgage scams and a market that can’t find the honest value of shelter, reporters are at a lost to cut a story with a new angle.

In Amarillo we observe a rise in the production of rental housing, not as sexy or profitable as upscale condos and townhouses but more “appropriate” for the masses in need.

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

Citigroup-SEC settlement rejected by New York judge

Jed Rakoff blocks $285m CDO settlement, arguing that the deal obscured an ‘overriding public interest in knowing the truth’

By Dominic Rushe      The Guardian [UK]      November 28, 2011

Citigroup faces a day of reckoning in court after a New York judge struck down a $285m settlement the bank reached with its financial regulator, arguing that the deal obscured an “overriding public interest in knowing the truth”.

Legal experts said the move could put pressure on the SEC to stop the “legal charade” of imposing fines without demanding an admission of liability, a common practice between regulator and Wall Street banks.

It comes as major US financial institutions are still trying to reach agreements with US authorities over their share of the blame in the run-up to the credit crisis.

Last month, Citigroup agreed to settle claims that it misled clients in a $1bn collateralised debt obligation (CDO), an investment linked to sub-prime residential mortgages. Investors lost about $700m from the CDO, according to the Securities and Exchange Commission (SEC), while the bank made $160m in fees and trading profits.

Full story at: http://www.guardian.co.uk/business/2011/nov/28/citigroup-sec-settlement-rejected-judge

October home sales rise 1.3 percent but prices fall

By Jason Lange        Reuters        November 28, 2011

WASHINGTON — Sales of new homes rose in October and the supply of homes on the market fell to its lowest level since April of last year, showing some healing in the battered housing sector.

The Commerce Department on Monday said sales of new single-family homes edged up 1.3 percent to a seasonally adjusted 307,000-unit annual rate, which was the fastest pace in five months yet still below analysts’ expectations.

The supply of new homes on the market would last 6.3 months at October’s sales pace, down from 6.4 months in September.

The data fueled hopes the housing market could at least be bottoming out.

“This looks like a bottom. The market is stabilizing,” said Gregory Miller, an economist at Suntrust Bank in Atlanta.

Financial markets largely dismissed the data, with investors focused on efforts in Europe to quell the region’s debt crisis. Prices for U.S. stocks rose sharply on hopes fresh proposals could be emerging.

Full story at: http://www.reuters.com/article/2011/11/28/us-usa-economy-idUSTRE7AL14I20111128

Rental projects grow

By Karen Smith Welch       Amarillo Globe-News        November 27, 2011

After years of American emphasis on homeownership, the “apartment’s moment” has arrived.

University of Pennsylvania Wharton School’s Susan Wachter coined the phrase at a Bloomberg Commercial Real Estate Summit in New York in mid-November. The professor of real estate and finance described a national rental market cresting on the wave of credit constraints submerging the U.S. housing market.

Less than 9 percent of Amarillo apartment units sat empty in October, according to ALN Apartment Data. In addition, developers tapping into the market here continue to produce projects on a large and small scale — and not just in the growing southwest sector of the city.

“Our rental market is hot,” said Amarillo Prudential Ada real estate broker Greg Glenn. “In many of the (apartment) complexes, you have to know somebody to get that next (available) unit.”

Besides selling houses in Amarillo’s current, relatively flat housing market, Glenn’s team also combs mid- to upper-scale apartment complexes for units for transferring hires made by Bell Helicopter and other companies.

Full story at: http://amarillo.com/news/local-news/2011-11-26/rental-projects-grow#.TtJidHO0zJw

New city program aims to turn foreclosed home sites into parks

By Dakota Smith       Los Angeles Daily News        November 25, 2011

One morning in September, Pacoima residents were greeted by a curious sight: A white tent pitched outside a long-shuttered, foreclosed home on Kagel Canyon Street. Under the tent sat eager staffers from the Department of Recreation and Parks, holding notebooks and questionnaires.

As the team explained, the foreclosed home was set to be bulldozed and replaced with a small park, one of 50 planned by the city.

The sidewalk meeting represents one piece of an ambitious plan announced last week by Mayor Antonio Villaraigosa to build 50 new parks throughout the city, including transforming 10 foreclosed homes into green spaces.

“This is the leading park initiative in the country,” said Barry Sanders, president of the Board of Commissioners of the Recreation and Parks Department.

“We’re building parks in a way that’s reasonable and economical.”

Full story at: http://www.dailynews.com/news/ci_19396120

DHAP families change to Section 8

By Amanda Casanova        Galveston County Daily News       November 29, 2011

GALVESTON — Nearly 1,000 families will continue to receive federal housing help next year when a Disaster Housing Assistance Program on the island converts to a housing choice voucher program.

The disaster housing program, which provides temporary assistance to families displaced by Hurricane Ike, will transition to the housing choice voucher program, which provides rental assistance to families. When the disaster housing program ends Jan. 31, residents in the program will convert to housing choice voucher, or Section 8.

“We were very excited to hear about the change,” Yvette Camel-Smith, Galveston Housing Authority’s director of housing operations, said. “We didn’t want our families to be dropped.

We do realize that most of our families are still in great need, so this is great news for us and our families.”

The Galveston Housing Authority manages more than 1,000 families in the Section 8 program, and the transition will add another 970 families into the federal program overseen by the housing authority, Camel-Smith said.

Full story at: http://galvestondailynews.com/story/275686

How Do You Define Who’s Homeless in a Recession?

By Emily Badger       The Atlantic Cities        November 25, 2011

Earlier this fall, the Census Bureau released new data on the number of households doubling up during the recession. Back in 2007, 27.7 percent of all adults in America were combining households under the same roof. By the spring of this year, that number had jumped to 30 percent, one of the surest signs that the recession is hitting families closest to home: in their basic ability to shelter themselves. The true number may be even higher, as researchers estimate that many households under-report the number of friends and relatives cramming in, either out of fear of the landlord or the immigration officer.

But how should society approach all these “doubled up” people? Technically, they don’t have homes of their own. But does that make them “homeless,” a term traditionally reserved for people who have no other option than a shelter?

Housing advocates for years have wrestled with how to handle this population. But now, as their ranks swell – and have grown to include working and middle-class families – our existing conception of who counts as homeless and who doesn’t seems inadequate to cover the vast challenges faced by people who aren’t living off the street but who are living inside motels, neighbors’ basements and friends’ living rooms.

“In a lot of ways, those people are maybe more vulnerable than folks who’ve just had an eviction notice,” says Molly Scott, a research associate with the Urban Institute, “because a lot of them have already had an eviction notice.”

Full story at: http://www.theatlanticcities.com/housing/2011/11/how-do-you-degine-whos-homeless-recession/555/