Housing News Clips – October 2011

Tuesday Report, Oct. 4, 2011

Special to the Texas Low Income Housing Information Service

The federal program to rescue “underwater” homeowners is shutting down after a terrible start and a system so mired in red tape that few qualified. The program had helped about half of the 30,000 targeted homeowners. For the few who qualify, mortgage rates have plummeted to 3.28 percent.

As Perry drops half his supporters in his presidential bid in one month, a new scam hits the press: he has deep ties with the engineering firm that Texas awarded the contract to allocate and monitor more than $1 billion in federal hurricane relief funds. The firm, HNTB, has moved at a snail’s pace; doubled its requests for payments to administer the program, and has contributed $3 million to Perry’s war chest.

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 modifications are still messed up, 4 years later

By Kevin G. Hall       McClatchy Newspapers       October 1, 2011

WASHINGTON — Jose Palomo was surprised when the knock on the door came in August, informing him that his California home had been foreclosed and he’d need to vacate promptly. After all, he’d recently started payments on an in-house mortgage modification with CitiMortage Inc.

“I was speechless, didn’t know what to say. What’s going on? Why? They got our hopes high saying we got approved, everything was going to go through,” recalled Palomo, 23, a car salesman fighting to keep his tiny home in Riverside.

Palomo’s plight illustrates why housing remains such a drag against U.S. economic recovery. He’s fighting to keep a 738-square-foot home that today is worth less than $85,000. He was given a mortgage modification where he’ll owe about twice that amount — illustrating how such modifications often fail to solve the problem they’re designed to fix. Simply put, mortgage modifications aren’t cleaning up the housing-finance mess.

And to top it off, even as he began making payments on his still too-high mortgage, Palomo still faced losing his home — underscoring lenders’ relentless pursuit of foreclosure proceedings four years after the housing-market bust.

Today there are at least 4.2 million homeowners who, like Palomo, are late on their mortgage payments or somewhere in the delinquency and foreclosure process. The first wave of foreclosures came during the 2008 financial crisis as subprime mortgages given to weak borrowers imploded. Now the subsequent economic downturn and high unemployment keep housing depressed.

Full story at: http://www.mcclatchydc.com/2011/09/29/125642/mortgage-modifications-are-still.html

U.S. Mortgage-Aid Program Is Shutting Down, With Up to $500 Million Unspent

By Cara Buckley         New York Times       September 29, 2011

In summer 2010, Congress set aside $1 billion for a program intended to bail out people in danger of losing their homes to foreclosure. It was estimated that the program, administered by the federal Department of Housing and Urban Development, would help as many as 30,000 households.

But the program is now ending after achieving lackluster results and stirring widespread recrimination.

Fewer than 15,000 households are expected to receive help despite enormous demand, and perhaps half of the money will go unspent.

The department attributed the program’s performance to the way it was set up by Congress. But Representative Barney Frank, Democrat of Massachusetts, an author of the legislation, said the program’s failings were a result of poor administration and the department’s late start in rolling it out.

“They dragged and dragged their feet,” Mr. Frank said in an interview. “I believe it was not one of their priorities.”

Full story at: http://www.nytimes.com/2011/09/29/nyregion/emergency-homeowners-aid-ending-with-up-to-500-million-unspent.html?src=rechp

Average rate on the 15-year loan falls to 3.28 percent; further declines foreseen

Washington Post        September 29, 2011

WASHINGTON — Fixed mortgage rates have fallen to historic new lows for a fourth straight week and are likely to fall further.

The average on a 30-year fixed mortgage fell to 4.01 percent this week, Freddie Mac said Thursday. That’s the lowest rate since the mortgage buyer began keeping records in 1971. The last time long-term rates were lower was in 1951, when most long-term home loans lasted just 20 or 25 years.

The average on a 15-year fixed mortgage, a popular refinancing option, ticked down to 3.28 percent. Economists say that’s the lowest rate ever for the loan.

Mortgage rates tend to track the yield on the 10-year Treasury note. The 10-year yield has risen this week to around 2 percent. A week ago, it touched 1.74 percent — the lowest level since the Federal Reserve Bank of St. Louis started keeping daily records in 1962. As recently as July, the 10-year yield exceeded 3 percent.

Full story at: http://www.washingtonpost.com/business/average-rate-on-the-15-year-loan-falls-to-328-percent-further-declines-foreseen/2011/09/29/gIQAVgv96K_story.html?hpid=z2

Shifting the Suburban Paradigm

By Allison Arieff        New York Times       October 3, 2011

Is there anything made in America that’s less innovative than the single-family home? While we obsess over the new in terms of what we keep in our houses — the ever-increasing speed and functionality of our Smartphones, entertainment options built into refrigerators, sophisticated devices that monitor, analyze and report on our sleep cycles, even the superior technology of the running shoes we put on before heading out the flimsy fiberboard door — we’re incredibly undemanding of the houses themselves. These continue to be built the same way they have for over a century, and usually not as well. Walls and windows are thin, materials cheap, design (and I use the term loosely) not well-considered. The building process is a protracted affair, taking far too long and creating embarrassing amounts of building waste (over 50 percent of all waste produced in the United States, in fact).

But the lack of innovation extends beyond the high-tech. Not so long ago homes were designed to make the most of their surrounding climate and terrain. Vernacular forms like the shotgun, in places like New Orleans, served a purpose that went far beyond aesthetics — they encouraged natural cooling by improving cross-ventilation. In Texas and New Mexico, thick adobe walls similarly kept heat in during the winter, and out during the summer. Houses were sited and windows placed to maximize or minimize sun exposure as needed.

Full story at: http://opinionator.blogs.nytimes.com/2011/10/02/shifting-the-suburban-paradigm/

Appeals court to review immigrant housing ban

Associated Press        October 4, 2011

NEW ORLEANS  — A Dallas suburb is asking a federal appeals court to overturn a judge’s ruling that the city tried to impose unconstitutional restrictions on home rentals to illegal immigrants.

A three-judge panel from the 5th U.S. Circuit Court of Appeals is scheduled to hear arguments Tuesday over a housing ordinance that Farmers Branch’s city council enacted in 2008.

Farmers Branch says U.S. District Judge Jane Boyle erred last year in ruling that its ordinance is pre-empted by federal immigration law. The city argues that denying illegal immigrants access to rental housing isn’t fundamentally different than denying them employment or public benefits.

Landlords and tenants who challenged the city’s ordinance said the licensing scheme adopted by the council impermissibly intruded on the federal immigration system.

Full story at: http://www.mysanantonio.com/news/article/Appeals-court-to-review-immigrant-housing-ban-2201414.php

State looks into handling of Ike money

By T.J. Aulds          Galveston County Daily News        September 28, 2011

BAYOU VISTA — The state’s attorney general is investigating how the city managed federal disaster dollars earmarked for Hurricane Ike recovery, the mayor revealed Tuesday. The attorney general has impaneled a grand jury in the 56th District Court to conduct the investigation, Mayor Bobby Rosenquist said.

His announcement came the same night that it was revealed that the Federal Emergency Management Agency has informed the city it must return $27,000 allocated to the city to help in its Ike recovery efforts. The council approved paying the money as part of the 2011-12 budget.

“I met with investigators for more than three hours (Monday),” Mayor Bobby Rosenquist said. “The main investigation going on is in the 56th District Court — it’s not the county … that is just one of the investigations going on.”

Full story at: http://galvestondailynews.com/story/261146

State outsourced allocation of federal disaster recovery funds to firm with ties to Perry

By Brenda Bell      Austin American-Statesman       October 4, 2011

The state of Texas has quietly outsourced the management of more than $1 billion in federal disaster recovery funds to an engineering firm with close ties to Gov. Rick Perry’s administration, paying the Kansas City, Mo. -based firm HNTB $45 million so far to process infrastructure grants for communities damaged by Hurricanes Dolly and Ike.

The company’s billings threaten to exhaust the amount budgeted for administrative and planning costs, while only 20 percent of the first round of money released to Texas to aid disaster recovery grants has been spent three years after the storms. Based on the state’s original timeline, at least half those projects should have been completed by now, federal officials say.

The problems have caused officials with the U.S. Department of Housing and Urban Development to voice alarm and begin quarterly reviews in an attempt to get the program back on track.

Hiring a private firm to handle what has been termed the largest public works project in the state’s history is unusual, federal officials say.

Full story at: http://www.statesman.com/news/texas-politics/state-outsourced-allocation-of-federal-disaster-recovery-funds-1893739.html

New Austin blueprint envisions new direction for growth

By Marty Toohey        Austin American-Statesman       September 29, 2011

After two years of debates and committee meetings, Austin officials have unveiled a broad vision for growth that condemns traditional suburban development and is garnering both praise and skepticism.

The proposed, 197-page “comprehensive plan” would be the city’s official philosophy for managing a booming population and the new housing, businesses, shops and restaurants that will come with it. The plan, dubbed Imagine Austin, envisions mixed-use development along corridors serviced by transit and new centers of housing and commerce miles north and south of downtown.

The plan is intended to guide every city decision over the next three decades, from where to allow construction to how much to collect in taxes to managing the economy.

It is unusually blunt for a municipal document. It talks of rectifying past mistakes. It plans around big-ticket initiatives such as urban rail or significantly expanded bus service.

Full story at: http://www.statesman.com/news/local/new-austin-blueprint-envisions-new-direction-for-growth-1885516.html

Advocates plan to rally for tent city for homeless

By Andrea Ball      Austin American-Statesman      October 4, 2011

Austin homeless advocates are piggybacking on the Occupy Wall Street momentum this week to push their own agenda: a sanctioned tent city for homeless people.

On Thursday, more than 1,000 supporters of Occupy Austin — a local offshoot of the ongoing protests in New York — are expected to rally outside Austin City Hall to decry such national issues as corporate greed, bank bailouts and the mortgage crisis.

Homeless advocates want to use that energy to revive the decades-long local debate over a campground devoted to people with nowhere else to go. Supporters plan to meet on Thursday across the river from City Hall near South First Street and Auditorium Shores. They’ll bring their tents, serve food and rally for a safe place for homeless people to camp.

“We’re hoping that in conjunction with Occupy Austin, homeless folks can be heard on the great need for affordable housing, transitional housing, shelter space and a tent city,” said Valerie Romness , a longtime advocate for homeless issues in Austin.

Full story at: http://www.statesman.com/news/local/advocates-plan-to-rally-for-tent-city-for-1893544.html

Tuesday Report, October 11, 2011

Special to the Texas Low Income Housing Information Service

Allegations of shabby paperwork and hard-hearted mortgage practices were directed at Fannie Mae and Freddie Mac this week. In Arizona, the quasi-governmental mortgage giants refuse to participate in a loan reduction program that the state would provide matching funds.

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

Report: Fannie knew of allegations of improper foreclosure practices in 2003

By Derek Kravitz       Associated Press       October 5, 2011

WASHINGTON — Mortgage giant Fannie Mae knew about allegations of improper foreclosure practices by law firms in 2003 but did not act to stop them, a government watchdog said.

Similar allegations are the subject of an investigation by state attorneys general into how lenders and law firms ignored proper procedures to handle a crush of foreclosure paperwork.

An unnamed shareholder warned Fannie Mae of alleged foreclosure abuses in 2003, Steve Linick, the inspector general for the agency that regulates Fannie, said in a report released Tuesday.

Fannie Mae responded by hiring a law firm to investigate the claims in 2005. The law firm reported in 2006 that it had found foreclosure attorneys in Florida “routinely filing false pleadings and affidavits.”

Full story at: http://www.statesman.com/business/report-fannie-knew-of-allegations-of-improper-foreclosure-1896052.html

Freddie and Fannie Reject Debt Relief

By Shala Dewan        New York Times       October 6, 2011

Home values have fallen so much in Arizona that almost half the people with mortgages there owe more than their homes are worth. So when federal money became available to help stem the tide of foreclosures, the state flagged that group for help.

If banks would forgive some of a homeowners’ mortgage debt, the state said it would pay half, up to $50,000 of a $100,000 loan reduction. Despite the generous terms, most banks balked.

Only three homeowners have been approved for debt reduction since the program began in September 2010. A major obstacle has been that the two largest mortgage guarantors, Fannie Mae and Freddie Mac, will not participate — in Arizona or elsewhere. No loans are eligible for the state’s program if they were bought and held or securitized by the two companies, which are now under government control and guarantee more than 70 percent of the country’s home loans.

“It is extremely difficult for the principal reduction program to be successful” when Fannie and Freddie opt out, said Shaun Rieve, a spokesman for the Arizona Department of Housing.

Full story at: http://www.nytimes.com/2011/10/06/business/opposition-from-freddie-and-fannie-stalls-debt-reduction.html?src=rechp

30-year mortgage below 4 pct. for first time ever

By Derek Kravitz         Associated Press        October 6, 2011

WASHINGTON — The average rate on a 30-year fixed mortgage has fallen below 4 percent for the first time in history.

For the lucky few with good jobs and stable finances, it’s a rare opportunity to save potentially thousands of dollars each year. For most people, it’s a tease and a reminder of how weak their own financial situation is.

On Thursday, Freddie Mac said the rate on the 30-year fixed mortgage fell to 3.94 percent from 4.01 percent last week, the previous low. The average rate on a 15-year fixed loan, a popular refinancing option, dipped to 3.26 percent, also a record.

Mortgage rates are now lower than they were in the early 1950s. The average rate reached 4.08 percent for a few months back then, according to the National Bureau of Economic Research. Although mortgages at that time typically lasted only 20 or 25 years.

Super low rates haven’t been enough to lift the housing market, which has struggled in recent years with anemic sales and declining home prices.

Full story at; http://www.star-telegram.com/2011/10/06/3424232/rate-on-30-year-mortgage-falls.html

Foreclosures Leave Apartment Buildings in Need of Repair

Gotham Gazette       October 1, 2011

The housing bubble may have burst a few years ago, but many New Yorkers — and the buildings they live in — can still feel the pain. An estimated 30,000 foreclosures are pending in courts in the five boroughs, with many cases lingering for years as owners and lenders abandon the properties and leave renters to cope with woeful and often dangerous conditions.

While much of the attention during the crisis has focused on owners of single-family dwellings who cannot meet their mortgage payments and end up losing their homes, thousands of renters whose landlords default also have their homes at risk. Recent litigation and a push for new legislation have combined to shine a light on this situation, but changes are not coming soon enough for residents whose homes are literally falling apart.

“It’s a widespread problem in the city,” said City Councilmember Brad Lander, who introduced legislation to tackle the issue last spring. “With foreclosures, you wind up with this long limbo period where the owner basically just stops taking care of the building. There are quite a few buildings where tenants have had to live without things like heat and hot water as a result.”

Full story at: http://www.gothamgazette.com/article/housing/20110915/10/3603/

Mortgage error sparks lawsuit

Bank wants a San Antonio couple to restart their payments nine years after a mistake.

By Patrick Danner      San Antonio Express-News        October 11, 2011

In a strange twist in the ongoing saga of shoddy record-keeping surrounding mortgage documents, Chase bank last month sued a San Antonio couple because they were mistakenly released from having to make any more house payments — nine years ago.

Chase filed suit in U.S. District Court in San Antonio last month against Ramiro and Delia Guerrero Jr. to rescind a mortgage-lien release recorded in 2002. The bank also wants the mortgage declared valid so the couple will have to resume making payments.

Stephen Cochran, the Guerreros’ lawyer, acknowledged that the couple never made their mortgage payments after a 2001 refinancing, blaming that on the then-lender apparently losing the note and the couple’s confusion over where to send their payments.

Full story at: http://www.mysanantonio.com/news/local_news/article/Mortgage-error-sparks-lawsuit-2211842.php

Eco-friendly housing project Paisano Green Community 1st of its kind

By Cindy Ramirez          El Paso Times         October 11, 2011

With the construction of the first net-zero-energy public housing development in the nation, the Paisano neighborhood in Central El Paso is getting a little greener.

“It’s really a blueprint on how things should be done from design to construction and the quality of life it offers to residents while being environmentally friendly,” said Marty Howell, the city’s sustainability manager. “There is a trend rolling throughout the country, and this project is one to talk and boast about.”

The Paisano Green Community, which is expected to open in April 2012, is an energy-efficient, 73-unit El Paso Housing Authority complex for senior citizens. The complex will feature wind turbines, rooftop solar panels, air-source heat-pump water heaters and more. All energy consumed will be generated on site, and no fossil fuels will be burned at the complex — making it one of the most cutting-edge green projects in the nation, officials said.

Full story at: http://www.elpasotimes.com/news/ci_19085432

Point Austin: Imagine Affordability

How Austin can avoid becoming ‘home to the very wealthy and the very poor’

By Amy Smith        Austin Chronicle       October 6, 2011

Last Saturday, under bright-blue skies and a kinder, gentler sun, hundreds of residents walked through the doors of the Carver Museum & Cultural Center in East Austin to catch a glimpse of what Austin might look like 10 to 30 years down the road. The indoor-outdoor event, billed as a “release party” for the Imagine Austin Comprehensive Plan, included musical entertainment, promotional swag, food trailers, and – everyone’s favorite – face painting.

The biggest surprise was the sheer number of people – the city’s estimate was about 600 – who turned out for an event that featured city planning as the main attraction. Apart from the political and policy wonks, the “regular” part of the crowd included a broad mix of people young and old. They strolled through the venue studying various maps and literature. Members of the Citizens Advisory Task Force that hammered out the plan were on hand to answer questions, along with a cadre of planning consultants and city leaders.

Full story at: http://www.austinchronicle.com/news/2011-10-07/point-austin-imagine-affordability/

New vision for Airport Boulevard has some business owners concerned

By Juan Castillo      Austin American-Statesman       October 11, 2011

Ambitious city plans to reinvent Airport Boulevard might not come to fruition for many years, and they depend first on writing the development rules intended to achieve the desired look. But elements of the early vision already are raising concerns among some business owners on the bustling commercial strip.

The city envisions transforming the 2½-mile stretch of Airport between North Lamar Boulevard and Interstate 35 into an attractive, pedestrian- and bicycle-friendly mix of public spaces and retail and residential development. Last week, residents and business owners got their first look at the work done so far by planners and designers.

Full story at: http://www.statesman.com/news/local/new-vision-for-airport-boulevard-has-some-business-1906494.html

Faced with flooding, McAllen homeowners consider FEMA buyout

By Dave Hendricks      McAllen Monitor      October 8, 2011

McALLEN — City officials met with two local homeowners Thursday to present grim news: McAllen had put aside $850,000 to improve drainage in their neighborhood, but the money might be better spent buying them out.

“It basically allows us an option, and it has to be (with) owner consent, to purchase the property from the owner,” said City Engineer Yvette Barrera, who helped explain the Federal Emergency Management Agency’s buyout program.

While poor drainage is a pervasive problem in the Rio Grande Valley, where even moderate rain routinely floods major roads and flat land makes drainage improvements an engineering challenge, the buyout program is an unusual step. Barrera said she couldn’t recall her office handling a federal buyout application before.

McAllen could use the money to improve drainage in neighborhoods west of 23rd Street near the Las Palmas Community Center.

Full story at: http://www.themonitor.com/news/mcallen-55504-consider-faced.html

Tuesday Report, October 18, 2011

Special to the Texas Low Income Housing Information Service

With more than 4.5 million vacant houses on the market, that sector of the US economy offers no foreseeable relief from a second recession. In order to improve appearances and cut maintenance costs in neighborhoods pocked with vacant houses, some banks are bulldozing the units.

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

Millions of homes lurk on bank inventories, casting doubts of rebound

By Toluse Olorunnipa        McClatchy Newspapers      October 16, 2011

MIAMI — Officially, there are 3.5 million homes for sale nationwide. But there are millions more lurking in the shadows — hidden neatly away on banks’ balance sheets, stalled in foreclosure court proceedings or simply occupied by nonpaying owners as lenders wait months or years before taking action.

The housing market’s ballooning shadow inventory — buoyed by a yearlong foreclosure slowdown — stands as the most menacing obstacle to the recovery of the residential real estate market.

Clustered mostly in hard-hit cities and states, there are more than 4.5 million homes either owned by lenders or headed for foreclosure. In Miami, for example, there are about 200,000 shadow homes, dwarfing the 30,000 properties that are listed on the active market. Even as prices in Miami have shown signs of stability this year, an impending wave of foreclosures threatens to keep real estate values deflated.

Full story at; http://www.mcclatchydc.com/2011/10/16/127042/millions-of-homes-lurk-on-bank.html

Banks turn to demolition of foreclosed properties to ease housing-market pressures

By Brady Dennis         Washington Post         October 12, 2011

Cleveland — The sight of excavators tearing down vacant buildings has become common in this foreclosure-ravaged city, where the housing crisis hit early and hard. But the story behind the recent wave of demolitions is novel — and cities around the country are taking notice.

A handful of the nation’s largest banks have begun giving away scores of properties that are abandoned or otherwise at risk of languishing indefinitely and further dragging down already depressed neighborhoods.

Full story at: http://www.washingtonpost.com/business/economy/banks-turn-to-demolition-of-foreclosed-properties-to-ease-housing-market-pressures/2011/10/06/gIQAWigIgL_story_2.html

Democrats losing patience with Obama over foreclosures

By Michael Doyle      McClatchy Newspapers      October 12, 2011

WASHINGTON — Unhappy California lawmakers on Wednesday escalated pressure on the Obama administration to aggressively aid the state’s distressed homeowners.

In a show of political force and a reminder that the president has disenchanted some allies, House Democrats from throughout the state rallied publicly for stepped-up efforts that might fend off foreclosures.

“California has been ground zero from the beginning,” Rep. Doris Matsui, D-Sacramento, said of the foreclosure crisis, “and it has been for too long.”

Matsui and 31 other California House Democrats wrote President Barack Obama urging more help with mortgage refinancing, interest-rate reductions and an overall streamlining of assistance.

The proposals would apply nationwide, potentially giving them political traction in other high-foreclosure states such as Florida, Idaho and Georgia. Nationwide, lenders filed a record-high 3.8 million foreclosure notices in 2010, according to RealtyTrac, a company that markets and tracks foreclosures.

Full story at: http://www.mcclatchydc.com/2011/10/12/127047/democrats-losing-patience-with.html

Magnolia Homes to be first mixed-income site

By Amanda Casanova        Galveston County Daily News     October 12, 2011

GALVESTON — The first phase of work for a controversial mixed-income community that would rebuild some of the island’s public housing will start at the former site of Magnolia Homes, Galveston Housing Authority officials said Tuesday.

Among many concerns from critics of the plan, the proposed blended community, which would include some of the 569 public housing units destroyed in Hurricane Ike, has sparked worries about how the mixed developments will impact the density of public housing on the island.

While the housing authority board of commissioners hasn’t voted to set how many units will be constructed at each site, the board discussed on Tuesday moving forward with a 40-20-40 ratio of mixed income, tax credit and public housing units at each site.

Tentatively, the Magnolia site, 1601 The Strand, could boast about 160 units,

Full story at: http://galvestondailynews.com/story/264194

Bad Vibrations

Fort Worth Weekly        October 12, 2011

People in the Mallard Cove neighborhood of East Fort Worth are awfully self-centered. They funnel many thousands of dollars into their biggest asset — their  homes — and then get all persnickety when somebody tries to plop noisy, toxin-belching compressor stations next door. Residents are afraid they’ll see drastic reductions in their property values. Constant noise might ruin their quality of life. Vibrations from the compressors might ceaselessly rattle their houses, windows, and pots and pans. And airborne toxins might make their children bleed from the nose. What a bunch of whiners.

On the bright side, the gas drillers probably won’t be coming over to borrow a cup of sugar anytime soon.

The Fort Worth League of Neighborhoods is urging the Fort Worth Zoning Commission to deny a rezoning request that would pave the way for an industrial site with up to 15 compressor stations near Randol Mill Road and East Loop 820.

Full story at: http://www.fwweekly.com/index.php?option=com_content&view=article&id=5087:bad-vibrations&catid=1:static&Itemid=373

Tuesday Report, October 25, 2011

Special to the Texas Low Income Housing Information Service

In an effort to save the swamped HARP program, the Federal Housing Finance Agency is lifting the cap on the amount potential applicants can be “underwater.” The previous cap was for mortgages appraised at less than 125 percent of the appraised value of the properties.

A tent city for homeless in Lubbock, buckled by dust storms and harsh weather, now faces elimination in a tough zoning battle. And protestors in Occupy Wall Street find themselves facing many of the hardships of the homeless.

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

Regulator throws lifeline to underwater borrowers

By Margaret Chadbourn        Reuters        October 24, 2011

U.S. homeowners who owe more than their properties are worth got new help on Monday when a U.S. regulator expanded a government program in a step that could help up to one million borrowers.

The Federal Housing Finance Agency, which oversees mortgage finance giants Fannie Mae and Freddie Mac, eased the terms of a refinancing program which helps so-called underwater borrowers who have been on time with payments but are unable to refinance.

The overhaul is the latest effort to deal with a problem at the center of the economy’s weak recovery — the crippled housing market. Officials have been frustrated that numerous efforts to bolster the market have shown little success.

FHFA said it was scrapping a cap that prohibited borrowers whose mortgages exceeded 125 percent of their property’s value from participating in the Home Affordable Refinance Program (HARP), which is targeted at loans backed by Fannie Mae and Freddie Mac.

“This is an appropriate balancing of risk that’s being borne by Fannie and Freddie, and hence the American taxpayer,” FHFA’s acting director, Edward DeMarco, said in a conference call with reporters. “This will make HARP more available.”

The government seized Fannie Mae and Freddie Mac, the two largest sources of U.S. mortgage financing, in September 2008 as losses on loans they backed spiraled, and the two firms have so far been propped up with $141 billion in taxpayer funds.

Full story at: http://www.reuters.com/article/2011/10/24/us-usa-housing-idUSTRE79K6JY20111024

Is the Housing Crisis Making People Sick?

By S. Mitra Kalita      Wall Street Journal       October 20, 2011

The foreclosure crisis may be making Americans sick.

A study published online yesterday in the American Journal of Public Health surveyed nearly 2,500 homeowners over the age of 50 who were asked if they had fallen more than two months behind on their mortgage payments since 2006.

Of those who had, 22% developed depressive symptoms over the next two years, compared to only 3% of those who weren’t delinquent. Twenty-eight percent reported food insecurity — meaning they were hungry or did not have adequate access to food in their households — compared to 4% for those who weren’t behind on their payments.

And about a third said they were not taking medications properly due to cost, compared to 5% of those who weren’t delinquent.

Full story at: http://blogs.wsj.com/health/2011/10/21/is-the-housing-crisis-making-people-sick/?mod=google_news_blog

Citigroup To Pay $285M To Settle Fraud Charges

Associated Press        October 19, 2011

Citigroup has agreed to pay $285 million to settle civil fraud charges that it misled buyers of complex mortgage investments just as the housing market was starting to collapse.

The Securities and Exchange Commission said Wednesday that the big Wall Street bank bet against the deal in 2007 and made $160 million in fees and profits. Investors lost millions.

Citigroup neither admitted nor denied the SEC’s allegations in the settlement.

“We are pleased to put this matter behind us and are focused on contributing to the economic recovery, serving our clients and growing responsibly,” Citigroup said in a statement.

The penalty is the biggest involving a Wall Street firm accused of misleading investors before the financial crisis since Goldman Sachs & Co. paid $550 million to settle similar charges last year. JPMorgan Chase & Co. resolved similar charges in June and paid $153.6 million.

All the cases have involved complex investments called collateralized debt obligations. Those are securities that are backed by pools of other assets, such as mortgages.

Citigroup’s payment includes the fees and profit it earned, plus $30 million in interest and a $95 million penalty. The money will be returned to the investors, the SEC said.

Full story at: http://www.npr.org/2011/10/19/141512128/citigroup-to-pay-285m-to-settle-fraud-charges

Homebuilding jumps 15 percent in September; consumer prices tick up

By Derek Kavetz         Austin American-Statesman       October 19, 2011

WASHINGTON — Homebuilders started projects in September at the fastest pace in 17 months, a hopeful sign for the economy.

Most of the gain was driven by a surge in volatile apartment construction.

That could help create jobs and boost economic growth, but it doesn’t signal a comeback for the depressed housing market.

Single-family home construction, which represents nearly 70 percent of homes built, rose only slightly. And building permits, a gauge of future construction, fell to a five-month low.

Overall, builders began work in September on a seasonally adjusted 658,000 homes, the Commerce Department said Wednesday.

Although that’s a 15 percent increase from August, it’s roughly half the 1.2 million that economists say is consistent with healthy housing markets.

Full story at: http://www.statesman.com/business/homebuilding-jumps-15-percent-in-september-consumer-prices-1924008.html

Affordable Housing That Doesn’t Scream ‘Affordable’

By Allison Arieff       The Atlantic Cities       October 20, 2011 

There’s a Section 8 housing complex just up the street from my house in San Francisco. Four of its street-facing garages were painted recently (pictured below) in four different color configurations best described as Institutional Drab. It’s as if each color selected (such as Swiss Coffee, second picture down) was drained of its vibrancy upon contact with the walls. And these modest buildings, though freshly painted just a few weeks ago, already look dated, decrepit even.

This soul-sapping approach to aesthetics is par for the course for affordable housing, which is meant not only to look low-budget but also low-effort. Conventional thinking on affordability proceeds from the misguided premise that anything well-designed will be, and look, expensive so it follows that design should not be a priority. Further, the argument goes, anything well-designed will be too appealing to eligible to tenants, thus discouraging them from ever leaving. So affordable housing should not only be cheap, it should look cheap. As a result, much affordable housing is more punitive than homey, by design.

Full story that includes a photo essay at: http://www.theatlanticcities.com/design/2011/10/affordable-housing-doesnt-scream-affordable/326/

Lawsuit says State Farm denied claims for Ike-damaged shingles

By Purva Patel         Houston Chronicle              October 21, 2011

A Houston lawmaker on Friday called for an investigation of State Farm after homeowners alleged in a lawsuit that the insurer wrongfully denied more than 100,000 roof-related Hurricane Ike claims.

In allegations similar to ones in an earlier lawsuit against the state’s insurers of last resort, the homeowners allege that State Farm denied many claims involving lifted shingles and told policyholders that the roof material would reseal itself.

State Farm spokesman Kevin Davis declined to comment on specific allegations.

“Should the court allow this case to move forward, and we do not believe that is appropriate, we are confident and prepared to make our case appropriately in a court of law,” Davis said.

The lawsuit, filed earlier this week in Galveston, alleges State Farm considered lifted shingles that weren’t creased and had no debris beneath them as undamaged.

Full story at: http://www.chron.com/business/article/Lawsuit-says-State-Farm-denied-claims-for-2230307.php

Mixed-income housing plans updated

By Amanda Casanova        Galveston County Daily News      October 24, 2011

GALVESTON — Representatives from the Galveston Housing Authority and the master developer in charge of a proposed mixed-income community will update residents about plans for the blended community Tuesday.

Tuesday’s community workshop is the second public meeting to discuss the controversial mixed-income community, which would include the rebuild of some of the 569 public housing units destroyed in Hurricane Ike.

The housing authority has said the approach to rebuild the 569 public housing units has three goals — 40 public housing units at The Oaks IV completed earlier this year, a minimum of 50 scattered sites and a mixed-income community of public housing, tax-credit and market rate units.

But the proposed community has some residents questioning the need for public housing and how the additional market rate units will affect the island’s housing market.

The first phase of work for the community will start at the former site of Magnolia Homes, 1601 The Strand. While the housing authority board of commissioners hasn’t voted to set how many units will be constructed at each site, the board has discussed a 40-20-40 ratio of mixed income, tax credit and public housing units at each site.

Tentatively, the Magnolia site could boast about 160 units, commissioners said, while the second phase of construction of the mixed-income community, the Cedar Terrace site, 2914 Ball St., would have about 125 units.

Under federal regulations, the housing authority and its partner, master developer McCormack Baron Salazar, can only build back half the number of public housing units that were at each site before the storm.

Full story at: http://galvestondailynews.com/story/266846

Fair housing town hall here on Oct. 27

The Huntsville Item         October 24, 2011

HUNTSVILLE — The city of Huntsville will host a town hall meeting on fair housing at 7  p.m.  Thursday, Oct. 27, at the Martin Luther King Jr. Recreation Center.

The event will offer information about two housing aid programs available to local residents.

The meeting will officially begin the application intake process for the HOME Program and the Neighborhood Stabilization Program.

Lone Star Legal Aid will also make a presentation related to the Fair Housing Act, and citizens who would like to learn more and potentially apply for either program are encouraged to attend.

“At our town hall meeting, we will begin the application intake process for the HOME Program, our owner-occupied housing program, and for the Neighborhood Stabilization Program, which is the first-time home buyer program,” said Sherry McKibben, community development specialist with the city of Huntsville. “We want to encourage any local resident who would like to learn more about the programs to attend the meeting.

Lone Star Legal Aid and the programs they provide are open to all Walker County and surrounding area residents, she said.

“And we hope local families will come take advantage of these opportunities.”

Both the HOME Program and the Neighborhood Stabilization Program are funded by the Texas Department of Housing and Community Affairs, McKibben said.

Full story at: http://itemonline.com/local/x250782056/Fair-housing-town-hall-here-on-Oct-2

Operator of homeless compound faces difficult fight to overturn zoning ruling against shelter

The recent dust storm took a toll on Tent City. The wind destroyed nine or 10 tents, leaving about 17 tents and 25 people there late this week.

By Joe Gulick        Lubbock Avalanche-Journal        October 21, 2011

City Councilman Paul Beane said last week’s powerful dust storm is a perfect example of why he never thought Tent City would be a permanent solution to the city’s homeless problem.

“The animals at the Animal Shelter were better protected against the dust storm of Monday than many of our homeless people were,” Beane said.

The dust storm took a toll on Tent City, confirmed Clifford Van Loan, a resident and manager of the site. The wind destroyed nine or 10 tents, leaving about 17 tents and 25 people there late this week.

However, the homeless compound on Sept. 1 had suffered a much more potent blow than one from nature when the city’s Planning and Zoning Commission ruled the land it is on could not be rezoned as a homeless shelter.

Link Ministries, which operates Tent City, has appealed the ruling to the City Council. The council will consider the matter at its meeting, which begins at 7:30 a.m. Thursday in City Council Chambers, 1625 13th St

Full story at: http://lubbockonline.com/local-news/2011-10-22/operator-homeless-compound-faces-difficult-fight-overturn-zoning-ruling#.TqVyOXO0zw4

Homelessness becomes an OWS issue

Protesters are discovering just how difficult the government makes life for its most downtrodden citizens

By Barbara Ehrenreich        TomDispatch        October 23, 2011

As anyone knows who has ever had to set up a military encampment or build a village from the ground up, occupations pose staggering logistical problems. Large numbers of people must be fed and kept reasonably warm and dry. Trash has to be removed; medical care and rudimentary security provided — to which ends a dozen or more committees may toil night and day. But for the individual occupier, one problem often overshadows everything else, including job loss, the destruction of the middle class, and the reign of the 1 percent. And that is the single question: Where am I going to pee?

Some of the Occupy Wall Street encampments now spreading across the U.S. have access to Port-o-Potties (Freedom Plaza in Washington, D.C.) or, better yet, restrooms with sinks and running water (Fort Wayne, Indiana). Others require their residents to forage on their own. At Zuccotti Park, just blocks from Wall Street, this means long waits for the restroom at a nearby Burger King or somewhat shorter ones at a Starbucks a block away. At McPherson Square in D.C., a twenty-something occupier showed me the pizza parlor where she can cop a pee during the hours it’s open, as well as the alley where she crouches late at night. Anyone with restroom-related issues — arising from age, pregnancy, prostate problems, or irritable bowel syndrome — should prepare to join the revolution in diapers.

Full story at: http://www.salon.com/2011/10/24/homelessness_becomes_an_ows_issue/