The nationalization of mortgage banks draws debate this week with conservatives arguing that “flexibility” will be jeopardized. Meanwhile, the inflated housing market continued a sharp slide with new home starts at record lows and sales tags falling on those available.
In Texas we see some decisions made in Galveston to restore public housing destroyed by Hurricane Ike.
For a pdf version of the full stories, plus contextural articles in economic, social and political areas, contact Bo McCarver at bmccarver@austin.rr.com
Fannie and Freddie Are Unlikely to Be Restored
By Charles Duhigg New York Times March 2, 2009
Despite assurances that the takeover of Fannie Mae and Freddie Mac would be temporary, the giant mortgage companies will most likely never fully return to private hands, lawmakers and company executives are beginning to quietly acknowledge.
The possibility that these companies – which together touch over half of all mortgages in the United States – could remain under tight government control is shaping the broader debate over the future of the financial industry. The worry is that if the government cannot or will not extricate itself from Fannie and Freddie, it will face similar problems should it eventually nationalize some large banks.
The lesson, many fear, is that a takeover so hobbles a company’s finances and decision making that independence may be nearly impossible.
Fannie Mae seeks $15 billion in federal aid
By Aalan Zibel Associated Press February 26, 2009
WASHINGTON – Mortgage finance company Fannie Mae said Thursday it needs $15.2 billion in government aid to make up for losses from the slumping U.S. housing market.
The mortgage finance company, seized by federal regulators in September, posted a loss of $25.2 billion, or $4.47 per share, in the fourth quarter. That compares with a loss of $3.6 billion, or $3.80 a share, in the year-ago period.
Fannie’s net worth – the value of its assets minus the value of its liabilities – fell below zero at the end of the quarter, forcing the company to request funding from the government for the first time.
U.S. housing market bottom may be a year away: Case
By Julie Haviv Reuters February 25, 2009
NEW YORK – The U.S. housing market slump is nowhere near over and home prices will probably keep falling well into next year, one of the property market’s best-known economists said.
Karl Case, the co-developer of a widely watched gauge of the housing industry, told Reuters that the hard-hit U.S. housing market has gone from being the primary source of the U.S. economic recession to one of its biggest casualties.
“Never say never, but it is looking increasingly probable that we will not see a housing market bottom until next year,” said Case, an economics professor at Wellesley College in Massachusetts.
Housing Price Decline Accelerates
By Dean Baker Center for Economic Policy Research February 25, 2009
The data in the December Case-Shiller 20-City index indicate that the rate of housing price decline is continuing to accelerate. The data show that house prices in the 20 cities fell at a rate of 2.0 percent in the month of December and were falling at a 21.3 percent annual rate in the last quarter of 2008.
It is important to remember that these data reflect sale prices in the three month period from October to December. Since there is typically a 6-8 week period between contracts and closing, these data reflect contracts in a period centered on October. This means that the data is already somewhat dated when it is released. If the recent rate of price decline has persisted, prices are already 8 percent lower on average than the data indicate.
New-home sales tumble to record low pace in Jan.
By Jeannine Aversa Associated Press February 26, 2009
WASHINGTON — New-home sales tumbled to a record-low annual pace in January and there’s no relief in sight as mounting damage from the collapsed housing market pushes the country deeper into recession.
The Commerce Department reported Thursday that sales fell 10.2 percent to a seasonally adjusted annual rate of 309,000, the worst showing on records going back to 1963. It also was weaker than the pace of 330,000 that economists expected, and shattered the previous all-time monthly low set in September 1981.
Choice Homes suspends operations
By Steve Brown Dallas Morning News February 25, 2009
One of North Texas’ largest homebuilders is suspending operations because of the tight credit markets.
Choice Homes, which has been in business for 21 years, is the latest in a string of local builders forced to shut down because of the lack of lending.
The Irving-based high production builder constructed more than 580 houses in the Dallas-Fort Worth area last year.
“We are still talking with our lenders, but the likelihood is we will be winding down our operations,” Choice Homes president Daniel Couture said Wednesday morning. “We are not filing Chapter 11” bankruptcy protection.
Building Green Houses for the Poor
By Brian Walsh Time February 25, 2009
When most people hear the term “green building,” they probably imagine something like Bank of America’s (BoA) soon-to-be-completed Midtown Manhattan headquarters. The skyscraper will have floor-to-ceiling insulating glass walls, automatic light dimming, water recycling, air filtration and on-site power generation. Those green features have helped make the BoA Tower the first skyscraper to win a Platinum Leadership in Energy and Environmental Design (LEED) rating, the highest possible such award. They also helped ensure that the tower won’t be cheap – the project is estimated to cost about $1 billion.
Mortgage companies holding insurance checks
By Leigh Jones Galveston County Daily News March 1, 2009
GALVESTON – Margaret Lopez hopes to be back in her home on 57th Street by spring, just in time for her husband, Jesus, to replant their withered and burned landscape.
Electricians have stretched new, bright yellow wiring throughout the house, and six other contractors are lined up and ready to finish the rest of the remodeling work.
The Lopezes used all the money the insurance company gave them for their home’s contents to start rebuilding.
City urges FEMA to honor agreements
By Leigh Jones Galveston County Daily News February 27, 2009
GALVESTON – After preparing a temporary mobile home park at Schreiber Field for 54 island families, representatives from the Federal Emergency Management Agency now say only 18 families are likely to move in when the site is finished.
The lower-than-expected numbers mean the site will not require a manager and security officers around the clock, an agency representative told the city council on Thursday.
But the agency promised both in an agreement it signed with the city to build the park, at Stewart Road and 83rd Street, and the city expects the federal government to honor its agreements, Mayor Lyda Ann Thomas said.
Public housing renovation to cost $1.4M
By Rhiannon Meyers Galveston County Daily News February 28, 2009
GALVESTON – Galveston Housing Authority will spend $1.4 million to clean and renovate a hurricane-damaged public housing development in an effort to bring some residents home by the anniversary of Hurricane Ike.
Bey Construction in Houston is expected to start next week pulling flooring and moldy drywall from all 139 apartments at Cedar Terrace, 2914 Ball St.
The contract amount is a little more than $10,000 per apartment.
San Antonio Housing Authority looks to maximize stimulus
By Josh Baugh San Antonio Express-News March 1, 2009
When the elevator arrived at the third floor of their apartment building, 41-year-old Fred Dominguez Rivas and his 80-year-old mother waited inside for the doors to open.
But nothing happened.
Scratched with graffiti, the brushed metal doors didn’t slide open like they were supposed to, and fear swept through Beatrice Dominguez Segovia. They were trapped.
Residents at the San Antonio Housing Authority’s Victoria Plaza apartments for seniors say it’s not uncommon for the decrepit elevators to fail.
Mayor takes blame for idea to pay home buyers’ debts
By Carolyn Feibel Houston Chronicle February 26, 2009
Mayor Bill White accepted responsibility for the widely disparaged plan for using public funds to pay some home buyers’ personal debts, saying he was not clear on the details and that the idea should have been reviewed more thoroughly.
The program would have allowed up to $3,000 in city grants to individuals trying to pay off personal debt to boost credit scores to qualify for mortgages in underserved Houston neighborhoods.
Number of homeless down in Victoria
Several factors influenced lower count totals
By Sonny Long Victoria Advocate February 26, 2009
Fewer homeless people were counted in Victoria in 2009 than in 2007, but that doesn’t necessarily mean there are fewer here.
Ginny Stafford, chief executive officer of Mid-Coast Family Services and member of the Victoria Area Homeless Coalition board, said several factors likely contributed to the lower numbers.
“There was an elevated level of fear and distrust of those of us conducting the count by the homeless themselves this year because of the report done in the same week about the crackdown at the library of homeless people using the restrooms. A fear of police involvement was definitely a factor,” Stafford said.
The 2009 homeless count shows 217 homeless in Victoria and Port Lavaca, 143 adults and 74 children.
Number of homeless students rising in Dallas-area districts
By Stella Chavez Dallas Morning News March 1, 2009
Dallas-area school districts are seeing more homeless children this year compared with last year, a nationwide trend spawned by families losing their jobs, their houses – and struggling just to pay bills.
In the Carrollton-Farmers Branch school district, the number of students classified as homeless has spiked 185 percent during the 2008-09 school year. Garland’s numbers have jumped by 86 percent, while DISD has enrolled about 100 more homeless students so far this year. With more than three months remaining in the school year, advocates for homeless families expect the numbers to rise.
“It’s not just poor people,” says Toni Gallego, Irving’s homeless liaison, who works inside a portable building next to Irving High School. “It’s middle-class people who have lost their homes, who have put up their homes to rent and are living with their in-laws.”
Down for the Count
The city’s homeless plan is taking hold – but officials are bracing for the recession’s effects.
By Bryan Shettig Fort Worth Weekly February 26, 2009
When city officials announced recently that a new census had shown fewer homeless people on Fort Worth streets, it sounded like good news on several fronts: good for homeless folks and maybe also for the city, which last year put in place an ambitious 10-year plan to end homelessness here.
Some are skeptical. Eastside activists say they aren’t seeing any big drop in panhandling or begging in their neighborhoods, and shelter workers say their facilities are still full. But even with a well-funded local plan and help from a $1.5 billion federal initiative recently announced by President Barack Obama, city officials and shelter workers fear that rising unemployment is going to once more swell the ranks of the homeless.
Homeless people act out realities of life on stage
The Seldom Seen Actors perform plays with a mission – saving others from addictions and a life on the street that they’ve faced themselves.
By Jocelyn Wiener Christian Science Monitor March 2, 2009
OAKLAND, CALIF.
One hour before curtain call, Dennis Forester realizes his acting troupe has a problem. “We forgot the crack!” he hisses.
The other members of the Seldom Seen Actors look up, surprised. A few giggle. But the missing prop worries him. Drugs figure prominently into tonight’s show. The script depicts their experiences with addiction and homelessness on the streets of Oakland, Calif.
They have lived this play. And tonight Mr. Forester wants to make sure they nail it.
