Tuesday Report, March 30, 2010
The penalties of the over-priced, over-sold and over-mortgaged housing era of the Bush years continue to linger. Bank of America has finally begun to negotiate at-risk mortgages as the Obama Administration rolls out new incentives for other lenders to do the same.
In San Antonio, we see a new scheme floated by developers that would pay them 1 percent each time one of their homes are flipped during a 99 year period.
For a pdf version of the full stories, plus contextual articles on social, environment and legal areas, contact Bo McCarver at bmccarver@austin.rr.com
Obama wields new tools to try, again, to stem home foreclosures
The Obama administration on Friday unveiled new programs to help 3 million to 4 million distressed borrowers avoid home foreclosures. By one count, 11 million borrowers now owe more than their homes are worth.
By Mark Trumbull Christian Science Monitor March 26, 2010
In a bid to meet its home foreclosure-prevention targets, the Obama administration is offering new incentives for lenders to reduce loan balances for at-risk borrowers
The program addresses a fundamental problem in the housing market: Because of falling home values, millions of borrowers now owe more than their homes are worth – with many so far “under water” that default and foreclosure are likely.
Full story at: http://www.csmonitor.com/Money/2010/0326/Obama-wields-new-tools-to-try-again-to-stem-home-foreclosures
Bank of America to offer home loan write-downs
Reuters March 24, 2010
Under pressure from Massachusetts Attorney General Martha Coakley, Bank of America Corp. (BAC.N) on Wednesday said it would offer about $3 billion in loan forgiveness to about 45,000 troubled homeowners.
Bank of America pledged to offer an “earned principal forgiveness” of up to 30 percent for homeowners nationwide who owe more than 120 percent of the value of their home.
The U.S. bank, the largest in terms of assets, has about 1.5 million home loans behind on payments by 60 days or more.
The plan, to begin in May, is the first by a U.S. mortgage lender to take a systematic approach to reducing mortgage principal to tackle the thorny issue of preventing foreclosures when home values drop well below the amount owed.
The forgiveness would be offered in two stages for the riskiest loans, including subprime loans and loans that offered borrowers multiple options for how much to pay each month.
Ineligible are 30-year fixed-rate loans.
Full story at: http://www.reuters.com/article/idUSTRE62N58S20100324
Home Prices Post Smallest Annual Decline in 3 Yrs
Associated Press March 30, 2010
NEW YORK — Home prices showed the smallest annual decline in almost three years in January, indicating there are surprising areas of strength in the housing market.
The Standard & Poor’s/Case-Shiller 20-city home price index fell just 0.7 percent from last year on a seasonally adjusted basis. The index reading of 146.32 was almost in line with analysts expectations, according to a survey by Thomson Reuters.
”There was some positive momentum in home prices in January,” wrote Ian Pollick, a portfolio strategist with TD Securities.
Better still, prices rose 0.3 percent from December to January, the eighth consecutive monthly gain. Among the 20 cities in the index, 12 rose.
Full story at: http://www.nytimes.com/aponline/2010/03/30/business/AP-US-Home-Prices.html?_r=1
Dallas-area home prices rose 4 percent in January
By Steve Brown Dallas Morning News March 30, 2010
Dallas-area home prices rose by more than 4 percent in the latest Standard & Poor’s/Case-Shiller Home Price Index.
The January increase is the largest since residential values began rising again in North Texas in November 2009, according to the closely-watched home price measure.
The Dallas area had the third largest year-over-year home price increase of any of the 20 cities Case-Shiller tracks. San Francisco prices rose 9 percent. And San Diego prices were up 5.9 percent.
Full story at: http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/033110dnbuscaseshiller.cffc03.html
Spurt of Home Buying as End of Tax Credit Looms
By David Streitfeld New York Times March 30, 2010
DES MOINES — Nine hundred days after putting their house on the market, Andrew and Jane Palestini were beginning to think they might be stuck in Iowa forever.
The looming expiration of the government’s housing tax credit pushed them into action. They dropped their price by an additional $10,000, to $235,000. Somewhat to their shock, a buyer emerged. The house is now under contract.
“I can’t feel happy,” said Mr. Palestini, a retired administrative law judge with the Social Security Administration. “Just relieved.”
After several disastrous months for home sales across the country, when volume dropped by 23 percent, the pace appears to be picking up again. The number of Des Moines homes under contract in February rose by a third from the January level. The number of pending contracts jumped 10 percent in Naples, Fla., 14 percent in Houston and 21 percent in Portland, Ore.
These deals will be reflected in the national sales reports when they become final, this month or next. There is no evidence that prices have begun to move in response to the higher volume. Indeed, so many homes are coming on the market that prices might well fall further.
Full story at: http://www.nytimes.com/2010/03/30/business/30housing.html?hpw
New homes are cropping up in cities, not suburbs
By Jonathan Hiskes Grist March 28, 2010
Today in conventional wisdom–busting news, we learn that grimy old cities are attracting more residential construction than the bright suburban frontier. Urban redevelopment is outpacing fringe sprawl by a solid margin, according to a new EPA study of the nation’s 50 largest metro areas. It’s a “fundamental shift in the real estate market,” says the report [PDF].
What’s more, the study finds, it’s not that regional policies are herding people back into urban neighborhoods. Personal preference seems to be driving much of the change. Turns out more people are deciding they want to live near walkable neighborhoods, transit lines, other urban stuff.
Overall construction has tanked in the last few years, of course. But the proportion of home building that happens in central cities has doubled since 2000 in 26 of those metro areas.
The Obama administration’s new Partnership for Sustainable Communities—a joint venture of the EPA, Transportation Department, the Department of Housing and Urban Development—should be glad to see the housing market’s already trending this direction.
[End of story: http://www.grist.org/article/2010-03-25-new-homes-are-cropping-up-in-cities-not-suburbs/]
Space: It’s Still a Frontier
By Allison Arieff New York Times March 26, 2010
“Our beds are empty two-thirds of the time.
Our living rooms are empty seven-eighths of the time.
Our office buildings are empty one-half of the time.
It’s time we gave this some thought.” — R. Buckminster Fuller
That quote is 40 years old, but I continue to be amazed by the extent to which we haven’t begun to address the problem Fuller highlighted. There’s a staggering glut of empty space around the country right now, unused space that’s not doing anyone much good. That in itself isn’t new; what is unprecedented is our ability to visualize that data in an entirely new ways.
Full story at: http://opinionator.blogs.nytimes.com/2010/02/03/space-its-still-a-frontier/?hp
AG Abbott cracks down on colonia developer
By Asher Price Austin American-Statesman March 29, 2010
I wrote last year about basic water quality problems at some colonias near Corpus Christi.
Twenty years after the state began to address the problems faced by colonias — a byword for poor communities that lack basic infrastructure — bad water and sewage issues continue to plague them.
Today Attorney General Greg Abbott charged a developer of subdivisions in South Texas’ Cameron County with violating the state’s colonia-prevention laws.
According to a news release from the AG’s office, Manuel J. Montemayor and the M.A.M Family Trust failed to install sewer and water services on residential lots offered for sale or sold in these subdivisions or to post a bond in the alternative to ensure installation of the services. The state also charged the defendants with failing to obtain plat approval from local officials.
“Texas law requires border-area developers to guarantee that basic water and wastewater infrastructure will be installed before lots are sold to purchasers,” Abbott said in a statement. “State colonia investigators have learned that the defendants not only failed to guarantee these basic requirements, but also failed to obtain the county commissioner court’s approval before marketing these lots.”
Listed numbers for the members of the M.A.M. family trust were not answered.
Colleyville homeowners divided over developer’s control of HOAs
By Scott Parks Dallas Morning News March 26, 2010
COLLEYVILLE – This affluent community, full of beautiful new homes and shops, doesn’t look like a hothouse for revolutionaries hellbent on overthrowing the established suburban order.
But a group of residents in five luxury neighborhoods has grown tired of their homeowners associations dictating everything from how many day lilies to plant in a flower bed to what companies they can hire to put in a swimming pool.
In fact, real-estate developer David Bagwell has angered so many homeowners that they’ve banded together to sue the homeowners associations that enforce his strict architectural standards.
Full story at: http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/032810dnmethoa.4195fce.html
GHA to hire security force as aid ends
By Rhiannon Meyers Galveston County Daily News March 24, 2010
GALVESTON — The Galveston Housing Authority plans to hire off-duty police to provide security at agency offices and deal with trouble that might occur when people are told government assistance through the federal Disaster Housing Assistance Program is ending.
Housing authority commissioners Monday approved spending up to $60,154 to post Galveston Police Department officers at places where the Disaster Housing Assistance Program is administered.
Full story at: http://www.galvnews.com/story.lasso?ewcd=f764404e84c0b271
GHA foe Stanowski an unlikely activist
By Rhiannon Meyers Galveston County Daily News March 26, 2010
Galveston — From a seat in a room adjoining the city council chambers, David Stanowski watched without expression as people stepped to a microphone and criticized his work. They came in dozens, and their comments drew rounds of raucous applause from a packed house.
By the time the council convened that Feb. 25 meeting to vote on releasing $25 million to rebuild public housing destroyed by Hurricane Ike, Stanowski, through a watchdog group he founded, had spent months working to block the effort.
He and other opponents had combed through records, researched federal laws, lobbied Galveston Housing Authority commissioners and council members and, some critics would argue, incited and exploited some of the community’s darkest, most hateful emotions.
Full story at: http://www.galvnews.com/story.lasso?ewcd=89af3b2f1b838b22
Landowners’ fears surface
Gas drilling abruptly upends family’s lives
By Peggy Heinkel-Wolfe Denton News-Record March 26, 2010
EDITOR’S NOTE: This is the first in a two-part series examining the effects of oil and natural gas drilling in eastern Wise and western Denton counties.
WISE COUNTY — A bit of yellow tape dangled from a short wooden stake in front of Christine Ruggiero’s house on Star Shell Road that September morning, less than a year ago.
The subtle signal meant something to someone.
On her 20-minute drive to work, Ruggiero hoped that what she saw wouldn’t become what she feared.
Aruba Petroleum had already dug up several acres of land on the neighboring 38-acre homestead, drilling a new gas well on Pat and Jim Headen’s front lawn.
Angry and upset, her husband, Tim Ruggiero, had painted two protest signs and hung them by the road. A few days later, someone made an addition to one of the signs. Between a crude depiction of male and female genitalia, the vandal scrawled “you’re next.”
Full story at: http://www.dentonrc.com/sharedcontent/dws/drc/localnews/stories/DRC_Ruggieros_0328.1ee8c9ff0.html
Private transfer fees plan would pay developers for 99 years
By Jennifer Hiller San Antonio Express-News March 29, 2010
Here’s a new concept in real estate: buy a house and when you go to sell it years later, owe the original developer or builder 1 percent of the sales price.
Freehold Capital Partners, a company started in Texas, is selling developers across the country on a plan that would attach a private transfer fee to homes, allowing developers to profit for generations.
The fee, written into neighborhood restrictions, would encumber the property for 99 years and throw 1 percent of the sale price back to the developer –— or his or her estate or another investor — and Freehold each time the home changes hands.
It’s an idea that’s drawn the attention of some state legislatures and real estate trade organizations, which are fighting to stop the transfer fees from gaining a toehold in the market.
Critics say that such fees could taint entire neighborhoods, making it difficult to sell homes and complicate title records for decades. If the fee is not paid by the seller, a lien is placed on the property and the title becomes muddy.
Full story at: http://www.mysanantonio.com/news/Private_transfer_fees_plan_would_pay_developers_for_99_years.html
Consumer watchdogs frown on State Farm rate increase
By Dan Wallach Beaumont Enterprise March 26, 2010
Texas homeowners who are covered by State Farm insurance are looking at their second insurance rate increase in seven months as a result of the company’s most recent filing with the Texas Department of Insurance.
State agencies and politicians, however, are hoping to halt the rate hike through correspondence with the company.
The increase that took effect last fall was for 8.5 percent. The second increase, filed March 2, is for 4.5 percent, bringing the overall increase for Texas consumers with State Farm policies to 13 percent since last September.
Full story at: http://www.beaumontenterprise.com/news/local/Consumer_watchdogs_frown_on_State_Farm_rate_increase.html
Study: Rent units better for homeless, city budget
Study finds apartments often are less expensive than housing individuals and families in shelters
By Renee Lee Houston Chronicle March 25, 2010
When helping first-time homeless, it’s cheaper for some communities to house individuals and families in rental apartments than in emergency shelters or transitional housing, according to a federal study released Thursday. In Houston, for example, it cost almost $1,400 a month to place a family in an emergency shelter compared with the cost of $743 month to place them in a two-bedroom apartment.
The average monthly cost to the city’s homeless system to house, feed and provide other services to an individual is $2,257 and for a family, $11,627.
Full story at: http://www.chron.com/disp/story.mpl/metropolitan/6930685.html
Housing the Homeless
A frustrated builder thinks inside the box.
By Peter Gorman Fort Worth Weekly March 25, 2010
Homelessness is a big problem in Fort Worth, said Mike Wallace, a retired homebuilder who grew up here and still lives here. “And I think I have a solution.”
Wallace wants to turn shipping containers — the boxcar-sized metal containers that carry freight around the world — into livable homes. He’s not the first with the idea: Both artist types and the U.S. military have used them for housing. But he may be the first to see them as a way to solve part of Fort Worth’s homeless problem.
The containers are cheap, nearly indestructible, and can be made into comfortable living spaces. But what seemed like a no-brainer to Wallace might not even get tested in his hometown. After a year of jumping through regulatory hoops in Fort Worth, Wallace said he was ridiculed when he tried to sell the idea to the neighborhood associations on the East Side, where many of the homeless live. “I was basically told to go do it somewhere else and come back later to sell them on the idea. I went somewhere else, but I don’t know that I’ll go back to Fort Worth,” he said.
Otis Thornton, the city’s homeless coordinator, said residents were concerned about the container-homes’effect on property values and whether the units would fit into their surroundings.
The city is “absolutely in need of quality, affordable housing for the homeless,” Thornton said. But “the last thing the homelessness committee is going to do is to push a type of housing on a neighborhood that doesn’t want it.”
Full story at: http://www.fwweekly.com/index.php?option=com_content&view=article&id=3076:housing-the-homeless&catid=76:metropolis&Itemid=377
East Side shelter allowed to stay open
By Brian Chasnoff San Antonio Express-News March 30, 2010
A state district judge ruled Monday that homeless residents may remain at an East Side religious shelter — at least for now — despite the city’s insistence that it should be vacated immediately because of unsafe conditions and violations of zoning and occupancy laws.
In addition to complaining about hazards such as exposed wiring, city attorneys argued that Living Stones Ministries should never have admitted residents because it lies in an industrial zone and its certificate of occupancy allows only for congregants to assemble and worship.
“It was for a church and a kitchen,” Assistant City Attorney Savita Rai said. “That’s all.”
But the church’s founder and pastor, Jim Spicer, testified he told city officials when he opened the church in 1998 that he would be sheltering the homeless there.
Spicer and his attorney, Eddie Bravenec, said that in 12 years of regular city inspections, no one complained about the church’s 44 bunk beds — until this month.
Full story at: http://www.mysanantonio.com/news/E_Side_shelter_allowed_to_stay_open.html
Disputed census count of Travis County homeless will go forward Wednesday
Regional census official seeks to allay local concerns of accuracy, security.
By Juan Castillo Austin American-Statesman March 30, 2010
A disputed federal census count of the area’s homeless population will go on as planned overnight Wednesday at outdoor camps and public places, despite local concerns about timing, safety and the ability to produce an accurate count, the U.S. Census Bureau said Monday.
Jenna Steormann, a census spokeswoman in Dallas, said the three-day federal count of the homeless began Monday at shelters and continues today at mobile food kitchens. But it is the planned count from midnight to 7 a.m. Wednesday at more than 600 homeless camps and public places that has stirred controversy, with local homeless advocates warning about safety risks for census workers.
Full story at: http://www.statesman.com/news/local/disputed-census-count-of-travis-county-homeless-will-481354.html
