Tuesday Report, April 6, 2010
Special to the Texas Low Income Housing Information Service
Tight banking rules on refinancing homes is credited for saving Texas from the foreclosure debacle suffered by many other states. Under state law, lenders cannot refinance more than 80 percent of a property’s appraised value.
San Antonio’s shakers and movers are trying to draw homeless persons out of the central business district by setting-up a homeless campus – but the project is forcing an ethical dilemma on the administrators of Haven for Hope who are pressed to cooperate with officials who press new rules that bust homeless persons for a myriad of minor offenses in the downtown area.
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
The Lone Star Secret
How Texas avoided the worst of the real estate meltdown.
By Alyssa Katz The Big Money March 30, 2010
It’s one of the great mysteries of the mortgage crisis: Why did Texas—Texas, of all places!—escape the real estate bust? Only a dozen states have lower mortgage foreclosure and default rates, and all of them are rural places like Montana and South Dakota, where they couldn’t have a real estate boom if they tried.
No, Texas’ 3.1 million mortgage borrowers are a breed of their own among big states with big cities. Just less than 6 percent of them are in or near foreclosure, according to the Mortgage Bankers Association; the national average is nearly 10 percent. Texas might look to outsiders an awful lot like Sunbelt sisters Arizona (13 percent) or Nevada (19)—flat and generous in letting real estate developers sprawl where they will. Texas was even the home base of two of the nation’s biggest bubble-era homebuilders, Centex and DR Horton (DHI).
Texas subprime borrowers do especially well compared with counterparts elsewhere. The foreclosure rate among subprime borrowers there, at less than 19 percent, is the lowest of any state except Alaska. Part of the state’s performance is due to the fact that Texas saw nothing like the stratospheric home-price run-ups other states experienced. On average, the 20 metro areas in the Case-Shiller Home Price Index saw their home-resale prices peak in 2006 after more than doubling since 2000. In Dallas, one of the 20, they went up just 25 percent, gradually, and have barely declined.
But there is a broader secret to Texas’s success, and Washington reformers ought to be paying very close attention. If there’s one single thing that Congress can do now to help protect borrowers from the worst lending excesses that fueled the mortgage and financial crises, it’s to follow the Lone Star State’s lead and put the brakes on “cash-out” refinancing and home-equity lending.
Full story at: http://www.thebigmoney.com/articles/judgments/2010/03/30/lone-star-secret?page=full
Dallas-Fort Worth home starts rise almost 60 percent in first quarter
By Steve Brown Dallas Morning News April 5, 2010
Betting on a market rebound, Dallas-Fort Worth homebuilders started almost 60 percent more houses in the first quarter than a year earlier.
The increase in single-family homes was the largest annual gain since 1983, housing analyst Metrostudy Inc. said Monday.
North Texas’ huge increase in homebuilding this year was prompted by a shortage of finished houses for builders to sell.
Full story at: http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/0405dnbushomestarts.21a35ee5a.html
Feds Tell Homeowners To Rip Out Chinese Drywall
Associated Press April 2, 2010
Thousands of U.S. homes tainted by Chinese drywall should be gutted, according to new guidelines released Friday by the Consumer Product Safety Commission.
The guidelines say electrical wiring, outlets, circuit breakers, fire alarm systems, carbon monoxide alarms, fire sprinklers, gas pipes and drywall need to be removed.
“We want families to tear it all out and rebuild the interior of their homes, and they need to start this to get their lives started all over again,” said Inez Tenenbaum, chairwoman of the commission, the federal agency charged with making sure consumer products are safe.
About 3,000 homeowners, mostly in Florida, Virginia, Mississippi, Alabama and Louisiana, have reported problems with the Chinese-made drywall, which was imported in large quantities during the housing boom and after a string of Gulf Coast hurricanes.
Full story at: http://www.npr.org/templates/story/story.php?storyId=125520312
What do buyers want in a home? Survey offers clues
By Lew Sichelman Los Angeles Times April 4, 2010
Reporting from Washington – Home buyers tend to want it all, especially in this age of affordability, when prices and mortgage rates are low.
But this also is the age of frugality, a time of economic uncertainty when many people are not as concerned about their next pay raise as they are about the next round of layoffs. So today’s buyers are far more willing to do without “extras.”
The question is what to give up: Do you really need a formal living room? A fifth bedroom would be nice, but is it a necessity? And what about that view of a golf course?
Full story at: http://www.latimes.com/classified/realestate/news/la-fi-lew4-2010apr04,0,2602030.story
Builders Ponder a Housing Mandate
By Elsa Brenner New York Times April 4, 2010
AS Westchester tries to comply with a federal settlement mandating the creation of affordable housing in mostly white, well-to-do communities, the construction of low-cost units continues in low-income, racially mixed areas.
But the outlook for more such housing in the poorer cities is uncertain. Budget constraints and the focus of the settlement, which calls for below-market-rate housing in affluent towns like Bedford and Scarsdale that have little or none, may limit county financing for affordable projects in cities like Mount Vernon, Peekskill, and Yonkers, developers say.
Westchester officials said through Donna Greene, a spokeswoman for Rob Astorino, the county executive, that “Everything is currently under review based on both the housing settlement and the county’s ongoing budget issues.”
Builders of affordable housing are concerned and apprehensive.
Full story at: http://www.nytimes.com/2010/04/04/realestate/04Wczo.html
Farrington, 7 others convicted in mortgage fraud case
By Brendan Case Dallas Morning News April 6, 2010
A federal jury convicted Eric R. Farrington Jr. and seven others Monday of operating a multimillion-dollar mortgage fraud scheme in the Dallas area from 2002 to early 2006.
Farrington, a 57-year-old Irving resident who had a late-night TV infomercial on making money in real estate, was convicted on 32 counts that included bank fraud, wire fraud and money laundering, said U.S. Attorney Jim Jacks. The trial began in mid-February.
“The government presented evidence at trial that Farrington … largely orchestrated the scheme,” Jacks said in a prepared statement.
John Carney, a lawyer representing Farrington, said he was disappointed by the verdict and was considering an appeal.
Full story at: http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/DN-Convict_06bus.ART.State.Edition1.4022f61.html
Leader of bogus community group sentenced to 2 years for role in Dallas City Hall bribery case
By Jason Trahan Dallas Morning News April 2, 2010
A leader of a bogus southern Dallas community group who was the first person to plead guilty in the Dallas City Hall public corruption case was sentenced today to two years in prison.
Allen McGill, 67, was once the president and vice chairman of the Black State Employee Association of Texas. He testified in last year’s massive public corruption trial that he and partner Darren Reagan used their group – which in fact represented no state employees – to help shake down developers on behalf of former Dallas Mayor Pro Tem Don Hill.
McGill’s testimony helped convict Hill and four others, including Reagan, of bribery and extortion in the largest corruption investigation in Dallas history. Hill got 18 years in prison; Reagan got 14.
Jurors in October found that Hill and his cronies pressured white developers to hand over hundreds of thousands in cash and contracts in exchange for approval to build affordable housing in largely black neighborhoods of southern Dallas.
Full story at: http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/0402dnmetcityhallcase.20a04c09a.html
Builder to resell Rivermist homes
By Jennifer Hiller San Antonio Express-News April 5, 2010
Homes in the Rivermist neighborhoods that builder Centex Homes has offered to buy back will eventually be repaired and resold.
Centex has offered to buy back the homes of 27 residents who live close to a collapsed retaining wall, and so far the company says about two-thirds of the homeowners have agreed to the deal.
After the retaining wall is rebuilt — a four- to six-month process — the builder will make any needed home repairs, work with the city to reinstate certificates of occupancy, and then find new owners for the repurchased homes.
“It’s our expectation that we will at some point resell these homes and put them back on the market,” said Centex spokeswoman Valerie Dolenga. “At some point they will probably go up for sale.”
Full story at: http://www.mysanantonio.com/news/Rivermist_homes_to_be_resold.html
Texas tenants may feel fallout of apartment complexes’ foreclosures
By Mike Lee Fort Worth Star-Telegram April 2, 2010
FORT WORTH — Last year, Amber Bradbury and her husband signed a great lease with their landlord. In exchange for her husband’s services as a maintenance man, they were to get a two-bedroom apartment for $250 a month — for five years.
Then their apartment complex, the 102-unit Sandy Oaks complex near Sandy Lane and Interstate 30 just east of downtown Fort Worth, was foreclosed on.
Bradbury’s husband has also lost his maintenance job, and the new owner is trying to get the couple to sign a new lease, for more than twice the rent. Other residents are being asked to reapply for their apartments because the records of their leases were destroyed in a fire.
Housing Authority to open waiting list
By Mary Rainwater Huntsville Item April 5, 2010
HUNTSVILLE — For one day only, the Walker County Housing Authority will open its waiting list for low-income individuals and families who need assistance paying housing costs. The waiting list for the Section 8 Housing Choice Voucher Program, which has been closed since Aug. 6, 2008, will be open April 13, 2010, from 9 a.m. until 4:30 p.m. “It used to be that the waiting list was opened up once a year,” Walker County Housing Authority Executive Director Mary Harrelson said. “But because of the economy, people have gotten so much more careful about remaining in the program, so I have not been able to open the waiting list until now.”
Full story at: http://itemonline.com/local/x993486978/Housing-Authority-to-open-waiting-list
Survey finds 755 homeless in Lubbock
By Elliott Blackburn Lubbock Avalanche-Journal April 1, 2010
Rent and mortgage prices – more than struggles with addiction or unemployment – kept a growing number of Lubbock residents living on city streets, according to draft survey results of Lubbock’s homeless population released to The Avalanche-Journal.
The report is part of a final state tally to be published within the next month and used to support funding requests by groups who offer assistance to at-risk or homeless Lubbock families,
Eric Samuels, Balance of State manager for the Texas Homeless Network, said Lubbock had 755 people – by conservative estimates – living on its streets in late January. The group estimated 764 homeless residents living on streets in the Panhandle region out of almost 600,000 residents in its statewide report issued last year.
Roughly 1,000 Lubbock residents fit a form of homelessness more difficult to define: families doubled up with other families or living with relatives and unable to afford their own place, under the draft report.
Full story at: http://lubbockonline.com/stories/040110/loc_598816052.shtml
Dallas cottage project to help chronically homeless
By Kim Horner Dallas Morning News April 4, 2010
Fifty of Dallas’ most costly homeless “frequent fliers” – people who repeatedly cycle through institutions such as hospitals and jail at a cost to taxpayers – could soon be finding homes, just south of Deep Ellum.
The Cottages at Hickory Crossing as proposed would include 50 dwellings, each 400 square feet. The residents would be the city’s chronically homeless, people who often have disabling mental illnesses and addictions along with criminal histories.
The project aims to stabilize that population – and save taxpayers money.
Full story at: http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/040410dnmetdeepellumhousing.3db11cd.html
Nature v. nurture
The City tries to take out a religious homeless shelter, gets kicked to the curb
By Elaine Wolfe San Antonio Current March 31, 2010
Come to him, to that living stone, rejected by men but in God’s sight chosen and precious. 1st Peter 2:4
Approximately four hours deeper into City of San Antonio v. Living Stones Ministry than anyone at the Bexar County Courthouse expected to be, attorney Sam Adams held up yet another photo and asked an increasingly testy Pastor Jimmy M. Spicer if he recognized it.
Yes, Spicer agreed, after examining the image, they were clothes donated to his church, which until March 16 had been quietly helping life’s hard-luck cases get back on their feet for almost two decades.
The tableau was striking: Adams in a natty blue bowtie and pastel checked shirt holding up a picture of used clothing in a vaguely accusatory fashion, towering over the white-bearded Spicer, who looked very much like Santa Claus on trial in Miracle on 34th Street. Faith was on the stand here, too. Spicer and his fellow missionaries believe that God has called them to serve the homeless, and because they minister to the soul as well as the body, that they can do an equal or better job than the City’s much-lauded $100-million Haven for Hope campus, which is set to fully open late this spring.
It was midday Monday, March 29, and the City was asking the judge to close down the shelter until Spicer obtained the proper certificate of occupancy and a zoning change, a months’ long process at best. Adams and fellow Assistant City Attorney Savita Rai argued that the facility was in such deplorable condition it was endangering the lives of its hapless tenants. “They do not have a Constitutional right to stay at a location that is a danger to them,” Rai told the Judge late in the hearing. But the prevailing impression in the courtroom audience — which included several of Living Stones’ 40 residents — is that the City’s real target was any method of dealing with homelessness that doesn’t fit their new model.
Full story at: http://www.sacurrent.com/news/story.asp?id=71067
