Tuesday Report, June 1, 2010
Special to the Texas Low Income Housing Information Service
The recession drags into a third year with mortgaged homeowners still folding under over-priced loans for over-priced homes. Stories from California and Memphis confirm the pattern; in Memphis aspiring African-Americans have been knocked from the middle class. Others foreclosure is stride and string out the proceedings with the bank.
In Texas, a revised plan to refocus hurricane relief funds to low-income groups has drawn the approval of HUD.
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Owners Stop Paying Mortgages, and Stop Fretting
By David Streitfeld New York Times June 1, 2010
ST. PETERSBURG, Fla. — For Alex Pemberton and Susan Reboyras, foreclosure is becoming a way of life — something they did not want but are in no hurry to get out of.
Foreclosure has allowed them to stabilize the family business. Go to Outback occasionally for a steak. Take their gas-guzzling airboat out for the weekend. Visit the Hard Rock Casino.
“Instead of the house dragging us down, it’s become a life raft,” said Mr. Pemberton, who stopped paying the mortgage on their house here last summer. “It’s really been a blessing.”
A growing number of the people whose homes are in foreclosure are refusing to slink away in shame. They are fashioning a sort of homemade mortgage modification, one that brings their payments all the way down to zero. They use the money they save to get back on their feet or just get by.
This type of modification does not beg for a lender’s permission but is delivered as an ultimatum: Force me out if you can.
Full story at: http://www.nytimes.com/2010/06/01/business/01nopay.html?hp
More California homeowners walk out on mortgages
By Tim Sheehan McClatchy News May 29, 2010
FRESNO, Calif. — A generation ago, a house was more than a house.
It was part of the “American dream.” And foreclosure was a horrifying but unlikely prospect for families who plunked down their savings and took out mortgages to become homeowners.
But a two-year recession has driven foreclosures to a record pace. For many families whose homes are worth far less than what they owe, financial and emotional stress is changing the “stay-at-all-costs” mindset.
In areas hardest hit by plunging real-estate values – including the San Joaquin Valley – some people who can afford their mortgage are opting to walk away from their loan and let their bank repossess the house.
“It’s very stressful to get to that point,” said James Graham, a 48-year-old power-plant worker who walked away from his home in Bakersfield last fall. “You’re raised up to do the right thing and pay your mortgage, pay your bills.”
Blacks in Memphis Lose Decades of Economic Gains
By Michael Powell New York Times May 31, 2010
MEMPHIS — For two decades, Tyrone Banks was one of many African-Americans who saw his economic prospects brightening in this Mississippi River city.
A single father, he worked for FedEx and also as a custodian, built a handsome brick home, had a retirement account and put his eldest daughter through college.
Then the Great Recession rolled in like a fog bank. He refinanced his mortgage at a rate that adjusted sharply upward, and afterward he lost one of his jobs. Now Mr. Banks faces bankruptcy and foreclosure.
“I’m going to tell you the deal, plain-spoken: I’m a black man from the projects and I clean toilets and mop up for a living,” said Mr. Banks, a trim man who looks at least a decade younger than his 50 years. “I’m proud of what I’ve accomplished. But my whole life is backfiring.”
Not so long ago, Memphis, a city where a majority of the residents are black, was a symbol of a South where racial history no longer tightly constrained the choices of a rising black working and middle class. Now this city epitomizes something more grim: How rising unemployment and growing foreclosures in the recession have combined to destroy black wealth and income and erase two decades of slow progress.
The median income of black homeowners in Memphis rose steadily until five or six years ago. Now it has receded to a level below that of 1990 — and roughly half that of white Memphis homeowners, according to an analysis conducted by Queens College Sociology Department for The New York Times.
Report cites gap between wages, affordable rental homes
By Alex Branch Fort Worth Star-Telegram June 1, 2010
MANSFIELD — Karen Stegall’s hunt for a new rental home started in January after she lost her accounting job.
As a single mother of three, she knew she could no longer afford the $1,200 monthly rent on the family’s three-bedroom home — not on her $1,600 monthly unemployment checks.
For four months, she couldn’t find anything that fit her budget, had three or four bedrooms and was well-maintained. Complicating her search was Stegall’s desire to stay in Mansfield, where her children are involved at school but rents are higher.
“Most three- or four-bedroom houses are about $1,400 a month and apartments that size are about the same,” she said. “I looked at houses, apartments and even trailers. What I could afford was practically falling apart. It was really frustrating and disheartening.”
Stegall is not alone in her struggle to find suitable rental housing.
The gap between working families’ wages and the cost of quality and affordable rental housing is growing and causing hardships nationwide, according to a report by the National Low Income Housing Coalition.
Charter challenge aims to force governments to create public housing
By Kirk Makin Ontario Globe and Mail May 29, 2010
One major obstacle stands between Jennifer Tanudjaja and her goal of becoming a successful career woman rather than a burden on the social welfare system – paying the rent.
Struggling to stay in school, the 19-year-old mother of two children plows most of her child welfare benefits and student assistance loan into a $998 per month tenement apartment in Toronto’s Jane-Finch neighbourhood. Meanwhile, she is mired at the bottom of a 10-year wait list for public housing.
Ms. Tanudjaja’s plight lies at the heart of a Charter of Rights challenge being filed on Wednesday in an attempt to persuade the judiciary to force governments to create low-cost public housing.
A coalition of social welfare groups that is launching the challenge seeks to compel the federal and Ontario governments to provide affordable housing for those who are homeless or impoverished by the cost of putting a roof over their heads.
One of the case histories the coalition is furnishing is that of Ms. Tanudjaja, a social work student who aims to be a probation officer. Just 13 years old when her mother handed her over to child welfare authorities, Ms. Tanudjaja ran away from a group home at 15 and then spent more than a year “couch-surfing” from one friend’s home to another.
Seattle’s backyard cottages make a dent in housing need
By Judy Keen USA Today May 29, 2010
SEATTLE — John Stoeck is building a one-bedroom, 437-square-foot cottage on the spot where his garage stood before a tree fell on it. Construction costs: about $50,000. When the cottage is finished this summer, he plans to rent it for at least $900 a month, which will make a nice dent in his mortgage payments.
His is just one of about 50 tiny cottages sprouting in backyards across the city as it tries to expand affordable housing options in established neighborhoods without resorting to high rises and apartment complexes. The city changed zoning rules to allow cottages in single-family neighborhoods citywide, rejected a proposed cap of 50 cottages a year and helped organize a design competition to spur creation of reasonably priced plans. The point is not just to allow the cottages, but to encourage them.
“I want to preserve rural areas around Seattle, and I don’t want the suburbs continuing to march on without any limits. One way to do that is to add more density to these inner-city neighborhoods,” says Stoeck, 47, an architect.
Full story at: http://www.usatoday.com/news/2010-05-25-cottages_N.htm
Recovery HUD applauds state’s new Ike funds plan
By Rhiannon Meyers Galveston County Daily News May 26, 2010
The U.S. Department of Housing and Urban Development on Tuesday applauded the state’s amended plan to spend $1.7 billion in federal disaster recovery money.
The federal housing department stopped short of approving the plan, however, until the state finishes collecting public comment on the changes.
The housing department rejected the state’s original plan to allocate the money after social justice advocacy group Texas Appleseed complained the plan did not set aside enough money for low- and moderate-income families to repair hurricane-damaged houses.
The original plan would have allocated money in a discriminatory manner, the department said in a statement issued Tuesday.
Full story at: http://www.galvnews.com/story/157270
Some choosing prebuilt houses over traditional
By T.J. Aulds Galveston County Daily News May 27, 2010
SAN LEON — When construction crews arrive at George Fowles and Laura Jane Weir’s property today to build their new federally funded house, workers will find 90 percent of the house already built.
The new home was built at a manufacturing plant in Fort Worth, then trucked to San Leon.
The couple is among the 16 percent of the recipients of new homes through the county’s disaster housing program who chose to get a modular home instead of a traditional build-on-site house.
The county has about $85 million in federal dollars to rebuild or repair houses destroyed or damaged by Hurricane Ike.
Full story at: http://www.galvnews.com/story/157319