Tuesday Report, April 26, 2011
Special to the Texas Low Income Housing Information Service
Conservatives bent on ending Fannie Mae and Freddie Mac have run into united opposition of bankers and builders. The mortgage giants underwrite most of the industry’s finances by bundling loans and reselling them as federal securities, a practice that failed in recent years and required a $150 billion federal bailout. Congressional leaders fret over retracting the programs and possibly adding to the nation’s protracted recession.
For a pdf version of the full articles, plus contextual stories in social, environmental and legal areas, contact Bo McCarver at bmccarver@austin.rr.com
Republicans find no unity over housing
By Alan Fram Associated Press April 26, 2011
WASHINGTON – Shutting down Fannie Mae and Freddie Mac should fit seamlessly into the Republican drive to shrink government. After all, keeping the ailing mortgage giants afloat has cost taxpayers $150 billion and many in both parties want private lenders to finance a bigger share of the nation’s $11.3 trillion residential mortgage market.
But House and Senate Republicans pushing bills to phase out both federally run companies are learning how fear, politics and old-fashioned lobbying can trump ideology.
Even in the GOP-run House, leading proponents of doing away with Fannie and Freddie aren’t predicting victory. As a precaution, they’re advancing eight bills taking bite-sized swipes at the issue. In the Democratic-led Senate, a sister measure by 2008 presidential candidate Sen. John McCain, R-Ariz., faces long odds, and the Banking Committee‘s top Democrat and Republican are wary of quickly reshaping the market for financing home purchases.
Full story at: http://www.mysanantonio.com/news/article/Republicans-find-no-unity-over-housing-1351959.php
The number of people who bought new homes jumped 11 pct., but pace is far below healthy level
By Associated Press Washington Post April 25, 2011
WASHINGTON — More people bought new homes in March, giving the battered industry a small lift after the worst winter for sales in almost a half-century.
New-home sales rose 11 percent last month from February to a seasonally adjusted rate of 300,000 homes, the Commerce Department said Monday. That follows three straight monthly declines. Still, the pace remains far below the 700,000 homes a year that economists view as healthy.
Sales of new homes fell last year for the fifth consecutive year and the market is showing no signs of rebounding. Economists say it could take years before sales return to a healthy pace.
The median price of a new home rose nearly 3 percent from February to $213,800. New-home prices are about 34 percent higher than the median price for re-sales. That’s more than twice the markup in healthy housing markets.
‘Strategic defaulters’ pay bills on time and plan ahead, study finds
By Dina ElBoghdady Los Angeles Times April 21, 2011
Some borrowers can’t keep up with their mortgage payments because they’re struggling to make ends meet.
Others choose not to keep up even though they can afford their monthly payments, and a new picture is emerging about who these borrowers are and why they walk away.
A growing body of research shows that these so-called “strategic defaulters” defy the tell-tale characteristics of most people whose loans go bad. They pay their bills on time, rarely exceed their credit-card limits and hardly use retail credit cards, according to a study released Thursday.
And they plan ahead.
They know their credit scores will take a hit after they fall behind on their mortgages, so they tend to open new credit cards in advance of defaulting, according to Thursday’s study, conducted by FICO, the firm that created the nation’s most widely used credit scoring system.
Homeless plan calls on United Way
Lubbock’s city-appointed homeless task force lurched forward Thursday with a plan to deputize a local nonprofit with the task of spearheading outreach for the area’s homeless.
By Matthew McGowan Lubbock Avalanche-Journal April 22, 2011
Lubbock’s city-appointed homeless task force lurched forward Thursday with a plan to deputize a local nonprofit with the task of spearheading outreach for the area’s homeless.
The plan unanimously approved in an afternoon vote could soon enlist Lubbock Area United Way to take a permanent advisory role in how Lubbock addresses the estimated 300 people living on its streets.
Under the proposal, the nonprofit umbrella agency would pull individuals from various local health, philanthropic and faith entities to assemble a board charged with networking, coordinating and streamlining the region’s disparate and often disjointed private homeless assistance programs.
Full story at: http://lubbockonline.com/local-news/2011-04-22/homeless-plan-calls-united-way
