Tuesday Report, July 12, 2011
Special to the Texas Low Income Housing Information Service
More corporate sleaze oozed into the news this week as courts favored charges of fraud by investors and homeowners. Bank of America will be tried for failing to help modify loans under the HAMP program while Wells Fargo was convicted of leading investors awry by misrepresenting risks on mortgage securities.
In Galveston, city leaders continue to drag their feet in rebuilding public housing destroyed by Hurricane Ike almost three years ago.
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Obama administration boosts aid for unemployed homeowners
Unemployed homeowners with government-insured mortgages will be allowed to miss a year of payments while they try to find a job.
By Jim Puzzanghera Los Angeles Times July 7, 2011
Reporting from Washington— Still scrambling to stabilize the struggling housing market, the Obama administration will allow some unemployed homeowners to miss a year of mortgage payments without threat of foreclosure while they try to find a new job.
The expanded assistance — triple the current limit of four months for those with government-insured mortgages — could help “tens of thousands” of people keep their homes, Housing and Urban Development Secretary Shaun Donovan said.
“Helping struggling borrowers avoid default is not only good for those borrowers, it is good for the economy,” he said.
But hoping to avoid high expectations that have accompanied other administration foreclosure efforts, Donovan cautioned Thursday that the move wasn’t a “silver bullet.”
The new requirement for so-called forbearance comes on top of several initiatives the White House has launched since 2009 to try to stem the tide of foreclosures, which continue to drive down real estate prices.
Rents Rise, Vacancies Go Down
By Wesley Lowery Wall Street Journal July 8, 2011
Apartment landlords are enjoying rising rents and falling vacancies.
The average effective rent, the amount paid after discounting, was $997 in the second quarter of the year, up from $974 a year earlier, according to a report scheduled for release Thursday by Reis Inc., which tracks leasing data for 82 markets. Second-quarter rents rose in all but two markets.
Rent levels rose fastest in San Jose, Calif., to $1,501 in the second quarter. The average effective rent in San Francisco was $1,806; Wichita, Kan., $495, and New York, $2,826.
Vacancies, meanwhile, fell in 72 of the 82 markets during the second-quarter vacancy rate to 6%, the lowest since 2008 and compared with 7.8% a year earlier, according to Reis. Vacancies declined fastest in Charleston, W.Va., Greensboro/Winston-Salem, N.C., and Richmond, Va.
“Rising rents and falling vacancies are the perfect situation for landlords,” said Rich Anderson, an analyst for BMO Capital Markets. “It’s like drinking without the hangover.”
Area sales of existing homes flat in June
By Sandra Baker Fort Worth Star-Telegram July 8, 2011
Sales of existing homes in North Texas were flat in June from a year ago, stopping a 12-month run of down sales, a Texas A&M Real Estate Center report said Friday.
Buyers in the 29-county North Texas region bought 6,929 homes in June, just 10 more than in June 2010.
The median home price rose 1 percent to $154,600.
On a year-to-date basis, existing home sales are down 12 percent, with 30,929 homes sold from January through June.
In Tarrant County, southeast Arlington recorded 26 sales, more than twice as many as a year ago, and Grapevine had 54, an increase of 69 percent. Kennedale showed the biggest decline, with sales dropping 71 percent in June.
Home sales have been falling since the federal first-time home-buyer tax credit expired in April 2010. The credit, offered for more than a year, boosted home sales nationwide.
Friday’s report shows 5,769 pending sales in North Texas, an increase of 23 percent from a year ago.
The data show 37,418 listings, down 9 percent from a year ago.
The Real Estate Center compiles its data from the Multiple Listing Service used by real estate agents to list and record property sales.
Fort Worth real estate agent faked loan documents
By Darren Barbee Fort Worth Star-Telegram July 6, 2011
A Fort Worth real estate agent is facing up to five years in prison for faking rental histories and paycheck stubs for home buyers in order to obtain HUD loans, according to a federal criminal complaint.
But her attorney says the case is so old – the crime dates back about nine years –she questions why it was prosecuted.
Toshia Ramsey, 41, pleaded guilty to conspiracy to make false statements to the U.S. Department of Housing and Urban Development, just days after the complaint was filed in May, court records show.
She is scheduled to be sentenced on Sept. 19. In addition to prison time, she faces a fine of up to $250,000.
Realty trade group overreported Chicago home prices
By Mary Ellen Podmolik Chicago Tribune July 11, 2011
The Illinois Association of Realtors dramatically overreported the median price of condominiums sold within the city of Chicago in May, with the price tumbling 10.4 percent year-over-year, not rising 10.3 percent as the trade group said.
The state Realtors’ group acknowledged the error after the Tribune, acting on a tip, questioned the accuracy of the data. The group now believes median prices for both condos and single-family homes sold within the city are inaccurate going back to at least January and possibly more than three years.
In its official May sales report that has now been discredited, the trade group said last month that the median price of an existing condo sold in Chicago in May was $299,000, compared with $271,150 recorded in May 2010. In fact, the median price was $243,000, compared to a year-ago price of $265,000, according to data from Midwest Real Estate Data LLC, the multiple listing service for the Chicago area.
Wells Fargo to pay $125 million in mortgage suit
Associated Press July 8, 2011
Wells Fargo & Co. has agreed to pay $125 million to a group of pension funds and other investors to settle allegations that the bank failed to warn investors of the risks of poorly written mortgage-backed securities.
The proposed settlement was filed Wednesday in a California federal court and represents lawsuits filed by the pension funds of Detroit, Alameda County, New Orleans, Guam, and other plaintiffs.
The settlement is subject to court approval.
The securities were sold by Wells Fargo in 2005 and 2006.
The investors said in their complaint that in its bid to collect fees, the bank misstated and omitted details that show that the securities were backed by poor quality mortgages sold to people without proper documentation.
The bank denied any wrongdoing.
BofA loses bid to end nationwide mortgage lawsuit
By Jonathan Stempel Reuters July 6, 2011
Bank of America Corp lost its bid to dismiss a nationwide lawsuit accusing it of reneging on promises to help borrowers modify their mortgage loans under a much-criticized federal program.
District Judge Rya Zobel in Boston said homeowners who contend they did not get modifications for which they qualified under the two-year-old Home Affordable Modification Program, or HAMP, could pursue claims against Bank of America.
The complaint “meticulously” detailed each plaintiff’s compliance with loan modification conditions, but said the bank “willfully failed” to modify the loans, either in bad faith or for its own economic benefit, Zobel wrote. Such allegations are “sufficient” to let the lawsuit go forward, she added.
Zobel dismissed some other claims and rejected a request to block Bank of America while the lawsuit is pending from foreclosing on 37 borrowers said to be in “imminent danger” of losing their homes.
Katrina homeowners will share $62M in settlement
By Cain Burdeau Houston Chronicle July 6, 2011
NEW ORLEANS — The U.S. Department of Housing and Urban Development said on Wednesday that it would hand out $62 million to 1,460 Louisiana homeowners to settle a lawsuit that alleged a Hurricane Katrina rebuilding program was unfair to blacks and left many people unable to rebuild in neighborhoods like the Lower 9th Ward after the 2005 storm.
The agreement ends a lawsuit filed in 2008 in federal court in Washington, D.C., by five homeowners and housing advocates over the way grants were handed out by the Road Home program. The suit alleged Road Home discriminated against blacks because it calculated the worth of a home on housing values prior to Katrina’s assault on the Gulf Coast.
Many blacks lived in neighborhoods, such as the Lower 9th Ward, where housing values were depressed before Katrina and therefore did not get enough money to rebuild after the storm, when the price of materials and labor skyrocketed.
Full story at; http://www.chron.com/disp/story.mpl/nation/7642331.html
In a Growth-Oriented System, Youngstown, Ohio Struggles to Shrink
By Angie Schmitt D.C.Streetsblog July 5, 2011
Youngstown, Ohio has its share of problems.
Once a single-industry steel town, the rust belt poster child has seen its population dwindle from 115,000 residents to barely 67,000 over just three decades. For the better part of the last century, the city was known for its mafia activity, and shaking off the residue of government corruption and violence has been difficult. Its homicide rate — driven upward by a not-yet-recovered economy — puts the city in league with towns three times its size.
But undergirding all of these ills is the problem that might just be Youngstown’s biggest: its built infrastructure is simply to large for its current population.
Black women take their place in D.C.’s bike lanes
By Vanessa Williams Washington Post July 10, 2011
Veronica Davis bikes almost everywhere, except to church on Sundays.
She’s a member and frequent user of Capital Bikeshare and has testified before the D.C. Council in favor of more bike lanes in Southeast Washington, where she lives and owns a small business.
Yet some people pause and look again when they see her gliding along on two wheels. “Mommy, look at the black lady on the bike!” a little girl squealed one day as Davis rode past the Potomac Gardens housing project.
It’s that kind of reaction, Davis says, that makes Black Women Bike DC the perfect name for the group that she and two other women launched after chatting on Twitter about their participation in Bike to Work Day last spring.
“It’s a tongue-in-cheek comment: ‘No, see, we do bike,’ ” Davis said.
Biking took a beating in last year’s mayoral election. For some political activists and residents who had soured on former mayor Adrian M. Fenty, the freshly painted bike lanes spreading along major streets around the city became a symbol of the young white people pushing longtime black residents out of the District.
Council to discuss giving $5M to GHA
By Amanda Casanova Galveston County Daily News July 12, 2011
GALVESTON — Officials from the Galveston Housing Authority are hoping the city council reconsiders a request to release $5 million of a restricted $25 allocation at Thursday’s meeting. At the end of June, the council deferred action to mull over the request and give Mayor Pro Tem Linda Colbert a vote. She was absent at the last council meeting. In 2009, the council voted to release $25 million in federal disaster recovery dollars for the housing authority. The money was restricted to be used only for construction costs and only after the city approved a final rebuilding plan. If the council votes to release the $5 million, the money would mobilize a plan to rebuild 569 public housing units that were damaged or destroyed during Hurricane Ike. The money would be spent on soft costs, such as engineering studies, architectural plans and other preconstruction expenses. “All it’s going to take is enough people on council raising their hands to release that money,” said James Dennis, vice chairman for the housing authority board. “With a vote of yes to the $5 million with no restrictions, the housing authority can get to building.” But city council members have worried that a final plan for the rebuild has not been completed.
Full story at: http://galvestondailynews.com/story/243942
Developer slow to help residents in Southeast Austin apartments slated for demolition
By Sarah Coppola Austin American-Statesman July 7, 2011
As Arturo Garcia walks the grounds of Shoreline Apartments in Southeast Austin, he points out rotted steps, peeling paint, cracked concrete and broken fencing.
This dilapidated, 308 -unit complex is now half vacant. Many tenants moved out this year, before Houston-based Grayco Partners demolishes Shoreline to build an upscale $200 million apartment and retail project in its place, near Lady Bird Lake.
But Garcia’s family is still waiting on “relocation assistance” that Grayco agreed to provide Shoreline’s mostly low-income tenants when the company sought city approval for the mixed-use project in 2009 . And city officials say Grayco only last week submitted a plan — due months ago — explaining how they’ll help find new homes for Shoreline tenants and those at Brookhollow, a smaller apartment complex nearby.