Bo McCarver’s weekly housing news compilation, 1-31-2012

Reporters snooping into Freddie Mac’s business dealings discover that the quasi-governmental organization makes money by screwing homeowners it’s supposed to help. Refinancing loans to lower rates that make them more manageable by distressed homeowners reduces Freddie Mac’s revenues. The conflict-of-interest raises more questions about the usefulness of the organization to help foster homeownership.

Meanwhile, the Occupy Movement increasingly focuses on corporate mortgage scams and fuels the issue into presidential debates.

For a pdf version of the full stories, plus contextual articles in social, environmental and legal areas, contact Bo McCarver at


Freddie Mac Betting Against Struggling Homeowners

By Chris Arnold       NPR        January 30, 2012

Freddie Mac, a taxpayer-owned mortgage company, is supposed to make homeownership easier. One thing that makes owning a home more affordable is getting a cheaper mortgage.

But Freddie Mac has invested billions of dollars betting that U.S. homeowners won’t be able to refinance their mortgages at today’s lower rates, according to an investigation by NPR and ProPublica, an independent, nonprofit newsroom.

These investments, while legal, raise concerns about a conflict of interest within Freddie Mac.

“We were actually shocked they did this,” says Scott Simon, who heads the mortgage-backed securities team at the giant bond trading and investment firm called PIMCO. “It seemed so out of line with their mission, out of line with what Congress wanted them to do.”

Freddie Mac, formally called the Federal Home Loan Mortgage Corp., was chartered by Congress in 1970. On its website, it says it has “a public mission to stabilize the nation’s residential mortgage markets and expand opportunities for homeownership.” The company is owned by U.S. taxpayers and overseen by a regulator, the Federal Housing Finance Agency (FHFA).

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Fannie and Freddie don’t deserve blame for bubble

By Mark Zandi       Washington Post        January 23, 2012

There is plenty of blame to go around for the U.S. housing bubble, but not much of it belongs to Fannie Mae and Freddie Mac. The two giant housing-finance institutions made many mistakes over the decades, some of them real whoppers, but causing house prices to soar and then crater during the past decade weren’t among them.

The biggest culprits in the housing fiasco came from the private sector, and more specifically from a mortgage industry that was out of control. These included lenders who originated home loans, investment bankers who packaged them into securities, rating agencies that misjudged these securities, and global investors who bought them without much, if any, study.

In other words, America’s mortgage securitization machine was fundamentally broken. It created millions of mortgage loans that, even under reasonable economic assumptions, stood little chance of being repaid — and were not. As a result, hundreds of billions of dollars were lost as defaults and write-downs brought the financial system, and the wider economy, to the brink, requiring a massive government bailout.

Also to blame, of course, were regulators, who gave the private mortgage market little, if any, oversight. The market’s watchdogs were lulled to sleep by a misplaced view that self-interested private financial institutions would regulate themselves. This flawed thinking was most pervasive at the nation’s most important financial regulatory agency, the Federal Reserve.

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White House proposes new help for troubled mortgages. Too little, too late?

President Obama’s mortgage modification program has helped only a fraction of Americans under water. New measures have been proposed, but they could be costly to taxpayers.

By Patrik Jonsson      Christian Science Monitor       January 29, 2012

ATLANTA– President Obama on Friday proposed to sweeten a deal from Washington to entice banks to modify payments, lower loan principal, and expand eligibility in order to help more of the 11 million American families sinking under their mortgages.

The proposed modifications would move the Home Affordable Mortgage Program’s sunset date from the end of 2012 to the end of 2013, triple incentives for banks to participate by paying up to 63 cents on the dollar to forgive portions of borrowers’ debt, and force banks to consider other debts, including medical bills, in their approval process.

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What’s next for Occupy Wall Street? Activists target foreclosure crisis.

As the protest movement heads into spring, Occupy Wall Street activists are interrupting foreclosure auctions and helping families re-occupy their homes.

By Kara Bloomgarden-Smoke         Christian Science Monitor        January 29, 2012

NEW YORK — The Occupy Wall Street movement, which cut its teeth last fall by occupying streets and parks across the country, is moving into a new phase as it gears up for spring: occupying homes.

The movement that claimed to speak for “the 99 percent” and made income inequality part of the national discussion now is organizing protests at housing auctions to support those affected by the foreclosure crisis.

“At first, we were occupying parks, then homes,” says Sofia Teona, an organizer with Occupy Atlanta, of the movement’s evolution. “We are starting locally, but it’s a national movement.”

On Thursday, dozens were arrested when a group in New York interrupted a foreclosure auction in a courtroom, and Occupy organizers say more events are planned nationally in coming weeks.

According to Michael Premo, an organizer for “Occupy Our Homes” in New York,  the movement has carried out 50 similar actions nationally in the past month, including foreclosure disruptions, eviction defense actions, and home re-occupations.

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Florida’s housing crisis: ‘There’s not a politician out there willing to help’

Years after the housing bubble burst, residents in the Sunshine State continue to face the heartbreak of home foreclosure

By Karen McVeigh       The Guardian [UK]        January 30, 2012

At the county court in downtown Miami, a stooped, elderly man smartly dressed in a light suit jacket, stands in front of the judge’s bench as he tries to cancel the imminent sale of his house.

“I spoke to the bank, they gave me papers” he said.

“You’ll have to file notice and notice on the day is not enough,” the judge replies. “I wish there was some way I could help, I’m sorry.”

Asked later what will happen, the man shrugs. “I’ve lost the apartment. Which I gave $85,000 in cash for.”

A woman, dressed in a tight-fitting skirt suit and heels, her make-up carefully applied, approaches the bench and talks to the judge in Spanish. Within minutes, her request for an extension has been denied. She turns around and walks briskly out of the courtroom, her eyes filling with tears.

Miami-Dade courthouse’s Foreclosure Master Calendar is where homeowners caught in the middle of Florida‘s housing crisis go to request emergency motions to cancel the bank’s foreclosure sales of their homes. Some have attorneys, some represent themselves. Those with attorneys tend to fare better.

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Calif. lawmakers to Obama: Do more to solve foreclosure crisis

By Michael Doyle       McClatchy Newspapers      January 25, 2012

WASHINGTON — Dissatisfied California lawmakers are pressing the Obama administration for more aggressive solutions to the foreclosure epidemic ailing the state.

It could get very expensive. But the alternative, lawmakers warn, could be continued hardship for California residents and sustained political trouble for the president.

In a concerted show of strength, 16 California House Democrats gathered Wednesday to bolster the case for more help. They want a meeting with the president, an infusion of new blood and specific relief for financially troubled homeowners.

“The administration has been playing footsie on this topic,” complained Rep. Dennis Cardoza, D-Merced, adding that he is “most concerned about the competency” of key administration officials.

In particular, the disgruntled Californians reiterated Wednesday their prior demands that Obama replace Edward DeMarco, the acting director of the Federal Housing Finance Agency. So far, Senate Republicans have blocked appointments.

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Home prices drop more than expected in November: S&P

Reuters        January 31, 2012

Single-family home prices fell more than expected in November, highlighting a sector that continues to struggle to make a meaningful recovery, a closely watched survey showed on Tuesday.

The S&P/Case-Shiller composite index of 20 metropolitan areas declined 0.7 percent on a seasonally adjusted basis, a bigger drop than the 0.5 percent economists had expected.

The decrease added on to the 0.7 percent decline seen in October.

“Despite continued low interest rates and better real GDP growth in the fourth quarter, home prices continue to fall,” David Blitzer, chairman of the index committee at Standard & Poor’s, said in a statement.

“The trend is down and there are few, if any, signs in the numbers that a turning point is close at hand.”

Prices in the 20 cities also steepened their year over year decline, falling 3.7 percent compared to a 3.4 percent decline the previous month.

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The Most and Least Affordable Housing in America

By Nate Berg       The Atlantic Cities       January 25, 2012

A house in Cleveland might run you $115,000. A similar home in San Diego would cost you three times that, probably more. Different locations have different housing values, which won’t be news to anyone. Whether the people who live in those metro areas can truly afford to buy them is another matter altogether.

Compiled by Wendell Cox and Hugh Pavletich, the 8th Annual Demographia International Housing Affordability Survey [PDF] bases its affordability measure on the “median multiple,” which is found by dividing the median home price by the gross annual median household income before taxes. Metro areas where the housing price is more than three times the income level are deemed unaffordable.

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Why Historic Buildings Are Greener Than LEED-Certified New Ones

Good Environment      January 26, 2012

Buildings eat up a huge amount of energy—about two-fifths of the country’s total use—so to suppress their appetite for power, efficiency entrepreneurs are churning out a suite of nifty technologies, like automatically shading windows, smarter thermostats, and high-tech heating and cooling systems. But a new report from the National Trust for Historic Preservation’s Preservation Green Lab concludes that constructing new, energy-efficient buildings almost never saves as much energy as renovating old ones.

Renovated buildings outperformed new buildings on energy savings in every category: single-family homes, multifamily complexes, commercial offices, “urban village” mixed-use structures, and elementary schools. Though the conclusion may seem counterintuitive in an age of ambitious LEED standards in many new buildings, consider that it uses more energy and creates more impact to construct an entirely new building than to fix up one of the same size for the same purpose.

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Builder has big plans for dome homes in Aransas Pass, surrounding area

Aransas Pass plan for homes takes shape

By Julie Silva       Corpus Christi Caller-Times       January 29, 2012

CORPUS CHRISTI — Ruben Castillo’s home has everything he needs: a stove, refrigerator and bathroom — all in a 315-square-foot dome.

Castillo, a McAllen native temporarily working for Kiewit Offshore Services near Ingleside on the Bay, has lived in his dome for eight months. His only complaint is the bad cellphone reception in the concrete building.

“I tell my friends I’m an Eskimo,” he joked.

Castillo’s dome is just large enough to fit a kitchenette, bathroom, twin-size bed, a small table with two chairs and a television. The round structure is one of five tucked behind a couple of town houses in Ingleside on the Bay.

His landlord, T. Frank Smith IV, owner of South Texas Nontraditional Housing, has plans for hundreds more dome homes in the area.

“There’s a lot of low-income wage earners and retirees, and there’s not a lot of low-cost housing,” Smith said.

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Walmart, neighborhood reps, homeowners, parry over proposed Fort Worth store’s design

Fort worth Star-Telegram       January 25, 2012

Representatives for Walmart and neighborhoods met again tonight to try and hash out disagreements over the design of a proposed Walmart Neighborhood Market in the middle of Fort Worth’s Hemphill/Berry Urban Village.

In a community meeting at the Travis Avenue Baptist Church South Annex — the building Walmart has under contract, with plans to raze and build a new Walmart

Neighborhood Market, pending a zoningchange it’s seeking — Walmart’s design consultants presented their latest plan, which they recently rolled out to the Fort Worth Zoning Commission. Because the plan included fresh changes that hadn’t been presented to the neighborhoods, the commission put the case off for a month to give Walmart and the neighborhoods time to meet.

“It’s a good store, it’s a catalyst,” Tom Galbraith, representing Dunaway, a Fort Worth firm that Walmart is working with on the case, offered to the groups.

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In the Dark, In the Cold, Counting the Homeless

Dallas Observer      January 25, 2012

The woman popped up from the pile of blankets she had laid out on a dirty patch of sidewalk and took a look at the ring of people surrounding her. She patted her woolen beanie self-consciously. “Why you takin’ pictures?” she complained sleepily to a photographer. “I ain’t put my hair on.”

Crystal is 42, and she’s been homeless about four years now. Sometimes she sleeps inside at a friend’s house, but mostly she’s right here at night, on a deserted stretch of road in East Dallas not far from where a DART train comes screeching by. She keeps most of her things in a baby stroller, a blue stuffed puppy with long purple hair dangling from the handle. Her knee is bothering her. She should be receiving disability checks, but there’s some kind of problem. She needs medical attention for this knee, she told the people around her, throwing back a green blanket to show how swollen it is. Can they help?

Crystal is one of several thousand people who were counted last night as part of the seventh annual point-in-time homeless count and census. Organized by Metro Dallas Homeless Alliance, the count takes some 200 volunteers to shelters and outdoor encampments where homeless people are known to stay. Four-hundred and 50 major cities in the U.S. do such counts in the last 10 days of January, a requirement from HUD to be eligible for federal funding. This year’s Dallas count was sponsored by the Real Estate Council, who also brought out some 50 volunteers to help.

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