Bo McCarver’s weekly housing news compilation, 3-13-2012

The Obama Administration promises zero-tolerance for infractions of mortgage rules negotiated in a settlement with big banks last month. Mortgages under the auspice of Fannie Mae and Freddie Mac, which make up 56 percent of the US mortgages, are not subject to the oversight measures.

Almost four years after Hurricanes Rita and Ike, not one of the 4,100 homes stated for rebuilding has been finished. Much of the delay has been caused by Texas placing administration of the program under local control.

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Banks to Face Tough Reviews, Details of Mortgage Deal Show

By Nelson D. Schwartz        New York Times       March 12, 2012

Banks will face stiff penalties and intense public scrutiny if they fail to live up to the standards of a $25 billion mortgage settlement with state and federal authorities, according to court documents filed as part of the deal Monday in federal court in Washington.

While the broad outline of the deal was announced last month, the mechanics of the agreement that took more than a year to negotiate were laid out in Monday’s filing, including exactly how much credit the five banks would receive for varying levels of loan forgiveness. and just what kind of conduct from the past is off-limits to future investigations.

“We are taking a zero-tolerance approach,” said one senior Obama administration official on Monday morning, who spoke on condition of anonymity because the documents had not yet been filed.

Banks must review their adherence to the new rules every quarter through a random sampling of cases, with a maximum threshold for errors at 1 percent in some cases if they are to avoid fines. “Any error that is found during the sampling process will have to be corrected,” the official said.

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Rising rents may signal a housing market recovery

Renters are paying more because the foreclosure crisis is adding to their ranks, which increases demand for apartments. Orange County has seen the biggest rent increase in the Southland: 13.2% in the last year.

By Alejandro Lazo       Los Angeles Times        March 13, 2012

Home prices are tumbling to fresh lows, but new data show the rental market is on an upswing, an early indicator that housing may be headed into recovery.

Rents are increasing because the foreclosure crisis has created a steady supply of renters in recent years, analysts said, and those people — with their tarnished credit records preventing them from quickly becoming homeowners again — need places to live.

Adding to the housing squeeze is the nascent jobs recovery, which is fueling desire for rental housing as people find employment and strike out on their own. Many renters with the potential to buy a home are also sticking to the rental market given the home price slump and the difficulty these days in getting a mortgage.

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Amid Finger-Pointing, Hurricane Relief Lags

By Becca Aaronson         Texas Tribune        March 9, 2012

Nearly four years after Hurricanes Ike and Dolly wreaked havoc on the Texas coast, thousands of Texans are still waiting for housing assistance. The long-term disaster recovery effort financed by the federal government has made little headway. But where two state agencies faltered, another is stepping in.

According to a state report to the U.S. Department of Housing and Urban Development at the end of June, none of the 4,100 homes expected to be rebuilt or reconstructed with federal money were completed. And by October, the state had only spent 10 percent of the federal money for long-term recovery.

“I can’t even let anyone in the house, it’s just too shameful,” said Orison Bolden of Houston, whose home was damaged by Ike. A blue tarp still covers her house in the Third Ward, a historically black neighborhood south of downtown. Although discouraged, she still hopes to receive assistance. “Just fix my roof,” she said. “I will try to go and find a job and fix the rest of my house piece by piece.”

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Federal Audit Questions $8 Million Paid to HNTB

By Becca Aaronson        Texas Tribune       March 9, 2012

Texas’ Ike-Dolly disaster recovery program, which is funded by the federal government, is facing a potential $8 million setback.

The U.S. Department of Housing and Urban Development’s inspector general released an audit Thursday recommending that Texas pay back more than $1 million for ineligible or questioned costs and that the state find supportive documentation or repay an additional $7.59 million for what the audit says are inflated labor costs.

The audit targets costs that are associated with contracts with HNTB, a private engineering firm that had been involved in the nonhousing portions of the recovery program. HNTB is still involved with some projects, but its role has been dramatically reduced.

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Council to consider temporary rental housing bids

By Amanda Casanova       Galveston County Daily News         March 8, 2012

GALVESTON — If the city council approves landlords in a temporary rental housing program, relief could come to homeowners bunking with families and living in hotels while waiting on their homes to be repaired or rebuilt in the disaster housing recovery program.

The $1.275 million temporary rental housing program, approved by the Texas General Land Office in September, would allow families to spend up to $3,000 for up to three months on their rent while their home is rehabilitated or reconstructed in the program meant to help homeowners whose homes were damaged in Hurricane Ike in 2008.

Eligible families would include those that earn 50 percent of the area median income or less, the elderly and the disabled. Galveston’s median income is about $36,000.

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A counterweight to foreclosure crisis: community land trusts?

As home foreclosures put a drag on the US economy, 250 community land trusts across the US use one-time taxpayer subsidies to help low-income homebuyers and stabilize communities.

By Nancy Humphrey Case          Christian Science Monitor      March 7, 2012

BURLINGTON, VT. — Bob and Lynne Robbins of Jericho, Vt., have an unusual perspective on the foreclosure crisis claiming homes nationwide. It might have claimed theirs, too, but for the efforts of a program here that is seen either as an innovative solution to affordable housing or one short step away from socialism.

The Champlain Housing Trust enabled the Rob­bin­ses to find a house they could afford, to secure a loan, and to survive the recession – without missing a single mortgage payment.

“I can’t imagine the last few years if we hadn’t had this place,” says Lynne of their 1,100-square-foot ranch-style home.

At a time when foreclosures continue to be a drag on the US economy, the Champlain Housing Trust offers a counterweight. It is the largest and most successful of nearly 250 community land trusts (CLTs) nationwide – ventures that seek to solve the problem of low-income housing by breaking the boom and bust cycles of the free market. Often financed at least in part by public money, CLTs buy land, build houses, and then subsidize the sale of houses to low- and middle-income consumers.

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Rick Santorum’s Housing Hypocrisy

The GOP candidate wants government out of housing and Fannie and Freddie eliminated—but bought his first home with a government-backed mortgage

By Andy Kroll and Tim Murphy       Mother Jones       March 9,2012

Rick Santorum wants the government out of every aspect of Americans’ lives—especially the housing market. He pledges to eliminate Fannie Mae and Freddie Mac, the twin government housing giants that help guarantee 90 percent of all new mortgages in America. He wants to “let capitalism work” and allow the housing market to “find its bottom.” Only then, he says, will the recovery begin. It’s a plan that would make Adam Smith proud.

Yet Santorum wasn’t always so opposed to government intervention in housing. In a deal that’s gone unreported during his presidential run, Santorum bought his first house in 1983 with a cut-rate government-backed mortgage, according to records compiled by the campaign of Sen. Harris Wofford (D-Penn.), who Santorum defeated in 1994. He received his loan through a state program to boost homeownership among low- and middle-income families. Santorum, in other words, benefited from a program whose mission mirrored that of Fannie and Freddie, the companies he now rails against and wants to dissolve. (Santorum spokesman Hogan Gidley did not respond to a request for comment.)

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Glimpse into El Paso’s future: Plan El Paso earns praise from EPA

By Chris Roberts       El Paso Times       March 11, 2012

A far-reaching plan expected to guide El Paso’s growth and development for decades promises to cure urban ills — including obesity, social alienation and rising taxes.

“Plan El Paso,” a comprehensive blueprint based on Smart Growth principles, received unanimous approval from the El Paso City Council last week. It has already gained national recognition.

A draft version of the plan was among five winners of the U.S. Environmental Protection Agency’s 2011 National Award for Smart Growth Achievement. The agency said it is a “comprehensive, transit-oriented development plan (that) will help link neighborhoods to greater economic opportunity and to one another, creating new homes and jobs.”

Kaid Benfield, the National Resources Defense Council’s sustainable communities director, wrote an extended blog post on the plan last week.

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Fort Worth council approves zoning for Wal-Mart market

By Bill Hanna     Fort Worth Star-Telegram      March 7, 2012

FORT WORTH — In a decision that divided residents of several south-side neighborhoods and upset at least one council member, the Fort Worth City Council voted 7-2 Tuesday night to approve zoning variances for a Wal-Mart Neighborhood Market but included restrictions that prohibit fuel sales and leave a parcel along West Berry Street undeveloped for now.

The vote came on a substitute motion by Councilman Sal Espino that included last-minute compromises suggested by Wal-Mart.

Councilman Joel Burns, who represents the neighborhoods the store would serve, had offered his own motion for approval. His motion would have prevented Wal-Mart from paving 14 parking spaces until development took place on a parcel of the lot that fronts West Berry. During discussion, council members initially signaled support for Burns’ recommendation but changed their minds after hearing from Wal-Mart.

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Siblings found living in abandoned school bus in Splendora

By Mike Glenn and John Rigg       San Antonio Express-News       March 8, 2012

SPLENDORA – A broken-down school bus on a garbage-strewn lot in Montgomery County was home until Wednesday for two children whose parents apparently are in prison.

A postal worker discovered a girl, 11, and her 5-year-old brother about 10 a.m. while making rounds along Three S Street near Circle H, officials said.

“They appeared to be unsupervised,” said Jamie Nash with the Montgomery County Precinct 4 Constable’s Office.

The bus had been converted into quarters for the children, with bunk beds and a window-mounted air conditioner. But shocked local officials said the youngsters’ living conditions were deplorable. What little food they could get at was in another building on the lot.

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