Archive for August, 2006

Today, HUD granted the Chicago Housing Authority a 70$ million bond to help them refinance and allocate the funding necessary to repair and redevelop public housing all over the city. The bond allowed the Chicago Housing Authority (CHA) to refinance existing bond loans, which ended up significantly decreasing their debt and freeing up money to do the housing overhauls that have been long-needed.

This refinancing is the first of its kind, and may become available to other Housing Authorities across the nation as well.

The CHA plans to revamp and modernize many of its existing units to improve the quality of life for residents, including the Trumbull Park Homes, Altgeld Gardens, and Washington Park. The plan includes replacing more than 18,000 distressed public housing units with 25,000 new or modernized units by 2010.

These new units probably won’t become available for a while, but will be open to FHA, VA as well as HUD housing grants and mortgage assistance programs as well once they do.

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While the United States has seen a dramatic rise in the rate of foreclosure over the past year, Utah has shown new evidence of fighting this trend. During the first three months of 2006, fewer Utah homeowners underwent foreclosure than in 2005. Yes that’s right, the Utah foreclosure rate actually dropped. The rate of foreclosure for 2005 in Utah was 1.33 percent, which came down to .87 percent after March of 2006, which is the lowest rate in seven years for the state.

What’s more is that fewer homeowners were found in default (meaning late on their payments). This suggests that unlike in other areas of the country, Utah homeowners are having less trouble meeting their monthly payments. Both of these developments are remarkable for Utah, who in past years has been near the top in both default and foreclosure rates.

Many attribute the change to the state’s recently revitalized economy, which has produced many new jobs. Others point to the fact that while the nationwide real estate boom has slowed down greatly, Utah’s still remains steady and is even improving. These two causes could go hand in hand. As people are able to afford homes through new jobs and a growing economy which attracts more residents, the real estate market has been able to sustain itself.

However, the recent popularity of adjustable rate mortgages was not unique only to the rest of the country. Utah may see a spike in foreclosures again once ARMs move past their first year, when the rates actually start to adjust. And with home values appreciating which causes rising interest rates, more and more people will be unable to pay their mortgage. However, this is yet to be seen, and it would be unfair to attribute this happening in other states to Utah’s future. Utah has not had as many people use ARM loans to buy homes as some areas on the east and west coasts.

And perhaps more encouraging than the low foreclosure rate is the low default rate. Default is the first step towards foreclosure. If people are able to make their mortgage payments and avoid default, the will subsequently avoid foreclosure as well.

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In response to recent claims of mortgage fraud running rampant in the southeastern United States, HUD has sponsored a symposium on how to recognize and avoid falling victim to this crime. The day-long educational conference is scheduled to be held in numerous areas throughout North and South Carolina, as well as Georgia and Florida.

Mortgage fraud can take on many forms, and in many cases requires a number of participants to work. Taking advantage of the modern lending system, where little or no verification is required to instate a mortgage loan, con-artists have bee working in teams to take money in loans from banks and lending institutions and never returning it. Often the crime begins with someone reporting false information on a loan application, but ends up requiring cooperation from a number of participants. Often loan closing attorneys and home appraisers are in on these crimes, and help to maximize the value of the loan and thus the criminal’s spoils.

One of the largest rates of mortgage foreclosure exists in South Carolina, which has seen a large spike in this crime in the past few years.

Many feel that loose standards and the ease of applying for a loan that has become an industry standard due to competition and an attempt to attract business has led to making it to easy for these people to succeed with their crimes. The absence of background checks and information verification allows many loan applicants to lie.

Lenders also are being bilked in South Carolina by organized networks of crooked professionals, said Brian Lamkin, special agent in charge of the FBI’s Columbia office and former head of the bureau’s national financial crimes section. “I’d say they’re more prevalent than one would realize,” he said.
HUD’s conferences are in conjunction with experts from the FBI’s white-collar crime units. Both agencies have an interest in seeing that the extent of mortgage fraud cases does not get further out of control. HUD hopes that raising awareness of the crime will not only lead to fewer instances, but also to legislative action which would make obtaining a mortgage a more rigorous process.

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With over 27,000 new foreclosure properties hitting the market in may of 2006 alone, many experts believe the housing boom of the past five years has finally come full circle and led to what many are saying is truly a buyer’s market.

During the recent boom, we saw housing costs rise to new heights, causing many people to overpay for homes. Lured by the prospect of profiting on investment, many homebuyers and real estate business people moved to buy up homes, hoping to capitalize on the inflated costs and low interest rates presented by lending agencies to potential buyers.

However, in the past two years, the market has seen a dramatic slowdown. With so many investors trying to flip homes for inflated prices, the market became flooded with overpriced homes that no one is moving to buy. In addition, many of these investors who hoped to sell quickly are now stuck with the rising interest rates associated with the adjustable rate loans they have taken out, and are now stuck with those costs.

These are the factors that have caused the dramatic increase in the nationwide foreclosure rate. This increase has especially occurred in the most desirable places to live, including metropolitan areas and areas on either coast.

Many feel this has led to a buyer’s market. Since so many people are facing foreclosure, they are now looking to move their property for practically any price. In addition, many homes are being sold at auction for well below their market costs. With so many availabilities on the market, property values have stabilized and even dropped in many areas.

If you have been sitting on the fence waiting for the right time to get involved in foreclosure investing, no9 might be the right time. While it may be a while before we see the kind of upsurge in demand for housing and property values we saw over the past few years again, property can be purchased for very low relative prices at the moment.

The one drawback is that interest rates are rising, and for some, this may be hard to cope with. However, for those looking to buy a new home for themselves, this may be the perfect time. Getting into a fixed rate loan for a low initial home cost and then refinancing later when interest rates drop again could be a very wise decision.

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In order to ease the rather dire foreclosure situation in Ohio, a group called

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This morning, HUD announced that 1,000 public housing units will be opened in post-Katrina New Orleans this summer. Many of the city’s public housing units are scheduled for demolition and replacement, but 1,000 residences in the least damaged areas will be repaired and habitable by August.

This will come as good news to many of the 5,100 families who were living in public housing before Katrina and are looking to return.

HUD also plans to provide many of the city’s poorer African-American inhabitants who were living in public housing units that were destroyed with vouchers for rent payments in any kind of housing throughout New Orleans. With so many former public housing residents still living in tents, HUD hopes this will encourage more people to get back into real homes and resume some semblance of a normal life. HUD also plans to raise the amounts paid in vouchers to landlords, as rising rent rates throughout the city make it hard for many poor residents to afford to live anywhere.

HUD also pledged to accelerate the process of rebuilding and redevelopment. In conjunction with Mayor Ray Nagin, HUD and the city’s government are investigating the possibility of an employment condition, that those living in public housing who can work, must work as a condition of their habitation.

The re-emergence of public housing in New Orleans means the possibility of the market for home their developing once again. However, with properties in such high demand, the possibility of tapping into it or even buying ready-made homes in New Orleans is still low.

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Broward and Palm Beach counties sit atop Florida’s real estate market as two of the most desirable places to live in the state. Now, they also lay claim to the two highest foreclosure rates in the state as well.

Broward county has seen a 50% increase in the number of homes being foreclosed upon in the past year. Palm Beach County is close behind, with an increase of 37% within the same time period.

This may come as a surprise to many, especially considering the wealth and median income levels of these two upscale counties. In Palm Beach County, for example, the median home price is roughly $400,000.

However, the rising rate of foreclosure can be attributed back to the housing boom of the past five years that has recently dropped off significantly. Since real estate was seen as at a premium value, people tended to buy up homes in the most desirable areas of the country. Many may have also hoped to be able to sell these homes later for an even higher price. In the case of Palm Beach and Broward Counties this was especially true, given the increasing population and their aura as high profile vacation destinations.

As a result, many homes were bought up by investors, and in many cases these people took out low initial cost loans with adjustable rates, hoping to sell before the adjustable rates kicked in after a year. Now that the market has slowed down, those who have been unable to sell their investment properties have become stuck with rising interest rates. Many of these investors cannot meet the payments associated with these rates, and with little chance to sell the property quickly, they face foreclosure.

What’s more is that these numbers show no signs of tapering off, experts say. As interest rates continue to rise, more and more homes will face foreclosure. In March of 2006, Florida as a whole reported 9, 283 properties in some stage of the foreclosure process. This number is the third highest of any other state, and is equal to 1.5 time the National average.

While this indicated a poor time for taking out an ARM loan on a Florida home, which is typically associated with investing, it might be a good time for those looking buy homes in which to live themselves. With so many properties in the foreclosure marketplace, it could be an excellent time to bid on homes at auction and instate a more reasonable fixed-rate loan.

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The Pittsburgh Housing Authority (PHA) must confront serious questions about its future as Keith Kinard steps down from the position he has held as Executive Director for the past five years.

Kinard was highly praised during his tenure with the PHA both for his work to improve the housing conditions in his city and for cleaning up an organization suspected of corruption under its former director, Stanley Lowe.

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