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Foreclosed Houses in Suburbs Like Cicero

Julie Parker — Thu, 08 Mar 2012 09:00:24 +0000

Photo by Renjith Krishnan

Design in urban planning has been an important factor contributing to the foreclosure crisis in suburban areas. In finding solutions to suburban problems, the focus has been mostly on improving their financial situation and not enough on trying to reduce the number of foreclosures.

The majority of the population in the suburbs is Latino immigrants. The houses constructed during the housing boom were mostly single-family units, which can easily be flipped. But, unfortunately, it had other consequences. Five or even six families squeezed into one house, which lead to both social and economic tensions.

Now that it has be done, what can be done about this horrible situation? Houses need to match the size of families and not the reverse. Should the present houses then be bulldozed? The answer is no. Vacant properties should be renovated in order to meet present needs and to raise property values. Cicero, a suburb of Chicago, can be held up as an example of the importance of renovating properties. Here, the problem is focused on the innumerable amount of deserted factories that are surrounding the foreclosed abandoned units.

These buildings are taboo for many developers because they are afraid of industrial contamination. Older suburbs are peppered with abandoned units while jobs and houses are sprawling outwards from these neglected areas. But there are new techniques nowadays that can be utilized in order to address this problem. Poplar and willow trees could be planted to absorb industrial toxins and make the way clear for safer and cheaper rehabilitation.

These abandoned factories are storehouses of steel, stonework and concrete. These would translate into wealth if all the materials were recycled and used for building new work places as well as residences. Instead of forcing the residents to fit into sprawling single-family units, these very houses could be made to either expand or to shrink to fit their size.

Another problem is that, due to zoning laws, in most of these places expanding or making homes smaller is illegal. In general, rules call for segregation of residential areas from commercial and industrial areas. This leads to prohibiting expansion and reusing of building material for constructing new houses and business units.

The restrictions of mixed use of properties are extremely tight. The code in Cicero also defines a family that will exclude the groupings comprised of multiple generations – something that is common across America. This has been a thorn in the side of many urban planners for many years. Thankfully, it can be loosened in order permit new combinations.

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A Forgotten Previous Foreclosure Settlement

Julie Parker — Thu, 23 Feb 2012 10:50:24 +0000

Photo by Renjith Krishnan

Borrowers numbering millions can now vindicate the wrong done on them in two ways. Firstly they can benefit from the settlement reached on 9th February involving $26 billion. Secondly there is in force a previous settlement that many have forgotten – it could result in bigger gains for the house owners.

On 14th April the federal authorities came to an understanding with mortgage servicers numbering fourteen. Among these were included Bank of America, Chase, Citibank, HSBC, MetLife Bank, PNC Mortgage as well as Wells Fargo.

The banks agreed to engage third party consultants to probe into the matter of foreclosure abuses and based on the findings compensate those borrowers who had endured losses. Millions of homeowners are eligible for this previous settlement compensation.

The programme would benefit nearly 4.3 million house loan takers who had endured losses relating to mortgage loans in 2009 and also in 2010. They can ask for independent reviewing of their foreclosure operations. So far only 90,000 have submitted their claims. This has made the Federal Reserve extend the time line for another 3 months till 31st July.

It has not yet been decided how much money the wronged homeowners will get. But if the reviewers find that “financial injury” had taken place by wrong fees being charged by the banks or if the banks proceeded with foreclosure without having the proper documents, the house owners will be recompensed in full.

If it was found that even a single charge levied on the borrower was wrong, he or she would get it back said Bryan Hubbard the spokesperson of the Office of the Comptroller of the Currency. The OCC, a federal regulator, participated in the negotiated settlement.

Those who suffered in a big way would be compensated with larger repayments than the recent AG’s settlement has promised. The latter will dole out a meagre $2,000 per mortgage to nearly 750,000 who were foreclosed upon from 2008 till 2011. Hubbard said that the amount of compensation in the previous settlement could even be equal to the worth of the property that was wrongfully lost.

This foreclosure review independently conducted was prompted by the rob-signing fraud case that exposed the transgressions of the lenders.

Unlike the recent settlement, in the previous one compensation will be paid even the houses have not been lost. Hubbard explained, “It could be anyone who suffered financial loss because of errors made in the foreclosure process”. Borrowers can file complaints in both the settlements.

The Blacks Have Been Worst Hit by the Foreclosure Crisis

Julie Parker — Mon, 16 Jan 2012 09:00:17 +0000

Photo by Woodleywonderworks

The Blacks have been worst hit by the foreclosure crisis. Many accusing fingers point at Community Reinvestment Act (CRA) that bans any form of redlining. The CRA stipulates that financial institutions find out and accordingly respond to the credit requirements of all in the regions within their jurisdiction, including those in the low to middle-income group. Accordingly they mandated to resort to sound lending practices that are safe.

According to Federal Reserve a mere 6% of highly toxic sub-prime loans made to those in the low to middle-income group originated from lenders that came under CRA. The bulk of these loans were contracted by financial institutions not covered by this law.

According to Center for Responsible Lending nearly 8% of the Blacks and Hispanics have seen their homes swallowed by foreclosure; in comparison 4.5% Whites have been affected. As per the estimates of United for a Fair Economy one third of Black families and 40% of the Hispanics are facing the danger from sliding down from the middle-class to the poor category because of the foreclosure triggered economic crisis.

Why was there this concentration of toxic loans and subsequent foreclosures in areas resided by the minorities? In Louisville at least the blame lies with the investors – primarily white speculators. They did not reside in these localities.

Research conducted by John Gilderbloom and Gregory Squires has found that in each of the years of 2007 and 2008 there were 2,000 foreclosure auctions. It measured to 39 foreclosures per census tract resided by Blacks and 20 resided by Whites.

In the Black area the count was 15 units owned by the investors experienced foreclosure while in the White area it was 2 units. Most of the foreclosed houses in Black localities were owned by Whites who resided far away from these places.

In Black areas the culprits were mostly the White investors seeking quick profits. Louisville is not the exception but rather the rule. It stands right in the middle of the chaos. It ranks 103 among 203 metro regions in recent foreclosure ratings.

There are many factors behind why a property is foreclosed upon and why the rates differ from one region to another; race is one of the reasons but not the only one. The other variables that fuel foreclosure – crime, property values, family earnings, levels of income, vacancies and toxic loan numbers, are the same for all communities, White or Black. But where the investor factor was isolated race did play an important part.

Police Union Taking Up Cudgels Against Management

Julie Parker — Fri, 13 Jan 2012 09:00:23 +0000

Photo by Digitalart

A drama is being played out in one of the foreclosed capitals of the country – Stockton City. The police union has taken up cudgels against the management. The city, starved of funds has targeted the police force with spending cuts. This has riled the group in an unprecedented way.

The first salvo against the administration has been protests through provocative banners. The second step was the purchasing of a house (the first property the union bought) right next to that of the city manager, Bob Deis. This targeting of the police by the city is happening at a time when crime has gone up in this inland port city. Stockton recorded the highest crime rate pertaining to violence in California in 2010.

The response of the city has been to sue the union regarding the purchase of the house and wants it to be sold. In documents submitted at court Deis stated, “I believe the SPOA purchased the property … for the sole purpose of coercing me in the exercises of my duties as city manager”. He said that one of the union members clipped trees during a party held in his house.

The police force that originally numbered 315 in 2008 has gone down by over 25%. The city compelled the force to accept reductions in wages and benefits while endeavouring to narrow a deficit of over $20 million.

The police union has brought legal charges against the city alleging that it has no right to use the fiscal emergency situation to break contracts. If the ruling goes in favour of the union then the city would have to pay arrear wages touching $10 million. The city is on the verge of bankruptcy and this verdict could well push it over the edge.

The city administrators did not make any comments on a pending legal suit. Meantime the union has rented out the house after indulging in loud noisy repairs to a retired person owning two dogs.

The angst is directed against the city spending on a sports arena, a hotel on the waterfront and other developments during sunny days. At night lights sparkle on a shopping plaza and movie complex. The theatre had sixteen screens but less number of customers hung around the neighbouring eateries.

Cops were often seen handcuffing offenders and for this the shop owner and residents were thankful. But with less numbers to patrol the streets they are apprehensive. Some want to move away.

Anti-Foreclosure Occupy Movement Takes a New Turn

Julie Parker — Wed, 21 Dec 2011 09:00:37 +0000

Photo by JacobRuff

The anti-foreclosure Occupy moment has taken a new turn – it has started to occupy foreclosed units. In Seattle the activists occupied a warehouse that had been boarded up and was scheduled to be demolished soon. The protestors announced their plans of setting up a community centre. A party was held to celebrate the opening of the building. The police stepped in and arrested sixteen persons to clear out the occupation.

Sergeant Sean Whit comb speaking on behalf of the police said trespassing on private property is the same as trespassing on the downtown park for which they were evicted. Whit comb said, “It’s no different than when people were trespassing (in the park). We went nights and days, letting people camp in the park. We relied on education and outreach, rather than enforcing the law to the letter”.

In Atlanta the Occupy activists were greatly aggressive in trying to break up auction of foreclosed houses. During the auction proceedings they blew sirens and whistles making communication difficult for those participating in the auction said Tim Franzen, a spokesperson of Occupy Atlanta. He said, “We don’t know how many homes we saved for one more month during the holiday season. It was kind of a Christmas gift to the people”.

At River sidein California, Art de los Santo together with Occupy supporters numbering thirty six, returned with his furniture to his previous house. He broke the lock and re-entered to start living in the housing having three bedrooms and three bathrooms. This was his last step to get JPMorgan Chase given due attention to his repeated applications for loan modification. He is hoping that by protesting the bank will sit up.

After foreclosure the house had remained vacant while Art de los Santo together with his large family comprising of his spouse and four children squeezed into a rented apartment in Orange County. He has also had to rent a storage space. Forty six year old Santo said the house is full of memories. The children used to cycle around the place. The neighbourhood was pleasant.

The spokesperson of JPMorgan Chase Tom Kelly, said he has not yet heard about the particular case of Santo sand therefore could not comment; however he did not fail to mention that it was a case of trespassing.

In New York the Occupy protestors announced plans of allowing a homeless family to set up home in a vacant foreclosed house. In Portlanda woman facing foreclosure, with the help of the protestors, pledged she would never leave her house until forced by the authorities.

Occupy Foreclosed Homes Gaining Momentum

Julie Parker — Fri, 16 Dec 2011 09:00:49 +0000

Photo by Respres

The latest strategy of the activists is “Occupy Foreclosed Homes”; this is gaining momentum. In Brooklyn the neighbours complained that a house on Vermont Street has been lying vacant for many years.

Three years previously Countrywide refused to modify the loan referring to hidden terms and clauses that were nothing but traps. Bank of America then bought the mortgage and started foreclosure action. This neighbourhood in East New York is one of the poorest localities of America. The foreclosure ratio here is 16:1000 – it being the highest in New York City and one of the steepest across the nation.

The rate of foreclosure is faster than the rate banks are selling them. A report by Government Accountability Office noted that there are high rates of homes lying vacant is because of foreclosures and unemployment. The report noted, “Non-seasonal vacant properties have increased 51% nationally from nearly 7 million in 2000 to 10 million in April 2010, with 10 states seeing increases of 70% or more”.

The banks are mostly neglecting the vacant houses they have foreclosed upon. These crumble and cause blight to the neighbourhood. Walking down East New York it is easy to note that every 6th house is boarded up.

A Los Angeles based study noted that from 2008 to 2012 all the house owners will forfeit see the loss of value on their houses to the tune of $78.8 billion because of increasing foreclosures lying vacant pulling down prices of adjacent buildings.

One of the victims is Tasha Glasgow. For the most part of the last ten years she has been sans a home living life in and out of various shelters in New York City. She has an autistic daughter aged eight as well as a son aged five.

While looking after her children she has to find work. Her hopes were raised when she got a voucher from the city administration saying they would allow her shift from the shelter arrangement. But suddenly that vital assistance was withdrawn when the Mayor Michael Bloomberg started off on austerity measures.

The string of events has caught up with OWS movement. It is now matching the homeless with vacant homes. Recently, the organizers shifted Glasgow and her children to a vacant house on Vermont Street: the unit is now owned by Bank of America. It seems the only sensible thing to do since the banks did not nothing with the bailout money they got from the taxpayers kitty.

Occupy Movement Targets Banks to Stop Foreclosures and Evictions

Julie Parker — Thu, 15 Dec 2011 10:55:56 +0000

Photo by Scottchan

The idea of occupying foreclosed houses has caught on. In Redwood City the protestors have been able to postpone the imminent auction of the house of septuagenarian Gloria Takla. On 6th December Takla together with thirty protestors forcibly entered a branch of Chase shouting slogans and waving placards.

For nearly two years Takla has been trying in vain to get her house loan modified. The original granter of the loan was Washington Mutual. Later Bank of America bought it off. Her monthly payment shot up to unmanageable levels from $1,450 to $2,650. She had bought it with her life’s savings of $1,450. Takla is not conversant with English and bemoans she has been victimized by predatory lending.

On 6th December, Takla demanded to talk to somebody “human” in the bank and not just a recorded voice. The employees linked her with agents in the customer service cell while the police of Redwood City tried to keep the situation calm outside the bank.

Ten protestors squatted in the lobby while the police remained silent spectators. Meanwhile, Takla helped by her daughter, spoke to the bank authorities. None was arrested. When the protestors had stormed the bank only minor scuffles had broken out.

Takla talked to Ramel Nalus of Santa Clara Home Ownership Center of Chase. He has probably given her till 14th February to have her loan modified or be foreclosed upon. None of the officials of Chase, including Nalus, responded to calls made by Daily Journal seeking comments.

Takla and the protestors came out of the bank after about an hour, claiming ‘victory’. Takla said, “We were able to postpone the sale date only because the people joining me in the action”. Among those who had teamed up with Takla were Pastor Sandy Perry, Lili Liu, Christy Wong, Louis Vaughn and Aaron Castle.

Liu had recently been able to get her loan modified with the help of Alliance of Californians for Community Empowerment. She had come from Freemont to join the march. The group had organized the march and the protest before the bank in Redwood City. After ACORN filed bankruptcy, ACCE came into existence.

Vaughn said that the minorities have been targeted by predatory lending; the renters too have suffered. The tenants have been thrown out because the landlords were foreclosed upon. It was a trap for the people – they got sandwiched.

Foreclosure Proceedings Against Heritage Discovery Center

Julie Parker — Tue, 13 Dec 2011 10:36:56 +0000

Photo by Wiertz Sébastien

City officials of Norwich have initiated foreclosure proceedings against many properties that are owned by Janny Lam, an eminent downtown developer. Lam said that she has been trying to sell a few of the 26 properties that she owns. This will help her to come out of the debt.

Lam owes above $300,000 in taxes that are listed under other names. Attorney Aimee Wickless had filed three foreclosure notices against several properties. One of them was the Heritage Discovery Centert hat borders Water and Main streets. There are 4 tenants in the building; one of which is the Norwich Community Development Corp. office.

The mayor had also announced that foreclosure action would be started against Lam’s properties. Wickless also said that this is only the beginning; more are yet to follow in the next few weeks. Lam naturally is very disappointed. She said that she has been singled out this week. At the same time, she regrets having fallen behind on payments. However, she is determined to work with officials and see that her properties are not foreclosed upon.

Lam also said that many properties are up for sale. However, the news about foreclosure notices has spread like wild fire. Now that will definitely hurt her efforts. The owner also said that a prospective buyer has brought down the price after the announcement.

Lam is of the opinion that the foreclosure action against Heritage Discovery Center at 77-85 and 87-91 Main Street show that the owner owes $16,264 on the two buildings. Lam, had, however, made a payment of $10,000 in October. Till 2010, the Heritage Discovery Center was registered as a single building. The taxes were, therefore, much lower. Lam pointed this out to the assessor Donna Ralston and even brought out the purchase deed.

Ralston pointed out that the houses will be joined together again. This will be done only after a list of properties is made in February 2012. Ralston has also pointed out in the new bill, the addresses will be once more joined. However, the change may not affect the total bill per se. After all, it is based on building usage and the square area. LAM may have to make an appeal to Board of Assessment Appeals. This board will meet in March 2012.

Also foreclosure filings were made against three vacant spaces located in 92 and 106, School Street amongst others.

Foreclosed Middle-Class Families Secretly Enrolling their School

Julie Parker — Tue, 06 Dec 2011 10:37:14 +0000

Photo by Healingdream

It is a tragic situation- middle class families that have Foreclosed on their properties are enrolling their school-age children for free or subsidized meals. Many families are pleading with school officials to keep it secret. Peggy Lawrence of School Nutrition (director) said, “We’re seeing people who were never eligible before, never had a need”.

One of the victims is Sheila Dawson, who is currently working as a salesperson at one of the Wal-Mart chains. Her husband became unemployed and their income went down by $45,000. She has a daughter who is fifteen. The family has been doing their best to save money– buying clothes at thrift stores, cutting down on movies and now enrolling the child for subsidized lunches at school.

There has also been a sharp rise in the numbers of school children enrolling for this benefit. The main reason has been the downturn in the economy. But there are other factors at play – one being direct certification.

The Congress in 2004 mandated that the 17,000 school districts of the country to match the lists of student enrollment with the records of local food-stamp agencies. Thus, those who get food stamps are directly enrolled for the meal projects. The number of districts doing this has gone up and as well as the number of school-age children from families that qualify for food stamps. It went up from 12 million in 2009-2010 to 14 million in 2010-2011.

Kevin Conway of Mathematica Policy Research (project director) said, “The concern of those of us involved in the direct certification effort is how to help all these districts deal with the exploding caseload of kids eligible for the meals”. Conway co-authored an October study has recently been submitted into Congress for review; the bill deals with direct certification.

In 1946, Congress enacted the National School Lunch Act following World War II. The idea was to reduce surpluses of farm products while giving food support to children going to school. By 1970, this project was giving lunches to 22 million students on any average day – a fifth of these meals were subsidized. Since then, the subsidized section has increased while fully paid lunch numbers have decreased.

Never so many school-age children have become qualified for free lunch meals like they did during the 2010 fiscal year. Currently, the program is costing the country $10.8 million and has offered a total of 32 million lunches.

Study Points to a Dip in Foreclosure Default Notices

Julie Parker — Fri, 02 Dec 2011 09:00:03 +0000

Photo by Stevendepolo

The realtor of Prudential America Sam Wagmeister made a study of those people who bought homes in the period between 2004 and 2008. The purpose of the study was to find out who were still living in the same house. And how many of these homes have been foreclosed upon.

The study is not very scientific as the one done by Sales Traq. The selection of communities has been very random, so are ZIP codes. According to the study most homes had been made since1994. These had common features like tile roofs and stucco exteriors.

The homes’ values have now slipped to 50 % of their original values. It may take five years at least for the home values to go up. Wagmeister said, “The assumption that I have is that, eventually, these homeowners will choose to stop supporting the super banks by making payments on homes that they will probably never realize equity in, and either short-sell the properties or suffer the long-term consequences of foreclosure.”

That means more foreclosures are on the way. Everyone wants to know the answer to this question. Jacksonville based company, Lender Processing Services have come up with the report that 16 % per cent of homeowners in Las Vegas are saddled with mortgage that are delinquent by 30 days.

The situation is indeed very confusing. Many people are lagging behind on home payments. It could be 10% 17% or 27%, and many of them are heading to foreclosure. The situation is bad in regions like Nevada, California, and Arizona.

In Nevada there is a new law that may slow down the foreclosure process. But ultimately it will not stop them. An average of 4,000 notices has been sent in September. Default filings had dropped to 771 last month.

Tim Kelly Kiernan, Re/Max Extreme, said, “Some Realtors feel the world is coming to an end because the foreclosure process will take forever, while others feel it’s just a speed bump and things will be fine in a month or so. I met with my Bank of America contacts and they say it’s also just a speed bump. Who knows? Patience is a virtue, I guess.”

James Saccacio, CEO, RealtyTrac, said the law had indeed caused a drop of 75 % in default notices – the first step in the foreclosure process. In fact, defaults have dipped lowest since the real estate boom in 2006.