Assclown(s) of the Week: the Housing Mortgage Credit Industry

According to the Philadelphia Inquirer minority borrowers received higher-cost mortgages more frequently than whites last year and were denied loans more often, the Federal Reserve said in an analysis of 2006 lending practices.

Black borrowers had high-cost loans 53.7 percent of the time last year, down a bit from 54.7 percent in 2005, the report said. For Hispanic borrowers, it was 46.6 percent last year compared with 46.1 percent in 2005. Those figures were not adjusted for loan size, borrower's income or geographic location. The report's release coincides with increased congressional scrutiny of lending practices that contributed to the collapse of the subprime-mortgage market and prompted credit-market volatility in recent weeks. The number of Americans who may lose their homes because they could not make payments reached a record in the second quarter, the Mortgage Bankers Association said in a survey released last week.

"Differences by race and ethnicity remain stubborn, persistent and significant," said Josh Silver, a vice president of research and policy for the National Community Reinvestment Coalition in Washington. "The differences are not narrowing. With all increased attention, why isn't it?"

Consumer advocates also say Blacks and Hispanics will be most hurt by the housing crisis and the "surging foreclosure and delinquency rates on subprime mortgages." Read the rest of the article on Philly.com.

Read another article back in August, 2007 that also says access to credit is deeply divided by race, ethnicity and income.

But, now these money hungry credit thieving hoodlums want a bail out - out of their crisis. This is a preposterous notion that these credit hacks who drive up the price for average Americans to buy a home, make us mortgage our entire future to gain access to home buying, and when it crashes, it of course hits those who have less, they want a bail out. It is a free market only when they cash in. When it hurts them they go crying to Daddy Bush.

We are giving our assclown of the week to the credit thieves who destroy average Americans chance at the so-called "American Dream," who drive a wedge by race, ethnicity and poverty and then seek a bail out of a mess completely controlled by them.

Assclowns.

A Handy Guide to the Housing Market

Two Years of Government Inaction. What an Anniversary!

It's two years after Hurricane Katrina and the thousands of New Orleanians and other Gulf Coast residents are still displaced.



I just came across this video and story on Alternet about the anniversary. So while you are listening to all of the media spin today, remember that there are still Americans that we should be working hard to help. In the mean time, sign the petition to support the Gulf Coast Recovery Bill.

UPDATE: If you are in/around NOLA today, consider joining in the national day of action. 8/29, A Day of Presence will take place today from 2 p.m. to 5 p.m. at the Ernest N. Morial Conventional Center.

Nation's Poor Hit by Housing Crunch

I have been meaning to post this for a while. So, it is a bit old, but (I think) very relevant.

There is a phenomenon taking place in urban and suburban communities, but according to the article has recently exploded in rural communities. A new report by HUD says the lack of affordable homes for poor families is the nation’s No. 1 housing problem and undermines the stability and security of families and communities nationwide. The report found that 6 million impoverished households used most of their monthly earnings for housing or lived in substandard conditions in 2005. That’s an increase of 16 percent, or 817,000 families, since 2003. Further, The number of rural families facing this dilemma grew by 51 percent to nearly 1 million households over the same two-year span. At the same time, these struggling households saw their average monthly incomes decline while their average rent payments increased. The level at which housing is affordable is 30% of your income, the standard set back in 1935.

The federal government is not helping. Only one in four eligible families are being helped. I can corroborate this qualitatively. Legal Services office are inundated with calls from needy clients who cannot pay their rent and there is just nowhere to send them. I serve clients in mostly family matters, but the issues often intersect and frustration is abound in the housing advocacy community because of a lack of resources for clients.

"There definitely has been a diminution of federal support for low-income housing in recent years," said Nicolas Retsinas, director of the Joint Center for Housing Studies at Harvard University. "Clearly, it says there are other priorities, and this is not on the short list."
The lack of assistance, soaring rents, slow wage growth and a shrinking inventory of affordable apartments have made it nearly impossible for millions of low-income renters to adequately house their families. One of the most startling problems is also that subsidized housing is being abandoned for condominiums.

For every new affordable housing unit constructed, two are demolished, abandoned or become condominiums or expensive rentals, according to the John D. and Catherine T. MacArthur Foundation. Nearly 375,000 U.S. apartments have been converted to condominiums since 2002, according to Real Capital Analytics, a New York real estate consulting firm. For more on this situation here.

Another rising problem from the San Francisco Chronicle. Foreclosures continued to rise throughout the country, the state (California) and the Bay Area in June, according to a report to be released today. Nationally, 164,644 foreclosure notices were filed in June, up 87 percent from June of last year, said RealtyTrac.com, an online marketplace for foreclosure properties. In the Bay Area, the number of foreclosure notices was 5,018, almost triple the 1,780 in June 2006. Subprime loans are said to be the culprit, which are loans to people with tarnished credit, as well as loans for 100 percent financing.

Of course this problem hits those at the bottom rung the hardest. But, it is sure to travel up the ladder. Many believed a housing crash is imminent, though it seems it may not occur so quickly until the blood is finally drained from our economy. Tax breaks for the rich, endless war and no bid contracts for multinational corporations (on our dime) is not only contributing, but is directly responsible for the lack of resources states and locales can put toward housing for the needy.

As Housing Depreciates, It's Cheaper to Rent

The Center for Economic and Policy Research (CEPR) today released an updated Housing Calculator. It enables users to compare owning a home with renting in 379 metropolitan areas.

"CEPR's calculator provides potential homeowners with an easy way to calculate how much a new home will cost them over time. It compares the amount of additional cash available to a renter with the amount available to a home buyer who sells a home at a specified time in the future. Users simply punch in data such as house price, region, down payment, mortgage rate, tax bracket, and the year they expect to resell the house."

From CEPR:

"Over the last decade, there has been a record increase in U.S. house prices, with prices rising by more than 70 percent after adjusting for inflation. By contrast, rents have risen only slightly more than the rate of inflation over this period. People who buy a home at a bubble-inflated price -- and then see the price plummet in the crash -- may lose much or all of their equity, which comprise the bulk of most household's wealth. Homeowners are still taking on mortgage debt rapidly, even as their homes have largely stopped appreciating in value. Homeowners increased their mortgage debt at a 5.4 percent annual rate in the first quarter of 2007, adding debt at an annual rate of $510 billion. This pushed the ratio of equity to value to a record low."

I did the math and my/we savings on renting instead of buying is $175,000 in the New York Metropolitan area. Try it.