Alphonso R. Jackson took credit for improving public housing when he announced his resignation last week as secretary of housing and urban development. But, in fact, the Bush administration has attempted to starve the once-promising Hope VI program aimed at urban poverty. Members of Congress, including Maryland's Sen. Barbara A. Mikulski, have kept it on life support, and now a more ambitious revitalization deserves passage.
Since 1992, Hope VI has used more than $6 billion in federal funds to help alleviate concentrated poverty by replacing dilapidated public housing projects with mixed-income development. The program offered chances at homeownership and other opportunities to boost the economic fortunes of neighborhoods and their residents.
But too often, low-income residents have seen their homes destroyed but not replaced. And while many families have been able to use vouchers to resettle in better neighborhoods, others have found their housing options limited. In Baltimore, complexes such as Pleasant View Gardens and the Terraces replaced crime-ridden projects, but there were fewer new units and some displaced families no longer qualified.
Nationally, the Hope VI revitalization effort led to a net loss of 43,000 public housing units between 1992 and 2006, according to an analysis by the Urban Institute. And many of the more than 1 million public housing units remaining have fallen into disrepair for lack of federal investment.
But Congress is considering new versions of Hope VI with significant and necessary changes that deserve support. In January, the House passed a bill that would mostly require one-for-one replacement of demolished units. It would also give residents more of a voice in planning and provide more support services to those who relocate.
Senator Mikulski is pushing a bill that would give housing authorities more leeway to decide whether to replace demolished units and tries to link access to new units to improved school performance of resident children. The House version, which also offers displaced residents better opportunities to occupy new housing, is generally preferable, but the differences between the bills are hardly irreconcilable.
After years of neglect, what's most important is to restore viability to Hope VI and offer better public housing options. (baltimoresun.com)
Showing posts with label housing. Show all posts
Showing posts with label housing. Show all posts
Monday, April 7, 2008
Thursday, January 24, 2008
Baltimore gains downtown housing
Two high-profile apartment projects in downtown Baltimore have wrapped up construction and are adding several hundred luxury residences to the market, one in a historic, former office building in the hub of west-side redevelopment and the other a new building overlooking Camden Yards.
Construction is nearly done on the 183-unit former Baltimore Gas and Electric Co. headquarters, a nearly century-old Beaux-Arts building at 39 W. Lexington St., and the developer is kicking off leasing this weekend.
And the long-delayed The Zenith, a 191-unit tower at 511 W. Pratt St., marked completion of construction yesterday, though some tenants started moving in late last year. The apartment tower is 20 percent leased and 13 percent occupied, a Zenith manager said.
Both projects are expected to be big contributors to the transformation of downtown from a predominantly business district to an area where people live and shop as well as work. They are part of the 3,265 rental units that have been added since 2000, downtown, which was double the number of downtown apartments it had a decade ago, said Bob Aydukovic, vice president of economic development for the Downtown Partnership. "It shows that demand for downtown housing is very strong," Aydukovic said.
About 955 rental units are in various stages of construction downtown, with several large projects slated to open this year. In addition, hundreds more are planned in various projects, including in the city's old retail district near the former BGE building.
Despite a slowdown in the for-sale side of the housing market, interest in leasing has grown and rents are rising, Aydukovic said.
At The Zenith, apartments rent for $1,350 for a studio, an average $1,800 for a one-bedroom, and an average $2,600 for a two-bedroom, said Corinne Warner, property manager for The Zenith, which was developed by Brian D. Morris, Dean S. Harrison and Ronald H. Lipscomb.
The six two-story penthouses, all of which overlook Camden Yards, range from $3,200 to $4,600 a month, Warner said.
"Studios have been our most popular, and two of the six penthouses are leased," she said.
The developers are negotiating with a restaurant tenant to open on site, possibly by summer, Warner said.
The $42 million project at 39 W. Lexington St. project transformed the former BGE headquarters, which opened in 1916 as the headquarters for BGE predecessor Consolidated Gas, Electric Light and Power Co. of Baltimore.
The conversion restored features such as carved marble panels with figures that represent knowledge, light, heat and power, and cast- iron work on the façade.
The building's top floor houses five two-story duplex apartments and the 19th floor, the former BGE executive floor, has retained such features as oak paneling and fireplaces, said developer David Hillman, chairman of Southern Management Corp.
Rents for apartments, which include studios, and one and two bedrooms, range from $1,300 a month for studios, to $4,000 for penthouses, including utilities. The building will offer concierge service and a limousine for getting around town, Hillman said. Plans call for a restaurant that will front on Liberty Street and a coffee shop.
Demand for new west-side apartments has been strong, said Ronald M. Kreitner, executive director of WestSide Renaissance Inc., and 39 W. Lexington "broadens what the options are."
Aydukovic said The Zenith, which opened for leasing in October, has averaged four leases a week, a strong pace especially in the winter months and in the face of new competition.
"Rents continue in an upward trend, and we're still not seeing any massive shifts of renters from one building to another," Aydukovic said. "This is all new blood." (By Lorraine Mirabella | Baltimore Sun)
Construction is nearly done on the 183-unit former Baltimore Gas and Electric Co. headquarters, a nearly century-old Beaux-Arts building at 39 W. Lexington St., and the developer is kicking off leasing this weekend.
And the long-delayed The Zenith, a 191-unit tower at 511 W. Pratt St., marked completion of construction yesterday, though some tenants started moving in late last year. The apartment tower is 20 percent leased and 13 percent occupied, a Zenith manager said.
Both projects are expected to be big contributors to the transformation of downtown from a predominantly business district to an area where people live and shop as well as work. They are part of the 3,265 rental units that have been added since 2000, downtown, which was double the number of downtown apartments it had a decade ago, said Bob Aydukovic, vice president of economic development for the Downtown Partnership. "It shows that demand for downtown housing is very strong," Aydukovic said.
About 955 rental units are in various stages of construction downtown, with several large projects slated to open this year. In addition, hundreds more are planned in various projects, including in the city's old retail district near the former BGE building.
Despite a slowdown in the for-sale side of the housing market, interest in leasing has grown and rents are rising, Aydukovic said.
At The Zenith, apartments rent for $1,350 for a studio, an average $1,800 for a one-bedroom, and an average $2,600 for a two-bedroom, said Corinne Warner, property manager for The Zenith, which was developed by Brian D. Morris, Dean S. Harrison and Ronald H. Lipscomb.
The six two-story penthouses, all of which overlook Camden Yards, range from $3,200 to $4,600 a month, Warner said.
"Studios have been our most popular, and two of the six penthouses are leased," she said.
The developers are negotiating with a restaurant tenant to open on site, possibly by summer, Warner said.
The $42 million project at 39 W. Lexington St. project transformed the former BGE headquarters, which opened in 1916 as the headquarters for BGE predecessor Consolidated Gas, Electric Light and Power Co. of Baltimore.
The conversion restored features such as carved marble panels with figures that represent knowledge, light, heat and power, and cast- iron work on the façade.
The building's top floor houses five two-story duplex apartments and the 19th floor, the former BGE executive floor, has retained such features as oak paneling and fireplaces, said developer David Hillman, chairman of Southern Management Corp.
Rents for apartments, which include studios, and one and two bedrooms, range from $1,300 a month for studios, to $4,000 for penthouses, including utilities. The building will offer concierge service and a limousine for getting around town, Hillman said. Plans call for a restaurant that will front on Liberty Street and a coffee shop.
Demand for new west-side apartments has been strong, said Ronald M. Kreitner, executive director of WestSide Renaissance Inc., and 39 W. Lexington "broadens what the options are."
Aydukovic said The Zenith, which opened for leasing in October, has averaged four leases a week, a strong pace especially in the winter months and in the face of new competition.
"Rents continue in an upward trend, and we're still not seeing any massive shifts of renters from one building to another," Aydukovic said. "This is all new blood." (By Lorraine Mirabella | Baltimore Sun)
Wednesday, October 10, 2007
Abell Foundation criticizes Baltimore Housing authority
The city's housing authority has abandoned its mission to house the poor, according to a new report by the Abell Foundation.
The report criticizes city housing officials for focusing on demolition of properties instead of providing new housing.
"On its seventieth anniversary, the Housing Authority - once on a mission to replace slums with safe homes for Baltimore's poor - is now in the demolition business," wrote Joan Jacobson, author of the Abell report,
The number of occupied public housing units in the city has declined by 42 percent in the past 15 years - from more than 16,000 to less than 10,000, according to the report, which says the authority's plans for new housing are "unclear."
City housing officials have also faced criticism for plans to use a $59 million affordable housing fund, created to provide homes for the poor and working class, to instead demolish units at 15 sites.
The Housing Authority of Baltimore City issued a response that called the report "deeply flawed and biased."
The authority said the report does not take into sufficient account federal funding cuts in the past six years, in which $79 million was cut from the authority's budget, or court orders that have made it harder to build new public housing.
Housing Commissioner Paul T. Graziano said the housing authority plans 3,700 housing units in mixed-income developments and demolition is needed to eliminate blight and make way for new housing.
"I think there is a failure to recognize that in order to create the viable mixed-income communities that our residents deserve, we need to tear down some of the old," Graziano said.
"These are not places where I feel good about the young children of the city growing up." (The Associated Press, examiner.com)
The report criticizes city housing officials for focusing on demolition of properties instead of providing new housing.
"On its seventieth anniversary, the Housing Authority - once on a mission to replace slums with safe homes for Baltimore's poor - is now in the demolition business," wrote Joan Jacobson, author of the Abell report,
The number of occupied public housing units in the city has declined by 42 percent in the past 15 years - from more than 16,000 to less than 10,000, according to the report, which says the authority's plans for new housing are "unclear."
City housing officials have also faced criticism for plans to use a $59 million affordable housing fund, created to provide homes for the poor and working class, to instead demolish units at 15 sites.
The Housing Authority of Baltimore City issued a response that called the report "deeply flawed and biased."
The authority said the report does not take into sufficient account federal funding cuts in the past six years, in which $79 million was cut from the authority's budget, or court orders that have made it harder to build new public housing.
Housing Commissioner Paul T. Graziano said the housing authority plans 3,700 housing units in mixed-income developments and demolition is needed to eliminate blight and make way for new housing.
"I think there is a failure to recognize that in order to create the viable mixed-income communities that our residents deserve, we need to tear down some of the old," Graziano said.
"These are not places where I feel good about the young children of the city growing up." (The Associated Press, examiner.com)
Monday, October 8, 2007
Retaliatory evictions are next issue for Baltimore City housing advocates
Retaliatory evictions are next issue for Baltimore City housing advocates
Unsightly piles of tenants’ furniture dumped on city sidewalks and lack of formal notice for evictions should be a thing of the past in Baltimore City, thanks to a new law just signed by Mayor Sheila Dixon.
But housing advocates said the law is just the first step toward a long-term effort to improve tenants rights.
“The next issue we want to tackle is landlord retaliation,” said John Netherecut, executive director of the Public Justice Center, a housing advocacy group. “We have some of the most lax laws in the country.”
Netherecut, whose organization joined dozen of tenants rights groups to muster support for the new law, said strengthening the laws preventing landlords from evicting tenants who complain or call a housing inspector is next.
“In most states, once the tenant alleges retaliation, that becomes part of a defense in an eviction case,” Netherecut said.
“Then the judge hears the facts from both sides,” he said.
But Kathy Howard, a lobbyist for the Maryland Multi-Housing Association, said any changes to the laws would add confusion to the eviction process.
“When you’re talking about whether or not someone is doing something for a retaliatory motive, that gets into what a landlord is thinking — which can be very muddy,” she said.
“The issue is whether or not the rent has been paid.”
Dixon signed the “chattel” bill into law Monday. The law requires landlords to take an evicted tenant’s belongings to a dump. The law also ensures tenants receive 14 days’ notice prior to an eviction.
The measure will improve the image of Baltimore, City Council President Stephanie-Rawlings-Blake said at a news conference Monday. “Children should be able to play outside without running into a living room set.”
Outgoing Councilman Kenneth Harris, D-4th District, who introduced the chattel bill, said: “I don’t know if there is anyone on the council who has the agenda like I did to make sure renters are treated fairly.” (by Stephen Janis, The Examiner)
Unsightly piles of tenants’ furniture dumped on city sidewalks and lack of formal notice for evictions should be a thing of the past in Baltimore City, thanks to a new law just signed by Mayor Sheila Dixon.
But housing advocates said the law is just the first step toward a long-term effort to improve tenants rights.
“The next issue we want to tackle is landlord retaliation,” said John Netherecut, executive director of the Public Justice Center, a housing advocacy group. “We have some of the most lax laws in the country.”
Netherecut, whose organization joined dozen of tenants rights groups to muster support for the new law, said strengthening the laws preventing landlords from evicting tenants who complain or call a housing inspector is next.
“In most states, once the tenant alleges retaliation, that becomes part of a defense in an eviction case,” Netherecut said.
“Then the judge hears the facts from both sides,” he said.
But Kathy Howard, a lobbyist for the Maryland Multi-Housing Association, said any changes to the laws would add confusion to the eviction process.
“When you’re talking about whether or not someone is doing something for a retaliatory motive, that gets into what a landlord is thinking — which can be very muddy,” she said.
“The issue is whether or not the rent has been paid.”
Dixon signed the “chattel” bill into law Monday. The law requires landlords to take an evicted tenant’s belongings to a dump. The law also ensures tenants receive 14 days’ notice prior to an eviction.
The measure will improve the image of Baltimore, City Council President Stephanie-Rawlings-Blake said at a news conference Monday. “Children should be able to play outside without running into a living room set.”
Outgoing Councilman Kenneth Harris, D-4th District, who introduced the chattel bill, said: “I don’t know if there is anyone on the council who has the agenda like I did to make sure renters are treated fairly.” (by Stephen Janis, The Examiner)
Monday, October 1, 2007
Report criticizes Housing Authority for demolishing public housing
The number of occupied public housing units in Baltimore has dropped 42 percent over the past 15 years — from 16,525 to 9,625 — as the Housing Authority of Baltimore City “is now in the demolition business,” according to a report from The Abell Foundation.
“With virtually no plans to replace the deteriorated units being razed or sold, tenant representatives and housing advocates have watched with growing alarm as they wonder if the Housing Authority has abandoned its mission to house the poor,” wrote Joan Jacobson, author of the recent report, “The Dismantling of Baltimore’s Public Housing.”
While more than a quarter of Baltimore families live in poverty, the Housing Authority is removing or demolishing 2,400 homes from its inventory, according to the report.
The report further states the Housing Authority is planning to spend almost twice as much on demolition, $24 million, as it will spend on redevelopment, $14 million, in 2007 and 2008.
People who read this also read:
“Today’s demolition plans offer no sense of hope for Baltimore’s neediest,” Jacobson wrote.
In a lengthy response, the Housing Authority said the report failed to recognize the funding crisis and complex challenges that affect every public housing authority in the nation.
The Housing Authority plans to lease 2,500 new Section 8 units in the next year. The Housing Authority reported funding for public housing decreased 33 percent from 1999 to 2006.
While the number of public housing units has decreased over the years, the Housing Authority has said it has increased its Section 8 vouchers to make up for the loss of units, as reported in The Examiner’s “Housing Matters” series, Sept. 17 and 18.
“The Jacobson report is filled with inaccuracies, distorts the historical record and offers no useful recommendations to respond to the crisis caused by the steady erosion of federal support for public and other types of affordable housing,” the Housing Authority said.
The Abell Foundation is a Baltimore nonprofit dedicated to improving the quality of life in the city.
Recommendations
» The state should pass a fair-housing law that requires landlords to accept Section 8 vouchers, similar to laws in Howard and Montgomery counties.
» A “one-for-one” replacement policy for demolished units should be adopted.
» Developers, city officials and housing experts should study city public housing. (by Andrew Cannarsa, examiner.com)
“With virtually no plans to replace the deteriorated units being razed or sold, tenant representatives and housing advocates have watched with growing alarm as they wonder if the Housing Authority has abandoned its mission to house the poor,” wrote Joan Jacobson, author of the recent report, “The Dismantling of Baltimore’s Public Housing.”
While more than a quarter of Baltimore families live in poverty, the Housing Authority is removing or demolishing 2,400 homes from its inventory, according to the report.
The report further states the Housing Authority is planning to spend almost twice as much on demolition, $24 million, as it will spend on redevelopment, $14 million, in 2007 and 2008.
People who read this also read:
“Today’s demolition plans offer no sense of hope for Baltimore’s neediest,” Jacobson wrote.
In a lengthy response, the Housing Authority said the report failed to recognize the funding crisis and complex challenges that affect every public housing authority in the nation.
The Housing Authority plans to lease 2,500 new Section 8 units in the next year. The Housing Authority reported funding for public housing decreased 33 percent from 1999 to 2006.
While the number of public housing units has decreased over the years, the Housing Authority has said it has increased its Section 8 vouchers to make up for the loss of units, as reported in The Examiner’s “Housing Matters” series, Sept. 17 and 18.
“The Jacobson report is filled with inaccuracies, distorts the historical record and offers no useful recommendations to respond to the crisis caused by the steady erosion of federal support for public and other types of affordable housing,” the Housing Authority said.
The Abell Foundation is a Baltimore nonprofit dedicated to improving the quality of life in the city.
Recommendations
» The state should pass a fair-housing law that requires landlords to accept Section 8 vouchers, similar to laws in Howard and Montgomery counties.
» A “one-for-one” replacement policy for demolished units should be adopted.
» Developers, city officials and housing experts should study city public housing. (by Andrew Cannarsa, examiner.com)
Thursday, August 23, 2007
756 to share $1 million in housing settlement
Advocates for the disabled announced yesterday that 756 people are in line to share $1 million from the settlement of a Baltimore housing discrimination lawsuit.
A victims' compensation fund was established as part of a landmark 2004 settlement in a lawsuit alleging that thousands of people with disabilities were intentionally or illegally excluded from public housing. Other terms of the settlement, worth more than $100 million, include development of more than 1,000 units of public housing accessible to people with disabilities and a program to help them obtain housing.
The parties in the lawsuit - the Maryland Disability Law Center, the U.S. Department of Justice and the Housing Authority of Baltimore City - jointly filed in U.S. District Court yesterday a recommendation to compensate the 756 people. Both the law center and the justice department had sued the housing authority.
Last summer, officials mailed 40,000 notices to potential housing discrimination victims, urging them to take advantage of the compensation fund. Soup kitchens and shelters also held informational meetings about it. About 2,500 claims were filed, said Lauren Young, the disability law center's legal director.
Assuming the court approves the arrangement, each of the identified victims will receive about $1,300 sometime in the next few months, Young said.
"These payments are given to individuals in recognition that their civil rights were violated based on their disabilities," she said in a statement.
Among those recommended for compensation are people who were denied housing because they used wheelchairs, and a person who had requested grab bars and fell repeatedly in the shower.
University of Baltimore's law school is planning to offer financial counseling sessions for recipients of the money. (baltimoresun.com)
A victims' compensation fund was established as part of a landmark 2004 settlement in a lawsuit alleging that thousands of people with disabilities were intentionally or illegally excluded from public housing. Other terms of the settlement, worth more than $100 million, include development of more than 1,000 units of public housing accessible to people with disabilities and a program to help them obtain housing.
The parties in the lawsuit - the Maryland Disability Law Center, the U.S. Department of Justice and the Housing Authority of Baltimore City - jointly filed in U.S. District Court yesterday a recommendation to compensate the 756 people. Both the law center and the justice department had sued the housing authority.
Last summer, officials mailed 40,000 notices to potential housing discrimination victims, urging them to take advantage of the compensation fund. Soup kitchens and shelters also held informational meetings about it. About 2,500 claims were filed, said Lauren Young, the disability law center's legal director.
Assuming the court approves the arrangement, each of the identified victims will receive about $1,300 sometime in the next few months, Young said.
"These payments are given to individuals in recognition that their civil rights were violated based on their disabilities," she said in a statement.
Among those recommended for compensation are people who were denied housing because they used wheelchairs, and a person who had requested grab bars and fell repeatedly in the shower.
University of Baltimore's law school is planning to offer financial counseling sessions for recipients of the money. (baltimoresun.com)
Thursday, August 16, 2007
Md. mortgage program thriving
Nearly 4,000 turned to the state last year for $767 million in low-interest home loans.
Here's a mortgage program that's not in trouble.
Nearly 4,000 homebuyers turned to the state for their home loans last fiscal year, a record for Maryland's 28-year-old loan program at a time of increasing disarray in the mortgage industry.
The state made about $767 million in low-interest loans to buyers, almost all of them purchasing their first home, in the 12 months that ended June 30. That's three-and-a-half times the amount it lent the previous fiscal year - and far above the $269 million record set in the 1995 fiscal year.
Stephen D. Silver, the state Department of Housing and Community Development's chief financial officer, credits timing for the big jump in demand.
The state expanded its "More House 4 Less" offerings a few years ago from a single product to several - 30-, 35- and 40-year mortgages including interest-only loans - but word filtered out slowly.
Meanwhile, first-time homebuyers found their private mortgage options shrinking this year as foreclosures rose and lenders, stung, backed away from borrowers with shaky credit or little money to put down.
"I'm sure we are picking up some people that were being steered toward subprime," said Silver, referring to loans aimed at borrowers with credit problems.
Thus far, the state has fewer delinquent loans than do lenders with mortgages in Maryland insured by the Federal Housing Administration, the state housing and community development agency said.
The state's loans have below-average interest rates - about 6 percent last fiscal year while the market rate was closer to 6.5 percent. Borrowers are also eligible for assistance with down payment and closing costs.
The products are all fixed rate. "We wanted to make sure our borrowers were getting something with no surprises," Silver said.
The state made 3,882 loans last fiscal year, triple the number a year earlier. Though that's a fraction of all new loans, it's a hefty increase at a time of slumping home sales.
Home values, which remain high, are part of the reason homebuyers would flock to a program that offers down payment and closing-cost help. Many first-time buyers are hard pressed to put even 5 percent down. With average sales prices in Maryland at $380,000, a 5 percent down payment would equal $19,000.
Ryan W. James, senior mortgage banker with First Horizon Home Loans in Timonium, said the More House 4 Less loans - sometimes called "CDA" because they're handled by the state's Community Development Administration - have grown in popularity as the state made it easier and quicker to get one.
"CDA had a bad reputation for a long time," said James, who said he now does 10 to 15 of the loans a month and said the processing time is much faster than it once was. "What took weeks with CDA now takes days. ... That helped a lot."
The average More House 4 Less borrower got a loan equaling 99 percent of the value of the home. Nine out of 10 participants got down payment assistance, closing-cost help or both from the state.
Borrowers had to be buying either for the first time or in targeted areas, such as Baltimore City. The average borrower had a household income of about $55,000 and purchased a home priced at almost $200,000.
The state housing agency, which finances its loans with mortgage revenue bonds, said it hasn't run into trouble getting money as investors abandon other parts of the mortgage market. Silver figures that's because the bonds are rated AA and are mostly tax-exempt, and because all the mortgages the state approves have either private or government insurance. (baltimoresun.com)
Here's a mortgage program that's not in trouble.
Nearly 4,000 homebuyers turned to the state for their home loans last fiscal year, a record for Maryland's 28-year-old loan program at a time of increasing disarray in the mortgage industry.
The state made about $767 million in low-interest loans to buyers, almost all of them purchasing their first home, in the 12 months that ended June 30. That's three-and-a-half times the amount it lent the previous fiscal year - and far above the $269 million record set in the 1995 fiscal year.
Stephen D. Silver, the state Department of Housing and Community Development's chief financial officer, credits timing for the big jump in demand.
The state expanded its "More House 4 Less" offerings a few years ago from a single product to several - 30-, 35- and 40-year mortgages including interest-only loans - but word filtered out slowly.
Meanwhile, first-time homebuyers found their private mortgage options shrinking this year as foreclosures rose and lenders, stung, backed away from borrowers with shaky credit or little money to put down.
"I'm sure we are picking up some people that were being steered toward subprime," said Silver, referring to loans aimed at borrowers with credit problems.
Thus far, the state has fewer delinquent loans than do lenders with mortgages in Maryland insured by the Federal Housing Administration, the state housing and community development agency said.
The state's loans have below-average interest rates - about 6 percent last fiscal year while the market rate was closer to 6.5 percent. Borrowers are also eligible for assistance with down payment and closing costs.
The products are all fixed rate. "We wanted to make sure our borrowers were getting something with no surprises," Silver said.
The state made 3,882 loans last fiscal year, triple the number a year earlier. Though that's a fraction of all new loans, it's a hefty increase at a time of slumping home sales.
Home values, which remain high, are part of the reason homebuyers would flock to a program that offers down payment and closing-cost help. Many first-time buyers are hard pressed to put even 5 percent down. With average sales prices in Maryland at $380,000, a 5 percent down payment would equal $19,000.
Ryan W. James, senior mortgage banker with First Horizon Home Loans in Timonium, said the More House 4 Less loans - sometimes called "CDA" because they're handled by the state's Community Development Administration - have grown in popularity as the state made it easier and quicker to get one.
"CDA had a bad reputation for a long time," said James, who said he now does 10 to 15 of the loans a month and said the processing time is much faster than it once was. "What took weeks with CDA now takes days. ... That helped a lot."
The average More House 4 Less borrower got a loan equaling 99 percent of the value of the home. Nine out of 10 participants got down payment assistance, closing-cost help or both from the state.
Borrowers had to be buying either for the first time or in targeted areas, such as Baltimore City. The average borrower had a household income of about $55,000 and purchased a home priced at almost $200,000.
The state housing agency, which finances its loans with mortgage revenue bonds, said it hasn't run into trouble getting money as investors abandon other parts of the mortgage market. Silver figures that's because the bonds are rated AA and are mostly tax-exempt, and because all the mortgages the state approves have either private or government insurance. (baltimoresun.com)
Monday, June 4, 2007
Maryland ranks second in U.S. for larger homes
31.1 percent in Anne Arundel County have at least 4 bedrooms.
Jeaneene Scott, a 44-year-old mortgage lender, moved her family from a Crofton townhome into a five-bedroom home at the Homeport community in Edgewater. Jeaneene Scott never thought she'd own a mansion. But this month, the 44-year-old mortgage lender moved her family from a Crofton townhouse into a five-bedroom home in Edgewater. "It's definitely a dream home," said Ms. Scott. "My son said it's the perfect hide-and-go-seek house."
Anne Arundel ranks eighth statewide, with 31.1 percent of occupied homes with at least four bedrooms, according to a recent U.S. Census Bureau report. And that's a safe sign the demand for McMansions here is still hot.
Calvert County took first place with 42.8 percent of homes equipped with four or more bedrooms. Howard County came in second with 41.9 percent and Charles County followed with 40 percent. Last place went to Baltimore city, which had 11.8 percent.
Anne Arundel's larger housing stock helped Maryland rank second in the nation, with 28 percent of its homes having at least four bedrooms. The state came in just behind Utah with 39.2 percent. Meanwhile, homes are steadily growing on a national basis, with 20 percent of occupied housing units having four or more bedrooms. That's an increase from 17.7 percent in 2000.
John Kortecamp, executive vice president of the Home Builders Association of Maryland, said he thought Anne Arundel County could rank higher if it weren't for zoning rules that limit home construction to "pretty much anything but age-restricted housing."
In Anne Arundel, Winchester Homes is building the larger homes that Ms. Scott and other home buyers are seeking. Winchester's 29-unit Homeport community off Solomons Island Road sells multi-bedroom homes starting around $1.2 million.
The county's affluent population has helped drive demand for the community and roughly 20 Homeport units sold since last summer, said Winchester President Larry Burrows.
"We have good job growth and household incomes, and we have a very educated, sophisticated customer base," he said.
Anirban Basu, chairman and chief executive officer of Sage Policy Group, an economic and policy consulting firm in Baltimore, said the proportion of large homes directly correlates to income levels. Anne Arundel ranks higher on the large-home list because of affluent communities like Severna Park and Annapolis, he said.
But younger buyers have flocked to less expensive areas, such as Odenton and Laurel because they may not have the wealth to purchase a four-bedroom home, or need to, he said.
Mr. Basu said that co-existence of residents with various income levels contributes to Anne Arundel's diverse and robust economy.
"Efficient economies are diverse economics," Mr. Basu said. "It doesn't just take the lawyer or the lobbyist to sit at lunch and have a power meal. Somebody actually has to serve the meal."
Mr. Basu said he expects home size to dwindle thanks to a growing number of empty nesters and baby boomers who want to downsize. The smaller-home trend already is taking place.
Buyers bought 197 county homes with four or more bedrooms last month, down from 273 in April 2005, according to the Metropolitan Regional Information Systems.
Charlie Buckley, a Realtor with Long & Foster who sells waterfront homes in Annapolis, said his clients are empty nesters and baby boomers looking to shed the "six-bedroom home."
These clients are saying "I just sold my big house in Potomac, my kids are grown now," he said.
Mr. Buckley said he's working to fill their needs with a builder who develops 3,000-square-foot waterfront homes that are "top quality" and "priced under $2 million."
"We always sell these houses right away," he said. "These houses have everything you would expect in a 6,000-square-foot house but they're 3,000 square feet." (www.hometownannapolis.com)
Jeaneene Scott, a 44-year-old mortgage lender, moved her family from a Crofton townhome into a five-bedroom home at the Homeport community in Edgewater. Jeaneene Scott never thought she'd own a mansion. But this month, the 44-year-old mortgage lender moved her family from a Crofton townhouse into a five-bedroom home in Edgewater. "It's definitely a dream home," said Ms. Scott. "My son said it's the perfect hide-and-go-seek house."
Anne Arundel ranks eighth statewide, with 31.1 percent of occupied homes with at least four bedrooms, according to a recent U.S. Census Bureau report. And that's a safe sign the demand for McMansions here is still hot.
Calvert County took first place with 42.8 percent of homes equipped with four or more bedrooms. Howard County came in second with 41.9 percent and Charles County followed with 40 percent. Last place went to Baltimore city, which had 11.8 percent.
Anne Arundel's larger housing stock helped Maryland rank second in the nation, with 28 percent of its homes having at least four bedrooms. The state came in just behind Utah with 39.2 percent. Meanwhile, homes are steadily growing on a national basis, with 20 percent of occupied housing units having four or more bedrooms. That's an increase from 17.7 percent in 2000.
John Kortecamp, executive vice president of the Home Builders Association of Maryland, said he thought Anne Arundel County could rank higher if it weren't for zoning rules that limit home construction to "pretty much anything but age-restricted housing."
In Anne Arundel, Winchester Homes is building the larger homes that Ms. Scott and other home buyers are seeking. Winchester's 29-unit Homeport community off Solomons Island Road sells multi-bedroom homes starting around $1.2 million.
The county's affluent population has helped drive demand for the community and roughly 20 Homeport units sold since last summer, said Winchester President Larry Burrows.
"We have good job growth and household incomes, and we have a very educated, sophisticated customer base," he said.
Anirban Basu, chairman and chief executive officer of Sage Policy Group, an economic and policy consulting firm in Baltimore, said the proportion of large homes directly correlates to income levels. Anne Arundel ranks higher on the large-home list because of affluent communities like Severna Park and Annapolis, he said.
But younger buyers have flocked to less expensive areas, such as Odenton and Laurel because they may not have the wealth to purchase a four-bedroom home, or need to, he said.
Mr. Basu said that co-existence of residents with various income levels contributes to Anne Arundel's diverse and robust economy.
"Efficient economies are diverse economics," Mr. Basu said. "It doesn't just take the lawyer or the lobbyist to sit at lunch and have a power meal. Somebody actually has to serve the meal."
Mr. Basu said he expects home size to dwindle thanks to a growing number of empty nesters and baby boomers who want to downsize. The smaller-home trend already is taking place.
Buyers bought 197 county homes with four or more bedrooms last month, down from 273 in April 2005, according to the Metropolitan Regional Information Systems.
Charlie Buckley, a Realtor with Long & Foster who sells waterfront homes in Annapolis, said his clients are empty nesters and baby boomers looking to shed the "six-bedroom home."
These clients are saying "I just sold my big house in Potomac, my kids are grown now," he said.
Mr. Buckley said he's working to fill their needs with a builder who develops 3,000-square-foot waterfront homes that are "top quality" and "priced under $2 million."
"We always sell these houses right away," he said. "These houses have everything you would expect in a 6,000-square-foot house but they're 3,000 square feet." (www.hometownannapolis.com)
Thursday, May 17, 2007
HUD to seek ban on mortgage 'aid'
WASHINGTON // The Department of Housing and Urban Development plans to seek a ban on a certain type of down payment assistance that has grown sevenfold this decade and contributed to a surge in foreclosures of government-backed mortgages.
Nonprofit groups, such as Nehemiah Corp. of America and AmeriDream Inc. of Gaithersburg, Md., provide the down payment help and are then reimbursed by the seller. The programs are "a contributing factor of increased risk in our portfolio" of loans, HUD spokesman Lemar Wooley said in an e-mail.
HUD plans to propose the ban this month for public comment, possibly as early as this week, Wooley said. More than 100,000 low- and moderate-income consumers bought homes using such programs last year.
The percentage of foreclosures on these homes is more than double that on other loans sponsored by the Federal Housing Administration, according to agency audits.
Once HUD issues its rule proposal, industry and consumer groups will have 60 days to submit comments.
In 1999, HUD proposed a similar ban and withdrew it in 2001 after industry opposition.
Foreclosures rose last year in the Baltimore metropolitan area - particularly the suburbs - as problematic loans and a housing market slowdown buffeted new owners with little equity.
But FHA loans weren't part of the problem. HUD records show a significant drop in FHA foreclosures, the result of aggressive efforts to stem the fallout from illegal flipping in the late 1990s.
Vincent P. Quayle, executive director of the St. Ambrose Housing Aid Center, a Baltimore nonprofit that does not offer seller-financed assistance, believes fewer local homebuyers have turned to such programs in the past few years because they can obtain assistance through the city and the state.
But he's still pleased to hear HUD is trying for a ban on seller-financed help. He said buyers paid for that help, literally: "The seller would just raise the price."
Under the program, groups including Sacramento, Calif., Nehemiah and AmeriDream give buyers an average of about $3,400 for a down payment.
They are then reimbursed by sellers of the house, who also pay a service fee. The arrangement was designed to circumvent U.S. rules that bar sellers from giving direct assistance.
Sellers have tried to recover the cost of the fee they pay nonprofits by raising the price of the house an average of 3 percent, a 2005 study by Congress' nonpartisan Government Accountability Office found.
The number of FHA-backed homes purchased with nonprofit assistance has risen to 102,921 in 2006 from 14,603 in 2000, HUD data show. While these payments accounted for just 2 percent of all FHA loans in 2000, they soared to 33 percent of the loans last year.
The Internal Revenue Service held last year that groups providing down payment assistance did not quality for tax exemptions and said it was examining the practices of 185 nonprofits. AmeriDream and Nehemiah said they are in talks with the IRS.
(Bloomberg News, baltimoresun.com)
Nonprofit groups, such as Nehemiah Corp. of America and AmeriDream Inc. of Gaithersburg, Md., provide the down payment help and are then reimbursed by the seller. The programs are "a contributing factor of increased risk in our portfolio" of loans, HUD spokesman Lemar Wooley said in an e-mail.
HUD plans to propose the ban this month for public comment, possibly as early as this week, Wooley said. More than 100,000 low- and moderate-income consumers bought homes using such programs last year.
The percentage of foreclosures on these homes is more than double that on other loans sponsored by the Federal Housing Administration, according to agency audits.
Once HUD issues its rule proposal, industry and consumer groups will have 60 days to submit comments.
In 1999, HUD proposed a similar ban and withdrew it in 2001 after industry opposition.
Foreclosures rose last year in the Baltimore metropolitan area - particularly the suburbs - as problematic loans and a housing market slowdown buffeted new owners with little equity.
But FHA loans weren't part of the problem. HUD records show a significant drop in FHA foreclosures, the result of aggressive efforts to stem the fallout from illegal flipping in the late 1990s.
Vincent P. Quayle, executive director of the St. Ambrose Housing Aid Center, a Baltimore nonprofit that does not offer seller-financed assistance, believes fewer local homebuyers have turned to such programs in the past few years because they can obtain assistance through the city and the state.
But he's still pleased to hear HUD is trying for a ban on seller-financed help. He said buyers paid for that help, literally: "The seller would just raise the price."
Under the program, groups including Sacramento, Calif., Nehemiah and AmeriDream give buyers an average of about $3,400 for a down payment.
They are then reimbursed by sellers of the house, who also pay a service fee. The arrangement was designed to circumvent U.S. rules that bar sellers from giving direct assistance.
Sellers have tried to recover the cost of the fee they pay nonprofits by raising the price of the house an average of 3 percent, a 2005 study by Congress' nonpartisan Government Accountability Office found.
The number of FHA-backed homes purchased with nonprofit assistance has risen to 102,921 in 2006 from 14,603 in 2000, HUD data show. While these payments accounted for just 2 percent of all FHA loans in 2000, they soared to 33 percent of the loans last year.
The Internal Revenue Service held last year that groups providing down payment assistance did not quality for tax exemptions and said it was examining the practices of 185 nonprofits. AmeriDream and Nehemiah said they are in talks with the IRS.
(Bloomberg News, baltimoresun.com)
Monday, May 14, 2007
Fall in Maryland home sales reflects trend across nation
Houses sitting longer on market.
The insider jargon is little consolation to apprehensive homeowners who are tired of seeing ‘‘For Sale” signs languish in their front yards.
Average time on the market for a Montgomery County home was 93 days in March, compared with just 50 days in March 2006. In Prince George’s County, time on the market increased from 40 to 76 days and in Frederick County from 65 to 110 days, according to data from Metropolitan Regional Information Systems Inc.
And the U.S. Commerce Department last week reported that new home sales in March declined by 23.5 percent from March 2006. The news mirrors a similar picture in existing home sales, also released this week by the National Association of Realtors. The group reported an 11.3 percent drop from last March.
Still, housing experts who worked through the 1980s housing slump remain optimistic.
‘‘The drop in existing home sales in Maryland in the first quarter this year from a year ago was a ‘correction’ to a more normal homebuying market,” said Ilene Kessler, president of the Maryland Association of Realtors.
‘‘In 2005 and 2006, there was a lot of interest in buying,” Kessler said. ‘‘It’s now a more balanced market. A lot of people have already bought.”
The market is finding equilibrium, said Frank Armantea, vice president for mortgage lending at Mid-Atlantic Federal Credit Union in Germantown.
‘‘You have to look at it as situational,” Armantea said. ‘‘There are some areas of [Montgomery County] that are quite robust. Some are drawing multiple contracts in the more moderate price ranges.”
Mortgage lender Glen Lazovick with Mid-Atlantic said there are pockets of the county with a shortage of inventory in the $500,000 range, particularly in ‘‘down county Potomac and Bethesda.”
The housing boom that ended last year was unprecedented, in that lending rates did not change much, Armantea said.
Another unusual sign was that traditional pricing trends, such as proximity to Washington, D.C., did not hold, he said. For example, in 2005 some 2,800- to 3,800-square-foot homes in Frederick were selling for the same prices as similar houses in lower Montgomery County, he said.
Last month’s slowdown in Maryland was strange, said Kenneth Wenhold, regional director of Metrostudy of Fairfax, Va., a nationwide housing market survey service.
Sales in January and February were ‘‘considerably stronger” than a year ago, he said. But the last two weeks in March were much slower than expected, possibly due to bad weather and Easter, he speculated.
By last week, though, the number of visitors to model homes and the number of signed contracts had picked up again to about 8 percent higher than the previous week, Wenhold said.
A March 31 survey by Metrostudy showed the inventory of available single-family detached homes and townhouses in Montgomery County was ‘‘very supply-constrained” at 700 units, compared with 1,026 in mid-2004, at the height of the boom. But the inventory had actually increased by more than 10 percent from Dec. 31. Meanwhile, inventory in Prince George’s and Frederick counties decreased considerably since December, Wenhold said.
Metrostudy is ‘‘really quite hopeful that the summer will increase sales as we burn through the remaining inventory and builders have more starts,” he said.
The resale market is down by 15 percent in Maryland and 18 percent in Virginia from the same time last year, according to Metrostudy.
This report originally appeared in The Business Gazette.
Falling Market
In Maryland, existing home sales in March fell 15.7 percent from a year ago, with the following decreases:
Montgomery County:16.4 percent
Frederick County:21.6 percent
Prince George’s County: 31.4 percent
Baltimore city: 8.5 percent
Source: U.S. Commerce Department
(gazette.net)
The insider jargon is little consolation to apprehensive homeowners who are tired of seeing ‘‘For Sale” signs languish in their front yards.
Average time on the market for a Montgomery County home was 93 days in March, compared with just 50 days in March 2006. In Prince George’s County, time on the market increased from 40 to 76 days and in Frederick County from 65 to 110 days, according to data from Metropolitan Regional Information Systems Inc.
And the U.S. Commerce Department last week reported that new home sales in March declined by 23.5 percent from March 2006. The news mirrors a similar picture in existing home sales, also released this week by the National Association of Realtors. The group reported an 11.3 percent drop from last March.
Still, housing experts who worked through the 1980s housing slump remain optimistic.
‘‘The drop in existing home sales in Maryland in the first quarter this year from a year ago was a ‘correction’ to a more normal homebuying market,” said Ilene Kessler, president of the Maryland Association of Realtors.
‘‘In 2005 and 2006, there was a lot of interest in buying,” Kessler said. ‘‘It’s now a more balanced market. A lot of people have already bought.”
The market is finding equilibrium, said Frank Armantea, vice president for mortgage lending at Mid-Atlantic Federal Credit Union in Germantown.
‘‘You have to look at it as situational,” Armantea said. ‘‘There are some areas of [Montgomery County] that are quite robust. Some are drawing multiple contracts in the more moderate price ranges.”
Mortgage lender Glen Lazovick with Mid-Atlantic said there are pockets of the county with a shortage of inventory in the $500,000 range, particularly in ‘‘down county Potomac and Bethesda.”
The housing boom that ended last year was unprecedented, in that lending rates did not change much, Armantea said.
Another unusual sign was that traditional pricing trends, such as proximity to Washington, D.C., did not hold, he said. For example, in 2005 some 2,800- to 3,800-square-foot homes in Frederick were selling for the same prices as similar houses in lower Montgomery County, he said.
Last month’s slowdown in Maryland was strange, said Kenneth Wenhold, regional director of Metrostudy of Fairfax, Va., a nationwide housing market survey service.
Sales in January and February were ‘‘considerably stronger” than a year ago, he said. But the last two weeks in March were much slower than expected, possibly due to bad weather and Easter, he speculated.
By last week, though, the number of visitors to model homes and the number of signed contracts had picked up again to about 8 percent higher than the previous week, Wenhold said.
A March 31 survey by Metrostudy showed the inventory of available single-family detached homes and townhouses in Montgomery County was ‘‘very supply-constrained” at 700 units, compared with 1,026 in mid-2004, at the height of the boom. But the inventory had actually increased by more than 10 percent from Dec. 31. Meanwhile, inventory in Prince George’s and Frederick counties decreased considerably since December, Wenhold said.
Metrostudy is ‘‘really quite hopeful that the summer will increase sales as we burn through the remaining inventory and builders have more starts,” he said.
The resale market is down by 15 percent in Maryland and 18 percent in Virginia from the same time last year, according to Metrostudy.
This report originally appeared in The Business Gazette.
Falling Market
In Maryland, existing home sales in March fell 15.7 percent from a year ago, with the following decreases:
Montgomery County:16.4 percent
Frederick County:21.6 percent
Prince George’s County: 31.4 percent
Baltimore city: 8.5 percent
Source: U.S. Commerce Department
(gazette.net)
Friday, May 11, 2007
Baltimore: Affordable housing at a premium
The Baltimore region lacks a supply of affordable housing, a local housing official said.
BALTIMORE - Work force housing is a key to the future of Baltimore-area real estate. For the housing market to be successful, it must create a system to support people moving from low-income housing to moderate- and then high-income homes, Ilene Kessler, president of the Maryland Association of Realtors, told The Examiner.
Work force housing is at the core of that cycle, creating stable, affordable options for local hardworking residents, she said.
With an influx of middle-class and blue-collar workers coming to the area as a result of the Base Realignment and Closure initiative, finding and identifying housing to meet their needs will be key, Kessler said.
In the Baltimore region, March statistics by Metropolitan Regional Information Systems have houses selling for an average of $306,588. Locally, Anne Arundel County, where Fort Meade is, has homes going for an average of $395,037, while nearby Baltimore City remains more affordable at $178,019. In Harford County, where the Aberdeen Proving Ground is, homes are selling for an average of $296,432.
“The region lacks an adequate supply of housing in decent condition that is available to a wide range of low- and moderate-income households,” said Tania Baker, acting director of communications for Baltimore Housing.
About 28,000 new households will soon move to the area, with about 24,000 of these being homebuyers, the Maryland BRAC study conducted by the Maryland Department of Business and Economic Development found.
With the Mortgage Bankers Association reporting that Maryland had a 12.39 percent increase in subprime loans for the last quarter, Kessler said it was important that people in the housing market work together to keep these potential buyers in their homes.
(examiner.com)
BALTIMORE - Work force housing is a key to the future of Baltimore-area real estate. For the housing market to be successful, it must create a system to support people moving from low-income housing to moderate- and then high-income homes, Ilene Kessler, president of the Maryland Association of Realtors, told The Examiner.
Work force housing is at the core of that cycle, creating stable, affordable options for local hardworking residents, she said.
With an influx of middle-class and blue-collar workers coming to the area as a result of the Base Realignment and Closure initiative, finding and identifying housing to meet their needs will be key, Kessler said.
In the Baltimore region, March statistics by Metropolitan Regional Information Systems have houses selling for an average of $306,588. Locally, Anne Arundel County, where Fort Meade is, has homes going for an average of $395,037, while nearby Baltimore City remains more affordable at $178,019. In Harford County, where the Aberdeen Proving Ground is, homes are selling for an average of $296,432.
“The region lacks an adequate supply of housing in decent condition that is available to a wide range of low- and moderate-income households,” said Tania Baker, acting director of communications for Baltimore Housing.
About 28,000 new households will soon move to the area, with about 24,000 of these being homebuyers, the Maryland BRAC study conducted by the Maryland Department of Business and Economic Development found.
With the Mortgage Bankers Association reporting that Maryland had a 12.39 percent increase in subprime loans for the last quarter, Kessler said it was important that people in the housing market work together to keep these potential buyers in their homes.
(examiner.com)
Tuesday, May 8, 2007
Maryland: Region avoids housing slump
Despite slower sales, prices are still rising in Baltimore area.
Baltimore's cooling housing market should continue to dodge the price slumps that have hit other parts of the country, experts said yesterday.
Home values will continue to gain moderately through the end of the year despite the slowdown in sales, thanks to relatively strong employment and job growth in the region, predicted Gregory H. Leisch, chief executive officer of Washington real estate consulting firm Delta Associates. Leisch presented his forecast at a housing outlook conference held by Metropolitan Regional Information Systems Inc., a Rockville-based real estate listing service that covers parts of Maryland, Washington, Northern Virginia, West Virginia and Pennsylvania.
The median price of a single-family home in the United States dipped 2.7 percent in 2006, compared with a year earlier, Leisch said. But it rose 4.8 percent in the Baltimore area, surpassing price gains in Chicago, New York and Los Angeles, Leisch said, even as the number of homes sold fell 13 percent.
And the average home price remained stable in the first quarter of this year.
The area, which has an unemployment rate below the national average, has been helped by its shift from a manufacturing base to an economy with growth in the medical, education and defense sectors, Leisch said.
"Baltimore was a Rust Belt city and now is one of the best-balanced regional economies," he said, with consistently high job growth and high-quality jobs, and thousands more expected in the next four years from a federal base realignment, know as BRAC, that will bring jobs to Fort Meade and Aberdeen Proving Ground.
"Is that sufficient to support a sturdy housing market? We think so," said Leisch.
The Washington metro area also fared well in the first three months of this year despite a slower pace of sales, according to the MRIS Trends in Housing Report, released in conjunction with the series of forecast conferences, including yesterday's at Martin's West in Baltimore County.
Though prices in the Baltimore region are projected to increase, values are not expected to approach the double-digit gains that persisted into the second quarter of last year.
And the average number of days homes are staying on the market has continued to rise, from 37 days in 2005 to 60 days in 2006 to 93 days in the first three months of this year.
Daraius Irani, the director of the Applied Economics Group at Towson University's Regional Economic Studies Institute and a panelist at yesterday's event, said job growth in Maryland has not been as strong as in past years.
"We are very puzzled by the fact that job growth has been anemic but unemployment is low," he said. "We view it as not enough job candidates are qualified in these high-skill fields.
The flood of new military and related jobs coming from BRAC will likely attract other companies seeking to locate near a concentration of high-tech businesses, Irani said.
Some 40,000 to 60,000 jobs overall are anticipated by 2011, creating an additional 25,000 households in Maryland and generating an estimated $500 million in income and property taxes annually, said Lisa Swoboda, a panelist and deputy director of the Office of Military and Federal Affairs in the state's Department of Business and Economic Development.
(Baltimore Sun)
Baltimore's cooling housing market should continue to dodge the price slumps that have hit other parts of the country, experts said yesterday.
Home values will continue to gain moderately through the end of the year despite the slowdown in sales, thanks to relatively strong employment and job growth in the region, predicted Gregory H. Leisch, chief executive officer of Washington real estate consulting firm Delta Associates. Leisch presented his forecast at a housing outlook conference held by Metropolitan Regional Information Systems Inc., a Rockville-based real estate listing service that covers parts of Maryland, Washington, Northern Virginia, West Virginia and Pennsylvania.
The median price of a single-family home in the United States dipped 2.7 percent in 2006, compared with a year earlier, Leisch said. But it rose 4.8 percent in the Baltimore area, surpassing price gains in Chicago, New York and Los Angeles, Leisch said, even as the number of homes sold fell 13 percent.
And the average home price remained stable in the first quarter of this year.
The area, which has an unemployment rate below the national average, has been helped by its shift from a manufacturing base to an economy with growth in the medical, education and defense sectors, Leisch said.
"Baltimore was a Rust Belt city and now is one of the best-balanced regional economies," he said, with consistently high job growth and high-quality jobs, and thousands more expected in the next four years from a federal base realignment, know as BRAC, that will bring jobs to Fort Meade and Aberdeen Proving Ground.
"Is that sufficient to support a sturdy housing market? We think so," said Leisch.
The Washington metro area also fared well in the first three months of this year despite a slower pace of sales, according to the MRIS Trends in Housing Report, released in conjunction with the series of forecast conferences, including yesterday's at Martin's West in Baltimore County.
Though prices in the Baltimore region are projected to increase, values are not expected to approach the double-digit gains that persisted into the second quarter of last year.
And the average number of days homes are staying on the market has continued to rise, from 37 days in 2005 to 60 days in 2006 to 93 days in the first three months of this year.
Daraius Irani, the director of the Applied Economics Group at Towson University's Regional Economic Studies Institute and a panelist at yesterday's event, said job growth in Maryland has not been as strong as in past years.
"We are very puzzled by the fact that job growth has been anemic but unemployment is low," he said. "We view it as not enough job candidates are qualified in these high-skill fields.
The flood of new military and related jobs coming from BRAC will likely attract other companies seeking to locate near a concentration of high-tech businesses, Irani said.
Some 40,000 to 60,000 jobs overall are anticipated by 2011, creating an additional 25,000 households in Maryland and generating an estimated $500 million in income and property taxes annually, said Lisa Swoboda, a panelist and deputy director of the Office of Military and Federal Affairs in the state's Department of Business and Economic Development.
(Baltimore Sun)
Monday, May 7, 2007
Fighting to Keep the Roof
Fighting to Keep the Roof
Strapped Owners Find Help From Their Lenders
Ernestine Witherspoon managed to hang onto her house in Northeast Washington even after she lost her job and fell far behind on her mortgage payments.
Her lender, Countrywide Home Loans, was weeks away from seizing the house when Witherspoon called, explained her situation, and worked out a plan to repay the $9,800 she owed. She scraped together $3,600 -- only because she landed a new job -- and Countrywide then tacked $25 onto her monthly payments for the life of the loan to make up the difference.
"I was treated well," said Witherspoon, 51, a secretary at a Maryland hospital. "But when you are in the position I was in, you have no choice but to accept the lender's terms if you want to keep your property, and that makes you feel very, very vulnerable."
Witherspoon benefited from the increasing willingness of lenders to help troubled borrowers stay in their homes. After easing lending standards in recent years, mortgage companies are facing a rising tide of late payments and defaults, driven by subprime borrowers with blemished credit or other factors that make them a risk to lenders. More than two dozen subprime lenders have shut down, and the rest of the industry is seeking ways to limit the damage.
"We would much rather work with a borrower than go through the foreclosure process," said Steve Bailey, Countrywide's senior managing director of loan administration. "We lose money on a foreclosure, the borrower is out of their home, and nobody is happy. The math works against us."
The lenders' new leniency works in favor of some borrowers. But to take advantage, homeowners have to move quickly, even if calling a mortgage company seems intimidating or stressful. Many people facing foreclosure simply "shut down" out of fear, says J. Michael Collins, a housing specialist with PolicyLab Consulting Group in Ithaca, N.Y.
"The more stressed people are, the less they're willing to seek help and the less they feel that lenders are helpful," he said.
If homeowners can overcome their anxiety and act soon enough, they have more options that can help avoid foreclosure. Those include refinancing the house, altering the terms of the original loan, filing for bankruptcy protection or even selling the house at a loss. But borrowers lose leverage, credibility and precious time when they try to dodge the lender, as more than half of them do in foreclosure cases, according to a survey by Freddie Mac, one of the largest investors in U.S. mortgages.
"As soon as you see trouble coming, that's the time to take action," said Ric Edelman, a financial planner in Fairfax.
The Equity Factor
If you're a financially troubled borrower, there are a few steps you should consider before contacting your mortgage company, especially if you have not missed a payment. Think about refinancing or taking out a home-equity loan, if you have equity in the property.
If refinancing won't work, identify every opportunity to raise cash. Sell your childhood toy collection on eBay. Rent out a room. Seek help from your church. "Do whatever it takes to raise money. You don't want to tell a creditor that you're having a problem if you can avoid it," especially if all you need is a one-time fix, Edelman said.
Telling a lender about your financial woes could put you at a disadvantage if you have equity in your home, said Jack Guttentag, professor of finance emeritus at the University of Pennsylvania's Wharton School and author of the Mortgage Professor column.
"The lender may tell you to come back after you've missed two payments," Guttentag said. By that time, your credit is shot, making it tough to borrow money elsewhere. If the lender then forecloses, that lender is protected against loss because the equity in your home could cover the loan balance and foreclosure-related costs, he said.
The riskiest borrowers typically don't have much equity, often because they have put little or no money down to buy their homes or have taken out second mortgages. As the housing market has softened, and home prices stagnated, those borrowers have found it hard to sell or refinance their way out of trouble.
Even if they could refinance, many borrowers with subprime loans face steep penalties if they pay off their loans early. Meanwhile, in response to the mortgage crisis, lenders have tightened their standards and made it harder for risky borrowers to qualify for new loans.
"It's a paradox, but the borrower who gets into trouble and has no equity is in a stronger negotiating position with the lender than the borrower who has equity," Guttentag said.
Work With the Lender
If refinancing is not an option, take a look at your mortgage statement and call the company that manages your loan. That call should be made quickly. The more time passes, the more a homeowner's credit tanks, limiting a lender's ability to work out a payment plan.
Lenders tend to be most amenable to the possibility of a forbearance, in which they suspend or reduce payments for a few months and then tack on portions of those payments to future ones. They will also consider lowering monthly interest rates, extending the life of the loan or altering the loan in some other way.
"Borrowers should seek modifications," said Allen Fishbein, director of housing and credit policy at the Consumer Federation of America. "But the modification should not just keep the wolf away for a while longer. It should actually create an affordable loan."
So far, the number of mortgages modified has been modest. But the numbers are expected to rise substantially as more adjustable-rate mortgages begin to reset at higher rates at year's end, says Rod Dubitsky, an analyst at Credit Suisse.
"Right now, many people experiencing a reset have a lot of equity because of home-price appreciation at the end of 2005," said Dubitsky. "By the end of this year, fewer and fewer borrowers will have equity to refinance or sell their homes."
Lenders say it's in their interest to work with borrowers. Servicing a healthy loan costs them about $50 a year, and managing a delinquent or foreclosed one costs them about $1,000 and $2,000, respectively, said Robert Lacoursiere, an analyst at Banc of America Securities.
However, that does not mean there's a solution for every troubled borrower. Homeowners whose incomes cannot support their mortgage may get nothing more than a sympathetic ear -- if that -- from whoever handles their mortgage. The ultimate solution may be to walk way from the house.
"There's no incentive to work out payment arrangements if it only delays the inevitable," said Greg McBride, senior financial analyst at Bankrate.com, a personal finance Web site.
Instead, the borrower may be able to arrange a "short sale." With the mortgage holder's permission, a borrower can sell a home for less than the amount due on the loan and turn over the proceeds to the lender.
If the lender has reason to believe it can extract more value from the house, possibly by negotiating lower commissions from the agent involved, it may ask the homeowner to give it the deed of the house, surrender ownership rights and leave the property. This transaction is called a "deed in lieu of foreclosure."
To entice homeowners to leave quickly, some firms might even offer "cash for keys" -- a small sum of money that can help defray moving costs.
For lenders, all these deals typically reduce the cost of taking possession of the house.
In return, borrowers can shed their loan obligations, spare themselves the humiliation of a public foreclosure notice and protect their credit record. A short sale and a deed in lieu of foreclosure are far less damaging to a consumer's credit than an outright foreclosure.
But pay attention, says Richard Gottlieb, a consumer financial services attorney at Dykema Gossett. "A lender has every right to proceed against a borrower for the balance due on the mortgage loan," he said. "A borrower with significant assets is still at risk."
As a practical matter, most lenders will accept whatever money they get from a short sale or a deed in lieu of foreclosure, but borrowers need to make sure when they walk away that they are released of all financial obligations for the loan, consumer advocates said. That release should be put in writing.
If the lender forgives the shortfall, that has tax implications because it is considered income for the borrower, said Steven M. Buckman, a real estate attorney in the District. "And any time you have income, you have to pay income tax on it, federal and state." Lenders are required by law to report canceled debt to the IRS, and borrowers should be sure to get a statement of how much was forgiven on the loan.
A Last Resort
Anita McKenzie's lender suggested she do a short sale. But McKenzie does not want to walk away from her home. She said when she bought her townhouse in Germantown less than a year ago, she believed her agent and broker, who told her she could immediately refinance into a more affordable mortgage.
The refinancing never came through, leaving her stuck with a $3,650 monthly payment on her $40,000 salary. McKenzie fell behind on her payments. She's in danger of losing her house this summer.
"I don't know what to do except file for bankruptcy," said McKenzie, who has been working with HomeFree-USA, a housing counseling agency in the District.
McKenzie's counselor advised against it. Like many consumer advocates, she argues that bankruptcy proceedings should be used as a last resort because they damage a filer's credit, though less so than a foreclosure.
But in some situations, a bankruptcy filing makes sense, says Steven Ramsdell, a bankruptcy attorney in Alexandria.
"For people who have missed house payments, their credit has usually been dinged up already," Ramsdell said. "The credit ramifications of saving a house through bankruptcy should not be a deterrent if they can in fact save it."
Before filing for bankruptcy protection, consumers must attend credit-counseling sessions held by designated groups throughout the country.
Once they do, said Ramsdell, the kind of bankruptcy protection most effective in saving homes is Chapter 13, which immediately halts a foreclosure sale and freezes all collection actions for debts that predated the bankruptcy filing.
The court then approves a repayment plan that determines which creditors get paid back and when.
Under that arrangement, a person has up to five years to pay missed mortgage payments, essentially forcing the lender into a repayment plan and forcing a time frame that most lenders would not otherwise accept, Ramsdell said.
But while trying to make good on past debt, filers must keep up with their regular mortgage payments and other living expenses. For people without sufficient cash flow to make those payments -- plus contribute to the late ones -- this course of action is futile, Ramsdell says. It also makes no sense to file for bankruptcy protection when the house is worth less than the mortgage balance.
"If you owe $480,000 on a house that's worth only $400,000, it may not make sense to hang onto the house," Ramsdell said. "That's a hard thing for people to accept."
(Dina ElBoghdady, Washington Post)
Strapped Owners Find Help From Their Lenders
Ernestine Witherspoon managed to hang onto her house in Northeast Washington even after she lost her job and fell far behind on her mortgage payments.
Her lender, Countrywide Home Loans, was weeks away from seizing the house when Witherspoon called, explained her situation, and worked out a plan to repay the $9,800 she owed. She scraped together $3,600 -- only because she landed a new job -- and Countrywide then tacked $25 onto her monthly payments for the life of the loan to make up the difference.
"I was treated well," said Witherspoon, 51, a secretary at a Maryland hospital. "But when you are in the position I was in, you have no choice but to accept the lender's terms if you want to keep your property, and that makes you feel very, very vulnerable."
Witherspoon benefited from the increasing willingness of lenders to help troubled borrowers stay in their homes. After easing lending standards in recent years, mortgage companies are facing a rising tide of late payments and defaults, driven by subprime borrowers with blemished credit or other factors that make them a risk to lenders. More than two dozen subprime lenders have shut down, and the rest of the industry is seeking ways to limit the damage.
"We would much rather work with a borrower than go through the foreclosure process," said Steve Bailey, Countrywide's senior managing director of loan administration. "We lose money on a foreclosure, the borrower is out of their home, and nobody is happy. The math works against us."
The lenders' new leniency works in favor of some borrowers. But to take advantage, homeowners have to move quickly, even if calling a mortgage company seems intimidating or stressful. Many people facing foreclosure simply "shut down" out of fear, says J. Michael Collins, a housing specialist with PolicyLab Consulting Group in Ithaca, N.Y.
"The more stressed people are, the less they're willing to seek help and the less they feel that lenders are helpful," he said.
If homeowners can overcome their anxiety and act soon enough, they have more options that can help avoid foreclosure. Those include refinancing the house, altering the terms of the original loan, filing for bankruptcy protection or even selling the house at a loss. But borrowers lose leverage, credibility and precious time when they try to dodge the lender, as more than half of them do in foreclosure cases, according to a survey by Freddie Mac, one of the largest investors in U.S. mortgages.
"As soon as you see trouble coming, that's the time to take action," said Ric Edelman, a financial planner in Fairfax.
The Equity Factor
If you're a financially troubled borrower, there are a few steps you should consider before contacting your mortgage company, especially if you have not missed a payment. Think about refinancing or taking out a home-equity loan, if you have equity in the property.
If refinancing won't work, identify every opportunity to raise cash. Sell your childhood toy collection on eBay. Rent out a room. Seek help from your church. "Do whatever it takes to raise money. You don't want to tell a creditor that you're having a problem if you can avoid it," especially if all you need is a one-time fix, Edelman said.
Telling a lender about your financial woes could put you at a disadvantage if you have equity in your home, said Jack Guttentag, professor of finance emeritus at the University of Pennsylvania's Wharton School and author of the Mortgage Professor column.
"The lender may tell you to come back after you've missed two payments," Guttentag said. By that time, your credit is shot, making it tough to borrow money elsewhere. If the lender then forecloses, that lender is protected against loss because the equity in your home could cover the loan balance and foreclosure-related costs, he said.
The riskiest borrowers typically don't have much equity, often because they have put little or no money down to buy their homes or have taken out second mortgages. As the housing market has softened, and home prices stagnated, those borrowers have found it hard to sell or refinance their way out of trouble.
Even if they could refinance, many borrowers with subprime loans face steep penalties if they pay off their loans early. Meanwhile, in response to the mortgage crisis, lenders have tightened their standards and made it harder for risky borrowers to qualify for new loans.
"It's a paradox, but the borrower who gets into trouble and has no equity is in a stronger negotiating position with the lender than the borrower who has equity," Guttentag said.
Work With the Lender
If refinancing is not an option, take a look at your mortgage statement and call the company that manages your loan. That call should be made quickly. The more time passes, the more a homeowner's credit tanks, limiting a lender's ability to work out a payment plan.
Lenders tend to be most amenable to the possibility of a forbearance, in which they suspend or reduce payments for a few months and then tack on portions of those payments to future ones. They will also consider lowering monthly interest rates, extending the life of the loan or altering the loan in some other way.
"Borrowers should seek modifications," said Allen Fishbein, director of housing and credit policy at the Consumer Federation of America. "But the modification should not just keep the wolf away for a while longer. It should actually create an affordable loan."
So far, the number of mortgages modified has been modest. But the numbers are expected to rise substantially as more adjustable-rate mortgages begin to reset at higher rates at year's end, says Rod Dubitsky, an analyst at Credit Suisse.
"Right now, many people experiencing a reset have a lot of equity because of home-price appreciation at the end of 2005," said Dubitsky. "By the end of this year, fewer and fewer borrowers will have equity to refinance or sell their homes."
Lenders say it's in their interest to work with borrowers. Servicing a healthy loan costs them about $50 a year, and managing a delinquent or foreclosed one costs them about $1,000 and $2,000, respectively, said Robert Lacoursiere, an analyst at Banc of America Securities.
However, that does not mean there's a solution for every troubled borrower. Homeowners whose incomes cannot support their mortgage may get nothing more than a sympathetic ear -- if that -- from whoever handles their mortgage. The ultimate solution may be to walk way from the house.
"There's no incentive to work out payment arrangements if it only delays the inevitable," said Greg McBride, senior financial analyst at Bankrate.com, a personal finance Web site.
Instead, the borrower may be able to arrange a "short sale." With the mortgage holder's permission, a borrower can sell a home for less than the amount due on the loan and turn over the proceeds to the lender.
If the lender has reason to believe it can extract more value from the house, possibly by negotiating lower commissions from the agent involved, it may ask the homeowner to give it the deed of the house, surrender ownership rights and leave the property. This transaction is called a "deed in lieu of foreclosure."
To entice homeowners to leave quickly, some firms might even offer "cash for keys" -- a small sum of money that can help defray moving costs.
For lenders, all these deals typically reduce the cost of taking possession of the house.
In return, borrowers can shed their loan obligations, spare themselves the humiliation of a public foreclosure notice and protect their credit record. A short sale and a deed in lieu of foreclosure are far less damaging to a consumer's credit than an outright foreclosure.
But pay attention, says Richard Gottlieb, a consumer financial services attorney at Dykema Gossett. "A lender has every right to proceed against a borrower for the balance due on the mortgage loan," he said. "A borrower with significant assets is still at risk."
As a practical matter, most lenders will accept whatever money they get from a short sale or a deed in lieu of foreclosure, but borrowers need to make sure when they walk away that they are released of all financial obligations for the loan, consumer advocates said. That release should be put in writing.
If the lender forgives the shortfall, that has tax implications because it is considered income for the borrower, said Steven M. Buckman, a real estate attorney in the District. "And any time you have income, you have to pay income tax on it, federal and state." Lenders are required by law to report canceled debt to the IRS, and borrowers should be sure to get a statement of how much was forgiven on the loan.
A Last Resort
Anita McKenzie's lender suggested she do a short sale. But McKenzie does not want to walk away from her home. She said when she bought her townhouse in Germantown less than a year ago, she believed her agent and broker, who told her she could immediately refinance into a more affordable mortgage.
The refinancing never came through, leaving her stuck with a $3,650 monthly payment on her $40,000 salary. McKenzie fell behind on her payments. She's in danger of losing her house this summer.
"I don't know what to do except file for bankruptcy," said McKenzie, who has been working with HomeFree-USA, a housing counseling agency in the District.
McKenzie's counselor advised against it. Like many consumer advocates, she argues that bankruptcy proceedings should be used as a last resort because they damage a filer's credit, though less so than a foreclosure.
But in some situations, a bankruptcy filing makes sense, says Steven Ramsdell, a bankruptcy attorney in Alexandria.
"For people who have missed house payments, their credit has usually been dinged up already," Ramsdell said. "The credit ramifications of saving a house through bankruptcy should not be a deterrent if they can in fact save it."
Before filing for bankruptcy protection, consumers must attend credit-counseling sessions held by designated groups throughout the country.
Once they do, said Ramsdell, the kind of bankruptcy protection most effective in saving homes is Chapter 13, which immediately halts a foreclosure sale and freezes all collection actions for debts that predated the bankruptcy filing.
The court then approves a repayment plan that determines which creditors get paid back and when.
Under that arrangement, a person has up to five years to pay missed mortgage payments, essentially forcing the lender into a repayment plan and forcing a time frame that most lenders would not otherwise accept, Ramsdell said.
But while trying to make good on past debt, filers must keep up with their regular mortgage payments and other living expenses. For people without sufficient cash flow to make those payments -- plus contribute to the late ones -- this course of action is futile, Ramsdell says. It also makes no sense to file for bankruptcy protection when the house is worth less than the mortgage balance.
"If you owe $480,000 on a house that's worth only $400,000, it may not make sense to hang onto the house," Ramsdell said. "That's a hard thing for people to accept."
(Dina ElBoghdady, Washington Post)
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