Along the Way Home

Here is a film,  Along the Way Home, created by a coalition of Maine housing agencies that discusses the Section 8 program.



Unfortunately, the Google beta captioning is having an especially hard time with this video, producing gibberish, so I don't have any idea what it actually says.  Be sure to leave a review in the comments!

Effects of Foreclosure crisis

Tom Daykin reports that apartment vacancy rate has gone down to 4.8% in the Milwaukee area.

The report also says asking rents and effective rents will rise 1.2% and 2%, respectively, to $813 per month and $780 per month.

I'm not sure how "Milwaukee area" is defined as I don't have access to the original Marcus & Milichap Real Estate Investment Services report, but the creation of 640 new units in 2010 probably is mostly City of Milwaukee as rural areas generally are unable to provide water & sewer service to multi-family housing and some suburban communities have a "housing mix" policy that essentially restricts the development of multi-family housing for the near future.

While this is a relatively small change, it's probably an indicator that people displaced by foreclosures are increasingly renting (although many probably are living with families/friends temporarily).

From my perspective, the creation of new multi-family housing, even when high-priced luxury housing, is a good thing as it increases the number of units covered by the Fair Housing Act's accessibility requirements.  Single-family market-rate housing has no state or federal accessibility requirements.

Good News on Overflow Shelter

It appears that there is, at least, a temporary home for the overflow shelter that used to be at the St. Matthias Episcopal Church the past few winters. With a six-month lease in place and ongoing negotiations for a purchase, things are looking up for people who are homeless this winter.

Here's to hoping the relatively warm weather lasts until they're able to open.

Rehabilitation of old Health Clinic into new housing

An old medical clinic in the south side of Milwaukee got a second life as a studio apartment building providing supportive housing for people who were homeless.  Mercy Housing Lakefront , a non-profit in Chicago, put together the financing to make the project happen, with services being provided by Hope House of Milwaukee (disclosure: I am a board member).

Supportive housing has been proven to work better than any of the alternative, as part of the rapid re-housing strategy being embraced nation-wide to get people who are homeless off the streets as soon as possible. 

Congratulations to Mercy Housing Lakefront and to Hope House for the successful grand opening, and many thanks to the many people who made this happen.

Chart showing how ridiculous the mortgage process is

Check out this Huffington Post for a staggeringly ridiculous chart (trust me, you gotta take a look!).  Originally shown at Zero Hedge, one cannot help but feel that there is something nefarious about all the extended activities connected with the (relatively) simple act of purchasing a home.

Also, if you note on the right side of the chart, there is mention of Mortgage Electronic Registration Systems (MERS).  I'm no expert, but it looks like MERS, which was created as a convenience to the big lenders, partly to avoid the recording fees charged by counties and states to record the change in ownership, was run so sloppily it caused many problems.  For one, MERS cannot claim to be both the agent for the bank and the actual owner of the mortgage when proceeding upon foreclosures.  I've read horror stories on many blogs about MERS encouraging agents to give themselves titles ("Vice President") and courts have wondered how a single person could be an officer of multiple companies at the same time.

Mortgage Interest Deduction reform

An interesting blog by Kevin Drum on the mortgage interest deduction.  Apparently this homeownership subsidy disproprotionately benefit high-income households.  Low-income households generally don't own, while middle-class households don't have mortgages that big.  But high-income households generally are homeowners and they benefit greatly from the mortgage interest deduction.

This begs the question, of course-why do we have it at all?  If high-income generally are homeowners, do they really need this deduction as an incentive to purchase a home?

That doesn't mean people are suggesting we eliminate it entirely (OK, maybe some are), but suggestions range from replacing it with a tax credit to capping the home price to limit the deduction.

Aurora eliminating 175 positions

The Freeman reports (link may not be active for long) that Aurora Health Care is eliminating 175 positions. 
Forty positions in Summit will be affected.

This is what grabbed my eye, emphasis mine.

“I’ve talked to you numerous times over the past two years about the economy. It’s still an issue, for us and other health care systems in our state. Overall fewer patients are visiting our hospitals, we have more bad debt, more charity care, increased levels of Medicaid with its associated low reimbursement and increased pension costs,” he wrote. “The impact from these economic factors on our financial performance is significant. For increased pension costs and higher levels of Medicaid, it’s $100 million this year alone.”

Bad debt and charity care should be less of a factor in the future as more of the health care reform begins.  As more and more people are covered by insurance, bad debt and charity care should decrease, and people will not be as reluctant to visit hospitals when needed.  As more people have access to health care, our overall health should increase as more preventive care is used rather than last-minute emergency room visits that basically only can put a band-aid on long-term problems.
Despite the announced cuts, Aurora Health Care President and CEO Nick Turkal stated that "the number of caregivers we employed at the end of 2009 have risen more than 5 percent year to date." 

Segregation & Foreclosures

Somewhat related to my previous post, here's an interesting article from HuffingtonPost that someone sent me.  But first, let's be clear where the blame lies:

The guilty parties in the foreclosure crisis are many: greedy homeowners, unscrupulous investors, lax underwriters, asleep-at-the-wheel regulators, sloppy mortgage servicers, and more. No doubt all share in the blame.

Focusing on lenders, it's evident that too many lenders do not act ethically, as evidenced by this:

...when subprime lending peaked in 2006, just 18% of white borrowers received subprime loans compared to 54% of African Americans. An unfortunate irony, as the Wall Street Journal reported in 2007, is that over 60% of subprime borrowers had credit scores that qualified them for prime loans, underscoring the discriminatory nature of the marketing.

The article discusses the effect of segregation, and how it allows subprime lenders to target heavily segregated areas.

Discriminatory lending patterns do not happen by chance. As the National Community Reinvestment Coalition has reported, in recent years racial minorities and minority communities were deliberately targeted by predatory lenders for subprime lending. The more segregated a metropolitan area is, of course, the easier it is to find exploitable clients. Segregation creates natural pockets of financially unsophisticated, historically underserved, poor minority homeowners who are ripe for exploitation.

Milwaukee metro area, of course, is one of the most segregated in the United States, so the foreclosure crisis will be with us for a long time.

Depressing realization

I subscribe to a newspaper.  Yes, one of those paper & ink newspapers.  I'd fallen behind on my reading and was catching up yesterday going through multiple issues.  Halfway though, I realized that the legal notices section seemed to be bigger lately, and took a look.

It was nearly all foreclosures & sheriff's sales.  I've known for a long time that foreclosures have been a problem in the metro area and across the nation, but for some reason, reading it in the newspapers, seeing the addresses, somehow made it more real.

Many of those homes were someone's dream, a very exciting and proud moment in someone's life, the result of years of saving and budgeting.  Then because of a bad economy, job loss, health reasons, or a predatory loan, those homes are being lost.