Culver in Iowa City For Jumpstart Bill Signing

According to the a press release from the governor's office via RIO (Rebuiding Iowa Office) Governor Chet Culver signed legislation today in iowa City to help homeowners affected by last year’s flood. Senate File 289 reduces the amount of time, from 10 years to 5 years, state-funded Jumpstart Iowa recipients must stay in their homes before their entire Jumpstart loan is forgiven.

“Last fall, when so many Iowans were struggling to recover from the floods and storms of 2008, state government took steps to help rebuild our state by creating the Jumpstart Iowa program, which included millions of dollars to help homeowners get back on their feet,” said Governor Culver. “With my signature, we are easing the administrative process on families and homeowners – to make this program more user-friendly, and to reduce the burdens loan recipients face. This is one of many steps we’ve collectively taken to rebuild Iowa and to help our state come out of the disaster of 2008 safer, stronger, and better.

In September, Governor Culver created the Jumpstart Program to help home and business owners affected by last year’s flooding and severe weather. One of the first major steps the State took to help homeowners and small businesses hurt by last year’s floods was to create the Jumpstart Business and Housing Initiative. Among Iowa’s small businesses, a total of 1,064 have applied for the program. 856 have been approved for Jumpstart assistance, and 677 have already received a check.

The second component – the Jumpstart Housing Program – provided homeowners 10 year forgivable loans for repairing their damaged structure or purchasing a new house; to date, a total of 2,471 homeowners have been approved for help. Jumpstart has obligated a total of $42.7 million, with an average award of $17,263 to Iowa homeowners. Under SF 289, Governor Culver and the legislature are helping homeowners by reducing the terms of these forgivable loans to 5 years. The legislation was passed unanimously by the House and Senate

National Housing Prices Continue Record Slide

From Builder Online

Single-family, existing-home prices fell 6.7 percent in the nation's 10 largest cities in October from the same period in 2006 according to the Standard & Poor's S&P/Case-Shiller home price index, which was released Tuesday morning. The index also revealed that prices fell 6.1 percent in 20 U.S. Metropolitan Statistical Areas (MSAs).

The Standard & Poor's/Case-Schiller home price index tracks the prices of existing single-family homes in Atlanta, Boston, Charlotte, N.C., Chicago, Cleveland, Dallas, Denver, Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, Portland, Ore., San Diego, San Francisco, Seattle, Tampa, Fla., and Washington, D.C.

According to Robert J. Shiller, chief economist at MacroMarkets, and one of the creators of the index, the data released by the monthly study shows that the "current state of the single-family housing market remains grim."

"Not only did the 10-city composite post a record low in its annual growth rate, but 11 of the 20 metro areas did the same," Shiller says. "If you look at the monthly figures, every MSA went down in both October and September. Eleven of the 20 MSAs, in addition to the two composites, recorded their single largest monthly decline on record in October. For both the 10-city and 20-city composites this was a decline of 1.4 percent over September"

The 6.7 percent year-over-year drop in the 10-city index surpassed the previous record of a 6.3 percent slide in April 1991 and the 20-city index decline is the most in six years. Overall, prices retreated in 17 of the 20 cities covered and in 11 cities, prices fell at record year-over-year rates.

Patrick Newport, an economist for Global Insight, a Massachusetts-based economic and financial analysis firm, says job losses and overbuilding may have played a role in the price declines in Las Vegas, Miami, Tampa, and Detroit. Newport also predicts continued declines in the near future.

"Local conditions will play a key role in what happens to house prices. In some cities, prices will collapse. In others, they may continue to rise," Newport said in a note. "We think that the sum of these forces will drive nominal house prices down about 10 percent over the next two to three years,"

Add to this this the confidence of a recovery according to a recent Gallup poll. According to "the results of the Dec. 10-13 survey suggest that Americans believe the housing slump will not end anytime soon. Only 18% believe the market will recover within the next six months (3%) or the next year (15%). Close to half, 46%, believe it will be two to three years before the housing problems are overcome. And roughly one in three are even more pessimistic, believing the problems brought on by the wave of foreclosures fueled by subprime mortgages will continue to affect the economy for four years or longer."

Buddy Can You Voluntarily Spare a Dime?

Not one to interfere with the free market, President Bush via Treasury Secretary Henry Paulson has come up with a scheme that looks good on paper, but rewards mortgage lenders for poor past behavior while leaving 2 million consumers at risk.

While lenders may voluntarily keep adjustable rates in place for 5 years, they do not have to convert them to fixed rate mortgages that would provide stability to the consumer in the long run. What this means is that the consumer's mortgage may not be raised (if the mortgage lender voluntarily agrees and the person have never missed a payment), but after 5 years their mortgages may balloon anyway.

From the AP

The Bush administration has come up with a plan to help strapped homeowners facing a daunting jump in their monthly mortgage payments.

The proposal, reached in negotiations led by Treasury Secretary Henry Paulson with the mortgage industry, would freeze introductory "teaser" rates on subprime mortgages, preventing them from resetting to higher rates for five years. White House deputy press secretary Tony Fratto said it would help "potentially a little more than a million" people who can afford payments with their introductory rates, but not if they jump to higher rates.

He said it was voluntary, and did not represent federal intrusion into the private market.
President Bush, who was to announce the agreement after a meeting with industry leaders at the White House on Thursday, has stressed that the deal is not a bailout because no government money is involved.

The effort is aimed at stemming a threatened wave of foreclosures in coming years as 2 million subprime mortgages _ loans provided to borrowers with spotty credit histories _ reset from their introductory rates of around 7 percent to 8 percent to levels as high as 11 percent, adding hundreds of dollars to the typical monthly payment.

The mortgage companies will offer to freeze the loans at the lower introductory rates as long as the borrowers did not miss any payments at the lower rate.

The program is the biggest effort yet to deal with a tidal wave of mortgage defaults, which have piled up billions of dollars in losses for big banks, hedge funds and other investors while roiling financial markets around the globe. The defaults are the latest economic blow from the worst housing slump in more than two decades. Some economists think the housing bust may become severe enough to push the country into recession.

Two Democratic presidential contenders, Hillary Rodham Clinton and John Edwards, complained Wednesday that, given the risks to the economy, Bush's proposal did not go far enough. They proposed their own plans that would not only freeze mortgage payment rates but also declare moratoriums on further foreclosures to add pressure on lenders to reach at-risk homeowners.

The financial services industry applauded the administration for negotiating a plan that will allow free-market forces to operate. The hope is that the five-year freeze will buy time for the housing industry to work down record levels of unsold homes and for sales and prices to start rising again.

A housing rebound would enable homeowners to refinance their current adjustable rate mortgages into fixed-rate loans with more affordable monthly payments.

More from the NY Times

Mortgage Rate Jumps May Put Out More Home Owners and Housing Bills to Watch

A recent surge in defaults on subprime mortgages and a slump in the housing market have caused growing concern over the state of the U.S. economy. Supbrime mortgages are high-risk loans given to people with weak credit histories. Some lenders have been forced into bankruptcy as a result, and the effect has been felt in other sectors of the economy. Adding to the concern is that many other adjustable-rate mortgages—perhaps 2 million—are scheduled to increase over the next year, which could cause many borrowers to lose their homes. .

Here are some bills in Congress dealing with housing:

S.788, the Moving to Work Charter Program Act of 2007: Bill would authorize the Moving to Work Charter program to enable public housing agencies to improve the effectiveness of Federal housing assistance.

S.1078, the Housing America's Workforce Act: Housing America's Workforce Act - Amends the Internal Revenue Code to allow employers a business tax credit for up to 50 percent of the qualified housing expenses paid for the benefit of their employees. Defines "qualified housing expenses" to include homeownership assistance and rental assistance. Limits the amount of such credit to the lesser of $10,000 or six percent of an employee's home purchase price, or up to $2,000 for rental assistance.

H.R. 1227, to assist in the provision of affordable housing to low-income families affected by Hurricane Katrina

Keeping Affordable Multifamily Housing

In Iowa City affordable housing is typically discussed in terms of public safety officers and teachers, but the most at risk group of people are those hovering on the edges of poverty. Before homeownership is an option, they need affordable rental housing/transitional housing. But since the late 1980's, there has been a "war on poverty" of a different feather:

u- Nationally, housing prices increased over 20% over past 7 years; wages increased 2% in real terms.

u- More than ½ of our nation’s carpenters, kindergarten teachers, groundskeepers, retail clerks, and other service workers pay more than half of their income for rent, the HUD standard for housing is 30% of your income.

u- The number of apartments affordable to those who earn less than $16,000/yr. fell by 13% or 1.2 million between 1993 and 2003.

u- We lose hundreds of thousands of affordable apartments per year. 300,000 apartments (15% of the total) has been lost nationwide to the affordable housing inventory dedicated to serving poor people since 1995

- According to the National Housing trust, more than 2,500 affordable apartments have been lost from Iowa’s affordable housing inventory between 1995-2003.

At the Iowa City Public Library on 4/24 from 7 to 8:30 pm, Michael Bodaken, president of the National Housing Trust and an expert in the area of affordable multifamily housing will be discussing "Affordable Multifamily Housing: Exploring Solutions". There will be a Question and Answer period after the presentation.

The event is sponsored by FAIR and the Housing Trust Fund of Johnson County. It is free and open to the public. Refreshments will be served.

What a Little Faith in Johnson County Can Do

Since last January, a small group of committed individuals from different faith groups has been working to address homelessness in Johnson County. Below is a summary of their successes put together by organizer Bob Untiedt. Some question the heart and soul of faith-based initiatives, myself included at times. However, it is important to note that many of the participants are members of "liberal" churches, synagogues, and mosques.

Events/outcomes of homeless organizing in Johnson County since 2006
-----------------------------------------------------------

Jan. 2006: 125 people meet with Mayors of Iowa City & North Liberty, and Vice- Mayor of Coralville, in a reflective meeting on values around housing.

Spring 2006: education, research efforts, and mobilizing occur.  We agree to ask for a 20% Inclusionary Zoning Ordinance, annual support starting in 2007 of $70,000 for Shelter House, a one-time grant of $50,000 for Shelter House to help match a federal grant, and a transit study for seniors.

April 30, 2006: 650 people, media, and government leaders from Coralville, Iowa City, and Johnson County gather. Few commitments are made, but this gets noticed.

Summer/Fall 2006: irregular gatherings occur of various church people. Over the summer, especially, a handful of people speak at the Coralville City Council meeting.  We consider and reject another large public meeting in the fall.

December, 2006: led by the Shelter House, 35 or so people from this group and other Shelter House volunteers attend an Iowa City City Council meeting, to request increased funding in the 2007 budget.

Spring 2007: big news! Iowa City funds Shelter House and its programs a total of $41,147 (up from just over $16,000 the last two years)!!! Johnson County increases funding from $8721 to $51,721!!! Coralville (as yet this is a rumor) may be doubling its historic support, from $2000 to $4000.  WE HAVE MADE A DIFFERENCE.

Also: this may be coincidence, or maybe not. Fr. Ken Kuntz acted to request Sen. Robert Dvorsky of Coralville look into why the State Supreme Court was holding up consideration of the Shelter House case.  Sen. Dvorsky was amenable to that request, and as he's on the state Senate Judiciary Committee, may have gotten a better-than-average response.  Call it coincidence, but two days after that  request by Fr. Ken: the Supreme Court set a date for the next hearing. Again, our actions have made a difference.

In early April, 2007, we met with Amy Corriea of the Iowa City City Council, on her request.  She noted that we were very effective and that we should "keep going".  We need to engage the decision of Iowa City to disinvest in affordable housing on the southeast side.  We are moving forward with requesting support from Cornell College for mapping the density of affordable housing by census tract, and also begin a process of discernment around creating a new nonprofit faith-based community organization in Johnson and Linn Counties.  Our next meeting will be called after the Supreme Court acts, or in early fall, whichever comes first.

The care and action of ordinary people does make a difference. Ask city and county government leaders.  Ask Shelter House employees.  Most importantly, ask the persons whom Shelter House serves.  Along with the continued commitment of persons of faith here in the Emergency Shelter - and the other ways in which we have acted to care for "the least of these" - we should be
grateful for the good of which we have been a part.

"Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has."
- Margaret Mead

Look For: "In Debt We Trust"

From Democracy in Action

In recent weeks there was an unexpected market meltdown - reports of a mortgage crisis which threatens to throw as many as two million Americans out of their homes, bankruptcies by major lenders, top banks reporting billions in losses and suggestions of complicity in predatory lending by top banks and Wall Street firms.The media focus has been on the financial institutions, not the people who are about to lose their homes and savings.

In America's earliest days, there were barn-raising parties in which neighbors helped each other build up their farms. Today, in some churches, there are debt liquidation revivals in which parishioners chip in to free each other from growing credit card debts that are driving American families to bankruptcy and desperation.

IN DEBT WE TRUST is the latest film from Danny Schechter, "The News Dissector," director of the internationally distributed and award-winning WMD (Weapons of Mass Deception), an expose of the media's role in the Iraq War. The Emmy-winning former ABC News and CNN producer's new hard-hitting documentary investigates why so many Americans are being strangled by debt. It is a journalistic confrontation with what former Reagan advisor Kevin Phillips calls "Financialization"--the "powerful emergence of a debt-and-credit industrial complex."

While many Americans may be "maxing out" on credit cards, there is a deeper story: power is shifting into fewer hands.....with frightening consequences.

Check out this fact sheet and these tips

Me and All of My Home-ies

From Alternet

George Bush likes to boast about the high rates of homeownership. But today in America, millions of homeowners are at risk of seeing their prized possession taken right out from under them.

Over the last decade, we have been witnessing some of the most brazen acts of mortgage entrapment ever to hit the American housing market.

Subprime lenders have coaxed eager consumers to buy or refinance their homes often with no money down, and at seemingly low interest rates. But now millions of homeowners are paying way more than they can afford.

Their dream of homeownership has quickly turned into a nightmare of foreclosure.
And this nightmare is beginning to rattle the economy as a whole.

All the while, the government has stood idly by.

Dream Homes Turn To Nightmares

Housing analysts predict between 1 million and 3 million U.S. homes will be foreclosed upon in 2007. Already a wave of defaults on subprime mortgages held by those with poor credit have caused a crisis in parts of the industry, and some economists believe a recession could result.

Subprime loans allowed many Americans with spotty credit to buy into the housing boom, driving home ownership to nearly 69 percent nationwide in 2006, up from 65.4 percent a decade earlier. But teaser rates that kept interest payments low for two or three years have begun to expire, driving monthly payments through the roof.

Shanna Smith, chief executive of the National Fair Housing Alliance, said lenders often targeted the most vulnerable borrowers for subprime loans, even if they were eligible for loans with lower rates. More often than not, the borrowers had little understanding of mortgages.
"All the predatory lending that has gone on, all of the pushing of exotic loans on people of color, female-headed households, families with children, people with disabilities -- it's all coming home to roost," Smith said.

Once borrowers fall 90 days behind on payments, lenders can start the foreclosure process, which can take up to a year. Owners can try to sell the house, but with prices falling and foreclosed homes flooding the market, borrowers often end up still owing more than they can get for the house.

Ain't Nothing But A House Party!

Okay, so I'm an old school J. Geils Band kind of guy...

The Gazette reports

Housing developments receive federal funds Two affordable housing developments in Johnson County have received nearly $5 million in federal money. The Housing Fellowship of Iowa City received almost $1.2 million from the federal Low-Income Housing Tax Credit program, Gov. Chet Culver said in a press release Wednesday. The Housing Fellowship will use the money to acquire and rehabilitate 14 units for family housing across Iowa City.

Harmony Development received $3 million from the same program and almost $800,000 from the HOME Investment Partnership program to build 30 units in North Liberty for senior citizens and seniors with disabilities, the release said.

Subprime Conditions

The lower 35-50% of income earners of our country can't get a break in trying to be included in the American Dream. Because of loan policies, often their credit scores do not allow them to qualify for prime-rate loans, meaning that because they are seen as "high risk", they are more likely to be offered subprime interest rates or "programs" like adjustable rate mortgages that balloon after a set period of time.

For example:
•In 2004, John Silva refinanced the modest home he and his wife own in Willow Springs, N.C. Today, with their mortgage at almost 10 percent, he worries he's just a "hiccup" away from foreclosure.

•Ten months ago, newly divorced Tammy Myers got a no-down-payment loan to buy a house in Denver. The interest rate is now so high it's difficult to make her monthly payment.

•Susie Smith – a retired social worker who's too embarrassed to use her real name – almost lost the house in St. Paul, Minn., she had lived in for most of her life. That was after she refinanced it and her monthly payments more than doubled from $675 to more than $1,400 a month.

The API reports that the market for subprime mortgages "exploded during the housing boom, from fewer than 5 percent of all new mortgage loans in 1994 to an estimated 20 percent currently, or $600 billion."

Foreclosures among high-risk U.S. mortgages could create the worst mortgage crisis since the 1980s, a published report said Friday. Rising foreclosures and defaults have pushed more than 20 lending companies into bankruptcy, The Christian Science Monitor says.

Some housing specialists worry the mortgage industry will respond by raising its lending standards so high that would-be homeowners with less-than-perfect credit will be frozen out, extending the current U.S. housing slump.

'It`s the most serious threat to the economy,' Mark Zandi of Moody`s Economy.com says. 'It has the potential to set the housing market back another big notch since there could be a whole class of people who can`t get credit.'

Affordable Housing and County Housing Trust Funds

There is no question that Iowa's low income housing situation is bad. Since the 1980's, publicly-funded housing has marched steadily backwards putting states, counties, and cities in the position of trying to patch together housing options that meet the needs of communities. Iowa, in 2002, ranked 47th (per capita) for the amount of state revenue spent on housing. Funding from the state for housing and housing assistance programs has been cut by $10 million in the last three years.

In Iowa, there are three county housing trust funds (in Dallas, Johnson, and Polk counties). The purpose of housing trust funds, according to the Center for Community Change, "systemically change reliance on annual budget allocations by shifting to committing dedicated public revenue to affordable housing through the creation of housing trust funds. There are now nearly 600 housing trust funds in operation. They dedicate in excess of $1.6 billion to help address critical housing needs throughout the country."

The Housing Trust Fund of Johnson Countyis a little over two years old, receiving funds from a variety of sources including the State of Iowa, HUD, local governments and individual and corporate contributors. All Trust Fund moneys support homes for households at or below the $58,000 level for a four person household. Funding is intended to be a layer of financing that is offered at attractive terms to help make more affordable housing financially feasible in a very expensive housing market.

Funding is limited to organizations, businesses and governments because the Trust Fund is not set up to administer the application, funding and monitoring processes involved in funding individual funding requests. HTFJC is currently staffed by one part time employee.

Learn more.

Thanksgiving

I am thankful for this past election cycle because it gives the nation a chance to regroup and reprioritize. I am thankful to the crop of candidates that ran for office and for those who succeeded of the progressive stripe--62 of whom are in the Congressional Progressive caucus.

We need to focus our attentions on smart security--and taking care of people by:

> Reducing global warming, reducing urban outgrowth, and lessening our energy use footprint
> Increasing family security including equal rights to the GLBT community, creative solutions to increase affordable housing stock for low income people, universal healthcare, improved care for our elders.
> Improving educational opportunities focusing math and science literacy along with reading and language fluency.
> A mandatory one year national service for 18 to 24 year olds to provide necessary activities to serve constituencies in fields like education, healthcare, child/eldercare, and the environment.
> Attaching requirements for fair (liveable) wages, energy efficient building design, and efficient use of resources to industries when economic development tax dollars are involved.

Have a Happy and Safe Thanksgiving

Next Issue: Affordable Housing

The housing bubble has burst. According to Harvard University "Across the nation, government cutbacks on construction, maintenance, and subsidies for low-income housing, combined with the booming economy's overheated real-estate market, have created what many experts are calling an affordable housing crisis. They predict that the problem is likely to get worse because of a widening income gap and a shrinking stock of low-income units." There is little doubt that those in need of affordable housing (Housing is generally considered "affordable" when its cost does not exceed 30 percent of the median family income in a given area.) were left out of the mix in the early With the median price of housing hovering in the $200,000 range, there are a significant number of lower income families (earning less than 50% of the median annual income) that have housing insecurity.

Why does housing matter so much. Stable family situations are recognized as one factor of student success in school housing stability, particularly in the early grades. Stable housing and is tied to lower domestic abuse rates, more community involvement, and lower crime rates.

Add to this the social justice aspect of persons having a basic need met. Affordable housing should not be a privilege, but a civil liberty, just as adequate food and clothing are necessary to sustain life. All persons should have access to safe, clean housing. The question is, how do we accomplish the goal?

One possibility is to take away the incentives to own rental housing, unless for the specific purpose of providing to housing to those who would otherwise be unable to afford it. In college towns it is a widely accepted practice to purchase real estate for investment purposes. The effect is to push up the rents for housing by relying on a captive audience who can afford a higher rent than the local lower income person can.

Another is to work with public/private partnerships to build housing that is affordable and can be financed creatively to allow those who are "high risk" to have a home and the informed responsibility to keep it.

Your thoughts?