Monarch Housing’s Blog!

Schools are among the first places to feel the fallout

NPR’s Marketplace did a report last night on how the foreclosure crisis is impacting the schools in Cleveland, OH. Mhari Saito from WCPN in Cleveland reports on how those districts, and their students, are coping.

Brian Davis, who heads the Northeast Ohio Coalition for the Homeless, summed up the situation: It’s usually somebody who is living in a duplex or multifamily apartment building that’s been foreclosed on. And usually the tenant is the last to know in the whole process. They have usually a short period of time to relocate and have then trouble finding a place to live.

To read the story click here.

Housing and Economic Recovery Act of 2008 most important housing legislation in decades!

If the Trust Fund had been fully in effect in 2008, it would have provided approximately $300 million for affordable housing!

On July 30, 2008, the Housing and Economic Recovery Act of 2008 was signed into law. This historic bill establishes a National Housing Trust Fund, creates a Capital Magnet Fund for housing and economic development, and makes significant improvements to the Low Income Housing Tax Credit program. The Act is one of the most important pieces of housing legislation in decades. We have reported on this bill extensively. For our most recent post click here.

Our friends at The National Alliance to End Homelessness has prepared a summary of its key provisions. To read the full report click here.

National Housing Trust Fund

The National Housing Trust Fund would primarily develop rental housing affordable to extremely low-income households (below 30 percent of area median income);

Resources for the Trust Fund are dedicated and would not require annual appropriations like other housing programs. Funding for the Trust Fund will be phased in over three years;

If the Trust Fund had been fully in effect in 2008, it would have provided approximately $300 million for affordable housing;

At least 90 percent of Trust Fund resources would be for rental housing, including the production, preservation, and rehabilitation of rental housing, or for operating costs; and

Read the rest of this entry »

26.6% who bought their homes in northern NJ in 2006 are now underwater!

“Unfortunately, with all the adjustable-rate mortgages that are re-setting and all the people that can’t afford their monthly payments, they are in a position where they have to sell their homes,” said Amanda Hoffman, a spokeswoman at Zillow.com. “For those people, having negative equity is a pretty big deal because they can’t sell their homes without owing the bank a lot of money.”

As the sub-prime crisis continues to impact New Jersey, negative equity has become a growing problem. Negative equity is when you owe more than what you owe on the house. In many circumstances this is a paper loss unless one needs to sale or refinance. However, in the current market of declining values, rising inflation, and job losses it is a significant indicator of an impact on NJ that will have significant consequences including increases in homelessness.

There is a fascinating web site - Zillow.com - that provides a wealth of information on major market areas. Zillow has expanded its market report beyond the Zillow Home Value Index and rates of negative equity to incorporate additional housing data in 165 metropolitan statistical areas (MSAs), including:

Read the rest of this entry »

Foreclosure Prone Loans Made Disproportionately to Minorities!

A new report by the National Community Reinvestment Coalition (NCRC) shows that minority consumers, regardless of income level, are most at risk of receiving high-cost home mortgage loans. High-cost loans represent the riskiest and most poorly underwritten home mortgages, millions of which have fallen into foreclosure in the last two years. The study, Income Is No Shield Against Racial Differences in Lending II, examined subprime and near prime (Alt-A) loans from more than 219 metropolitan areas, as reported under the Home Mortgage Disclosure Act data from 2006, the most recent publicly available data. The data provides details on all of New Jersey.

“The data reminds us that the current housing crisis was overwhelmingly the result of the explosion of bad loan products in financially vulnerable communities. It is not surprising that foreclosures have been concentrated among African-Americans and Latinos, because predatory and problematic loans are most prevalent in those communities,” said John Taylor, President and CEO of NCRC.

Click here to read the full report.

You think you have everything but you can lose income tomorrow!

Homelessness may be getting a new face according to a report on ABC on August 8, 2008. In an article entitled “I Used to Be Normal: Poor Economy Contributing to Upper-Class Homelessness” Sarah Netter chronicles several families that have fallen from the upper or middle class into homelessness. To read the full article click here.

Craig and Paige Miller are one of the couples. They currently live in their RV in Santa Barbara. “You think you have everything,” Miller said, “but you can lose income tomorrow.”

Ms. Netter’s article states: Miller once had a four-bedroom home, complete with pool and spa, when he lived in Orlando and worked as a life coach and ran his business. He’s now part of what appears to growing number of Americans who have been forced out of their comfortable lives and into their vehicles by the continuing foreclosure crisis and slumping economy.

Is this happening in NJ? At the 2nd Annual Congressional Reception, Congressman Rush Holt made the same point in his speech. He reminded those in attendance that Read the rest of this entry »

NJ ranked 5th in nation!

Union and Essex have 25% of foreclosures!

Our friends at The Federal Reserve Bank of New York released on August 3, 2008, A Look at New Jersey’s Subprime Mortgages in Foreclosure, the first article in the new series, Community Affairs Forum: Facts & Trends. The first set of articles in the Facts & Trends series will have a shared focus on subprime mortgage conditions around the region. These articles will augment the dynamic maps of nonprime mortgage conditions currently available on the New York Fed’s website. Click here to go to the dynamic maps.

A Look at New Jersey’s Subprime Mortgages in Foreclosure traces patterns of regional variation in, and neighborhood concentration of, owner-occupied subprime mortgages in foreclosure. New Jersey ranks fifth amongst states in subprime mortgages in foreclosure per 1000 housing units and exceeds the U.S. ratio. The highest concentration - a combined 25 percent of the state’s total number- is in Essex and Union counties. Within these two counties, zip code-level data reveal that about 75 percent of foreclosure activity occurs in neighborhoods that are grouped together and tend to have relatively lower household incomes.

To read the full report click here.

The bill will take effect October 1, 2008!

Includes significant tax credit changes!

Includes new CDBG funding!

Includes assistance for the homeless!

As we reported yesterday Congress has approved H.R. 3221, the Housing and Economic Recovery Act of 2008. The President having rescinded his veto threat is expected sign the bill this week. This is the most significant and far reaching housing legislation since 1989. The bill will take effect October 1, 2008.

The details of the bill and its impact are now becoming clear. The National Low-Income Housing Coalition has prepared a concise and detailed review. This document can be read by clicking here.

Of special significance are three areas.

Homeless assistance. The bill increases the authorization level for McKinney-Vento homeless assistance programs by $30 million. These grant funds will be used to provide emergency assistance for homeless children and youths and their families who have become homeless due to foreclosures, whether they were renting or owning their homes. The grants would be made by HUD to state educational agencies that would then make sub-grants to local educational entities.

Low Income Housing Tax Credits and Tax-Exempt Bonds. The bill contains several provisions related to the coordination of HUD’s and Rural Housing Service’s programs’ coordination with the low income housing tax credit and changes to the low income housing tax credit program itself. The bill will temporarily increase, by 10%, the amount of low income housing tax credits to states for 2008 and 2009. The bill also includes an additional $11 billion in tax-exempt mortgage revenue bond authority for the next two years. To read about all of the changes click here.

Stabilizing Neighborhoods Hurt by the Foreclosure Crisis. H.R. 3221 appropriates a one-time $3.9 billion in emergency assistance to states and units of general local government. Read the rest of this entry »