Happy New Year from AHAA

As we celebrate the coming of 2010, AHAA wishes you and your family a prosperous and happy new year.

Some Unexpected Side Effects of H1N1 Flu Spread

The Government Accountability Office (GAO) warned in a report last week that the spread of H1N1 flu could have an unexpected side effect that has nothing to do with the nasty cough and fever associated with the wicked bug: vast numbers of homebound Americans logging on to the Web from home could overload local Internet networks.

The report said that pandemic-type numbers of homebound adults telecommuting and kids doing homework, playing games or accessing video files could create an overload that the Department of Homeland Security (DHS), which is in charge of communications networks during national emergencies,  may not be prepared to deal with.

Internet access is an essential resource to keep financial markets going and residents informed during national emergencies like a flu pandemic, the GAO said, and DHS hasn’t yet created guidelines for how telecom, cable and satellite providers could minimize congestion or prioritize traffic in such an emergency.
Some expensive options for Internet service providers exist, including adding bandwidth capacity and laying private lines for essential employees, but with the flu spreading so rapidly, such actions would take too long.

Regulatory and contractual issues are additional hurdles, the GAO said: "Private Internet providers have limited ability to prioritize traffic or take other actions that could assist critical tele-workers. Some actions, such as reducing customers' transmission speeds or blocking popular Web sites, could negatively impact e-commerce and require government authorization.”

Click here to view the report summary.

Obama Outlines American Recovery and Reinvestment Plan

Over the weekend, President Barack Obama outlined his $820 billion economic recovery plan that he believes will give the U.S. economy a boost by saving or creating an expected 3-4 million jobs and investing in energy and education as well.

Congress is prepared to take up the bill this week, and it won't come a moment too soon because the vicious circle continues. This morning more than 45,000 job cuts were announced by American companies, including 20,000 at Caterpillar, 7,000 at Home Depot, 2,000 at General Motors, 8,000 at Sprint Nextel. Another 8,000 will likely lose their jobs when pharmaceutical companies Pfizer and Wyeth merge. Last week, Intel and Microsoft announced layoffs as well. And as we know all too well, people who don't have jobs can't pay their mortgages, which leads to more foreclosures.

Obama's economic plan includes doubling the nation's capacity to generate alternative sources of fuel; building a new electricity grid; installing 40 million smart utility meters on homes and weatherizing efforts to control energy usage and costs; improving roads, schools, and water and sewer systems; enhancements to the COBRA health insurance program; and increased Pell Grant funding to make college more affordable. Additionally, the plan would include $1,000 in tax cuts for as much as 95 percent of Americans.

"This is not just a short-term program to boost employment," Obama said in his weekly video address on Saturday. "It's one that will invest in our most important priorities -- like energy and education, health care and a new infrastructure -- that are necessary to keep us strong and competitive in the 21st century.

"Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four," Obama said. "And we could lose a generation of potential, as more young Americans are forced to forgo college dreams or the chance to train for the jobs of the future. In short, if we do not act boldly and swiftly, a bad situation could become dramatically worse."

So what do you think, does it sound like we're on the right track?

HUD Takes Another Swipe at Homeownership

Just one week ago today, HUD proposed yet another rule in another effort to eliminate an essential tool available to first time homeowners and other low- to moderate-income individuals and families looking for some help with the required down payment to secure an FHA mortgage on a home of their own--Down Payment Assistance Programs.    These programs, operated by charitable organizations, have helped over 1 million homeowners in the past ten years; and HUD's latest ruling seeks to eliminate a program that operates without any government assistance, has generated over $10 billion in home equity, and has even been used by HUD itself to sell its own properties    Eliminating DPA programs would leave few options to qualified buyers who just need help with the downpayment.

While critics say that downpayments provided by DPA's are the cause of HUD's financial woes, I just don't buy it.  I'm surprised their latest proposal doesn't blame the sub-prime crisis on DPA programs.   In HUD's rationale for this latest proposal, they throw out sweeping generalizations that just don't play out in the very numbers they put up on their website. Homebuyers that need some assistance with a downpayment are not twice as likely to default--It may be slightly higher, but how is that offset with the increase in revenue that comes from increase in FHA production?    Plus, there is not substantiated evidence that buyers of homes insured using FHA with DPA have higher sales prices for their home than those in the same area without DPA

Just because FHA throws out these unsubstantiated assertions, doesn't make it true. They need to be stopped, and you can help. Take action now. Submit a comment through our website directly, and let your congressional representatives know how you feel about the rights of homeowners being trampled by this bureaucratic nonsense.

House Passes Homeowner Aid Bill

The house passed a Homeowner Aid package on Thursday designed to come to the rescue of a hobbling housing market and rescue troubled homeowners.   A key provision of the bill would provide struggling homeowners with new, reduced principle mortgages, insured by FHA.   

The Senate version of the bill, which is due out May 15, is likely to contain provisions that run contrary to the house language.   The differences will have to be ironed out as they two bills go to conference.  They will have their work cut out for them--President Bush has already promised to veto the legislation if it comes to him in its current form.

The bill, if enacted, will overhaul regulation of Fannie Mae, Freddie Mac, and the 12 Federal Home Loan Banks, in addition to modernizing FHA.   

Struggling homeowners need the relief promised by this legislation.     Each and every homeowner is affected by these defaults, not just the people losing their homes.  It is in everyone's interest to get this resolved in a way that keeps homes in the hands of their owners and not the banks.    In the long run, the banks don't want them and the homeowners are desperate to keep them.    Ultimately, the best solution is to work toward this end.

HOA Fees~~The Next Hit

One of the latest casualties in the mortgage crisis is homeowners' associations, and ultimately the owners of homes that remain in communities wrought with foreclosures.   Homeowners, who cannot make their mortgage payments, certainly cannot pay their HOA fees.  The fees are still incurred, and banks are not going to volunteer to pay them when they take over, so the remaining homeowners have to pick up the tab to keep up the maintenance on their investment.

There are measures in the works in some states, that are particularly hard hit such as Florida, to require banks to keep up with the HOA fees on the pool of properties they hold.    Everyone is in a bad spot on this one.   

So the next time the argument surfaces about the value of finding workable solutions for homeowners to keep their homes, here's another reason to add to the list.   Most new communities, especially condominium developments, will be affected by this latest twist in fall-out of the sub prime crisis.  This certainly means the list of homeowners adversely affected by the mortgage crisis now includes homeowners who have good mortgages, but live in communities with HOA fees.   As the fees increase to keep up with the costs, I can see more homeowners falling behind on their payments. You can see the cycle.   

Homeowners in trouble need to do everything they can to find a solution.   Most states now have developed programs to help, in addition to the ones put out there by the Feds earlier this year.    Almost every homeowner benefits from finding ways to keep families in their homes, not just the families themselves.

The Check is in the Mail

Did you get your stimulus check?   Treasury began issuing stimulus payments last week that it hopes will boost the economy and get money into the hands of Americans quickly.   The long-term cost of that money to the economy is not mentioned, but for right now consumers seem to be welcoming the small windfall.   It is enough to put some food on the table or pay the electric bill~~A godsend to some.

As the economy continues to reel from the effects of so many troubling economic factors, homeowners are all hoping that the housing part of the equation has finished falling, but it doesn't look like it.   Statistics tell us that foreclosures continue to rise, despite the administration's efforts.

If you are a homeowner in trouble, contact your lender or the Hope Now Alliance NOW.  It is not in anybody's best interest for you to lose you home.   If you don't get help from the first person you try, try again.   Sometimes that persistence will pay off.   

In the meantime, the Treasury sent you that check to help ease the burden a bit.   I just hope it does.

The Danger in Foreclosed Homes

The startling impact of all of the foreclosures on families, neighborhood stability, and the economy as a whole continues to reveal itself as the tsunami of foreclosures continues to mount, despite efforts by the feds to reign in the disaster. The latest toll is on the vandalism and crime that the vacant homes attract. Abandoned homes have been popping up in almost every neighborhood across the country, often leaving entire communities vulnerable to the plight.

Police departments are ill equipped to deal with the squatters, vandals, thieves, and partying teenagers that take advantage of the vacant space. In Virginia, police found blood inside a vacant house and traced it to an injured sexual assault suspect who had been hiding there before he stole a car and fled. I have first hand knowledge of a squatter who moved into a vacant apartment building, set up shop, and was renting out other units in the building to unsuspecting tenants, without the owners knowledge. Empty driveways, overgrown lawns, realty signs, lock-boxes, and No Trespassing notices in windows are all signals to would be violators. The statistics on the disastrous impact foreclosures have on communities bear themselves out with stories like these.

Lenders and Servicers need to work together to find ways to slow this foreclosure roll, and the Fed needs to step to the plate. Workouts have to be made available to more homeowners facing foreclosure. There are the naysayers who think the market should just play itself out, and anyone not smart enough to realize what they were getting into doesn't deserve to keep their home at any price. But ultimately the price is paid by everyone. Each and everyone of us has a stake in seeing it resolved.

Foreclosures Continue to Soar

With all the fury over federally sponsored programs hoping to come the aid of the flailing housing industry, it sad to see that foreclosures continue to mount.  I didn't expect a complete turnaround, but I'm sure that even feds fully expected to at least slow the bleeding.   However, the hemorrhaging continues.

A study from the State Disclosure Prevention Working Group, which is a group made up of 11 state Attorneys General, claims 70 percent of homeowners who are two months behind on their loans are not getting help.  According to Hope Now, servicers are working furiously on loan modifications, but the number of loans 90 days overdue or more continues to increase by leaps and bounds.

Troubled homeowners and servicers alike need to sense the urgency of this continuing trend.   I'm not confident the fixes out there are really fixing anything.  Secretary Paulson and the feds need to get back to the drawing board.

Alphonso Jackson Just Doesn't Get It

An article in Today's New York Times pictures Alphonso Jackson telling Congress that the FHA has been pushed to the brink of insolvency.   In the article, he takes the erroneous position that non-profit DPA's are the cause of the insolvency because defaults are twice as high for loans with down payment assistance.  Twice as high as what?   Secretary Jackson's position is no secret to the industry that has helped hundreds of thousands low- to moderate-income buyers get a home, but I'm sure they find it astounding just the same.    HUD's creditability on this issue is more than flawed, yet they continue to tout poorly conducted studies and statistics or just not reveal the source data at all.   Secretary Jackson's shenanigans are forcing him to resign his position has housing secretary, but not before he takes one last swipe at the industry that arguably has saved FHA, not caused its demise during the subprime years. If it hadn't been for non-profit DPA, FHA would have lost at least 40% of its business.   Why don't the folks at HUD talk about that?

HUD's alternative involves excessive fees on the borrowers least able to foot the bill for FHA's solvency, the very borrowers it was meant to serve.   Congress needs to jump in and become a champion of an industry that is helping to shore up the market for struggling home buyers, not knock out a viable leg from under the table.    The House is on board, and Rep Barney Frank of Massachusetts has recommended reform measures, not banning the program, as the Senate has proposed.   

Take the time to write your Senator to express your views~~We need solutions to the struggles home buyers are facing, not more roadblocks.