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Affordable housing in California becomes even more so

October 27th, 2009 2:22 PM

The development of affordable housing in California has received a boost as the US Treasury Department announced that it will be allocating nearly $284 million. This is part of the more than $3 billion that has been distributed to state housing agencies in order to help fund these kinds of projects, an article in HousingWire explained.

The Treasury Department announced the allocation of nearly $284m in American Recovery and Reinvestment Act to spur affordable housing development in California.

The funds are the latest in more than $3.1bn given to housing agencies in 45 states and Puerto Rico in lieu of tax credits to fund affordable housing projects.

“This innovative Recovery Act program allows the federal government to partner with states to support local developers and helps ensure that housing developers can access the financing necessary to build affordable housing,” said Treasury deputy secretary Neal Wolin.

“We have worked quickly to make available more than $3 billion to state housing agencies, and we expect to see continued efforts at the state level, so that these funds can be delivered to the communities that need it most,” Wolin added.

The program began in May, and after state housing agencies are notified they will receive funds, each agency manages a competitive process for disbursing the funds to developers.

Florida is the leading recipient of funds, with more than $580m given to the state’s housing agency. North Dakota received the least among participating states, with about $3.7m given.

In other news, a Wall Street Journal article on Homeowners walking away was very enlightening. Hearing straight from the borrowers mouth proved to be as well, as evidenced in the comments.

The banks (my lender is ) are unwilling to modify mortgages for the people able to pay. I suspect if the people underwater, but with money and good credit - you know, responsible people - were able to secure a more reasonable APR that made their monthly payments less painful, they’d more easily tolerate paying on that over-valued house. I their customers they deserve to get screwed especially by people in non-recourse states.have no outstanding debt other than my mortgage. No credit debt, no student loan, no car note - nothing. I can afford my house. But the 6.9 APR irks me. I’ve tried for months to get a MODIFIED better rate - something in the mid 4s. But because of no hardship and being underwater, the banks refuse. After 10 months of trying for a better rate I HAVE NO QUALMS walking away in a non-recourse state. For what - keeping an 800 FICO score? Screw that! The wife’s credit and our cash will secure the new home - a better house, larger, with a better APR - and the bank can bite me. Hell, when our old house goes up for auction maybe I’ll convince my brother to buy it for half its current cost. If banks like , who egregiously borrowed tax payer money, are unwilling to help those same taxpayers who are

And they weren't the only ones.

I’m walking away because of the absurd policy of the bank. Let me explain:

Because of the economy, my income took a hit and I now make about two thirds less than what was the norm a few years ago. After exhausting a large safety net of savings, I declared bankruptcy. I have NEVER been late on my mortgage, it was always the first thing I paid but the bank now refuses to report my payment history to the credit bureaus after my bankruptcy. They cite it is their prerogative to do so, but if I was to reaffirm the debt, they would be happy to report my timely payments to the credit bureau, which would help me, rebuild my credit.

So I call an appraiser I know to get a feel as to what my home is worth and I find out that I am $160K upside down. So I basically can keep my home but not get any credit for never being late in payments or for continuing to be an on time customer, or I can walk away since after all the bankruptcy did discharge the debt. Also, after looking at a few rental homes, I can rent the same home for half what my mortgage payment is.

So let’s see, I can put a roof over my head for half the price monthly, walk away from $160K of negative equity, and the bank thinks they are doing me a favor by offering me a deal to start reporting to the bureaus in exchange for reaffirming the debt. Yea right!

The bank can keep the house and the loan is held by Fannie so they can sustain the loss. I will restore my credit by other methods. By the way, one of my cars was financed and I was also upside down in that and they tried the same tactic. I gave them back the car.

The logic used by these borrowers is skewed and not the logic used by normal people who have lost their jobs and homes against their will. It is, however, telling that people are proud to discuss how they're going to make everyone else pay (especially in the case of the Fannie loan). It seems the American dream isn't home ownership, it's getting the upper hand in every single way and "sticking it to the man". This, undoubtedly, is not what the Founding Fathers had in mind.

Posted by Leah Barr on October 27th, 2009 2:22 PMPost a Comment (0)

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