Here’s a tale of two cities in Southern California, one that survived the worst of the foreclosure crisis with a few scratches, and one that was badly beaten up. In 2000, Santa Paula, a historic oil town bounded by vast greenbelts of orange, lemon, and avocado groves, had a population of 29,000 and a median household income of $42,000. When the subprime mortgage industry collapsed eight years later, 16 of every 1,000 homes in the “Citrus Capital of the World” went into foreclosure, well below the national average of 22 for every 1,000 homes. Another old town, Lake Elsinore, closely ... Read More
Real Utility: Accounting for Energy Costs Makes Mortgage Sense
October 21, 2011 • By • Leave a Comment
Mortgage underwriters generally weigh several numbers when deciding whether a family can afford a new home. They look at income, of course, and tally up expenses in the form of a home’s property taxes, insurance premiums and monthly payments. There is one number they ignore: how much a household spends on its utilities, a figure that averages more than $2,000 a year in the U.S. In fact, most U.S. families spend more powering, heating, and cooling their homes than they pay in real estate taxes and insurance. At the margins, that number can spell the difference between a home a family can ... Read More
Facing Foreclosure? Get Counseling
February 9, 2010 • By • Leave a Comment
Want to save $454 a month or more than $5,000 a year on your mortgage payment and escape foreclosure? As a new study conducted by the Urban Institute for NeighborWorks America suggests, that’s the happy result for more than half of the clients of the National Foreclosure Mitigation Counseling program. The legally mandated report, which studied the program’s first full year, 2008, found that homeowners who take advantage of the free counseling — it’s government-funded — are 62.5 percent more likely not to lose their homes to foreclosure than those who sail that legally fraught ... Read More
Did Financial Rules Mandate a Meltdown?
October 22, 2009 • By • 4 Comments
If you ask political philosopher Jeffrey Friedman who's doing a worse job, bankers whose companies needed to be rescued in last year's financial disaster or economists and political scientists trying to figure out what really happened, he won't have a hard time picking one over the other. In Friedman's interpretation it's the bankers whose decisions actually made sense, and the economists and regulators trying to fix what went wrong are the ones who are senseless. Many bank CEOs were mistaken and ignorant about the risks they were taking, Friedman concludes, but the economists and ... Read More
Dream Deferred: Fair Housing Act Turns 40
April 29, 2008 • By • Leave a Comment
Four decades after the passage of landmark federal legislation meant to eliminate race-based housing discrimination, the practice hasn’t died — it’s just evolved. While the blatant practices of years past, like restrictive covenants and insurance redlining, are far less common, housing discrimination today may take a more subtle form, such as linguistic profiling — identifying home seekers with a particular race or ethnic group according to their national or regional accents and then discriminating against them on that basis. The federal Department of Housing and Urban ... Read More
