Home Stealing Swindles and Similar Crimes

$_72Baton Rouge   For years I’ve seen these almost handmade looking signs on street corners in our neighborhoods in various cities in the USA that say something on the order of “We Buy Old Houses, Call XYZ” or “No Matter What Condition, We Buy Houses” and so forth. In New Orleans it seemed part of the post-Katrina landscape, just like other signs that say, “I’ve Got a Backhoe, Call Me” or “House Gutting, Call Me.” Seeing those signs in other cities made me scratch my head but not hard enough to dent the brain until recently I read about several home stealing swindles preying on the elderly, uninformed, and lower income families.

The simplest swindle was a straight up proposition to buy a home with some age on it and some repairs needed and offer a hefty price, get the owner to sign over the documents based on a front end payment of a couple of thousand dollars, flip the house, and then stiff the original owner for a sucker. Invariably, the owner was desperate for money because of medical bills, payday loans, or whatever so overlooked the simple logic and fine print in order to get some real money in their hands while the swindler saw the switch as a down payment worth tens of thousands in their pockets. Worse, it’s horrifying how many get away with this swindle, much like a couple of years ago when shady mortgage brokers would dupe the elderly especially into refinancing their homes just to pocket the fees and points.

A more sophisticated swindle seems to take advantage of the modernization of county and parish property records on-line to speed transactions and increase transparency in the often burdened process of clearing titles and effecting sales at real estate closings. In some jurisdictions, virtually all of the records attending the sales are now visible online, often exposing not only a good facsimile of the owner’s signature for future criminal duplication, but also bank account numbers, social security numbers, and pretty much the whole package. Finding homes where there are absentee owners that rarely visit and inspect the property and often don’t have friends or neighbors keeping the extra eye out, allows the swindlers to come in, place the house for sale quietly, bring in a team of helpers to pretend to be the owners, and even con legitimate lawyers and title companies into handling the closing. The New York Times ran a story of an elderly woman who suddenly discovered a house she owned was sold out from under her for more than a half-million. She got lucky and the police did right, but we have to wonder how many times people get away with this kind of thing, and how many more may in the future. In red hot housing markets this may look like easy pickings.

Meanwhile, the big banks are still trying to muscle into the housing market to displace the federal lending authorities like Fannie Mae and Freddie Mac. Most of them have hardly paid off their billions in penalties and fines from their earlier crimes in crashing the housing market and now they think they should be trusted to control the whole shebang. Some reported the good news that homes that were underwater, where more was owed in mortgage than the value of the home in the market, had decreased from over 16% to only 13% and change in 2014. Some cities like Las Vegas, Chicago, and Atlanta are over 18% underwater in the market. Since 3 to 5% used to be the normal, and we are supposedly in recovery from the meltdown, it seems like we still have a long way to go with a lot of pain and suffering on the road.

Big swindles or small, no one can be too careful when there are so many vultures waiting to swindle homeowners on a regular and daily basis. Seems there’s always something.

Devolution in the North of England

CGeorge Osborne’s northern powerhouse policy has given Greater Manchester a £6bn health and social care budget and powers over transport, police and housing. Photograph: Joel Goodman/PA

George Osborne. Photograph: Joel Goodman/PA

Newcastle    I had ridden by Newcastle before on the train between Edinburgh and London, and mainly looked at the wide river and noted how striking it was in contrast to the old saying that defined a waste of time and effort as being like “bringing coal to Newcastle.” Of course they don’t mine coal anywhere around Newcastle anymore, nor is their steel and other heavy industry. The city center is still grand and looming in a way that Pittsburgh and Detroit speak to immense wealth in the past that is still a work in progress in the present.

Talking to the ACORN organizers in Newcastle their attention was riveted on their first organizing drive in Heaton, low-and-moderate income area which is building momentum toward the launch of the organization in coming weeks. Invariably conversations moved to the problems of getting rental security deposits back despite rules and regulations requiring it, the escalating rent, damp and mold, and the myriad issues burdening tenants all over the United Kingdom finding little action or relief.

The north of England has been the focus of the ruling Conservative Party’s initiatives around devolution. During the Scottish election last year more than 100 city councils had made parallel demands for increased powers along the lines the Party was pledging to Scotland if they rejected independence. Now the Treasury Secretary George Osborne has made a number of proposals starting with an amalgamation in Manchester that outline what they are willing to allow. Newcastle has also made a number of steps to get in the early line for whatever might be possible from devolution.

Osborne’s outline is pretty straightforward. There would be a grand mayor of sorts and representatives from each of the city councils amalgamating into this form of larger or regional government would have a seat on the new council. The new formation would have authority over housing, transportation, planning, and public safety or policing. Roads, schools, and garbage collection would remain with the local councils. Osborne claims he’s willing to make the devolution deal with any metropolitan formation that is willing to agree to such terms and conditions. Bristol has an elected mayor so might be eligible for example.

Given the tension on housing and the general distance of the central government and its resistance to change and isolation from pressure, this has some attraction, and as argued to me in London recently by a former government official, the cities are going to get stuck with cuts and having to defend them anyway, so essentially, they might as well get something out of the deal. Obviously the one key thing they are not getting is the ability to raise more money. They would get the money from Treasury to pay the bills they are handling centrally, but austerity is austerity.

We walked past several large parks after we left the city centre and the soaring soccer stadium crouched over the skyline. Tom Scott, one of ACORN Newcastle’s organizers, made the point that the council had announced that in the next budget there would be no money for parks. He wondered what might happen to them in the future with no maintenance or attention. Pushing the buck down the line doesn’t mean that the pain won’t persist until the screaming and cries are deafening.

Integrating the Suburbs

Chicago.CBL.protest-aKiln, Mississippi    Peter Drier, comrade, housing expert, and professor at Occidental College in Los Angeles, made an interesting point in a piece he wrote recently about segregation. Reflecting on Ferguson, Missouri, although it could have been hundreds of places he wrote:

Sociologists have invented a way to measure segregation called the “index of dissimilarity,” which shows the percentage of black (or Latino, or Asian) households that would have to move to achieve racial balance across the region. In the St. Louis area, at least 70 percent of all black families would have to move if every part of the metro area was to have a mix of black and white families that reflects their proportion in the entire region.

We’re talking Katrina-level displacement in one urban area after another. Little surprise that most community-based organizations concentrate on improving the communities where low-and-moderate income families, who are often also minorities, live, rather than making their major campaign integrating the suburbs.

Drier is clear that if that were our mission, we would be taking on a mission of Herculean proportions. Our people can’t handle the sticker shock of the suburbs, when means finding affordable apartments, but

…there simply aren’t enough apartment units in most suburbs, especially the more affluent ones. This is due to the widespread practice of suburban “exclusionary zoning”—not only in St. Louis, but in most metro areas. Rentals comprise half of all housing units in cities, but only one-quarter of those in suburbs, and many suburbs have almost no rental housing at all. The Section 8 program won’t help break down residential segregation if there aren’t enough suburban apartments to rent. It would be like giving people food stamps when the supermarket shelves are empty.

The last nationwide study of the Section 8 program’s success rate, conducted in 2000, found that 31 percent of families with Section 8 vouchers couldn’t find an apartment to rent, but the figure varied from city to city; in Los Angeles, 53 percent of families with vouchers had to return them unused; in New York City, 43 percent of the families with vouchers came back empty-handed. The scarcity of apartments was certainly the major cause of families’ inability to take advantage of their housing subsidy, but racism played a role, too; the 2000 study found that whites had a higher success rate than blacks of using their Section 8 subsidy to rent an apartment.

There are things that can be done, and Peter lists several of them.

We can “ban discrimination by landlords,” and recent decisions of the United States Supreme Court should technically make that easier to do so because we would only have to prove “disparate impact,” rather than deliberate intent. But, private landlords do not have to accept Section 8 vouchers, the program is voluntary for them, so it would only be possible to punish landlords who were willing to allow Section 8 in the first place. Secondly, we could mandate that suburbs have to build a certain number of apartments not simply that a small number of any that are built have to be reserved as affordable. Thirdly, we could greatly expand the number of Section 8 vouchers. Though Section 8 is one of the largest housing programs for low-income families, it is based on a lottery and is not an entitlement only benefiting about 25% of those eligible, and that’s if they can find a place to use their vouchers, which many cannot. This is a vicious cycle that returns us back to square one in many cases.

We can hold our breath, but few of these recommendations are likely to find enough love in Congress and its Republican majority that survives largely because of its firm commitment to racial gerrymandering constructed on a legacy of racial segregation in suburban and exurban metropolitan areas that is vital to their future as well. Absent a new civil rights movement focused on integrating the suburbs and based on a consensus about its need and desirability that does not exist today, count on the “dissimilarity index” and the putative Republican majority both coexisting happily for years to come, even if a sad situation for the rest of us.

Could Trailer Design Make More of “Less” in Housing?

inside of an airstream

inside of an airstream

Rock Creek, Montana     When discussing the fascinating work done by the Advanced Studio of nine students from the Yale School of Architecture working with noted Italian architect, Pier Vittorio Aureli, on the question of how to squeeze 100,000 units of affordable housing into the overheated, expensive real estate market of San Francisco, I noted what I found to be an appropriate irony that I was reviewing their work while pecking away in an Airstream trailer, my son sleeping silently in another room nearby, so I wanted to flesh out that point.

The paper sent along to me by my comrade, Michael Robinson Cohen, one of the budding architects on the project was entitled, poignantly and astutely, “Is Less Enough.” Many of the proposed projects as well as their historical references harkened to the designs of monastic life, their cells, and cloisters. There were discussions of how to design these units from what they called a “standard” apartment size of 400 square feet to half or one-third the space, between 150 and 200 square feet. There were discussions of SRO, single room occupancy, hotels as a potential model for these new units. In fact, the heart of the overall argument underpinning the entire studio was a new vision of “the room” itself. It would seem to me to make these kinds of housing units or apartments feasible and even desirable in the future, some cross fertilization with the work that is probably less appreciated in addressing exactly these problems has been undertaken by house trailer, marine, and railway architects, who make a living out of making a whole lot more of the “less.”

Being off-the-grid, I can’t access the exact dimensions of the 1978 Airstream Land Yacht where I’m pecking away, but I would reckon the inside room dimensions, wall-to-wall, front-to-back at between 300 and 350 square feet, and likely way closer to 300 than 350. Unlike the Aureli Studio designs, trailers and houseboats, not only have designated areas for sleeping, toilets, and showers, but also kitchens and cooking, which the students’ designs were all putting into the “core” or shared spaces, which might or might not appeal. In a trailer like this one, and there are no doubt huge improvements unknown to me that trailer architects have devised in the last 37 years since the Silver Bullet came off the line in Elkhart, Indiana, there are bunks for two and a fold out couch in the living room for more. I’m not recommending this for permanent family living, but for the onesies and twosies of the urban precariat this is pretty good. One of the marvels of these contained spaces is that there is storage everywhere, largely absent in the designs I saw: under bunks, under couches, above bunks and above couches, along walls, under sinks, around the shower and sink, above the sink, and frankly in every nook and cranny. Making more out of less, remember.

A ceiling on a trailer is hardly 6 ½ feet tall. No housing code would allow less than 8 feet, giving a different concept of a “room,” even more space. Many of the designs seem to have foldout Murphy-type beds, which is nice, or bed lofts, taking advantage of more height in the room, which would seem like a gift for design as well. An Airstream has a rounded top, rather than a rectangular surface, meaning more usable cubic space for the taking in these proposed new units.

I don’t want to beat the point to a pulp, but perhaps the way to look at future use is not only some cooperative space for larger social utilization, laundry, and the like, but to imagine a unit design as less monastic and more on the order of self-contained. Low-and-moderate income families in large parts of the USA have already established that they will buy trailers, because they are affordable, and they will live in them, not as transients, but as permanent housing.

When architects talk about embracing the vernacular, when it comes to getting more out of less and making people line up and be happy getting it, it might be worth learning from these humble dwellings.


Inside of an airstream

Inside of an airstream



The Neighborhood Gap: Racial and Income Segregation

indexLittle Rock    Three Stanford researchers are claiming to have discovered something new in the acknowledged huge divide between white and black families in addition to making less money and “blatant discrimination,” and that’s a so-called “neighborhood gap.” Meaning that through data crunching they found what the Times called “a striking pattern: White (and Asian-American) middle-income families tend to live in middle-income neighborhoods. Black middle-income families tend to live in distinctly lower-income ones.” Going further they argue that “A typical black child living in a household with $100,000 annual income lives in a neighborhood with a median income of $54,000. And a black child in a household making $50,000 typically lives in a neighborhood with a median income of $42,000.” The neighborhood gap means the obvious, that black families, even with higher incomes, have less access to the better schools, day care, transportation, parks, and needless to say jobs, access to healthcare, and other amenities that higher income neighborhoods attract.

I would love to really sit down and look eye-to-eye with any of these folks and ask, What’s the surprise? What’s new here? Are we trying to simply define the line more tightly between what constitutes “blatant discrimination” compared to run of the mill, everyday discrimination?

The Times concedes that discrimination plays a role, but pushes it off on historic legacies of public policies from the 20th century that included “essentially whites-only wealth creation” through federal housing policies, even while acknowledging that “subtle discrimination” continues citing a 21st century HUD study in 2013 that found that “black home shoppers were often shown fewer options than similar white shoppers.” This racial steering has been a persistent and unconquered problem for over fifty years for cry-eye! Remember block-busting! Remember whites-only advertising. Where’s the change?

Let’s also recall persistent efforts and continuing battles to economically integrate higher income housing enclaves. The Wall Street Journal recently featured a column written by someone from the Manhattan Institute with the provocative headline that President Obama was trying to integrate the Clinton’s 95% white neighborhood in Westchester County, New York, saluting the efforts of a newer Republican mayor trying to resist a court approved settlement with HUD to add 750 units of publicly subsidized housing in the county. Similar efforts in another 1200 plus communities were derided. Let’s be clear we are talking about a HUD federal policy to in fact place lower income families in communities with higher incomes and stop income and racial discrimination. This is not a new policy, but it certainly is an ongoing battle to maintain whatever you want to call it, a “neighborhood gap,” segregated communities, or what have you.

The increasing number of rental units and the percentage of families renting, partially trapped by the impact of the Great Recession, means that greater numbers of families, especially non-white families, are stuck in their neighborhoods, and these are going to be neighborhoods that technically have lower incomes, but given new and more conservative lending standards are going to wall in more moderate income families wherever they are.

The difference between so-called “choice” and “blatant” versus systemic discrimination is impossible to parse, but the clear fact that federal policy to create change is still being resisted tooth-and-nail doesn’t escape peoples’ information when they look for a home. Neither does the fact that federal policy, along with state and local policies, to make a difference here are tragically wanting, is going to continue to make such gaps enduring unless there are many more fundamental and sweeping changes.

Brother Ali – Work Everyday

Supreme Court Sinks More Homeowners into Permanent Debt

dead_economy-300x199New Orleans    In a startling unanimous decision, the US Supreme Court overturned an 11th Circuit Court of Appeals decision finding in favor of Bank of America that even bankruptcy protection does not allow underwater homeowners the ability to escape the obligations of second mortgages.  The impact of the decision allows zombie banks to continue operating on the basis of balance sheets reflecting virtually lifeless real estate holdings and makes these beleaguered homeowners into walking dead debtors with virtually no hope of a second chance.The Supreme Court once again reminds Americans that the Constitution is fundamentally about property rights and that the sanctity of a contract trumps all vestiges of common sense.

Generally speaking, a home is commonly classified as “underwater” if the value of the outstanding mortgage is 25% higher than the current market value of the home.  Remember the mortgage we are talking about here is the first mortgage.  The second mortgage is satisfied after the first is fulfilled.  Many of these second mortgages are home improvement loans.  Others arose from the need to finance children’s education or medical emergencies by attaching what has historically been the primary asset creating citizen wealth for the vast majority of low and moderate income families in the country.   Bank of America in their court filings estimated that there were 2.1 million underwater homeowners with second mortgages at the end of 2014.   Others like Zillow estimated that there are still 8 million homeowners who are underwater and most real estate experts estimate that it is likely that half of them have some kind of “second” on their homes.  This is not an insignificant problem in either the economic recovery or the hope for narrowing the equity gap.

Of course not all of these families had declared bankruptcy, partially because banks and others have done an amazing job over recent years with Congress in making bankruptcy both harder to achieve for desperate families and less valuable as a chance for a clean slate and a second chance.  Filing for bankruptcy does not allow someone to wipe out a mortgage debt or a student loan debt for example.  The mortgage obligation is what forces an underwater homeowner into foreclosure.  The best hope for the debtor is that surrendering what used to be an asset to the bank, calls quits to that debt.  In 2007 and 2008 when ACORN was negotiating with big banks and mortgage loan servicers as the implosion began, I was at some of those meetings.Executives then believed that they would just have to wipe out their second mortgage portfolios as worthless.

The Supreme Court’s decisions says, “no way, you’re stuck.”Hey, some day in the by and by, real estate values may go back up, allowing the loan to be collected.  Some of these properties are so far underwater that it won’t be a year but a generation for that to happen.  For the banks paying a dollar on that loan every 90 days allows them to still call it a performing loan, helping their zombie balance sheets, and leaving the debtor, desperate for a clean start, carrying even more weight. The Justices say, “dude, it’s a contract, didn’t you get that?”  The debtors, like millions of others, were on the merry-go-round being pushed by these same bankers and promoters in the real estate bubble into these sucker bets.  These weren’t contracts as much as cons.

Only death relieves some of these debts.It’s already legal for 25% of someone’s social security to be attached.  Now the Supreme Court has just locked another ball and chain onto untold numbers of families with little hope for the future but dragging the weight behind them, sentenced to a life as walking dead, not in debtors’ prison, but in a permanent debtors’ probation of sorts with little or no chance of escape.

Johnny Cash – Folsom Prison Blues (Live)