Shaky ground
Some say homeownership is at the heart of the American Dream — a symbol of family, success and security. For most people, buying a home is the biggest investment they’ll ever make. Getting what they pay for is a value probably as important to Americans as homeownership. Unfortunately for dozens of homeowners in Hutto, expansive soil and questionable building practices have combined to create a perfect storm of discontented residents asking construction companies to right shaky foundations...Janet Ahmad, president of Homeowners for Better Building, a San Antonio-based organization devoted to defending homeowners’ rights, said homebuilders Lennar and Centex did not sufficiently inform homebuyers of the possible problems.

The arrests took place over the past three months in about a dozen cities.
Over the past couple of months, federal agents have nailed hundreds of real estate wheeler-dealers, charging them with fraud in a crisis that has crippled the mortgage industry and left thousands of homeowners, particularly African Americans, cribless. Even as the FBI was announcing the arrests of some 400 alleged financial criminals – including housing developers, mortgage lenders and brokers, lawyers, real estate agents and appraisers – Washington Mutual, the nation’s largest savings and loan association, was firing 1,200 people across the country. Many of WaMu’s layoffs will be in its home loan business, Forbes.com reports, as the Seattle-based bank dissolves its riskier loans, such as sub-prime mortgages. The arrests, 60 of which occurred on Wednesday alone in a dozen or so cities, including Chicago, Houston and Miami , were part of a crackdown against fraud that has cost homeowners about $1 billion. “Mortgage fraud poses a significant threat to our economy, to the stability of our nation’s housing markets and to the peace of mind of millions of American homeowners,” Deputy Attorney General Mark Filip said at a news conference. The sting, known as “Operation Malicious Mortgage” has netted 406 people since it kicked off on March 1, he said. While there is a rainbow of Americans crushed under the weight of predatory lenders and their unscrupulous cohorts, nobody has felt the pressure more than African Americans. Studies have shown that Blacks are more likely to be targeted for high-risk loans than less credit-worthy Whites. These sub-prime mortgages, with interest payments that often balloon after reeling in borrowers with relatively low introductory rates, have triggered a cascade of foreclosures, particularly in Black and Latino communities.

Hundreds swept up in mortgage fraud arrests
More than 400 real estate industry players have been indicted since March - including dozens over the last two days - in a Justice Department crackdown on incidents of mortgage fraud nationwide that stem from the country's housing crisis... Law enforcement officials said their stepped-up focus on mortgage cases aims to combat problems that have grown out of the risky lending practices prevalent until the mortgage market collapse started last year. Officials have identified 10 "mortgage fraud hotspots" nationwide in California, Colorado, Texas, Minnesota, Michigan, Illinois, Ohio, New York, Georgia and Florida...Those named in the cases include housing developers, mortgage lenders and brokers, lawyers, real estate agents and appraisers, said Sharon Ormsby, section chief in charge of financial crimes for the FBI.

News from the Swamp: Countrywide scandal
Both senators received their juicy home loans from Countrywide honcho Angelo Mozilo, as did Jim Johnson, a top Demo operative who was slated to handle Barack Obama’s vice-presidential search committee until his relationship with Mozilo became public. Other friends of the toxic Mozilo include Alphonso Jackson, the former HUD secretary who resigned in April, and Donna Shalala, former HHS secretary under Bill Clinton. Dmocrats had been hoping to plow a mortgage bailout through Congress before this whole mess gets exposed, but President George W. Bush has threatened a veto because of the overly generous terms for Countrywide and similar lenders.

Mortgage fraud scheme lands 6 in jail
On Wednesday, US Marshals and attorneys lead suspects in through the back of the federal courthouse to face a ten count indictment for a mortgage fraud scheme that began in 2004.  It is alleged that six people committed $25 million in mortgage fraud across Houston and its suburbs. They would then get a phony appraisal that would almost double the home’s actual value. In that case, $400,000.

N. Texas shingle problems turn to blame game
Shingle manufacturer CertainTeed has been working with Lennar Homes to replace or reseal shingles at no cost to homeowners. Also, CertainTeed extended their five-year wind warranty to ten years. But when April's powerful storms wreaked havoc on North Texas, that warranty suddenly ended. Homeowners in The Colony are caught in the middle of a storm between their builder, a shingle manufacturer and their insurance companies. They said no one wants to take responsibility for the damage to their roofs.

Rosa Rosales on Mirasol & HUD
League of United Latin American Citizens passed a resolution calling for an investigation by the appropriate federal agencies into the “disturbing trend in substandard new home construction” in the affordable-housing market. LULAC also called for subcommittee hearings in Congress on the deregulation of HUD and its lack of oversight for the past decade...We very much endorsed that. As we have seen through the years it’s become a nightmare. People thought they were buying their dream you might say, their home for the first time, and then everything starts falling apart. Then aside from that, not only is it falling apart, it’s affecting their health and that of their children. Start from step one when [Mirasol] first started and then, aside from that, you’ve got to compensate them for all the problems that they caused because the homes were not built correctly. Without hurting anyone’s feelings, if the task force has been in existence for a year and indeed the problems still exist, and we don’t have a plan of action, with all due respect then we would have to look to something other than this task force.  See LULAC Resolution

SAHA retrenches
The President and CEO of the San Antonio Housing Authority announced his resignation last Thursday, one of several recent internal changes in the department that may represent a deeper shift in the City’s approach to low-income housing...his four-year run at SAHA was marred by lawsuits and public criticism over the Mirasol Homes project, a low-income housing development completed in 2001...Ahmad and League of United Latin American Citizens have been working to aide the Mirasol residents,... The five-neighborhood, 247-home development on the West Side was funded by the federal Department of Housing and Urban Development’s HOPE VI program.  The City sued Magi realty, the original contractor that hired KB Homes, and created a task force to address the residents’ problems. Magi then sued KB Homes for the poor construction. The Mirasol Task Force consists of 11 committee members, including representatives from SAHA, residents, and KB Homes. “That’s like putting KB on the jury,” Ahmad said... “I don’t think the offers are fair enough concerning buying their homes,” Cavazos said. “The threat of the mold is being resolved through the homes being fixed right now, but the residents that want to move out, we want to make sure we give them fair benefits.”  Related HUD Letter

Twin Cities builder files for Chapter 11
Twin Cities homebuilder MW Johnson has filed for Chapter 11 bankruptcy protection, in the latest fallout of the housing market collapse. The Builders Association of the Twin Cities ranked the company as the 11th-largest home builder in 2007, based on gross revenues, which it estimated to be $41.4 million.

How homeowners, speculators and Wall Street rode a wave of easy money
It was the peak. It was the embodiment of business success," Connelly said. "We underestimated the bubble, even though deep down, we knew it couldn't last forever." Indeed, Pinnacle's party would soon end, along with the nation's housing euphoria. The company has all but disappeared, along with dozens of other mortgage firms, tens of thousands of jobs on Wall Street and the dreams of about 1 million proud new homeowners who lost their houses...The aftershocks of the housing market's collapse still rumble through the economy, with unemployment rising, companies struggling to obtain financing and the stock market more than 10 percent below its peak last fall... Seen in the best possible light, the housing bubble that began inflating in the mid-1990s was "a great national experiment," as one prominent economist put it -- a way to harness the inventiveness of the capitalist system to give low-income families, minorities and immigrants a chance to own their homes. But it also is a classic story of boom, excess and bust, of homeowners, speculators and Wall Street dealmakers happy to ride the wave of easy money even though many knew a crash was inevitable.