Ever wondered what San Antonio’s HDRC Process is like, what tax incentives can be realized by living in a historic district, or how the city can help with Owner Occupied Rehab Loans? Watch this 29 minute video featuring Shannon Wasielewski from San Antonio’s Office of Historic Preservation.
This is a great article by David Matiella, an architect and resident of Mahncke Park. I really relate to the idea of “new homeowners come with an infusion of energy and optimism” and their blending with “sage older residents” of the neighborhood. This is certainly the case with my neighborhood Lavaca and many other great inner-loop neighborhoods experiencing revitalization. I have many neighbors like the one David writes of that “have seen this neighborhood grow, decline and come back.”
When I look around my neighborhood of Mahncke Park, I see many new neighbors moving in. This is always an exciting time, and it gets me wondering: Will these new people be nice? Will they be young or old? Will they have young children like us or — even better — do they have babysitter-age kids?
Historical information indicates the houses in my neighborhood were built between 1920 and 1950. Starting in 1891, George W. Brackenridge gave the city 25 acres of land connecting the water reservoir at the top of the hill near the San Antonio Botanical Garden to Brackenridge Park. He asked that the land be named for his close friend, City Park Commissioner Ludwig Mahncke, and the neighborhood that developed around the park still bears his name and statue.
Mahncke Park has character and a history. Some homes are in excellent shape, having been well- maintained by their owners, while others are in need of tender care.
For many reasons, older owners will sell their homes and move away, and new homeowners will move in. Most of the time, new homeowners come with an infusion of energy and optimism.
More and more, I observe houses being snatched up by buyers who restore or rehabilitate them. Some buyers purchase in order to turn a profit with these homes. Others buy in order to rehab a fixer-upper and create a liveable home for themselves. Their neighbors may lend a hand installing wood floors or painting, creating new relationships and further tightening the bond between neighbor and community.
There’s an older gentleman my family runs into on our neighborhood walks. Having witnessed the turnover of neighbors through the years, he is happy to gaze fondly at our small children and recite stories of his own childhood in the neighborhood.
“It sure is nice to have children playing on this street again,” he says with a twinkle in his eye. “I’ve been here 57 years and have seen this neighborhood grow, decline and come back.” I cannot mistake the nostalgic pride in his manner as he says this about his neighborhood, now my neighborhood — our neighborhood.
He is not just talking about the neighborhood houses, he is talking about the people who make up the neighborhood, and I realize that my mind-set about Mahncke Park has been broadened once again by one of our sage older residents.
The man’s words become a lesson when I look with pride at the fine older homes in Mahncke Park and realize that I can put too much emphasis on the materiality of our neighborhood. A collection of houses may make a neighborhood, but it is the people who live in these homes who are truly special and create a community.
David Matiella, Assoc. AIA, is a project manager at Marmon Mok Architecture.
This is a great article by Washington Post Housing writer Ken Harney explaining “private transfer fees.” Various organizations, including the National Association of REALTORS, are pushing for a federal mandate that will outlaw private transfer fees.
WASHINGTON — Can you name a housing controversy that pulls Iraq and Afghanistan veterans, consumer advocates, labor unions representing transport workers and government employees, the title insurance industry, the National Council of La Raza, libertarian and property rights groups and the National Association of Realtors all together into a protest coalition demanding quick action from the Obama administration?
A more unlikely collection of real estate bedfellows is hard to imagine. Yet at the end of July, 11 groups with widely divergent agendas and memberships formed something called the Coalition to Stop Wall Street Home Resale Fees.
The target of their protest: Private transfer fees being attached as liens on homes and requiring successions of property owners to pay a fee every time the house or lot resells during the coming 99 years. Though proponents say the concept helps real estate developers raise capital for projects by bringing in Wall Street investors, critics contend the liens amount to a perpetual money machine that lowers equity values for unsuspecting consumers and complicates real estate sales.
Here’s how the plan works. Say you buy a $300,000 house in a subdivision where the developer is participating in a private transfer fee program and has recorded liens on every lot. What the developer may not have disclosed to you, however, is that when you later sell the property, you will be required to pay a fee of 1 percent of the price you receive. The money must be disbursed out of the closing proceeds and sent to a trustee representing investors. Those investors fronted cash to the developer in exchange for the right to receive streams of payments for decades as individual houses sell and resell.
To illustrate: If you buy a house this year for $300,000 and resell it for $325,000 a few years from now, you will owe $3,250 at closing. Even if the house drops in value, you will still owe the 1 percent fee. And if you refuse to pay it, the deal will not close because a lien has been recorded that runs with the title to the property and mandates that every seller pay.
Your purchaser might not like the fee requirement, either, and might demand a lower price as compensation. When your purchaser later goes to sell, the same rules will kick in. And so on, through successions of sales until 2109, when the covenant recorded in 2010 disappears. Along the way, assuming modest appreciation in real estate values, investors and their estates stand to reap huge amounts of cash.
In the words of Kurt Pfotenhauer, chief executive of the American Land Title Association, “it’s a pretty slick way to make money, but it’s bad public policy and bad for consumers.” Pfotenhauer’s group and the National Association of Realtors have spearheaded drives directed at state legislatures to ban or restrict private transfer fees. But now the focus has shifted to the federal level, where the 11- member coalition wants the Obama administration to prohibit transfer fees on all mortgages purchased or backed by Fannie Mae, Freddie Mac and the Federal Housing Administration.
The FHA has already indicated that the fees violate its rules, said the coalition in a July 29 letter to Treasury Secretary Timothy Geithner. If Fannie Mae and Freddie Mac, which both operate under federal conservatorship, follow suit, the underlying mortgage-financing fuel supply powering transfer-fee programs effectively will be shut off. Along with the FHA, Fannie and Freddie now account for an estimated 95 percent of all mortgage financings.
The principal advocate for the private transfer fee concept, Freehold Capital Partners of New York, did not respond to repeated requests to comment for this column. In an e-mail sent to me earlier this year, Curtis Campbell, a spokesman for Freehold, said that “private transfer fees represent an adaptation in how to pay for development costs” incurred by builders “at a time when funding is not available” to them on “reasonable terms.”
On its website, Freehold claims that major real estate development firms controlling “hundreds of billions of dollars in real estate projects nationwide,” including some of the “largest, most well respected,” have participated in the program. However, the company has declined to identify any of them.
Members of the new anti-fee coalition said they have very specific reasons for joining. For example, Jon Soltz, co-founder and chairman of VoteVets.org, said military families generally move every three years, and have been disproportionately hard hit by the real estate bust. Because of their frequent moves, “these fees hurt the military more than anyone,” he said, and “take advantage of unsuspecting homeowners and buyers.”
Here’s a great article by Washington Post Housing writer Ken Harney on a new way mortgage lenders can quickly help boost your FICO score. Working with a professional, both REALTOR and mortgage lender, will greatly increase your success rate in buying your perfect “Front Porch.”
Call it the great real estate disconnect of 2010: Mortgage rates have been at half-century lows and home prices have stabilized, but applications for mortgages to buy houses have declined most weeks during the past three months, as measured by the Mortgage Bankers Association.
What’s going on here? Shouldn’t 30-year fixed-rate loans well below 5 percent be flying off the shelf? Economists say part of the reason is the expiration of the federal home purchase tax credits, which encouraged thousands of buyers to accelerate their transactions — starting with mortgage applications — into the early spring months to qualify for the April 30 contract deadline.
But other key factors are at work: More-stringent underwriting standards imposed by private lenders, declining consumer credit scores in the wake of the recession, and rule changes by Fannie Mae, Freddie Mac and the Federal Housing Administration have all combined to make qualifying for a new mortgage more challenging than it has been in years.
Take credit scores. While most lenders have raised the bar on minimally acceptable scores, Fair Isaac Inc., creator of the widely used FICO score, said there has been a deterioration in millions of Americans’ scores during the past two years. More than 25 percent of all consumers who have active credit files — roughly 43 million people — now have FICO scores of 599 and below. On Fair Isaac’s scale, which runs from 300 (highest risk) to 850 (lowest risk), a 599 score is considered unacceptable by most lenders.
In fact, since the housing boom went bust, lenders prefer to see minimum scores well into the 700s. Fannie Mae, for instance, gives its best combinations of rates and fees to applicants with 740 FICOs or higher.
How can buyers deal with the tougher rules on everything from minimum scores to debt-to-income ratios? Tops on the list: Be aware that there are work-arounds and creative solutions to some of the roadblocks. For example, say a buyer’s credit scores appear too low to qualify for a mortgage. They should ignore the online and junk-mail “credit repair” come-ons that promise miraculous FICO score improvements overnight. They are often rip-offs and may not even be legal in some instances.
However, an experienced mortgage broker or retail loan officer can get a buyer’s credit file into a “rapid rescoring” program that just might get them the legitimate lift they need to qualify. Rapid rescorings performed by independent credit reporting agencies — most of them members of the National Credit Reporting Association — use procedures approved by the three national credit bureaus to make direct changes to the information contained in credit files.
If there are documented errors in the file, or omissions that are dragging down a score, the rescorers connect a buyer, their creditors and the national bureaus — Equifax, Experian and TransUnion — to get the problems fixed. In some cases, rescorers can even spot steps a buyer can take, such as cutting their utilization percentage on a particular account, that will boost the score immediately.
Marty Flynn, president of Credit Communications Inc. in San Ramon, Calif., a credit reporting firm, said most rescorings take from three to five days and cost an average of $30 per “tradeline,” or credit account, per borrower. A typical rescoring may cost anywhere from $90 to $200. Though extensive rescorings can push FICOs up dramatically, Flynn said the average increase is more like 25 points to 32 points. If the buyer has been an irresponsible deadbeat, of course, rescoring the files won’t help much or at all.
Dale Di Gennaro, president of Custom Lending Group, a mortgage brokerage in Napa, Calif., said he uses rapid rescorings to help clients raise their scores enough “to get them into the loan program that’s best for them.” In one recent case, he said, homebuyers whose scores had been in the mid-600s boosted them into the 700s when rescorers helped eliminate a late payment dispute on their three bureau files.
Steve Stamets, a loan officer with Union Mortgage Group in Rockville, Md., said rapid rescoring can rack up transaction costs — and even pinch loan officers’ revenue — when an applicant’s scores are being depressed by issues in multiple accounts. One recent applicant had problems with three separate credit tradelines, throwing the entire mortgage application into jeopardy. Straightening them out cost $270.
“We got [the client] above the 620 FICO he needed” to be approved for the mortgages, said Stamets, “but believe me, it took some work.”
This is a great article by Washington Post Housing writer Ken Harney. I’m glad to hear that Fannie Mae has listened to buyers, sellers, REALTORS, and lenders and have made changes to the way appraisals will be conducted. These changes begin September 1st.
By Kenneth R. Harney
Saturday, July 10, 2010
Picture this: You’ve signed a contract to sell your house. Your buyers say they have nailed down the right mortgage. All is well. But then the appraisal comes in low — $25,000 to $50,000 under what was agreed upon in the contract.
The lender insists on cutting the mortgage amount to reflect the lower appraised value. You refuse to negotiate anywhere near the price indicated by the appraisal, and suddenly — poof! The whole deal is off. You, the buyers and the agents involved are all left sputtering over the appraisal that scuttled the transaction.
This scenario is not unusual in many markets across the country, say home builders, brokers and appraisers. Here’s one little-publicized reason why: Lenders unilaterally may be lowering the numbers on the appraisals submitted to them, in order to avoid accusations that the loans they sell to giant investors Fannie Mae or Freddie Mac are based on inflated appraisals — even slightly inflated. Such value inflations can expose lenders to dreaded “buyback” demands, forcing them to repurchase loans at huge costs.
The vice chairman of the National Association of Realtors’ Appraisal Committee, Frank K. Gregoire of St. Petersburg, Fla., says it’s a widespread problem. Large numbers of legitimate home sales are “sabotaged by lenders and underwriters arbitrarily reducing the value estimate” provided by the appraiser.
Typically, Gregoire says, the lender orders a low-cost electronic valuation — based on publicly available statistical data, with no onsite inspections — to review the accuracy of what was submitted by the appraiser. If there’s a discrepancy between what the computer says and what the appraiser reports, the lender’s underwriters sometimes simply cut the number — even if this means knocking the real estate transaction off track. Or they demand an immediate explanation from the appraiser.
All this may be about to change. Effective Sept. 1, Fannie Mae is prohibiting lenders who sell it loans from changing appraisers’ numbers. In guidance issued June 30, Fannie said lenders must contact appraisers to “resolve” any disagreements about the valuation. If that’s not possible, they should order a second appraisal — not just chop the value.
Appraisers applauded the new rule. “This is huge,” said Gary Crabtree, president of Affiliated Appraisers of Bakersfield, Calif., and a member of the national government relations committee of the Appraisal Institute, an industry group. Pat Turner, an appraiser in Richmond, said Fannie’s new requirement “is great news for consumers” because loan underwriters hundreds of miles from the property “no longer will be able to change the appraiser’s valuation” simply because they pulled a lower number off a computer.
Turner said these electronic models “are often inaccurate” and provide no information on a property’s condition. He said an appraisal completed recently in Virginia was challenged by a review company based in California using a proprietary electronic-valuation system. The reviewer wanted to know why Turner hadn’t used a specific property in the area as a “comparable” in doing his appraisal on the house. Turner checked out the suggested “comp,” and it turned out to be a vacant lot, worth far less than the house — not a true comp “by any stretch of the imagination.”
Fannie’s new guidelines also attempt to clarify other issues that have arisen during the past year, including the widespread use of inexperienced appraisers who are unfamiliar with local market conditions. Real estate agents, builders and mortgage brokers have complained to Congress that rules adopted by Fannie and Freddie last year encouraged lenders to use “appraisal management” companies to value properties.
Those companies, in turn, often pay appraisers deeply discounted fees — half off traditional prevailing rates in some cases — and require them to complete their assignments far faster than normal turnaround times. Critics have said that low-budget appraisers working for management companies frequently travel long distances to do their valuations, have minimal access to local data, and make excessive use of foreclosures and short sales as comparables — thereby depressing the values of non-distressed sales in the area.
Fannie’s letter attempts to clarify its “appraiser selection” standards. Top on the list: Appraisers should be experienced, “have the requisite knowledge” about local market conditions and have access to all local data sources. Fannie also emphasized that the demonstrated experience of an appraiser should always trump fees or turnaround times — a clear swipe at management companies that bid out their work on the latter two criteria.
Asked whether Freddie Mac plans to issue similar rules on appraisal-quality standards, a spokesman said, “We’re definitely looking at it.”
In the previous post about The Pearl Brewery complex I mentioned the Riverwalk Expansion.
Check out San Antonio River Authority’s award winning site for all the details of the Riverwalk Expansion.
News 4 WOAI recently did a great story on all of the wonderful things happening at The Pearl Brewery complex. This revitalized space is quickly establishing itself as the anchor point for the Northern expansion of the downtown core and the Riverwalk. This is one place you need to check out!
I took part in the King Willliam/Lavaca 5K History Run back in May and was embarrassed at my lack of ability to keep up with the runners. It has clearly been years since my days of running track in high school!! I wish I would have known there were multiple groups on this “run.” I would have taken the “moms with strollers” walk!
San Antonio’s Office of Historic Preservation is doing a great job of engaging the public and creating fun events to learn about this city’s history.
This is a nice write-up of the event by John Tedesco with the Express-News.
There are many ways to learn about a city and its history — but not many involve putting on a jogging outfit and trying to keep up with Amy Unger.
On Saturday, about 45 people showed up for a three-mile run through the East Side near downtown, which offered a unique perspective of a struggling neighborhood that many people simply glimpse at on their way to Spurs games.
“I’ve lived in San Antonio my entire life and really don’t know anything about the neighborhood,” said jogger Sarah Deosdade.
Unger and her other fit colleagues at the city’s Office of Historic Preservation have been leading runners on tours through historic parts of San Antonio. They started the free program in May, Historic Preservation Month.
District 2 Councilwoman Ivy Taylor invited the city’s history experts to explore the East Side, home of the grand houses of Dignowity Hill and the recently restored Hays Street Bridge.
Participants gathered at the Carver Community Cultural Center and had the option of tagging along with Unger or two other guides. Some joggers who showed up looked like triathletes, but the program is for everyone — the slowest group walked and a few people pushed children in strollers.
The three groups set out at 7:30 a.m. and stopped periodically to hear a brief history lesson, like the one on Dignowity Hill. Unger pointed out a tall, well-kept house.
“Edward Friedrich — we saw his massive air conditioning company — he lived in this house here, this yellow house, which is a really excellent example of the Queen Anne style,” she said.
One theme of the tour was the impact of freeways built in the 1960s that segmented downtown and cut off neighborhoods.
“Large freeways were driven through the heart of many of our cities,” Unger said, speaking above the soft roar of traffic on nearby U.S. 281. “It cut off a lot of neighborhoods from downtown, and that’s when you saw a lot of the urban decay that kind of peaked in the 1980s.”
When three noisy tour buses interrupted her talk during another part of the jog, Unger laughed and pointed out how much more people can learn about a community just by being outside.
“Wouldn’t you much rather be out on the ground, getting a workout?” she asked. “You get to see so much more.”
The reopening of this bridge to bike and foot traffic provides a much needed connection for the revitalizing East Side and Downtown. Great article by Colin McDonald.
After 28 years of barricades, demolition threats, ownership disputes and fundraising shortfalls, the Hays Street Bridge is open again.
On Tuesday, several hundred East Side residents, bicycle riders, engineers, historic preservationists and politicians gathered on a concrete ramp to the bridge to mark its rebirth as a bike-and- pedestrian passageway.
“We are here to welcome this old lady back,” said East Side advocate Nettie Hinton, just before cutting the ribbon to the restored span, which stretches from Austin Street to near Cherry Street.
The new bridge decking creaked under the weight of the crowd as it admired the fist-sized bolts from the 1880s and the view of downtown San Antonio.
Doug Steadman, who spent the past 10 years working alongside Hinton to save the bridge, just smiled.
“What a beautiful place to have parties,” he said the day before as he walked the bridge. “Maybe even a wedding.”
It’s been a long transition.
In 1982, the wrought-iron bridge was deemed too dangerous for vehicles and closed.
The bridge owner and the city’s code compliance office talked of demolition.
That’s when Hinton started her campaign and petition to save the bridge. The San Antonio Conservation Society threw its political clout behind the effort.
In 1999, Steadman was “bit by the bridge bug,” as Hinton put it, after hearing about a bridge restoration in Waco. He and his wife, Jurene were as tireless as Hinton.
“The preservationists were shamelessly persistent,” said architect Ann McGlone, who was San Antonio’s historic preservation officer from 1993 to 2008.
Hinton grew up listening to the clatter of the bridge’s wooden deck every time a car drove it and could not imagine the East Side without it.
For Steadman, 83, the elegance of the 19th century Whipple-Phoenix span, held together with pins, was too important to let slip away.
To help save it, the bridge was designated a historic structure by the city, the state and the Texas Historical Commission. Fundraisers were held and $200,000 was raised toward the $3.7 million total cost. A federal grant paid the remainder.
Reconstruction began in May 2009.
Now there are promises from the city of more bike lanes and sidewalks to connect with the bridge.
Hinton has her eye on the 1.5 acres of land below the bridge, and she told the crowd Tuesday there was plenty of work left to be done.
“We have a park to develop,” she said.
Informative article from Associated Press writer Hope Yen. I’m really liking the term “bright flight” as the counter movement to “white flight.”
White flight? In a reversal, America’s suburbs are now more likely to be home to minorities, the poor and a rapidly growing older population as many younger, educated whites move to cities for jobs and shorter commutes.
An analysis of 2000-2008 census data by the Brookings Institution highlights the demographic “tipping points” seen in the past decade and the looming problems in the 100 largest metropolitan areas, which represent two-thirds of the U.S. population.
The findings could offer an important road map as political parties, including the tea party movement, seek to win support in suburban battlegrounds in the fall elections and beyond. In 2008, Barack Obama carried a substantial share of the suburbs, partly with the help of minorities and immigrants.
The analysis being released Sunday provides the freshest detail on the nation’s growing race and age divide, which is now feeding tensions in Arizona over its new immigration law.
Ten states, led by Arizona, surpass the nation in a “cultural generation gap” in which the senior populations are disproportionately white and children are mostly minority.
This gap is pronounced in suburbs of fast-growing areas in the Southwest, including those in Florida, California, Nevada, and Texas.
“A new metro map is emerging in the U.S. that challenges conventional thinking about where we live and work,” said Alan Berube, research director with the Metropolitan Policy Program at Brookings, a nonpartisan think-tank based in Washington. “The old concepts of suburbia, Sun Belt and Rust Belt are outdated and at odds with effective governance.”
Suburbs still tilt white. But, for the first time, a majority of all racial and ethnic groups in large metro areas live outside the city. Suburban Asians and Hispanics already had topped 50 percent in 2000, and blacks joined them by 2008, rising from 43 percent in those eight years.
The suburbs now have the largest poor population in the country. They are home to the vast majority of baby boomers age 55 to 64, a fast-growing group that will strain social services after the first wave of boomers turns 65 next year.
Analysts attribute the racial shift to suburbs in many cases to substantial shares of minorities leaving cities, such as blacks from New Orleans in the aftermath of Hurricane Katrina in 2005. Whites, too, are driving the trend by returning or staying put in larger cities.
Washington, D.C., and Atlanta posted the largest increases in white share since 2000, each up 5 percentage points to 44 percent and 36 percent, respectively. Other white gains were seen in New York, San Francisco, Boston and cities in another seven of the nation’s 100 largest metro areas.
“A new image of urban America is in the making,” said William H. Frey, a demographer at Brookings who co-wrote the report. “What used to be white flight to the suburbs is turning into ‘bright flight’ to cities that have become magnets for aspiring young adults who see access to knowledge-based jobs, public transportation and a new city ambiance as an attraction.”
“This will not be the future for all cities, but this pattern in front runners like Atlanta, Portland, Ore., Raleigh, N.C., and Austin, Texas, shows that the old urban stereotypes no longer apply,” he said.
The findings are part of Brookings’ broad demographic portrait of America since 2000, when the country experienced the attacks of Sept. 11, 2001, a historic boom in housing prices and the worst economic downturn since the Great Depression.
Calling 2010 the “decade of reckoning,” the report urges policymakers to shed outdated notions of America’s cities and suburbs and work quickly to address the coming problems caused by the dramatic shifts in population.
Among its recommendations: affordable housing and social services for older people in the suburbs; better transit systems to link cities and suburbs; and a new federal Office of New Americans to serve the education and citizenship needs of the rapidly growing immigrant community.
–About 83 percent of the U.S. population growth since 2000 was minority, part of a trend that will see minorities become the majority by midcentury. Across all large metro areas, the majority of the child population is now nonwhite.
–The suburban poor grew by 25 percent between 1999 and 2008 — five times the growth rate of the poor in cities. City residents are more likely to live in “deep” poverty, while a higher share of suburban residents have incomes just below the poverty line.
–For the first time in several decades, the population is growing at a faster rate than households, due to delays in marriage, divorce and births as well as longer life spans. People living alone and nonmarried couple families are among the fastest-growing in suburbs.