As financial regulators and Congress probe more deeply into delinquencies and foreclosures in the subprime home loan market, one contributing factor is receiving increased attention: the lack of mandatory escrow accounts.
According to some industry estimates, most subprime mortgages closed during the housing boom years carried no escrows for property taxes and hazard insurance. That is in stark contrast to the prime mortgage market for consumers with good credit, where mandatory escrow accounts are routine.
Forget the harsh world of modern reality television. “It’s like ‘Leave It to Beaver,’ ” Roxanne Sweeney said about her Montgomery County neighborhood.
River Falls, an upscale neighborhood of well-maintained Colonials on lots of more than a third of an acre, wasn’t built until several years after the Beav went off the air in 1963. But Sweeney, who has two children, ages 7 and 9, compared the well-maintained Potomac neighborhood to the fictional suburb for several reasons, including its friendliness and strong community ties.
HUNTINGTON STATION, N.Y. — About two years ago, when Kevin White and his wife, Tricia, were searching for a new home, the last thing on their minds was energy efficiency. Like most new-home buyers, their interest was more in aesthetics.
They noticed granite countertops and wood floors, decorative moldings and vaulted ceilings.
For the past few weeks, I have been examining in this column the issues surrounding whether there should be a suitability standard for mortgage loans — that is, whether lenders should be held liable if they allow borrowers to take home mortgages that aren’t suitable for them.
Consumer groups back a suitability standard. In my opinion, though, loan officers and mortgage brokers have neither the incentive nor the competence to apply a suitability standard in determining whether borrowers are taking loans that are too risky for them. The appropriate remedy to excessively risky mortgages is a sharply targeted disclosure rule.
Q: DEAR TIM: My kitchen pantry has traditional 24-inch-deep shelves. I think a pantry drawer or set of pantry drawers would make finding things easier. Pantry organization is in my top 10 things to do this spring, so tell me what you think is the best way to incorporate storage drawers in my existing kitchen pantry closet. What do I need? How hard is it to get the job done? If I think it is too complicated, whom would I call to do the job? — Courtney M., Menominee, Mich.
A: DEAR COURTNEY: Shelves that are 24 inches deep work well for sweaters, pants and large boxes but not for small cans of soup, boxes of cereal, jars of juice and boxes of pasta. Things get hidden behind one another, and it’s impossible to see what you have in stock. These smaller items work better when placed on narrow 6- or 9-inch-deep shelving.
Occasionally a work of architecture is so compelling, so well crafted, so imaginatively conceived both aesthetically and functionally, that it makes me wish I had designed it. That was my reaction when I recently visited San Francisco’s Golden Gate Park to see the new de Young Museum, justifiably described in the museum’s brochure as “a landmark building that dramatically integrates art, architecture and nature.”
One of the two Fine Arts Museums of San Francisco, the de Young is a venerable public museum with a diverse collection that includes art of the Americas, Native American art, pre-modern and contemporary American art, and African and Asian art.
Q: We have been reading that a lot of homeowners are in financial trouble and that their homes are going into foreclosure. We would like to buy a home at a foreclosure sale and need guidance as to how to go about this.
ASome people might say you are trying to take advantage of other people’s troubles. But the reality is that in many cases, the greedy ones were the lenders who made loans to consumers who either could not afford them or did not understand the terms and conditions.
Q: DEAR BOB: I live in a condominium complex where one resident has a pit bull, a breed of dog considered by many to be dangerous. He allows it to run loose. Despite getting several letters of complaint, our condo association board of directors has done nothing other than to write a letter of warning last year to the resident. The dog continues to run loose. If this dog were to bite someone, would the board of directors and the condo association be liable? – Elizabeth H.
A: DEAR ELIZABETH: If that dog injures anyone on the premises, the dog’s owner would be primarily liable. But you can be 100 percent certain that the condo association would also be sued for damages because it is well aware of the danger.
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WASHINGTON — Sales of new homes fell sharply for a second consecutive month in February, a weaker-than-expected performance that dimmed hopes for a rebound in the troubled housing market.
The Commerce Department reported Monday that sales of new single-family homes fell by 3.9 percent last month to a seasonally adjusted annual rate of 848,000, the slowest sales pace in nearly seven years. All regions of the country except the West experienced weakness last month.