Not a Pretty Picture at HUD

The Department of Housing and Urban Development recently contracted with Connecticut artist Daniel Mark Duffy to paint portraits of HUD Secretary Alphonso Jackson, as well as his four predecessors (above), for $100,000. The artwork will put Jackson in something of a rogue’s gallery: The last HUD secretary to have his portrait done was Samuel R. Pierce, Jr.—vilified by his many detractors as “Silent Sam” for his record during the Reagan administration and the subject of an independent counsel investigation for cronyism and corruption.

Then again, maybe the two have a good deal in common. Jackson is currently under investigation by the FBI and HUD’s Inspector General for corruption and perjury regarding the awarding of contracts to his friends. He has, in his own words, “shot off his mouth” enough to warrant calls for his resignation. As head of the financially strapped department, Jackson’s accomplishments include making drastic cuts to federal Section 8 housing vouchers and delaying the rebuilding of public housing in New Orleans. Come to think of it, it’s obvious why Jackson scrupulously guarded the treasure chest—he had to save up for those paintings.

It seems that no one is taking responsibility for shipping containers that turned a Newark, N.J., publichousing project’s recreation area into a mountain of metal more than 12 stories high. A recent article in The New York Times described the plight of residents in the Millard E. Terrell Homes, whose buildings are eclipsed by the stacked cargo containers that often serve as makeshift shelters for homeless people. Neither city officials nor the New York Shipping Association, which represents three storage depots for shipping containers along the Passaic River, can say how many “derelict containers” blight the waterfront, and the city is fuzzy on the contractual arrangement with a private container storage company that brought some of them to the Terrell Homes playground more than 15 years ago. While Mayor Cory Booker has ambitious plans to develop the riverfront into a recreation area, it’s clear that removing the containers hemming in Terrell Homes isn’t high on the city’s To Do list. Says Keith Kinard, executive director of the chronically troubled Newark Housing Authority, “I’ve got homeless people squatting inside the apartments themselves. If containers were my worst problem, this job would be a walk in the park.’”

The Housing Authority of Baltimore City (HABC) is “dismantling” public housing at an alarming rate without providing replacement units for displaced tenants, getting HUD approval, or allowing for genuine public participation in the process, according to a scathing new study by the Abell Foundation. The Baltimore-based foundation’s report has drawn sharp words from Paul T. Graziano, Baltimore housing commissioner, whose office issued a response dubbing the report “deeply flawed and biased.”

The Abell study paints a grim picture of HABC’s zeal for demolition, its failure to consider renovation as an alternative, and its chronic disregard for disseminating accurate and timely information about its facilities, policies, and planning. The authority’s actions, according to the Abell study, have compounded the already acute shortage of decent housing for the city’s poor: Through the practice of moving tenants out of public housing without first submitting a relocation and demolition plan to HUD, the HABC has rendered those residents who do not choose to move to other public housing units ineligible for Section 8 rental vouchers.

On Oct. 31, Judge Christopher A. Boyko of the Federal District Court in Cleveland dismissed 14 foreclosure cases filed by Los Angeles-based Deutsche Bank National Trust Company, a trustee for pools of mortgage-backed securities, citing missing paperwork necessary to prove that the investors represented by Deutsche Bank owned the property at the time the foreclosures were filed. Homeowner advocates hailed the ruling as a blow against the companies that bundle and resell their loans. In most proceedings, courts do not demand proof of ownership in the form of producing the mortgage note although it is required by law.

Boyko’s strongly worded opinion took mortgage lenders to task for their “condescending” approach to the legal process, saying that the lenders “seem to adopt the attitude that since they have been doing this for so long, unchallenged, this practice equates with legal compliance. Finally put to the test, their weak legal arguments compel the court to stop them at the gate.”

Bill Faith, executive director of the Columbus-based housing advocacy group COHHIO, said of Boyko’s ruling: “It’s a wake-up call. This decision symbolizes that the mortgage industry has been getting away with tremendous abuses, not just in mortgage origination, but in the foreclosure process. The stage has been set for the one-sided foreclosure process to be challenged in numerous ways going forward in our state.”

And in what may be a harbinger of things to come, Judge Kathleen O’Malley of the U.S. District Court of Northern Ohio followed Boyko’s rationale in dismissing 32 foreclosure cases in early November, and according to the Cleveland Plain Dealer, several other Ohio judges have done the same.

Subprime-related turmoil in the housing market is spelling new troubles for renters, who already suffer from negative stereotyping and the general absence of decent, affordable places to live. Around the country, renters are losing their homes because the building’s owner has defaulted on his mortgage. Renters often learn of their plight only when they receive notice from the lender that they must vacate the premises in 30 days or face eviction. And in a case of heaping insult onto injury, a court-issued eviction can go on their records, making it difficult to rent other apartments. The Cleveland Plain Dealer reported on a local family who endured two moves in a year’s time as one landlord after another went into foreclosure.

Disdain for renters is also creating problems for increasing numbers of homeowners who have become what the Wall Street Journal Online dubs “accidental landlords”—people renting out their homes because they can’t afford the mortgage payments and can’t sell because the real-estate market has slowed to a standstill. Seems like the neighbors don’t like the change in demographics that renters represent: Residents of a Wesley Chapel, Fla., housing development interviewed for the article complain renters bring a “frat house” atmosphere to the neighborhood. According to WSJ.com, “Some homeowner associations are fighting back—targeting lax landlords and renters with ‘good neighbor’ letters, limiting the number of units that can be rented at any one time, and, in some cases, banning investors from buying altogether.”