Think Progress

Alphonso Jackson photo homage replaced with pictures of ‘housing’ and ‘homeowners.’»

Alphonso Jackson was barely out the door on Friday when Housing and Urban Development (HUD) staffers “began planning to take down that spectacular photo homage to him in the HUD lobby.” By Monday, the 21 large photos of Jackson had been replaced, “under orders of acting Secretary Roy Bernardi, with an equal number of photos of homeowners, cityscapes and housing”:

The Washington Post’s Al Kamen reports that there will also soon be shots of “employees who receive awards for service.”

McCain: ‘A lot of our problems today are psychological.’»

This week on Fox News, Neil Cavuto asked Sen. John McCain (R-AZ) about the worth of rescinding an 18-cent gas tax as prices at the pump escalate this summer. McCain responded that “a lot of our problems today” are “psychological” — even the “ability to keep our own home”:

I’m very concerned about it, Neil. And obviously the way it’s been going up is just terrible. But I think psychologically — and a lot of our problems today, as you know, are psychological — the confidence, trust, the uncertainty about our economic future, ability to keep our own home. This might give them a little psychological boost. Let’s have some straight talk, it’s not a huge amount of money.

Watch it:

While he now states that America is in a recession, McCain earlier this year dismissed such concerns as “psychological.”

To find out how little money McCain’s gas tax “holiday” really delivers for average Americans, go to the Wonk Room.

Transcript: Read the rest of this entry »

Poll: Homeowners see home values falling.»

According to a new Reuters/University of Michigan survey, 41 percent of homeowners report “that their home had lost value during the past year, compared with 36 percent the prior month, the highest level since the late 1980s when the question was first asked. A year ago, only 20 percent said their homes had lost value.” Just 18 percent anticipate home values increasing over the next year.

Bush to appoint ‘loyalist’ as HUD Secretary.»

The AP reports that President Bush plans to name Steven Preston as Secretary of Housing and Urban Development, replacing the disgraced Alphonso Jackson. Preston comes to HUD from chief of the Small Business Administration (SBA). When he was appointed to SBA, Preston had no “experience running a small business,” previously serving as a senior vice president of ServiceMaster, a “multibillion-dollar corporation.” BusinessWeek reported in April 2006:

As executive vice-president, strategic services of Illinois-based ServiceMaster, which operates popular home service brands such as Merry Maids, Terminix, and TruGreen ChemLawn, Preston oversees the company’s long-term planning and technology systems, among other areas.

The nominee has also likely strengthened his ties to the Bush Administration during his time there. A self-described “committed Republican,” Preston worked at ServiceMaster while Claire Buchan, currently the chief of staff for Commerce Secretary Carlos Gutierrez, was a vice-president for communications at the company. […]

[H]is resume shows he has no experience as an entrepreneur and comes from a company with a reputation as a bully among some small-business owners.

Preston is known as a “Bush loyalist,” BusinessWeek added.

One in 33 homeowners to face foreclosure in the next two years.»

A new report released today by The Pew Charitable Trusts finds that “one in 33 homeowners is projected to be in foreclosure primarily over the next two years, as a result of subprime loans made in 2005 and 2006.” The report also finds that home values and municipal taxes will drop as much as $356 billion over the same period. “Frustrated by the slow pace of federal action,” nine states are taking steps to help homeowners avoid foreclosure by implementing publicly funded refinance programs.

Jackson ignored housing crisis, solicited ‘emergency bid’ for oil portrait of himself.»

This week, Housing and Urban Development (HUD) Secretary Alphonso Jackson will be leaving office under a cloud of ethics investigations. But less examined than his corruption was his inattention to the housing crisis. During Jackson’s tenure, “foreclosures for loans insured by HUD’s Federal Housing Administration (FHA) have risen and default rates have hit a record high.” The Washington Post reports:

In late 2006, as economists warned of an imminent housing market collapse, housing Secretary Alphonso Jackson repeatedly insisted that the mounting wave of mortgage failures was a short-term “correction.”

He pushed for legislation that would make it easier for federally backed lenders to make mortgage loans to risky borrowers who put less money down. He issued a rule that was criticized by law enforcement authorities because it could increase the difficulty of detecting and proving mortgage fraud. […]

They contend that Jackson ignored warnings from within his agency, the Department of Housing and Urban Development, whose inspector general told Congress that some of the secretary’s efforts were “ill-advised policy” and likely to put more families at risk of losing their homes.

At the same time, Jackson “launched a new $7 million auditorium and cafeteria” at HUD’s headquarters and used taxpayer money to solicit an “emergency bid to obtain oil portraits of Jackson and four other HUD secretaries.” He also insisted upon a personal chef and security detail.

House conservatives ignore housing crisis over the recess.»

Traditionally, party leaders prepare “recess kits” for congressional members before they go on break, to help members stay on message. Today, the Hill reports that Republican recess packets distributed on Mar. 13 did not mention the housing crisis at all:

The 21-page document distributed on March 13 addressed economic concerns ranging from overspending to tax hikes to earmarks but did not address the foreclosure crisis. […]

[GOP Conference Chairman Adam] Putnam’s [R-FL] office last month distributed the recess kits, which state that the economy is “slowing.”

GOP members may not be concerned about the economy, but their constituents are. Economists have predicted that 1.4 million Americans will face foreclosure in 2008. A recent poll found that 81 percent of Americans feel the country is on the wrong track, with 78 percent saying the economy is getting worse.

Mortgage Bankers Association finding it harder to pay its own mortgage.»

The Washington Post notes that last year, the “Mortgage Bankers Association was thrilled to sign a contract to buy a fancy new headquarters building in downtown Washington.” Since then, however, the group “has fallen on tough times as many of the subprime mortgages dispensed by some of its members proved dicey.” The result is that the group is now finding it “harder than it imagined to pay its own mortgage“:

Scheduled to close on the building in the coming weeks, the association will have to pay millions of dollars more than it would have a year ago when it contracted to buy the 160,000-square-foot structure — millions of dollars it is now less able to afford. […]

Critics also see irony — and some justice — in this predicament. “They are certainly getting what they deserve,” said Dean Baker, co-director of the Center for Economic and Policy Research, a liberal research group. “Mortgage bankers encouraged people to take out mortgages that were very risky, and the result of that was a large number of the mortgages went bad and caused mortgage interest rates to soar. Now they are the victims of high mortgage rates and chaos in the market more generally.”

Dodd: Jackson’s resignation was ‘the right thing to do.’»

Over in the Wonk Room, Senate Banking Committee chairman Chris Dodd (D-CT) guest-blogs and says that Housing and Urban Development Secretary Alphonso Jackson’s resignation was the “right thing to do.” He also calls on President Bush to appoint a new Secretary “who can devote his full energy to solving our nation’s housing crisis” — without the distraction of ethics investigations:

In this time of economic crisis and instability in the housing market, it is more important than ever that we have a HUD Secretary who is fully committed to addressing the challenges facing our economy. Given that Secretary Jackson is currently the subject of ongoing investigations into alleged misconduct at HUD, it became clear to me over the past few weeks and months that these investigations have been a distraction at a time when the HUD Secretary must devote his undivided attention to helping American homeowners.

Read the full post here.