New Home Builders NewsBlog.com

Comments Wanted on Abolishing the Texas Homebuilders Commission; TRCC

Brought to you by HADD:

"In Texas we have a 'Sunset Commission' which reviews each Commission in

Texas to determine if the commission should continue or if it
should be abolished. TexasThe Residential Construction Commission,
created by the builders for the builders, is up for review this year.

If you care to comment, please contact Kelly Kennedy at the Sunset
Commission  (512) 463-1300 or via email: sunset@sunset.state.tx.us.
Ask for the TRCC questionnaire.

From Houston Bay Area http://bayareahouston.blogspot.com/2008/05/history-of-failure-in-homebuilders.html

The TRCC law is up for sunset review, a process that includes a public
comment period through May 16 and hearings Sept. 23 and 24, during
which commissioners invite public testimony. Under sunset law
provisions, lawmakers are supposed to address any concerns raised when
they convene in 2009.

To fix this grossly unbalanced legislation will
require a willingness among representatives to give the same
consideration to the needs of Texas homebuyers as they do to the
wishes of the construction industry."

Builders Sodomise American Taxpayers for the Second Time in 20 Years Replete with Government Complicity

Can you smell the KY smoking? Is your lower back aching? Can you barely remember what happened to you? Well, let me refresh your memory…

1986 - 1995: $500 billion S&L bailout bill crafted by our elected officials that benefited fraudulent developers and lenders directly costing taxpayers approx. $153 Billion.

Does any of this sound vaguely familiar? It should; its damn near a mirror image of what is happening today with a few caveats. Here is what happened back then…

A bunch of greedy people got together and opened up a slew of S&L’s (Savings and Loans - specializes in accepting savings deposits and making mortgage loans) that were able to take in millions of dollars in government backed (FSLIC ) CD deposits and then take the same deposits (minus their capitol of course) and originate new mortgage loans with the money. Everyone involved got rich.

Then the greedy people got even greedier. The owners of these S&L’s began using the profits to make loans to their friends, relatives, and developers to fund construction projects that should never have been built. This created a building boom with no buyers. Meanwhile, all of this money being generated made it possible for kickbacks to accountants, auditors, representatives and senators on the banking committees.

Then the recession hits and the developers default on the loans causing a collapse of the construction market. Then our government comes to the rescue of the developers and S&L’s (who just got filthy rich) with our taxpayer money to bail them out.

Talk about sickening Déjà vu. Now fast forward to today…

2008 - $25 billion Builder Bailout under the guise of the “Housing Relief Bill” aka “2008 Foreclosure Prevention Act” passed by our Senate and being considered by our Congress preceded by mortgage fraud and over-development perpetrated by lending institutions and homebuilders pushing subprime garbage facilitated in shaddy backroom dealings.

Residential homebuilders saw the opportunity to make record profits due to the lowering of interest rates and a possible repeat of history. When the builders saw how much money the lenders were making they decided to enter and push their own mortgages; many times forcing homebuyers to use their in-house financing. Then subprime lending was just too profitable to ignore and the big homebuilders began pushing riskier loans to people who were obviously not going to be unable to repay them. All the while, building shoddily constructed new homes at a fevered pace causing the huge overhang of severely overpriced homes (by as much as 60%) in the residential housing market we are currently enjoying.

The flood of foreclosures and complaints of shoddily built homes that were sure to come are all around us driving our home values and wealth down. Yet, homebuilders and lenders have gotten rich as can be attested by the obscene compensation packages of their CEO’s and record profits.

Now, after all of this ill gotten money has been made, the homebuilders wanted to get in line to gorge again at the public trough via the first stimulus package. When they were denied the carry back tax credits that they sought the National Association of Home Builders (NAHB) threatened our government officials with, “ceasing all approvals and disbursements of BUILD-PAC contributions to federal congressional candidates and their PACs until further notice.”  As a result of this apparently legal blackmail, our elected officials crafted a second version of the bill that has been stripped of actual aids to the homeowners in order to serve up the public money demanded of them by the home building lobby lest the congress and the senate lose their precious reelection money; somewhat along the lines of legal bribes that assure future blackmail if the intended demands are not met; can you say Bob Perry of Perry Homes?

If this dual “Sodomiseing of the American Taxpayer” (you and me) to further enrich the wealthy has angered you as it has me, I urge you to contact your congressmen and senators and demand their accountability to the American people instead of continuing "corporate welfare" and strike out the tax credits demanded by the homebuilding industry (blackmail money) from the Housing Relief Bill / The Foreclosure Prevention Act of 2008. And if our elected officials refuse to represent their constituents – let’s vote the sorry b**tards out of office!!

ERIN BROCKOVITCH CONFIRMS CONTAMINATION IN LENNAR HOME & TEXAS SUPREME COURT GRANTS DOUBLE STANDARD DECISION TO ‘BUILDER BOB’ PERRY

Erin Brockovitch has her eye on the homebuilding industry. 

Brockovich will disclose test results of high levels of contamination in the Lennar Homes Westcott community in South Carolina.  Undisclosed source say Brockovich plans on naming KB Home (KBH) a contamination case in conjunction with the Wescott lawsuit as well. Additionally, Lennar (LEN) is the subject of homeowner outrage as community leaders in HuttoTexas(See: Lennar Homeowners Unite in Hutto Texas) hold a meeting next Saturday, May 10 to address loan irregularities as well as major construction defects.  See details.

For those of you who live in other states other than Texas, it is important to pay close attention to what is happening in Texas.  Why should you become more involved and be concerned about Texas?  The reason is Bob Perry of Texas (Perry Homes) and his nationwide campaign money machine is endorsed by the building industry (NAHB) to promote Tort Reforms and Binding Mandatory Arbitration that protect builders to assure new home warranties are unenforceable. 

Case in point; the Texas Supreme Courts decision Friday, in the infamous Bob Perry vs. Robert and Jane Cull case which illustrates how builder political contributions can so profoundly influence, when the court found in favor of Perry.  The Cull's were understandably stunted at learning of the decision. The couple has come to understand under the worst possible circumstance that a new home warranty is not a warranty at all but a deceptive false sense of security, designed to end in vicious litigation, influenced by big money.

This decision sets a double standard. No where has special interest money been more powerful and evident as Texas where builders freely build substandard homes, confident they will not be held accountable.  As I have said before, “As Goes Texas So Goes the Nation.”   

Last week a stunning article by Lise Olsen of the Houston Chronicle titled “Owners stuck with flawed homes – Families' costs mount, but state, builder give scant help, files show”   The article once again reported the scandals of Bob Perry’s TRCC builder protection agency and how the agency fails homebuyers.  Be sure to read the more than 300 reader responses the first day to the article.

Help us to help you by keeping in touch. Tell your story through HOBB, to your elected officials, and write the press. We would like to hear from you so, please take a few minutes to post your comments on the HOBB Forum.

 Thank you,
Janet Ahmad, President
Home Owners for Better Building

Wasteful $29 Billion Tax Cut Won't Help Housing: John M. Berry

Bloomberg -"Suppose you're trying to sell your house when a similar home down the street has a sign in its yard proclaiming, 'Foreclosure. Priced to Sell.'' You're probably already upset because the foreclosure likely has driven down the value of homes in the neighborhood. Then you learn that a law has just been passed giving a $7,000 income tax credit to anyone who buys a foreclosed property, further undercutting your asking price...More than $25 billion would be handed out to homebuilders over a three-year period in the form of rebates of income taxes paid during the height of the housing boom. The proposal would let homebuilders carry net-operating losses incurred in 2008 and 2009 for four years instead of just two as the tax code now allows...No, they're not keys to handling the housing crisis. At best, they would be a waste of taxpayer money. At worst, they might delay some of the adjustments that have to occur before the housing market can stabilize. The $7,000 credit, which would be paid over two years, is as likely to depress values as to prop them up. Why provide a credit to a buyer that's also going to help a lender sell a property when a hard-pressed homeowner in the same neighborhood is also trying to sell his property, possibly to avoid a foreclosure? Might that other owner not feel pressure to lower his asking price in the face of an effective reduction in the price of the foreclosed property?...Like the credit for someone buying a foreclosed property, the income-tax break for homebuilders could have a perverse impact and actually extend rather than shorten the current crisis...Avoiding the sale of land and the inventory of unsold new homes is exactly the wrong thing to encourage. Reducing the overhang of new homes is the real key to establishing a bottom for the industry. And until that is done, shoring up homebuilder bottom lines would do precious little to prevent layoffs...This legislation known as the 'Foreclosure Prevention Act of 2008'' should be called the 'Homebuilder Bailout Act.'''
April 7, 2008

         

Housing Accord Puts Builders First; Strapped Homeowners Offered Little Aid

Washington, DC. -"Senate Democratic and Republican leaders rushing to address the nation's housing crisis reached agreement yesterday on a package that would provide billions of dollars in tax rebates to the slumping home-building industry while offering little to homeowners threatened with foreclosure... Instead, lawmakers settled on a sharply scaled-back array of measures...Home builders and other businesses suffering losses in the flagging economy, meanwhile, would get the lion's share of federal spending in the bill: $6 billion in tax rebates...Still, some economists, local politicians and advocates for borrowers reacted with disappointment. They estimated that 8,000 families per day are sliding into foreclosure and said that without a major new mechanism for renegotiating mortgages, the package announced yesterday is unlikely to help most borrowers struggling to keep their homes. 'It's not clear what good it's really doing,' said Dean Baker, co-director of the Center for Economic and Policy Research. 'It's a bipartisan effort not to help the right people.'...Both parties wanted to help home builders and other businesses. Under the agreement, corporations that lose money in 2008 and 2009 would be permitted to apply their losses to tax returns from as far back as 2004, making them eligible, according to a bill summary, to 'receive any applicable refunds.'"
April 3, 2008

Wrong Relief; A Senate housing package would be better without an unjustified tax break for businesses.

Washington, DC. -" DEMOCRATS and Republicans in the Senate have joined hands and are marching to rescue the U.S. housing market...But the mere fact that both parties agree on 'principles' to deal with the mortgage problem does not guarantee that those principles are valid...We refer to the awful idea of extending the tax code's current 'carryback' provisions for net operating losses...Under current law, companies can use net operating losses to offset the taxes they owe on profits made in the two previous years...The Senate is considering extending this 'carryback' period from two years to four, meaning that companies that lose money in 2008 and 2009 could get money from Uncle Sam on the basis of profits they made way back in the first half of this decade. And who would be the biggest beneficiaries of this new tax break (estimated cost: $6 billion)? Well, a good guess is the folks who made money hand over fist during the housing bubble but have been losing money at the same rate since the subprime mortgage market collapsed last year: the home construction industry and Wall Street firms such as Merrill Lynch (MER) and Citigroup (C). In other words, this provision is a large, unwarranted bailout for the very industries that helped send the U.S. economy on its scary roller-coaster ride in the first place. Business lobbies failed to get the carryback provision written into the fiscal stimulus plan that sailed through Congress in February...It deserves to die again."
April 3, 2008

Senators ditch aid in housing bill

U.S.A. -"Mortgage companies are embracing it. The home builders who overreached in the housing boom stand to gain billions in tax breaks. And investors who snap up foreclosed homes will get a sweet tax credit. But consumer groups?...As the Senate unveiled its bipartisan housing bill on Wednesday evening, it was clear that the path to passage meant ditching the provisions that might help hundreds of thousands of homeowners...As a result, housing advocates are feeling steamrolled because a bankruptcy provision aimed at helping homeowners in foreclosure was removed from the bill. The compromise bill also slashed in half the foreclosure prevention funds proposed in the original Democratic bill...'If you did a cost-benefit analysis, I think consumers might not fare better than industry,' said Brenda Muniz, legislative director of ACORN, the community housing agency. ' Regardless of the fact that the [housing industry] got us into this problem, they still have a lot of power. We’re disappointed, but I can't say we're surprised.'...Nonetheless, the bill is still shaping up to have a generous pile of tax breaks and credits for Big Business — most notably home builders, who will be able to write off in 2008 and 2009 major losses going back four years...'It started off in a very good place for consumers, average Americans,' said Andrew Jakabovics, a housing expert for the Center for American Progress. 'But it turned into something that was targeted at a narrow sector of the economy.…The net operating loss provision is basically a handout to the building groups.'... The so-called carry back provision was a big win for the National Association of Home Builders...The union characterizes the tax measure as a corporate handout for a handful of big firms that helped cause the subprime crisis and that made billions in profits off subprime-related projects. 'This bill will force American taxpayers who are already struggling with foreclosure, job loss and shrinking retirement savings to pay again for home builders' reckless and unethical behavior,' LIUNA General President Terence M. O’Sullivan said."...
04/03/08

Builders Get Breaks From Congress

Washington, DC. -"Homebuilders and the mortgage industry are emerging as big victors in a bipartisan agreement reached by Senate leaders on legislation designed to limit the housing crisis. The $15 billion measure, announced Wednesday by Majority Leader Harry Reid, D-Nev., and GOP leader Mitch McConnell of Kentucky, contains a $6 billion emergency tax break that would let companies use losses from 2008 and 2009 to offset profits earned over the previous four years, instead of the usual two-year timeframe. That's good news for big homebuilders such as KB Home (KBH) and Pulte Homes Inc. (PHM), which have been saddled with massive losses over the past year...Homeowners facing bankruptcy, however, won't find relief in the proposal...The tax carryback also drew the ire of critics, who immediately labeled it a giveaway to big business.'Why does nearly half of the money in a bill supposedly intended to help struggling homeowners go to a multibillion dollar tax break for corporate homebuilders who helped cause this mess?' Jacob Hay, spokesman for the Laborers' International Union of North America, which represents construction workers, said in an e-mail...Earlier this year, the builders' trade group was so dissatisfied by lawmakers' actions — notably not including the tax provision in the economic stimulus bill - that it snapped shut its political purse. NAHB said it would stop making contributions to congressional candidates 'until further notice.' Since 1990, the trade group has given nearly $20 million to federal candidates, with 35 percent going to Democrats and 65 percent to Republicans, according to the Center for Responsive Politics."...
April 2, 2008