Thursday, May 7, 2009


Why I love Detroit:

Austin Black II

Austin Black II, real-estate agent and the president of City Living Detroit, a nonprofit that promotes urban living. He is seen standing in the Guardian Building Detroit: My whole life

People think of Detroit as a declining industrial town, but we have absolutely gorgeous architecture.
The Guardian Building, which is a national landmark, is especially breathtaking. I live about a mile or two from the skyscraper. It's bright and bold and art deco, made all of brick. It's just a beautiful structure inside and out, and it could never be replicated.
To me, it represents when the auto industry and Detroit as a whole were booming.
Why I love Detroit: It's one of the last cities to have a rebirth. I'm 28, and most of my friends my age own their own houses and businesses. You can't go to New York at 28 and start a business, unless you have a ton of money. A lot of us have experience in other urban areas, and we come back.
I see Detroit shifting from dependence on the auto industry, given the reality of what's going on. I think entrepreneurship and emerging technology will drive Detroit.
When I show real estate, I see young people and empty nesters coming back. It's evolving into an urban center. It's exciting to see.

Thursday, April 30, 2009

Best Cities for Jobs

Over the past five years, Michael Shires, associate professor in public policy at Pepperdine University, and I have been compiling a list of the best places to do business. The list, based on job growth in regions across the U.S. over the long, middle and short term, has changed over the years -- but the employment landscape has never looked like this.
In past iterations, we saw many fast-growing economies -- some adding jobs at annual rates of 3% to 5%. Meanwhile, some grew more slowly, and others actually lost jobs. This year, however, you can barely find a fast-growing economy anywhere in this vast, diverse country. In 2008, 2% growth made a city a veritable boom town, and anything approaching 1% growth is, oddly, better than merely respectable.

So this year perhaps we should call the rankings not the "best" places for jobs, but the "least worst." But the least worst economies in America today largely mirror those that topped the list last year, even if these regions have recently experienced less growth than in prior years. Our No.1-ranked big city, Austin, for example, enjoyed growth of 1% in 2008 -- less than a third of its average since 2003.

The study is based on job growth in 333 regions -- called Metropolitan Statistical Areas by the Bureau of Labor Statistics, which provided the data -- across the U.S. Our analysis looked not only at job growth in the last year but also at how employment figures have changed since 1996. This is because we are wary of overemphasizing recent data and strive to give a more complete picture of the potential a region has for job-seekers.
The Big Winner: Texas

The top of the complete ranking -- which, for ease, we have broken down into the two smaller lists, of the best big and small cities for jobs -- is dominated by one state: Texas. The Lone Star State may have lost a powerful advocate in Washington, but it's home to a remarkable eight of the top 20 cities on our list -- including No. 1-ranked Odessa, a small city in the state's northwestern region. Further, the top five large metropolitan areas for job growth -- Austin, Houston, San Antonio, Ft. Worth and Dallas -- are all in Texas' "urban triangle."

The reasons for the state's relative success are varied. A healthy energy industry is certainly one cause. Many Texas high-fliers, including Odessa, Longview, Dallas and Houston, are home to energy companies that employ hordes of people -- and usually at fairly high salaries for both blue- and white-collar workers. In some places, these spurts represent a huge reversal from the late 1990s. Take Odessa's remarkable 5.5% job growth in 2008, which followed a period of growth well under 1% from 1998 to 2002.

Of course, not all the nation's energy jobs are located in Texas, even if the state does play host to most of our major oil companies. The surge in energy prices in 2007 also boosted the performance of several other top-ranked locales such as Grand Junction, Colo., Houma-Bayou Cane-Thibodoux, La., Tulsa, Okla., Lafayette, La., and Bismarck, N.D.

Looking at the energy sector's hotbeds, however, doesn't tell the whole story. Another major factor behind a city's job offerings is how severely it experienced the housing crisis. There's a "zone of sanity" across the middle of the country, including the region around Kansas City, Mo., that largely avoided the real estate bubble and the subsequent foreclosure crisis.

College Towns as Emerging Hubs

Still other factors correlating with job growth -- as evidenced by Shires' and my current and past studies -- are lower costs and taxes. For example, the area around Kennewick, Wash., is far less expensive than coastal communities in that same state, and residents and businesses there also enjoy cheap hydroelectric power. Compared with high-tech centers in California and the Northeast, such as San Jose and Boston, places like Austin offer both tax and housing-cost bargains, as do Fargo, N.D. and Durham-Chapel Hill, N.C.

College towns also did well on our list, particularly those in states that are both less expensive and outside the Great Lakes. Although universities -- and their endowments -- are feeling the recession's pinch, they continue to attract students. In fact, colleges saw a bumper crop of applicants this year, as members of the huge millennial generation, encompassing those born after 1983, reach that stage of life. More recently, college towns have emerged as incubators for new companies and as attractive places for retirees.

Specifically, the college town winners include not only well-known places like Austin and Chapel Hill, but also less-hyped places like Athens, Ga., home of the University of Georgia; College Station, Texas, where 48,000-student Texas A&M University is located; Morgantown, W.Va., site of the University of West Virginia; and Fargo, the hub of North Dakota State University.

Democratic states are glaringly absent from the top of the list. You don't get to a traditionally blue state -- in a departure from past years, Obama won North Carolina -- until you get to Olympia, Wash., and Seattle, which ranked No. 6 among the large cities.

But political changes afoot could affect the trajectory of many of our fast-growing communities -- and not always in positive ways. It's possible that the Obama administration's new energy policies, which may discourage domestic fossil fuel production, could put a considerable damper on the still-robust parts of Texas and elsewhere where coal, oil and natural gas industries are still cornerstones of economic success.

Economic and Power Shifts

By contrast, the wind- and solar-power industries seem to be, as of now, relatively small job generators, and with energy prices low, endeavors in these areas are sustainable only with massive subsidies from Washington. But still, if these sectors grow in size and profitability, other locales that have not typically been seen as energy hubs over the past few decades may benefit -- notably parts of California, although Texas and the Great Plains also seem positioned to profit from these developments.

Another critical concern for some communities is the potential for major cutbacks on big-ticket defense spending. This would be of particular interest to communities in places like Texas, Oklahoma and Georgia where new aircraft are currently assembled. Over the years, blue states like California have seen their defense industry shrivel as the once-potent Texas Congressional delegation and the two Bushes tilted toward Lone Star State contractors.

These days it's big-city mayors and big blue-state governors who are looking for financial support from Obama. Northeast boosters are convinced more money on mass transit, inter-city rail lines and scientific research will rev up their economies. Boston -- No. 16 on the list of large cities and a leading medical and scientific research center -- could be a beneficiary of the new federal spending.

The most obvious winner from the recent power shift should be Washington, D.C. The Obama-led stimulus, including the massive Treasury bailout, has transformed the town from merely the political capital into the de facto center of regular capital as well. Watch for D.C. and its environs to move up our list over the next year or two. Already the area boasts one of the few strong apartment markets among the big metropolitan areas in the country, which will only improve as job-seekers flock to the new Rome.

More Promising Places

Yet Washington is an anomaly, because most of the places that stand to benefit from this unforgiving economy are ones that are affordable and therefore friendly to business, reinforcing a key trend of the last decade. It also helps regions to have ties to core industries like energy and agriculture, a sector that has remained relatively strong and will strengthen again when global demand for food increases.

Some areas have attracted new residents readily and continue to do so, albeit at a somewhat slower pace. Over time this migration could be good news for a handful of metropolitan areas like Salt Lake City, which ranks seventh among the big cities for job growth, and Raleigh-Cary, N.C., which was No. 1 among large cities last year and No. 8 this year. Over the last few years, these places have consistently appeared at the top of our rankings and are emerging as preferred sites for cutting-edge technology and manufacturing firms.

Below these winners are a cluster of other promising places that have already managed to withstand the current downturn in decent shape and seem certain to rebound along with the overall economy. These include the largely suburban area around Kansas City, Kan., perennial high-flyer Coeur d'Alene, Idaho, and Greeley, Colo. -- in part due to their ability to attract workers and businesses from bigger metropolitan centers nearby -- as well as Huntsville, Ala., which has a strong concentration of workers in the government and high-tech sectors.
In the end, most of the cities at the top of the lists -- whether they are small, medium or large -- have shown they have what it takes to survive in tough times. Less-stressed local governments will be able to construct needed infrastructure and attract new investors

Wednesday, April 29, 2009

Detroit Entreprenuers band together

Detroit entrepreneurs band together
Local business owners are teaming up to draw shoppers and rebuild Detroit, one business at a time.
Liz Blondy, who runs a dog grooming and boarding business, co-founded Open City to bring together Detroit's entrepreneurs.
DETROIT ( -- After David Mancini opened Supino Pizzeria eight months ago in downtown Detroit, he quickly came to appreciate a powerful source of word-of-mouth marketing: his fellow business owners. Even those who are potential rivals.

The owners of nearby Russell Street Deli, who sold the pizzeria space to Mancini last year, give Supino menus to their customers and allowed Mancini to test dough recipes in the pizza kitchen before he decided to go into business. Jerry Belanger, a partner with Park Bar in Detroit, has bought rounds of pizza for his patrons and frequently promotes Supino's to the bar crowd.

As a newbie entrepreneur trying to make it in Detroit's struggling economy, Mancini finds the help essential.

"I don't know where I'd be without it," said Mancini, who has hired seven part-time employees. "We've done pretty well considering the economy is the way it is. I'm doing a lot better than I thought I'd ever be doing at this point."

Mancini is part of a community of Detroit entrepreneurs banding together to help each other weather the struggles of running a business through a deep recession. Such cooperation isn't exclusive to Detroit, but local entrepreneurs say having a support system is especially crucial in an economy that is plagued by the troubles of the Big Three automakers.

"We really want each other to succeed, because we know the whole situation with the cars has been a little bit devastating," said Liz Blondy, president of Canine To Five, a dog daycare, boarding and grooming facility in Detroit's midtown.

Blondy is a co-founder of Open City, a small business networking group that gathers monthly. Around 100 people attended the April meeting, at which longtime business owners offered advice on how new companies can navigate Detroit's economy and achieve similar longevity. Among their tips: Keep your overhead low. Detroit's rock-bottom real estate prices help with that -- commercial space is inexpensive and homes can be had for less than $1,000.

"There is no place to open a business where your fixed expenses will be lower than Detroit," said Dave Muer, owner of Blue Pointe Restaurant.

Launching in Detroit
Muer's advice was a welcome tip for Open City attendee Torya Blanchard, the owner of Good Girls Go To Paris Crepes. Blanchard opened her creperie's first location nine months ago, where she now employs four part-time workers. She's planning to soon open a second Detroit outlet and a third in nearby suburb Grosse Pointe Park.

"When you get advice and insight from people who have done business in the city for 10 or 20 years, they can tell you from experience how they got through the rough spots and how to change with the times," Blanchard said.

Open City's co-founder believes Detroit's challenges make the small business community here particularly cohesive.

"Not a day goes by that I don't talk to another small-business owner in Detroit to say, 'Hey, how's it going,' or 'How's business? Is there anything that I can do to help you?'" said Blondy, whose company has 12 employees and had sales of $290,000 last year.

Belanger, who helped Mancini in Supino's infancy, has made it a personal mission to assist new entrepreneurs in town. Most recently, he helped create Detroit Cheers, a local currency circulating among Detroit businesses. Detroit Cheers trade at par with U.S. dollars and are backed up by money in a bank account. The bills, which come in $3 denominations, can be redeemed for cash if turned in to Belanger or his two partners in the currency: Tim Tharp, owner of Grand Trunk Pub, and John Linardos, owner of Motor City Brewing Works.

There are 4,500 Cheers in print, but Belanger said he and his partners are leaking the currency out slowly to keep interest up in the program. Belanger gives the bills out for free to Park Bar customers who promise to use the money at about 20 Detroit businesses that accept the currency.

"It provides new or struggling businesses with revenue they need, and exposes their products to a new customer base," Belanger said. "The point of the program is primarily awareness, togetherness and community. It is more of a social statement than anything."

Lending a hand
For some entrepreneurs, building the local business community means referring customers to potential competitors.

Slow's Bar BQ in Detroit has become a hotspot for regulars craving baby-back ribs or Texas-style beef brisket. The restaurant is so popular that diners wait as long as two hours for a table on a Saturday night.

While Slow's has a bar, co-owner Phil Cooley often refers people to nearby LJ's Lounge, where they can grab drinks until their table is ready. On some busy nights, he points hungry customers to El Barzón instead, a Mexican and Italian restaurant where Cooley frequently dines.

"We want businesses as competition, because in our minds it's about getting more people down here visiting and having a nice time," said Cooley, who expects sales of $3 million for Slow's this year.

Sharing customers is especially helpful in a city that has more than 900,000 residents but few national retail and restaurant chains. "We're so underserved in so many ways, but especially commercially," Cooley said. "So there's plenty of market to share."

When Claire Nelson's home accessories store Bureau of Urban Living doesn't have what a customer is after, she'll often pick up the phone and call Mezzanine or Design 99, two other design stores in town. Nelson, who created Open City with Blondy, says she'd rather steer a buyer toward another independent retailer than lose them to a chain store like Target.

Peer support can be a powerful motivator for new members of Detroit's business community, especially as the city struggles to gain an economic foothold.

"There has to be something that makes people live here, because you have to endure in this town," said Belanger of Park Bar, which opened in 2004. "You have to endure the economy, you have to endure blight. But there's something about Detroit that makes people say it's worth the struggle."

Cooley thinks that "something" is directly related to the struggle. Detroit's turmoil bonds together the entrepreneurs who choose to build their companies there.

"It's exciting to watch people to work together out of necessity to make things work," he said.

Thursday, April 23, 2009

Foreclosure State

Foreclosure leaders focused on 4 states in new metro list

Wednesday April 22, 2009, 9:47 am EDT

Buzz up! Print The 26 cities with the highest foreclosure rate in the nation are all located in four hard-hit states, with Las Vegas topping the list, according to a report released Wednesday.

Metro areas in California, Florida, Nevada and Arizona topped the foreclosure filing list for the first quarter of 2009 in a report from RealtyTrac, an online marketer of foreclosed properties. A foreclosure filing includes default papers, auction sale notices and repossessions.

Las Vegas had the highest rate of foreclosures of any city, with one in every 22 homes subject to a foreclosure filing in the first three months of the year. The rate of foreclosure filings was 4.5%, seven times the national average.

Merced, Calif., had the second highest rate, with Cape Coral-Fort Myers, Fla., Stockton, Calif., and Riverside-San Bernardino-Ontario, Calif., rounding out the top five.

"The metro areas with the highest levels of foreclosure activity in the first quarter of 2009 paint a picture of concentrated problems in a relatively small number of hard-hit areas," said James J. Saccacio, chief executive officer of RealtyTrac, in a written statement.

Foreclosure rates have been very high in the 4 key states throughout the bursting of the housing bubble, and so it was to be expected that cities from those states would pepper the top of the list.

However, it was a surprise to see the list so top heavy, according to Rick Sharga, senior vice president at RealtyTrac.

"The concentration of troubled metro areas within the hardest-hit states, candidly, was even more severe than we expected it to be," Sharga said. "The degree to which those four states dominated the rankings surprised even us."

New problem cities: Meanwhile, some metropolitan areas had a surge in foreclosures. Boise City-Nampa, Idaho, in 27th place, Provo-Orem, Utah, in 37th, and Charleston-North Charleston, S.C., in 51st were examples Sharga gave of areas that had particular strong gains in filings.

Sharga said the rise of foreclosures in additional regions indicates new factors influencing the housing market as the recession drags on.

"What we believe we are seeing is some of the areas with unemployment problems," said Sharga. "These are people living paycheck to paycheck and, when the paycheck is gone, suddenly they can't afford to make their mortgage payments."

The data for RealtyTrak's metro area foreclosure report is collected from 2,200 counties across the nation, and those counties represent more than 90% of the U.S. population. Some 203 areas are covered by the report.

Across the nation, foreclosure activity in the first quarter hit a record high, according to another RealtyTrac report issued last week. Total foreclosure filings reached 803,489 in the first three months of the year, the highest monthly and quarterly totals since RealtyTrac began reporting in January 2005.

The national report also found that the worst of the foreclosures were centralized in a handful of worst-hit states. California, Florida, Arizona, Nevada and Illinois accounted for nearly 60% of the total foreclosure activity in the first quarter, with 479,516 properties received foreclosure filings in those states.

Wednesday, April 22, 2009

Freddie Mac CFO found dead

David Kellermann, acting chief financial officer since the government takeover of Freddie Mac, was found dead in his Virginia home. The death is under investigation.

Reporting from Washington -- The acting chief financial officer of Freddie Mac, an embattled government-owned company that controls millions of home mortgages, was found dead today of apparent suicide in his suburban Virginia home.Fairfax County Police were called to the Vienna, Va.-area home of Freddie Mac's David Kellermann at 4:48 a.m. to investigate. Though it appeared to be suicide, they said the cause of death is under investigation, with an autopsy planned today.

Kellermannn, 41, had served as acting chief financial officer for Freddie Mac since September and worked there for 16 years.McLean, Va.-based Freddie Mac has faced intense criticism for reckless practices that some believe contributed to the housing crisis at the heart of a financial economic meltdown and recession. Chief Executive David Moffett resigned last month.Freddie Mac owns or guarantees about 13 million home loans. Freddie Mac and Fannie Mae, which together own or back more than half of the home mortgages in the nation, have been hobbled by loan defaults and collected $60 billion in federal aid.
Kellermann was named acting chief financial officer after the resignation of Anthony "Buddy" Piszel, who stepped down after the September 2008 federal government takeover of Freddie Mac.Fairfax County Police were called to Kellermann's home on Raleigh Hill Road in the Vienna area, a suburban community near Washington, D.C., with the department's information officer Mary Anne Jennings initially reporting that they were called from the home "to come investigate an apparent suicide."Kellerman was found dead inside the home, according to Fairfax County Police Officer Shelley Broderick."It is under investigation," Broderick said, with an autopsy planned today. "There are no signs of foul play."Foul play would indicate a crime had been committed, Broderick said, adding: "Suicide is not a crime."Kellerman, a 16-year veteran of Freddie Mac, had served as senior vice president, corporate comptroller and principal accounting officer before becoming acting chief financial officer in September.

Tuesday, April 14, 2009

Hiring or Not

Should I Hire a Property Management Company for My Rental Property?

Once you have invested in a rental property, the responsibility of maintaining and running the property can quickly become overwhelming. For many landlords, the logical solution is to hire a property management company to oversee their rental property. But is this the right decision for you?

1. Do you have what it takes to run a rental property? If this is your first foray into property management, you could find yourself in over your head. Collecting rent may sound easy, but in reality, it can be more like a painful extraction. If you are not familiar with rent collection, you can quickly find that your tenants are taking advantage of your inexperience.
In addition to rent collection, day-to-day maintenance of a rental property can be tiring. If you are not operating your property as a full-time job, you may not have the time to address tenant concerns and repairs in a timely manner. This may make hiring a property management company an excellent choice.

2. Where is your rental property located? If you have purchased a rental property near your home or place of business, you'll be able to keep an eye on the property. However, if your rental property is far away, you'll be loath to travel to it to deal with the inevitable problems that arise. If you're unable to check on the property on a regular basis and handle any issues that may arise, finding a local property management company can mitigate these concerns.

3. Does the property need frequent visits, repairs, or attention? If your rental property is a veritable money pit, you can find yourself spending more time there than at your regular job. If you're getting constant requests for repairs to a property, having someone who can devote the majority of their time to your property is very helpful. The more units you have, the more you can benefit from a professional maintenance worker or property management company.

4. What services do you need? If you're looking for a small amount of assistance, such as monthly rent collection, a full-service agency may be too much for your needs. Since you'll need to budget in the fees charged by a property management company, this will cut into your profit margin. Therefore, instead of hiring a full-service company, you may be better served by a part-time property manager or specialist who can handle the most frequent problems.
On the other hand, if you do need a complete solution, make sure that the company can provide you with all the services you require. For example, if you need someone who is capable of light maintenance work in addition to rent collection, keep this in mind while you shop for a property management company.

5. Is the company trustworthy and friendly? Before hiring a property management company, do thorough research to ensure that it is reputable. If you are an absentee landlord, this is extremely important. You will be relying on this company to collect rent and represent you and you interests. Check references and talk to other landlords who have worked with this company. Make sure the representative of the property management company is level-headed and diplomatic. Just one bad interaction between tenant and rent collector can destroy goodwill that can take years to restore.

Hiring a property management company should result in more free time and less worry for you. If you hire a property management company and find that you are still constantly worrying about your property, you may need to restructure your schedule to spend more time at the property, or have more frequent communication with the property management company.

Managing Rental Properties

How to Manage Rental Property

If you plan to manage rental property, you'll need organizational and management skills, along with a good working knowledge about real estate matters. Here are the major things you'll have to take care of.

Things You’ll Need:
· Newspaper Ads
· Insurance
· Rental Applications
Advertise vacant property for rent.
Show available property for rent and interview prospective tenants.
Screen the best candidates for your rental property by requiring written applications with credit and employment references.
Evaluate prospective tenants by investigating their backgrounds, credit histories, personal references and employment histories.
Obtain liability, fire, theft and other insurance on rental property.
Arrange for regular maintenance and necessary repairs of the property.
Assure that tenants comply with rental policies and procedures.
Supervise repairs and maintenance work.
Conduct inspections of the property on a periodic basis.
Establish and maintain an organized system of collecting rental payments and security deposits.

Monday, April 13, 2009


Radical cheap: $1,000 homes
In places like Detroit and Cleveland, banks are unloading rundown homes for next to nothing. And they're tremendous bargains, even after factoring in renovation costs.

NEW YORK ( -- The real estate market is so awful that buyers are now scooping up homes for as little as $1,000.

There are 18 listings in Flint, Mich., for under $3,000, according to There are 22 in Indianapolis, 46 in Cleveland and a whopping 709 in Detroit. All of these communities have been hit hard by foreclosures, and most of these homes are being sold by the lenders that repossessed them.

"Foreclosures have turned banks into property management companies," said Heather Fernandez, a spokeswoman for, the real estate Web site. "And it's often cheaper for them to give these homes away rather than try to get market value for them."

In Detroit for instance, Century 21 Villa owner Randy Eissa has a three-bedroom, one-bath bungalow of about 1,000 square feet listed at just $500. It's a nice place with lots of light, but it needs a total rehabilitation inside, which Eissa estimates will cost between $15,000 and $20,000. But that's not bad, considering that the home last sold for $72,000 in late 2007, according to

With prices this low, lenders aren't looking to make any money on these deals. They just want to get these houses off their books, so they don't have to bear the cost of maintaining them and paying property taxes.

In fact, the $500, $1,000 or $3,000 that a buyer forks over often goes straight to the real estate brokers as a commission. And often the lenders have to kick in extra cash to make it worthwhile for a realtor even take the listings, according to Eissa.

"Usually these homes are bank repossessions that the lenders have already tried to sell on the market, perhaps then put up for auction without success and then re-listed," he said.

Fixer uppers
These houses are almost always small fixer-uppers. Wiring, plumbing and heating systems have to be replaced, walls and ceilings sheet-rocked, plumbing and light fixtures installed and new kitchen cabinets and counters put in. Few come with working appliances.

Often buyers are legally required to rehab these homes to bring them up to code. In Detroit, buyers are required to sign Affidavits of Compliance Responsibility, which obligates them to make repairs outlined in an inspection report. Only after that can a certificate of occupancy will be issued, which makes the house legal to live in.

But even factoring in these costs, they're still bargains.

And as the housing crisis drags on, there are more and more four-figure listings popping up, as lenders try to unload their repossessed properties.

Cleveland is another city with many incredibly inexpensive homes. On Ardenall Avenue, in East Cleveland, McMullen Realty has a listing for a four-bedroom, one-and-a-half bath house for $1,900. It's been vandalized inside, but the outside is in good shape.

It features a deep front porch with Doric columns, double dormer windows and a separate garage. It's an excellent opportunity, according to agent Tonya Stoudamire. The last time it sold was in March of 2008 when it went for $16,677, according to Zillow.

"East Cleveland has a beautiful housing stock," she said. "These houses just need someone to come in and love them a little."

Another property for sale in Birmingham Ala. is priced at $1,900. The one-bedroom, one bathroom home was built in 1923 and has major fire damage, according to its listing broker, Tom Murphy Realty. The listing states that "Rooms are hard to distinguish."

But it's on a nice-sized lot, about 0.38 acre, close to downtown and transportation and has all utilities. Nearby, comparable homes in good condition sell for about $100,000, according to Zillow.

Rehab money
Most of these $1,000 homes can be renovated relatively inexpensively, and buyers can actually get government help to finance these repairs. The U.S. Department of Housing and Urban Development (HUD) has a special loan program for just such purchases.

Its rehabilitation mortgage insurance, available through FHA-approved lenders, was designed to encourage banks to issue a single, long-term loan to buyers that covers both the acquisition and rehabilitation of a property, according to HUD spokesman Brian Sullivan.

He adds that there may also be grant money available from the $4 billion Neighborhood Stabilization Program, which was a part of the massive housing rescue bill passed by Congress in July, to assist buyers with grants for down payments.

Buying homes like these is certainly a leap of faith; they're generally not in the best of neighborhoods and they're often surrounded by many other vacant and deteriorating homes. Still, some of these neighborhoods may turn around and provide residents with good, dirt-cheap housing.

"It's a sad time," said Stoudamire. "But it's also a time of opportunity, especially for low and moderate income people."

Saturday, April 11, 2009

No U.S. banks will close due to stress tests: source

Failing banks should be closed. They are not contributing to the community's they are located and continue to hold back the area from recovering.
Read the Article at HuffingtonPost

Farmington Hills bank told to sell or merge

The Federal Reserve System's Board of Governors has ordered Michigan Heritage Bank in Farmington Hills to find a buyer or merge with another bank by Wednesday because it is "critically undercapitalized."
The move follows two recent "cease and desist" orders issued by the Federal Deposit Insurance Corp. to University Bank in Ann Arbor and West Michigan Community Bank in Hudsonville. The cease and desist orders are issued by the FDIC to stop banks from committing unsafe or unsound banking practices and violations of laws and regulations.
And last month, the Office of Thrift Supervision ordered Home Federal Savings Bank in Detroit to find a buyer or merger partner by Wednesday.
The government orders reflect the struggles that many Michigan small banks are facing as they cope with the prolonged economic downturn in the state. Though only one Michigan bank -- Main Street Bank in Northville -- has failed in the past year, the number of problem banks continues to rise and more banks are operating under cease and desist orders.
Michigan Heritage, established in March 1997, has $180 million in assets and branches in Novi and Wixom. It lost $3.4 million in the fourth quarter of last year.
A Michigan Heritage executive was not available to comment. Raymond Biggs II, its CEO and president, is no longer with the bank.
The Federal Reserve System ordered Michigan Heritage on April 1 to take other actions including increasing its equity through the sale of shares and restricting bonuses and compensation increases to senior executive officers.
Deposits at Michigan Heritage are insured by the FDIC up to $250,000