A lot of homes are changing hands for very little money these days.

I looked at four cities, each a well-known entity in the housing crisis, to see how many home purchase loans were made on houses for less than $25,000.  The four cities were Detroit, Cleveland, Las Vegas, and New Orleans.  The first two have had waves of foreclosures due to the gradual decline of industrial employment.  Subprime lending flourished here.  Las Vegas, by contrast, is driven by tourism and retirement.  Unlike Detroit and Cleveland, it was the site of scores of new housing development in the last few years.  It is also the locus of many foreclosures, though.  New Orleans’ decline is a bit different. Its economy has been destabilized by natural causes – Hurricanes Rita and Katrina.

In all, more than 700 homes were purchased for less than $25,000 in these four cities in 2008.  Detroit is the leader, with 256 homes, followed closely by 256 homes in Cleveland.

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Duroville’s continued existence points to the ongoing lack of affordable housing, particularly for very low-income workers.

U.S. District Judge Stephen Larson ruled that Duroville, a sprawling mobile home park in the far eastern portion of Riverside County, California, can remain open.  Larson indicated that the park should not be closed until alternative housing can be found for the park’s households.  When harvest time comes for the park’s myriad crops, as many as 6,000 people are estimated to make their home within the park.

Duroville is estimated to have more than 850 feral dogs.  It has open sewers with backed-up sewage.  Electrical systems are faulty.  And, systems for wastewater appear to be largely lacking.  Its a chronic mess that compromises the health of the farmworker families that live there.

The park is shielded from some law by the protection afforded to tribal communities.  Harvey Duro, is a member of the Torres Martinez Desert Cahuilla Indians, and the park is on tribal land.

The key statement is that Larson recognizes that there is no better alternative out there for these families.   Its telling that the 250 mobile homes in the park house as many as 6,000 individuals.  This is a situation where people are probably taking shifts to sleep in beds.

I have seen these kinds of situations in Haiti.  Its hard to believe that its a good idea to house the people responsible for bringing food to our table in this kind of mess.

The Senate has spoken, and a loan-modification bankruptcy bill is not going to gain passage this year.  Yesterday, Senators voted 51 against and 45 for on a motion to continue deliberation.

The Helping Families Save their Homes Act, referred in the House as HR 1106, stalled in the Senate.  Observers credit its defeat to pressure from Wall Street.  Even then, though, it appears that opposition was hardly uniform among banks: Citigroup even announced its support for the provisions in the proposed legislation.

This is a shame for anyone interested in finding a realistic solution to prevent just the kind of paralysis that allows this foreclosure crisis to spiral out of control.  The bill hardly takes borrowers off the hook.  Rather, it merely introduces a place for judgment in individual cases.  Bankruptcy court judges, who already have the ability to make modifications on loans for yachts, second homes, and automobiles, are denied the same powers as a result of yesterday’s decision in the Senate.

The stakes are high.  Home mortgage debt is the single largest element of household borrowings in the country, with estimates suggest that Americans owe more than $14 trillion on their homes.  The next closest category – credit card debt.  We “only” owe about $950 billion on our cards, though.

Its interesting that a consumer protections bill for credit cards is likely to pass, while a home mortgage bill appears to have failed.

In the last administration, the action of regulators could be summed up like this:

1) We reserve the right to regulate, and we deny states the right to regulate within their state.

2) We choose not to regulate.

It was a nice one-two punch.  In North Carolina, some good anti-predatory lending laws were enacted that should have shielded our residents from many problems.  When in place, the state rules worked.  State-regulated institutions (including BB&T, the largest) followed those rules.

Still, national banks argued that they didn’t need to heed states.  It was too hard to follow rules in 50 places.  Better to follow one rule.  Even better, if the one rule was essentially saying that “there should be no rules.”

In Wachovia v. Watters, the Court emphatically ratified this regulatory principle into law.

Fast forward to today’s hearing, though.  In Cuomo vs. The Clearinghouse Association, the Justices will hear arguments related to New York Attorney General Eliot Spitzer’s investigation into mortgage pricing.  Spitzer was denied the ability to issue subpoenas after he used publicly available data to find discrepancies in lending prices to minorities.

Spitzer had to move on to pursue other opportunities.  Andrew Cuomo has gladly filled in for him, though, and he is the author of the filing heard today.

Bankers have traditionally argued that the publicly available data, from the Home Mortgage Disclosure Act, paints a false picture because it does not contain all of the relevant data that goes into underwriting decisions.  That is true.  Credit scores are omitted, as are loan-to-value ratios.  That said, the banks will not assent to having that data in the HMDA reports, and they declined to make it available to Cuomo.

Cuomo’s petition is here.  The attorneys represent the Clearinghouse Association have presented this brief.

Today, we will get a hint if this case is going to find traction.

You may have heard claims by Bank of America’s about its stature in small business lending:

“With our scale and depth of resources, Bank of America offers small business owners unparalleled access to solutions to help run their businesses smoother, more profitably and with greater access to a wider business network.” — Mark Hogan, BAC Small Business Banking

True enough, BAC is the largest Small Business Administration Lender, measured by aggregate statistics for the entire country.  In fiscal year 2007, Bank of America made more than 10,000 SBA (7) a loans for a sum of more than $300 million.

Yet another look reveals that this position is really a product of the size of their business.  This is an mile-wide, inch-deep kind of commitment.

Take a look at the area where, of any in the country, Bank of America’s “leadership” in small business banking should translate into market dominance:  Charlotte, North Carolina.  This is BAC’s headquarters.  Charlotte is home to some other large banks, of course, but none that claim to be the leader in small business banking.

That’s too bad, because many of them outpace Bank of America.  Let’s look at the list of leading small business lenders in the area, in terms of loans by loan amounts.  We get data from the Federal Financial Institutions Examination Council (FFIEC), the leading publicly available provider of data on small business loans.  The FFIEC cuts has several ways of defining small business lending – this one applies to firms with less than $1 million in annual revenue.

1. Wachovia (now part of Wells Fargo), $120,000 million
2. BB & T, $89.9 million
3. First Citizen’s Bank & Trust, $56.1 million
4. First Charter (now part of Fifth Third), $38.2 million
5. FIA Card Services, $38 million
6. Suntrust, $30.2 million
7. Citizen’s South, $25.8 million
8. RBC Centura, $22.8 million
9. Bank of America, $19.1 million

So, in Charlotte, Bank of America actually lags 8 institutions.  Some significantly smaller institutions, most glaringly Citizen’s South, provide more funding to the region’s small businesses.

Now, it is possible that some could claim that $1 million is the wrong place to draw a line in the sand.  Sure, that’s reasonable.  Then again, its as reasonable as most other demarcations.  It means that businesses up to the size of a small deli or a local pest service are counted, but perhaps a local franchise is excluded.  The former are likely to have a particularly hard time getting loans.  They are also likely to be job generators, as they include many nascent firms with the potential to expand quickly.

Still, this is getting ahead of things.  What about in terms of loan volume?  Well, here, the list ahead of Bank of America is probably too long to write in a blog.  Suffice to say that Bank of America comes in 17th in Charlotte.

There is a caveat, applying to both lists.  FIA Card Services, which ranks fifth by amount and second by volume in Charlotte, is the former MBNA brand acquired in 2006 by Bank of America.  Taken together, BAC’s sums would increase a few places in each category.

Nonetheless, the impression remains off the mark.  If the pr surrounding BAC’s small business lending indicated that it mostly consisted of credit card loans (presumably with high interest rates, terms subject to constant revision, and few consumer protections) wouldn’t that seem different?

In fact, to make it more transparent – here is one disclosure statement of standard terms for a B of A card through FIA:  variable interest rates range from 12 percent to as high as 19.99 percent. Cash advances are almost 25 percent.  A default APR of 27.24 percent! Hardly the kind of lender that a small business would want to work with while it finds its way.  More like a lender of last resort.

Ouch!  Doesn’t sound like higher standards.