On Spec

By The Globe, 12/1/2001

Home sales down 4.1 percent in Oct.

Sales of single-family homes in Massachusetts fell 4.1 percent in October, compared to one year earliler, while the average selling price jumped 10.1 percent, according to the Massachusetts Association of Realtors. The number of sales of single-family dwellings dropped from 4,028 in October 2000 to 3,861 in October 2001. When compared to September 2001, sales jumped 2.3 percent, from 3,774 in September to 3,861 in October.

Condominium sales fell more dramatically, from 1,181 in October 2000 to 1,055 in October of this year, a 10.7 percent decline. Condo sales also saw a 6 percent dip from September to October, down to 1,055 units from 1,122.

The average price for a single-family home soared from $282,175 in October 2000 to $310,713 in October 2001. Prices increased less than 1 percent when data from September 2001 and October 2001 are compared.

Condo prices registered an 18.1 percent increase, to $206,671 in October 2001, versus $174,961 a year earlier. Prices fell 4 percent from September to October.

Sales of single-family homes fell in Massachusetts, but nationwide, October sales were 2 percent above the 5.07 million unit pace in October 2000, according to the National Association of Realtors. Existing-home sales increased 5.5 percent in October to a seasonally adjusted annual rate of 5.17 million, up from 4.9 million in September.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.62 percent in October, down from 6.82 percent in September; it was 7.80 percent in October 2000. Last month's commitment rate was the lowest since 1971.

Guilty plea brings fine, prison for Sec. 8 fraud

Norman J. Gallant of Springfield was sentenced recently to 24 months in prison, fined $50,000, and ordered to pay $293,551 in restitution after he pleaded guilty in US District Cout in Springfield to fraudulently receiving Section 8 rental housing assistance payments from 1992 to 2000.

Gallant pleaded guilty in June to two counts of mail fraud, one count of Social Security fraud, and one count of tax evasion. Prosecutors said his fraudulent acts included using a trust to conceal his ownership of a condominium in which he resided and for which he received Section 8 rental assistance; procuring Medicaid payments for a fictitious personal care assistant; obtaining Social Security disability benefits when he was able to work; and evading federal income taxes.

The US Department of Housing and Urban Development, Social Security Administration, Health and Human Services, and the IRS investigated. Restitution to be paid is $29,130 to HUD, $102,021 to HHS, and $162,000 to Social Security.

Housing bill signed

President Bush has signed two provisions in the 2002 Veterans, Housing and Independent Agencies Appropriations bill that are designed to increase homeownership opportunities.

The bill includes a 25 percent boost in the Federal Housing Administration (FHA) multifamily loan limits. The limits had not changed since 1992. Increasing the limits will permit FHA's housing partners to develop new affordable housing units in areas that had become too costly for the program.

FHA can now offer a new adjustable-rate mortgage (ARM) product under the new legislation. The new ''hybrid'' ARM carries an initial fixed interest rate for between three and seven years, followed by annual rate adjustments for the balance of the term. This new product will provide thousands of homebuyers with more financing flexibility.

The legislation includes a total of $30 billion for HUD programs - an increase of $1.8 billion over the 2001 appropriation. This budget bill also provides full funding for Section 8 contract renewals, funding for 26,000 new Section 8 vouchers, and $50 million under Home Investment Partnerships (HOME) for HUD's homeownership down-payment assistance program.

Boston mayor honored

Boston Mayor Thomas M. Menino was honored recently for his role in the development of ''Don't Borrow Trouble,'' an award-winning campaign against predatory lending. Created by Menino and the Massachusetts Community and Banking Council in 1999, the campaign uses advertising, public service announcements, and hotlines to advise borrowers to avoid abusive lending practices, such as exorbitant interest rates, high points, and hidden fees.

Menino received the award at Freddie Mac's national ''Don't Borrow Trouble'' forum in Los Angeles Nov. 16. Earlier this year, the campaign received an award for excellence from the US Conference of Mayors.

Following Boston's example, Freddie Mac is now launching local initiatives in 24 cities.

Please e-mail material to be considered for this column to tgrillo@hotmail.com.

This story ran on page E1 of the Boston Globe on 12/1/2001.
© Copyright 2001 Globe Newspaper Company.