Want To Buy A Home But Can’t Because of Student Debt?

Chicago suburbs, by flikr user Scorpions and Centaurs

American student loan debt totals nearly one trillion dollars. These loans break down to about $23,300 owed by each borrower. Changing Gears has been reporting on the effects of that debt and what it takes to pay it off.

We want to know how student debt affects big purchasing decisions. Are you ready to buy a house? And if so, can you get a mortgage?

Tell us how student debt affects your housing plans.

Midwest Memo: Lighting Up The Economy, Speedy Job Training And A Compromise In Wisconsin

The big question A blog post at the Harvard Business Review asks, “Just How Important Is Manufacturing?”

Bright future The National Resources Defense Council says Ohio has become a leader in making high efficiency light bulbs. It says the industry has created 1,500 jobs in the state. The Columbus Dispatch has the story.

The long (distance) con European investors who thought they were helping Detroit’s struggling housing may have actually been victims of a scam. The Detroit News reports that at least a dozen overseas investors say they bought homes in Detroit, but the homes were never repaired, and tenants were never found.

Faster ed Why are community colleges so important to manufacturers? Speed.

Final resort After much debate and disagreement over a controversial plan to open up mining in northern Wisconsin, lawmakers are trying a new approach: compromise.

Midwest Money: How Can I Improve My Credit Score?

Last month, Changing Gears teamed with authors and CNN anchors Ali Velshi and Christine Romans to collect your questions on the personal finance issues that you’re facing because of the recession.

Here’s the final question in our series of Midwest Money answers from Ali and Christine, based on their new book, How To Speak Money: The Language and Knowledge You Need Now. (Each person whose question was used will receive a copy of the book.)

Imran Kahn of Chicago writes,

My father was a realtor. So, during the housing boom, I purchased two homes and rented them. Then the housing bubble blew up. My property was worth a quarter of what I paid for it. I stopped making payments. The banks harassed me and then eventually disappeared.

Now, a couple years later, I am trying to build my damaged credit score back up. I got a credit card that was sent to me in the mail. I am paying on time. Why is my score still so low? How can I get this score up fast? I need to move on.

Ali and Christine reply,

Imran, we all need to move on from the housing crisis. But sadly, it is still with us. There is no fixing it fast, and there is no fixing your credit score fast. We’re not going to pass judgment on your foray into speculative real estate or on deciding to walk away. That’s a conversation for another place. But in the eyes of the banks, you are a terrible credit risk. That’s why your credit score is so low. Continue reading “Midwest Money: How Can I Improve My Credit Score?”

Midwest Memo: Detroit’s Financial Troubles Examined, Chicago’s Unemployment Rate Worsens

Three stories making news across the Midwest today:

1. Detroit’s finances a long-term problem. In the past 45 years, the city of Detroit has recorded 19 budget surpluses and 26 budget deficits, according to the Detroit Free Press. Experts tell the newspaper the city’s debt is now so high that the city could default on unpaid bonds soon, a prelude to bankruptcy. State officials will begin a formal review of Detroit’s finances in January, which could lead to the appointment of an emergency manager. Gov. Rick Snyder said the city faces both a short-term cash-flow shortage and a longer-term structural deficit. “We can’t continue this process because Detroit has been in a financial crisis of some fashion for decades,” he tells the newspaper. “We need a long-term solution.”

2. 2011’s dubious housing distinction. The year 2011 will likely be the worst in history for new home sales. The Commerce Department said it expects the adjusted annual number to reach 315,000 by the close of this month, fewer than the 323,000 sold last year, the worst year on record dating to 1963. That’s less than half the 700,000 new homes economists tell the Associated Press are necessary to sustain a healthy market. The projection comes even as new-home sales rose 1.6 percent in November. December would need to mark its best monthly sales total in four years to avert the dubious finish.

3. Unemployment up in Chicago area. Chicago’s unemployment rate rose in November to 9.8 percent, according to the Chicago Sun-Times. The rate ticked upward one-tenth of a percentage point from 9.7 percent in October, and was up 0.9 percent year over year. The unemployment rate dropped in nine of Illinois’ 12 metro areas in November compared to 2010. Chicago’s rate remains slightly lower than the state’s overall 10.0 percent unemployment rate, which has remained nearly flat for three consecutive months. The state’s lowest unemployment rate was found in the Bloomington/Normal area, at 6.8 percent, according to the newspaper.

Questions Emerge About Wisconsin Mining Bill, Detroit Suburbs Rejects Mass Transit, Housing Shows Slight Uptick

Three stories making news across the Midwest today:

1. Who wrote Wisconsin mining bill? New details are emerging on who helped write a bill that overhauls Wisconsin’s mining laws. Last week, state Republicans declined to provide details on who authored the legislation. The Milwaukee Journal Sentinel reported today that five Republican legislators, their staffs, representatives from the Wisconsin Manufacturers & Commerce business lobby and officials from the mining company Gogebic Taconite all participated. Earlier this year, Gogebic Taconite demanded changes in mining legislation so the company could move forward with plans to open a $1.5 billion mine in a forested area of Iron and Ashland Counties.The Journal Sentinel reports that details of Assembly Bill 426 had been “kept under wraps for months,” leading to questions from environmentalists about who authored the legislation.

2. Detroit suburb rejects mass transit. The city council of one town in southeast Michigan rejected a proposal Monday to build a federally funded transportation center within its borders. The center in Troy, considered a key piece to a mass-transit system in metro Detroit, was voted down, 4-3. Opponents called the $8.5 million center a “waste of tax dollars,” according to the Detroit Free Press, although Troy would not have footed the bill. Earlier, Michigan Gov. Rick Snyder sent a letter urging the council to support the proposal. Monday was the final day for a decision in order to complete the project by the Oct. 1, 2013 deadline set by the U.S. Department of Transportation.

3. Housing shows slight improvement. The homebuilding industry is showing modest improvement headed into 2012, according to analysts. The Associated Press reports that apartment construction and permits “surged” in November, jumping 9.3 percent from the previous month. It’s the highest level since April 2010. Still, the market remains troubled. Builders broke ground on a seasonally adjusted rate of 685,000 homes last month, but economists say a healthy housing market would produce 1.2 million homes each year. “While beginning to improve, a strong, sustained recovery in the housing market, especially the important single-family sector, is still a ways off,” Steven Wood, chief economist at Insight Economics, tells the AP.

NPR Features Detroit Blotters

Kevin Garcia is a "blotter" in Detroit

Remember our series on empty places? Well, our friends at NPR took an interest in the experiences of Detroit’s “blotters” — residents who annex vacant lots around them, creating block/lots.  You can listen to the NPR piece here. It includes the story of Kevin Garcia (above) who tried for years to buy the lot next door. He wants Detroit to cut down on the bureaucracy involved. City officials want that too, since Detroit currently manages more than 60,000 parcels of land, most of it vacant.

Midwest Memo: Michigan Debates International Bridge, Ohio Foreclosures Rise, U.P. Coal Plant Could Close

Three stories making news across the Midwest today:

1. Detroit bridge project scrutinized. Michigan Gov. Rick Snyder absorbed his first major political defeat since taking office – and it came at the hands of his own Republican party, which refused to green-light the construction of a new bridge between Detroit and Windsor. Expectations are growing, according to the Detroit Free Press, that Snyder will try to circumvent the legislature, a strategy that will raise legal questions about the range of the governor’s executive authority. Last week, Changing Gears senior editor Micki Maynard detailed the skirmish over the new bridge for The Atlantic Cities, and examined forceful opposition from Ambassador Bridge owner Matty Moroun.

2. Ohio foreclosures on the rise. After enjoying their lowest level of foreclosures in five years, Ohio residents saw a foreclosure uptick in the third quarter of 2011, mirroring a nationwide trend. Our partner station Ideastream reports foreclosures in Cuyahoga County increased 17 percent from the previous three-month period. Experts attribute the jump to mortgage lenders resuming the foreclosure process after last year’s robo-signing scandal had halted proceedings. Over the summer, less than 1 percent of Ohio home loans entered the foreclosure process, Ideastream reports. Currently, 9.3 percent of Ohio mortgage holders are late on their payments, according to the Mortgage Bankers Association.

3. Future of Michigan coal plant unclear. The only major power plant in Michigan’s Upper Peninsula is at a crossroads. A coal-fired plant owned by We Energies could be shut down over the next five or six years as new environmental rules go into effect. One alternative would be a switch to natural gas, a conversion being employed by numerous plants across the Midwest. The Milwaukee Journal Sentinel reports the future of the plant is of high concern in Marquette, where We Energies employs 180 workers and plays 17 percent of the city’s property taxes. “A closure would be devastating for our community,” Mayor John Kivela tells the newspaper.

(Clarification: An earlier version of this entry contained dated information. It has been revised to indicate that a Michigan state senate committee defeated a proposal regarding a new bridge linking Detroit to Canada last month.)

Midwest Memo: Cleveland Mayor Presents Waterfront Development Plan, AirTran Ends Central Illinois Service

Three stories making news across the Midwest today:

1. New Cleveland lakefront development plan. For more than a century, development along Cleveland’s lakefront has come with “piecemeal action and broken promises,” writes The Plain Dealer. Mayor Frank Jackson presented a plan Monday for changing that, the newspaper reports today. Jackson’s plan included developing the waterfront from the city’s port to Burke Lakefront Airport with offices, restaurants, shops and marinas across a 90-acre space. The plan, according to EE&K architects, could take years to complete and reach $2 billion in value. Money for the project is expected to come from the private sector. Many who have watched similar plans never come to fruition in the past were skeptical at Monday’s press conference, but Jackson said this plan has the backing of key lakefront interests.

2. Detroit-area home sales up. Home sales in metro Detroit increased for the fourth consecutive month in October, according to a report from Farmington Hills, Mich.-based Realcomp II, which reports sales of condominiums and single-family homes jumped 4.8 percent. Median prices rose 7.7 percent to $70,000, according to The Detroit News. Sales were up in three of the metro areas four counties. Oakland, Livingston and Macomb counties all saw increases, while Wayne County sales decreased 3 percent.

3. AirTran cuts central Illinois service. AirTran announced Monday it would end service to five U.S. airports, including one in the Midwest that leaves local officials seeking an alternate air service plan. Central Illinois Regional Airport learned service would not continue, after being an AirTran destination for 15 years. The airline flew 40 percent of passengers from the Bloomington, Ill. facility. Although officials considered themselves an “underdog” for continued service amid airline consolidation, according to The News-Gazette of Champaign, the airport’s marketing director said the official announcement “changes the landscape for everybody.”

Midwest Memo: Ohio Overlooks $1.1 Billion in Potential Tax Revenue, Chicago-Area Real Estate Data Tells Mixed Story

Three stories making news across the Midwest today:

1. Ohio misses tax revenue. Ohio businesses are losing out of “hundreds of millions” because internet companies do not collect tax dollars at the point of sale, according to a report from the University of Cincinnati’s Economics Center. Over a six-year period, the study’s author said the state will miss $1.1 billion between 2007 and 2012. At the same time, the competitive disadvantage for store-based retailers would result in a $600 million loss, Jeff Rexhausen, the study’s spokesperson, tells our partner station, Ideastream. He says approximately 11,000 jobs could be created if the loophole is closed.

2. Mixed Chicago real-estate numbers. In September, sales of all Chicago properties rose 6.8 percent year over year, and were accompanied by a median price increase of 5.6 percent. Outside the city, the story was a little different. In the nine-county Chicago area, sales rose 13.3 percent year over year, but the median price declined 8.6 percent to $160,000. The biggest drop came in Kane County, which endured a 20 percent median-price decline. “The slow economy and job recovery are sever drags on the market,” Loretta Alonzo, president of the Illinois Association of Realtors, tells the Chicago Tribune. “Plus, many able buyers are hitting roadblocks on financing a home purchase due to the overcorrection in mortgage underwriting requirements.”

3. Michigan unemployment rate down. Michigan’s unemployment rate fell by one-tenth of one percent in September, settling at 11.1 percent. Total employment rose by approximately 4,000 and the number of unemployed fell by 6,000, according to the Detroit Free Press. The rate is two percentage points higher than the national rate of 9.1 percent. Although the decline was the first since April, it was too miniscule to indicate the direction of the state economy, according to the newspaper. The flat rate hides an upswing in hiring, Jim Thompson, vice president of business development at JMJ Phillip.

Midwest Memo: Ford-UAW Contract Support Increases, Report: Illinois’ Business Climate Still Sturdy

Three stories making news across the Midwest today:

1. Illinois still strong business center. Reports of Illinois’ demise have been greatly exaggerated. At least that’s the conclusion of Crain’s Chicago Business, which examined the business climate of the state and its neighbors in the wake of headlines about rising corporate taxes and companies threatening to relocate. The crux of the analysis: Illinois’ workforce, market size, capital available for investment and transportation infrastructure outweighs rising taxes and the state’s budget deficit, which puts it in better position than neighboring states.

2. Ford-UAW contract gains ground. Sixty-two percent of voters now support the tentative agreement between Ford and the United Auto Workers, according to the UAW Facebook page. Several large local unions voted over the weekend on the deal and moved it closer to ratification. Voting ends Tuesday. Last week, initial votes had showed weak support for the agreement, which offers signing bonuses but does not restore cost-of-living increases.

3. Wisconsin home sales up, prices down. In September, existing home sales in Wisconsin rose 17.7 percent year over year, according to the Milwaukee Journal Sentinel. Sales in the Milwaukee area were particularly strong, growing 26.8 percent from September 2010. The media sales price fell 1.5 percent, however, to $134,900. It was the smallest decline this year, and considered good news by members of the Wisconsin Realtors Association. New listings are down 17.4 percent this year, the newspaper reported, while an inventory backlog remains.