Rockwall City Councilmember Matt Scott has taken a step toward regulating Homeowners Associations (HOAs) in the City of Rockwall. At the last meeting of the city council, Scott called for a public hearing to address what he describes as abuses against homeowners by the HOAs in various neighborhoods. "We require that any subdivision coming in with community facilities have a homeowners association, so we create these little monsters," Scott said. Scott stated that he intended to "go after these HOAs and reign them in" which brought open applause from many gathered in the room. Scott related how his own homeowners association created a "special assessment" in excess of $1,000 that was over and above the normal dues, which exceed $900 per year. The special assessment was decided upon in order to fund $125,000 for the replacement of a walking trail through the neighborhood. "That's more than the house I grew up in," Scott said. "That's more than any house my parents ever owned." Scott stated that the rules which govern his homeowners association give broad leeway to a selective few individuals to coerce the cooperation of all in the neighborhood, and also that those individuals had actively scheduled meetings so as to exclude participation from the neighborhood's broader population. Scott stated that he would be looking for quorum requirements and restrictions to protect homeowners from zealous boards.

See also:
• Scott files lawsuit against homeowners association
• HOA lawsuit to be heard May 2

As a result of a dispute over a walking trail in the Oaks of Buffalo Way neighborhood, Matt Scott has filed suit for an injunction against the neighborhood homeowners association (HOA). The suit was filed after the board of the Oaks of Buffalo Way voted to suspend the voting rights of residents who had not paid a "special assessment" levied by the HOA for the replacement of an asphalt walking trail with concrete. The election for new board members is scheduled for April 13. Scott has stated that he believes this measure was initiated to deny a vote to residents who disagree with the current board, thereby assuring current board members their reelection. Scott was one of an estimated one-third of the homeowners who had informed the HOA that he would not be able to pay the entire $1,500 assessment within the 30-day time allotment. Scott, also a member of the Rockwall City Council, stated in a letter to residents that the HOA (described effectively as a taxing entity) had overstepped its boundaries. "If the City tried to raise taxes by $1,500 on 30 days notice (which it cannot legally do), the backlash would be thundering," Scott wrote. "Most of you would not only be asking what I was thinking, you would probably be calling for my head. But that is exactly what the Board has now put in motion."

See also:
• Scott vows to 'reign in' HOAs
• HOA lawsuit to be heard May 2

Meanwhile, the Rockwall City Council has called for a public hearing regarding the powers and practices of HOAs to be held on June 9 at 6 p.m. Currently the council plans to hold the meeting in the city chambers, unless participation is high enough that the proceedings must be moved to The Center. Scott had called for the city to look at HOAs prior to filing the lawsuit, referring to them as "little monsters" and explaining that they are in effect "mini-taxing agencies." "Because the City currently requires a developer to create an HOA for any subdivision that has common areas, the City has to take some ownership of the mess it has created," Scott stated. "And because the City reviews DCCRs before we grant final approval of a subdivision, the City has the ability to take a step toward correcting the mess, at least for future communities. "And that is why I asked the Rockwall City Council to hold a series of public hearings to discuss HOAs. My goal, and I believe the goal of the council (which approved the request unanimously) is to figure out what works well, what does not work well, then provide some uniformity in future DCCRs in communities that are approved in Rockwall.

See also:
• Scott files lawsuit against homeowners association
• Scott vows to 'reign in' HOA

During the recent writers strike that virtually paralyzed television production for three months, Patric Verrone learned the true value of the Internet. Patric Verrone, president of the Writers Guild, said the Web helped writers stay in contact during the strike. It was his job as president of the Writers Guild of America, West, to keep his members unified during the highly public 100-day strike, and the Internet proved invaluable. "When your employers are the same companies that control the media, it's hard to get your message out," he said in an interview. To maintain contact with one another, guild members used blog postings, e-mail and videos. It was the success of that campaign that prompted Verrone to come to Washington and push for legislation that he hopes will guarantee the Internet's status as an open forum for communication. Verrone was appearing Tuesday before the Senate Commerce, Science and Transportation Committee at a hearing on the future of the Internet......The FCC has conducted two hearings on "network management" following admissions by Comcast Corp. that it sometimes delayed file-sharing traffic for subscribers as a way to keep Web traffic flowing. The network neutrality debate has divided Congress, with Democrats largely in favor and Republicans mostly opposed, a point that was clear at Tuesday's committee meeting.

Homeowners face the threat of soaring repossessions this year, with a 25 per cent increase in the number of properties expected to be seized by the banks and building societies as mortgage costs remain stubbornly high. According to a report today from the Centre for Economic and Business Research (CEBR), more than 33,000 borrowers will lose their homes once their fixed-rate mortgages, agreed prior to the credit crunch, come to an end and interest costs rise. The forecaster is predicting that house prices will fall by 10 per cent in the next two years, while the number of transactions is expected to decline by 25 per cent. Lenders are refusing to pass on lower interest rates to borrowers, despite pleas by the government, which failed to persuade the banks to give ground at a meeting with the Chancellor Alistair Darling in Downing Street last week. Their reluctance to do this stems from a desire to bolster their capital position at a time when they have been forced to take huge provisions, linked to the sub-prime debacle in the US.

Mervyn King yesterday laid the blame for the credit crunch squarely at the door of commercial banks, criticising their excessive pay packages and risky lending.The Bank of England governor also told the Treasury select committee he was unhappy that excessive pay in the City attracted too many young people away from careers elsewhere. Speaking as data emerged showing that the credit crunch had hit retail sales, consumer confidence and mortgage lending hard, King said he hoped the banks would learn the lessons from the crisis and rein in their pay structures and be more responsible in their lending. Last week the director-general of the CBI, Richard Lambert, said the bonus culture in the City and Wall Street had been responsible for much of the excessive risk-taking that led to the collapse of the US mortgage and housing markets.

The US should fight the housing crisis by using low-cost government loans to help borrowers pay down unaffordable mortgages, Sheila Bair, one of the country's top banking regulators, proposes. Writing in the Financial Times on Wednesday, Ms Bair, chairman of the Federal Deposit Insurance Corporation, says the new government loans should cover up to 20 per cent of the value of the existing mortgages. These loans, which would be interest-free for the first five years, would be used to pay down part of the existing mortgage. In return for the cash, lenders would reduce payments on the remaining part of the mortgage to affordable levels, defined as a proportion of income. They would also pay a fee to cover the government's funding costs over the initial five-year period. Ms Bair said her plan posed little risk to taxpayers because the government would be repaid first if the borrower defaulted. "You would not have the same type of credit exposure that you have with FHA," she said. Some economists believe negative equity is a bigger problem than unaffordable monthly payments. But Ms Bair said: "For most of these mortgages, if you can make them affordable, then people will want to stay in their homes and ride it out."

Deutsche Bank faces calls to spin off its investment banking activities within two years and pull back from the US, under proposals put forward by activist shareholders at its forthcoming annual meeting. The demands come from Ekkehard Wenger, a university professor and a prominent champion of change at many of Germany's biggest companies for two decades, and Leonhard Knoll, a fellow academic, who liken the investment banking industry to football where "everything is distributed to the players and nothing is left for the club". Deutsche Bank's management board said it would recommend that the proposals be rejected. The intervention comes less than a week after Luqman Arnold, the former chief executive of UBS, called on the Swiss bank to separate its investment banking and wealth management businesses. Excessive bonuses have also been blamed for encouraging risky behaviour in pursuit of short-term reward at the expense of long-term shareholder value. The call for Deutsche to pull back from the US runs counter to its strategy to be an established competitor to the traditional Wall Street investment banks. ....The professors urge Deutsche to "launch a de-Americanisation process without delay before it becomes even more deeply embroiled" in the US, which they describe as "the country of crisis, unsound economic activity and pathological overcompensation of fair weather captains".

A Deutsche Bank employee is at the centre of an investigation into insider trading involving shares in IKB, the German lender that was one of the first casualties of last year's subprime crisis. The insider dealing probe is the first such publicly-acknowledged investigation into possible wrongdoing arising from the subprime crisis in Europe and seems bound to embarrass Deutsche. The bank, which learned of its employee's involvement in the investigation after asking authorities, said it would co-operate fully. Deutsche said the inquiry concerned trading on behalf of customers, rather than proprietary trading on behalf of the bank. The bank had not profited from the trades that were valued in the "low single millions", Deutsche said.

Deutsche Bank on Tuesday reported its first quarterly loss in five years and revealed the drastic impact of the credit crisis on its profitable investment banking activities. Reporting a net loss of €141m ($220m, £110m) for the first three months of 2008, Germany's largest bank said the short-term outlook remained highly uncertain. Deutsche took €2.7bn of write-downs - more than expected - in markets that Josef Ackermann, chief executive, said were "the most difficult in recent memory". Net revenues more than halved, from €9.6bn in the first quarter of 2007 to €4.6bn, as some of Deutsche's business lines shrank as a result of the credit crisis. The corporate and investment bank - including Deutsche's most lucrative trading operations - saw net revenues plunge from €6.7bn to €1.5bn.