The road to recovery. (Kristen Artz/Mayor's Office)

A storm from the tropics blew through town last week. It left wintry weather in its wake, along with a path of destruction that has left as many as 40,000 New Yorkers temporarily homeless. Half of them are expected to be unable to go home for weeks or months, assuming they even have homes to return to. Serious damage to heat and electrical infrastructure in apartment buildings and homes on the waterfront are among the most serious issues that have created a housing crisis for the city following Hurricane Sandy.

"Many of the fears we have is that with cold weather coming, we have to make sure people can stay warm," Mayor Bloomberg said at an afternoon press briefing. "Among the hardest hit are the Rockaways and Staten Island. A lot of places aren't gonna have electricity but are going to experience the cold. That is the next big problem for us."

At a separate briefing with the mayor and FEMA this morning, Governor Cuomo echoed the Bloomberg administration's concerns. "People don't like to leave their homes, but the reality is going to be in the temperature, and then we are going to have tens of thousands of people who need housing solutions right away, and a variety of housing solutions," the governor said. He added that a morning meeting with local, state and federal officials was mostly spent figuring out ways to house those in need for weeks or even months.

Temperatures are expected to fall to 37 degrees tonight in the city, with a high in the mid-40s tomorrow and a low in the mid- to low-30s tomorrow night. Areas on the water are expected to be even colder, with temperatures falling into the mid-20s in the Rockaways and Coney Island.

The mayor said that once power is restored by the various utilities, from Con Ed to the Long Island Power Authority, which provides electricity to the hard-hit Rockaways, many people will be able to return home to their houses and apartments with heat and light, bringing down the estimated evacuation count from 40,000 to about 20,000. But many buildings, even once power is back, will not be operational because of damage to their internal utilities from the storm surge.

"Over the past few days, we have been going block by block to identify the issues blocking many of them from getting the power back on," the mayor said. "We're resolving many of the issues one block and even one house at a time. Even when some of the power is turned back on, the buildings are going to be out of commission for a long time because of damage to their boilers and electrical systems."

Both the mayor and the governor are stressing that people without power should go to one of the city's 15 shelters for protection from the elements. The city has also set up warming centers to help combat the conditions. "If you find yourself shivering uncontrollably or see someone who is disoriented, those are signs of hypothermia," the mayor said. "You really should get to a warm place, covered with blankets, a hot water bottle, anything you can do to get them warm quickly."

A big issue has been for public housing residents, whose buildings are aging and have fragile infrastructure. "Some 45,000 public housing residents live in the coastal areas designated as Zone A, many of them in the Rockaways," the mayor said.

The desperation of the situation was underscored by FEMA director Craig Fugate, who made it clear that many more New Yorkers have been seriously effected besides those currently without reliable shelter. "Our administration numbers give you some sense of the magnitude, but right now, as of this morning, we have 86,000 households have registered for assistance already directly deposited into those accounts is $96 million," Mr. Fugate said.

Those numbers are only expected to rise in the coming weeks as people get power back and lives return to enough normality that more claims can be filed.

"We don't have a lot of empty housing in the city, so it's hard to find it when we need it," Mayor Bloomberg said during the closing remarks of his afternoon press briefing.

Housing crisis? Piece of cake.

Is Mitt Romney really the man to solve the housing crisis? Well, consider this: Mr. Romney may not have ever struggled "to put food on the table" as folksy politicians are so fond of saying, but he has four houses. Four. So he knows a thing or two about home ownership. And, unlike some homeowners who took out mortgages and couldn't pay them back, Mr. Romney is wealthy enough not to have to take out mortgages (although there's a possibility that he did—the man does have the common touch, at times).

In any event, the Republican candidate has revealed his four-point plan while taking a few swings at Obama, like: "the dream of home ownership is out of reach for many Americans as a result of President Obama’s failed policies and stalled economy."

Because Americans were doing so well with home ownership before Obama took the helm. Ha! Good one! As though the "stalled economy" and, well, the entire economic crisis weren't a largely a result of the fact that many Americans were actually really horrible when it came to assessing risk and making responsible choices about home ownership.

Anyway, Mr. Romney would like to, and we quote: 1) responsibly sell the 200,000 vacant foreclosed homes owned by the government; 2) Facilitate foreclosure alternatives for those who cannot afford to pay their mortgage; 3) Replace complex rules with smart regulation to hold banks accountable, restore a functioning marketplace and restart lending to creditworthy borrowers; and 4) Protect taxpayers from additional risk in the future by reforming Fannie Mae and Freddie Mac.

The Washington Post does a pretty stellar job of pointing out how A) this isn't much of a plan and B) the Obama administration is already doing a lot of these things, like proposing new ways to refinance and modify loans. And, as of Nov. 1, for example, the Federal Housing Finance Agency will enact new regulations that make it a lot easier for homeowners to conduct short sales—a key move to help those with underwater mortgages get out from the untenable housing situations.

Moreover, as the Post points out, the government has a pilot program to convert the foreclosed homes it owns into rental properties, given that's where a lot of the demand is at the moment (people who got caught up in the whole foreclosure business the last time are wary to sign their names to another mortgage—and rightly so in a lot of cases). Besides, selling 200,000 houses is hard to do, particularly considering that banks, who also own a lot of vacant houses, haven't had such an easy time offloading properties—and buyers are often speculators, who are happy to let properties sit vacant until prices rise.

In the end, the "plan" looks like a few nice, though vague, talking points, coming rather late in the game. In any event, it's better than Mr. Romney's 2011 plan. As he told the editorial board of the Las Vegas Journal Review Board last year, he thought that the foreclosure process should be allowed to "run its course and hit the bottom."

John Cusack, policy expert.

Hollywood actor John Cusack has developed some strong opinions on the mortgage crisis. He's been doing some reading, even talking to a few experts, and is reasonably well-informed about a plan some California cities have to use eminent domain to seize troubled mortgages.

Those of you curious to hear what Lloyd Dobler thinks about a complex policy initiative can now satisfy that curiosity in a poorly-produced, 15-minute long video of John Cusack discussing these issues. Mr. Cusack shares his expertise during a painfully long HuffPost Live video, kicking off the first day of Huffington Post's video news initiative in true Huffington Post fashion. Appearing via Google Hangouts, Mr. Cusack has a badly organized discussion with Arianna Huffington, segment host John Zepps, a random homeowner in California and John Vlahoplus, the guy who's pitching the plan and the lone expert in the group.

But the discussion isn't the only thing that's out of focus. Mr. Cusack's overexposed face is a barely-recognizable blob of white beneath his dark floppy hair. A Hollywood star should never be asked to set-up his own shot, of course, and this proves that perhaps they might even need help setting up their own webcam. Moreover, we understand that HuffPost Live wanted to stay with the low-budget, disorganized look of the mother ship, but they might want to cut the length of their video segments to under 15 minutes if they don't want to make viewers nauseous.

The segment begins, without introduction, as a ghostly Mr. Cusack launches into the topic without preamble: "And so I thought they could give people a view from 30,000 feet. What America would look like if those numbers actualized. John, what do you see coming as far as the next wave of mortgage foreclosures that's coming and what will America look like if we do nothing?"

We cut to Mr. Vlahoplus, also appearing via webcam, who says his piece before we finally go to the studio/newsroom where Ms. Huffington and Mr. Zepps sort of explain what they're talking about, or at least explain that Matt Taibbi wrote an article about it for Rolling Stone. "Can we get a snapshot of my laptop?" Mr. Zepps asks the cameraman. The camera goes to the screen of the wrong laptop. "That's not my laptop, actually," Mr. Zepps  corrects. And so on.

The next 12 minutes are mostly Ms. Huffington and Mr. Cusack agreeing with each other about how exciting the idea is and how passionate they both are about it.

Representative quotes:

Ms. Huffington: "If you see the string of emails that John has sent me over these last few weeks, you see this passion, this sense of urgency that has been missing."

Mr. Cusack: "That's what seemed to be so exciting about it, that it's passing, um, Washington completely and going on a civic level, right to local communities and taking action. They certainly didn't create this crisis and chop up all these houses into derivatives that can never be put back together again."

Occasionally, we hear from Mr. Vlahoplus, except for when he briefly steps away from his computer, or the random homeowner, although his sound cuts out most of the time so we can't really tell what he's saying. He probably can't afford a new computer because he's pouring all his money into his underwater mortgage.

Are you wondering why people would watch a 15-minute video of a movie star and a media mogul having an ill-informed discussion about the mortgage crisis via web cam? Doesn't life present enough opportunities to watch people having meandering, opinionated conversations about topics that they read about in The New Yorker a few months ago?

Aha, but that's what people have always turn to the Huffington Post for! To see people with familiar names who don't know what they're talking about talk about things.

kvelsey@observer.com

Foreclosures in Dec. 2011

Foreclosures in Feb. 2007

Want to experience the housing market crash in less than a minute? You're in luck! The New York Fed has released an interactive map that displays foreclosures by county in the tri-state area between Jan. 2007 and Dec. 2011. (Warning: we do not recommend the map to anyone with an underwater mortgage or high blood pressure).

The map animation shows the New York's counties, as well as New Jersey's and Connecticut's, changing from a calming light peach (one percent of properties in foreclosure) to panicky dark red as the number of foreclosures climbs (more than four percent!). Watching it made the Observer's palms sweat.

The map reveals that Manhattan was the only place in the state with less than 2 percent of foreclosures (1.3 percent) in Dec. 2011, although considering that before the crisis, it sat comfortably at .1 percent, that number's still kind of scary. The outerboroughs fared much worse, with 8.3 percent in the Bronx, 8.1 percent in Brooklyn and 7 percent in Queens.

The map is frightening, but as a small silver lining, NYU's Furman Center for Real Estate and Urban Policy released a report this week that found foreclosure starts were down in most of the city—33 percent fewer foreclosure notices in the fourth quarter of 2011 compared to the same quarter in 2010

For a more calming experience, you can also watch maps of delinquent mortgages (60 and 90+ days delinquent) in purple and blue.

The map will be updated on a regular basis, according to the Fed.

“We are confident this tool will provide relevant and timely analysis to help inform the public, policy makers, and community leaders about these ongoing conditions," said Kausar Hamdani, senior vice president of regional and community outreach, in a release.

kvelsey@observer.com

We don't feel so well. (Getty)

For almost five years now, the housing crisis has been a drag on the U.S. economy, the U.S. psyche, the U.S. spirit. It turns out it is also dragging down Americans’ health.

A new study by two economists finds a relationship between the number of foreclosures in a community and the number of hospital visits, according to The Wall Street Journal. Princeton’s Janet Currie and Erdal Tekin of Georgia State University studied residents in Arizona, California, Florida and New Jersey, and they discovered “an increase of 100 foreclosures corresponded to a 7.2% rise in emergency room visits and hospitalizations for hypertension, and an 8.1% increase for diabetes, among people aged 20 to 49.” There has also been a rise in suicides.

The Journal notes that general financial stress could be as much to blame as the housing bubble, but since the two are so intimately intertwined, the case either way seems strong. Furthermore, because there was not a corresponding rise in cancer or elective surgeries at hospitals, it appears that the hospitalizations were more stress related than anything.

There is evidence of these problems outside the states studied, too. The Journal found Patricia Graci, a Staten Island woman whose husband lost his job as a painter in 2008, which led to two years of dwindling savings spent on mortgage payments until nothing was left. "Everything was going downhill. My savings were going down to nothing," Ms. Graci told the daily. "When I realized the money wasn't there anymore, I started getting very anxious and depressed."

Then there is the unfortunate case of Norman Adelman.

In 2008, Norman Adelman of Freehold, N.J., called his lender to ask for a forbearance of three or four months, saying he was about to undergo knee-replacement surgery. The lender complied and Mr. Adelman, who runs a home-energy business, says he began scaling back his work. He underwent needed tests and doctor visits.

After two months of not paying his mortgage, he successfully applied for a loan modification, taking his monthly payment from $2,700 to $1,900. But then the loan was sold—and a new servicer didn't recognize the terms of the arrangement, he says.

Mr. Adelman is fighting the new lender but says he has been in and out of the hospital for the last two years. He never had his knees replaced and is now on antidepressants and antianxiety medication.

"He's deteriorated. He's had sleepless nights," says his wife, Shulamis. "You always have this fear of being thrown out. He's just gotten worse and worse from not sleeping."

So which do we need more—chicken soup or loan modifications?

mchaban@observer.com

The subpoenas focus on the earliest stage of the mortgage securitization process, said the sources, who requested anonymity because the probe is not public.

The sources said the SEC is asking for information about the role of so-called "master servicers" -- specialized firms that oversee the selection and maintenance of the large pool of home loans that go into every mortgage-backed bond.

Regulators are also taking a new approach to the banks. Whereas in the past they focused on the poorly executed paperwork banks were using to evict people from their homes, now they're also examining whether banks properly handled mortgages when turning them into bonds. This investigation is distinct from the one about banks misrepresenting the value of their mortgage-related assets to investors that yielded a big settlement from former Countrywide exec Angelo Mozilo. Readers can be forgiven for getting confused; when it comes to alleged misconduct by bankers in the housing market, there's a lot to keep track of.

Look at horror stories from the foreclosure apocalypse.>>

mtaylor [at] observer.com | @mbrookstaylor

The bank instructed its foreclosure attorneys this week to prepare new affidavits in 7,800 cases where court approval is required to foreclose on a home, out of a total of 102,000 frozen by the bank amid documentation concerns. In states where no court approval is required, attorneys were asked to lift the hold on 8,000 delayed foreclosure sales out of 30,000.

Readers can be forgiven for thinking that Bank of America had already done this, since in mid-October the bank said it had a good handle on its foreclosure situation and would begin refiling affidavits. But it's been fits and starts for BofA:

Bank of America officials previously said they would resubmit affidavits on pending foreclosures starting Oct. 25, with foreclosure sales resuming in November. But those efforts hit several snags, including the hiring of new law firms to handle new foreclosure paperwork, as the bank refiled just a "handful" of cases as part of an initial pilot test of the process. "We are taking a deliberate and phased approach," said bank spokesman Dan Frahm.

As insurance against additional blowback on these 16,000 foreclosure proceedings, BofA is going after the low-hanging fruit: empty and rented houses. That's probably smart, considering the bank's track record with occupied homes.

mtaylor [at] observer.com | @mbrookstaylor

Goldman also said that the stock market has reduced its valuation of the four banks by $28 billion as investors have tried to value the potential losses. Private-label mortgages are mortgages from private companies, rather than government-sponsored entities Fannie Mae and Freddie Mac.

To cap off a pesimistic forecast, Goldman cut its price target for BofA, PNC Financial and Wells Fargo -- while endorsing Citigroup and JPMorgan Chase as industry leaders.

mtaylor [at] observer.com | @mbrookstaylor

The Wall Street Journal reports:

Freddie Mac took the rare step of removing loan files after an internal review raised "concerns about some of the practices at the Stern firm," a Freddie spokeswoman said.

"We have begun taking possessions of all files on Freddie Mac mortgages simply to protect our interest in those loans as well as those of the borrowers," the Freddie spokeswoman said. A Fannie spokeswoman declined to elaborate.

Florida Attorney General Bill McCollum has been investigating the law firm, whose foreclosure processes have wrought for its namesake attorney a Bugatti, a yacht and other fancy things. Amid reports of fraud and forgery in the Florida foreclosure document industry, Citigroup has stopped sending paperwork toward the Stern law offices. Citing people familiar with the matter, The Journal says Freddie Mac has charged the Stern business with handling around 10,000 foreclosure documents.

mtaylor [at] observer.com | @mbrookstaylor

Already, there are signs that state officials are working together closely to gain more leverage over companies such as Bank of America Corp., Wells Fargo & Co. and J.P. Morgan Chase & Co.

Yet there also was a squabble over what to call the investigation, with some state officials preferring "inquiry" and others the word "effort."

If the attorneys general continue to busy themselves by nitpicking over the proper label for what it is they're doing, perhaps a few years from now, the correct term will become obvious: "nothing." Meanwhile, a less-than-vengeful course of action appears to be in the works:

Some bankers, lawyers and other participants in early discussions related to the investigation say Mr. Miller's leadership role suggests that state attorney generals will push hard for a sweeping settlement. One potential scenario: mortgage modifications that allow homeowners to stay in their houses.

"One possibility is that instead of having the companies pay huge fines for what they did, they use the money to fully fund the modification process," Mr. Miller says. "They don't have enough resources in the modification process-people don't hear for months, documents get lost."

mtaylor [at] observer.com | @mbrookstaylor