NJ second-home owners in limbo a year after Sandy

STAFFORD TOWNSHIP, N.J. — The Jersey shore's vacation bungalows and cottages have for decades staked out little plots of paradise where families who scrimped and saved could while away summer evenings, parents having drinks on the deck and kids working at an ice cream stand or stealing a first kiss under a boardwalk.

Now, nearly a year after Superstorm Sandy blasted through, countless middle-class families whose tiny vacation homes were once the place to make precious memories are finding them to be a financial albatross.

While billions of dollars in federal relief have helped primary homeowners rebuild after the storm, second homeowners find themselves stuck in limbo: not eligible for enough money to rebuild or even demolish their homes while they remain on the hook for mortgage payments and fatter flood insurance fees for houses they can't even use.

"We thought we were good for the community, and to suddenly be labeled this second homeowner like it was a derogatory statement, it was like a smack in the face," said Benita Kiernan, a retired nurse who with her retired New York City firefighter husband sank every spare cent into a cottage on an inlet in Stafford Township.

"We became the scarlet-S second homeowners."

For decades, the Jersey shore has been a place where police officers, plumbers, teachers and other working-class families can save up and put a down payment on a small beach bungalow to spend their summers "down the shore," as it is called. In many cases the properties are passed down through families.

Even before Sandy tore the Kiernans' home down to a wooden shell, it was not the palatial estate conjured by the phrase "vacation home." But even then the modest 1,000-square-foot house had been a financial stretch — the family skipped dinners out and vacations to be able to afford it.

The sacrifice has been worth it, Kiernan said. The shore is where their grandchildren played, their four daughters packed in with their friends and the couple was considering moving full time because they viewed the community as a second hometown.

"It was low-key fun," Kiernan said.

But the little house offers mostly heartache now. The Kiernans received about $100,000 from their insurance company, but that's less than half the amount of their policy and nowhere near enough to pay the mortgage and shoulder the cost of demolishing and rebuilding.

"This was our investment," John Kiernan said as his wife wiped away tears.

Even tearing down the house and selling the lot is no easy way out — while homes have been selling on the Jersey shore, values are not what they were before the storm.

"Do I build it, do I leave it? I can't even sell the property because properties have been downgraded that much," he said.

Second homeowners are not eligible for a suite of relief options available to primary homeowners. Federal Emergency Management Agency rebuilding assistance, $1.8 billion in rebuilding funds the U.S. Department of Housing and Urban Development gave to New Jersey or low-interest loans from the Small Business Administration. Second homeowners will also see their flood insurance rates go up because they are not grandfathered in like primary homeowners.

In Lavallette, the skeleton of Cora Hoch's sea glass-colored vacation bungalow remains, its foundation tipped, wiring exposed, doors missing and "do not enter" spray-painted on the side.

"We put our life savings into that little house," said Hoch, a school nurse from Kearny, N.J. "We can't afford to fix it, and FEMA will not give us anything."

FEMA said the assistance money is meant to be a one-time stopgap measure to help people get back into their primary homes as soon as possible. Congress, FEMA said, set the rules.

"It was designed for those who don't have a roof over their head or a place to live," said Tom McDermott, a FEMA mitigation specialist. "I guess they said if they can afford a second home or a camp, and don't take this the wrong way, it isn't necessary that they get back up so they can enjoy a weekend or a week away."

Second homeowners said the problem is that insurance doesn't fully cover the price of the options for these homes: rehabbing and, in many cases, lifting them or demolishing them and rebuilding from scratch.

"Everybody is in limbo because you can't proceed to the next step," said Benita Kiernan, whose neighborhood is now a patchwork of vacant damaged homes, freshly leveled lots and small ranch homes boosted up on stilts in an effort to keep them out of the water the next time a massive storm strikes.

Many are waiting to see if they can qualify for any other assistance, but aside from private charities, there is little help. Some are dipping into their retirement funds.

Michelle and John Novella are rebuilding their Stafford Township home on their own, putting everything on credit cards.

"First homeowners should be the priority," Michelle Novella said, but she feels second homeowners who patronize the seasonal businesses and make up the lifeblood of the Jersey shore should get something.

"Otherwise," she said, "it's going to make the Jersey shore very different."

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Follow Katie Zezima at www.twitter.com/katiezez

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Groups accuse Egypt satirist of defaming military

CAIRO — An official in Egypt says complaints already have been filed against a popular television satirist, less than 24 hours after returning to air following a coup in the country.

Bassem Youssef, often compared to U.S. comedian Jon Stewart, mocked the new pro-military fervor gripping Egypt in his program aired Friday night.

By Saturday, an official said at least four complaints had been filed with the country's top prosecutor, accusing Youssef of defaming the military in his show.

The official said no investigation into the complaints had started yet. He spoke on condition of anonymity because he wasn't authorized to speak to journalists.

Youssef used satire to criticize Islamist President Mohammed Morsi, ousted by the military following popular protests in July. Morsi supporters also sued Youssef, leading to his brief detention.

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OSHA fines Avon co. in death

The U.S. Occupational Safety & Health Administration has fined an Avon construction company $21,560 for four "serious" safety violations after the death of one of its workers at a Plymouth job site in July.

Diaz Construction Co. worker Jason Faria was crushed to death when a concrete form, to which the 26-year-old Fall River man was harnessed, came loose and fell on him at The Pinehills residential community in Plymouth, where the Mirabeau Inn & Spa was under development.

Diaz Construction failed to frequently and regularly inspect the Plymouth job site and materials and equipment used there — including the concrete formwork for stability prior to workers climbing on them — according to OSHA.

"We're working with the company in terms of mitigating unsafe practices," OSHA spokesman Andre Bowser said.

Diaz Construction president Leonel Diaz could not be reached, and his attorney declined comment. Faria's parents also couldn't be reached for comment.

The construction company also failed to adequately train Faria in hazards associated with improper anchorage and installation of the formwork systems, according to another OSHA violation, each of which includes a $5,390 fine.

The formwork also wasn't erected properly and failed when Faria climbed on it, causing it to roll over, according to OSHA. "The form wasn't installed properly using the right fastening systems, which would have been provided by the manufacturer," Bowser said. "Therefore it was not able to sustain the loads imposed upon it."

Diaz Construction's job site also did not have the required drawings or plans for the jack layout, formwork, shoring equipment, working deck and scaffolds, OSHA said.

Diaz construction previously had been cited by OSHA for 19 safety violations totaling $46,000 in initial fines — 15 of which were deemed serious violations — since 2005, according to OSHA records.

OSHA has scheduled a meeting next week to allow Diaz Construction to contest the violations.

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Style built in to sunny, 4-level Newton condo

This updated townhouse in Newton's Auburndale neighborhood may not look large from the outside, but it has four levels with 3,000 square feet of airy living space.

The four-bedroom end-unit at 580 Auburn St. is part of the three-building, six-townhouse Auburn Woods development built in 2000. The current owners have updated their unit, replacing carpeting in all the bedrooms and a washer/dryer and adding custom built-ins and window treatments throughout. The townhouse, which includes two bedroom suites and a basement-level two-car garage, is on the market for $875,000.

Set back from the street, the exterior of the unit is gray clapboard with white trim and there's a covered front entryway. The door opens into a spacious L-shaped oak-floored foyer lined on one side with custom built-in cabinets added in 2010, and there's an adjacent half bath with a pedestal sink.

In one direction the foyer leads to a sunny living room with oak floors, recessed lighting and a three-part picture window. Against one wall sits a gas fireplace with a carved wood mantel.

A wide archway leads into an oak-floored formal dining room with three 6-over-6 windows and a glass door that leads out to a brick patio in a small back yard area.

A wall opening and French doors lead into an open kitchen/family room. The recessed-lit kitchen has 27 white wood cabinets and Uba Tuba granite counters. A center island holds a Jenn Air gas stovetop and white oven below. A white G.E. dishwasher is also original to the unit but a white Kitchen Aid refrigerator was added in 2010. The oak-floored family room area has a wall of 6-over-6 windows, recessed lighting, oak floors and French doors. A built-in with cabinets and bookcases, as well as space for a flat screen TV, was added in 2010.

There are three bedrooms on the second floor via a stairway in the foyer and all off a carpeted hallway. The master bedroom suite, recarpeted in 2010, has a good-sized bedroom and walk-in closet. The en suite master bathroom has beige marble floors and surround for a whirlpool tub. There's also a walk-in shower and a double-sink vanity topped with white Corian.

The second bedroom also has updated carpeting and a three-part picture window as well as a built-in dresser and mirror added three years ago. A third bedroom, currently used as a home office, has a wall-length built-in desk, cabinets and bookcase. An additional bathroom on this floor has white ceramic tile floors and a Fiberglas shower, and there's an alcove with a full-size front-facing Bosch washer and dryer.

The entire third floor is taken up by a second bedroom suite with a large carpeted bedroom under the eaves with recessed lighting and a wall-length built-in window suite. There are three closets, two of which run under the eaves, and an en-suite bathroom with white ceramic tile flooring, a Fiberglas shower and Corian-topped vanity.

The current owners added a carpeted exercise room in the unit's basement. There are also unfinished storage areas, one of which holds a gas-fired central heating and cooling system. And there's direct access to a two-car garage.

There's not much yard space — just a small landscaped front yard framed by a stone wall and back yard strip of grass and a stone wall ­— but there is a common grass and wooded area off to the left of the unit. There's also a paved area for guest parking.

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JPMorgan's $5B settlement doesn't end its troubles

WASHINGTON — The $5.1 billion that JPMorgan Chase has agreed to pay hardly ends its legal troubles over mortgage securities it sold.

It's merely a down payment.

JPMorgan still faces heavy financial burdens. The bank has set aside $23 billion to cover legal costs — and it may need it all.

In a statement Friday night, JPMorgan called its latest settlement an "important step" toward resolving allegations over mortgage-backed securities it sold. The $5.1 billion would resolve federal claims that it misled Fannie Mae and Freddie Mac about risky home loans and securities they bought before the housing market collapsed.

Fannie and Freddie were rescued in a taxpayer bailout in 2008 as they sank under the weight of mortgage losses.

Between 2005 and 2007, JPMorgan sold $33 billion in mortgage securities to Fannie and Freddie, according to their regulator. That was the second-most sold to Fannie and Freddie ahead of the crisis, behind only Bank of America. The securities soured after the housing bubble burst in 2007, losing billions in value.

Fannie and Freddie own or guarantee about half of all U.S. mortgages, worth about $5 trillion. The two don't directly make loans to borrowers. They buy mortgages from lenders, package them as bonds, guarantee them against default and sell them to investors. This system helps make loans widely available to borrowers.

The Federal Housing Finance Agency, which oversees Fannie and Freddie, announced Friday's settlement with JPMorgan, the largest U.S. bank.

The deal is expected to be followed by a broader agreement with the Justice Department that's still being negotiated. Last weekend, JPMorgan reached a tentative deal with Justice to pay $13 billion.

The $13 billion tentative deal included $4 billion to resolve the FHFA claims. Even reduced by that amount, it would be the largest penalty the government has extracted from a company for actions related to the financial crisis. It's unclear when the broader agreement will be finalized.

The bank still faces local, state and federal investigations into its sale of the mortgage-backed securities. Most of the trouble stems from JPMorgan's acquisition of Bear Stearns in March 2008.

In September, JPMorgan agreed to pay $920 million and admit that it failed to oversee trading that led to a $6 billion loss last year in its London operation. That combined amount, in settlements with three regulators in the U.S. and one in Britain, is one of the largest fines ever levied against a financial institution.

In another case, the company agreed to pay a $100 million penalty and admitted that its traders acted "recklessly" with the London trades.

If that weren't enough, JPMorgan is tied up in litigation over the Bernard Madoff Ponzi scheme. JPMorgan has said it's responding to investigations by Justice and other regulators. The bank hasn't given details. But it has previously faced accusations that it and other banks ignored signs that Madoff was a con artist.

Edward DeMarco, the FHFA's acting director, said the settlement with JPMorgan "provides greater certainty in the marketplace and is in line with our responsibility for preserving and conserving Fannie Mae's and Freddie Mac's assets on behalf of taxpayers."

The FHFA sued 18 financial institutions in September 2011 over their sales of mortgage securities to Fannie and Freddie. The total price for the securities sold was $196 billion.

The government rescued Fannie and Freddie during the financial crisis when both were on the verge of collapse. The companies received taxpayer aid totaling $187 billion. They have since become profitable and repaid $146 billion.

Of the $5.1 billion it's agreed to pay, New York-based JPMorgan will pay about $2.74 billion to Freddie and $1.26 billion to Fannie for mortgage bonds it sold. JPMorgan is paying a separate $1.1 billion for home loans it sold them.

The mortgage securities that JPMorgan sold to Fannie and Freddie included billions that were packaged by two institutions that failed in 2008: Wall Street bank Bear Stearns and Seattle-based Washington Mutual, the largest U.S. savings and loan. JPMorgan bought Bear Stearns and Washington Mutual in deals brokered by the government.

A number of big banks, including JPMorgan, Goldman Sachs and Citigroup, previously have been accused of abuses in sales of securities linked to mortgages in the years leading up to the crisis. Together, they have paid hundreds of millions in penalties to settle civil charges brought by the SEC, which accused them of deceiving investors about the quality of the bonds they sold.

But no high-level Wall Street executives has been sent to jail over charges related to the financial crisis. And the banks in all the SEC cases were allowed to neither admit nor deny wrongdoing — a practice that brought criticism of the agency from judges and investor advocates. Some lawmakers and other critics have demanded that the big bailed-out banks and senior executives be held accountable.

JPMorgan had long enjoyed a reputation for managing risk better than its Wall Street competitors. The bank came through the financial crisis in better shape than most of its rivals.

But in recent months, it has been engaged in a number of embarrassing and costly settlements. In September, the bank agreed to pay $920 million and admit that it failed to oversee trading that led to a $6 billion loss last year in its London operation. That combined amount, in settlements with three regulators in the U.S. and one in Britain, is one of the largest fines ever levied against a financial institution.

In another case, the company agreed to pay a $100 million penalty and admitted that its traders acted "recklessly" with the London trades.

And in a first for a major company, JPMorgan admitted in the agreement with the SEC over the trading loss in London that it failed in its oversight.

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Sweet contributed to this report from New York.

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Another month of fixes for health care website

WASHINGTON — It should be working well by the end of November. That's the Obama administration's rough timetable for completing a long list of fixes to HealthCare.gov, the new, trouble-plagued website for uninsured Americans to get coverage.

Summarizing a week's worth of intensive diagnostics, the administration acknowledged Friday the site has dozens of complex problems and tapped a private company to oversee fixes.

Jeffrey Zients, a management consultant brought in by the White House to assess the extent of problems, told reporters his review found dozens of issues across the entire system. The site is made up of layers of components that are meant to interact in real time with consumers, government agencies and insurance company computers.

It will take a lot of work, but "HealthCare.gov is fixable," Zients declared.

The vast majority of the issues will be resolved by the end of November, he asserted, and there will be many fewer screen freezes. He stopped short of saying problems will completely vanish.

The troubles have been nightmarish for the White House, which had promoted enrollment to be as simple as making a purchase on Amazon.com. This week, President Barack Obama declared himself frustrated by the setbacks while still trumpeting the benefits of the health care law and encouraging consumers to apply by phone if the website proved a hindrance.

In his weekly radio and internet address Saturday, Obama vowed that "in the coming weeks, we are going to get it working as smoothly as it's supposed to." In the meantime, he encouraged the public to call 1-800-318-2596 or visit LocalHelp.HealthCare.gov.

"We're only a few weeks into a six-month open enrollment period, and everyone who wants insurance through the marketplace will get it," he said.

As part of its effort to repair the system, the administration said it is promoting one of the website contractors, a subsidiary of the nation's largest health insurance company, to take on the role of "general contractor" shepherding the fixes.

Quality Software Services Inc. — owned by a unit of UnitedHealth Group— was responsible for two components of the government's online insurance system. One is the data hub, a linchpin that works relatively well, and the other is an accounts registration feature that initially froze and caused many problems.

HealthCare.gov was supposed to be the online portal for uninsured Americans to get coverage under Obama's health care law. Envisioned as the equivalent of Amazon.com for health insurance, it became a huge bottleneck immediately upon launch Oct. 1. The flop turned into an embarrassment for Obama and will likely end up as a case study of how government technology programs can go awry.

The briefing from Zients came a day after executives of QSSI and the other major contractor, CGI Federal, told Congress that the government didn't fully test the system and ordered up last-minute changes that contributed to logjams. Next week, Health and Human Services Secretary Kathleen Sebelius is scheduled to testify.

Visiting a community health center on Friday in Austin, Texas, Sebelius said that "in an ideal world there would have been a lot more testing" but added that her department had little flexibility to postpone the launch against the backdrop of Washington's unforgiving politics. House Republicans trying to defund the nation's health insurance program precipitated a government shutdown.

In the Republican address, Rep. Fred Upton of Michigan, the chairman of the House Energy and Commerce Committee, asked whether the problems evident now foreshadowed future troubles with the health care law.

"In a few short months, families across the country will be subject to penalties under the law's individual mandate," he said. "How can the administration punish innocent Americans by forcing them to buy a product many cannot afford, from a system that does not work?

Zients gave some new details about the extent of the problems, but administration officials are still refusing to release any numbers on how many people have successfully enrolled. Although 700,000 have applied for coverage through the new online markets, it's believed only a fraction of that number actually managed to sign up. Before the website went live, an administration estimate projected nearly 500,000 people would sign up in October alone.

The marketplaces are the gateway to obtaining health insurance under the new health care law, which requires most Americans to have coverage by Jan. 1. Middle-class people who don't have insurance on the job can purchase a private plan with new tax credits to make the premiums more affordable. Low-income people will be steered to an expanded version of Medicaid in states that agree to extend the safety net program.

The federal government is running the insurance markets or taking the lead in 36 states. The rest were set up by states themselves.

Consumers have until Dec. 15 to sign up for coverage to take effect Jan. 1. Under the law, pre-existing medical conditions will no longer be a barrier. But the markets also need lots of young, healthy customers to keep premiums affordable. Open enrollment season extends until Mar. 31.

Zients said almost daily fixes are already having an impact. For example, more than 90 percent of users can now complete one of the first steps, creating an account.

But the application process, which involves submitting and verifying personal information and income details, remains "volatile," he said. At one point, as few as one-third of users were getting through that part.

Zients said there are two big categories of problems. Performance issues involve the speed and reliability of the website. Functional issues are bugs that keep the software from working as intended. Among the high-priority issues is that insurers are getting enrollments with incomplete, incorrect or duplicative information.

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Online:

Obama's address: http://www.whitehouse.gov

Republican address: http://www.gop.gov

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For Obama, health care woes may have staying power

WASHINGTON — For nearly five years, Republicans have struggled to make a scandal stick to President Barack Obama's White House.

One by one, the controversies — Solyndra, Benghazi, Fast and Furious, and others — hit a fever pitch, but then faded away.

But some Republicans see the disastrous rollout of Obama's health law as a problem with the kind of staying power they have sought.

The health care failures are tangible for millions of Americans and can be experienced by anyone with Internet access.

The law itself is more closely associated with Obama personally, and long has been unpopular with the public.

The longer the technical problems persist, the more likely they are to affect the balance of enrollees needed in the insurance marketplace in order to keep costs down.

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Facebook off limits for Macedonian clergy

SKOPJE, Macedonia — The Macedonian Orthodox Church has banned it clergy from using Facebook to protect against abuse and "new phenomena of confessions and intimate conversations with young people," local media report.

Reports on Saturday said the Holy Synod, the executive body of the Macedonian Orthodox Church, took the decision after one bishop's complaint.

Local media say the decision has already created tensions between older church dignitaries who do not use the Internet and are hostile to it, and younger clergy and even bishops who make use of social media.

Nearly two-thirds of Macedonia's two million people are Orthodox Christians.

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9 Ohio, W.Va. residents sue DuPont Co. over cancer

CINCINNATI — Nine Ohio and West Virginia residents who have cancer and other diseases have filed federal lawsuits this month against chemical giant DuPont, alleging the company knowingly contaminated drinking-water supplies with a chemical used by one of its plants.

The lawsuits, filed Oct. 8 and this week, are among about 50 such cases — including one alleging wrongful death — filed against DuPont since April, when a court-appointed science panel found probable links between exposure to perfluorooctanoic acid, also known as C8, and kidney cancer, testicular cancer and thyroid disease, among others.

DuPont, based in Wilmington, Del., uses C8 at its plant near Parkersburg, W.Va., on the Ohio line but plans to stop making and using the chemical by 2015. C8 is a key ingredient in Teflon, the coating used on cookware, clothing and other products.

The recent litigation is the latest in a yearslong battle between DuPont and residents of the Mid-Ohio Valley, in the heart of Appalachia along the Ohio River.

About 80,000 area residents filed a class-action lawsuit against the company in 2001. It resulted in a settlement in which DuPont agreed to pay as much as $343 million for residents' medical tests, the removal of as much C8 from the area's water supply as possible and a science panel's yearslong study into whether C8 causes disease in humans.

"These are folks who've been waiting many, many years to be able to pursue these claims," said Rob Bilott, a Cincinnati attorney who has been working on the case for more than 15 years and represents the Mid-Ohio Valley residents. "Our goal is to be able to get these resolved for them and move forward as quickly as we can."

In a written statement, DuPont spokesman Dan Turner pointed out the company's efforts to pay for the medical study of C8 and fund a medical monitoring program for residents exposed to the chemical.

"Lawsuits such as these ignore family history, lifestyle choices and other causes of health issues and disease in specific individuals," Turner said. "DuPont will vigorously defend against any and all such lawsuits not based upon valid science."

The roughly 50 recent lawsuits in Ohio and West Virginia, which seek unspecified damages, have been consolidated into one case being presided over by a federal judge in Columbus. The first trial in the matter is set for September 2015.

Many of the lawsuits are more than 50 pages long and accuse the company of negligence, concealment, fraud, deception, battery and the "negligent, intentional and reckless infliction of emotional distress and outrage."

The lawsuits allege that DuPont's own research had concluded by at least 1961 that C8 was toxic and it conducted studies in the 1980s showing higher-than-normal birth defects among babies born to its female employees.

DuPont is accused of recklessly, maliciously and knowingly ignoring the risks and releasing C8 into the air and groundwater through its production practices, all while telling members of the public and news media that C8 was safe.

"No reasonable person could be expected to endure the knowledge that an entity has knowingly and intentionally exposed them to years of harmful contact with a dangerous chemical, and has furthermore actively misrepresented and/or concealed such danger from them, while reaping hundreds of millions of dollars in profits as a direct and proximate result," the lawsuit says.

The lawsuits quote internal notes written by DuPont's attorneys, obtained during previous litigation, that show their apparent frustration.

"Too bad the business wants to hunker down as though everything will not come out in the litigation," wrote one attorney who was not named in 2001, according to the lawsuit. "God knows how they could be so clueless. Don't they read the paper or go to the movies?"

Among the lawsuits is one filed by Virginia Morrison of Parkersburg, W.Va., accusing DuPont of causing the death of her husband in 2008 from injuries related to kidney cancer.

DuPont denies all the allegations in court filings, saying that plaintiffs' damages, if any, were caused by acts of God or actions of others, "over which DuPont had no control," and were not reasonably foreseeable by the company.

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Follow Amanda Lee Myers on Twitter at https://twitter.com/AmandaLeeAP

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A year after Sandy, a slow recovery for thousands

NEW YORK — A year after Superstorm Sandy, thousands of people are still trying to fix their wrecked homes.

The violent storm that struck the northeast U.S. on Oct. 29, 2012, has given way to an uneven recovery, stymied by bureaucracy, insurance disputes and uncertainty over whether hard-hit homeowners can afford to rebuild.

Billions of dollars in federal aid appropriated months ago by Congress have yet to reach homeowners who desperately need that money to move on.

Many residents along the coasts of New York and New Jersey say they still haven't figured out how to pay to reconstruct their houses to new flood standards.

The storm killed at least 181 people in the U.S. and did an estimated $65 billion in damage.

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