The Housing Bubble

The Bernake sez…

Bernanke Steps Up Stimulus Defense, Turns Tables on China
Nov. 19 (Bloomberg)

Federal Reserve Chairman Ben S. Bernanke took his defense of the U.S. central bank’s monetary stimulus abroad, saying it will aid the world economy, and implicitly criticized China for keeping its currency weak.

The best way to underpin the dollar and support the global recovery “is through policies that lead to a resumption of robust growth in a context of price stability in the United States,” Bernanke said in prepared remarks to a conference later today in Frankfurt. Countries that undervalue their currencies may eventually inhibit growth around the world and risk financial instability at home, he said.

We will see… State and local governments have too many dependents, gonna be hard to just say no…

New Republican Governors Promise After Elections Cuts Are `Going to Hurt’

The nation’s Republican governors and governors-to-be met for the first time since the Nov. 2 election that gave their party control of 29 statehouses, promising to address budget deficits by chopping the size of government.

“Why do you exist?” Pennsylvania Governor-elect Tom Corbett said that he would ask every state agency when he spoke yesterday at the Republican Governors Association meeting in San Diego. New Mexico Governor-elect Susana Martinez said she would reduce the public payroll by 5 percent through attrition to deal with a deficit she said recently nearly doubled to $452 million on $5.6 billion in revenue next year.

Democrats held 26 governorships before the election. The Republican victories increased the party’s influence before the 2012 presidential election and gave it more sway over the redrawing of congressional districts and in policies of states trying to recover from the recession.

South Carolina Governor-elect Nikki Haley, a state representative, said she beat candidates with more name recognition by telling voters that she would reduce the size of government.

“We need to be honest and say, ‘This is going to hurt,’” said Haley, when asked how she will explain cuts. “We are heading into a terrible budget year.”

Obama foreclosure-prevention effort struggles as more than half falling out of program.

WASHINGTON (AP) — More than half of the 1.4 million homeowners who enrolled in the Obama administration’s flagship foreclosure-prevention program have fallen out.

The program is intended to help those at risk of foreclosure by lowering their monthly mortgage payments. But the latest report from the Treasury Department shows that the effort is still plagued by high failure rates.

Approximately 755,000 borrowers, or 54 percent of those who tried to get their payments lowered through the program, have been cut loose through October. That compared to a 53 percent disqualification rate through September.

More than 36,300 homeowners, or 34.6 percent who had enrolled in the program, had received permanent loan modifications and were making their reduced mortgage payments on time. That was up slightly from around 34 percent in the previous report.

In response to my statement “[t]he real key to a good litigator is to be able to cut through the bs and evaluate the true value of the claim, convince the otherside it is worth somewhat more, and settle at FMV or a slight premium” REhobbyist wrote “[s]o to be a good litigator is to be a lying salesman?”

As to whether being a good litigator is dependent on being a good salesperson, of course the answer is “yes.” As to the lying aspect, of course I do not manufacture evidence or encourage false testimony, nor would doing so be in your best interests if you plan on mantaining your career. Most lawsuits include components that have no precise value (e.g., the value of human life, pain and suffering, lost profits, etc.) and some components that you may have a reasonable basis for requesting but know in advance you may not be granted (e.g., punitive and consequential damages, recovery of attorney’s fees, etc.). As between the client and their attorney, I believe the attorney should counsel the client on what they believe the true value of the claim is to manage expectations and to help decide what settlement amount would be fair. In doing so, you always have to take into the account the chance that you will lose the case (you never know what evidence may emerge to blindside you, or exactly what people will say on the stand, no matter how much you prepare) or that, even if you win, damages awarded will not be best case scenario for you. As between the attorney and opposing counsel, however, you have a duty to be an advocate for your client. As long as you have a reasonable basis for believing your claims or defenses have merit, you shouldn’t be working on the case and you would be a pretty lousy attorney if didn’t project the image that you expect to win on all claims. It is part of the business, and those involved know the rules. Are you saying that you believe it is lying to not to disclose to opposing counsel what you view as the biggest weaknesses in your case, the minimum amount your client would accept, and that even though you have a reasonable basis to make some claims you are not sure you will prevail? If you believe opposing counsel is not as sharp, not paying attention to the case, or for some other reason not doing the best job possible, do you believe you have a duty to help them out so that the actual outcome equals your expected mean outcome going into the case (perhaps even drafting their briefs and motions if necessary)? That is contary to American jurisprudence. Perhaps there was just a misunderstanding in that you read my statement regarding convincing the otherside that your claim is worth more than your expected mean means manufacturing evidence, as opposed to projecting an image that you expect the best case scenario for your client to occur. One is illegal, and the other duty bound.

“Thankfully the hedonically adjusted fiction story released by the Bureau of Lying Statistics came in with a “gasp” indication of more disinflation which caused everyone on Bubblevision this morning to have a joint Fedgasm about how prescient Bernanke was to inflate more money into the system just to bail out the banksters. As long as you do or buy anything outside of eating, driving, getting medical care, or paying for your schooling, then there is no threat of inflation. Thank you Saint Benron for saving us”!

~ John Galt

* OPINION
* NOVEMBER 19, 2010

What’s Really Behind Bernanke’s Easing?
My guess is that the Fed chairman knows that we still have too many banks overstuffed with toxic real estate loans and derivatives.

By ANDY KESSLER

Federal Reserve Chairman Ben Bernanke’s $600 billion quantitative easing program has been roundly criticized in this country and around the world. So why is he doing it? Does he know something the rest of us don’t?

Mr. Bernanke claimed earlier this month in a Washington Post op-ed that “higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending.” But, as Mr. Bernanke must know, the Japanese have been trying to influence their stock market for 20 years, with little effect on their economy. It is also unlikely, as some claim, that the Fed chairman is whipping up a stealth stimulus or orchestrating a currency devaluation. He knows these have been tried and are more likely to destroy jobs than create them.

I have a different explanation for the Fed’s latest easing program: Without another $600 billion floating through the economy, Mr. Bernanke must believe that real estate (residential and commercial) would quickly drop, endangering banks.

The 2009 quantitative easing lowered mortgage rates and helped home prices rise for a while. But last month housing starts plunged almost 12%. And in September, according to Core-Logic, home prices dropped 2.8% from 2009. Commercial real estate values are driven by job-creation and vacancy rates, both of which are heading the wrong way.

Because of unexpectedly bad construction loans, the staid Wilmington Trust was sold to M&T Bank earlier this month in a rare “takeunder”—what Wall Street calls a deal done below a company’s stock value, in this case by 40%.

In other words, real estate is at risk again. But Mr. Bernanke would create a panic if he stated publicly that, if not for his magic dollar dust, real estate would fall off a cliff.
…

Rust Belt Cities Demolish Homes as Foreclosures Blight Cleveland, Detroit
By Brian Louis - Nov 17, 2010 9:01 PM PT

Nov. 18 (Bloomberg) — Cities across the Rust Belt, saddled with abandoned properties under their control as owners stop paying taxes, are choosing to tear down some buildings rather than sell them as residents move to the suburbs and steel, automotive and manufacturing jobs disappear. Bloomberg’s Monica Bertran reports. (Source: Bloomberg)
Cities Burying ‘Dead’ by Demolishing Homes

Cleveland has lost more than half its population since 1950 as the decline of steel, automotive and manufacturing jobs forced residents to leave for parts of the U.S. where employment was growing. Photographer: David Levitt/Bloomberg

Cleveland’s population has been shrinking for 60 years as the city lost manufacturing jobs. Now, after more than 33,000 foreclosures since 2005, it’s demolishing hundreds of deserted, derelict homes.

An agency started last year to manage abandoned houses in Cuyahoga County, which includes Cleveland, plans to acquire as many as 1,000 properties next year, and tear down as many as 900 of them. The city of Cleveland may raze double that amount, according to Gus Frangos, president of Cuyahoga County Land Reutilization Corp.

“You really have to bury the dead right now,” Frangos said in a telephone interview. “You have to remove blight. It’s unfortunately on a grand scale.”
…

2010 a record year for foreclosure filings in Dallas-Fort Worth
12:00 AM CST on Friday, November 19, 2010
By STEVE BROWN / The Dallas Morning News

Dallas-Fort Worth home foreclosure filings hit a record in 2010 – but not by much.

For all of this year, 63,835 homes have been posted for foreclosure in the four-county area, Foreclosure Listing Service said Thursday. That’s only 4 percent higher than 2009’s total.

Foreclosure postings in North Texas were up more than 20 percent in 2009 and 17 percent in 2008.

“The rate of increase has slowed, and it looks like 2010 is kind of the pivotal year as far as foreclosures here are concerned,” said George Roddy, president of the Addison-based foreclosure-tracking firm. “But they are still going to be high into 2011.”
…

U.S. Homeowners Drop Out of Foreclosure Program Amid Record Defaults
By Lorraine Woellert and Clea Benson - Nov 18, 2010 4:26 PM PT

U.S. homeowners are dropping out of the Obama administration’s foreclosure prevention program at a faster rate than they are joining it, according to figures released today by the U.S. Treasury Department.

Borrowers aided by the Home Affordable Modification Program grew to nearly 520,000 in October, up 23,750 from a month earlier, the Treasury said in its monthly report. The increase was less than five percent. A total of 36,300 borrowers have dropped out of the plan for failing to make their payments, an increase of 24 percent from a month earlier.

At a congressional hearing earlier in the day, lawmakers said HAMP, which pays lenders to modify loans and reduce monthly payments for struggling borrowers, isn’t doing enough to help homeowners falling behind on their mortgages amid high unemployment and depressed real estate values.

“It’s safe to say that HAMP isn’t meeting its goal of preventing foreclosures,” Representative Maxine Waters, a California Democrat, said at a House Financial Services subcommittee hearing after the Treasury provided a preview of the report.
…

* REAL ESTATE
* NOVEMBER 19, 2010

Foreclosure Talks Gain Steam
Attorneys General Embracing Broad Strategy to Probe Other Mortgage Practices

By VANESSA O’CONNELL and DAN FITZPATRICK

Talks between major lenders and state attorneys general about the nationwide investigation of foreclosure practices are accelerating, with state officials pushing for an overhaul of the loan-modification process that would be much broader than a crackdown on the use of “robo signers,” people familiar with the situation said.

Ally Financial Inc.’s GMAC Mortgage unit on Thursday held its first face-to-face meeting in Iowa with the multistate group involved in the investigation. Iowa Attorney General Tom Miller is spearheading the probe. Bank of America Corp., Citigroup Inc. and J.P. Morgan Chase & Co. have recently picked up the pace of their talks or are planning to meet soon with key officials in the probe.
…

Regulators criticized for not catching foreclosure crisis
By Ariana Eunjung Cha
Washington Post Staff Writer
Thursday, November 18, 2010; 8:31 PM

Members of Congress criticized federal regulators for failing to recognize problems with the nation’s foreclosure system before they were brought to light by media reports, and they called for an examination into whether these issues present a systemic risk to the financial system.

Rep. Maxine Waters (D-Calif.) during a House subcommittee hearing said that a newly created group of senior financial regulators, known as the Financial Stability Oversight Council, should assess the potential impact on the broader economy.

“Why is it you don’t know how these systems work that you regulate? That’s the big question among members on both sides of the aisle,” Waters said.
…

WRAPUP 3-US lawmakers hit banks, regulators on foreclosures
Thu Nov 18, 2010 6:49pm EST

* Banks say they tightening foreclosure procedures

* Regulators tipped by news reports

* Bank regulator doesn’t see widespread industry issue

* U.S. loan modification program still disappoints

* Lawmakers ask risk panel to weigh servicing spinoff (Adds lawmaker letter, HAMP data update)
…

RE yesterdays UE benefits indefinite extension discussion:

I personally don’t even consider Government assistance an option. Who are all these people that just give up on taking care of themselves by the millions and expect someone else to take care of them? If I were broke, homeless, naked, and starving I would figure something out and take care of myself one way or another. What is wrong with people these days? What happened to innovation and hard work? The basic building blocks of America. If you see me lying in a ditch somewhere, do not feel sorry for me - to only means I exhausted every possible option. Survival isn’t ever guaranteed by anybody. You are responsible.

Much the same down under:

Prime Minister Julia Gillard says she shares the ‘‘uncomfortable feeling’’ Australians have about huge CEO salaries.

A new study shows the average CEO will this year take home $6.4 million in total remuneration.

The Australian Financial Review survey shows executive pay rose by an average of more than $940,000 or 17.2 per cent over the past year. By comparison, the annual wage of a full-time worker rose by $3200, or 5.2 per cent.

And an ACTU study on remuneration shows a typical CEO is taking home almost 100 times what the average worker gets paid.

I guess it’s better than “mildly amused’ …..

What’s in your foreclosure?

Guy finds body in his new purchase:

http://www.floridatoday.com/article/20101118/BREAKINGNEWS/101118021/1086/Body+found+in+foreclosed+home+in+Cape+Canaveral

China to Raise Reserve Ratio by 50 Basis Points From Nov. 29

China ordered banks to set aside larger reserves for the fifth time this year, draining cash from the financial system to limit inflation and asset-bubble risks in the world’s fastest-growing major economy.

Lender seizes desperate borrowers’ homes

By Christine Willmsen
Seattle Times staff reporter

Emiel Kandi forever changed the lives of a pregnant hairdresser, a jobless mechanic and a single mom when he loaned them money.

“I am a wolf,” he explained.

Jefferson Marsh, a 56-year-old car mechanic, owned his Puyallup home free and clear for a decade. After he lost his job several years ago, he struggled to pay the bills

By October 2007, he was desperate. He owed $13,400 in property taxes and was about to lose his home in a sheriff’s sale if he didn’t act fast.

He turned to the bank where he had a checking account. he was turned down.

Marsh contacted Kandi

Following Kandi’s instructions, Marsh signed a promissory note for $170,000, even though he was getting only $17,000.

Marsh knew he was paying about $7,000 in fees and interest for the loan. But he had no idea he had signed his house away. Nor did the documents state the true interest rate of the loan, later determined to be 45 percent.

Kandi required Marsh to repay him in person, cash only. Marsh said that after he made the first four payments, Kandi wouldn’t meet with him to accept an April 2008 payment of $1,000.

Kandi denied that, saying Marsh didn’t have the money.

Then he flipped the property, selling it for $235,000 to a former banker who had borrowed money from Kandi in the past. The new owner had most of Marsh’s belongings tossed into the yard. Marsh’s great-grandmother’s hurricane lamp, his grandfather’s banjo and his dad’s ukulele were gone, he said.

And the Kandis walked away with more than $200,000.

http://seattletimes.nwsource.com/html/localnews/2013427831_hardmoney14.html - 93k -

Mark-to-Make-Believe Perfumes Rotten Bank Loans:

By Jonathan Weil - Nov 17, 2010 9:00 PM ET Bloomberg Opinion

Consider the recent events at Wilmington Trust Corp. The Delaware bank on Nov. 1 said it would sell itself to M&T Bank Corp. for $351 million, which was 46 percent less than its stock-market value at the time. In August, Wilmington had said the fair value of its loans was only $40 million less than their $8 billion balance-sheet value as of June 30.

That term, fair value, was supposed to have been given a uniform definition under a FASB standard issued in 2006 called Statement 157. For financial assets, including loans, the FASB defined it as the sale price that would be received in an orderly, arm’s length transaction. This is known as an “exit price.”

Make-Believe Numbers

Wilmington didn’t use that definition for its loan disclosure. The loophole instead let Wilmington show an “entry price” estimate of how much it would cost to originate similar loans, rather than what its loans would be worth in a sale. That proved to be more like mark-to-make-believe than mark-to-market. Wilmington’s investors got blindsided as a result.

Wilmington disclosed its sale plans the same day it said its third-quarter loss widened to $365.3 million from $5.9 million a year earlier. It also said M&T had identified $506 million of additional credit losses. It’s unfathomable to think that none of those losses started happening until last quarter. An exit-price approach should have provided an early warning. A Wilmington spokesman, Bill Benintende, declined to comment.

http://www.bloomberg.com/news/2010-11-18/mark-to-make-believe-perfumes-rotten-loans-commentary-by-jonathan-weil.html - 56k -

“It’s Over” - A Realtor Finally Speaks the Truth About the US Housing Market

http://www.youtube.com/watch?v=aO5IU3GQlZE - 113k

Hacker arrested after cracking Federal Reserve
November 19, 2010

A federal grand jury has indicted a Malaysian citizen for allegedly hacking into a computer network at the Federal Reserve Bank and stealing more than 400,000 credit and debit card numbers. Federal prosecutors also allege Lin Mun Poo, 32, made a career of compromising systems at financial institutions, major corporations and defense contractors.

They say he sold or traded the information he found. Also according to the Justice Department, “in approximately August 2010, he hacked into the computer system of a Department of Defense contractor that provides systems management for military transport and other military operations, potentially compromising highly sensitive military logistics information.” Poo was arrested when he traveled to the U.S. in October. If convicted of the most serious charges, he faces up to 10 years in prison.

Dollar to Become World’s `Weakest Currency,’ Drop to 75 Yen JPMorgan Says

By Shigeki Nozawa - Nov 17, 2010 10:25 PM ET

The dollar may fall below 75 yen next year as it becomes the world’s “weakest currency” due to the Federal Reserve’s monetary-easing program, according to JPMorgan & Chase Co

“The U.S. has the world’s largest current-account deficit but keeps interest rates at virtually zero,” Sasaki said at a forum in Tokyo yesterday. “The dollar can’t avoid the status as the weakest currency.”

http://www.bloomberg.com/news/2010-11-18/dollar-to-become-world-s-weakest-currency-drop-to-75-yen-jpmorgan-says.html - 52k -

The great American consumer…because people are smart!

Black Friday deals: St. Pete family is first in nation to start camping at Best Buy.

St. Petersburg, Florida — Forget just being first in line. These folks are the first in the nation to start camping out at a Best Buy store in search of Black Friday deals.

The Davenport family pitched a pair of tents Wednesday at 10 a.m. in front of the Best Buy at Tyrone Square in St. Pete to snag deals that were still nine days away.

That made them the first people to start camping out at a Best Buy store anywhere in the country. To put that in perspective: there are more than 1,000 Best Buy stores in the United States.

So the manager of the Tyrone Square Best Buy will join the Davenports on Friday, November 19 — a week before the big deal day — to present them with an award.

They’ll be recognized as the “First Family of Black Friday” and get a special gift.

How do they do it? They have ten family members taking turns.

Why do they do it?

“We’re here really early this year because we’ve always been second, third and fourth and down the line,” Lorie Davenport said.

“We’re tired of not being first and we figured we’ve put in six years, we want to be first.”

What? The recession is long passed and The Bernake has it all under control…Or so we’ve been told.

~ Few Businesses Sprout, With Even Fewer Jobs. ~ WSJ

Fewer new businesses are getting off the ground in the U.S., available data suggest, a development that could cloud the prospects for job growth and innovation.

In the early months of the economic recovery, start-ups of job-creating companies have failed to keep pace with closings, and even those concerns that do get launched are hiring less than in the past. The number of companies with at least one employee fell by 100,000, or 2%, in the year that ended March 31, the Labor Department reported Thursday.

That was the second worst performance in 18 years, the worst being the 3.4% drop in the previous year.

Newly opened companies created a seasonally adjusted total of 2.6 million jobs in the three quarters ended in March, 15% less than in the first three quarters of the last recovery, when investors and entrepreneurs were still digging their way out of the Internet bust.

Jeez…

First look at the blog this morning and there’s a re/max banner ad with a big photo of that hideous, haggard-looking RealtLiar Margaret Kelly.

What a way to start a Friday.

QE2 indirectly buying commercial RE? $31m for a bad strip-mall.

A local story just popped up that makes no sense whatsoever. The aging strip-mall featured in the article has absolutely nothing going for it. An outdated movie theater-complex, a serial failure restaurant location, and a crappy old-school Home Depot. Something really fishy is going on here:

http://www.news-journalonline.com/business/local-business/2010/11/19/volusia-square-sale-biggest-deal-in-years.html

Harrah’s Shelves $531 Million IPO on Market Conditions

Harrah’s Entertainment Inc., the world’s biggest casino company, said that it terminated its $531 million initial public offering due to market conditions.

The casino company taken private by Apollo Global Management LLC and TPG Capital was scheduled to sell 31.3 million shares for $15 to $17 yesterday, according to a filing with the Securities and Exchange Commission and data compiled by Bloomberg. Las Vegas-based Harrah’s planned to change its name to Caesars Entertainment Corp. before the initial offering.

And you all want to “Audit the FED” …fine, which of you wants to ‘xplain it all to the rest of us mis-fit-wee-li’l-people?:

http://nationalmortgageprofessional.com/content/dan-teri-securities-transaction-process-reverse-engineered

Ho ho, hah hah, hehehehehehe, BwaHaHaAhHAHAHAHAHAHA!!! (Cantankerous Intellectual Bomb-thrower™)

Here’s a report from Central Texas. We’ve just made another offer, this one on a lovingly maintained late 1970s 2100 sq. ft. 4BR/2.5BA in a location that would allow my husband to walk to work and allow us to remain a one-car family. The only objectionable thing about it is that the kitchen is basically original. They want $220k. We have offered $165k and told the sellers that our offer is good for two weeks. We’ve got two kids in private school, so we really can’t budge too far up on our offer. I’m going to hate it if this one gets away. On the bright side 1) they are closing on another house in three weeks and 2) we still have a good year and a half left before we have to leave our rental.

Texas is indeed different…

I am currently paying $1450 for a 870 sq ft apartment in the heart of downtown Austin… When I moved in two years ago, parking was free…. My lease will be up in 80 days… I got a letter from management indicating my new parking bill will be $80 and my rent will go up to $1630. My total bill will be $1,710 or an increment of ~18%.

Apparently, higher end 1-bedroom units are in high demand…. I spent the last couple of days looking at other units within the area, and every single complex has raised the prices and decoupled rent from parking… I could not find any other complex nearby that could match the price, size or location… The only way for me to keep a similar rate would be to compromise location OR to take one of the 500 or 600 sq ft studios

I also took a look at resale condos in nearby buildings. However, buying doesn’t make a whole of sense with the high property taxes in Texas (2.5%) and the high HOA costs. For example, there are two comparable units in the 360 condos, which are 2 blocks away from where I currently live:

-Unit for rent is 748 sq ft on the 18th floor facing west. Going rate is $1650.

-Unit for sale is the same floor plan, but on the 19th floor also facing west. Sales price is $279,900. Annual Taxes $6,078. Monthly HOA fees of $277. If I were to put 20% to avoid mortgage insurance and I got a 4.75% interest on my loan, the monthly payment would be $2,126.

Renting for $1650 or buying for $2,126 a month…. why would anyone do that?

Financially, I am doing great…. single engineer, no student loands, no credit card debt, no car payments… who are these people renting/buying high end apartments/condos in downtown Austin?

Renting for $1650 or buying for $2,126 a month…. why would anyone do that?

#1…You would do it so you don’t continue to get the increased rent notices like you just received…

#2… Assuming tax laws did not change (which is a big assumption) your effective payment (plus principal reduction) would be well below what you are paying in rent…

Not suggesting that it would make sense for you, But it could make sense for someone given the close relationship of the two payments…

Fed chief Ben Bernanke argued in a speech in Germany today that the Fed’s Treasury bond purchases are needed to promote faster job creation and reduce the risk that very low inflation could turn into deflation.

Even so, the Fed’s program by itself can’t fix all the economy’s problems, Bernanke said.

“There are limits to what can be achieved by the central bank alone,” he said, tamping down expectations.

~~Fed Can’t Do It Alone~~

< This should cause a shudder among Americans. Bernanke says the Federal Reserve System needs help to get the economy rolling again. Whence cometh the help? From the U.S. Congress. Think “another stimulus package.”

Crazy, to be sure, but that’s the track the experts are following. Dr. John Maynard Keynes, a dead but very influential economist, is still running the game. Unemployment high? Print money. Debt load making the economy sluggish? Take on more debt. These policies are leading to a tragic ruin of the U.S. dollar.

Greece Needs Deflation to Be Saved: Economist

Greece needs to go through a period of deflation to return to competitiveness and ensure sustainable growth, John Sfakianakis, group chief economist at Banque Saudi Fransi, told CNBC Friday.

Greece’s lack of competitiveness is a major issue that is not being addressed and it, coupled with the burgeoning debt, could stall the country’s return to growth considerably, Sfakianakis said.

“Right now in Athens coffee is going for 4 euros, so you cannot have a competitive economy when you are charging everybody an arm and a leg. Deflationary economics have to set in, in order for Greece to become competitive,” he said.

I imagine the ratio in D.C. must be around 1 out every 2.

Nearly 1 in 5 Americans had mental illness in 2009

CHICAGO - More than 45 million Americans, or 20 percent of U.S. adults, had some form of mental illness last year, and 11 million had a serious illness, U.S. government researchers reported on Thursday.

Young adults aged 18 to 25 had the highest level of mental illness at 30 percent, while those aged 50 and older had the lowest, with 13.7 percent, said the report by the Substance Abuse and Mental Health Services Administration or SAMHSA.

The rate, slightly higher than last year’s 19.5 percent figure, reflected increasing depression, especially among the unemployed, SAMHSA, part of the National Institutes of Health, said.

“Too many Americans are not getting the help they need and opportunities to prevent and intervene early are being missed,” Pamela Hyde, SAMHSA’s administrator, said in a statement.

Web Censorship Bill Sails Through Senate Committee
Who says Congress never gets anything done?

On Thursday, the Senate Judiciary Committee unanimously approved a bill that would give the Attorney General the right to shut down websites with a court order if copyright infringement is deemed “central to the activity” of the site — regardless if the website has actually committed a crime. The Combating Online Infringement and Counterfeits Act (COICA) is among the most draconian laws ever considered to combat digital piracy, and contains what some have called the “nuclear option,” which would essentially allow the Attorney General to turn suspected websites “off.”

U.S. sending tanks to Afghanistan for first time

Washington (CNN) — The United States is beefing up its firepower in Afghanistan by employing heavily armored tanks in Afghanistan for the first time in the nine-year war, a military spokesman said Friday.

The U.S. Marine Corps plans to use a company of M1A1 Abrams tanks in restive Helmand province by early spring, said Marine Maj. Gabrielle Chapin.

The M1A1 tank is the fastest and most deadly ground combat weapons system available. It will allow for more aggressive missions while mitigating risks to U.S. forces, the military said.

U.S. forces used the tanks to battle insurgents successfully in Iraq’s Anbar province, Chapin said.

“Everyone knows that the entire apparatus of the [airport] security line is a national homage to political correctness. Nowhere do more people meekly acquiesce to more useless inconvenience and needless indignity for less purpose.” ~Charles Krauthammer

Bubble Flashback:

“Mortgage Products” - Huge pet peeve.

You know its a bubble when lenders are advertising mortgage products. Its a freakin’ loan, there are no products!

No other lender can do what Countrywide can.

Kids…ya know I love ‘em! (for context: the deadline to declare candidacy for mayor of Chicago is this Monday)

(From today’s Chi Tribune)

Cook County Sheriff Thomas Dart said today he will resume foreclosure evictions as early as next week despite continuing questions over the legality of bank paperwork.

He said he wanted bank attorneys to sign a sworn affidavit saying they had verified the foreclosure was valid before he would carry out an eviction for them. But none would, he added.

Now, he said, the Cook County state’s attorney’s office has told the sheriff’s office it must attempt to enforce all foreclosure eviction orders that are signed by a judge, even if a review by sheriff’s staff finds some irregularities in the file. The state’s attorney advised that once a judge signs an eviction order, it is is presumed to be valid, he said.

The bond vigilantes may have woken up first in Greece, Ireland, and Portugal. “But France,” Roubini says, “does not look much better than the periphery.”

In Roubini’s view, the probability of the right steps being taken in France soon is not great. “Politically they are constrained from making reforms.” For example, after the French made relatively small changes in their social welfare system-raising the retirement age from 60 to 62 -”You had massive riots in the streets.”

And that, in Roubini’s view, was just the beginning of the necessary austerity.

“What’s going to happen when you do more radical reform? That’s an open question in the case of France.”

Looking beyond France to the future trajectory of the crisis, Roubini says, “The next one in line is going to be Portugal. “Due to the severity of Portuguese debt problems, Portugal is going to lose market access-and that means they are going to require IMF support as well.

But the real nightmare domino is Spain. Roubini refers to the Spanish debt problems as “the elephant in the room”.

“You can try to ring fence Spain. And you can essentially try to provide financing officially to Ireland, Portugal, and Greece for three years. Leave them out of the market. Maybe restructure their debt down the line.”

“But if Spain falls off the cliff, there is not enough official money in this envelope of European resources to bail out Spain. Spain is too big to fail on one side-and also too big to be bailed out.”

I just think the average person would be much more willing to take a hit in retirement etc if the banking elite who caused this mess took their medicine too.

Meredith Whitney Plans to Launch Rival Rating Agency

Meredith Whitney, a Wall Street analyst who shot to prominence with bearish calls on banks before the financial crisis, plans to set up a credit-rating agency to go head to head with Moody’s Investors Service and Standard & Poor’s.

Meredith Whitney

Ms Whitney said in an interview with the Financial Times that her new agency would use the same business model as established agencies, in which issuers of debt pay for ratings. She maintained that she would be able to manage potential conflicts of interest, saying: “If you run a good business and you have compliance in place, there should not be problems.”

Indeed, the huge amounts of debt financing and refinancing activity that has been going on this year in the capital markets, particularly in the US bond markets where interest rates are at record lows, have boosted revenues for the biggest rating agencies. Bond sales by companies with “junk” or “high yield” ratings, for example, are higher this year than they have ever been before.

At NATO summit, Obama’s ride is talk of the town
Whoops, President Obama must have missed the memo on this one.

While the Portuguese prime minister and the Portuguese president of the European Union’s executive commission are tooling around the NATO summit here in no-emission electric vehicles, Mr. Obama is fouling the Lisbon skies with his no-efficiency “Beast,” the eight-ton, diesel-fueled behemoth of a limousine the president carts around the world with him.

Oh, and to drive the point home, journalists attending the summit are being ferried to events in electric buses, as well.

A “note to the media” left at every journalist’s work station in the summit press center says the use of electric vehicles is meant to raise awareness of Portugal’s “world pioneering leadership in electric mobility.” Portugal claims to derive 45 percent of its electricity consumption from “clean” energies. Its “Mobi.E” electric mobility network – with 100 charging stations in 25 municipalities around the country, set to rise to 1,300 charging points by mid-2011 – is considered a world leader.

But the Portuguese press is more interested in the Beast. Pages in Lisbon newspapers have been dedicated to cutaway renderings of “Cadillac One,” with charts and boxes offering every detail of the vehicle that the Secret Service divulges: the Kevlar tires, the special foam in the gas tank to immediately extinguish any fire from a direct hit, the supply of presidential blood.

Another point of fascination is the unparalleled security detail to accompany Obama as he moves from bilateral meetings with Portuguese leaders to the summit venue to the Lisbon Marriott Hotel, where he may or may not sleep. (Another overnight option, to keep everyone guessing, is the residence of the US ambassador to Portugal).

While Obama’s motorcade is accompanied by the 35 Portuguese police motorcycles, Russian President Dmitry Medvedev – who arrives for a three-hour visit Saturday to participate in a NATO-Russia Council meeting – will get no such treatment.

On the bright side for Mr. Medvedev, he – unlike Obama – will be able to claim that his modest transport is more in line with the NATO meeting’s green theme.

Dude! Gotta pay your taxes…

Wesley Snipes to Be Ordered to Prison for Tax Evasion (AP)

A federal judge granted a government motion that actor Wesley Snipes be ordered to prison.

Snipes had been convicted on tax evasion charges in 2008.

His attorneys had requested a new trial, but that motion was denied on Friday by U.S. District Court Judge William Terrell Hodges.

Earlier this month, federal attorneys had asked a central Florida judge to revoke Wesley Snipes’ bond if the actor was granted a new trial, but it looks like that point is now moot.

Snipes’ attorneys argued he deserved a new trial because of jury bias in his 2008 conviction. They said two jurors were accusing other jurors of deciding the case without hearing evidence.

They also said prosecutors hid damaging information about a key witness.

Federal prosecutors argued interviewing those jurors about their deliberations would violate juror rules, and intimidate future juries.

The star of the “Blade” trilogy faces a three-year prison sentence.

So James Carville has been saying Hillary should some of her testicular fortitude w/Obama so then they’d both have some. The comment was in reference to how he’s handled the banks. He he he! That’s just beautiful.

Reposting Jeff Saturdays link. This is a great commentary.

“It’s Over” - A Realtor Finally Speaks the Truth About the US Housing Market

http://www.youtube.com/watch?v=aO5IU3GQlZE

75-year Ponzi scheme demystified:

Are The Social Security Trust Funds A Mirage?
Categories: Government, Debt
01:21 pm
November 19, 2010

Proposals to fix the deficit are coming fast and furious in Washington these days. One major target: Social Security.

Whether you favor cutting Social Security may depend on how you view the Social Security trust funds, which currently contain $2.5 trillion for retirement benefits. That’s $2.5 trillion that, according to some people, don’t actually exist.

Here’s the back story.

If you look at your paycheck, in the spot where it lists deductions, there’s a line that says “FICA.” That’s the money that gets taken out of your check to pay for Social Security.

For the past 25 years or so, the amount of money the government has raised through those taxes has been greater than what it’s been spending to fund Social Security.

The surplus came largely from the baby boomers — and we’re going to need that extra money when they retire and start collecting Social Security.

This is where the $2.5 trillion trust funds come in.

The government has invested all that money in Treasury bonds, which are traditionally considered among the safest investments in the world.

But a Treasury bond, remember, is the way the government borrows money. So the government is lending the Social Security surplus to itself. And the obligation to repay those loans is the trust funds’.

“They are nothing like any trust fund that any one of us would think of,” says Maya MacGuineas of the New America Foundation. “It conjures up an image of really holding savings, and it doesn’t do that at all.”

* NOVEMBER 19, 2010, 1:09 A.M. ET

WORLD FOREX: Dollar Drifts Lower Against Yen As Bernanke Defends QE2

By Kosaku Narioka
Of DOW JONES NEWSWIRES

TOKYO (Dow Jones)–The U.S. dollar fell against the yen in Asia Friday from a fresh six-week high hit overnight in New York, after Federal Reserve Chairman Ben Bernanke mounted a strong defense of the Fed’s easy-money policies.

In remarks prepared for delivery Friday in Frankfurt, Bernanke showed his resolve to continue with the Fed’s second round of quantitative easing.

“On its current economic trajectory the United States runs the risk of seeing millions of workers unemployed or underemployed for years,” Bernanke said. “As a society, we should find that outcome unacceptable.”

Bernanke’s remarks followed comments by other Fed officials who supported the easing steps to stimulate the U.S. economy. Minneapolis Federal Reserve Bank President Narayana Kocherlakota, who was presumed to be uncomfortable with the Fed’s recent decision to buy $600 billion in longer-dated Treasurys, said late Thursday, “I did express support for the decision at the recent meeting (of the Federal Open Reserve Committee).”

Foreign exchange participants sold the dollar in reaction, pushing it lower.

“Although some recent U.S. economic indicators turned out to be stronger than expected, comments from Fed officials have given the reassurance that the Fed is going to implement the QE2 just as it announced,” said Satoshi Tate, senior vice president of the foreign exchange division of Mizuho Corporate Bank.
…

Oh my — just when it seemed like the financial crisis was finally dying down, it looks like Goldman Sachs may be in for another thirty lashes with a wet noodle. Oh, the humanity!

* HEALTH INDUSTRY
* NOVEMBER 20, 2010

U.S. in Vast Insider Trading Probe

By SUSAN PULLIAM, MICHAEL ROTHFELD,JENNY STRASBURG and GREGORY ZUCKERMAN

Federal authorities, capping a three-year investigation, are preparing insider-trading charges that could ensnare consultants, investment bankers, hedge-fund and mutual-fund traders and analysts across the nation, according to people familiar with the matter.

The criminal and civil probes, which authorities say could eclipse the impact on the financial industry of any previous such investigation, are examining whether multiple insider-trading rings reaped illegal profits totaling tens of millions of dollars, the people say. Some charges could be brought before year-end, they say.

The investigations, if they bear fruit, have the potential to expose a culture of pervasive insider trading in U.S. financial markets, including new ways non-public information is passed to traders through experts tied to specific industries or companies, federal authorities say.

One focus of the criminal investigation is examining whether nonpublic information was passed along by independent analysts and consultants who work for companies that provide “expert network” services to hedge funds and mutual funds. These companies set up meetings and calls with current and former managers from hundreds of companies for traders seeking an investing edge.

Among the expert networks whose consultants are being examined, the people say, is Primary Global Research LLC, a Mountain View, Calif., firm that connects experts with investors seeking information in the technology, health-care and other industries. “I have no comment on that,” said Phani Kumar Saripella, Primary Global’s chief operating officer. Primary’s chief executive and chief operating officers previously worked at Intel Corp., according to its website.

In another aspect of the probes, prosecutors and regulators are examining whether Goldman Sachs Group Inc. bankers leaked information about transactions, including health-care mergers, in ways that benefited certain investors, the people say. Goldman declined to comment.
…

* REVIEW & OUTLOOK
* NOVEMBER 20, 2010

The Fed’s Bipolar Mandate
Time to repeal the Humphrey-Hawkins Act of 1978.

If there is a silver lining to the uproar over the Federal Reserve’s decision to create $600 billion in new reserves in the next few months, it is the renewed public attention to the Fed’s impossible dual political mandate for stable prices and maximum employment.

To be specific, Paul Ryan suddenly has company. The Wisconsin Congressman has since 1999 proposed legislation that would let the Fed focus monetary policy solely on the goal of stable prices. This week he’s been joined by fellow Republicans Mike Pence of Indiana and Tom Price of Georgia, while Senator Bob Corker of Tennessee told us he plans to work with Mr. Ryan to introduce legislation next year that would lift the dual mandate. If the 112th Congress did nothing else, this would be worth the price of its election and a major contribution to better economic policy.

These columns have decried the dual mandate since it became the law of the land in 1978 with the Full Employment and Balanced Growth Act, aka Humphrey-Hawkins. To appreciate the problem, consider that in the original Federal Reserve Act of 1913 Congress asked the central bank to supervise banks. It did not mention explicit economic goals. Even in the Keynesian heyday of the Employment Act of 1946, Congress did not ask the Fed to manage the economy.

But with Humphrey-Hawkins, Congress ordered the central bank to “promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates.” The political context in that age of Jimmy Carter will sound familiar. U.S. unemployment was stubbornly high and the fiscal policies (tax rebates) of a Democratic Congress had failed to stimulate. So the politicians decided to conscript the Fed in its job creation mission by ordering the ostensibly independent central bank to target employment as well as prices.

The contradictions were as apparent then as now; as Mr. Corker puts it, a central bank cannot have “a bipolar mandate.” The pressure to bring down unemployment using money creation during difficult economic times will inevitably complicate the task of maintaining stable prices. As the Fed pushes money out the door, whether or not there is an economic demand for more dollars, there will be an illusion in the short-run that people are better off. But the longer-term effect may be inflationary as too much money chases too few goods.
…

Turns out that jobs today are more important to the world outside California than dire prospects for catastrophic consequences of global climate change that are supposed to happen at some indeterminate point a century or more into the future.

The Wall Street Journal

* REVIEW & OUTLOOK
* NOVEMBER 20, 2010

Cap and Retreat
The largest U.S. carbon market collapses.

A cap-and-trade system for carbon emissions has been touted by environmentalists as a market-friendly mechanism to reduce global warming. Well, the market has spoken. The Chicago Climate Exchange, which advertises itself as “North America’s only cap and trade system for greenhouse gasses,” is shutting down.

The CCX launched to great fanfare in 2003 with a grant of some $1.1 million from the Joyce Foundation. Time magazine called company founder Richard Sandor a “hero of the planet.” The exchange got off to a blazing start with hundreds of companies—from DuPont to Ford to Motorola—voluntarily agreeing to buy and sell rights to emit CO2 above a legally binding quota. At its peak in May 2008, CCX was trading 10 million tons of carbon permits per month. The price of carbon offsets rose from $1 a ton to a high of $7.40 in mid-2008.

The market collapsed in 2009 when the price fell to $1, and trading all but ceased this summer. The fate of the carbon trading market closely followed the prospects of passing a mandatory federal cap on carbon emissions in Congress. Once the Senate rejected the cap-and-tax scheme—because the tax would have cost millions of jobs—many corporations suddenly lost interest in paying for greenhouse gas emissions. A market that green groups had predicted would exceed $500 billion a year in trading is now flat-lined. The only place cap and trade is still alive and well is, alas, California.

If you decide to buy a foreclosure home, by all means don’t hesitate to ask questions about former occupants. Can banks be charged in the deaths of home owners who are facing eviction? What if it turns out someone dies because of an erroneous robo-signing eviction?

Body in 1 foreclosed Fla. home, death in another
By TAMARA LUSH
The Associated Press
Friday, November 19, 2010; 3:42 PM

ST. PETERSBURG, Fla. — A man who bought a foreclosed Florida home discovered a body in the garage, and it may be that of the former owner, authorities said Friday.

The man went to the home in Cape Canaveral on Thursday, a day after buying it, Brevard County Sheriff’s Major Andrew Walters said. He found the body in a car in the garage.

Walters said it’s unclear how long the body had been there, or how the person died. An autopsy was underway.

News of the gruesome find came the same day as a 71-year-old man in Gulfport, across the state, died after shooting himself in the head Monday as he was about to be evicted from his home under foreclosure.

Boyd Rubright shot himself as a sheriff’s deputy tried to drill through the lock on his front door, police said.

The body in the Cape Canaveral house was believed to be that of a woman, Walters said. Investigators think it may the home’s previous owner, because she hasn’t been seen for a while. She went through foreclosure earlier this year.

Mortgage lender Wells Fargo & Co. sold the home Wednesday. Neighbors told authorities that the woman had “disappeared” some time ago.

In Gulfport, foreclosure proceedings against Rubright began two years ago, court records show.

Gulfport Police Sgt. Robert Burkhart said the eviction was scheduled for the weekend but was postponed for a few days, Burkhart said. On Monday, when a deputy went to the house to evict Rubright, the officer knocked and received no answer.

That’s when he began drilling the lock and heard a single shot.

Burkhart, who later responded to the scene, said Rubright was discovered in a recliner with a .357-caliber revolver in his hand.

Authorities spoke with Rubright’s family, who said the elderly man had lived in his home for 20-plus years.

“He had mentioned to them that they were not going to take his house from him,” Burkhart said. “They, I assume, meaning the bank.”

It must be great to be Too-Big-to-Jail!

Foreclosure Foul-up: Tracking Down Those ‘Lost’ Mortgages
By Stephen Gandel Monday, Nov. 29, 2010

One of a million foreclosures this year.
Anthony Suau for TIME

Trevor Douglas, 54, may soon lose his Orlando house. Sure, Douglas hasn’t paid his mortgage in more than two years, which is what a Bank of America spokesperson tells me “is important to remember.” It is. Still, if it happens, I will feel partially responsible. I helped push Douglas closer to eviction.

Like many other home loans, Douglas’ IOU was bought and sold numerous times and finally packed into a bond. So when his foreclosure notice finally arrived, the entity trying to kick him out was one he had never heard of, something called GSAMP 2005-HE3. Worse, GSAMP said it had lost the original document — called a promissory note — to prove they owned his loan. Douglas hired a lawyer, who got the foreclosure put on hold. And that’s when I showed up. Much of the ire focused on the banks recently has been on their use of robo-signers — low-wage workers hired by banks to witness and sign hundreds of thousands of foreclosure notices without verifying that the grounds for the evictions were valid. On Thursday, a Federal Reserve official told lawmakers on a House Financial Service subcommittee that U.S. bank regulators are conducting a review of the banks’ foreclosure practices. In hundreds of thousand of cases, the promissory note that proves a bank owns a borrower mortgage is now gone. Vanished. Some borrowers may walk away scot free. In other instances, banks may be forced to dramatically reduce what a borrower owes. Many foreclosures have already been halted by the courts or by the banks themselves. Still, bank officials say, even if they are missing the original promissory note, they have the paperwork to prove they own the mortgages. (See pictures of Americans in their homes.)

Just how bad is the problem? TIME dug into the mortgage of one troubled borrower. What we found suggests that many promissory notes are not lost. In an effort to rush homeowners to foreclosure, and hide damaging information, bankers’ have needlessly created a huge legal mess that once again questions the financial industry’s credibility and ethics. “They [banks] don’t comply with the law when they’re taking people’s homes,” says Michael Olenick, who owns Legalprise, a legal research firm.
…

25 People to Blame for the Financial Crisis
The good intentions, bad managers and greed behind the meltdown

Angelo Mozilo
Photo Illustration; Mozillo: Mark Wilson / Getty; Getty

The son of a butcher, Mozilo co-founded Countrywide in 1969 and built it into the largest mortgage lender in the U.S. Countrywide wasn’t the first to offer exotic mortgages to borrowers with a questionable ability to repay them. In its all-out embrace of such sales, however, it did legitimize the notion that practically any adult could handle a big fat mortgage. In the wake of the housing bust, which toppled Countrywide and IndyMac Bank (another company Mozilo started), the executive’s lavish pay package was criticized by many, including Congress. Mozilo left Countrywide last summer after its rescue-sale to Bank of America. A few months later, BofA said it would spend up to $8.7 billion to settle predatory lending charges against Countrywide filed by 11 state attorneys general.
…

Chicago-area sheriff resumes foreclosure evictions
(AP) – 7 hours ago

CHICAGO (AP) — An Illinois sheriff who halted foreclosure evictions last month because some bank employees weren’t following the proper procedures said Friday he’s been forced to order his deputies to carry them out, but he will continue investigating the matter and could charge banks and their employees with crimes.

Cook County Sheriff Tom Dart said he is only ordering evictions to resume because county prosecutors told him that he was legally bound to carry out foreclosure eviction orders signed by a judge.

“For the people who have been involved with this and think now that because the (Cook County) State’s Attorney’s office has ordered me to go ahead with the evictions that everything’s fine . . . No, we are going to be looking at you for criminal violations,” Dart said. “You may have got through one storm now, the other one is coming.”

Dart singled out Bank of America, JP Morgan Chase and GMAC/Ally Financial last month for problems with eviction notices. He said Friday that investigators continue to find problems with bank employees signing off on foreclosure documents they haven’t read, although he did not single out individual companies.

“When we asked a month ago . . . send me an affidavit to say that everything was done legally, not one organization, law firm handling these cases, not one of them sent in one document,” Dart said. “Not one, and they had over a month to do it.”

The sheriff said that if anything, his office’s investigation has shown the problems that prompted the moratorium were even more widespread than he first thought.

“We are being overwhelmed with abundant evidence that there are irregularities,” he said, adding that just a cursory investigation by his financial crimes unit has shown problems in eviction order after eviction order. “Irregularities are going on all over the place here. It’s the norm.”
…

Mortgage Foreclosures - What’s the Rush?

I was talking to a friend of mine this morning who is a defense attorney, and we were discussing some of the facts of the mortgage cases our firm is handling. As I’ve mentioned in previous cases, many of these mortgage companies are representing that they will review the clients’ situation for a modification, or approving their modification, and at the same time, they proceed with foreclosure.

While we were talking, it struck me. What’s the rush? Why are these banks moving so quickly to foreclose? Why are they putting themselves in this position? It doesn’t make sense.

The current situation in the United States is unprecedented. These banks have never had so many loans in default. The banks, even though very large (Chase, Wells Fargo, Bank of America, CitiMortgage, etc.), are not equipped to handle all of these modifications and foreclosures. So, why not slow down? Quit rushing the process. You don’t have to foreclose immediately. You don’t have to commit fraud and misrepresentations. You don’t have to throw people out on the street.

Why are they rushing? Well, I can only think of a couple reasons. First, many of the people handling the modifications and foreclosures are low level employees, and they do not think outside the box. They are given their structure and told what to do, and they are scared to deviate even if it means helping the customer.

Second, there might be some accounting, tax and/or regulatory reasons why the banks have to get these bad loans off their books. If this is the case, then maybe we need new legislation to address the problem. However, if they weren’t losing documents and making people file their packages on multiple occasions, they might not need to rush to foreclosure.

We have been successful in helping a couple people with these issues, but there are thousands suffering. Hopefully, in the future, better processes will be developed, and better decisions will be made. Until then, the court dockets will continue to increase with these types of cases.

Stay tuned . . .

Sell now, or get priced in forever by future waves of foreclosure sales!

Foreclosures, Markets
Sellers, here’s your chance
Posted by Scott Van Voorhis
November 19, 2010 06:22 AM

Home sales have plunged since the home buyer tax credit breathed its last in April.

But now, thanks to the robo-signing scandal, along comes another artificial stimulus to prop up the housing market.

Hammered with questions over the validity of foreclosure paperwork, banks are pulling back big time, putting on hold both initial foreclosure petitions and foreclosure deeds, the last step in the process.

Foreclosure petitions fell 51 percent in October, while foreclosure deeds, representing completed home seizures, fell 39 percent, according to The Warren Group, publisher of Banker & Tradesman.

Now don’t get fooled here into thinking this is some great boost for the battered housing market. In fact, there are already some suggestions to that effect, unbelievably really. While this could prove a short-term boon for sellers - stick with me, I will get to that - it is likely to prove another unfortunate roller coaster ride for the housing market as a whole.

Just wait until the spring, when foreclosure petitions and takings soar after the major banks work out the paperwork kinks. After all, the foreclosure crisis was already on track to set new records here in Massachusetts and across the country before the robo-signing controversy erupted.

So we are looking at a temporary lift followed by another deep dip, similar to what happened this summer after the home buyer tax credit went away.

But for anyone faced with having to sell a home, yes, the next few months could prove to be a rare opportunity akin to what we saw last spring in the months leading up to the end of the credit.
…

Peter Ticktin fights his own home foreclosure by Deutsche Bank
By Diane C. Lade, Sun Sentinel
November 19, 2010

Peter Ticktin, the South Florida attorney who has received national attention as a foreclosure defense expert, has something in common with his clients: He is fighting the bank to keep his house.

Deutsche Bank National began foreclosure proceedings on Ticktin’s Boca Raton home in 2007 after the lawyer and his wife fell behind on their loan. The couple haven’t made a mortgage payment since December 2006 and continue to live in the 3,920-square-foot house in Paradise Palms.

Ticktin has fought Deutsche Bank using the same strategy that he’s been able to use for his clients: uncovering sloppy paperwork and poorly prepared mortgage files. In the Ticktins’ case, Deutsche Bank didn’t have their mortgage note, a problem that has surfaced in tens of thousands of foreclosure defense cases nationwide.

Deutsche Bank dropped its foreclosure action in February after the Ticktins’ attorneys claimed they didn’t have enough information to respond because there was no note. The bank refiled the foreclosure last month, saying it has original affidavits showing it has the right to foreclose.

“It’s embarrassing that I’m in foreclosure. But I now understand my clients better than some lawyers who never had a problem in their lives,” said Ticktin, whose firm is handles 3,000 foreclosure defense cases at two Florida offices, one in Deerfield Beach and one in Tampa.

He said he’s confident he and his attorney, Jamie Sasson, can defend against the action. “[Deutsche Bank] doesn’t have the paperwork,” Ticktin said.
…

Isn’t it great that the recession and the banking crisis are finally over, so America can get back to business as usual again?

Real Estate Weekly

Nov. 19, 2010, 5:01 p.m. EST
This week’s Real Estate stories
By MarketWatch

Foreclosures got attention on Capitol Hill this week, as the Senate Banking Committee heard testimony related to foreclosure paperwork problems plaguing lenders.

The “robo-signing” controversy that caused some lenders to halt foreclosures might be a bigger crisis than originally thought, said Christopher Dodd, the committee’s chairman.

The problems could further deepen the current foreclosure crisis, said Diane Thompson, a lawyer for the National Consumer Law Center, in her testimony to the committee.

“The lack of restraint on servicer abuses has created a moral hazard juggernaut that at best prolongs and deepens the current foreclosure crisis and at worst threatens our global economic security,” Thompson said, according to a news release. “Recent exposures of robo-signing and lack of ownership documentation by servicers have taken the wraps off a servicing system that has failed homeowners, investors and our society.”

Meanwhile, the Mortgage Bankers Association said Thursday that a greater percentage of mortgages entered the foreclosure process in the third quarter.
…

007 Financial Survival Podcast –
Reggie Middleton Reveals the Nasty Little Detail Left Out of the Case-Shiller Home Price Index
by admin on October 28, 2010
Reggie Middleton

We’ve got an interesting discussion this week with financial analyst Reggie Middleton of the BoomBust Blog.

Earlier this week, the S&P Case-Shiller Index of home prices was released, reflecting a 0.3% drop in home prices in August 2010 from the previous month. Doesn’t sound too bad, right? But wait — Reggie tells us that in averaging the current price of houses in certain US markets, the Case-Shiller boys left out a few little, um, important details…

Reggie also talks about his background in real estate investing, and the warning signs that led him to exit the New York real estate market.

Dumb question of the day:

Can (does) the Fed use QE2 to directly prop up housing prices?

Reggie says that Case-Shiller/S&P 500 excludes foreclosures from their data. This obviously skews the index to the high side, as the percentage of recent home sales transactions which are foreclosures approaches 50 percent of the market in some areas.

If this guy knows what he is talking about, the Case-Shiller index is nothing but an upwardly-biased statistical lie.

The rate of home sales has plummeted in The OC. Further significant price declines are in the bag, especially once the robo-signer paperwork issues are cleared up and foreclosure sales kick back up into overdrive.

Published: Nov. 16, 2010
Updated: 5:18 p.m.
Housing prices flat, sales sinking
By JEFF COLLINS
THE ORANGE COUNTY REGISTER

The housing market continued to struggle against fierce headwinds last month, losing ground in the face of tightfisted lenders and edgy buyers.

The median price of an Orange County home – or price at the midpoint of all sales – fell to $438,000 last month, housing tracker MDA DataQuick reported Tuesday.

That’s the lowest since April and up just 0.3 of a percentage point (or $1,500) from the October 2009 median.

Find out how the rest of Southern California’s housing markets did on Lansner on Real Estate.

Meanwhile, sagging sales stretched into their fourth month, with 2,298 Orange County homes trading hands in October.

That’s 9 percent fewer than in September and 17.9 percent below the October 2009 tally.

While sales typically drop from September to October, last month was the second-slowest for an October since DataQuick began tracking home sales in 1988. It also was nearly 36 percent below the average of around 3,600 housing deals in a typical October.

The market appeared to be on fire during the first half of the year. But industry insiders now fret that state and federal tax breaks failed to ignite a stronger, longer-lasting recovery after ending in the second half.

“A lot of us were disappointed that the wind that would be in our sails just faded,” observed Jeff Culbertson, executive vice president for Coldwell Banker’s Southwestern U.S. region, which includes Orange County.

“We’re not in a bad market,” Culbertson added. “But we’re not in a good market.”
…

Which kind of criminal is worst: A bankster, a fraudster or a thief?

Mark-to-Make-Believe Perfumes Rotten Bank Loans: Jonathan Weil
By Jonathan Weil -
Nov 17, 2010 6:00 PM PT
Bloomberg Opinion

Just when it looked like U.S. banks were starting to reveal the true values of their loans, it turns out there’s an accounting loophole they can exploit to keep bad news buried.

Ever since new rules took effect last year, lenders have been required to disclose the “fair value” of their loans each quarter. The results have been something of a mystery, though. Some banks show large disparities between these numbers and the loan values on their balance sheets. Others don’t.

One big reason: Thanks to the loophole, they don’t all have to follow the same definition of fair value. My guess is most investors don’t know this. Often lenders’ disclosures don’t clearly explain which approach they’re using, or that companies have a choice. Unsuspecting readers of their financial statements easily could be misled.
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I’m guessing we will see no housing bottom until well after Fannie and Freddie are shut down.

Housing downturn has hit bottom
The Business Journal - by Jeff Clabaugh
Date: Friday, November 19, 2010, 3:10pm CST

Total housing sales in 2010 will be down about 8 percent from last year, and will mark the bottom of the downturn, says a monthly report from Fannie Mae economists.
…

High wind, indeed!

HIGH WIND WATCH

Bernanke on perilous ground for Fed chairman
Last Update: 11/19 4:17 pm

WASHINGTON (AP) — Federal Reserve Chairman Ben Bernanke is taking some highly unusual steps to counter widespread opposition to his $600 billion plan to jump-start the economy. He’s pressing China to let its currency rise and pushing Congress to pass more stimulus aid.

Yet as he veers into these political debates, Bernanke may be putting at risk the Fed’s strongest tools — its credibility and independence.
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A wave of pension conversions from defined benefit to defined contribution plans played out on a massive scale twenty years ago in the U.S. private sector. The wave appears to be catching up to the public sector now, and typically, San Diego appears to be the canary in the mine shaft.

Posted: Friday, November 19, 2010 6:49 pm
Mayor Proposes Eliminating City Pensions
by Liam Dillon

As time runs down in San Diego Mayor Jerry Sanders’ tenure, his proposals to solve the city’s financial crisis are becoming more drastic. This summer, he embraced a tax hike. Friday, he proposed 401(k)-style retirement accounts for most new city employees, and in turn, eliminating their pensions.

Staring him and everyone else in the face is a $70 million-plus ongoing deficit, one that neither a tax increase or a pension elimination will fix. The tax hike won’t work because voters said no. The pension elimination, which also needs voter approval, won’t save any money for years and wouldn’t go on a ballot until next year at the earliest.

Sanders has two more years to solve the financial problem he was elected to fix. Friday, he recommitted to the task.

“I won’t pass the structural deficit on to the next mayor,” Sanders said.
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San Diego Explained: Bankruptcy
Posted on November 17, 2010

by Dagny Salas

How’s a bankruptcy judge like a symphony conductor?

In the latest edition of San Diego Explained, we explain how municipal bankruptcy works and why the issue’s so complex. It’s done in partnership with NBC 7/39.

And don’t miss our explainer that explores whether pensions are fair game in bankruptcy.

Interviewed in this video are Marvin Hamlisch, principal pops conductor for the San Diego Symphony, and Jan Goldsmith, city attorney for the city of San Diego.
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