The Housing Bubble

I was looking at comps in my current ‘hood, and the last sale (one month ago) was $207 for a 2/1.5. When I factor in TI on my rental (3/2), I’d say a fair price would be about $120k — that would keep the payment around $1,100.

I still can’t believe the prices people are getting, not to mention I am STILL surrounded by abandoned houses, and those aren’t even on the property appraiser’s radar yet.

“This buyers’ market, it turns out, is hell for renters like us”

http://www.tampabay.com/news/business/realestate/in-tampa-bay-areas-buyers-market-rental-pickings-are-slim/1136655

How do people do it stand in line for days for black friday sales and i have to scrimp to pay this months rent….what do they have that I don’t?

……..a clueless mind? cheer me up guys and gals..

Black Friday shoppers trampled in New York

(CNN) — Several Black Friday shoppers eager to get great holiday deals were trampled Friday morning as they surged through store doors in North Buffalo, New York.

CNN affiliate WIVB had a camera inside the Target and captured the drama. People at the front of their line were pushed to the floor when doors opened. The commotion and screams drew additional store staff to sort the crowd out.

One shopper, bent over in pain, continued into the store.

Keith Krantz told WIVB that he was pinned against a metal door support and was shoved to the ground. Shoppers went over him until staff pulled him to safety. “At that moment I was thinking I don’t want to die here on the ground,” he said.

Krantz, who said he suffers from a herniated disc, said he was given X-rays and painkillers at a local hospital.

CNN was unable to reach Krantz Friday night. It was not clear from the video if others were hurt. Target declined to comment on whether there were injuries.

“It went from controlled to a mob in less than five minutes,” shopper Rich Mathewson told WIVB. “And then it just got nasty.”

Several people had cut into the line, angering the crowd, Mathewson said.

“The safety of our guests and team members is a top priority,” Target spokeswoman Jessica Carlson said in a statement issued to CNN. “We take this incident very seriously. Target plans well in advance of Black Friday and employs numerous crowd management tactics to prevent incidents. We continually analyze and improve those plans, and will do so in this case, to help ensure a safe and enjoyable shopping experience.”

Target would not comment further on details of the incident.

Hypocritical statement of the day:

“White House says WikiLeaks putting ‘lives at risk’ ”

Something about the pot calling the kettle, uh,….

“A Webster resident, he’s also part of a quickly growing demographic. Across the country, as the Great Recession has clawed away at the jobs and livelihoods of millions, poverty has been creeping into the suburbs. The Rochester area has been hit harder than most, as more than half of the region’s poor now live outside the city.”

http://www.democratandchronicle.com/article/20101128/NEWS01/11280355/Poverty-moving-into-Rochester-s-suburbs

Sounds like higher house prices would help this man.

Yet according to John Boehner, we need to cut corporate tax rates for these poor, struggling victims. John Boehner wants to cut you to the ground, America.

Corporate Profits Were the Highest on Record Last Quarter

The nation’s workers may be struggling, but American companies just had their best quarter ever.

http://www.nytimes.com/2010/11/24/business/economy/24econ.html

Poll: Most Irish want banks to pay for EU bailout

DUBLIN (AP) — A new poll indicates that most Irish people want the world’s banks to take a share of losses as part of a massive EU-IMF bailout of Ireland.

The Sunday Independent poll in Dublin says 57 percent favor a loan deal that requires senior lenders to Irish banks — chiefly other banks in Britain, Germany and the United States — to suffer partial write-offs on their investments.

The remaining 43 percent polled agree with the existing European Union policy that defaulting on debts would cause unacceptable shockwaves in global banking. The paper said results were based on phone polling of 500 people, with a 3 percent margin of error.

On Sunday, finance ministers from across the 27-nation EU are meeting in Brussels to discuss a draft loan agreement for Ireland for a reported euro85 billion ($112.5 billion), nine-year loan from EU and International Monetary Fund donors.

If I had a dollar for every time a Realtor told me it wasn`t a great time to buy.

I WOULDN`T HAVE ANY MONEY AT ALL!

492 Days From Default to Foreclosure.
Wall Street Journal

492: The number of days since the average borrower in foreclosure last made a mortgage payment.

Banks can’t foreclose fast enough to keep up with all the people defaulting on their mortgage loans. That’s a problem, because it could make stiffing the bank even more attractive to struggling borrowers.

In recent months, the number of borrowers entering severe delinquency — meaning they missed their third monthly mortgage payment — has been on the decline, falling to about 700,000 in October, according to mortgage-data provider LPS Applied Analytics. But it’s still more than double the number of foreclosure processes started.

As a result, banks are taking progressively longer to foreclose. The average borrower in the foreclosure process hadn’t made a payment in 492 days as of the end of October, according to LPS. That compares to 382 days a year ago and a low of 244 days in August 2007.

In other words, people who default on their mortgages can reasonably expect, on average, to stay in their homes rent-free more than 16 months. In some states such as New York and Florida, the number is closer to 20 months.

That’s a meaningful incentive, and it’s likely to grow unless banks manage to boost their throughput. Speeding up the process won’t be easy, as demonstrated by the banks’ continuing legal troubles related to robo-signers, bank employees who signed foreclosure affidavits without properly checking the required loan documentation.

Millions of Americans still are paying their mortgages even though they owe more than their homes are worth. The more banks’ backlog grows, the more likely they are to join it, adding to the already giant pile of foreclosures weighing on the housing market

Is all lost for Wall Street, now that Joe Mark the Plumber has thrown in the towel on the stock market?

I love how the AP writers elevate the import of Mark the Plumber’s conclusions about the rigged stock market, based on him observing the same kind of erratic daily movements in prices of individual stocks which has continued unabated for decades, although generally unnoticed by plumbers.

Probe leads investors to wonder: Is game rigged?
(AP) – 3 days ago

NEW YORK (AP) — The Wall Street insider trading investigation may lead everyday investors — already rattled by a stock market meltdown, a one-day “flash crash” and the Madoff scandal — to finally conclude that the game is rigged.

“A large part of trading has to do with trust, and I don’t have it,” says Mark Swenson, a 43-year-old plumber from New Hampshire who refuses to buy individual stocks.

“When a stock moves up 10 percent, you don’t know why,” he added. “We can pretend that everyone has access to the same information, but they don’t.”
…
“Virtually everyone on the Street believes there are significant improprieties, and I think there is an even more important point for the massive number of investors who are not Wall Street players,” says former New York Gov. Eliot Spitzer, once known as the “sheriff of Wall Street” for aggressively prosecuting white-collar crime as state attorney general. “And that is for most of us, you can’t beat these guys at their own game.”

People are nervous about the state of their assets in part because their homes are worth so much less these days, not to mention job insecurity and slow economic growth overall.

Some pros on Wall Street say hesitation by small investors is good news. It means that there’s plenty of “dry powder” to propel the market higher in the next few months when and if the little guy finally relents and joins in the rally.

The insider-trading probe could test that theory.
…

Shortcuts on the foreclosure paper trail

To get a sense of the lawlessness in Florida’s court-run foreclosure process, look no further than public records at the Sarasota and Manatee county courthouses.

“Every one of them is suspect. Some of them are clearly criminal. All of them need to be investigated by law enforcement.”– Michael Belle, Sarasota real estate attorney

There, on foreclosure documents open to everyone, is the evidence that at least one law firm’s employees repeatedly broke a state law in a rush to push cases through the courthouse so banks could seize people’s homes.

The evidence — missing signatures and misdated documents that could not have been signed on the dates specified — can be found on an important document called a “mortgage assignment.”

Without it, a bank would have a costlier and more time-consuming legal path to foreclose, even if a homeowner never makes another mortgage payment.

The Plantantion-based firm, one of the state’s largest foreclosure practices and a key player in local foreclosure cases, generated dozens of error-filled mortgage assignments in Sarasota and Manatee counties alone. In each case, the firm’s employees notarized the documents, swearing they were accurate when they were not.

Stern’s attorney and his employees have repeatedly told state investigators and reporters that mistakes on the paperwork they generated were just that — unintentional and isolated errors.

Checking for problematic documents in your case is easy if you know where to look. This slideshow will show you how.
http://tinyurl.com/257alg6

Did I previously mention how I just love this story? It just seems like such a poster child for the fraud-ridden U.S. financial system!

Shortcuts on the foreclosure paper trail
By Todd Ruger
Published: Sunday, November 28, 2010 at 1:00 a.m.
Last Modified: Saturday, November 27, 2010 at 7:26 p.m.

To get a sense of the lawlessness in Florida’s court-run foreclosure process, look no further than public records at the Sarasota and Manatee county courthouses.

Foreclosures have swept the nation. And a Herald-Tribune review of more than 1,000 property and foreclosure documents filed by one Florida firm in 2008 and 2009 shows that the errors were blatant, widespread and repeated.

“Every one of them is suspect. Some of them are clearly criminal. All of them need to be investigated by law enforcement.”
– Michael Belle,
Sarasota real estate attorney

There, on foreclosure documents open to everyone, is the evidence that at least one law firm’s employees repeatedly broke a state law in a rush to push cases through the courthouse so banks could seize people’s homes.

The evidence — missing signatures and misdated documents that could not have been signed on the dates specified — can be found on an important document called a “mortgage assignment.” The paperwork helps prove a lender has the legal right to seize a property.

Without it, a bank would have a costlier and more time-consuming legal path to foreclose, even if a homeowner never makes another mortgage payment.

Faced with that prospect, employees in David J. Stern’s law offices bent and broke the rules designed to ensure the documents judges rely on to award foreclosures are authentic, a Herald-Tribune investigation found.

The Plantantion-based firm, one of the state’s largest foreclosure practices and a key player in local foreclosure cases, generated dozens of error-filled mortgage assignments in Sarasota and Manatee counties alone. In each case, the firm’s employees notarized the documents, swearing they were accurate when they were not.

Stern’s attorney and his employees have repeatedly told state investigators and reporters that mistakes on the paperwork they generated were just that — unintentional and isolated errors.

But a Herald-Tribune review of more than 1,000 property and foreclosure documents filed by Stern’s firm in 2008 and 2009 shows that the errors were blatant, widespread and repeated:

• At least 60 local homeowners have lost property based on improper mortgage assignments, and dozens more are just a hearing away from the same fate. A spot check of six other counties turned up similar examples.

• One in 10 mortgage assignments filed by Stern’s law firm in Sarasota County contains mistakes that violate state law. One in three contains either legal violations or other irregularities, such as mismatched dates, that experts say call into question their authenticity.

• At least 14 Stern employees notarized documents — essentially swearing they were accurate — even though the documents contain omissions, incorrect dates and improper signatures that clearly show they were not proper.

Neither Stern, his attorney, nor others at his firm responded to repeated calls for comment. A reporter who visited Stern’s office in Plantation was met by a security officer who threatened to call authorities.

Meanwhile, Florida judges and legal officials have been slow to prevent or reverse foreclosures based on questionable documents.

Judges do not question the documents unless homeowners question them first, so they continue to rule in favor of lenders. Twelfth Circuit Chief Judge Lee Haworth said judges must remain neutral in court, and cannot raise possible defenses — such as bad paperwork — on behalf of homeowners who choose not to fight, or don’t know how to fight, their foreclosure.

“The judges will accept, as they do in every case, pleadings that are represented by counsel as legitimate,” said Haworth. “It’s the defendant’s case. … If they don’t want to hire an attorney, that’s their business.”
…

Prices of foreclosed homes continue to plunge; dropping to $116,000 average
REAL ESTATE AND CONSTRUCTION
By Roger Yohem, Inside Tucson Business
Published on Friday, November 26th, 2010

Because just one high-end, foreclosed home sold in October, the true market value of distressed residential properties has shaken up the real estate marketplace. When expensive million-dollar-plus homes sell as foreclosures, the transactions skew the market’s average and median sales prices.

The lack of high-end activity has given real estate agents and builders a more accurate reading of what the market is really like. During October, the highest sales price for a foreclosure was $825,000 followed by a closing at $399,900.

As a result, the average sales price of foreclosures fell to $115,919, a 23 percent drop from $149,889 in September. In October 2009, the level was $145,583, according to John Strobeck, owner of Bright Future Business Consultants.

The median foreclosure price fell for the third straight month to $106,900, down 13.5 percent from from $123,525 in October 2009.

Coldwell Banker calculates the selling price per square foot to “normalize” the mix of high-end and low-end properties. The October selling price per square foot of $93 was down from $94 in September. Compared to October 2009, the price has dropped 11 percent from $104.
…

Please repeat after me:

All real estate is local.
All real estate is local.
All real estate is local.
…

VOL. 125 | NO. 231 | Monday, November 29, 2010
A story from The Memphis News
On newsstands throughout the city

Crisis Casts Long Shadow Over City’s Housing Woes
The Memphis News
Updated 2:14PM

Shadow inventory – the massive backlog of houses either in foreclosure or headed that way – poses a significant threat to the fledging recovery in residential real estate nationwide, including Memphis.

Some parts of Memphis were hit so hard by the foreclosure crises that there is no place to go but up. The question remains: When will we start to see upward movement in these parts of Memphis?

Complicating this recovery is the bulging inventory of houses, a supply that is steadily growing when you consider the number of properties that have not hit the market yet but surely will as soon as the recovery strengthens.

This is potential crisis has ramifications that aren’t always apparent immediately.
…

Posted on Wednesday, 11.24.10
REAL ESTATE
`Shadow inventory’ haunts residential market

Home sales dropped across South Florida in October, as the foreclosure freeze took hold. Median prices increased in certain sectors of the market.
By TOLUSE OLORUNNIPA
tolorunnipa@MiamiHerald.com

Prices of existing South Florida homes rose as the number of sales dropped in October following a slowdown in foreclosures by banks because of irregularities in procedures. Both single-family and condos across the region were affected, according to a report released Tuesday by the Miami Association of Realtors.

Those trends may be temporary now that foreclosures have resumed. But the slowdown could deepen “shadow inventories,” say industry watchers, and slow down a long-term recovery.
…

Bidding Wars Are Back in Some Markets
Wall Street Journal

In another sign of a housing-market recovery, bidding wars are back.

Not everywhere. But in some upper-middle-class suburbs around San Francisco and New York, and other areas where prices have hit bottom, first-time buyers eager to take advantage of relatively low prices and low mortgage rates are actually driving up prices, says Tara-Nicholle Nelson, an analyst at Trulia.com. Buyers are competing at the low end of the market, too, for homes under $200,000 and foreclosures, as buyers with smaller budgets take a stab at ownership.

But experts say bidding wars play on buyers’ worst fears. When an offer is rejected, it fosters a sense of urgency, so they’ll place more aggressive offers on the next homes they bid on, says Ms. Nelson. In the worst-case scenario, buyer psychology could boost home prices beyond what they’re really worth.

That’s the kind of whirlwind that led to the last bubble, “with the potential for financial disaster for buyers who overspend,” says Jack McCabe, an independent housing analyst.

To avoid a bidding war, here are three things a buyer can do:

Research a neighborhood’s inventory. In a real buyer’s market, houses sit on the market for more than six months before selling. To find out how long is typical in a given neighborhood, compare the number of active listings to those under contract — if there’s a glut of houses on the market, there will be far more of the former than the latter.

Watch the jobs numbers. Areas with strong employment numbers are more likely to see bidding wars, because that’s where more people have the credentials — a down payment, work documentation — to buy a home, says John Mulville, a vice president at Real Estate Economics, which tracks real-estate data.

Don’t go to war over a foreclosure. Bank-owned foreclosures sell for about 36% less than regular listings, according to RealtyTrac, and they account for about 16% of all sales.

But buyers often lose track of their goal with a foreclosure — to buy a home at a big discount — when competing offers kick in, says Mynor Herrera, a Weichert Realtor who specializes in Washington, D.C., and Montgomery County, Md. In general, buying a foreclosed property at 30% above the asking price wipes out any savings from a foreclosure.

These Memphis News stories about the shadow inventory are truly awesome. Who’d've thunk Memphis was among the myriad ‘grounds zero’ for the housing bubble?

By the way, for those of you who have not yet drunk your Sunday morning coffee, 40 months is three years and four months; so the anonymous ‘analysts’ cited in this article don’t expect the bulk of shadow inventory to hit the housing market until March 2014. If true, this means that U.S. residential housing could be a terrible money-losing investment for anyone who buys over the next decade. Try not to catch yerself a falling knife!

VOL. 125 | NO. 231 | Monday, November 29, 2010
A story from The Memphis News
On newsstands throughout the city

Shadows of Doubt
Foreboding ‘shadow inventory’ threatens housing recovery
By Sarah Baker
Updated 2:06PM

As the housing market continues to improve, a significant backlog of foreclosed and distressed properties that have not been put on the market could bring the recovery to a screeching halt.

Many lenders across the nation – mostly banks – are struggling to keep up with the overwhelming number of borrowers who have stopped making their mortgage payments. And with the fledgling recovery in housing still weak, banks, institutional investors and even some homeowners who want to sell their homes are waiting until the market shows marked improvement.

This “shadow inventory” – the backlog of properties that are 90 days or more delinquent, in foreclosure or bank owned but haven’t yet hit the market – poses a threat to the housing recovery.

“It may well be that the lenders are moderating what comes in by what goes out so that there’s kind of a balance – they’re not trying to dump everything on the market all at once,” said Corky Neale, director of research for RISE, a Memphis-based organization that helps low-income residents achieve financial success.

“The other possibility, too, is that there may be stuff that’s never going to be added to the inventory … (for example) houses that are awaiting foreclosure, where the residents have already moved out.”

Shadow inventory is estimated at more than 7 million properties nationally, about $480 billion, according to the most recent Fitch Inc. data.

Analysts expect it will take more than 40 months for the distressed properties to even hit the market.
…

Foreclosures of U.S. Homes Fell 36% After Freeze

The number of U.S. homes seized by banks tumbled more than a third in October after loan servicers imposed a moratorium to probe whether repossessions were properly conducted, according to Lender Processing Services Inc.

Banks took over 79,886 homes, down 36 percent from a record 124,051 in September and the lowest number since May 2009, the Jacksonville, Florida-based real estate data company said in a report today. Lender Processing bases its figures on information collected from loan servicers at the time of foreclosure.

Bank-owned homes are among the most affordable real estate and a drop in their numbers may keep some homebuyers out of the market, said Sean O’Toole, chief executive officer of ForeclosureRadar.com, a real estate service in Discovery Bay, California, that tracks foreclosure sales in five western states. Sales of existing homes fell 2.2 percent in October, according to a National Association of Realtors report today.

“If there are many fewer, it could have an impact on one of the hottest selling segments,” O’Toole said in a telephone interview.

Mortgage Delinquency High at 6.44% and Foreclosure Shadow Inventory Up to 2.1 Million Homes
Contributed by Wallace Manfrin on Nov. 23

2.1 million houses are subject to foreclosure, says a report from CoreLogic. A whopping 6.44% of mortgage holders are delinquent according to TransUnion.

For purposes of this report TransUnion defines delinquency as payments that are more than 60 days overdue. The highest delinquency rates were in Nevada and Florida, where delinquency exceeded 14.5%. The lowest levels of delinquencies were found in Nebraska, South Dakota and North Dakota with rates of between 1.5 and 2.7 %.

Although the number of mortgage holders who are delinquent in their payments fell in the third quarter, the big picture indicates that borrowers and the housing market in general remain in dangerous waters. A large supply of unoccupied and foreclosed properties will continue to put downward pressure on home prices across the nation.

Foreclosure freezes mean that the backlog of foreclosures is growing and distressed properties will continue to flood the housing market. Some percentage of mortgage delinquencies will ultimately end in default and grow the number of foreclosed properties on the market.

TransUnion’s report showed that average borrower mortgage debt fell by .58% in the third quarter. California, District of Columbia and Hawaii had the highest average mortgage debt at more than $300,000 per borrower. West Virginians carried the least amount of mortgage debt at $100,000 per mortgage holder.
…

Does it seem to anyone besides me that banks are shooting themselves in the foot through low-budget robo-signing of foreclosure documents? Scaring off potential buyers can only serve to reduce the market value of the shadow inventory they hold off their balance sheets.

WSJ Blogs
Developments
Real estate news and analysis from The Wall Street Journal

* November 22, 2010, 9:36 AM ET

Shadow Inventory of Homes Rising
By Nick Timiraos

The “shadow inventory” of unlisted bank-owned homes and potential foreclosures increased to 2.1 million units in August, up 10% from one year earlier, according to new estimates from CoreLogic, a real-estate research firm.

That’s around eight months of supply, compared to a five-months’ supply one year ago.

By contrast, the inventory of all unsold homes listed for sale totaled 4.2 million units in August, unchanged from one year ago. Together, that means the visible and shadow supply of homes stood at around 6.3 million in August, or around 23 months of supply at the current sales pace.

Mark Fleming, chief economist at CoreLogic, says that weak housing demand “is significantly increasing the risk of further price declines in the housing market.” Delays in the foreclosure process, including those brought on by banks’ inability to file the proper legal paperwork, threaten to exacerbate that trend.
…

Body in 1 foreclosed Fla. home, death in another

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 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.

I caught this article on Saturday, concerning Freddie and Fannie foreclosures. I don’t know if it was posted previously, but it creates an interesting turn of events if it is true.
Especially when contrasted to the “all the foreclosures are fraudulent” stories we have seen lately:

http://www.palmbeachpost.com/money/real-estate/fannie-mae-freddie-mac-give-the-go-ahead-1074746.html.

I still believe MERS has created a huge mess, and it has obviously effected the market. I think it will cause more delays as more fraud claims are made. A lawyer’s stock in trade is a lawsuit.
But if this article is true, then there is more smoke than fire. When the smoke clears, we may find there are still a lot of good documents that didn’t end up on the pyre. Proceed with sales, they say.

Don’t ask me why, but I find this pretty amusing:

Down Payment Grants
FHA Loan Assistance to Help You Get a Mortgage

Down payment assistance and community redevelopment programs offer affordable housing opportunities to first-time homebuyers, low-income and moderate-income individuals and families who wish to achieve homeownership.

Elimination of Non Profit Down Payment Assistance

On July 30, 2008, President Bush signed H.R. 3221 - Housing and Economic Recovery Act of 2008. Section 2113 of the bill prohibits seller-funded DPA (Down Payment Assistance) for loans backed by the Federal Housing Administration. Prior to this bill, the seller could contribute up to 6% to the buyer to cover either a down payment or closing costs on an FHA loan. The changes took effect on Oct. 1, 2008.

We provide this information for reference only.
…

FTC clamps down on mortgage modification scammers

The agency plans to ban almost all upfront payments, institute mandatory disclosure rules and place new restrictions on lawyers.

By Kenneth R. Harney
November 28, 2010

Reporting from Washington —

You’ve probably seen the pitches on TV and the Internet or found them stuffed in your mail: official-looking communications complete with logos and letterheads that look vaguely like those used by the Treasury, Internal Revenue Service and other federal agencies.

They are instead criminal enterprises posing as do-gooders who promise to get you out of the mortgage jam you’re in. They claim they can persuade your lender to cut your monthly payments, forgive all penalties, slash your interest rate and even get your loan balance reduced. If your lender won’t cooperate, they say they’ll perform “forensic audits” on your mortgage and convince a court that your entire loan transaction should be canceled because of technical mistakes in the paperwork.
…

Many greater fools who plowed in to the safety of Treasury bonds to avoid ‘risky’ assets are in for a Joshua tree-administered education in financial risk.

Treasuries Head for Second Monthly Decline Amid Signs of Stronger Economy
By Susanne Walker - Nov 26, 2010 9:00 PM PT

Treasuries headed for a second monthly loss as stronger-than-forecast economic data and confidence the Federal Reserve’s $600 billion Treasury purchase program will fuel more growth, reduced demand for the debt.

The yield on the two-year note rose for the fourth straight week, the longest period of increases since April 2, as a report on Nov. 24 showed initial jobless claims dropped to the lowest level since July 2008, reinforcing sentiment the employment market is healing. A report on Dec. 3 may show nonfarm payrolls rose by 145,000, according to a Bloomberg survey.

“It’s more of a function of the negative sentiment in the Treasury market, given the broader macroeconomic strength,” Ian Lyngen, a government bond strategist at CRT Capital Group LLC in Stamford, Connecticut, said Nov. 24. “The market has been under pressure.”
…

Can someone please explain why Treasury department officials spend time and effort studying the stock market? I find this highly curious; wouldn’t private markets better be left private, rather than subject to day-to-day scrutiny by central planners? To what end do Treasury officials monitor the stock market? What actions are predicated on such studies?

Inside Treasury’s nerve center
Michael N. Pedroni, director of the Treasury’s markets room, studies stock numbers in his office. He and his staff provide detailed daily analysis to the Treasury secretary and other high-level policymakers.
(Photos By Astrid Riecken)
By Brady Dennis
Saturday, November 27, 2010

Two years after the harrowing days of the financial crisis, Michael N. Pedroni still draws wary looks when he heads upstairs to the third floor of the Treasury Department, which houses the offices of Secretary Timothy F. Geithner and other top brass.

“When I walk through the halls, people are like, ‘Oh no, here he comes!’ ” Pedroni said.

He’s able to joke about the suspicious stares now. But in the frantic days of fall 2008, the markets room operation that he runs played a critical role as Treasury officials wrestled with the calamity unfolding in the financial sector.

Tucked away in a former carpentry shop inside the bowels of the Treasury building, the markets room’s small staff plays a key role in monitoring the world’s financial markets, spotting emerging trends and providing detailed analysis day after day to Geithner and other senior policymakers.

“I think we are known as the front line,” said Pedroni, 38, a former International Monetary Fund economist and Federal Reserve Bank of New York employee who has spent time at a Wall Street research firm. “Our analysis is meant to be very candid, very quick, very unvarnished.”
…

Can someone please explain why the Fed has to ever worry about selling securities that it buys, given that it can create the money needed to finance other operations with the stroke of a virtual pen? For that matter, since these purchases are financed by ‘thin air’ money, why does the Fed have to ever worry about anything?

Don’t Forget About the Fed’s Other Asset-Buying Effort
Nov 28 2010, 10:00 AM ET

In early November, the Federal Reserve Open Market Committee (FOMC) decided to begin a new program to buy $600 billion in longer-term Treasury securities. It would do so by purchasing $75 billion per month for eight months. But that isn’t the whole story. This new quantitative easing measure, commonly referred to as QE2, is really just a more aggressive extension of a program that was initiated in the FOMC’s August meeting. The November minutes, released on Tuesday, provide some detail on the earlier program that helps paint a more complete picture of the Fed’s monthly purchases.
…
A little simple math shows that 82 days that elapsed between August 11th and November 1st, which averages out to about $24 billion per month in asset purchases. So if you add QE1.5 to QE2, then the Fed will actually be buying close to $100 billion in longer-term Treasury securities per month — not just $75 billion, as QE2 alone implies. Of course, that assumes that the assets on its balance sheet continue to mature at a consistent pace.

The purpose of QE1.5 is to make sure that the Fed’s balance sheet doesn’t shrink. So the net purchases are just QE2’s $75 billion per month. But the Fed will have to actively seek around $100 billion in gross purchases per month in order fulfill its quotas. That’s a lot of Treasuries. The two programs combined will also significantly shift the asset mix of the Fed’s balance sheet to longer-term Treasuries, as the maturing securities will be predominately mortgage-backed securities and shorter-term Treasuries.

This could complicate the Fed’s exit strategy a little. These new purchases will predominately have maturities between two and 10 years. So if it wants to reduce its holdings in these Treasuries much in the next, say, two to three years, it will have to begin looking for buyers, instead of just allowing them to mature. By the end of June, the Fed will have around $865 billion of these longer term Treasuries on its balance sheet from QE1.5 and QE2, which could be hard to sell if investors are ready to take more risk again on stocks or are worried about inflation.
…

I’m wondering if Chindian property market crashes might reduce the flow of foreign investment into U.S. property? Opportunity may lie in store for those who are sufficiently patient to wait out Asian property bubble collapse before investing in U.S. real estate.

The Economic Times
Real Estate

26 Nov, 2010, 06.16AM IST,ET Bureau
Property prices may crash as loan scam hits funding

MUMBAI/NEW DELHI: Finance minister Pranab Mukherjee’s direction to state-run lenders to prevent a recurrence of the loans-for-bribes scandal, and banks’ decision to go for a critical appraisal of all real estate loans above Rs 50 crore may stall projects and drive developers to private funds.

Liquidity for the sector may dry up as bankers turn cautious in sanctioning fresh loans, forcing builders to cut prices to improve cash position, helping prospective buyers who have been holding on due to high prices.

DB Realty tumbled 10%, Indiabulls Real Estate lost 5.2%, DLF fell 3.8%, and Unitech declined 6% as a fund shortage threatens to derail their project execution, which had just started to show signs of recovery after the 2008 credit crisis.

The arrest of eight finance executives by the Central Bureau of Investigation on Wednesday on charges of taking bribes to sanction loans does not lead to a systemic risk since the amount involved is tiny, bankers and bureaucrats said. It is getting more attention than it deserves, they said.

“ banks and financial institutions should strengthen the NPA (non-performing assets) monitoring and management in their institutions to ensure that advance action is taken to identify incipient sickness and take appropriate action on it,” said Mukherjee.

A Bank of India official said, “All big-tickets loans, particularly to builders, will come under the scanner now. Recall of loans can happen if there is a fear that the quality of loans may suffer. But as of now, there is no such worry and hence it would not prompt us to recall loans.”
…

No other disclaimer is as suspect as a bankster’s.

27 Nov, 2010, 08.14PM IST,PTI
We have robust system to prevent wrongdoing: Bank of India

CHANDIGARH: Three days after CBI arrested Bank of India’s General Manager (Delhi) RN Tayal , for his alleged role in the housing-finance scam , the bank on Saturday asserted it has a robust system in place to prevent any wrongdoing in advancing corporate loans.

“….our bank has a robust system to take action wherever there is any wrong doing,” Bank of India’s Executive Director N Seshadri told reporters here today.

“Incidentally, nothing has gone wrong on process with the bank…if you really talk about it… it is an aberration and we will have a look at it when we have full details (with us),” Seshadri said here on triennial delegation session organized by Federation of Bank of India Officers’Association .

When asked if the bank was contemplating any action against the official who was arrested by CBI on graft charges, Seshadri said that action would definitely be taken against him.

“We just got (his) details yesterday and there is a specific guideline…(and)there is a process (for action)..but action will definitely be taken against the official,” he said.

However, he said, “no individual in the bank can influence such type of loans.”

Bank of India has said that the companies under CBI scanner are not from realty sector but rather from the manufacturing sector. “In one of the case, we do not even disbursed so far…it was just sanctioned. In another case, a group of banks are advancing loans ,” he said.

Bank of India maintains it has just 3.2 per cent exposure to the realty sector. “We have very small exposure towards real estate sector,” he said.
…

This is small potatoes compared to the TARP:

Irish bailout: $112.61 billion

European Union finance ministers expected to sign off on package later Sunday, media report says.

U.S. economic preview
Jobs outlook still bearish

Despite payrolls’ strong gains in past three months, economists remain cautious about U.S. jobs. Report in coming week wild shed more light.

“Mission Accomplished”? Or “Remember the Alemao?”

Brazil police claim victory in drugs ‘war’

http://www.telegraph.co.uk/news/worldnews/southamerica/brazil/8166143/Brazil-police-claim-victory-in-drugs-war.html

Armed police in Rio de Janeiro claimed on Sunday to have defeated drugs gangs of up to 600 men who waged a week-long campaign of violence across two of the city’s slums that threatened the city’s image as a suitable venue for the Olympic Games.

A combined force of 2,600 police officers and soldiers with painted faces took control of the network of favelas known as the Complexo do Alemao, where hundreds of gang members were thought to be hiding.

“We won. We brought freedom to the residents of Alemao,” said Colonel Mario Sergio Duarte, head of Rio’s Military Police, after an operation backed by armoured military vehicles and low-flying helicopters.

….Police later hoisted the national flag of Brazil high above the Complexo do Alemao as a symbol of their victory in winning the area back from the drugs gangs.

Lying will get you everywhere in politics.

Posted on Sat, Nov. 27, 2010 10:15 PM
Cleaver’s absurd take on mortgage meltdown
By E. THOMAS McCLANAHAN
The Kansas City Star

One of the topics likely to come before the next Congress is what to do about the crippled mortgage giants Fannie Mae and Freddie Mac, whose reckless behavior contributed so much to the meltdown of 2008.

The financial hole dug by these two “government-sponsored enterprises” is so deep many experts aren’t sure how much filling it in it will cost. Estimates run in the hundreds of billions.

Given that, one would hope members of Congress have learned the primary lesson of ’08: that home ownership is no longer the surest route to personal prosperity.

Apparently, the lesson still hasn’t taken in some quarters, judging by a meeting in late October between The Star’s Editorial Board and U.S. Rep. Emanuel Cleaver, a Missouri Democrat.

The discussion began with Cleaver announcing his priorities for the coming year, assuming his bid for re-election was successful (it was). One thing he wanted to do was make the Community Reinvestment Act “more impactful,” as he put it. The CRA requires banks to meet the needs of borrowers in all parts of the communities they serve, including low- and moderate-income neighborhoods.

That led to a discussion of Fannie and Freddie, both of which have placed heavy emphasis on extending credit to low-income borrowers. I asked whether Cleaver thought housing policy, and Fannie and Freddie in particular, had gone too far in pushing home ownership. His reply was jaw-dropping.

“There’s no evidence that anyone told Fannie and Freddie to make bad loans,” he said.
…

SATURDAY, NOVEMBER 20, 2010
Banks Face Another Mortgage Crisis
By JONATHAN R. LAING

The government may have bailed out the nation’s biggest banks, but now the courts will sort out who gets stuck with mortgage losses. Banks could lose more than $100 billion.

JUST WHEN AMERICA’S MAJOR BANKS seem to be back on their feet, having paid back federal bailout money and cranked up their employee bonus programs, a new threat has emerged that could seriously affect their earnings power over the next few years.

The potential liability facing bankers arises from the $2 trillion in subprime, alt-A and option-adjustable rate mortgages that they underwrote and sold to investors, mostly as mortgage-backed securities during the home-lending boom of 2005 to 2007. The losses on the mortgages will be horrendous before the dust settles—over $700 billion on these and other so-called nonagency mortgage securities, according to New York mortgage-research specialist and broker Amherst Securities Group.

And now investors—from the federal housing giants Fannie Mae (ticker: FNMA) and Freddie Mac (FMCC) to major bond managers like closely held Pacific Investment Management and BlackRock (BLK)—are fighting back. They are seeking to put back the mortgages to the banks from whence the investment flotsam came and force the banks to eat much of the mortgage losses.
…

Talking Business
The Give and Take of Liar Loans
By JOE NOCERA
Published: November 26, 2010

Did you hear the one about Countrywide Financial demanding that mortgage originators buy back many of the so-called stated-income loans that it had purchased from them during the late great housing bubble?

Countrywide purchased stated-income loans, but is now insisting that the original lenders repurchase them.

It boggles the mind. This, after all, is Countrywide we’re talking about: Countrywide, which came to represent, in the public mind, the dirtiest of all the subprime lenders. Countrywide, which handed out fraudulent stated-income loans — they were often called “liar loans” — like candy. Countrywide, whose former chief executive, the disgraced Angelo Mozilo, once actually admitted to analysts, “I believe there is a lot of fraud in stated-income loans.”

This same company is now insisting that other lenders that made stated-income loans — loans that Countrywide eagerly bought to fatten its balance sheet — must repurchase them on the grounds that, golly, the loans turned out to be fraudulent. The hypocrisy is breathtaking.

At least, it is until you realize one other salient fact: since early 2008, Countrywide has been owned by Bank of America. Then it all starts to make some perverse sense.
…

Hey Housing Wizard, looks like you’re around today: sorry that I was hard on your sis/bil the other day. Sounds like it is easy to agree that they made some mistakes regardless of the details of what happened with their contractor…

But regardless, it is hard to watch those that we care about suffer from having been infected by the mania. It happened in my family, too…

Even those of us who saw it coming and tried to warn are impacted by seeing the effects around us on the ones we couldn’t save.

Next year, taxpayers in America’s heartland will continue to enjoy the pleasure of guaranteeing mortgages to California home buyers who want to finance home purchase of homes costing over $729,750. It’s great that Fannie Mae and Freddie Mac are able to continue their mission of providing affordable housing, even after their Fall 2008 collapse.

Jumbo Loan Limits Unchanged Through 2011
By Michael Kraus on November 22, 2010

A quick update here: the Federal Housing Finance Administration announced that jumbo loan limits are not changing in 2011.

In an effort to limit risk, Congress has limited the maximum loan size that Fannie Mae and Freddie Mac can purchase. This limit is known as the conforming loan limit, and anything above that limit is referred to as a jumbo loan. The conforming loan limit is set at $417,000, although in some high cost areas the conforming loan limit is as high as $729,750. High cost areas are places where the median home price exceeds the conforming limit. Some examples are New York City, Washington D.C., Miami, and many parts of California.
…

WASHINGTON – Job-based health care benefits could wind up on the chopping block if President Barack Obama and congressional Republicans get serious about cutting the deficit.

Budget proposals from leaders in both parties have urged shrinking or eliminating tax breaks that help make employer health insurance the leading source of coverage in the nation and a middle-class mainstay.

The idea isn’t to just raise revenue, economists say, but finally to turn Americans into frugal health care consumers by having them face the full costs of their medical decisions.

Such a re-engineering was rejected by Democrats only a few months ago, at the height of the health care overhaul debate. But Washington has changed, with Republicans back in power and widespread fears that the burden of government debt may drag down the economy.

“There is no short-term prospect of enactment,” former Senate Majority Leader Tom Daschle, a leading Democratic adviser on health care. “However, in a tax reform (and) deficit reducing context in the long term, the prospects are much better,” said Daschle. He opposes repealing the tax break by itself, but says he would be “willing to look” at it with other changes that improve access to quality health care while reducing costs.

Labor unions believed they had squelched any such talk. Now, they’re preparing for another fight.

Tampering with health care tax breaks is “a terrible step in the wrong direction,” said Mary Kay Henry, the new president of the Service Employees International Union, which represents many hospital workers. “We want the middle class stabilized, not destabilized.”

Employer-provided health insurance is part of a worker’s compensation. Unlike wages, it isn’t subject to income and payroll taxes.

Repealing the tax break would raise several hundred billion dollars a year, depending on how it’s done. Many economists believe employers would boost pay if they didn’t provide health care. Proponents of repeal usually call for a tax credit to offset part of the cost of individually purchasing coverage.

The leaders of Obama’s deficit commission — Democrat Erskine Bowles, a former Clinton White House chief of staff, and Alan Simpson, a former GOP senator from Wyoming — have proposed to limit the tax break or eliminate it along with other cherished deductions, such as the one for mortgage interest. That would allow for a big cut in tax rates.

The commission is supposed to report its plan on Wednesday. It’s unclear if leaders have the votes to back their sweeping changes.

A separate group, the Bipartisan Policy Center, is proposing to cap the health care tax break in 2018 and eliminate it over the next 10 years. That’s part of a deficit reduction strategy from Democrat Alice Rivlin, a former Federal Reserve vice chairman, and former Sen. Pete Domenici, R-N-M., who once led the Senate Budget Committee.

“The problem of rising debt is so serious that Republicans and Democrats are going to have go back and look at almost everything to see how we solve this,” said Rivlin.

Simpson calls the health care tax break a “tax earmark.” He said that “you cannot get anything done in this game unless you deal with every single aspect of the federal budget, and the biggest thing to wrap our arms around is health care.”

Democrats struggled with proposals to curb the tax break during the health care debate, but strong opposition from organized labor won out. The compromise was a tax on high-cost health insurance plans, which won’t go into effect until 2018.

In a twist, the health care law eventually may make it easier to pry people away from employer insurance, a system that dates to World War II and has sustained three generations.

Starting in 2014, new insurance markets will make it easier for people to buy coverage on their own. These state-based “exchanges” would work like the federal employee health plan. Taxpayer subsidies will help individuals and families with low to moderate incomes pay premiums.

Our country is run by of and for corporations. Seriously they pass a health care law that requires people have insurance then they will push this law through doing away with employer health insurance. I love the quote that says many economists believe companies will raise pay to offset the loss of insurance. Yeah that will happen. I love how the bailout goes to the rich and is carried out on the backs of the middle class.

Can anyone who thinks they understand please explain why Republicrat politicians favor policies which encourage low-income American households to buy homes they cannot afford, increasing the percentage of Americans who will face future financial hardship? I never did understand ‘affordable’ housing policy, and I still don’t get it.

Still the Best Congress Money Can Buy

http://www.nytimes.com/2010/11/28/opinion/28rich.html

The Great Depression ended the last comparable Gilded Age, of the 1920s, and brought about major reforms in American government and business. Not so the Great Recession. Last week, as the Fed’s new growth projections downsized hope for significant decline in the unemployment rate, the Commerce Department reported that corporate profits hit a record high. Those profits aren’t trickling down into new jobs or into higher salaries for those not in the executive suites. And the prospect of serious regulation of those at the top of the top — the financial sector — is even more of a fantasy in the new Congress than it was in its predecessor.

America is falling apart
January 10, 2009

Boom in Counterfeit Money as the Economy Collapses
January 01, 2009

Adventures in homeownership

Last year was out first year for having a house to put Christmas lights out. We did a fairly nice display. Unfortunately, we shorted out a number of those long-lasting LED strands, and I thought I’d post a warning about them to the nice folks on the blog:

No matter how long-lived a bulb is, it is not protected from corrosion in the socket. While LEDs are sturdier than comparable incandescent strands, don’t clip them to your gutter. Hang them underneath.

Particularly if your gutters are clogged with the muck of years.

Two bits I found via Survivalblog:

7 Towns Where Land Is Free

To take advantage of the free land in Marne, applicants need only to submit a proposed floor plan for the house they want to build. It’s not restrictive, but Baxter notes that it must be within reason– no trailer homes, no horses or livestock. Among the unreasonable proposals for the land: “They want to bring a camper in hogs, or store junk there.”

http://finance.yahoo.com/real-estate/article/111360/7-towns-where-land-is-free?mod=realestate-buy

Another step closer to Mad Max?

Is Your New Neighbor a Squatter?

In an upscale enclave in the San Fernando Valley, there’s a new neighbor on the block. He drives a big Mercedes, sometimes a fancy SUV and residents say he’s been living in a three-story mansion, which was empty and going into foreclosure.

His name is Dawud Walli, and neighbors say he moved into a huge empty home last July, furnishing nearly every room of the house.

“We feel unsafe. We can’t sleep. We have families,” say some of the residents who live nearby.

They say Walli made this a party house.

http://www.nbclosangeles.com/news/Squatters-110233439.html?dr

http://www.efinancialnews.com/story/2010-11-29/france-seizes-euro-36bn-of-pension-assets

First Hungary, then Ireland, and now France are seizing private pension funds as a finger-in-the-dike measure to pay off the bankers and ensure a comfortable retirement for politicians and public sector workers. Look for Wall Street’s Establishment GOP political action arm to faciliate a looting binge of private pension funds, before a resurgent DNC can raid those same accounts to fund its ever-growing votes-for-entitlements schemes.

The People against Wall Street: The Fed`s Quantitative Easing Violates the Rule of Law
We Need A Rally To Restore The Rule Of Law And/Or The Constitution
by David DeGraw

Global Research, November 16, 2010

The Federal Reserve represents global banking interests who have overstepped their legal authority. Their Quantitative Easing program is an explicit violation of the Constitution. By deliberately devaluing the dollar and causing the price of basic necessities to rise, the Federal Reserve is, as a matter of strategic policy, sacrificing a significant percentage of the US population for the benefit of a few global bankers. In the process, they are also igniting a global currency war that threatens the security of the American people. In clear terms, the Federal Reserve’s actions represent a declaration of war against the people of the United States.

Now that comedians like Glenn Beck, Jon Stewart and Stephen Colbert have demonstrated the ability to rally thousands of Americans, don’t you think it’s time to have a serious rally to restore the rule of law and the Constitution?

How much longer are we going to remain passive while global banking interests rob us of our national wealth and destroy the fabric of our society. Our nation has become a banana republic where the rule of law has become a farce and clearly doesn’t apply to one-tenth of one percent of the population. Anyone who has been paying attention realizes that an organized criminal operation has taken over the United States.

The collapse of the housing market was the result of organized criminal activity, from top to bottom. The people who committed the largest financial crime in the history of the United States were rewarded with trillions of dollars in national wealth, and continue to be rewarded as this criminal activity continues unabated.
…

More Burdensome to Pay Rent Than to Be a Mortgage Deadbeat
by Hans Bader
November 28, 2010 @ 12:42 pm

Under government mortgage bailout/modification programs, the mortgage payments of many delinquent borrowers were cut to 31 percent of income, even for borrowers with high incomes and big houses. That cut was based on the false assumption that anything over that percentage was unaffordable (and perhaps even predatory lending). But people often pay far more than that in rent and mortgage payments, especially in prosperous regions like Washington, D.C. So mortgage deadbeats are sometimes getting their payments cut well below what their responsible neighbors have to pay — not merely getting relief from a bad deal.

“One in five renters and one in seven homeowners in the Washington area spend more than half their income on housing, according to census figures,” notes a recent Washington Post story. Much of the population in the counties surrounding Washington, D.C. spent more than 30 percent: “In Fairfax County, for example, more than half the renters with household incomes of $50,000 to $75,000 spent more than 30 percent of their income last year to keep a roof over their heads,” as did “more than six out of 10 homeowners in that income bracket in Prince George’s and Prince William counties,” and “more than half” in Washington, D.C. itself.
…

Real Estate November 28, 2010, 9:10PM EST

The Next Home Buyers: Ozzie & Harriet
As Americans cease looking at homes as ATMs, new buyers are better off taking a more traditional approach

By David Bogoslaw

It’s an unsettling time to be shopping for a home. Home values have yet to stabilize in three-quarters of U.S. metropolitan areas. Alarm about so-called robo-signing of foreclosure paperwork has raised fundamental questions about who owns a property’s title. And, while unlikely, two bipartisan commissions have suggested capping or killing the previously sacrosanct tax deductibility of mortgage interest.

As a result, home shoppers are being forced to accept a more traditional view of a real estate purchase: seeing their new home more as a savings account than as an investment. That represents a switch from how many owners thought during the go-go years of surging home prices and easy money, says Stan Humphries, chief economist of real estate information and listings website Zillow. “It’s essentially a forced savings plan, putting aside a percentage of your income into a savings account that is a non-depreciating asset in typical times,” he says.

Of course, that’s not necessarily a bad thing. From the 1950s through the mid-1990s, home values appreciated 2 percent to 4 percent a year, on average, just beating the rate of inflation. The challenge is that Humphries also thinks home values won’t bottom nationally until June 2011 at the earliest. Even when home values bottom out, Humphries expects an L-shaped bottom. His grim outlook is based on the fact that 23.2 percent of single-family homes across the U.S. had negative equity in the third quarter—which means high foreclosure rates will likely persist, while underlying demand for housing remains weaker due to high unemployment. The Obama Administration doesn’t expect unemployment to return to a normal range, below 6 percent, until 2015, according to the Office of Management and Budget’s mid-session review released in July.
…

Some homeowners still owe after short sale

A short sale allows people to sell their homes for less than they owe.
By Catherine Reagor, The Arizona Republic

PHOENIX — Some former homeowners who went through short sales to avoid foreclosure are finding they are still in debt to their lenders.

Because the short-sale concept, which allows people to sell their homes for less than they owe, is designed specifically to help homeowners avoid having to pay their lenders more money, some sellers have been careful to negotiate their deals so the lender, by contract, can’t later seek payment. Those who haven’t done so are at risk.

“I know that there is a great deal of confusion and uncertainty about this issue,” said Michelle Lind, general counsel for the Arizona Association of Realtors. In Arizona, many people thought they were covered by a law that bars lenders from seeking payment from a borrower after foreclosure if a bank cannot sell a property for as much as was owed.

“The law is unclear,” she said, “and there are many variables that factor in.”

Tricia Goldblatt sold her Phoenix home through a short sale last year after losing her job as an executive assistant at an engineering firm. A few months ago, she started receiving calls from a collection agency.

“They are telling me I owe $10,000. I did a short sale to get out from under my mortgage,” she said. “I don’t have that money. I had to move in with my mom.”
…

Some of my relatives have recently scored some pretty good home purchases along the Wasatch Front. The latest:

BIL bought himself a 4000 sq ft short sale home (reportedly one of many recent short sales) for $240,000. If my math is right, that works out to $60/sq ft.

As the announcers often said during the world cup, GOOOOOOAAAAALLLLLLL!!!

US fast-tracks foreclosures through courts
By Andres Schipani in Jacksonville
Published: November 28 2010 22:10 | Last updated: November 28 2010 22:10

“I am required to bring this case to a conclusion. I am setting the date of foreclosure for January 12. I wish you well,” the duty judge told Anthony Bell, who was soaking up his tears with the last tissue from a box placed in front of him at courtroom 58 of the Duval County Courthouse.

After eight minutes, that was the end of case 5543, “Wells Fargo Bank versus Anthony Bell”, for a property in Orange Park, Jacksonville.

In October 2009, Mr Bell, a manager at McDonald’s, the restaurant chain, stopped making payments on his mortgage after his wife lost her job with Citibank. “I’ve been devastated,” Mr Bell said.

He has enough reasons to be. In April his wife died of a heart attack (financial stress “was consuming her”) and in July the bank entered the default notice on his house. “The bank was just interested in getting some money back. And the judge, well, he needed to get my case out of the way as quickly as possible,” Mr Bell said as he left the courthouse.

After dismissing Mr Bell, the judge began signing off on uncontested home repossession cases as fast as his clerk could pile up the folders, sometimes less than a minute per file. Thousands of cases are awaiting judgment and more are filed each day.

“We are overbooked, just like airlines,” the judge, who declined to be named, told the Financial Times afterwards.

“But it’s all working fine, fine and fair.”
…

FHA’s Stevens Reports: Downpayment Assistance May Wind Up Costing the FHA $13.6 Billion
Tue, 2010-11-16 16:07
David Stevens at Podium

The report found that loans insured before 2009 are responsible for 70 percent of the expected single-family FHA loan losses. Even though they are now prohibited, “seller-financed downpayment assistance loans” produced $6.6 billion in claims to date with the FHA, and may ultimately cost the agency approximately $13.6 billion. Without these seller-financed loans, FHA’s capital ratio would be above the congressionally-mandated two percent threshold.
…

Mangano Announces HOME Down Payment Program Through Grant From HUD
Friday, 19 November 2010
Initiative Will Help First-time Buyers in Nassau County

Those who hope to fulfill the dream of owning their first home were given an edge this week when Nassau County Executive Edward P. Mangano announced a new program that will provide down payment assistance.

“There are few things more gratifying in life than owning your first home,” said Mangano. “One of those things is being able to help others realize that dream. Nassau is doing just that with the HOME program.”

The 2010-2011 HOME Down Payment Assistance Program will help first-time buyers who qualify with up to $20,000 in assistance toward a down payment. One requirement for those who apply is to contribute a minimum of $3,000 toward the down payment. The program is being run in conjunction with the Long Island Housing Partnership (LIHP). The monies are being granted to the county by the Department of Housing and Urban Development (HUD).

“The Long Island Housing Partnership is pleased to continue our partnership with Nassau County in providing down payment assistance to first time homebuyers,” said LIHP President Peter Elkowitz. “I would like to thank County Executive Mangano for the opportunity to implement this worthwhile program and we look forward to working with Nassau County on bringing the American Dream of home ownership to the residents of the county.”
…

Lower housing prices = more sales activity. What could be simpler?

Home Buying Gets Tougher as Lenders Restrict FHA Loans
By Jody Shenn and John Gittelsohn - Nov 17, 2010 11:41 AM PT

The U.S. home-ownership rate remained at a 10-year low in the quarter ended Sept. 30, in part because of rising foreclosures, the U.S. Census Bureau reported. Photographer: Jim R. Bounds/Bloomberg

Nov. 17 (Bloomberg) — Home ownership may be falling out of reach for more Americans as lenders toughen their standards for Federal Housing Administration-insured loans beyond what the agency itself requires.

Mortgage lenders including Wells Fargo & Co. and Bank of America Corp., the two largest, have raised the minimum credit score on FHA-insured loans that they will buy to 640 from 620. About 6.3 million people fall within that range, according to FICO, which created the formula for the ratings.

The higher hurdles for FHA loans, used in about a fifth of U.S. home purchases, add to challenges for a housing market already struggling with record-low sales and surging foreclosures. While lax lending fueled the bust that led the U.S. into recession, the new requirements will stifle the real estate recovery needed to revive the economy, said Ron Phipps, president of the National Association of Realtors.

“We’ve gone from silly to stupid,” Phipps, principal partner of Phipps Realty Inc., said in a telephone interview from his home in Warwick, Rhode Island. “People who should be getting credit can’t get it. To have a healthy real estate market, you need activity. You need transactions.”
…

A one-month price decline of 0.8% occurs at an annualized rate of ((1-0.008)^12-1)*100 = -9.2%.

market pulse

Nov. 28, 2010, 7:01 p.m. EST
British house prices down 0.8% in Nov.: Hometrack
By William L. Watts

LONDON (MarketWatch) — The average British house price fell 0.8% in November as demand faltered, property-analysis firm Hometrack said Monday. The firm’s national housing survey found a 4.3% drop in demand in November, the fifth consecutive monthly decline and the largest fall since January 2009. “Concerns over the economic outlook on the back of recent spending cuts together with widespread expectations that house prices are set for a period of retrenchment, are driving the continued weakness in demand,” said Richard Donnell, research director at Hometrack.

WASHINGTON | The jobs crisis has brought an unwelcome discovery for many unemployed Americans: Job openings in their old fields exist. Yet they no longer qualify for them.

They’re running into a trend that took root during the recession. Companies became more productive by doing more with fewer workers. Some asked staffers to take on a broader array of duties - duties that used to be spread among multiple jobs. Now, someone who hopes to get those jobs must meet the new requirements.

As a result, some database administrators now have to manage network security.

Accountants must do financial analysis to find ways to cut costs.

Factory assembly workers need to program computers to run machinery.

The broader responsibilities mean it’s harder to fill many of the jobs that are open these days. It helps explain why many companies complain they can’t find qualified people for certain jobs, even with 4.6 unemployed Americans, on average, competing for each opening. By contrast, only 1.8 people, on average, were vying for each job opening before the recession.

Banks can fail and life does not end in fact citizens maybe better off

“Iceland’s President Olafur R. Grimsson said his country is better off than Ireland thanks to the government’s decision to allow the banks to fail two years ago and because the krona could be devalued.

“The difference is that in Iceland we allowed the banks to fail,” Grimsson said in an interview with Bloomberg Television’s Mark Barton today. “These were private banks and we didn’t pump money into them in order to keep them going; the state did not shoulder the responsibility of the failed private banks.”

“How far can we ask ordinary people — farmers and fishermen and teachers and doctors and nurses — to shoulder the responsibility of failed private banks,” said Grimsson. “That question, which has been at the core of the Icesave issue, will now be the burning issue in many European countries.”