Bits Bucket for April 12, 2012

(At least Debbie started out slow in the 80`s with her cash out liposuction but at this point Debbie needs some serious Hardest Hit cheese in order to save her ATM.)

Hardest Hit foreclosure prevention program slammed by inspector general

by Kim Miller

Deborah Stockhammer, of Jupiter River Estates, applied for Florida’s Hardest Hit Fund to save her home.

A federal audit released this morning by the Office of the Special Inspector General for the Troubled Asset Relief Program says the federal Hardest Hit Fund has experienced “significant delays in providing help to homeowners,” and must dramatically increase its efforts.

The Hardest Hit Fund, announced by President Obama in early 2010, provided four rounds of funding to states whose homeowners were most negatively impacted by unemployment and housing value declines.

In all, $7.6 billion has been given to states, including more than $1 billion to Florida, to keep struggling borrowers in their home.

Yet two years after the program was announced, just $828.6 million has been drawn down by the states in the program, the majority of which is being used for administrative expenses, said today’s audit.

“As of December 31, 2011, Housing Finance Authorities had spent $217.4 million (or 3 percent of the $7.68 billion) to assist 30,640 homeowners,” the report states.

In Florida, as of January, about 3,400 homeowners had received help paying their mortgages from the Hardest Hit program overseen by the Florida Housing Finance Corp.
Statewide, about 23,320 people have completed applications and $77.3 million has been either reserved or spent on those approved for money.

In Palm Beach County, 1,931 applications were completed, 348 have been approved and $7.7 million has been either reserved for payments or already spent.

But a Florida official quoted in the federal audit said that while the $1 billion “has been a nice carrot” it’s been difficult to get banks and loan servicers to participate in the plan.

“There is no stick with the carrot to force servicers to participate,” the unnamed Florida official is quoted as saying.

Palm Beach, Palm Beach County, real estate, sigtarp

This entry was posted on Thursday, April 12th, 2012 at 9:01 am and is filed under Florida economy, Foreclosures, Housing affordability. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

“Deborah Stockhammer, of Jupiter River Estates, applied for Florida’s Hardest Hit Fund to save her home.”

WAAAAASSSSUUUUP Debbie? Momma needs a new pair of shoes. (and a fuqin boat) (and a new car) (and a flat screen) (and a free house to live in and extract the equity from while she acquires these necessities)

Type: MTG
Date/Time: 8/16/1985 10:09:00
CFN: 19850185240
Book Type: O
Book/Page: 4626/217
Pages: 1
Consideration: $2,499.00
Party 1: LAMENDOLA DEBORAH A AKA
STOCKHAMMER DEBORAH A AKA
Party 2: FLEET FIN INC
Legal: L2 B32 JUP RIVER EST

Type: MTG
Date/Time: 8/19/1986 09:53:00
CFN: 19860212257
Book Type: O
Book/Page: 4976/318
Pages: 1
Consideration: $4,951.00
Party 1: LAMENDOLA DEBORAH A AKA
STOCKHAMMER DEBORAH A AKA
STOCKHAMMER MARK
Party 2: FLEET FIN INC
Legal: L2 B32 JUPITER RIVER EST

Type: MTG
Date/Time: 9/4/1987 11:20:00
CFN: 19870264980
Book Type: O
Book/Page: 5409/1105
Pages: 1
Consideration: $4,951.00
Party 1: LAMENDOLA DEBRA A AKA
STOCKHAMMER DEBORAH A AKA
STOCKHAMMER MARK
Party 2: FLEET FIN & MTG CO
Legal: L2 B32 JUPITER RIVER EST

Type: MTG
Date/Time: 7/31/1992 08:33:08
CFN: 19920235418
Book Type: O
Book/Page: 7341/1681
Pages: 3
Consideration: $1,183.00
Party 1: LAMENDOLA DEBORAH A AKA
STOCKHAMMER DEBORAH AKA
STOCKHAMMER MARK
Party 2: BLAZER FIN SVC INC
Legal: JUPITER RVR EST B32 L2 BL

Type: MTG
Date/Time: 3/25/1993 08:32:43
CFN: 19930087880
Book Type: O
Book/Page: 7636/418
Pages: 3
Consideration: $2,287.00
Party 1: LAMENDOLA DEBORAH A AKA
STOCKHAMMER DEBORAH AKA
STOCKHAMMER MARK
Party 2: BLAZER FIN SVC INC FL
Legal: JUPITER RVR EST B32 L2 BL

Type: MTG
Date/Time: 6/21/2000 10:22:58
CFN: 20000233582
Book Type: O
Book/Page: 11851/1062
Pages: 7
Consideration: $15,000.00
Party 1: STOCKHAMMER DEBORAH & MARK E
STOCKHAMMER MARK E (M)
LAMENDOLA DEBORAH A
Party 2: BANK 1
Legal: JUPITER RVR EST B32 L2 BL

Type: MTG
Date/Time: 4/4/2003 10:50:57
CFN: 20030188343
Book Type: O
Book/Page: 15018/1468
Pages: 17
Consideration: $62,000.00
Party 1: STOCKHAMMER MARK E
STOCKHAMMER DEBORAH
Party 2: CENTEX HOME EQUITY COMPANY LLC
Legal: JUPITER RVR EST B32 L2 BL

Type: MTG
Date/Time: 5/20/2003 11:30:26
CFN: 20030291469
Book Type: O
Book/Page: 15248/227
Pages: 17
Consideration: $75,000.00
Party 1: STOCKHAMMER MARK E
STOCKHAMMER DEBORAH
Party 2: CENTEX HOME EQUITY COMPANY LLC
Legal: JUPITER RVR EST B32 L2 BL

Type: MTG
Date/Time: 3/25/2004 13:48:07
CFN: 20040163430
Book Type: O
Book/Page: 16715/1785
Pages: 14
Consideration: $99,900.00
Party 1: STOCKHAMMER MARK E
STOCKHAMMER DEBORAH A
Party 2: MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC
FULL SPECTRUM LENDING INC
Legal: JUPITER RVR EST B32 L2 BL

Type: MTG
Date/Time: 5/23/2007 09:13:43
CFN: 20070251322
Book Type: O
Book/Page: 21762/1306
Pages: 20
Consideration: $150,000.00
Party 1: STOCKHAMMER DEBORAH A
Party 2: MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC
NOVSTAR MORTGAGE INC
Legal: JUPITER RVR EST B32 L2 BL

Type: MTG
Date/Time: 9/27/2011 17:04:17
CFN: 20110360776
Book Type: O
Book/Page: 24765/1871
Pages: 5
Consideration: $0.00
Party 1: STOCKHAMMER DEBORAH
Party 2: FLORIDA HOUSING FINANCE CORPORATION
Legal: JUPITER RVR EST B32 L2 BL

Type: LP
Date/Time: 7/27/2011 11:59:38
CFN: 20110278259
Book Type: O
Book/Page: 24657/1236
Pages: 1
Consideration: $0.00
Party 1: DEUTSCHE BANK NATIONAL TRUST COMPANY TRUSTEE
NOVASTAR MORTGAGE FUNDING TRUST
Party 2: STOCKHAMMER DEBORAH A
LA MENDOLA DEBORAH A
STOCKHAMMER SPOUSE
LA MENDOLA SPOUSE
USA
Legal: JUPITER RVR EST B32 L2 BL

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Reading Rates: MBA Application Survey – April 04 2012

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Your Own (Sort of) Private Island: Our cousins over at Curbed National...

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Tuesday, April 10, 2012, by Sally Kuchar

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? Previous: Sunday Streets This Weekend; Yardbombing Drama In Berkeley

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Radar Watching: February 2012

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Martha, Martha, Martha!: Decorating doyenne Martha Stewart will go...

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Wednesday, April 11, 2012, by Sarah Firshein

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? Previous: Former Italian Penal Colony Asks $20M, Doesn't Include Prison

? Next: Exclusive Domino First Look: Leading Off, the Cover!

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Reading Rates: MBA Application Survey – April 11 2012

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Have Refis Run Out?

The average rate on the 30-year fixed mortgage is up about a half a percentage point since the middle of February, when they hit a record low. Mortgage refinances, however, dropped 24 percent in the same period of time.

That's a huge reaction to a small move from a record low.

"Rates have been there (3.75 percent) for so long that most everybody who could benefit from lower rates has applied," says mortgage analyst Mark Hanson. "Now, when rates pop up over 4 percent, it chokes off refi activity, which is sad. 5 percent rates in the U.S. are now prohibitively high."

Again, a little perspective here. Mortgage rates, spurred by government intervention in the market, of course, are still incredibly low. The problem is that the refinance business has changed fundamentally. This from analyst Barry Eisbruck:

"There used to be a product called cash out refinancing. Those quarterly refinancing numbers are amazing from 2003 vs. 2011. In 2003 you had 4.3T of total mortgage volume, 3T in cash out/refinancing and 1.3T in purchase origination. In 2011 it was around 1.3T of total mortgage volume, 75-80 percent of that was refinancing, so probably around 300-400B of purchase origination. These numbers are happening with record low rates and home prices at 1Q2003 levels."

Here's another strange point: In the fourth quarter of 2011, mortgages were cheaper than they've ever been, and yet refinancing was lower than the previous year, when rates were much higher. It all leads to the question: have refis run out?

"The decline in the Refinance Index this week was driven largely by a 12.0 percent drop in government refinance activity, while conventional refinance applications fell by less, decreasing 3.4 percent from the previous week," according to today's mortgage applications report from the Mortgage Bankers Association.

That's a problem, because government mortgages (largely FHA) are going to get even more expensive on April 1, when the FHA raises insurance premiums.

There will still be some refis going through the government's HARP2 program, which allows borrowers who have Fannie Mae and Freddie Mac loans to refinance, even if they owe more on their mortgages than their homes are currently worth ("underwater"). Those borrowers have been priced out of the refi market until now, but the program has just kicked into gear, so that could provide a boost.

For others, though, the return on a refi is getting ever smaller as rates go higher. Why do we care about refis? Because they put extra money in consumers' pockets…money they generally spend, fueling the greater economy.

Questions?  Comments?  document.write("");document.write("RealtyCheck"+"@"+"cnbc.com");document.write('');And follow me on Twitter @Diana_Olick

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ISM Manufacturing Report on Business: March 2012

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Kansas City Fed Manufacturing Survey: March 2012

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The Feast Is Coming To An End

It’s Friday desk clearing time for this blogger. “Baoding has reported rapid increases in new-home prices, from about 3,000 yuan (Dh1,750) per square metre in 2007 to 6,000 yuan in 2010. With 1,800 luxury apartments in a prime downtown location, Guo Zhai Hua Yuan is just one of countless schemes emerging in this city of 1.6 million. An hour south-west of Beijing, the former capital of Hebei province is at the frontline of China’s building boom, with a cityscape full of cranes and half-finished apartment blocks. At its peak, residents were ‘crazy about buying property,’ said Ma Tengfei, Huazhong Realestate’s sales manager.”

“‘We gave our customers only half an hour to decide whether to buy or not because we had other customers interested. People were in such a frenzy, they didn’t worry about the quality. They were just worried whether they could get one,’ he said.”

“Across China, potential buyers are now holding off. Mr Ma said at the peak his offices received 20 to 30 visits a day from families or other potential purchasers. Now the figure is five or six. With the market in limbo, those who snapped up property several years ago are glad they did so. Pei Wenbo, 31, an accountant, bought his three-bedroom flat in the north-east of the city in 2008, paying about 3,000 yuan for each of its 167 square metres. He has since bought a second, yet-to-be-completed flat as an investment.”

“‘It’s a huge relief that I got this apartment earlier,’ he said. ‘Nowadays there’s a huge pressure on people thinking of buying a flat. Wage earners find it almost impossible to afford an apartment, because incomes haven’t kept up with property price hikes.’”

“Twice a year, one of Beijing’s largest convention venues holds a large-scale international property fair. Developers and agents spruik property from all over the world - the United States, United Kingdom and Singapore all have a large presence, as does Australia. The drawcard, it seems, is more than property. One booth, which advertised property from all across the Australian east coast, prominently boasted: ‘Invest in property; speedy migration.’”

“One prospective investor, who gave his last name as Wang, said Beijing property prices were too high and unstable. ‘I have a friend who has ten properties in Melbourne. I want to invest too,’ Mr Wang told BusinessDay.”

“One Chinese agent explained: ‘You need over $600,000 in Australian assets, and have a controlling share in a company for more than two years with a turnover of more than 2.4 million yuan (about $350,000).’ It all sounded a bit too hard, one investor remarked.”

“‘Will you only consider Australia for migration? What about Canada?’ came the reply.”

“‘Blaming Chinese For High House Prices in Vancouver Is Racist,’ April 6. Pretty strong stuff from Allen Garr last week. Hello? Vancouver real estate made headlines around the world, shooting to the second least affordable city on the globe. And the media have told us why in clear terms: international investment—spurred by China’s new wealth. Here’s a small sample of the headlines: Bloomberg: Chinese Spreading Wealth Make Vancouver Homes Pricier than NYC. Wall Street Journal: Chinese Fuel Vancouver Home Boom. China Daily: Chinese Drive Up Vancouver Home Price. South China Morning Post: Chinese Love Affair with Canada Continues. Globe and Mail: Canadian Real Estate - A Piggy Bank for Chinese Investors.”

“It’s only now that the public is questioning its practices that the real estate and development industry has hit full tilt back-pedal mode. Denial, denial, denial, with a helping of racial invective on the side. Richest of all is the quote from Larry Beasley, identified by Garr as a former city planner, who dismisses public anxiety about international capital as ‘bullshit,’ adding that it’s ‘racist.’ Interesting that Garr didn’t mention that Beasley is now VP of Aquilini Developments—part of the Aquilini Group reported in the media for inking its strategic partnership with Asian developers, and for its proposal to market the remaining Olympic Village condos to—where else—China.”

“A significant part of China’s growth since 2007-08 has been an illusion. Its headline growth of 8-10 per cent since then has been driven by new lending averaging 30-40 per cent of GDP. Up to 20-25 per cent of these loans may prove to be non-performing, amounting to losses of 6-10 per cent of GDP. The case for a soft landing assumes that the investment and property bubbles are less serious than thought. The case for a hard landing assumes the rapid and destructive unwinding of asset price bubbles and problems within the Chinese banking system.”

“A poor external environment and losses on foreign investment exacerbate the problem. Growth collapses, triggering massive social unrest and political tensions. But the end of a cycle of debt- and investment-driven growth is typically disruptive. Japan’s experience, which China has drawn on in shaping its economic model, is salutary. Japan grew by 10 per cent in the 1960s, 5 per cent in the 1970s, 4 per cent in the 1980s, and has remained stagnant since, adjusting to the deflation of its debt-fuelled bubble.”

“The global economy increasingly looks to China to drive the world’s growth. These febrile expectations are ill-founded. There will be significant effects on commodity prices and volumes, affecting resource producers and commodity-exporting nations such as Canada, Australia, Brazil, Russia and South Africa. It will also affect demand for industrial goods, especially advanced machinery. Chinese demand for US dollars, euros and yen will diminish. This will force borrowers, primarily governments, to find alternative buyers for their bonds.”

“A hard landing will be especially traumatic for the global economy, which has not dealt with its core problems – excessive debt levels, weak non-debt fuelled demand and global imbalances. The crisis and its effects have been masked in developed economies by artificial demand from government spending, which is proving increasingly difficult to sustain. In China, it was masked by debt fuelled investment. Now, that feast too is coming to an end.”

“Sherry Cooper was reminded of just how devastating the U.S. housing crisis has been for families and the overall economy in that country after speaking recently with a friend who is having trouble selling his house in New Jersey. Ms. Cooper, the chief economist at Bank of Montreal, is starting to worry about Canada’s housing market after refuting the arguments of the extreme bears in the past.”

“But now Ms. Cooper is looking at the debacle in the United States and the blistering pace of the market here and warning people to tread carefully. I can add a story to the mix: I have a family member who paid about $750,000 for a house in Indiana in the late 1990s. She doesn’t think she could get $350,000 for it today.”

“She also knows that, if she were to list it, her house would be competing with swathes of newer houses built on the surrounding farmland during the boom. Meanwhile, her husband’s job has been re-located about three hours away in Chicago. They’re stuck with a house they can’t sell without taking a huge loss. How many years will they have to wait for it to recover its value, if it ever does?”

“‘I’m not forecasting a crash landing but it would be foolish to ignore the lessons learned south of the border, Ms. Cooper says.”

“Sales by Realtors of single-family homes in Jupiter were more brisk in February than elsewhere in Palm Beach County and Florida. Though the median price was almost 5 percent down from a year ago, sales volume was up almost 21 percent. Though new listings are up 10 percent from a year ago in Jupiter and 21 percent throughout Palm Beach County, the inventory of available homes is down 37 percent in Palm Beach County, even sharper than the 34 percent decline statewide.”

“‘More people are looking, and there is an influx of Canadian buyers,’ Chris Cox, president of the Jupiter-Tequesta-Hobe Sound Realtor Association said in an email.”

“Across Tallahassee and throughout Florida, it’s a scenario that is played out thousands of times and for a host of different reasons. The result, however, is a distressed property and an often frustrating effort by the homeowners to resolve their situation. After more than three years of phone calls, faxes and correspondence, Neil and Jane Mooney’s foreclosure ordeal may be over.”

“For the Mooneys, making the $1,188.88 monthly payment on the Cabin Hill house was not feasible and, in fact, took a chunk out of their retirement income they could not sustain. ‘We were not able to continue doing that,’ Jane Mooney said. ‘For a long period of time we went through the modification, trying to get a modification and all this kind of thing. Finally, they did give us what we thought was a forbearance on the situation, but we learned later that money had not gone toward the payment, but had been put into a fund to pay the taxes.’”

“Jane Mooney concedes that she’s not ready to celebrate having the case behind them, not yet. The retired Tallahassee couple anticipated a resolution before, only to face repeated disappointment. ‘I realized when I was about a month into this that it was going to be a long time. That’s the thing. I knew that it was going to take a while and sure enough, it’s been three years now and still no resolution to this situation,’ she said.”

“Other sellers are on the sidelines, as reflected by the 7,000 houses in this market the past five years that didn’t sell and are no longer listed, said Joe Manausa, broker and owner of Century 21 Manausa & Associates. ‘It’s another 10 years before we work our way out of them.’”

“Recently, Gov. Scott Walker was the featured speaker for Realtor/Government Day in Madison. This is a time when Realtors (such as me) from around the state meet with their government officials to rally support for issues vitally important to homeowners. He did give a nod to the importance of Realtors. Glaringly missing, though, was any defense of his taking of $25.6 million from distressed homeowners and instead applying it to ‘plug holes’ in the state budget.”

“The money is part of the state’s $141 million settlement with big banks responsible for foreclosure fraud and mortgage-servicing abuses. It is intended to be used for foreclosure remediation. The money could provide up to $2,000 in aid to two of my neighbors who have lost their homes to foreclosure (due to tragic illnesses). It could prevent another neighbor, who took a lower-paying job when he lost his, from doing a short sale and instead refinance at a lower rate. It could help one of my clients who was a victim of Wells Fargo’s ’servicing abuses’ (the bank actually renegotiated the loan to a higher rate).”

“It could prevent three of my military families (recently deployed out of state and out of the country) from losing their homes. It would allow my daughter to refinance her condo (devalued by foreclosures in her complex) at a lower rate.”

“Our home has dropped $23,000 in assessed value since the housing decline started, yet we still have a property tax increase of over $500. We Realtors are not happy with this. Realtors are on the front lines dealing with the fallout of the depressed market on homeowners. Walker took money that could prevent this from happening to you. This money could help keep up the value of the house you own.”

“Foreclosure activity in Shasta County extended its downward trend in March. But experts say the recent decline isn’t necessarily an indicator that the supply of distressed homes has been exhausted. Banks continue to do a good job of manipulating the flow of foreclosures as they work to sell off these repossessed properties, said Curt Largent of Sheldon Largent Realty in Redding. ‘It will continue to be a very controlled flow,’ Largent said. ‘Banks are managing the flow of foreclosures, whether it’s the number of homes they are actually foreclosing on, the number they are postponing or delaying, or the number they are sending to market.’”

“The number of homes for sale in Shasta County is low, down roughly 30 percent from a year ago. The low inventory has made the lower end of the market, homes priced below $200,000, very competitive. ‘There is a lack of inventory under $200,000; there is a huge lack of inventory under $150,000,’ Largent said.”

“Doug Juenke, board president of the Shasta Association of Realtors, believes banks are seeing that values may be coming up, so they are ‘metering’ the release of foreclosed homes in their portfolio accordingly. ‘That means if they are holding and releasing at a slower rate, they will get more money,’ Juenke said.”

“‘Through relentless meddling with delusions that ‘foreclosures are bad,’ they effectively destroyed the macro housing market,’ says California-based mortgage analyst Mark Hanson, referring to government intervention in the housing market. ‘Contrary to popular thinking, the eradication of foreclosures will lead this housing market into paralysis, not recovery.’”

“Hanson claims that the lack of ready and available distressed supply, ‘portends big trouble’ for the overall housing market, but more pointedly for California, Nevada and Arizona, where distressed supply and sales are the bulk of the market. Some of the modifications, claims Hanson, are even more ‘exotic’ than the loans borrowers defaulted from in the first place, like 2 percent interest-only loans, 40 year amortizations, 33 percent forbearance, and five-year fixed rate loans. This as more than 11 million borrowers (22 percent of homeowners with a mortgage) owe more on that mortgage than their homes are currently worth. ‘Legacy borrowers are now more levered than ever,’ worries Hanson.”

“‘It will soon become apparent that ‘foreclosure prevention’ was one of the biggest housing and finance policy blunders of all time. That’s because it circumvented interest rate policy in part aimed at household de-leveraging, kicked the problem forward and spread it out over many more years.’”

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Full Time Workers Fully Under Pressure: March 2012

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Bits Bucket for April 8, 2012

Depths of foreclosure crisis difficult to measure

WEST PALM BEACH, Fla. (AP) – When Frank Verna pulls up to a battered, four-unit apartment building at lunch hour, he’s just over a mile as the seagull flies from the gated, oceanfront palaces of South Florida’s wealthiest.

“Just watch your step,” the real estate agent says, parting bushes grown across the building’s entry path. Beyond is the darkened doorway to Unit 1 — missing its door.

“I think there’s a dead animal over there,” Verna says, aiming his flashlight at brown fur in the center of a living-room floor blanketed in garbage. The stench of whatever’s in there is potent. Nobody is home.

Verna is here because he specializes in distressed properties and Florida, thrashed by the mortgage crisis, has thousands. But figuring out just how many is not simple.

Economists at CoreLogic, a California company that analyzes mortgage data, chart 1.6 million homes in shadow inventory nationwide. They count homes not listed for sale, with loans at least 90 days overdue, in foreclosure or bank-owned.

Others say the shadow is much bigger. Laurie Goodman of Amherst Securities in New York says it covers from 8.3 million to 10.4 million homes. Goodman’s analysis includes homes with loans at least 60 days overdue, those that were delinquent before and are likely to default again, and thousands whose owners are making payments but may give up because they owe more than homes are worth.

Lenders have good reasons to delay. Empty homes require upkeep and claiming ownership means shouldering taxes and fines. As long as a case in still in process, loan servicers continue to collect their fees.

A recent check of records in this one county found more than 10,000 cases in which a bank secured a final judgment more than a year ago, yet there has still been no change in title, says Michael Olenick, a West Palm Beach computer programmer who tracks the system.

Then there are houses like one where Peter Gardner answers the door. Gardner, a former laser technician, bought it for $44,000 in 1995. After a car accident left him disabled, he says he tried to catch up on payments, but couldn’t meet demands to pay accumulated late fees. The lender filed foreclosure papers three years ago. Gardner, who says it’s been years since he’s made a payment, tried for a loan modification, but every three months was told to reapply. Last fall, the lender claimed his house at auction for $500.

It’s now owned by Bank of America, whose representatives still call. “They want me to live in the house, mow the lawn, keep the air conditioning on so the fungus doesn’t grow in it,” Gardner says. He tells callers he no longer owns the place, but they don’t believe him.

“Somebody went and sold my house and they’re telling me I’m not even in foreclosure,” Gardner says. “I was mad crazy with it and every time you just have to laugh. Otherwise, you’d just kill yourself inside.”

http://www.usatoday.com/money/economy/housing/story/2012-04-01/foreclosure-crisis-florida/53929010/1 - 64k -

I won`t post it because I know people don`t like it but Peter Gardner who bought his house for $44,000 in 1995 may have had an easier time catching up on payments after his his car accident that left him disabled if he had not cash out refied to the tune of $150k.

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Bits Bucket for April 11, 2012

True market failure = so much federally-guaranteed funny money floods the market that prices get pushed up to unsustainable bubble valuation levels, leading many households who take the bait the way to financial ruin.

Charles Lane
Editorial Writer

When Uncle Sam plays banker
By Charles Lane, Published: April 9

Today’s lesson on How America Really Works begins with a question: What is the largest and most influential financial institution in the world? It’s not J.P. Morgan, or even Goldman Sachs. It’s the U.S. government.

That’s the verdict of Brookings Institution banking expert Douglas J. Elliott, and the numbers back him up. By the end of 2011, the federal government’s housing, farm, business and educational credit programs had $2.7 trillion in loans and guarantees outstanding. That’s not counting the $5 trillion-plus, mostly related to housing giants Fannie Mae and Freddie Mac, that Washington took on its books amid the financial crisis that began in 2008.

Tom Toles on the budget battle:?Collection of cartoons on the federal budget and economy.

We’ll find out soon enough whether these “emergency” programs gradually become permanent, as did Great Depression emergency programs such as the Export-Import Bank and the Federal Housing Administration (FHA).

The federal government’s massive intervention in the credit markets, necessary as it might be in a crisis, shows that our nation often honors its commitment to free markets in the breach.

It is also cause for concern — if, like me, you believe that one of the Great Recession’s lessons is that financial commitments can be a lot riskier than they appear. To make matters worse, current law obscures, rather than clarifies, the risks to taxpayers in the government’s portfolio.

Federal lending is always done in the name of some socially beneficial objective that the private banking system would insufficiently support, if left to its own devices.

Take, for example, student loans. A well-educated populace produces a more civilized, more productive society. Banks are not generally in the habit of making long-term, uncollateralized individual loans; ergo, it makes sense for the government to advance tuition money to would-be college students. Economists call this correcting “market failure.”

Nevertheless, when government decides how to allocate scarce resources, it sometimes strikes the wrong balance. Some categories of federal credit — rural utilities, railroad upkeep, small business — benefit interest groups with no clear payoff for the overall economy.

The social benefits of government-backed student loans may indeed outweigh their costs. But even this program distorts the markets it’s meant to repair. A guaranteed flow of tuition dollars weakens colleges’ incentive to restrain costs. Tuition rises and students must borrow more.

Over the past generation, federal credit support for housing boosted homeownership rates — but not sustainably. The national investment in home mortgages was a lot more vulnerable to the ups and downs of the business cycle than a series of Congresses and presidents of both parties had supposed. The resulting excess supply may burden the economy for years.

Some experts believe that the government’s $706 billion student loan portfoliosignifies a similar bubble in higher ed.

Federal credit programs are here to stay. Even if there were a consensus to unwind them all, doing so would be impractical in the short run. Meanwhile, in select cases, federal lending or loan guarantees may correct true market failures.
…

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Extended Unemployment: Initial, Continued and Extended Unemployment Claims March 29 2012

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Real Estate Sold: Top Three Residential Property Sales For the Past Seven Days

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Tuesday, April 10, 2012, by Sally Kuchar

Listed for: $2,195,000
Received: $1,925,000
Size: 5-bed, 4-bath; 3,528 square feet
Location: 1521 Baker Street, Lower Pacific Heights
The skinny: This big abode has actually been on the market since June of 2010, but it's last known asking price was $2,195,000 in November of 2011. The home has been completely remodeled and has "luxury" home features like a chef's kitchen with "state-of-the-art professional appliances" for when you want to fry an egg before you head off to work. Home highlights include a library alcove and large rear garden. There's also a one bedroom inlaw on the lower level.

Listed for: $3,395,000
Received: $3,400,000!
Size: 4-bed, 3.5-bath; 3,708 square feet
Location: 2940 Jackson Street, Pacific Heights
The skinny: This home was designed by architect Ernest Coxhead and built in 1894. While the home recently underwent a pretty intense remodel, we're happy to report that it most of its original charm is still apparent.

Listed for: $7,950,000
Received: $7,000,000
Size: 13-bed, 14-bath; 20,000 square feet
Location: 1000 Fulton Street, Alamo Square
The skinny: Click here for complete deets on the sale.

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ADP National Employment Report: March 2012

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On The Stamp: Food Stamp Participation January 2012

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Comment of the Day: "It's a wonderful park off the...

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Wednesday, April 11, 2012, by Sally Kuchar

"It's a wonderful park off the beaten path. I have photographed many sunsets in SF. There's no better view than from the Western side of the park. You can see from Daly City all the way to Marin. Just check the weather before you go in case of fog." - sweetsf [Spotlight on Golden Gate Heights Park]

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Bits Bucket for April 13, 2012

Delray Beach Dunkin’ Donuts robber gets 9 life sentences

By Daphne Duret Palm Beach Post Staff Writer
Posted: 6:16 p.m. Thursday, April 12, 2012

WEST PALM BEACH — A 21-year-old Broward County man received nine consecutive life sentences Thursday for participating in the violent 2008 robbery of a Delray Beach Dunkin’ Donuts where another man shot several people.

Charles Luke Faustin of Lauderhill received the life sentences on three counts of attempted first-degree murder and five counts of robbery with a firearm. Circuit Judge Karen Miller also sentenced him on charges of aggravated assault with a firearm and possession of firearm while committing false imprisonment.

Faustin’s demeanor during his Thursday hearing and his trial last month was a stark contrast to James Herard, the shooter in the case who laughed aloud as his victims testified at his sentencing hearing in August.

Miller had to temporarily stop Faustin’s trial when he fell over and began hyperventilating as jurors watched the videotaped statement he made to investigators, saying the plan was never to hurt anyone during the robbery and he was shocked when Herard began shooting.

Amy Morse, Faustin’s attorney, said the differences between her client and Herard should have afforded him a lesser sentence.

“His prayers and his heart goes out to the victims,” Morse said. “If he could go back in the past and change it he would.”

Assistant State Attorney Jill Richstone said that although Faustin wasn’t the shooter, the fact that he participated in the robbery as well as other robberies with Herard was enough to earn him the same sentence.

Even after Herard was arrested, Richstone said, Faustin could have gone to authorities in the two days before they caught up with him as well. Instead, she said, he destroyed the gun Herard used in the crime.

“He certainly didn’t have remorse at that time,” Richstone said.

According to testimony during both men’s trials, customers and employees were ordered to get on the ground while Faustin began to remove money from the register while Herard stood by with a pump-action shotgun and two other men began to rob the customers.

Then Herard began shooting. As he fled the coffee shop, he shot through the windshield of a person driving nearby, striking that victim in the face.

Herard, like Faustin, received nine life sentences on 19 charges, including attempted first-degree murder.

http://www.palmbeachpost.com/news/crime/delray-beach-dunkin-donuts-robber-gets-9-life-2300453.html -

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Buy Now While You Can

The Chicago Tribune reports from Illinois. “Ken Neumann is back building houses in the Chicago area, but he’s no longer focused on constructing thousands of homes in subdivisions for entry-level buyers. Instead, he’s tearing down homes in long-established communities and building houses for a more discerning, upscale clientele. There’s one other difference: Neumann Homes Inc., a name synonymous with the spectacular rise and fall of Chicago’s home-building market, is nowhere to be seen. Instead, Neumann is operating under the Greenscape Homes brand.”

“On Nov. 1, 2007, Neumann, which also had operations in Wisconsin and Colorado, sought reorganization under Chapter 11 bankruptcy protection, owing at least $235.6 million to eight banks, suppliers and contractors, and an additional $137 million to its largest unsecured creditors, according to court documents. Ken Neumann agreed to pay $1.125 million to settle certain disputes. Neumann set his sights on teardowns in established west suburban communities, constructing in their place semicustom homes under the Greenscape Homes name and pricing most of them from the mid-$400,000 range to more than $700,000.”

“He opted not to use the Neumann name while the bankruptcy case continued but said, ‘I’m not ashamed of being Ken Neumann.’”

The Chicago Sun Times in Illinois. “For homeowners planning to sell this year, condolences are in order. With the median price hitting a new low since its 2007 peak, Realtors say a big chunk of today’s sellers are in the ‘have-to’ camp as the home buying season is set to shift into higher gear. For home buyers, it remains a dream market.”

“Twenty-five-year-old Sandra Becerra closed in February on a three-bedroom, 1½-bath tri-level home in Burbank she snapped up for $145,000. She said it originally listed for $220,000 two years ago. She put 5 percent down and got a 30-year, fixed-rate FHA mortgage with a 3.875 percent interest rate. ‘I went for it because I just thought it was such a great deal. I didn’t really want to pass it up,’ Becerra said.”

Minnesota Public Radio News. “Homes sales are heating up this spring in the Twin Cities as buyers compete over a tight inventory of homes. Anna, 32, and Evan, 29, want something bigger their family can grow into. But finding what they want in their price range of $250,000 to $450,000 has been tougher than they expected. They want to get into a home by the beginning of next year. They hope it doesn’t take that long, Anna said. ‘Right now, everyone knows it’s a good time to buy with the historically low mortgage rate and the ten-year low housing prices,’ she said.”

“Sally Rousse, 48, didn’t have to update her home. But she did lower the price by almost $150,000 to just over $700,000 since she first tried to sell last year. When the house didn’t sell after a few months, Rousse took it off the market. The market in Rousse’s price range near the Minneapolis lakes is slow and prices have dropped significantly. She needs to sell her house this year to cut her family’s expenses. ‘I guess I felt I took it personally at first. I thought ‘Why don’t they like my house.’ and I didn’t really understand the market and how it works, and how people wait and wait and wait and see what’ll happen and if you’ll drop the price,’ Rousse said. ‘Every month that we stay here is more money that we are spending that we could be saving for things that we want to do,’ she said.”

The Journal Sentinel in Wisconsin. “Sales of existing homes in metro Milwaukee rose almost 23% in the first quarter, but prices continued to slide, data shows. Economist Brian Jacobsen said the southeast region of the state ’seems to be following the general pattern for the nation of slightly more sales, but prices going nowhere fast. There’s likely going to continue to be a shift in potential homeowners preferring to rent than buy, unless they can get a great bargain,’ said Jacobsen, ‘Job insecurity is a major impediment to buying a home. Low interest rates aren’t enough to entice buyers into the market. Jobs are key.’”

“A separate report showed that permits to construct new homes rose 8.8% in Wisconsin’s biggest population centers in the first quarter of 2012. ‘There are a number of builders that are putting up spec homes right now,’ said Dominic Collar of Oshkosh-based MTD.”

The Toledo Blade in Ohio. “Despite a few slightly positive statistics and anecdotes of improving sales, local real estate agents and national data tracking firms say that five years into the nation’s housing crisis the Toledo area’s foreclosure problem remains as bad as ever. ‘I think there’s still a lot of them in the pipeline that we haven’t seen and which won’t come onto the market until maybe after the election. There could be political reasons why we maybe aren’t seeing them yet,’ said Glennis Przymierski, a foreclosure specialist with the Danberry Realtors. ‘I think there’s a lot of homes in limbo right now that people are trying to sell for more than they can get and eventually they are going to end up in foreclosure.’”

“The picture looks slightly better in Wood County, which has seen numerous foreclosure cases in its Perrysburg subdivisions. Foreclosure cases there decreased by 6 percent through the first three months to 127 cases, according to Cindy Hofner, the county clerk of courts. But the court’s work load hasn’t gotten any lighter. ‘It is slowing a bit as far as new cases, but we are still dealing with foreclosures from several years ago,’ she said.’”

The Herald Bulletin in Indiana. “Stephen Kowell was ready to move out of his Chesterfield home, abandoning it and letting it go into foreclosure. Kowell said he is no longer able to keep up with his house payments. He attended Occupy Anderson’s ‘Occupy Your American Dream’ foreclosure information session to learn about his options. By the time it was over, Kowell knew that leaving his home wasn’t the best option. ‘It feels less overwhelming,’ he said. ‘The seminar was well worth it. Now I don’t feel like I’m alone. I understand things.’”

“About a dozen people attended the session. Anderson real estate agent Helen Wean, a facilitator with Occupy Anderson, said that with the hundreds of abandoned homes throughout the city, she expected to see a bigger turnout. ‘I guess that once you have walked away from your house, you have given up,’ Wean said.”

The Columbia Daily Tribune in Missouri. “Pam Stephenson suspects she owes more on her home than it’s worth. So Stephenson, who purchased her Boone County home about nine years ago, made the trip to the Boone County Government Center yesterday to hear whether she could get any help from the programs set up after a settlement between five of the nation’s largest banks, 49 states and the federal government.”

“Doug Ommen, the division chief of the Missouri Attorney General’s Consumer Protection Division, spoke to eight people who attended. Ommen’s presentation also detailed shortfalls in the settlement. Because banks often sell the loans they make to other investors, they don’t always hold the loan they service. Homeowners whose loan no longer is owned by one of the five banks are out of luck ‘There are a huge number of people out there … who may not be able to benefit from that,’ Ommen said.”

“For Stephenson, who wanted to know whether her home was underwater, Ommen couldn’t help her because the appraisal parameters of the settlement still are being finalized. ‘I didn’t get a clear answer,’ Stephenson said.”

The Kansas City Star. “The 50th Spring Parade of Homes kicks off this weekend, and while home building activity is improving, it’s leaden compared with the golden years, when more than 10,000 homes were built each year in much of the last decade. But now many Kansas City area builders and others believe the pendulum has swung too far, with an average of only 2,700 homes going up the last four years. Some predict there will be a shortage of new speculative or ’spec’ homes to choose from.”

“Fifty years ago, the average home on the Spring Parade had three bedrooms, one and a half bathrooms, a two-car garage and cost about $20,000, according to the Builders Association. This year, the average price is $402,750, and the house has four bedrooms, three and a half baths and a three-car garage. Lending standards also were tighter. Saul Ellis, a former home builder who moved on to develop some of Johnson County’s more high-end subdivisions, said that in the mid-1960s, a buyer had to put 20 percent down and show the bank an income level four and a half times the monthly payment.”

“But after many years of getting bigger, the average new home is 15 to 20 percent smaller than previously. Dan Whitney, a housing consultant at Landmarketing Inc. said some of the downsizing is in response to the housing crisis. ‘People are adjusting,’ he said. ‘The ‘McMansion’ isn’t over, but the McMansion is smaller.’”

From KCTV 5 Kansas City. “Sally Moore with Keller Williams Eastland Partners says now is the time to buy. Moore said she is about to close on six brand-new homes in her community, which is more than double the number of homes she sold last year at this time. Moore says what people are seeing on TV could make the market change sooner than they might expect. ‘Now when you turn on the news, instead of all the down reports on the housing market, the economy, the unemployment rate, things are turning more positive. People listen to that,’ Moore said.”

“Builder Kevin Stallings says with the up-tick in the housing market here in the metro area, people need to act fast before prices continue to rise. He noted interest rates, too, are slowly creeping upwards. ‘We don’t get six-month price locks, we get month-to-month at this point. This is appliances, this is light fixtures, drywall, lumber, asphalt, shingles. We get month-to-month locks, that is it. It has never been like that, and every month as the economy comes back, they’re raising their prices so we have to pass it on to the consumer. So buy now while you can,’ Stallings said.”

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Recovery-less Recovery: Unemployment Duration March 2012

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That's a Wrap: At a Board of Supervisors committee...

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Thursday, April 12, 2012, by Sally Kuchar

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Reading Rates: MBA Application Survey – March 28 2012

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Real Estate Sold: Condos at The Washington Are Quickly Selling

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Wednesday, April 11, 2012, by Sally Kuchar

It looks like at least four condos at The Washington (which is currently on our Where To Buy Now map) have sold since landing on the market in late March. The 26-unit building in Pacific Heights is brand new steel-frame construction. All received asking.

Unit #403 is a 1-bed, 1-bath, 830 square foot condo with monthly HOA dues of $410. It sold in late March for $779,000.

Unit #601 is a 2-bed, 2-bath, 923 square foot condo with monthly HOA dues of $429. It sold for $1,014,300.

Unit #701 is a 2-bed, 2-bath, 923 square foot condo with monthly HOA dues of $429. It sold for $1,053,500.

Unit #702 is a 2-bed, 2-bath, 985 square foot unit with monthly HOA dues o $442. It sold for $1,122,100.

We'd like to point out that all but one of these units is clocking in at over $1,000 per square foot. (Unit #403 is $931 per square.)
· Condos: Where To Buy Right Now [Curbed SF]
· 1840 Washington, #403 [Redfin]
· 1840 Washington, #601 [Redfin]
· 1840 Washington, #701 [Redfin]
· 1840 Washington, #702 [Redfin]

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Bits Bucket for April 7, 2012

I sadly suspect the April Fool’s joke of this article is on the U.S. taxpayer.

OPINION
April 1, 2012, 5:49 p.m. ET

Federal Lending Is as Rotten as Federal Borrowing
Uncle Sam has a loan for everyone, and many of them are likely to go bad.
By GEORGE MELLOAN

We all know about the dire fiscal outlook arising from manic federal borrowing. The interest cost of financing and refinancing the burgeoning national debt has climbed 55% over the last three years. The Obama budget predicts net interest expenses tripling to over a half trillion dollars by fiscal 2015 from the 2010 level. That is probably conservative, given the likelihood that the administration has lowballed inflation and interest-rate prospects.

If that isn’t bad enough, let’s consider the risks not from federal borrowing but from federal lending. Those risks are pretty awful, too.

The big bump in federalized lending came in August 2008 when the government took over failing Fannie Mae and Freddie Mac. With the addition of these two giants, the federal government now has a $5 trillion mortgage portfolio, much of it of dubious value.

Since the takeover, Fannie and Freddie have drawn a net $136 billion from the Treasury to cover their losses, and they could cost taxpayers $259 billion through 2013, according to their regulator, the Housing and Home Finance Agency (HHFA). On top of that, the Federal Housing Administration is facing huge losses on the home mortgages it has guaranteed over the years and very likely will also require a taxpayer bailout.

By comparison, the cost of the $700 billion Troubled Asset Relief Program in 2008 is relatively modest, a mere $28 billion so far, according to the latest government audit. Major banks have paid back their share of the loans.

As large as these numbers are and as likely that the HHFA is overly optimistic about the future of Fannie and Freddie, these exposures are only a part of the big picture of federal lending disarray. Government lending, like government borrowing, is a political tool used by Washington to win favor with voters. According to a Congressional Budget Office (CBO) report this month, the government has, in addition to Fannie, Freddie and TARP, a further $2.7 trillion in other loans and loan guarantees outstanding, and some of those loans don’t look so good either.

One of the more worrisome categories is student lending, which the government took over directly in 2010 after having merely guaranteed private loans previously. Student lending has soared along with college tuition, and has even contributed to tuition inflation by flooding colleges and universities with government cash. William Brewer, head of the National Association of Consumer Bankruptcy Attorneys, has been quoted as predicting that student loans will be the next “debt bomb” for the U.S.

The CBO’s new report says that federally issued or guaranteed student loans outstanding have grown to $706 billion from $79 billion a decade ago. (The government’s new Consumer Financial Protection Bureau estimates that all student loans outstanding now total over $1 trillion.) They don’t seem to be very good risks. A Journal story reporting on the CFPB estimate cites Federal Reserve Bank of New York data showing that as many as “one in four student borrowers who have begun repaying” are behind on their payments.

The sad state of government loan programs has produced two opposing views. Liberals want further bailouts for debtors. Dick Durbin of Illinois, the No. 2 Democrat in the Senate, has proposed that bankruptcy laws be liberalized so more former students can shed their debt burdens.

The Obama administration is pushing the idea of forgiving the portions of home mortgage debts that are under water. HHFA acting director Edward DeMarco has opposed forgiveness, telling Congress it would cost taxpayers another $100 billion. But the administration is applying pressure, offering to pay half the cost with unused TARP funds, so look for TARP losses to rise.

Taking a more responsible but politically risky approach, House Budget Chairman Paul Ryan (R., Wis.) is backing a budget bill provision that would put a more realistic value on the cost to taxpayers of government-subsidized lending. Currently, agencies calculate subsidies by comparing the interest rates on their loans to the rates on Treasury securities. Given rock-bottom Treasury rates, that often makes it look as if the agency is getting a positive return. Under Mr. Ryan’s “true value” accounting (backed in the CBO’s March report), the return instead would be measured against market interest rates.

The CBO analysis shows that true-value accounting on direct student loans would convert what the government records as a positive return into a budgetary loss.
…

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On The Market: Room For Everyone, Plus A Private Playground, $6.95M

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Wednesday, April 11, 2012, by Philip Ferrato

More room for everyone: 1349-51 Clay Street came on the market last Friday, asking $6,950,000 for a spanking-new 6-bed, 6-5 bath, 2-kitchen, 1-elevator house with a 4-car garage. It's actually two units with identical finishes, and once upon a time, was two flats over a garage that's been renovated out of existence, with CEQA and height exemptions dating back to 2009. The lower unit has 2-beds and 2-baths and a garden facing south onto Leroy Place, while the two-level upper unit has a double-height living room overlooked by a glassed-in master bedroom suite, plus three additional bedrooms.

Out front, the house plays well with it's Beaux-Arts neighbors- a somewhat traditional front with French doors and windows composed to look like a late-19th Century studio building, but the rear facade is glazed and sleek, looking down Leroy Place and into the big drum of the SFFD fire hydrant water supply. A roof-top terrace big enough for a party. Or a playground. Seriously, we could see a pirate ship and sandbox up there. The house is staged as a 1-family with the lower bedrooms as offices, but we could see this as a multigenerational or sibling setup with the potential for a very swank rental. Listing is silent on an architect, and the last four images in the gallery are of the lower unit. The open house is on Sunday, April 15 from 2:00pm to 4:00pm.
· 1349-51 Clay Street [Redfin]
· 1349-51 Clay Street [Bridge Properties/TRI/Coldwell Banker]

1349-51 Clay Street, San Francisco, CA

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Constuction Spending: February 2012

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Extended Unemployment: Initial, Continued and Extended Unemployment Claims April 05 2012

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Bits Bucket for April 9, 2012

To a contrarian, I am sure this article looks bullish for bullion.

Rumors of my death are greatly exaggerated.

– Mark Twain

April 9, 2012 at 1:00 am
Gold rush may be over; price falls 15% since September
Drop stirs debate about investors’ desire to buy the metal
By Bernard Condon and Matthew Craft
Associated Press

The price of gold plunged Wednesday to its lowest level in three months. It fell almost $58 to $1,614 per ounce, from a peak of $1,907 in September. The decline has led to speculation that the fervor to invest in gold as a hedge on inflation is fading. (Nick Ut / Associated Press)

The price of gold, which has climbed for years like a blood pressure reading for anxious investors, plunged Wednesday to its lowest level in three months.

Gold fell almost $58 to $1,614 per ounce. It has declined 15 percent since September, when it hit a peak of $1,907. It had more than doubled since the financial crisis three years earlier.

Surprisingly, the fall came on an ugly day in the stock market — the Dow Jones industrial average lost 125 points. Last year, a day like Wednesday would have caused fearful investors to buy gold as a protective investment.

“It’s difficult to forecast, but I think the gold bull market is over,” said Cetin Ciner, a professor of finance at the University of North Carolina-Wilmington. He likened the surge in gold to dot-com stocks before they collapsed.

Some investors buy gold as a hedge against inflation, and minutes from a Federal Reserve meeting that came out last week suggested that the central bank believes inflation remains under control.

Gold’s attraction as an asset of refuge during crises also seems to have diminished. The economy has picked up, and worst-case scenarios in the United States and Europe have faded.

“Fear has been gold’s best friend, and so to the extent that fear is dissipating, gold should fall,” said Jim Paulsen, chief investment strategist at Wells Capital Management. “We might look back at these Fed minutes as the line in the sand.”

Gold has been hit in recent weeks by striking gold sellers in India, the world’s largest buyer of physical gold, who are upset over government tariffs. Another bearish sign was a surge Wednesday in the dollar, which tends to rise when gold falls.

Gold fetched only $300 to $400 an ounce during the 1990s but climbed steadily last decade. By late 2008, it was near $900. It took off that fall when prices for stocks and corporate bonds plunged, wiping out years of savings. Even money market funds looked suspect. Investors bid up prices for the safest of assets, like U.S. Treasury bonds. Others turned to gold.

“During our bout with Armageddon, people ran to it for safety,” said Abraham Bailin, a commodity analyst at Morningstar.
…

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Debate Rages Over Principal Forgiveness at Fannie and Freddie

Tom Grill | Photographer's Choice RF | Getty Images

The man at the center of the controversy over writing down mortgage principal on Fannie Mae and Freddie Mac loans isn’t wavering. He may be reconsidering previous loss formulas, factoring in new government subsidies for principal write-down, but his opinion seems largely unchanged.

After beginning a speech this morning about all the so-called “Enterprises” (Fannie and Freddie) have done to help millions of borrowers behind on their mortgage payments, and reminding listeners of his agency’s mandate to, “preserve and conserve the assets of the Enterprises,” FHFA Acting Director Ed DeMarco took a left turn.

“There is another human element in this story that does not seem to receive much attention,” DeMarco continued. “Clearly, many households got over-extended financially. Some accumulated debts they couldn’t afford when hours or wages were cut or jobs were lost. Others withdrew equity from their homes as house prices soared. Others bought houses at the peak of the market, often with little money down, perhaps in the belief house prices would continue to climb. Yet there are other Americans who did not do these thing.”

That last part really clinches what may eventually be his decision not to allow principal forgiveness, or to do it in an extremely narrow way. Yes, there are all kinds of formulas, and “net present value” analyses that have been and continue to be run. There will be Enterprise gains offset by taxpayer losses, and there will be estimates of operational costs to implement a wide-ranging and necessarily transparent program. But in the end, less than one million borrowers would be helped, and for DeMarco, as for many others, it will come down to fairness and cheating.

“One factor that needs to be considered is the borrower incentive effects. That means, will some percentage of borrowers who are current on their loans, be encouraged to either claim a hardship or actually go delinquent to capture the benefits of principal forgiveness?” asks DeMarco.

“This is a particular concern for the Enterprises because unlike other mortgage market participants that can pick and choose where principal forgiveness makes sense, the Enterprises must develop the program to be implemented by more than one thousand seller/servicers. In addition, the Enterprises will have to publicly announce this program and borrower awareness of the possibility of receiving a principal reduction modification will be heightened among Enterprise borrowers,” he explains.

In other words, this opens the flood gates to cheating. The fact is that there are 11 million borrowers who currently owe more on their mortgages than their homes are worth and yet the vast majority of them are still making monthly payments. Those who haven’t been paying have been delinquent, in some cases, for many years. The concern is that borrowers who are current on their loans might think it’s unfair that those who are not current are being rewarded and they are not. It would take a relatively small group of them strategically defaulting to offset the gains of any principal reduction program and turn it into a massive debacle.

“The far larger group of underwater borrowers who today have remained faithful to paying their mortgage obligations are the much greater contingent risk to housing markets and to taxpayers. Encouraging their continued success could have a greater impact on the ultimate recovery of housing markets and cost to the taxpayers than the debate over which modification approach offered to troubled borrowers is preferable,” concludes DeMarco.

He is expected to announce a decision on principal reduction this month, but the analysts are already out:

“We see this as a strong political attack against principal reduction,” says Jaret Seiberg of Guggenheim partners.

The Obama administration is clearly pushing for it, with Treasury Secretary Timothy Geithner recently telling a Senate panel that there is a, “very strong economic case” for principal write-down. He suggested DeMarco, “take another look at the math,” which DeMarco is obviously doing. The trouble is, when it comes to today’s housing market and today’s borrowers, paying your mortgage, whatever it’s worth, is not always a simple equation.

Questions?  Comments?  document.write("");document.write("RealtyCheck"+"@"+"cnbc.com");document.write('');And follow me on Twitter @Diana_Olick

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Envisioning Employment: Employment Situation March 2012

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Comment of the (Yester)day: "What a fun place this was...

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Tuesday, April 10, 2012, by Sally Kuchar

"What a fun place this was in the late 50's, early 60's. We kids would spend the whole day there (when we could get a sunny day). The ocean water was green and you'd sometimes feel slimy vegetation brush across your legs. It seems like every year pranksters would add green dye to the water. There was also a large wading pool for the little kids in the zoo." - auburn [Fleishhacker Pool, Now a Parking Lot]

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Bull Trip!: GDP Report Q4 2011 (Third Rough Estimate)

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On The Pulse: Ceridian-UCLA Pulse of Commerce Index March 2012

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ISM Non-Manufacturing Report on Business: March 2012

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Weekend Topic Suggestions

Has the Chinese growth slowdown bottomed out, with a soft landing on the way?

And does frequently saying ’soft landing’ increase the chances of one occurring?

The Associated Press April 13, 2012, 08:18AM ET
China’s economic growth falls to nearly 3-year low
By JOE McDONALD

BEIJING

China’s declining economic growth fell to its lowest level in nearly three years in the first quarter, but analysts said it should rebound in coming months.

The world’s second-biggest economy grew by a still-robust 8.1 percent in the three months ending in March, down from the previous quarter’s 8.9 percent, data showed Friday. It was the weakest expansion since the second quarter of 2009 but above the government’s 7.5 percent target for the year.

China’s rapid growth has fallen steadily since 2010 as a slump in global demand battered its exporters and Beijing tightened lending and investment curbs to cool an overheated economy and surging inflation.

An uncontrolled slump could have global repercussions, hurting demand for oil, industrial components and consumer goods at a time when U.S. and European growth are weak. It also might fuel political tensions in China as the ruling Communist Party prepares for a sensitive, once-a-decade handover of power to younger leaders.

“This quarter’s growth was pretty weak,” said IHS Global Insight analyst Xianfang Ren. “Starting from next quarter, growth should strengthen.”

The World Bank and private sector analysts expect China to achieve a “soft landing,” with growth rebounding later this year. But some worry the slowdown might be too sharp, raising the risk of job losses.

The World Bank and International Monetary Fund expect 8.2 percent growth for China this year — below 2010’s explosive 10.4 percent expansion but ahead of low single-digit forecasts for the United States, Japan and Europe.

Last year’s unexpectedly steep plunge in demand for China’s exports due to U.S. and European economic woes prompted communist leaders to reverse course and ease controls on bank lending to help struggling manufacturers.

“The `soft landing’ scenario is very likely,” said Frances Cheung, senior strategist for Credit Agricole CIB in Hong Kong.

Still, Cheung said financial markets might react badly to the latest data, because a recent rally in prices was based on expectations Chinese growth would be stronger.

Chinese leaders are trying to reduce reliance on exports and investment and shift to growth based on domestic consumption. In line with that, they reduced their annual growth target through 2015 to 7.5 percent from the 8 percent level of recent years.

On Friday, the Cabinet issued a statement pledging to press ahead with reforms intended to increase domestic consumption but announced no major policy changes, suggesting Communist leaders are satisfied with the latest economic performance.

The statement cautioned that China still faces difficult economic conditions due to uncertainty in key export markets and possible pressure for prices to rise. It called on the public to remain diligent and calm.

In a possible sign of gathering economic strength, Chinese factory activity, retail sales and exports accelerated over the course of the first quarter.

Industrial production rose 11.9 percent over a year earlier in March, up 0.5 percentage points from the January-February period. Growth in retail sales rose by a similar margin to 15.2 percent. Export growth rose two percentage points to 8.9 percent, though that was well below China’s double-digit rates in recent years.

“China’s economy is stabilizing,” said Sheng Laiyun, a spokesman for the National Bureau of Statistics, at a news conference.

IHS Global Insight’s Ren said China also should benefit from an improved outlook for the U.S. economy, which would help exporters, and recent growth in real estate sales.

Data released Thursday showed bank lending in March soared to just over 1 trillion yuan ($160 billion), well above analysts’ forecasts.

On Thursday, the World Bank trimmed its growth forecast for China this year from 8.4 percent but said it should avoid an abrupt downturn. It said growth next year should rebound to 8.6 percent.

“The near-term challenge we see is maintaining this `soft landing‘ that we see under way,” the bank’s lead China economist, Ardo Hansson, told reporters.
…

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Top 10: The 10 Most Expensive One-Bedroom Homes For Sale in San Francisco

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Monday, April 9, 2012, by Sally Kuchar

We decided to spice it up a bit this week and end our run of featuring a specific neighborhood for our top ten least expensive list. Instead, we've combed through all the listing to find you the 10 most expensive one-bedroom homes for sale in San Francisco. As always, we won't be including any sale that has a sale that's currently pending. Onwards!

10) Unit #603 at The Washington, Pacific Heights
Asking price: $835,000
Size: 1-bed, 1-bath; unlisted square footage
Price per square foot: Unavailable
The skinny: The Washington at 1840 Washington is a brand spankin' new luxury condo building. The condo's being described as having "luxury finishes and timeless modern design." That means that there's fancy finishes like quartz Caesarstone countertops, Studio Becker Cabinets, Bosch stainless steel appliances, and maple hardwood flooring. Building highlights include a "stunning" view common roof terrace. Monthly HOA dues are $410 and there's 1-car parking. We should also point out that Brokerbabble tells us that it's "near Yahoo, Google, Facebook, Apple and LinkenIn shuttle stops."

9) Unit 17C at the Millennium Tower, Yerba Buena (SoMa)
Asking price: $849,000
Size: 1-bed, 1-bath; 833 square feet
Price per square foot: $1,019
The skinny: This unit had a brief appearance on the market in 2011. Like most fabulous and new residential towers, this one also has a "fabulous kitchen custom designed by Studio Becker." The monthly HOA dues are high but cover amenities like a 20,000 square foot club level, which features a wine cellar and fitness center. 1-car parking is included.

8) #302 at 2170 Vallejo Street, Pacific Heights
Asking price: $855,000
Size: 1-bed, 1-bath; 1,236 square feet
Price per square foot: $692
The skinny: Get your Art Deco fix on in Pacific Heights. This unit oozes elegances and glamour. The usual suspects are present: designer finishes, stainless steel appliances, etc. Monthly HOA dues are $692 and there's leased parking for $300.

7) Unit #608 at 2200 Sacramento Street, Pacific Heights
Asking price: $900,000
Size: 1-bed, 2-bath; 947 square feet
Price per square foot: $950
The skinny: Let's get this out of the way: the unit's currently rented. Condo highlights include a patio off the bedroom. There's an "elegant 16th floor club room." Monthly HOA dues are $784 and there's 1-car parking.

6) #454 at the Clocktower Building, South Beach
Asking price: $949,000
Size: 1-bed, 1-bath; 1,733 square feet
Price per square foot: $548
The skinny: This unit's being described as "wonderful, sexy and spacious," so there's that. This unit, like most others in the Clock Tower Loft, is rather industrial with its exposed brick and tall ceilings and big windows. Monthly HOA dues are $548 and there's 1-car parking in the garage.

5) 86 Stanton Street, Eureka Valley
Asking price: $985,000
Size: 1-bed, 1-bath; 435 square feet
Price per square foot: $2,264
The skinny: Before you freak out about the price per square foot let's clear something up. What you'd be purchasing is two buildable lots and one updated cottage. The cottage sits on "a little dell, down flagstone steps, with a terraced stone-paved front yard and grassy yard." Adorable! The cottage's been trick out and features Carrera marble countertops and a Pedini kitchen. There's talks of plans being available for a three story home on Stanton lot and a carriage house/three car parking lot on Yukon Street.

4) #104 at the Hubien Building, SoMa
Asking price: $998,000
Size: 1-bed, 1-bath; 1,701 square feet
Price per square foot: $587
The skinny: You get to brag a little bit with this unit because the Hublien Building was one of the first conversion loft buildings in San Francisco. It was designed by David Baker and features tall ceilings, concrete columns, and a room that could be an extra bedroom if you really needed one. Monthly HOA dues are $430 and there's 1-car parking in the garage.

3) #411 at The Glassworks, South Beach
Asking price: $1,095,000
Size: 1-bed, 2-bath; 1,461 square feet
Price per square foot: $749
The skinny: This is some serious contemporary living. It would also help if you were a Giants baseball fan, as AT&T Park is directly across the street from this building. A major pro and a major con, depending on who you're talking to. Monthly HOA dues are $675 and there's 1-car leased parking for $300.

2) #506 at 200 Brannan, South Beach
Asking price: $1,250,000
Size: 1-bed, 2-bath; unlisted square footage
Price per square foot: Unavailable
The skinny: This condo's being described as a "sophisticated Manhattan-style penthouse." Question: Do Manhattan-style penthouses usually have wall-to-wall mirrors in the bedroom? Because this unit does. Monthly HOA dues are $635 and there's 2-car parking in the garage.

1) #702 at the Clay-Jones, Nob Hill
Asking price: $1,785,000
Size: 1-bed, 1.5-bath; 1,115 square feet
Price per square foot: $1,601
The skinny: In 1929 local architect Benjamin P. Jones designed this building on one of Nob Hill's most sought-after blocks. The building also houses five star restaurant Keiko. Talk about convenience. Monthly HOA dues are $630 and there's 1-car parking in the garage.

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On The Margin: Total Unemployment March 2012

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Bits Bucket for April 10, 2012

Homes for the price of a car

By Erika Riggs, Zillow
April 2, 2012

A house for the price of an SUV? That’s plausible, given the dip in housing. But a home for the price of a Ford Fiesta?

Whoa. Now there’s a value-bending proposition.

While most people don’t think of real estate in prices relative to that of a car, there are houses in some parts of the United States that are for sale with listing prices just like what you’d see at an auto dealership.

And we’re not talking about a house priced at the median home value of $150,000, which is akin to the sticker price of an Aston Martin. The homes featured below compare more favorably to standard highway fare: Nissans, Hondas, Fords, etc.

Some of these properties are distressed sales — either foreclosed or in the midst of a short sale — and some need a little renovation, but that’s still a pretty impressive given that they’re all comparable to the price of a new car.

1620 W 2nd N, Wichita, KS
For sale: $54,900

1404 22nd St, Two Rivers, WI
For sale: $29,900

15851 Rutherford St., Detroit, MI
For sale: $12,900

210 Melrose Circle, North Little Rock, AR
For sale: $30,000

969 Tunstall St, Memphis, TN
For sale: $24,000

121 comments

Thomas Fry · RETS
GO AHEAD buy that home in DETROIT for 12,900….then spend another 12,900..for the alarm system and assault rifles your going to need to get in it.
Reply · 52 · Like· April 3 at 9:51am

Naisha Feliciano-Brown
only ninja’s need apply
Reply · 14 · Like· April 3 at 10:03am

Bhaktavar Thakur
Also along with the Home Loan the buyer should make all final arrangements with a Funeral Home ! Actually 12,900 should buy 3 blocks in that crime infested dump.
Reply · 12 · Like· April 3 at 12:14pm

Jack Gaither
Goes to show how over-priced cars are.
Reply · 21 · Like· April 3 at 10:38am

Bhaktavar Thakur
But shouldn’t the homes in Detroit be free? Who would want to go and live in that dump?
Reply · 13 · Like· April 3 at 9:40am

Frederick Baum · Lake Worth Community High School
How much is that in dime bags?
Reply · 14 · Like· April 3 at 11:59am

http://realestate.yahoo.com/promo/homes-for-the-price-of-a-car.html - 56k -

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AM Linkage: Very Rich People Are Still Buying Very Expensive Property; Defining Dogpatch's Boundaries; What's Up With 529 Buchanan; More!

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PM Linkage: Roosevelt School Squatters; Understanding Peralta Avenue; Bay Bridge Drama; More!

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Accelerating Mobile with Akamai

At Trulia, mobile is an extremely important channel for us and we now see more than 30 percent of our traffic being driven through mobile applications. In our industry, mobile performance is critical because buyers and renters are always on-the-go. That’s why we use Akamai to bring a better quality experience to our mobile users across our mobile site and mobile apps

Here’s our VP of Product, Lee Clancy, talking about Trulia’s relationship with Akamai:

Popularity: 1% [?]

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On the Market: From Luxe to Money Pit, Five of America's Best Starter Homes

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Tuesday, March 27, 2012, by Rob Bear

Here now, a look at some of the best starter homes around the country, taking into consideration relatively affordable properties in neighborhoods appropriate for young families. These picks come from some of the country's most populous urban areas—so don't expect much space to spread out—but all benefit from the cultural bounties at their doorstep. In some cases the perennial love for luxury won out; in others, get ready for a renovation!

South Boston used to be famous as the headquarters for Whitey Bulger and the rest of the Irish mob. Today, it's a thriving and thoroughly gentrified district where first time buyers just might find a deal in the otherwise pricey Boston real estate market. This third-floor penthouse, with two bedrooms and one bath, is one of the most luxurious units on the market in "Southie" and it still comes in at $580K. Panoramic views of Dorchester Bay and the islands can be enjoyed from the private roof deck, a covered porch, and the unit's numerous windows. Additional luxuries include built-in speakers, central air conditioning, a jacuzzi tub, and an updated kitchen with stainless appliances. Short on space at 1,165 square feet, this well-kept condo makes up for it with the finishes and the view.

? Shopping for a home in famously expensive NYC on a first time buyer's budget is no mean feat, but it's certainly possible to find something other than a shoebox if buyers look outside of Manhattan. The Brooklyn neighborhoods of Park Slope, Cobble Hill, and Carroll Gardens have all emerged as cheaper alternatives. That's not to say cheap, as a roster of excellent restaurants, bars, and retail keep these neighborhoods pricey. In the southern section of Carroll Gardens, close to Red Hook and, unfortunately, the elevated expressway, this two-bedroom loft penthouse offers the feel of Tribeca for $775K. Highlights include the high ceilings, expansive private roof deck, open kitchen with marble counters, and a coveted in-unit washer/dryer.

? Compared to the expensive Northeast, there are considerable deals to be found in some of Chicago's lesser-known neighborhoods. Considered an isolated pocket of prosperity on the city's otherwise depressed South Side, Hyde Park is sandwiched between the lake, Washington Park, and the campus of the University of Chicago. The students give the area a youthy vibe and provide a source of potential rental income should the buyers' circumstances change. This six-bedroom townhouse, built in 1895, is rife with historical detail, but gravely in need of some TLC. A buyer willing to rehab the place could get quite the deal considering the interior houses six bedrooms and the place is asking just $229K. Perhaps first time buyers would do well to steer clear of such a daunting challenge, but, then again, they just don't make inlaid floors like that anymore.

? Make it to San Francisco and you'll find real estate prices that rival New York for big price and small space. Still, the City by the Bay has some deals, even in the traditionally upper class neighborhood of Nob Hill—sometimes derisively referred to as "Snob Hill." While this two-bedroom, 1,100-square-foot condo can't rival the billionaires' abodes up on Broadway, the unit is well finished and sits in a charming, nine-unit Spanish-style building that was completed in 1913. Built-ins and bay windows abound, and while the listing photo of a wood paneled room illuminated by a bare bulb gives us pause, the rest of the place is immaculately presented considering the $599K price tag.

? Down in sunny Los Angeles, home to famously expensive areas like Beverly Hills, finding an affordable first home requires venturing off the beaten (or televised) path. The gentrifying neighborhood of Highland Park, in the northeastern section of the city, has experienced a wave of renovations lately, most in an accessible price range. Listed for $380K, this revamped bungalow might be small, with just two beds and a single bathroom in 843 square feet, but it certainly beckons with outdoor space ripe for entertaining and a garage that could be converted into extra interior space. For those that find this too small, a third bedroom in this neighborhood runs roughly $75K more.

· 1774 Columbia Road UNIT 3 [Zillow]
· 529 Court Street #PH4 [Streeteasy]
· 1314 E 52nd St [Zillow]
· 1236 Washington St [Zillow]
· 5611 Meridian [Zillow]

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