Thursday July 3 Housing and Economic stories

Top Stories:

Before and After pictures and price for the same house that looks like it has been completely trashed:
· Menlo Park House BEFORE in 2005 - (patrick.net) Sold for $675K. House looks cute and well-kempt
· Menlo Park House AFTER in 2008 - (patrick.net) Now selling for $365K. House looks trashed and grass is long.

Modesto, Patterson houses in peril for late fees - (www.modbee.com) The cities of Modesto, Patterson implemented special property tax assessments that are causing 100s of homeowners to go into foreclosure. Hundreds of homeowners in Modesto and Patterson are late paying special property taxes, forcing the cities to begin a speedy foreclosure process for houses in newer subdivisions. The cities went through the same procedures last year when clusters of homeowners didn't pay Mello-Roos taxes they owe for growth-related effects such as roads and parks. Neither city has a choice in turning to foreclosures. Bonds tied to the taxes require them to foreclose on the homes when 5 percent of the total amount owed becomes delinquent. Delinquency rates in both cities are higher than 8 percent this year. Normally people have 18 months to catch up on Mello-Roos taxes. But because the delinquency is higher this year, the fees are due immediately and the foreclosure process quickens. People who don't have to pay Mello-Roos taxes usually have five years to break even on their county property taxes. April property taxes officially become delinquent today. More than a fifth of what Patterson residents owe in Mello-Roos charges hasn't been paid, City Manager Cleve Morris said. That has cost the city about $1 million this year.

Fairfax County, VA Socializing House Ownership - (www.washingtonpost.com) Let’s see how long it takes for Fairfax County to go bankrupt!! Noble goal, but these politicians are idiots. Maybe the same people losing their homes to foreclosure will get them back from Fairfax County again at a reduced price and subsidized by the taxpayers of Fairfax County. “Fairfax County approved a landmark housing program yesterday to buy foreclosed properties for middle-income families, becoming one of the first communities in the country to tackle the nation's growing mortgage crisis while also addressing the region's increasing demand for affordable housing. County leaders said the program, through which Fairfax will purchase some properties outright and help families buy others through subsidized loans, takes advantage of a unique moment when thousands of homes are entering foreclosure and available for purchase at below-market prices. The program will expand the county's stock of affordable housing and help stabilize areas where clusters of abandoned, unkempt properties in foreclosure threaten the value and vitality of surrounding neighborhoods, county officials said.”

Merrill says GM bankruptcy possible – (news.yahoo.com) - General Motors Corp (GM.N) will need to raise as much as $15 billion in cash to shore up liquidity and bankruptcy is "not impossible" if the U.S. auto market continues to slump, Merrill Lynch said. Other analysts have suggested GM, whose shares fell to a new 54-year low on Wednesday, needs to raise funds to ride out the downturn in the U.S. auto market through 2009. But Merrill's estimate of GM's financing needs is the highest yet. It also carried the most stark warning of the bankruptcy risk for the largest U.S. automaker. If conditions continue to deteriorate, we would consider other operating measures," GM spokeswoman Renee Rashid-Merem told Reuters.

IndyMac: Too Big to Fail? – (www.minyanville.com) Federal regulators may soon be forced to decide if IndyMac Bank (IMB) is too big to fail. IndyMac? Spun out of Countrywide (CFC) in the late 1980s, IndyMac is a Southern California thrift and mortgage originator specializing in loans a couple of notches above subprime. Known as “Alt-A,” these mortgages thrived during the credit boom, when verifying a borrower's income was considered due-diligence overkill. IndyMac aggressively issued these loans, along with billions in option adjustable rate mortgages, or option ARMs, to become the country’s second largest private mortgage lender. Countrywide was number one. Since the mortgage market stumbled last year, however, IndyMac's shares have plummeted. They now sit at just 70 cents per share, down from over $47 in December 2006.Thanks to Senator Chuck Schumer, the Federal Reserve may need to decide whether IndyMac’s potential demise is too great a risk for the fragile financial system to bear. According to The Wall Street Journal, Schumer sent a letter to banking regulators last week suggesting that they look more closely into the bank’s financial strength - and the potential implications of its collapse.

IndyMac reassures customers after Schumer letter - (biz.yahoo.com) - The Pasadena, Calif.-based mortgage lender said Monday that the letter, by Sen. Charles Schumer, D-N.Y., gave "the wrong impression" on several issues.
Depositors withdrew about $100 million from the bank in the wake of Schumer's letter, company spokesman Grove Nichols said in a prepared statement. The withdrawals are equivalent to one-half of 1 percent of the bank's deposits, he said. "While branch traffic is somewhat elevated this morning," Nichols said, it is "substantially lower than on Saturday." Schumer said Tuesday that he had spoken with Treasury Secretary Henry Paulson and Sheila Bair, chairman of the Federal Deposit Insurance Corp., and "I am reassured they are on top of the situation."

Here's a video of the realtwhore selling her home on eBay and Craigslist - (housingpanic.blogspot.com) – A video of the woman trying to off-load her half million dollar property. Claudio from Italy seems to be in the lead. “Everyone gets their 15 minutes... Even realtor would-be-hookers. I hadn't wanted to post, because my my gut says 'scam alert', but have at it..”

Home builder Taylor Wimpey sees shares collapse - (news.yahoo.com). Home builder Taylor Wimpey faced collapse after its shares plunged by more than half on Wednesday, having failed to secure a refinancing package to help it weather a downturn to the housing market, traders said.

Conspiracy theory? Congress Secret Session March 13, 2008 and Imminent Collapse of the US Economy - (www.dailypaul.com). I am usually not a conspiracy theorist but this one is very interesting and the question is posed to Ron Paul on the Ron Paul website. The March 13, 2008 Closed Door Session was only the 4th time in 176 years that Congress has closed its doors to the public. Word has begun leaking from the special, closed-door session of the United States House of Representatives. Not only did members discuss new surveillance provisions as was the publicly stated reason for the closed door session, they also discussed:
- the imminent collapse of the U.S. economy to occur by September 2008,
- the imminent collapse of US federal government finances by February 2009,
- the possibility of Civil War inside the USA as a result of the collapse,
- advance round-ups of "insurgent U.S. citizens" likely to move against the government,
- The detention of those rounded-up at "REX 84" camps constructed throughout the USA,
- the possibility of retaliation against members of Congress for the collapses,
- the location of "safe facilities" for members of Congress and their families to reside during expected massive civil unrest
- the necessary and unavoidable merger of the United States with Canada (for its natural resources) and with Mexico (for its cheap labor pool),
- the issuance of a new currency - THE AMERO - for all three nations as the proposed solution to the coming economic armageddon.
Members of Congress were FORBIDDEN to reveal what was discussed. Several are so furious and concerned about the future of the country, they have begun leaking info.

Fortis Bank Predicts Meltdown Of U.S. Financial Markets In Coming Weeks - (www.dft.nl ) – TRANSLATED FROM DUTCH: Fortis expects a complete collapse of the US financial markets within a few days to weeks. That explains, according to Fortis, the series of interventions of last Thursday to retrieve € 8 billion. “We have been saved just in time. The situation in the US is much worse than we thought”, says Fortis chairman Maurice Lippens. Fortis expects bankruptcies amongst 6000 American banks which have a small coverage currently. But also Citigroup, General Motors, there is starting a complete meltdown in the US”

Barclays warns of a financial storm - (www.telegraph.co.uk) - Barclays Capital has advised clients to batten down the hatches for a worldwide financial storm, warning that the US Federal Reserve has allowed the inflation genie out of the bottle and let its credibility fall "below zero". "We're in a nasty environment," said Tim Bond, the bank's chief equity strategist. "There is an inflation shock underway. This is going to be very negative for financial assets. We are going into tortoise mood and are retreating into our shell. Investors will do well if they can preserve their wealth."




Other Stories:

Fugitive hedge-fund swindler surrenders in Mass. - (news.yahoo.com) A hedge fund swindler who set off a national manhunt when he faked his suicide to avoid reporting to prison surrendered Wednesday to small-town police in Massachusetts after three weeks in which authorities suspected he was hiding out in RV parks and highway rest areas. Israel disappeared June 9 just hours before he was to report to prison to begin serving a 20-year sentence handed down in April for his role in the collapse of the Bayou hedge funds. Israel's SUV was found abandoned on a bridge over the Hudson River in suburban New York City with the words "Suicide is Painless" — the theme song for the "MASH" television show — scrawled in dust on the hood. In a separate development, federal prosecutors announced Wednesday that more than $115 million is available to pay back victims of the Bayou fraud. The money includes whatever was forfeited by Israel and his co-defendants as part of their sentences, plus interest. The total loss to investors was about $300 million.
U.N. Report Calls for Government Intervention on Global Economy - (www.washingtonpost.com)
Send Spare Keys To Protest Bailout - (www.stopthehousingbailout.com)
Vacant houses spread blight, so we need LOWER PRICES - (www.csmonitor.com)
Auto Sales Dismal At GM, Toyota, Ford, Chrysler - (Mish at globaleconomicanalysis.blogspot.com)
Angry Consumers Flood Federal Reserve Board with Complaints - (www.loanworkout.org) - Apparently the Federal Reserve has been inundated with over 8,200 consumer complaints against various banking and lending institutions for credit card abuse and predatory lending. The Fed’s inbox has been full since it invited personal comments regarding a proposed new rule to end “Unfair or Deceptive Acts or Practices.” Sarah Byrnes said, Campaign Manager of Americans for Fairness in Lending (AFFIL)
Obama Got Discount on Home Loan - (www.ml-implode.com) - Shortly after joining the U.S. Senate and while enjoying a surge in income, Barack Obama bought a $1.65 million restored Georgian mansion in an upscale Chicago neighborhood. To finance the purchase, he secured a $1.32 million loan from Northern Trust in Illinois
As Foreclosures Escalate - (www.ml-implode.com) - By the time the Senate returns next Monday from its July 4 recess, some 55,000 more homes will have entered foreclosure. And that’s hardly the full picture of the growing calamity.
Mortgage Rates Mark Time Waiting for Federal Action - (www.ml-implode.com) - "Mortgage rates continued to set record 2008 levels with long term rates moving up slightly during the week ended June 26, and s...
Small Banks' Reckoning Day Is Coming - (online.wsj.com) - Wall Street is bracing for regional and small banks to fess up to large losses from their mounting volume of soured construction loans made primarily to home builders. According to the Federal Deposit Insurance Corp., $45.4 billion of the $631.8 billion in construction loans outstanding at the end of the first quarter were delinquent. When banks announce second-quarter results in coming weeks, they are expected to report sharp increases in loans that builders can't repay. Banks are also facing intensifying pressure from federal and state regulators to deal with the problem loans on their books.
Taylor Wimpey Drops After Failing to Secure Funding - (www.ml-implode.com)
HELOC Delinquencies Rise in Q1, ABA Says - (www.ml-implode.com)

June car sales plummet for nearly all automakers - (news.yahoo.com)
At Midyear, the Economic Pain Persists - (www.nytimes.com)
As Foreclosures Escalate - (www.nytimes.com)
English house prices fall at fastest rate in 16 years - (www.telegraph.co.uk)
Across the pond, a housing mess redux - (www.housingwire.com)

Oil prices rise to record highs above $144 - (www.ap.com)
Stocks drop on profit jitters, oil record - (www.reuters.com)
Dollar Falls to Two-Month Low Against Euro on ADP Jobs Data - (www.bloomberg.com)

Consumer delinquencies up in first quarter: ABA - (www.reuters.com)
Overdue Home-Equity Credit Lines Rise Most Since 1987, ABA Says - (www.bloomberg.com)
Deepening Cycle of Job Loss Seen Lasting Into ’09 - (www.nytimes.com)
ADP Says U.S. Companies Decreased Payrolls by 79,000 - (www.bloomberg.com)
Factories feel pain as their costs rise - (www.chicagotribune.com)
Car Sales at 10-Year Low - (www.nytimes.com)
Manhattan Second-Quarter Apartment Sales Drop Most Since 1998 - (www.bloomberg.com)
Rising prices hammer seniors on fixed incomes - (www.usatoday.com)
Peak likely this summer in resetting ARM loans - (www.philly.com)
Leveraged Loan Prices Drop to April Lows on Default Concerns - (www.bloomberg.com)
Fears for US disclosure rules after CSX ruling - (www.ft.com)
Few signs of deals returning to table - (www.ft.com)
Manhattan apartment sales drop, but prices climb - (www.chicagotribune.com)
When Hedge Funds Bar the Door - (online.wsj.com)
CDO Creators Seek Redemption, and Profits, From Mortgage Market - (www.bloomberg.com)
Oil Demand Will Grow, Despite Prices, Report Says - (www.nytimes.com)

Honda, Hyundai Motor Avoid Slump as Asians Again Top U.S.-Based Automakers - (www.bloomberg.com)
Construction Loans Hurt Banks - (online.wsj.com)
Moody’s Says Workers Rated Some Securities Incorrectly - (www.nytimes.com)
IndyMac still facing nervous depositors - (www.latimes.com)
Sparks fly over rate plan by Southern California Edison - (www.latimes.com)
CIT Group exits home lending businesses - (www.chicagotribune.com)
Stagflation grips Eurozone as interest rates look set to rise - (www.telegraph.co.uk)
British Firms Hit by Weak Economy - (online.wsj.com)
Europe Producer-Price Inflation Accelerates to Record - (www.bloomberg.com)
Trichet Sees Risk of `Exploding' Inflation; May Raise Rates - (www.bloomberg.com)
Nikkei hits longest losing streak in 43 years - (www.boston.com)
Japan Stocks Fall, Sending Nikkei to Worst Streak in 43 Years - (www.bloomberg.com)
Housing slowdown starts to bite economy hard - (www.reuters.com)
Wanted: Skilled Workers for a Growing Economy in Brazil - (www.nytimes.com)

East End businesses begin accepting payment in euros - (www.newsday.com)
SUV Drivers Burned Twice: At the Pump, on the Car Lot - (www.washingtonpost.com)