Friday August 29 Housing and Economic stories

Top Stories:

Is Your Bank About to Implode? The FDIC is Hinting, YES! - (www.loanworkout.org) The lender carnage, death and destruction litter the home page of Aaron Krowne’s Mortgage Lender Implode-O-Meter like the beach at Normandy on D-Day. The infamous list has grown from September 2006 when Aaron started the website with approximately 10 failed lenders to a whopping 276 major U.S. failed lending operations today. Wall Street Journal - Exhibit A is the revelation by Federal Deposit Insurance Corp. Chairman Sheila Bair that her $45 billion deposit insurance fund may not be adequate to pay off account holders as banks continue to fail. This has been inevitable for months, but neither Ms. Bair nor Treasury wanted to admit the truth in public for obvious political reasons. Yet now we learn that the insurance fund shrank by $7.6 billion in the second quarter, bringing its reserve ratio well below the minimum required by Congress.

FDIC may borrow money from Treasury - (news.yahoo.com) Federal Deposit Insurance Corp (FDIC) might have to borrow money from the Treasury Department to see it through an expected wave of bank failures, the Wall Street Journal reported. The borrowing could be needed to cover short-term cash-flow pressures caused by reimbursing depositors immediately after the failure of a bank, the paper said. The borrowed money would be repaid once the assets of that failed bank are sold. "I would not rule out the possibility that at some point we may need to tap into (short-term) lines of credit with the Treasury for working capital, not to cover our losses," Chairman Sheila Bair said in an interview with the paper

FDIC says IndyMac failure costlier than expected - (www.reuters.com) WASHINGTON, Aug 26 (Reuters) - A U.S. banking regulator said the failure of mortgage lender IndyMac Bancorp Inc IDMC.PK will deliver a bigger blow to its insured deposit fund than originally expected. The Federal Deposit Insurance Corp said on Tuesday it now expects IndyMac's failure in July to cost its insurance fund $8.9 billion, compared with the previous expected range of $4 billion to $8 billion. The FDIC also said during its quarterly bank briefing that it will soon start widely marketing IndyMac's assets.

Fannie/Freddie’s Survival Spells Big Trouble for Housing Market - (www.ml-implode.com) - If these two companies survive as private, beware. House prices will continue to fall, defaults, foreclosures and inventory will continue to surge, which causes house prices to fall and defaults, foreclosures and inventory to surge……

Ron Paul throws the Fed and the GOP under the bus on CNN - (housingpanic.blogspot.com) - Here's Ron Paul speaking the truth on the Fed, the two parties, and Russia/Georgia among other things. Truth you won't hear from Dems or Reps. Truth you especially won't hear from McCain. Damn, I wish he'd run as an independent, just to get into the debates. Ron Paul has as much to do with the current GOP as Santa Claus has to do with Islam. I bet he's not even let in the door of the GOP convention next week.

Man Simulated Robbery to Pay Mortgage - (www.thetruthaboutmortgage.com) - It seems things are becoming increasingly desperate as more and more borrowers grapple with unaffordable mortgage payments.
The latest involves a Long Island truck driver behind on his mortgage who executed an elaborate fake robbery in order to pocket the money and make good on his commitments, CBS 2 reported.

From boom town to ghost town in Spain - (news.bbc.co.uk) Developers are desperate to get people to move into the apartments and are slashing prices. Monica Torremocha Orocco is one of few who is interested in moving into the area. She says that rents there have fallen by more than 400 euros in a month. "They've cut the prices of flats a lot because people don't have any money. You could say we are in poverty here," Ms Orocco adds.
Sesena is just the tip of the iceberg. Down on Spain's southern coastline, the signs of overdevelopment are plain to see. Cranes and apartment blocks under construction dominate the horizon. In many tourist communities on the Costa Del Sol, Britons and Spaniards have scrambled to snap up their dream holiday homes. But today many of the flats remain empty and developments unfinished. Developers have gone bust and people who have put down deposits have struggled to get their money back.

What happens when the downturn goes upmarket? - (www.newyorker.com) In the town of Greenwich, Connecticut, it is illegal for a real-estate agent to post a “For Sale” sign in front of a house or a tract of land. For many years, such an ordinance was unnecessary; those who needed to know knew, and those who did not did not. But in the nineteen-eighties, with the arrival in town of national real-estate firms, “For Sale” signs started sprouting up, cluttering the roadways with middleman names and numbers. Many residents found the signs unsightly and crass; some home-town agents, keen to preserve the relationship between their local knowledge and their market share, agreed. The absence of such signage has been a blessing in recent months, as the town’s brokers and homeowners have sought to maintain, in the face of mounting evidence to the contrary, that they are immune, more or less, to the ravages of the credit crisis. On its own, the subprime-mortgage fiasco would not much affect home prices in Greenwich, a place more prime than sub, but it has reverberated through the financial system, costing many residents, actual or aspiring, their jobs or credit lines. If brokers’ signs were allowed, the town might look, from the right distance, like a giant and very expensive tag sale, and the sudden conspicuousness of so much supply, in a time of slackening demand, might shatter a range of illusions best epitomized by the risible listing prices. Generally, people are almost as protective of their property values as they are of their children, and will be as doting in their appraisals of both.

Prime Foreclosure Starts Surge Past Subprime in July - (www.ml-implode.com) - There can be no remaining doubt that the nation’s mortgage crisis has become a problem for prime credit borrowers: data released by the HOPE NOW coalition on Wednesday finds that prime foreclosure starts have finally moved ahead of subprime foreclosure starts, for the first time since the industry coalition began collecting data in July of last year — and likely for the first time in a much longer timeframe, as well, sources suggested to HousingWire Thursday afternoon.


Other Stories:

Lehman Brothers Announces Layoffs - (www.ml-implode.com) - Lehman Brothers, the ailing Wall Street bank, plans to lay off as many as 1,500 employees, or nearly 6 percent of its work force...
House prices plummet to a new record - (money.cnn.com)
Housing market still in basement - (www.denverpost.com)
FDIC Head Expects Banking Crisis to Worsen - (www.nytimes.com)
IndyMac bailout worse than worst-case scenario - (latimesblogs.latimes.com)
Fear of Defaults After a Flurry of Apartment House Sales - (www.nytimes.com)
Small Banks, Tight Credit - (www.washingtonpost.com)
Fed Officials Agree Next Move Will Be Rate Increase - (www.bloomberg.com)
Housing: From Speculative Investment to Low-Cost Shelter - (Charles Hugh Smith at www.oftwominds.com)

Housing market has a green lining - (marketplace.publicradio.org)
The Great Gold, Silver Conspiracy Explained - (Mish at globaleconomicanalysis.blogspot.com)
Wachovia cutting home-equity credit lines - (www.ml-implode.com) - "Wachovia is the latest of the nation's big banks to close or reduce the size of home-equity lines of credit in response to the ...
Woodside Homes Insolvent, BK Real - (www.ml-implode.com) - Court filings that have come to light in the last 24 hours have led us to re-affirm our "implode" listing for major homebuilder ...
Former HUD Secretary Cisneros Calls for New Stimulus Package With Strong Housing Measures - (www.ml-implode.com) - Henry Cisneros, former secretary of the US Department of Housing and Urban Development (HUD), declared today that the housing in...
Pasquinelli Homes: Ailing Coverage Initiated - (www.ml-implode.com) - We've been hearing word that this Top 25 builder is being foreclosed on all over the place, and have received public confirmatio...
The FHA Whistleblower: FHA Raises and Lowers Mortgage Insurance Premiums with RBP Moratorium - (www.ml-implode.com)
BREAKING NEWS: Fannie Mae Shares Halted; New CFO & CRO To Be Announced - (www.ml-implode.com)
Graphs - Not Laughs - From the FDIC Report - (www.ml-implode.com)
Update: BankUnited "May Be Unable To Survive" - (www.ml-implode.com)
Fannie Rises as Merrill Calls Bailout Talk Premature - (www.ml-implode.com)
Stifel cuts BankUnited to sell on capital concerns - (www.ml-implode.com)
Fed's Lockhart Says House Prices May Fall Another 15% - (www.ml-implode.com)
Call It Wishful Thinking - (www.ml-implode.com)
Mortgage Applications Increase — or Did They? - (www.ml-implode.com)

Fire Sale: California home prices now 40% below year-ago levels - (www.latimes.com)
US shoppers turn away from credit - (www.ft.com)
Health care, not boomers, will bust us - (money.cnn.com)
Orders for Durable Goods in U.S. Unexpectedly Gain - (www.bloomberg.com)
Fed Minutes Show Split on Inflation Risk - (online.wsj.com)
3 Executives Are Leaving Fannie Mae - (www.nytimes.com)
Southwest Airlines to drop nearly 200 flights - (www.chron.com)
Microsoft browser threatens Google's ad model - (www.ft.com)
End of down payment program spurs builders - (www.chicagotribune.com)
Home Depot and Lowe's Cut Back Sales Promotions - (online.wsj.com)
Wind Energy Bumps Into Power Grid’s Limits - (www.nytimes.com)
ABS markets nervous over ECB collateral crackdown - (www.ft.com)
As Food Prices Soar, Brazil and Argentina React in Opposite Ways - (www.nytimes.com)
Inflation fears steer ECB away from rate cuts - (www.ft.com)

UK homebuilder Taylor Wimpey posts huge 1H loss - (www.chron.com)
New fears over quality of Northern Rock mortgages - (www.telegraph.co.uk)
Japan's Inflation Probably Exceeded 2% for First Time in Decade - (www.bloomberg.com)
Weber Says Higher ECB Rates May Be Needed When Economy Recovers - (www.bloomberg.com)
South African Inflation Surged to Record 13% in July - (www.bloomberg.com)
Power-Sector Emissions Of China To Top U.S. - (www.washingtonpost.com)
Moody's Reviewing All 2006, 2007 Jumbo Mortgage Bonds - (www.bloomberg.com)
Corporate America taking longer to collect: study - (www.reuters.com)
New Credit Hurdle Looms for Banks - (online.wsj.com)
FDIC may borrow money from Treasury: report - (www.reuters.com)
U.S. Moves Toward International Accounting Rules - (www.nytimes.com)
One in Four Junk Issues in Distress - (www.cfo.com)
Fed closes window on preferred ARS - (www.ft.com)
FHA Raises Its Premiums to Insure Repayment of Mortgages - (online.wsj.com)