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Buyers of Huge Manhattan Complex Face Default Risk - (www.nytimes.com) Three years ago, the sale of the 110 red-brick apartment buildings at Stuyvesant Town and Peter Cooper Village in Manhattan represented the most expensive American real estate deal in history. Now the buyers are running out of time and money. Jerry I. and Rob Speyer and their partner, BlackRock Realty, who paid $5.4 billion for the quiet middle-class redoubt near the East River, have seen the property lose more than half of its value, and the income from rent — down 25 percent from its peak — covers less than half of their debt payments. Real estate analysts say they expect that by December, the partnership will run out of an additional $890 million set aside for apartment renovations, landscaping and interest payments, and that the owners are at “high risk” of default on $4.4 billion in loans. Two real estate executives who have been briefed on the finances insist the owners can hold out, but only until February. On Thursday, the partnership will go before the Court of Appeals in Albany to try to overturn a lower court decision that could force them to pay hundreds of millions of dollars in rent rebates to thousands of tenants. Regardless of that outcome, Stuyvesant Town and Peter Cooper Village are in trouble. City officials have been monitoring the looming crisis and how it might affect a complex that has served as an oasis of affordability in Manhattan for middle-class New Yorkers. Some 6,875 of the 11,227 apartments at the complexes are rent regulated. “We are absolutely keeping an eye on it,” said Rafael E. Cestero, the city’s housing commissioner. “It’s an iconic complex.” Referring to the people who were part of the original real estate transaction, he went on, “Those folks are going to take their lumps. We are looking at how we can ensure that the rent-stabilized units and the families that live there and families that could live there in the future could be insulated from the unwinding of this deal.” Even with the partnership’s financial problems pointing to a possible default, tenants would not be likely to face high rent increases or eviction, but they may face a period of deferred maintenance and disinvestment.
As owners leave foreclosed houses, squatters move in - (www.mcclatchydc.com) The first time Carey Mitchell saw her, Tammy was standing at an intersection near the 16th Street off ramp from Highway 99. Her clothes looked dirty, her face tired. She held a cardboard sign asking for spare change. Without thinking, Mitchell pulled her car over. In an instant, Tammy was at her window. Mitchell rolled it down. “Do you need a place to sleep tonight?” she remembers asking. On a scrap of paper, Mitchell quickly sketched a map to a house a few miles away. It was Mitchell’s house, but she didn’t want it anymore. She'd decided to stop paying the home’s mortgage. As she walked away, she handed the keys to Tammy, who stayed for three months before she was formally evicted this May. The nights Tammy spent there were the first she’d slept inside in more than three years. When homes fall into foreclosure, former owners who won’t leave on their own are kicked out. The homes stand empty until banks sell to new owners — at least that’s the way it usually worked before the foreclosure crisis. But in its wake, a lot has changed. These days, it’s not uncommon to find foreclosed homes occupied by squatters, including homeless people, evicted former owners who move back illegally, and opportunists looking to live rent-free for as long as they’re able. Some are invited by people leaving the homes behind. Others aren’t. Along with loan modification firms and a host of new industries that have sprung up around the mess, such as foreclosure cleanup services, foreclosure squatters are among the few beneficiaries of the bust. Emboldened by the sheer number of vacant homes and the months that many of them go unsold, the squatters have become a nationwide phenomenon. And in Merced, where the foreclosure rate remains higher than anywhere else in California, they seem to be a growing population. In Tammy’s case, the foreclosure was an older one-story on Sonora Avenue. Mitchell, a real estate agent from Redwood City, had happily scooped it up as an investment property at the height of the housing boom in 2005. But by the time she met Tammy this spring, she was angry. She owed way more on the house than it was worth, and she claims the former owner, who financed the deal himself, had concealed evidence of roof damage. Mitchell was in town to try one last time to get him to take the house back and undo it all. He refused. So she stocked the fridge, dropped off a few towels and some dishes, then transferred the utilities to Tammy and gave her the keys. “I said, ‘I’m done,’” Mitchell recently explained. “I wrote Tammy a note saying she had a right to be there, and then I walked out the door.”
Tough times for job seekers - (money.cnn.com) The job market is showing signs of improvement, according to the latest economic reports. But for those out of work and pounding the pavement, there are few signs of a turnaround. After peaking in January, the pace of job losses has slowed dramatically, according to the Labor Department. Employerscut 216,000 jobs from their payrolls in August -- 22% fewer than the previous month. But even though job cuts have abated, hiring is close to a standstill, as most employers are still hesitant to add workers. The number of new hires remains near an all-time low, according to the Bureau of Labor Statistics. And job hunters aren't seeing much improvement either. "I've applied to over 80 positions and only gotten one callback from a company that 'wasn't hiring but was interested in me for future openings,'" said Shalon Brown, 27, who was laid off in December and has struggled to find something else in her field of landscape architecture. "I'd be willing to take any job that pays at least $30,000 and offers health insurance right now." But that might be harder than it sounds. One problem is that companies are trending away from filling full-time positions with benefits. For those businesses in need of extra help, employers are much more likely to bring on temporary workers to meet demand, explained Janette Marx, senior vice president of Ajilon Professional Staffing. "They are not quite sure of hiring full time yet," Marx said. In fact, almost 70% of U.S. companies surveyed expect no change in their fourth-quarter hiring plans, according to a recent study by employment services company Manpower Inc. Jo Prabhu, who runs placement firm 1-800-Jobquest in Long Beach, Calif., has no intention of bringing on any full-time workers in the year ahead. "We will be taking advantage of the new and acceptable methods of hiring, and will only be hiring independent consultants or contractors for 2010 on an as-needed basis." Prabhu also says the other companies she works with share her sentiment. "The old standards of hiring and retention have given way to the new concept of jobbing and outsourcing, and employers are seeking a greater percentage of 'at will' services without having to finance and support medical, retirement and other benefits." And that leaves many unemployed workers out of luck and still out of a job. Rebecca Natale, 42, is hopeful there will be more employment opportunities going forward, but is realistic that her situation might not improve until next year. Natale left her position as a human resources manager in May planning to start her own business or find another position in her industry. In the last four months, she says she has only received calls for commission-based sales jobs. "I applied for summer help to stay busy and nothing," she said. "I figure it will be the same response if I apply for upcoming seasonal positions." Natale views her job prospects as being "pretty nonexistent in my field until the middle to the end of next year." Some experts agree with that outlook. Many recruiters expect hiring to pick up again in 2010, albeit at a very slow pace. "I do believe we will start to create jobs again," although likely "after the first of the year," said Bob Damon, the president of North America for recruiting firm Korn/Ferry. But Shalon Brown is less optimistic. Even with lowered expectations, "I've got no job prospects," she said. "I'm expecting a long, cold winter ahead."
58 and no retirement savings - (money.cnn.com) Question: I'm 58 and have never opened any kind of a retirement account. Is it too late for me to do so now, or should I hope that Social Security will be there when I retire in a few years? --Vincent I., Denver, Colorado. Answer: Although the Social Security system definitely faces challenges, the program isn't just going to disappear. At some point, the government will have to shore up the program, which could include moves such as increasing payroll taxes, raising the retirement age for younger workers and dialing back benefits in some way. But, while there are no guarantees, I think the chances are remote that people in or nearing retirement will see a significant cut in benefits. So I don't think the question you should be focusing on is whether Social Security will be there, but how satisfying retirement will be if Social Security is your only source of income. You can judge that for yourself by going to Social Security's Retirement Estimator, which will show you the monthly benefit you're now projected to receive based on your work history. When you see that figure, I think you'll agree that while you might be able to live on Social Security alone, you won't want to unless you don't mind a real no-frills lifestyle. Which brings me back to the first part of your question: Is it too late to open a retirement account now? My answer is emphatically no. You're always better off doing something than doing nothing. That doesn't mean you can put yourself in the same position you would have been in had you saved and planned for retirement your entire career. That's not realistic.
US Foreclosure Filings Top 300,000 for 6th Straight Month - (www.bloomberg.com) Foreclosure filings in the U.S. exceeded 300,000 for the sixth straight month as job losses that boosted the unemployment rate to a 26-year high left many homeowners unable to keep up with their mortgage payments. A total of 358,471 properties received a default or auction notice or were seized last month, according to data provider RealtyTrac Inc. That’s up 18 percent from a year earlier, and down 0.5 percent from July, the Irvine, California-based company said in a statement. One in 357 households received a filing. Foreclosures rose from a year earlier as companies cut payrolls by 216,000 workers last month, boosting the U.S. jobless rate to 9.7 percent, according to Labor Department data released last week. The rise in unemployment is having a bigger impact than an effort by the U.S. government and banks to modify mortgages and prevent foreclosures, said Morris A. Davis, an assistant real-estate professor at the Wisconsin School of Business. “The foreclosure numbers are largely unemployment related,” Davis, a former Federal Reserve Board economist, said in an interview. “As long as 15 million Americans are unemployed, record foreclosures will continue.” Foreclosures aren’t abating even as demand is returning to the U.S. housing market after a three-year slump. The number of contracts to buy previously owned homes rose more than forecast in July and increased for a record sixth consecutive month, while mortgage buyer Freddie Mac said the average price rose 1.7 percent in the second quarter. Nevada Leads: Nevada had the highest foreclosure rate in August, with one in every 62 households receiving a filing, even with an 8.4 percent decrease in foreclosures from July, RealtyTrac said. August filings were up 53 percent from a year earlier, with 17,902 Nevada properties receiving a foreclosure filing.
Foreclosures remain at near-record pace in CA central valley - (www.centralvalleybusinesstimes.com) Foreclosure filings -- default notices, scheduled auctions and bank repossessions -- were reported on 358,471 U.S. properties in August, a decrease of less than 1 percent from July but still an increase of nearly 18 percent from August 2008, according to a report Thursday from RealtyTrac Inc., an Irvine-based foreclosure information company. The report also shows one in every 357 U.S. housing units received a foreclosure filing in August. Areas of the Central Valley had foreclosure rates far worse. Stockton posted the nation's second highest metro foreclosure rate -- one in every 74 housing units received a foreclosure filing -- followed by Merced at No. 3 (one in 78); Modesto at No. 6 (one in 84); and Bakersfield at No. 10 (one in 94). Six California metro areas documented foreclosure rates among the top 10 in August. The others were Riverside-San Bernardino-Ontario at No. 4 (one in 80) and Vallejo-Fairfield at No. 5 (one in 82). The nation’s highest foreclosure pace was in Las Vegas, Nev. Foreclosure filings were reported on 14,940 Las Vegas properties in August, one in every 53 housing units -- more than 6.7 times the national average and the highest foreclosure rate among metro areas with a population of at least 200,000. The city's foreclosure activity was down 11 percent from the previous month but still up 48 percent from August 2008. With one in every 86 housing units receiving a foreclosure filing in August, the Reno-Sparks metro area joined Las Vegas in the top 10, posting the seventh highest metro foreclosure rate. Two Florida metro areas documented foreclosure rates among the top 10: Orlando-Kissimmee at No. 8 with one in every 87 housing units receiving a foreclosure filing, and Cape Coral-Fort Myers at No. 9 with one in every 88 housing units receiving a foreclosure filing. "The August report demonstrates that there is still an ample supply of properties filling the foreclosure pipeline even while the outflow of bank-owned REO properties onto the resale market is being more carefully regulated," says James Saccacio, chief executive officer of RealtyTrac. "After hitting a high for the year in July, REOs dropped 13 percent in August, but we also saw a record high number of properties either entering default or being scheduled for a public foreclosure auction for the first time."
OTHER STORIES:
Obama's other fight: Fixing bank rules - (money.cnn.com)
China pushes back after U.S. sanction - (money.cnn.com)
When Wall Street nearly collapsed - (money.cnn.com)
Bailouts: The big windup - (money.cnn.com)
Foul play isn't suspected in O.C. financier's death - (www.nytimes.com) Foul play is not suspected in the death of indicted financier Danny Pang of Newport Beach, the Orange County coroner's office said Sunday.
Will U.S. learn its healthcare reform lesson from California? - (www.nytimes.com) The difference between a government program that works and one that fails spectacularly can be razor thin. A few words here, a loophole there, and you...
Grupo Televisa CEO Emilio Azcarraga Jean has a life like a telenovela - (www.nytimes.com) Practically since the day he was born, in 1968, Emilio Azcarraga Jean has owned one of the most famous names in Mexico.
224-story skyscraper would be high point for architect - (www.nytimes.com) A Santa Monica architect known for his high-rise designs is working on what may be the ultimate "spec" building -- a 224-story skyscraper with green...
Obama tries to coax the middle class into saving for college - (www.nytimes.com) Dismal college savings statistics among middle-income families have the Obama administration pushing for a series of changes to so-called 529 plans,...
U.S. sweetens tax credits for higher education expenses - (www.nytimes.com) Parents: Save those education receipts.
25 Best Places to Retire - (money.cnn.com)
Mortgage problems are walloping Americans' credit scores - (www.nytimes.com)
8 couples, 8 great retirement spots - (money.cnn.com)
Insiders sell like there's no tomorrow - (money.cnn.com)
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