KeNo's Housing and Economic Portal: Wednesday February 16 Housing and Economic stories

Tuesday, February 15, 2011

Wednesday February 16 Housing and Economic stories

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TOP STORIES:

Judge temporarily delays loan document shredding - (www.reuters.com) A U.S. bankruptcy judge temporarily blocked bankrupt subprime lender Mortgage Lenders Network USA from destroying 18,000 boxes of original loan files after federal prosecutors said documents in them may be needed as evidence in more than 50 criminal investigations. In a hearing Monday before U.S. Bankruptcy Judge Peter J. Walsh, a representative from the Delaware U.S. Attorneys' Office said she did not know details of any of the investigations. But she said prosecutors and FBI offices around the country had requested time to access to the boxes and assess whether the contents contain needed evidence before the judge permits any destruction. Walsh granted a 30-day delay, and said he would hold another hearing on Mortgage Lenders' request.

Sacramento houses selling for the price of a car - (blogs.sacbee.com) The housing bust has made it possible to buy a home in Sacramento -- albeit a shabby, small, old one -- for roughly the price of a new Toyota Prius. Last year, several dozen homes sold in Sacramento for less than $30,000. Most of these homes sit within poverty-stricken neighborhoods; will need work to be habitable; or will be torn down for eventual new construction. Here's a look at four Sacramento homes that sold for less than $27,000 last year. Would you rather have one of these or a new car? Note: May take up to a minute for panoramas below to load; click and drag panorama to see surrounding neighborhood.

Bailout List: Banks, Car Companies, and More - (www.bailout.propublica.org) We're tracking where taxpayer money has gone in the ongoing bailout of the financial system. Our database accounts for both the broader $700 billion bill and the separate bailout of Fannie Mae and Freddie Mac (go here for the Federal Reserve’s emergency loans to banks). Below is the list of companies to which Treasury has committed money. "Revenue to Government" shows the amount that has been paid to the Treasury Department through interest, dividends, fees or the repurchase of stock warrants. Click on each recipient for more detail on the transactions.

Fannie and Freddie Leave Legal Bills to the Taxpayers - (www.nytimes.com) Since the government took over Fannie Mae and Freddie Mac, taxpayers have spent more than $160 million defending the mortgage finance companies and their former top executives in civil lawsuits accusing them of fraud. The cost was a closely guarded secret until last week, when the companies and their regulator produced an accounting at the request of Congress. The bulk of those expenditures — $132 million — went to defend Fannie Mae and its officials in various securities suits and government investigations into accounting irregularities that occurred years before the subprime lending crisis erupted. The legal payments show no sign of abating. Documents reviewed by The New York Times indicate that taxpayers have paid $24.2 million to law firms defending three of Fannie’s former top executives: Franklin D. Raines, its former chief executive; Timothy Howard, its former chief financial officer; and Leanne Spencer, the former controller.

Shadow inventory threatens housing recovery - (money.cnn.com) There is a growing glut of foreclosed homes threatening to hit the market over the next couple of years, potentially delaying any recovery. There were 1.7 million homes either owned by the bank or in some stage of foreclosure at the end of the third quarter of 2010, according to a recent report by Standard & Poor's. It would take 44 months, at the current rate of sales, to sell them off -- a 25% increase from the beginning of 2010. (S&P does not count home loans backed by Fannie Mae and Freddie Mac.) This so-called "shadow inventory" may depress home values and delay the housing market recovery. "The problem is you have all these properties coming down the pipeline that are nearly certain to hit the market. That's going to be a negative for the supply-demand equation," said Diane Westerback, Managing Director for S&P and an author of the report.