Thursday, October 25, 2012

Friday October 26 Housing and Economic stories


TOP STORIES:

Spain Foreclosures Spread to Once Wealthy: Mortgages - (www.bloomberg.com) Home foreclosures in Spain, which disproportionately affected lower-income immigrants after the real estate bubble burst, are spreading to formerly well-to-do families and businessmen as they run out of ways to pay mortgages in a deepening recession. Spanish business people, upper middle class families and their loan guarantors, typically parents of first-time buyers, now account for 60 percent of foreclosures in Madrid, according to AFES, an association that advises homeowners facing repossession. Three years ago, 80 percent of foreclosures were on the homes of immigrants, usually the first to lose jobs and fall behind on loan payments in a souring economy. They now comprise 40 percent of the total, according to AFES. “Repossessions are encroaching further into the city centers, like an overflowing river,” said Emilio Miravet, head of real estate finance at the Spanish property unit of advisory and investment firm Catella AB.

Germany faces image problem in Greece, thanks to its growing clout - (www.washingtonpost.com) Amid a massive security operation that locked down much of this ancient capital, German Chancellor Angela Merkel on Tuesday staged a gutsy foray into the heart of Europe’s debt crisis. If her protest-plagued trip shined a spotlight on struggling Greece, it also highlighted a problem for a resurgent Germany: its image. As Europe’s largest and healthiest economy, Germany has risen to the height of its post-World War II power over the past three years, effectively serving as the region’s paymaster through a series of debt-crisis bailouts. As Germany has led demands for harsh cuts in exchange for cash, Merkel has emerged as Europe’s symbol of austerity. A country keenly attuned to any perception of itself as aggressor, Germany witnessed the price of its rising clout Tuesday as 7,000 police officers sought to contain tens of thousands of chanting demonstrators who at least partly blame Berlin for Greece’s economic nightmare of soaring unemployment and cascading bankruptcies.

Rajoy’s Deepening Budget Black Hole Outpaces Spain’s Cuts - (www.bloomberg.com) The black hole in Spain’s budget has expanded faster than Prime Minister Mariano Rajoy’s attempt to shrink it, portending the same unrest roiling Greece. The harshest austerity since the return to democracy in 1978 has failed to contain the deficit as the economy sinks deeper into recession. The shortfall increased in the first half of the year, as it did in the previous 12 months. Even after a sales-tax increase and health-care cuts kick in this quarter, it may still approach last year’s 9.4 percent of gross domestic product, said Ignacio Conde-Ruiz, an economist at the independent Applied Economic Research Foundation in Madrid. The fiscal and political consequences of demanding austerity in a shrinking economy highlight the dilemma facing Rajoy. To trigger a European financial lifeline, he may have to impose yet more cuts, repeating the pattern seen in Greece, Portugal and Ireland.

Greece's debt nightmare just got worse - (www.jasmts.com) German Chancellor Angela Merkel offered words of support for her counterpart, Greek Prime Minister Antonis Samaras in Athens on Tuesday, even as new data showed Greece's debt situation was worsening and as two former Greek government ministers told CNBC, international lenders would have to restructure its debts yet again. "I think that recently the pace of reform has picked up considerably," Merkel said on her first visit to Greece since the debt crisis erupted here in 2009. Seven thousand police officers and rooftop snipers and commandos were in place to provide protection for the German leader. Thousands of protestors streamed into Syntagma square despite a ban on protests and a security lock down. TV pictures showed protestors dressed as Nazi soldiers holding Nazi flags, while other protestors threw rocks at police who fired tear gas. 

Oakland aims to prevent foreclosures - (www.sfgate.com)  Like other homeowners in his East Oakland neighborhood, Manuel De Paz is underwater on his house and behind on his payments. His attempts to get a loan modification from his bank were frustrating and fruitless, he said. De Paz, 45, who provides social services to immigrants and refugees at a Berkeley church, hopes that a new Oakland initiative to prevent foreclosures will help him persuade the bank to make his mortgage more affordable. "I think we needed this a long time ago and very badly," he said. Oakland, one of the Bay Area cities hardest hit by the foreclosure crisis, plans to roll out details Tuesday of its "Comprehensive Foreclosure Prevention and Mitigation Plan," which takes a multipronged approach to assist struggling homeowners and tenants in foreclosed homes.




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