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STORIES:
Menlo
Park may have to pay $400K for house it can resell for only 285K - (www.mercurynews.com) A house purchased by a couple through Menlo Park's affordable housing
program and then refinanced with loans exceeding $1 million has created a legal
nightmare for the city. The city may have to spend $400,000 to buy back the
house. And the most it can resell it for is $285,000, under the program's
rules. The city council tonight is to consider paying the sum and authorizing
City Attorney Bill McClure and City Manager Alex McIntyre to settle a lawsuit
Menlo Park filed against Theresa and Jeremy Salcedo in 2009 to retake the
two-story home at 25 Riordan Place without assuming the couple's debt. Under
Menlo Park's Below Market Rate (BMR) Housing Program, qualified buyers can get
a house at a substantially reduced price. But they cannot resell the home at
market rate, and they must obtain the city's permission to refinance. In
addition, owners are responsible for notifying lenders that the property is
part of the affordable housing program. A few months after the Salcedos bought
the home in August 2008, a former city employee sought to correct the original
BMR agreement by adding the name of a party who helped them buy the house,
McClure said. However, the employee neglected to include a legal description of
the property with the updated documents and used the wrong BMR form, McClure
said. Compounding the error, a title company neglected to note on the revised
title that the home was a BMR unit, as required. So unless the Salcedos told
the lenders, there would be no way for them to know the reduced market value of
the home.
Monte Paschi's spokesman found dead: sources - (www.reuters.com) The spokesman of Monte Paschi di Siena found dead on Wednesday was under
pressure over an investigation into alleged corruption and fraud that has
rocked the world's oldest bank, reporters who knew him said. David Rossi, born
in 1961, was found dead at the bank's Siena headquarters, lying beneath an open
window overlooking a back street outside the building, a restored 14th century
fortress. Prosecutors in Siena are investigating whether Rossi, known as a reserved
and serious professional, committed suicide, a judicial source said on
Thursday. "He was a very serious person, under pressure over a judicial
probe which had touched on him through a recent police search, even if he was
not under investigation," Andrea Greco, reporter at la Republica said on
the newspaper's website.
Firms Race to Raise Cash - (online.wsj.com) Companies are taking advantage of the stock market's record-breaking
rally to raise funds. The rush to sell shares is a sign of U.S. corporations'
desire to boost growth by investing and acquiring rivals after years spent
licking the wounds inflicted by the financial crisis. As the Dow Jones
Industrial Average climbed toward its peak, which it reached on Tuesday and
topped again on Wednesday, companies ranging from home builders to seed growers
have tapped into investors' appetite for shares. Public companies have raised
$35.1 billion in secondary offerings of stock in the U.S. since the beginning
of the year, according to data provider Dealogic, marking the most-robust start
to any year since 2000.
Norway
Cracks Down on Mortgage Debt to Fight Bubble Risk - (www.bloomberg.com) Norway’s financial regulator is throwing its
weight behind a government proposal to force banks to assign higher loss
probabilities to mortgage assets as the nation looks for ways to cool its
overheated property market. The Financial Supervisory Authority in Oslo will
add stricter risk-weight recommendations to a raft of measures, including curbs
on covered bond issuance, all designed to prevent a repeat of the 1990s crisis
that sent Norway’s real estate prices plunging 40 percent and left households
with unsustainable debt loads. “The FSA
shares the ministry’s concern for household indebtedness and soaring house prices,” Morten Baltzersen, who heads
the watchdog, said yesterday in a telephone interview. “We agree with the ministry
that the risk weights on house loans need to be increased.”
SNB Spent $199 Billion in 2012 on Enforcing Its Franc Cap -
(www.bloomberg.com) The Swiss central bank spent 10 times as much in 2012 as it did the year
before to defend the currency cap it implemented to shield the economy. The Swiss National Bank (SNBN) bought
188 billion francs ($199 billion) in foreign currencies from a wide range of
counterparties in Switzerland and abroad, the Zurich-based central bank said in
its Accountability Report today. It has amassed record foreign currency reserves in
its fight to protect the ceiling, and a large portion of those reserves are
held in highly rated government bonds. In 2011, it spent 17.8 billion on
foreign currencies. “The SNB took care to avoid its investments having any
impact on the markets and currency developments of other countries,” the
central bank said in the report.
Markets
wrong to downplay Italian political risk - (www.reuters.com)
Italian bond spreads have risen nearly one
percentage point since Italy’s election. It could have been worse – and
considering the risks, it should. Political reform is a prerequisite if the
country is to come out of its economic predicament: only a strong government
can implement the fundamental changes that are still needed to boost growth in
the long term. There is no doubt that Italy is headed for new elections this
year. The question is whether the next parliament will be elected under the
current bankrupt system, or under one that could help build a stable majority. The
best chance for reform would be a scenario involving comedian Beppe Grillo’s 5-Star
Movement whereby a centre-left government he openly or tacitly supports
implements part of his platform: it includes electoral reform, cutting down the
number of deputies, and serious measures against corruption and conflicts of
interest. Pier Luigi Bersani, head of the centre-left party, hinted at an
alliance with the 5-Star Movement last week. Grillo, so far, has turned him
down.
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