TOP
STORIES:
Bank’s
attitude toward struggling loanowners toughening as prices rise - (www.ochousingnews.com) In any negotiation the options of the parties determines the strength of
their bargaining position. Ordinarily, when a lender and a borrower execute a
promissory note and a mortgage agreement, the lender has most of the power,
which is why they determine the terms of the agreement. The only option a
borrower has is to shop for slightly better terms from another lender. If the
borrower fails to pay according to the terms of the promissory note, the lender
has the option of calling a public auction on the property to regain the
outstanding balance on the loan. Lenders wisely force the borrower to put money
down on the transaction to provide a cushion to protect the lender from loss if
the foreclosure sale doesn’t obtain appraised value on the property. At least
that’s how the system is supposed to work. When house prices crashed, borrowers
found they had more options and lenders found they had less. The balance of
power in the negotiation shifted. Because lenders foolishly loaned money at
100% of appraised value during the bubble, they had no cushion when prices
fell. If they were to exercise their contractual right under the mortgage
agreement to call a public auction, they stood to lose money – lots of it. This
made banks hesitant to foreclose.
'Shadow'
homes could burden U.S. housing agencies - (www.reuters.com) Well over a million U.S. homeowners are months behind on payments on
government-backed mortgages, raising the risk federal housing agencies will end
up facing the cost of managing a fresh flood of foreclosed homes, two
government watchdogs said on Thursday. Some 1.7 million borrowers have missed
several payments on mortgages backed by the U.S. government, the inspectors
general of the Federal Housing Finance Agency and Department of Housing and
Urban Development said in a joint report. These loan delinquencies represent a
"shadow inventory" of homes that could hit the market if foreclosed
on, which would need be managed by government-run Fannie Mae or Freddie Mac, or some other
federal housing agency. Once seized, these so-called real estate owned
properties, or REOs, present significant financial challenges to these
government agencies, the report said.
Turkish
Protesters Attacked in Erdogan’s Black Sea Hometown - (www.bloomberg.com) Turkish Prime Minister Recep Tayyip Erdogan accused
protesters across the country of violating laws and damaging state property,
and said he won’t permit a minority to dominate. “No right can be sought in
violation of the law,” Erdogan said at a press conference in Tunis today, where
he’s on the fourth day of a North Africa visit. He said people with
“environmental sensitivities” who have protested against the redevelopment of a
park in central Istanbul are being exploited by illegal groups, including
terrorists. Demonstrations spread nationwide after police attacked a rally in
the park, near Istanbul’s Taksim Square, with tear gas and water cannons on May
31. Many protesters have called for the resignation of the Islamist-rooted
Erdogan, saying he’s become too autocratic, and cite grievances including
alleged police brutality and curbs on alcohol sales.
Philippine,
Thai Bourses Try to Calm Investors on Stock Rout - (www.bloomberg.com) Stock exchanges in
the Philippines and
Thailand have moved to soothe investors after speculation the U.S. Federal
Reserve may scale back bond purchases prompted selloffs by overseas investors. Stock
Exchange of Thailand President Charamporn Jotikasthira today urged investors
not to panic, saying economic and corporate earnings growth in Southeast Asia’s second-biggest economy
remains strong. The benchmark SET Index dropped to two-month low. Philippine
Stock Exchange President Hans Sicat described the selloff as an “extreme
overreaction.” The Philippines benchmark index has slumped 11 percent and the
Thai gauge 8.4 percent since May 22, when Fed Chairman Ben S. Bernanke said policy makers could
consider reducing the pace of monetary stimulus if the nation’s labor market
improves. Overseas investors have sold a net $414 million of Thai stocks and
$147 million of Philippine shares this month.
$1
Trillion Debt Crushes Business Dreams of U.S. Students - (www.bloomberg.com) Dr. Steve Sherick wants to build the emergency-care business he started
two years ago that now employs seven doctors and two part-time administrators.
The $300,000 in student loans he and his wife carry makes that prospect
difficult, he said. Sherick, 36, who contracts with a local hospital in
Trinidad, Colorado, about 200 miles
south of Denver, graduated in 2009 with about $140,000 of debt. That’s not
counting the student loans of his wife, a pediatric oncologist, and their
mortgage. He would like to hire a full-time administrator and offer more
competitive salaries to entice doctors to work in the rural community. “It
deters an entrepreneurial spirit when you already start four steps behind the
starting line,” said Sherick. “The student debt increases the risk for an
entrepreneur like me and makes it harder to expand new business, get loans and
thus hire new people.”
JPMorgan
‘Afraid’ of Emerging Market Selloff on Fed Tapering - (www.bloomberg.com)
Report: Entitlement changes to put seniors at financial risk - (www.washingtonpost.com)
Report: Entitlement changes to put seniors at financial risk - (www.washingtonpost.com)
Dimon
Sees ‘Scary’ World as Interest Rates Return to Normal - (www.bloomberg.com)
Companies in U.S. Added Fewer Workers Than Forecast in May - (www.bloomberg.com)
Companies in U.S. Added Fewer Workers Than Forecast in May - (www.bloomberg.com)
ECB
Keeps Rates on Hold as Confidence Returns to Euro Region - (www.bloomberg.com)
Central-bank-liquidity worries put Draghi in focus - (www.marketwatch.com)
Central-bank-liquidity worries put Draghi in focus - (www.marketwatch.com)
No comments:
Post a Comment