Friday May 30 Housing and Economic stories

Top Stories:

Senate Doesn’t Want Borrowers Walking - (www.ml-implode.com) - Buried in the proposed legislation is something new and revolutionary, an effort to stop mortgage walk-aways. The Senate legislation addresses the walk away issue by saying that before borrowers can get FHA financing they must certify that they have not intentionally defaulted on any debt, not just their current mortgage. Lying about this issue can be considered perjury, and perjury can result in a jail sentence. No less important, if a homeowner has walked away from an FHA loan, then the borrower would have to repay the government for any loss on the property — potentially tens of thousands of dollars. In the same way that we should hold lenders to certain standards, borrowers also have an obligation to meet certain requirements. Sending back the keys — creating so-called "jingle mail" — is not fair and it’s not right. The Senate committee has the correct idea: Walking away from a mortgage should not be a free pass to new financing, especially financing insured by the federal government.
Foreclosure is rarely fair - [2008-05-29] - "My take is that foreclosure has traditionally not been "fair". Credit scores are not designed to be a measure of borrower’s honesty, but a measure of the risk involved in lending to a borrower. Typical reasons for foreclosures in the past included illness, job loss, death of a spouse- not "failed flips". Lenders have looked at these incidences of financial stress and determined that these problems, however undeserved, raise the risk of default, and credit scores have been gauged accordingly."
JPMorgan Chase Shareholders Approve Bear Stearns Buy - (www.ml-implode.com) - Bear Stearns is gone, but the brokerage firm's near collapse will live on as the moment it became impossible to ignore the mortgage mess.”
Signs of Worsening Credit Conditions - (www.ml-implode.com) - Two UK columnists looked at the credit markets, and neither liked what he saw. And they wrote it up more colorfully than most of their American counterparts would have.
Bad Omens for Banks? - (www.businessweek.com) - News from KeyCorp suggests U.S. banks' loan losses may worsen. Is the credit crisis hitting a second, even scarier phase? Nobody was expecting an easy year for U.S. banks, but many observers thought the bulk of the industry's credit troubles would come in the first quarter. Now, it seems the rest of the year may be even worse. Case in point: A May 28 announcement from KeyCorp (KEY). Mounting loan losses at the regional bank company suggest the banking industry's troubles with bad loans are just beginning
Fed's Fisher: Rate hikes could come sooner vs later - (www.reuters.com)
Credit default swaps on Lehman Brothers and Merrill Lynch debt have risen - (www.telegraph.co.uk) – Could this be a sign that phase 2 of the credit crisis has begun?
The Fading of the Mirage Economy - (www.washingtonpost.com) - Suddenly, it seems, we're getting hit from all directions.
Energy and food prices are soaring. The housing market continues to collapse. Government revenue is falling, and taxes are rising. Airlines are jacking up fares and fees while reducing service. Banks are pulling credit lines. Auto companies are cutting production once again. Even investment bankers are losing their jobs. The tendency is to see these as separate developments, each with its own causes and dynamic. Fundamentally, however, they are all part of the same story -- the story of the global economy purging itself of large and unsustainable imbalances that for a time allowed many Americans to think they were richer than they really were.
You think your condo rules are bad? - (www.sun-sentinel.com) Ann Zucker, a teacher who has the summer off, was looking forward to spending time relaxing at her Weston condo's pool. Sorry, Ann. Her condo documents make four separate buildings responsible for maintaining the pool, which was closed for repairs more than a year ago. The problem, she said, is that representatives of the four buildings can't agree on an acceptable plan. So, because of the rules, she and her neighbors won't be able to use the pool, for the second summer in a row.


Other Stories:

Bear Neared Collapse -- Twice - (online.wsj.com)
Lenders, Borrowers Discuss Bad Loans - (www.npr.org)Investors Putting Bad Loans Back To Lenders - (www.mrmortgage.ml-implode.com)
Foreclosures Disguised As Ordinary Houses For Sale - (patrick.net)
Realtors to Stop Blocking Discount Web Listings - (www.nytimes.com)
The Housing Capital Trap Snaps Shut - (Charles Hugh Smith at www.oftwominds.com)

Mortgage Rates Rise as Inflation Jitters Grow; Treasury Yields Jump Above 4 Percent - (www.ml-implode.com) - "Average mortgage rates rose to an eleven-week high, with rates on a traditional 30-year fixed-rate mortgage averaging 6.08 perc...
Consumer Satisfaction with HE/HELOC Origination Increases - (www.ml-implode.com) - "Despite an economy affected by a stagnant housing market, decreasing home values and upheaval among lenders, overall customer s...
The Giant Pool of Money - (www.thisamericanlife.org)
BK Judge Rules Stated Income HELOC Debt Dischargeable - (www.ml-implode.com) - Judge Leslie Tchaikovsky ruled that a National City HELOC that had been "foreclosed out" would be discharged in the debtors' Chapter 7 bankruptcy. Nat City had argued that the debt should be non-dischargeable because the debtors made material false representations (namely, lying about their income) on which Nat City relied when it made the loan. The court agreed that the debtors had in fact lied to the bank, but it held that the bank did not "reasonably rely" on the misrepresentations.
Settlement could drive down real estate commissions - (www.nytimes.com)
U.K. Home Values Drop Most on Record, Nationwide Says - (www.bloomberg.com)
How to Call the Bottom: Cash Flow! - (Mike Morgan)
SoCal values off 15.4%, worst in 43 years - (lansner.freedomblogging.com)March S&P/Case-Shiller Figures - (www.seekingalpha.com)California House Sale Price Medians by County and City - (www.dqnews.com)House Prices Across the Nation - (www.nytimes.com)
Merrill's David Rosenberg on Economy, Housing, Employment - (www.ml-implode.com)
Credit Derivatives Clearing House Planned For September - (www.ml-implode.com)
"Voldemort Mortgage" and Its "Magical Mystery Mortgage" - (www.ml-implode.com)
Tumbling prices dog US housing market - (www.guardian.co.uk)US and UK Housing Bear Market Trends - (www.marketoracle.co.uk)Treasuries Decline as Stocks Rise; U.S. GDP May Beat Estimates - (www.bloomberg.com)
U.S. Economy Grows More Than Previously Estimated as Trade Deficit Shrinks - (www.bloomberg.com)
U.S. Initial Jobless Claims Rose Last Week to 372,000 - (www.bloomberg.com)
Food prices to keep hitting wallet - (money.cnn.com)
Chemical Prices Jump, Fueling Fear of Inflation - (online.wsj.com)
Jobless claims up; continued claims at 4-year high - (www.reuters.com)
Topeka utility wants 15% rate hike - (www.kcstar.com)
Atlanta home prices drop another percent - (www.ajc.com)
Inflation's Little Parts - (www.nytimes.com)
Death and Taxes - (www.zoomorama.com)
As food prices spiral, farmers profit - (www.chicagotribune.com)

Study Casts Doubt on Key Rate - (online.wsj.com)
Investors increase bets on US rate rise - (www.ft.com)
Lessons From the Housing Bubble - (online.wsj.com)
Investors increase bets on US rate rise - (www.ft.com)
Banks launch central clearer for derivatives - (www.ft.com)
Natural gas shipments to U.S. in pause mode - (www.iht.com)
Another Firm Gets Tangled in ARS Web - (www.cfo.com)

Oil Exporters Can't Match Demand - (online.wsj.com)
KeyCorp plunge sparks fears for smaller lenders - (www.ft.com)
Industry's woes trickle down to regional banks - (www.latimes.com)
GM plans more restructuring measures - (www.chicagotribune.com)
Ford plans involuntary layoffs of salaried workers - (www.signonsandiego.com)
Sears Posts Net Loss as Consumers Slow Spending on Clothing - (www.bloomberg.com)
American Axle to cut 2,000 U.S. hourly jobs - (www.chicagotribune.com)
Honda intent on saving US jobs by switching models - (www.chicagotribune.com)
In Stock Plan, Employees See Stacked Deck - (www.nytimes.com)
It's Wall Street, Without the Cash - (www.washingtonpost.com)

Wall Street worries come home to roost in Greenwich - (www.latimes.com)
Dow and US inflation - (www.ft.com)
New ethanol plant bets on a better method than corn - (www.chron.com)