Thursday May 15 Housing and Economic stories

Top Stories:

How does State of California deal with $20B deficit? Of course, by borrowing against future lottery profits. Again, the politicians in CA are bankrupting the future so they can get re-elected in the present.
Guv Defends Lottery Plan - (www.sfgate.com) – Obviously, the steroids have shrunken the gov’s cohones as he obviously has none. He has given in to all the special interest groups. Schwarzenegger says using future lottery profits to pay off the $15B deficit is necessary because cuts alone will not balance the budget.
Vallejo Schools Feel The Pain - (www.sfgate.com) – Feel free to blame your city unions (fire department and police department) as they are sucking up 75% of the city budget. City's decision to declare bankruptcy has adversely affected the district, which is a separate governmental entity.
Congress Votes to Stop Stockpiling Oil - (www.nytimes.com) – Yes, both republicans and democrats are buying votes for this fall, even though everyone agrees it will do little except reduce prices by a few pennies. This is not a long-term solution to the underlying problem.
House OKs $290B Farm Bill – (www.sfgate.com). More vote buying by our cohones-less politicians. Veto-proof legislation includes an unprecedented $3 billion to support California fruit and vegetables.
As Condo Dues Dry Up, The Neighbors Pay - (online.wsj.com) – Good reason why you shouldn’t own a condo or townhouse in this market. Even if you are financially stable, you never know about your neighbors. The association at Monaco Place, a community of single-family homes and condominiums in Denver, is short $250,000 of its $9.3 million annual operating budget. It can't pay for needed roof and siding repairs to homes. Potholes in the streets haven't been filled in order to save money to keep electricity running in common areas, says Dee Tyler, CEO of Colorado Association Services, which manages the association. Monaco Place was already suffering from a high rate of foreclosures before the credit crunch hit. In the past three years, about a third of its 193 units have been foreclosed on.
1,000 Foreclosure auctions per day in California - (latimesblogs.latimes.com) - California's foreclosure crisis passed another ominous milestone in April, when more than 1,000 foreclosed homes were auctioned off every weekday at courthouses across the state, the auction tracking firm ForeclosureRadar reported today. The April total of foreclosure sales at auction -- 22,838 for the state -- represents a jump of 44% over March totals and the highest level ever in California, ForeclosureRadar reports
Deflating house prices leave little equity to borrow against - (biz.yahoo.com) – What a concept, people will actually have to save money for the purchases.
FHA Chief Criticizes Bailout Plan - (www.usnews.com) - As one colleague described it, it is "on steroids" because it throws sound underwriting out the window. It moves us toward a federalization of the mortgage market, forces taxpayers to pay for bad loans, and doubles FHA's portfolio, adding hundreds of thousands of risky loans in a Byzantine process that will take years to sort out and create a regulatory nightmare.
Get ready for more bank failures - (money.cnn.com)
Lawsuit targets mortgage brokers - (www.lvrj.com) - An attorney representing a homeowner has filed the first local lawsuit in what could be a wave of litigation targeting mortgage companies and other real estate professionals.
Robert Cottle, a partner in the Las Vegas law firm Mainor Eglet Cottle, filed the lawsuit May 1 in Clark County District Court on behalf of homeowner Brad Cohen, who refinanced his southeast Las Vegas home with an adjustable-rate mortgage in 2005 and can no longer afford his monthly housing payment. In the lawsuit, Cohen accuses eight defendants of fraud, negligence, breach of fiduciary duty, negligent misrepresentation, intentional misrepresentation, and breach of covenant good faith and fair dealing. Named in the lawsuit are Countrywide Financial Corp.; Countrywide Home Loans; HSBC Mortgage Corp.; Direct Equity Mortgage Corp.; Alex Burke, an employee of Direct Equity Mortgage; Countrywide Tax Service; Rob's Tax Service; and National Title Co.
Honest Appraisal Regulations Opposed - (www.latimes.com) - Who's not happy? Major financial and banking trade groups, for starters. In a joint letter, eight groups, including the American Bankers Assn., Mortgage Bankers Assn. and the Consumer Mortgage Coalition, called the whole idea "bad policy" and demanded that Fannie's and Freddie's federal regulator withdraw its support for the agreement, effectively killing it.
The Latest Twist in Student Loans - (www.businessweek.com)
Brunswick cites economy in decision to close boat factory - (www.chicagotribune.com) - Because its big-ticket pleasure boats are a "discretionary' purchase which consumers can easily defer, Brunswick's results are sensitive to the economy's cycle. "The U.S. marine industry has been in a prolonged slowdown since late 2005," noted Chairman and Chief Executive Officer Dustan McCoy.


Other Stories:

Latest CA Foreclosures Stats - (mrmortgage.ml-implode.com)
Libor Credibility Doubted; Real Interest Rates Much Higher - (www.bloomberg.com)
What Will Happen to Your Money When Your Bank Fails - (www.homeguide123.com)
Ron Paul on the Housing Bubble - (www.pressmediawire.com)
Housing Bailout Backlash - (Mish)
Call Senator Shelby - (patrick.net)
Incomes predict 40% further decline in San Diego - (www.californiahousingforecast.com)
Foreclosures looming for the Hamptons' poshest pads - (www.nypost.com)
The Housing Bust: Worst yet to Come - (Charles Hugh Smith at www.oftwominds.com)
NAR's Lawrence Yun Continues to Lie - (www.seekingalpha.com)
The cheaper housing option in Bangalore, India - (bangalore.craigslist.co.in)
About exponential growth - (www.chrismartenson.com)

Volcker Warns of Precedent Set by Fed Moves - (online.wsj.com)
Volcker Says Fed Interventions Risk Political Battles - (www.bloomberg.com)
Condo Life: Foreclosures, Higher Fees and Mowing the Lawn - (www.nytimes.com)
Most Americans don't expect the economy to improve soon, poll finds - (www.latimes.com)
Consumer Credit Crisis Showing up in the Cards - (www.nypost.com)
Survey: 1 in 10 boomers borrowing for everyday expenses - (www.ajc.com)
Opposition Builds to $300 Billion Government Mortgage Bail Out - (www.forbes.com)
State foreclosure sales hit record high - (www.mercurynews.com)
Away from the Strip, Vegas land values plunge - (www.lvbusinesspress.com)

Banks turned markets into "monster": German president - (www.reuters.com)
Home prices fall across the country in first quarter - (www.latimes.com)
FBI warns of escalating mortgage fraud - (www.usatoday.com)

Bank analyst pans Citi turn around plan - (www.nypost.com)
Freddie Mac Posts Loss, Plans to Raise $5.5 Billion - (www.bloomberg.com)
Toll Brothers preliminary 2Q sales fall 30 percent - (www.chicagotribune.com)
GM May Look to Raise Additional Cash - (online.wsj.com)
More Companies Sell Off Assets - (online.wsj.com)
Fannie and Freddie capital alert - (www.ft.com)
Deere 2Q profit rises, but warns of cost trouble ahead - (www.forbes.com)
Fewer fliers for summer, packed planes persist - (www.azcentral.com)
UK inflation woe 'set to worsen' - (news.bbc.co.uk)
Economic woes begin to hit UK jobs - (www.ft.com)

The great asset price controversy - (www.ft.com)
The Water-Industrial Complex - (www.forbes.com)