Thursday June 26 Housing and Economic stories

Top Stories:

Vital Part of Housing Bill Is Brainchild of Banks - (www.washingtonpost.com) A key provision of the housing bill now awaiting action in the Senate -- and widely touted as offering a lifeline to distressed homeowners -- was initially suggested to Congress by lobbyists for major banks facing their own huge losses from the subprime mortgage crisis, according to congressional staff members and bank officials. Credit Suisse, a large investment bank heavily invested in mortgage-backed securities, proposed allowing hundreds of thousands of homeowners to refinance their mortgages with lower-cost government-insured loans, relieving financial institutions of the troubled debt. After the bank proposed this to Congress in January, it became known as the "Credit Suisse plan" among congressional staffers and lobbyists. It later formed the basis of housing provisions in both the House and Senate.
Bank of America, which is acquiring Countrywide Financial, the country's largest mortgage lender, followed with a similar and more detailed proposal, principal negotiators on the legislation said. In approaching congressional aides, the lobbyists suggested that banks take less than full payment for the distressed loans on their books. But the measures would allow financial institutions to get cash out of foreclosed properties that would otherwise sit on their books as dead weight.
High Medicare Costs, Courtesy of Congress - (www.nytimes.com) On Wal-Mart’s Web site, you can buy a walker for $59.92. It is called the Carex Explorer, and it’s a typical walker: a few feet high, with four metal poles extending to the ground. The Explorer is one of the walkers covered by Medicare. But Medicare and its beneficiaries aren’t paying $59.92 for the Explorer or any similar walker. In fact, they’re not paying anything close to it. They are paying about $110. For years, Congress has set the price for walkers and various medical equipment, and it has consistently set them well above the market rate, effectively handing out a few hundred million dollars of corporate welfare every year to the equipment makers.
Calif. attorney general sues Countrywide Financial - (www.ml-implode.com) – First Illinois, now California. Funny how CA AG did not sue until days before the merger with BofA. When Countrywide was a CA corporation, CA was fine with all the lending practices. Now that they are ready to move HQ out to the East Coast, time to sue. "Countrywide Financial Corp. is accused of using misleading advertising and other unfair business practices to trick borrowers i...
Countrywide's Licenses Revoked By State of Washington - (www.ml-implode.com) - Gov. Chris Gregoire says the state is pulling the license of Countrywide Home Loans to write loans in Washington and that invest...
Illinois to Sue Countrywide, CEO Mozilo - (www.cnbc.com) The lawsuit is the first known case of a state authority charging Countrywide, the largest U.S. mortgage lender, for actions related to the housing crisis. It also comes on the same day the company's shareholders are expected to vote on its sale to Bank of America. The acquisition is expected to close on July 1.
Illinois attorney general says she'll sue Countrywide Financial - (www.latimes.com)
Chrysler Taps $2 Billion Line of Credit - (online.wsj.com) Chrysler LLC tapped a $2 billion credit line from its owners, Cerberus Capital Management LP and Daimler AG, to bolster the auto maker's liquidity amid a painful downturn in U.S. sales that is stretching its resources.
California Police Gone Wild: Charity carnival scrapped because of police fees – (www.insidebayarea.com/argus). First Vallejo police/fire department cause Vallejo to file for bankruptcy. Now Police departments are padding their pay by mandating police coverage (rather than private security) at town events. But a carnival fundraiser the group had planned to begin Thursday in Fremont has fizzled because of high police fees, organizers said. The carnival was set to start at the Hub shopping center, but league Executive Director Shirley Sisk said the hoped-for take of up to $30,000 through the weekend was offset by an expected $21,000 bill from Fremont police for security. Gorman said his understanding is that the police department wanted seven officers, two gang task force members and a dispatcher at the Hub event at time-and-a-half pay rather than private security that Butler typically hires at a fraction of the cost.
The Market Created the Money, Not the State - (www.brookesnews.com) – Of course, this conservative think-tank would never blame the Republican Admin or the Fed for creating this credit mess due to lowering interest rates to 1%.
Marshals Make Millions Serving Foreclosure Papers - (www.ml-implode.com) Last year, John T. Fiorillo earned almost twice as much as University of Connecticut women’s basketball coach Geno Auriemma and more than 10 times the salary of Gov. M. Jodi Rell. The Bristol resident grossed more than $2 million, but not by coaching a team to the Final Four or running state government. Fiorillo is a self-employed state marshal who serves legal papers to people about to lose their homes through foreclosure. Fiorillo’s bounty can be attributed to his relationship with two law firms — Hunt Leibert Jacobson and Reiner, Reiner and Bendett — that have a virtual monopoly on the burgeoning foreclosure market.
CIBC likely to take big Q3 writedown - (www.reuters.com)
GMAC's $60 Billion Deal Loses Confidence as Mortgages - (www.bloomberg.com)
Rebate checks diverted to pay $2B in debts - (www.usatoday.com) About $2 billion in economic stimulus rebate checks are being confiscated to pay overdue bills for child support, student loans and back taxes, the government says. So far, 1.8 million rebate checks have been intercepted by Treasury Department computers showing that individuals owe money to federal or state governments.


Other Stories:

Profits seen off more than 10 percent - (www.bloomberg.com)
Consumer confidence fell sharply in June - (www.latimes.com)
Chapman University forecasters say U.S. is in recession - (www.latimes.com)
Home Not-So-Sweet Home - (www.nytimes.com)
Communities suffer as foreclosure rate rises - (www.msnbc.msn.com)

Phoenix Commercial Real Estate Financier Files Bankruptcy - (www.ml-implode.com) - Mortgages Ltd. filed for Chapter 11 bankruptcy Monday night, under pressure from a borrower that earlier had filed a petition ...
$200 oil? - (www.ml-implode.com) - "If Israel bombs Iran, $200 oil is a distinct possibility. Both look more likely given recent developments."

You Might Want To Think Twice Before Gutting Your Preforeclosure - (www.ml-implode.com) - "We’ve heard tale after tale of bitter homeowners stripping their homes in foreclosure, prior to losing the home. Now they migh...
American Express Says Late Payments Rising Faster Than Expected - (www.ml-implode.com) - ``Business conditions continue to weaken in the U.S. and so far this month we have seen credit indicators deteriorate beyond our...
Mr Mortgage Update: Ultimate Fannie/Freddie ‘Con’ Job - (www.ml-implode.com) - Now, the big guns have come out to weigh in. Today, Bloomberg released a detailed story on just how little demand there is for t...
Mark to Misery in the cash equivalent fund biz - (www.ml-implode.com) - "A bond fund closed down yesterday and it brings up another interesting dilemma that few people if anyone wants to address, incl...
Case-Shiller home prices - (www.ml-implode.com)
Taxpayers Helping Bank Of America Finance Countrwide Deal - (www.ml-implode.com)
Mortgage Rates Continue to Set New 2008 Records, Applications Fall - (www.ml-implode.com)
Man with a Tan Needs a Plan - (www.ml-implode.com)
False Housing Turnaround Expectations - (www.ml-implode.com)
Senate ethics committee proposes Senators disclose their mortgage details, may now be investigating Dodd and Conrad - (www.ml-implode.com)
Countrywide shareholders set to vote on BofA takeover - (www.ml-implode.com)
Update: Vanguard operations illegal? - (www.ml-implode.com)
Politico Gets Mortgage Answers from Senators - (www.ml-implode.com)
Senate seen approving [BofA/CFC] rescue bill - (www.ml-implode.com)

Oil Declines After Supplies Rise for First Time in Six Weeks - (www.bloomberg.com)
Treasuries Decline; Fed May Shift Focus to Fighting Inflation - (www.bloomberg.com)
Gold Futures Decline on U.S. Inflation Outlook; Silver Steady - (www.bloomberg.com)
U.S. Stocks Advance Ahead of Fed; JPMorgan, Jabil Circuit Climb - (www.bloomberg.com)

Durable Goods Orders in U.S. Are Unchanged; Ex-Transportion Decline 0.9% - (www.bloomberg.com)
Consumer confidence fell sharply in June - (www.latimes.com)
U.S. Economy: Home Sales Fall, Durable Goods Orders Stagnate - (www.bloomberg.com)
Stagflation fears vexing for Bernanke - (www.chicagotribune.com)
Fed Vacancies Pose Challenge - (online.wsj.com)
Economist forecasts softer landing - (www.ft.com)
Rethinking the Country Life as Energy Costs Rise - (www.nytimes.com)
Chapman University forecasters say U.S. is in recession - (www.latimes.com)
Bernanke May Halt Rate Cuts, Shift Focus to Inflation Concern - (www.bloomberg.com)
Whatever Happened To Inflation Targets? - (www.forbes.com)
Approval Is Near for Bill to Help U.S. Homeowners - (www.nytimes.com)
Hedge Funds Fear Backlash From Congress - (online.wsj.com)
Speculating on why oil, gasoline prices are soaring - (www.latimes.com)
Short Interest Increases on the Nasdaq - (online.wsj.com)

Oil May Cost Jet Makers Orders - (online.wsj.com)
Illinois to Sue Countrywide - (www.nytimes.com)
Barclays to Raise $8.9 Billion to Shore Up Capital - (www.bloomberg.com)
Pump pain hits independents - (www.signonsandiego.com)
Lowe's Weighs Increases - (online.wsj.com)
Eurozone growth fears as inflation bites - (www.ft.com)
Trichet: ECB determined to combat inflation - (www.marketwatch.com)
New Zealand Consumer Confidence Falls to 17-Year Low - (www.bloomberg.com)