Wednesday July 9 Housing and Economic stories

Top Stories:

Market leaves housing flippers flopping - (www.tampabay.com) - Someone, please put this guy in a Turkish prison for the rest of his life. This guy should not be allowed to continue working in Real Estate or keep his existing properties and 401K account: As the market began to cool in 2006, it became harder to flip houses, and questionable transactions began to surface. Lepzinski and his wife Peggy, 49, sold several houses to the elderly father of a St. Petersburg loan officer who had done prison time for fraud and theft. The father, who lives in New York, said he knew nothing about the transactions or how his name ended up on high-interest mortgages that required no down payment. Last summer, a Lepzinski-owned home in St. Petersburg that had sat vacant for months with no buyers suddenly sold for $630,000 — far more than comparable sales — to an 82-year-old retired trucker living on Social Security. Lepzinski declined to talk about that or other transactions. On Feb, 23, the Lepzinskis filed a Chapter 7 liquidation bankruptcy. Their petition listed nine properties on which the lenders had foreclosed, repossessed or taken the deed in lieu of foreclosure. Contrary to the image Lepzinski cultivated of successful real estate investor, his petition showed no income for 2007 and negative income of $151,577 in 2006. Even at the peak of the boom in 2005, his income was minus $218,320. In all, the Lepzinskis owed $1,547,705, including nearly $190,000 in credit card debt to American Express, Target, Home Depot and others. Among their individual creditors was a neighbor who had loaned them $97,800. "You make me out to be evil and I'm the victim — am I not the one who went into bankruptcy?'' Lepzinski asks a reporter.

Good Video: We're All Homeowners Now, Nationalization of Fannie, Freddie Unavoidable - (finance.yahoo.com) The two mortgage lenders are simply too big to fail and too critical to the housing market, Depew says. Given Fannie and Freddie own or guarantee 50% of all housing debt, according to the WSJ, continued stress on their balance sheets means higher borrowing costs for the firms, and ultimately higher mortgage rates for individuals. It also means another round of write-downs for the battered financial sector generally, which owns a lot of Fannie and Freddie-backed paper. But nationalizing the firms, each created by an act of Congress, would mean a wipeout for equity holders, who have already seen their holdings decimated in the past year. The nationalization of Fannie and Freddie and would put U.S. taxpayers on the hook for the socialization of the housing market, but Depew says we're already there whether we know it or not.

3,200 Martial Arts Studios Went Out Of Business In May - (Mish at globaleconomicanalysis.blogspot.com) 3,200++ Martial Arts Studios went out of business in the month of May alone. In the history of Martial Arts in the United States - nothing like this has ever happened. In one month about 20% of all studios closed their door. Most will never reopen! Most should never been in business to start with. Starbucks is closing 600 locations this year because people cannot afford to pay $3 for a cup of coffee. How do studio owners - especially those with 90% kids expect parents to pay $100 per month plus testing fee's? Now they have the added expense of $4 a gallon gas.

We're All Homeowners Now, Nationalization of Fannie, Freddie Unavoidable - (Mish at globaleconomicanalysis.blogspot.com) Unsurprisingly, the lie of the day today is Fannie, and Freddie are Adequately Capitalized. Mortgage financiers Fannie Mae and Freddie Mac are adequately capitalized and continue to be active in the mortgage market, said James Lockhart, director of the Office of Federal Housing Enterprise, which regulates the two enterprises. "Both of these companies are adequately capitalized, which is our highest criteria," Lockhart said in an interview with CNBC. "They have been very active in the mortgage market, and they are continuing to be. And, in fact, Congress has put on them the requirement to do jumbo mortgages and they have been doing those as well."
Fannie Mae holds or guarantees over $5 trillion in mortgages. A mere 1% decline would wipe them out. Is that adequately capitalized? I do not think so and neither does Minyanville's Kevin Depew.

A massive taxpayer bailout of the GSE's, banks and lenders is now upon us. - (www.ml-implode.com) Having the nations' housing 'wealth' destroyed is catastrophic, especially since we're a nation of spenders and not savers. And having home values plummet 20% to 50% or more is devastating.
But having the banks fail, that's a whole different ballgame. Having Fannie and Freddie collapse, that's financial Armageddon.

Toxic CDOs Renamed - (Mish at globaleconomicanalysis.blogspot.com) Collateralized debt obligations that helped drive banks to $400 billion of writedowns and credit losses are finding buyers under a different name: Re-Remics. Re-Remic stands for "resecuritizations of real estate mortgage investment conduits,"the formal name of mortgage bonds. They are composed of AAA rated bonds backed by so-called Alt-A mortgages, issued to borrowers with higher credit scores who don't prove their incomes, seek higher debt ratios or buy investment properties.

Imprisoned Vick files for bankruptcy protection - (news.yahoo.com/s/ap) – I guess this is partially real estate related. According to the filings, Vick's other debts include $4.5 million owed to Richmond-based Joel Enterprises Inc., and $550,0000 owed to Radtke Sports Inc. for breach of contract. In May, a federal judge ordered Vick to repay about $2.5 million to a Canadian bank for defaulting on a loan. The Royal Bank of Canada had sued Vick in September, arguing his guilty plea to a federal dogfighting charge — and the resulting impact on his career — prevented him from repaying the loan. A default judgment for $1.08 million also was entered in January against Vick and a business partner in a lawsuit brought by Wachovia Bank over a loan for an Atlanta-area wine shop and restaurant.

IndyMac admits deposit run at ‘elevated levels’ - (www.ft.com) Shares fall almost 50 per cent on Tuesday (down to 40 cents). IndyMac said on Tuesday that depositors had continued to withdraw money at “elevated levels” since June, when a senator urged regulators to monitor closely the bank’s condition. The disclosures, which were made in a regulatory filing, came a day after the beleaguered US mortgage lender said it was shrinking its business drastically because it was was no longer well capitalised, raising concerns it could fall victim to the credit crisis.
Struggling Indymac says depositors pulling cash - (www.reuters.com)
Former mortgage lending giant IndyMac faces its grim future - (www.fortune.com)

Emergency mortgage aid bogged down - (www.ml-implode.com) - "Emergency legislation intended to help as many as 500,000 homeowners on the brink of foreclosure to renegotiate their mortgages...



Other Stories:

Fannie and Freddie, One Day Later - (www.ml-implode.com) - "Fannie Mae and Freddie Mac have a few defenders among analysts after Monday’s sell-off. Some aren’t exactly mounting spirited d...
Fannie Mae and Freddie Mac hit at a new 52-week-low - (money.cnn.com)
Freddie Mac, Fannie Mae Plunge on Capital Concerns - (www.bloomberg.com)
Fannie, Freddie Capital Concerns Send Bond Risk to 14-Week High - (www.bloomberg.com)
Bank losses from credit crisis may run to $1,600bn, warns Bridgewater - (www.telegraph.co.uk)
Fed plans new rules to protect future homebuyers - (www.ml-implode.com) - The Federal Reserve, trying to stabilize a shaky U.S. financial system, may give squeezed Wall Street firms more time to tap t...
Desperation Phase - (www.ml-implode.com) - "In another whodathunk moment comes developments that Fannie Mae and Freddie Mac will need to raise $75 billion in new capital. ...
House Prices Fall in 23 of 25 U.S. Metro Areas - (www.bloomberg.com)
The Continuous Housing Free Fall - (www.washingtonindependent.com)
Sellers balk at low bids at auction - (www.palmbeachpost.com)
Indymac Says "No Bids On Its Mortgage Loan Portfolio" - (Mish at globaleconomicanalysis.blogspot.com)
U.S. Pending Home Sales Fall 4.7% in May - (www.ml-implode.com) - "U.S. pending home sales resumed their decline in May, falling 4.7% in the month after an upwardly revised 7.1% bounce in April,...
GSE's Saw Lowest Share Prices In 14 Years On Capital Concerns - (www.ml-implode.com)
Real Estate Agent Shot Dead After Home Declines In Value - (www.ml-implode.com)
Hundreds of Indiana Mortgage Brokers May Have Licenses Revoked - (www.ml-implode.com)
Rubin: Economy Facing `Extended Difficulties' - (www.ml-implode.com)
Buy & Bail: FNMA Looking To Stop The Latest In Mortgage Fraud - (www.ml-implode.com)
Loan Pains Turned Site Into a Hit - (www.ml-implode.com)
Subprime Fallout Spreading to Private Mortgage Insurers - (www.ml-implode.com)
IndyMac Woes Could Spell Trouble For Regional Banks - (www.ml-implode.com)
And Now, To Screw In Some Light Bulbs! - (www.ml-implode.com)
An oldie but a goodie - (www.ml-implode.com)

S&L Redux: Men in Black at IndyMac? - (optionarmageddon.ml-implode.com)
Crisis wipes $1 trillion from financial stocks - (news.yahoo.com)
U.S. Stocks Now Worth Less Than Rest of G-8 - (www.bloomberg.com)
The Declining U.S. Dollar - (www.politicalcortex.com)
Will gas prices drive housebuyers away from suburbs? - (seattletimes.nwsource.com)
The House-Equity Door Slams Shut - (www.washingtonpost.com)
Bailout Will Send 140,000 Families To Second Foreclosure - (www.talkingpointsmemo.com)
Building Portfolios for a World of 2.5% Gains - (online.barrons.com)
Morningstar Gives Up on Builders and Financials - (www.1440wallstreet.com)
Avoiding Foreclosure. Trading Down. - (www.chatmag.com)
Rent signs filling front yards - (www.dailybulletin.com)Debt collectors on the rampage - (money.cnn.com)

Crude slumps over $5 amid broad commodity sell-off - (www.marketwatch.com)
Stocks down again on more evidence of weak housing market - (www.marketwatch.com)

Bernanke says Fed may extend Wall Street lending - (www.reuters.com)
Pending U.S. Home Resales Decline More Than Forecast - (www.bloomberg.com)
Home Prices Fall in 23 of 25 U.S. Metropolitan Areas - (www.bloomberg.com)
Fed's Yellen says rate policy at crossroads - (www.signonsandiego.com)
G-8 Says Oil, Food Prices Pose Risk to World Economy - (www.bloomberg.com)
Fed, SEC to work more closely - (www.latimes.com)

Mortgage Fears Depress Global Shares - (www.nytimes.com)
Fed, SEC Team Up On Bank Oversight - (www.washingtonpost.com)
Suburban office space losing occupancy and value - (www.chicagotribune.com)

Mortgage Giants Take Beating On Fears Over Loan Defaults - (online.wsj.com)
Time for Fannie, Freddie? - (online.wsj.com)
Airlines Cut Long Flights - (online.wsj.com)
Auto Makers Resist Steel Firms' Surcharges - (online.wsj.com)
Retailers Start to Get Ready for School - (online.wsj.com)
GM contemplating selling brands to generate cash - (www.chicagotribune.com)
P&G to hike prices 16% - (www.newsday.com)
IndyMac to exit most home lending, slash 3,800 jobs - (www.latimes.com)
Output plummets at huge Mexican oilfield - (www.ft.com)
Vacancies Rise at Retail Centers - (online.wsj.com)
Airlines' staffing in a steep descent - (www.chicagotribune.com)

U.K. Economy Faces `Serious' Recession Risks, BCC Survey Shows - (www.bloomberg.com)
High oil prices are a game changer for Asia - (www.telegraph.co.uk)
Global markets shudder after new worries about U.S. financial institutions - (www.iht.com)
UK annual mortgage lending slumps 44% - (business.timesonline.co.uk)
Economists See No End to U.K. Layoffs - (online.wsj.com)
Bradford & Bingley shares crash - (www.telegraph.co.uk)
Property squeeze spreads to Europe, says Savills - (www.ft.com)
Oil: The New Reality - (www.businessweek.com)
As food costs soar, it's back to basics for meal planners - (www.usatoday.com)