Sunday January 4 Housing and Economic stories

TOP STORIES:

Mortgage woes causing some to walk away - (www.lvrj.com) - Another pathetic Vegas realtor complaining that she is paying her mortgage payments out of pocket because her tenants are not covering the mortgage. So sad!!!
The local mortgage broker said she owes more than $100,000 beyond her home's worth. She's had trouble keeping renters who could cover the $2,400 monthly payment. When she first called her bank in February to discuss new loan terms, the bank told her she had too many assets to qualify for renegotiation. She called back in October and learned that she was by then too underwater for a modification. She's paid $7,500 out of pocket in 2008 to stay current in her mortgage, but with her brokerage business slow, she can no longer afford the financial hit. She's stopped paying the loan altogether."

Schwarzenegger May Order Unpaid Leave for Employees - (www.bloomberg.com) California Governor Arnold Schwarzenegger today ordered all state workers to take two days of unpaid leave each month to conserve money amid a record budget deficit and a legislative impasse over how to fix it. The furloughs will begin in February and will last through June 2010, Schwarzenegger said in an executive order. He also ordered all departments to cut 10 percent of their workforce costs, through firings if necessary. “Every California family and business has been forced to cut back during these difficult economic times, and state government cannot be exempt from similar belt tightening,” Schwarzenegger said in a letter to state workers. The furloughs came after Schwarzenegger vowed to veto a package of tax increases and spending cuts approved yesterday. Democrats had attempted to find a way around a two-thirds supermajority normally needed for passage of a tax measure as they considered ways to close the $42 billion shortfall that has depressed California bond prices and forced officials to halt $3.8 billion of public-works projects. The deficit also threatens to leave the most-populous U.S. state without enough cash to pay bills by February. The furloughs would amount to a 10 percent pay cut, Chris Voight, executive director of the California Association of Professional Scientists, a group that represents about 3,000 scientists working for the state. The association and the Service Employees International Union announced they will sue to block the furloughs and any layoffs, which they said would violate collective-bargaining deals. Regressive Bargaining: “We don’t think it’s right, and we’re prepared to file an unfair practices charge against the governor,” Yvonne Walker, SEIU Local 1000 president said today at a news conference in Sacramento. “We think it’s regressive bargaining. For him to do this outside of existing negotiations is improper.”

Democrats find end-run solution to budget - (abclocal.go.com) he California budget in a word can be summed up as a mess. Late Wednesday night, state Democrats are making an end-run around Republicans, but it is a plan that will cost taxpayers money. Among the proposals are sales tax increases, added fees at the gas pump, and a surcharge when you pay your income taxes. Democrats were hoping to pass their plan Wednesday night, but negotiations with the governor went longer than expected. The plan now is to vote on it Thursday and Democrats are hopeful the governor will sign it. On day 42 of the budget gridlock in Sacramento Democratic leaders say they have a plan to help bridge the $40 billion shortfall, claiming they can do it without Republican votes. "We cannot sell any bonds at all unless we are able to pass this and the governor signs it. This will be a real boost to the market to know that at least we've stopped the emergency that we're facing in March, which is running out of cash," said Assembly Speaker Karen Bass (D). The plan contains $9.3 billion in new fees and taxes, while cutting $7 billion. Democrats say they can pass it with a simple majority, instead a of two-thirds super majority, because it doesn't raise the amount of taxes overall, it just shifts them. The creative maneuvering includes dropping all state taxes in gasoline and replacing it with a 39-cent-a-gallon fee and adding a 2.5 percent surcharge on state income tax. The proposal also includes a sales tax hike of up to three quarters of a cent and an economic stimulus plan demanded by the governor. Democrats added the economic stimulus Wednesday evening after hours of back-and-forth negotiations.

Golden Gate to nowhere - (business.theage.com.au) Home prices in the San Francisco Bay Area in the United States plunged a record 44% in November and the median fell to the lowest since September 2000 as foreclosure sales pushed down values, according to MDA DataQuick. A total of 5756 new and resale houses and condominiums sold in the nine-county region last month, a 12% increase from a year earlier. The median fell to $US350,000 ($501,000), down 7% from October and down 47% from the peak set in June, July and August of 2007, the San Diego-based research firm said in a report. The Bay Area median has fallen 12 consecutive months on a year-on-year basis.

Los Angeles County shelters brim with families - (www.latimes.com) Vouchers for motel rooms are growing scarce as bad economy, bad weather take their toll. At the Union Rescue Mission downtown, mothers with children tell how they cope with their circumstances. With her 5-week-old baby asleep face-down across her lap, Erica Richardson settled into a chair at the Union Rescue Mission and reviewed her strategies for staying sane while living with an infant in a homeless shelter. The key is to get away from the shelter during the day, the tired-looking 33-year-old said. Head to the park, to a friend's house, to any place where she can pretend, for a while anyway, that she is just another mom on an outing. With her 5-week-old baby asleep face-down across her lap, Erica Richardson settled into a chair at the Union Rescue Mission and reviewed her strategies for staying sane while living with an infant in a homeless shelter. The key is to get away from the shelter during the day, the tired-looking 33-year-old said. Head to the park, to a friend's house, to any place where she can pretend, for a while anyway, that she is just another mom on an outing. The economic crisis and cold weather have created a larger than usual influx of families to shelters in Los Angeles County this year, according to shelter officials and other service providers. On Wednesday, officials at the Union Rescue Mission, which runs the county's cold-weather shelters, held an emergency meeting to figure out what to do when they run out of hotel vouchers for families, which could happen this month. "This is, as far as I am concerned, a disaster of Katrina-esque proportions," said Tanya Tull, chief executive of the nonprofit Beyond Shelter. A variety of negative economic forces are contributing, she said, from job losses to an uptick in foreclosures.

Bailing out California, Again - (www.newgeography.com) If many of the nation’s governors have their way, the next agenda item for the spendthrift federal government could be a bailout of state budgets. According to a report issued on December 10 by the Center on Budget and Policy Priorities, 37 states face mid-year 2009 budget deficits, totaling $31.7 billion. As would be expected from its size, California leads the pack at $8.4 billion. However, California’s shortage is well above its share, at more than one-quarter of the total which is double its share of the population. Yet it gets worse. Later, California Governor Arnold Schwarzenegger announced that the budget deficit had risen to $14.8 billion, which would take its share of the deficits to more than three times its share of the population. All of this is after a long and drawn out legislative process that was to have closed a previous $22 billion deficit earlier in the year. For years, California boasted a strong economy, with the world’s leading technology, entertainment and agricultural industries. The state’s Legislative Analyst claims that California would be the 7th largest economy in the world if it were a nation. California is rich not only in the aggregate, but at the ground level. Only eight of the 50 states have a higher gross state product per capita. This means that California is per capita the richest large economy in the world. Thus, any bailout would be disproportionately financed by parts of the country that are often far less affluent. How can it be that California stands in such tatters seeking a handout? Why are people from other states, at least 30 of which wouldn’t even rank in the top 50 economies of the world, being asked to prop up this dynamo?

Renters' eviction notices often illegal in S.F. - (www.sfgate.com) San Francisco Assessor Phil Ting did his best impression of a broken record at a news conference Wednesday. At least it was for a good cause. "Did we say 'stay in your house' enough?' " Ting joked. "Do not leave. Do not leave your home." Ting wasn't alone. A representative from the city's Rent Stabilization and Arbitration Board and members of the Housing Rights Committee were all in attendance to speak out against a truly unfair and harmful practice: Some renters are being told that if their landlord defaults on the mortgage during this foreclosure crisis, they must move out - even if they've been making their rent payments on time. The fact is, in San Francisco that is simply not true. "Tenants in rent-controlled buildings in San Francisco are protected by the need for a 'just cause' for eviction," said Darlene Wolf, executive director of the rent board. "And foreclosure is not just cause."



OTHER STORIES:

Moody's Puts $76 Billion In Comml CDOs On Watch For Cuts - (www.easybourse.com) - Moody's Investors Service warned that $76 billion in U.S. commercial real estate collateralized debt obligations face possible multi-notch downgrades due to deteriorating market conditions. The breadth of the warning harkens back to similar alarms on subprime mortgages at the start of the credit crisis. While the pain accompanying the rapid weakening in commercial real estate will be severe, few expect it be as deep as the residential real estate debacle. That's because many still see the economy as the driving force behind the deterioration rather than negligent lending standards present in the subprime market.
The Fed Has Become a Prime Broker, Will Lend to Hedge Funds Under Consumer Loan Program - (www.nkaedcapitalism.com) the Fed is going further and further down the path of buying every and any junky asset to try to stimulte lending. But the more it steps in, both on the funding and the distribution side, the more it crowds out private players and impedes the resumption of normal activity
'Angel' of foreclosure defense bedevils lenders - (www.ml-implode.com) - "Charney said her crusade was born out of experience. Over and over again, she said, in her cases and those of other attorneys s...
Hey Barack…you might want to see this… - (www.ml-implode.com) - The FDIC also announced that in the third quarter, the Deposit Insurance Fund (DIF) decreased by 23.5 percent ($10.6 billion) to...
Congress Ready to Tap $350 Billion in Aid, Frank Says - (www.ml-implode.com)

Bay Area house prices hit 8-year low in November - (www.sfgate.com)
Bay Area house prices plummet 44% to 2000 levels - (lansner.freedomblogging.com)
More are moving out of California than in - (www.latimes.com)

Walking away from a mortgage - (msnbc.msn.com)
Foreclosed Houses Sell At Steep Discounts - (www.businessweek.com)
Pulte House Valued At $0 - (www.justanotherlemon.com)
Why the party lasted so long - (optionarmageddon.ml-implode.com)
On Wall Street, Bonuses, Not Profits, Were Real - (finance.yahoo.com)
Two Ways to Revamp U.S. Housing Policy - (economix.blogs.nytimes.com)
Fed Slashes Rates as Prices Plunge - (www.kiplinger.com)
The Hardest Lesson: Inequality Harms The Economy - (www.thepeoplesvoice.org)
The Economic Crisis is a Test of Character - (www.huffingtonpost.com)
Madoff Scandal Shaking Real Estate Industry - (www.nytimes.com)
Madoff scam is part of "the bezzle" - (marketplace.publicradio.org)
Bailout Cash Benefits Only Banks - (www.lasvegassun.com)
Silicon Valley Implodes, Yahoos Sing - (www.youtube.com)