Wednesday March 25 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Trump Sued by Condo Buyers Over Abandoned Baja Luxury Resort - (www.bloomberg.com) Ah, another deal The Donald involved with has gone bad. Donald Trump, the U.S. real estate developer, and his partners in a defunct hotel and condominium project near Tijuana, Mexico, were sued by condo buyers who claim to have lost as much as $18 million in deposits. Trump and Los Angeles-based Irongate Development allegedly induced buyers with marketing materials touting Trump’s involvement when he had merely licensed his name to the project, known as Trump Ocean Resort Baja, according to the complaint filed yesterday on behalf of 69 condo buyers in state court in Los Angeles. Buyers were led to think that Trump played an active role in development and held an equity stake, and that his children Donald Trump Jr. and Ivanka Trump, executives in his company, had bought condo units, the suit claims. Irongate also concealed from condo buyers that it failed to obtain construction financing after credit markets unraveled last year, while continuing to withdraw their deposits from escrow accounts, according to the complaint. The defendants allegedly set up a shell company in Mexico to deflect liability. “They were taking money out as late as November ‘08 without saying ‘boo,’” said Bart Ring, a lawyer for the plaintiffs. He said the condo buyers weren’t formally notified until last month that the project wouldn’t go forward.

Altered deed leads to 2 arrests, police say - (www.insidebayarea.com) A woman who investigators say fraudulently changed the deed to her dead mother's house was arrested after she tried to evict several other family members who lived there, police said Thursday. Donna May Dennis, 47, of Livermore, and 56-year-old Mariefe San Juan Bago, of Fresno, have been in custody at Santa Rita Jail in Dublin since their arrests Feb. 27, Livermore police Lt. Matthew Sarsfield said. "They both conspired to commit these crimes," he said. Dennis is accused of preparing a fake "quit claim" deed to get control of the house, in the 200 block of El Caminito in Livermore, after her 71-year-old mother died from an illness Sept. 12, authorities said. The deed had to be notarized, and police said Dennis arranged to meet with Bago, a licensed California Notary, in Fresno. Dennis forged her mother's signature on the "quit claim" deed and Bago notarized it, authorities have said. After she became the owner of the home, she tried to evict several siblings, who immediately suspected her of forging the documents, police said.

NAACP plays race card and files suits claiming African Americans were targeted for subprime mortgages – (www.latimes.com) I don’t buy complaint. NAACP (and the criminals of Acorn) are the same groups that were pushing congress to expand lending in the first place to minority groups which normally would not have qualified for lending due to their credit scores. Now these guys are using the race card and riling up the populace and marching to the doors of bank executives. Let’s face it, these banks and mortgage brokers were pushing whites, blacks, and all people into whatever loans they could make the most fees on. If you don't believe me, see the following story from 1999.

Fannie Mae, NAACP Announce Partnership to ProvideExpanded Mortgage ... - (www.allbusiness.com) WASHINGTON--(BUSINESS WIRE)--Jan. 21, 1999--The National Association for the Advancement of Colored People (NAACP) and Fannie Mae (NYSE:FNM), the nation's largest source of financing for home mortgages, Thursday announced a five-year partnership to provide expanded mortgage financing, homeownership counseling, and information to help underserved and minority families become homeowners. The multi-million dollar partnership is planned to help at least 20,000 African-American households receive information on how to move toward their goal of homeownership. Through the partnership, Fannie Mae, working with lenders such as NationsBank, will expand its commitment to provide mortgage financing using the full range of available mortgage products and flexible underwriting guidelines at its disposal. There is no limit on the amount of mortgage financing that the NAACP can access for its clients using standard Fannie Mae products. Fannie Mae also will provide up to $110 million in special financing products, including a new $50 million underwriting experiment specifically tailored to the unique credit needs of the NAACP clientele.

An ACORN Jammed the Gears of America's Economy - (www.personalmoneystore.com) Michael Gaynor writes that Anita MonCrief, who has testified in court against the community organization group, is eager to expose the group’s connection to Herbert Sandler. She’s writing a four-part series entitled “ACORN and the Sandlers.” Like everyone else who cares about eliminating government corruption, I’d love to see what she comes up with. Why didn’t ACORN go after “one of the worst predatory lenders in the country?” What is its relationship with the Center For Responsible Lending (take a look; new information is always good, however)? What should we know about ACORN’s housing projects like Desert Rose in Arizona and the Glenn Subdivision in Texas?

At A.I.G., Good Luck Following the Money - (www.nytimes.com) WE return this week to the subject of the American International Group, the giant insurer that has received $170 billion in taxpayer guarantees, because the clamor over its rescue continues to grow. Of concern to those on both Capitol Hill and Main Street is the secrecy surrounding the $50 billion funneled to A.I.G.’s counterparties since it nearly collapsed last fall. Now that we live in bailout nation, why does the A.I.G. rescue rub so many the wrong way? Here is a hypothesis: Even as investors, employees, communities and taxpayers have been battered by the crippled financial system, A.I.G.’s counterparties were saved from losses on deals they struck with the insurer. Add the fact that the government has resisted revealing these companies’ identities or how much federal money they received, and it’s easy to see why resentment boils. As a result of the A.I.G. rescue, taxpayers own almost 80 percent of the company. (Friday evening, as this column was going to press, rumors were swirling that A.I.G. might be releasing a list of all of its counterparties.) Representative Carolyn B. Maloney, Democrat of New York, said she had twice asked for a full accounting from Ben S. Bernanke, the chairman of the Federal Reserve, which arranged the A.I.G. rescue. She has not received it. “They have told others it is proprietary information,” Ms. Maloney said in an interview. “But we are the proprietors now. Taxpayers own the store, and we should be able to see the books.” A.I.G., at one time the world’s largest insurer, sold contracts to these sophisticated counterparties that theoretically protected them from losing money if the debt they had purchased defaulted. Known as credit default swaps, the contracts offer the same kind of protection a homeowner receives from an insurance policy against fires and other unforeseen calamities.

California Teachers Rally as 26,000 Job Cuts Loom - (www.bloomberg.com) California teachers organized protests in more than a dozen cities today as about 26,000 may lose their jobs because of spending cuts the Legislature approved last month to keep the state from running out of money. School districts across the most-populous U.S. state have been warning thousands of teachers that they may be fired as a result of California’s declining tax collections. The plan signed by Governor Arnold Schwarzenegger last month cut $8.4 billion from schools and community colleges out of $15 billion trimmed from state spending through June 2010. “These cuts are going to hurt an entire generation of children and damage California’s public education system for years to come,” David Sanchez, president of the California Teachers Association union, said in a statement. California is among the states hardest hit by the economic recession that slashed its revenue from July through February by $5.5 billion from the same period a year earlier, according to Controller John Chiang. The state relies on the receipts to pay for schools, health care, jails and other programs. With less money, the state has temporarily scuttled thousands of construction projects and has forced more than 200,000 employees to take one day of unpaid leave every month, amounting to a 5 percent pay cut.

KKR Losses Show Failure to Close Gap Raising Defaults - (www.bloomberg.com) Investment funds that purchased a majority of the lowest-rated loans during the credit boom have stopped buying, threatening to undermine President Obama’s plan to pull the economy out of the worst recession since 1982. The funds, known on Wall Street as collateralized loan obligations, provided cash to movie-rental chain Blockbuster Inc., which is now exploring a bankruptcy filing, according to a person familiar with the situation. They also helped finance the $33 billion buyout of Nashville, Tennessee-based hospital operator HCA Inc. Now, as an economic slowdown drags into the 16th month, borrowers unable to pay their debts are causing record losses for CLOs. Moody’s Investors Service put 760 of the funds, holding about $440 billion of assets, on review for downgrades on March 4. Unless policymakers decide to earmark some of the $11.6 trillion of government programs created to combat the seizure in credit markets to support high-yield loans, defaults may soar through 2012, according to investors. “The game is over,” said Ross Heller, managing director at New York-based NewOak Capital LLC, an investment and advisory firm. “There isn’t going to be money available for refinancing. Companies will have to be put into bankruptcy and the debt restructured.” …. Henry Kravis’s KKR Financial Holdings LLC, a publicly traded finance company whose shares have fallen 97 percent in the past year, reported a $1.2 billion loss on March 2. That included charges for loans held in its CLOs to bankrupt Chicago-based newspaper owner Tribune Co. Kravis, his cousin George Roberts and Jerome Kohlberg started Kohlberg Kravis Roberts & Co. in 1976 and were pioneers in leveraged buyouts, where investors acquire companies mostly with borrowed money. KKR participated in the largest deals, ranging from the $31.4 billion acquisition of RJR Nabisco Inc. in 1989 to the $43 billion purchase of Dallas-based electricity producer TXU Corp. in 2007.

Texas gov. rejects stimulus money for unemployment - (www.google.com/hostednews/ap) Texas Gov. Rick Perry announced Thursday he turned down $555 million of federal stimulus funding that would expand the state's unemployment benefits, saying the money would have required the state to keep paying for the expanded benefits after the stimulus money ran out. Perry, an outspoken critic of President Barack Obama's $787 billion stimulus bill, did accept most of the roughly $17 billion slated for Texas in the plan. But he turned down the unemployment benefits because he said it would require the state to increase the tax burden on Texas businesses. "During these tough times, Texas employers are working harder than ever to move products to market, make payroll and create jobs," Perry said at a news conference. "The last thing they need is government burdening them with higher taxes and expanded obligations." Other Republican governors have said they will turn down federal stimulus money, including Louisiana Gov. Bobby Jindal, who said he would not accept nearly $100 million to expand unemployment benefits. Moments after Perry said he would reject the money, the House Senate Committee on Federal Economic Stabilization Funding voted 5-1 in favor of a motion encouraging the Legislature to make the necessary changes to enable the state to receive $555 million. Republican Rep. Jim Pitts, chairman of the powerful House Appropriations Committee, was among those voting in favor the motion.

Oakland Man (and previous Berkeley Tree Sitter) Injured In West Bank Protest - (www.sfgate.com) Another man protesting for the sake of protesting, and now paying the consequences. He fucked with the wrong group (Israeli soldiers) and now has a hole in his skull. Oakland man who was among the tree-sitters who fought to save a grove of oaks and redwoods next to UC Berkeley's Memorial Stadium was critically wounded Friday in the West Bank by an Israeli-fired tear-gas canister, officials and acquaintances said. Tristan Anderson, 38, was injured during a protest over the separation barrier that Israel erected between it and the West Bank. An Israeli soldier fired the canister during a clash with protesters and hit Anderson in the head, said Ulrika Jenson of Sweden, an activist with the International Solidarity Movement. Jenson, who saw the incident, said in a statement released by the group that "the Israeli soldiers were standing on the hill looking over us, firing tear-gas canisters straight into the crowd." "Tristan was hit and fell to the ground," Jenson said. "He had a large hole in the front of his head. I tried to stop the bleeding, but he was bleeding heavily from the head, nose and mouth." Anderson underwent brain surgery at Tel Hashomer hospital in Tel Aviv and was in the intensive care unit, Woody Berch, who works in civil-rights law in Israel, said after visiting the hospital.




OTHER STORIES:

Iran signs $3.2-billion natural gas deal with China – (www.latimes.com) China will help in the exploration of the offshore South Pars field, believed to be part of the world's...
Banking sector scrambles to ditch bailouts - (www.latimes.com) Healthy chains are opting to return federal funds to distance themselves from bad publicity and unwieldy restrictions.
Madoff Had Accomplices: His Victims - (www.nytimes.com)
Japan Vows More Spending, Backing American Stance - (www.nytimes.com)
Germany Said to Consider New ‘Bad Bank’ Plan for Toxic Assets - (www.bloomberg.com)
Split on a Cure for Recession, Leaders Try Three Efforts - (www.nytimes.com)
G-20 Looks to Tackle Toxic Assets, Defuse Tension - (www.bloomberg.com)
Deal on IMF likely to disguise divisions - (www.ft.com)
California Budget Runs $8 Billion Short, Analyst Says - (www.bloomberg.com)

G20 Backs Rescue Funds Boost, Renews Crisis Pledges - (www.cnbc.com) G20 finance ministers said they would use their full fiscal firepower to combat the worst downturn since the 1930s.
Commodities Clearing a Path for Stocks to Follow - (www.cnbc.com)
Is the White House Changing Its Tune for Wall Street? - (www.cnbc.com)

Short Sale Price Rules on Agenda for April Meeting - (www.cnbc.com)
Getting Your Taxes Right—the Second Time Around - (www.cnbc.com)
Mark-to-Market Meeting Set By Accounting Board - (www.cnbc.com)
The Week: Bear Market Rally, or Something More - (www.cnbc.com)
Obama Autos Task Force Hires Bankruptcy Lawyer - (www.cnbc.com)
Madoff's New Digs: Penthouse to 'Big House' - (www.cnbc.com)