KeNo's Housing and Economic Portal: Saturday August 8 Housing and Economic stories

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Mark Ponder, famous for local billboards, found dead - (www.bakersfield.com) Mark Ponder, the real estate broker whose face has loomed above Bakersfield on billboards for years, was found dead in the Kern River Wednesday. The 38-year-old's death is being treated as suspicious -- a routine classification whenever a body is pulled from the river and cause of death isn't obvious, said Detective Mary DeGeare of the Bakersfield Police Department. An autopsy is scheduled Thursday morning. A coroner's release classified the case as an apparent drowning. "I was shocked...just total shock," said Debbie Craig-Banducci, broker with RE/MAX Magic, who was in Las Vegas Wednesday evening at an industry gathering. News of Ponder's death had traveled quickly from hotel to hotel among a contingent of Bakersfield attendees, she said. "My phone and other people's phones have blown up" with calls and text messages, Craig-Banducci said. Ponder was owner-broker of Westchester Realty at 2501 F St. Two agents worked under his license, state records indicate. Karen Davenport, an agent with McKinzie Nielsen Real Estate Inc., was also shocked when she learned of Ponder's death while at a dinner party Wednesday night. "It's quite stunning," she said. "He was a nice guy... . You hate that to happen to anyone." Linda Vernon, chief executive of the Bakersfield Association of Realtors, said Ponder was a member but she declined to comment "out of respect for the family." Police say a man was jogging around noon on the south side of the river, east of Manor Street, when he saw a body floating in the water. He called 911, then used a stick to push the body to the river's edge to wait for emergency personnel. County Search and Rescue members estimated the victim had been in the water 24-72 hours. DeGeare said police will have a clearer idea of how to proceed with any investigation after the autopsy. Ponder had been on local television news this week over allegations he'd recently thrown a beer bottle at another man. The incident is being investigated by the Kern County Sheriff's Department. No updates were available Wednesday night. Ponder had previous scrapes with the law, online court records show, beginning at least as early as 1990 and continuing through last year. All charges filed against him were misdemeanors, including drunk driving-related charges and driving with a suspended license. In 2003, one count of assault with a deadly weapon and one count of petty theft were dismissed. Although he was sentenced more than once to serve time in county jail, it appears Ponder never remained more than a few days behind bars. Ponder's real estate records indicate state regulators filed an administrative action against him in March. Details weren't available Wednesday night.

USPS May Be Unable to Make Payroll in October and Retiree Health Plan Costs, Unions' Letter to White House Says - (www.myfederalretirement.com) On July 14, unions representing United States Postal Service (USPS) workers wrote the White House with "extreme urgency" asking for a meeting to address lack of funding for both employee payroll in October and health benefits for retired employees. The letter, which the FederalTimes.com blog provided a scanned copy late last week, says: "[USPS] top executives are now saying that the USPS will default on a $5.4 billion payment to prefund future retiree health benefits on September 30, 2009. And its government affairs representative are now telling Congressional staff that the Postal Service may not be able to make payroll in October and will be forced to issue IOUs instead." The letter was co-signed by the presidents of the American Postal Workers Union, National Rural Letter Carriers' Association, National Association of Letter Carriers and National Postal Mailhandlers Union, and sent to White House Deputy Chief of Staff, Jim Messina. GovExec.com reported more on the letter in this column on July 17 which is included here below:

Postal unions seek White House help on pay, benefits - (jessescrossroadscafe.blogspotcom) Four unions representing the nation's postal workers are pleading for a meeting with the White House to address possible funding shortfalls for workers' payroll and retiree health benefits, according to a letter obtained by CongressDaily. The presidents of the American Postal Workers Union, National Rural Letter Carriers' Association, National Association of Letter Carriers and National Postal Mailhandlers Union co-signed the Tuesday letter to White House Deputy Chief of Staff Jim Messina, warning that the U.S. Postal Service is at risk of defaulting on a $5.4 billion payment to prefund retiree health benefits at the end of September. The letter alleges that USPS "may not be able to make payroll in October and will be forced to issue IOUs instead." Yvonne Yoerger, a spokeswoman for USPS, confirmed that the unions wrote the letter but disputed the claim that payroll deadlines will be missed. "That's not something that's been discussed at all," she said. "We are committed to making payroll." Yoerger said USPS will continue to work with OMB and the Office of Personnel Management to determine if and how the Postal Service can meet the Sept. 30 deadline to pay forward $5.4 billion in future health liability costs. The Postal Service is required by law to set aside funds for future retiree health care costs, rather than paying recipients as costs are incurred as other government agencies do. As a result of a $3 billion loss to date this year, the unions wrote, no money is available for those future payments, and regular payroll deadlines may not be met unless other funds are tapped. "Such a [financial] collapse can be averted without resort to a taxpayer bailout by reforming the retiree health prefunding provisions of the law and [by] giving the Postal Service access to its own resources in the Postal Service Retiree Health Benefits Fund, which now has a balance of $32 billion," the unions wrote. But that transfer of funds would require congressional approval, and the unions fear that pressure from the White House will be needed to prompt quick action. "We believe that the Obama administration must intervene now to avoid both a political and economic train wreck," they wrote. Reps. John McHugh, R-N.Y., and Danny Davis, D-Ill., introduced legislation this year that would amend the law to allow USPS to reach deeper into the flush Retiree Health Benefits Fund, but the unions argue the measure would not do enough to fix the financial problems.

Fannie & Freddie: The most expensive bailout - (www.money.cnn.com) Efforts to use the troubled mortgage finance firms to fix housing market problems are likely to push the taxpayer bill for Fannie & Freddie above $100 billion. The first big government bailout of the financial crisis -- the takeover of mortgage finance giants Fannie Mae and Freddie Mac -- is poised to be the most expensive and complicated to complete. Since Congress essentially wrote a blank check to the Treasury Department in July 2008 to do what needed to be done to inject capital into the two firms, Fannie (FNM, Fortune 500) has received $34.2 billion of direct government support while Freddie (FRE, Fortune 500) has received $51.7 billion. While that's lower than the $117.5 billion poured into insurer AIG by the Federal Reserve and the $200 billion given to the nation's largest banks through the Troubled Asset Relief Program, or TARP, the current cost of the Fannie and Freddie bailouts dwarfs original estimates from a year ago. When Congress was debating the bailout of Fannie and Freddie last July, the official estimate from the Congressional Budget Office was that a bailout would most likely cost taxpayers $25 billion, with only a 5% chance of the price tag reaching $100 billion between them. In addition, both Fannie and Freddie are likely to need billions of dollars more after they report second quarter results in the coming weeks. Experts believe the cost will only continue to rise in the next year. "We're assuming they each will cross the $100 billion mark fairly soon. They could be hitting the $200 billion barrier by the end of next year," said Bose George, mortgage analyst at Keefe, Bruyette & Woods, an investment bank specializing in financial services firms. The direct government aid has helped keep the two troubled firms solvent. The amount of any additional aid will be determined by their ongoing losses and reserves for future losses on the trillions of dollars in mortgage loans they own or guarantee. Fannie and Freddie were originally created to help ensure that financing for homes would be available and affordable to more consumers. The two firms buy mortgages from banks and other lenders and bundle them together into securities. They then either hold those securities or sell them to them to investors with a guarantee that they will be paid the money owed by homeowners. But as more homeowners continue to default on mortgages, the two firms will likely book additional losses well into next year. Neither firm has given an estimate as to how high losses will reach. But the original limit of $100 billion in losses set in place when the government put Fannie and Freddie into conservatorship, essentially a form of bankruptcy, last September was quickly raised early this year to $200 billion each because of concerns about looming losses. In return for pumping taxpayer dollars into the two firms, Treasury received preferred stock, which is designed to give the government a healthy 10% to 12% dividend. But few expect that Fannie or Freddie will be able to pay that dividend, let alone return the money handed to the firms to cover their losses..

Builder Rally Fleeting as Buyers Flee - (www.bloomberg.com) Townhouses and loft-style condominiums overlook manicured green lawns, flower-lined footpaths and gurgling stone fountains at the Central Park Westdevelopment in Irvine, California. Just a short walk away there’s a basketball court, a junior Olympic pool and a park. People are the only thing missing. While construction of the 43-acre real estate project by Lennar Corp., the third- biggest U.S. homebuilder, is almost finished, a message at the information center says some homes in the development are expected to start selling early next year. The largest homebuilders are mothballing communities across the U.S., signaling they have little confidence that a market rebound is imminent. Builder shares have rallied 76 percent from the lows in November. They may fall more than 20 percent in the next four months unless home prices and property writedowns stabilize, said Anna Torma, a former Merrill Lynch & Co. analyst who tracks the industry at Soleil Securities Corp. in New York. “Until we see job losses abate and foreclosures begin to decline, rather than increase as we expect, there is unlikely to be a catalyst for the builders,” Torma said. “It’s going to continue to be a challenging environment.” The Standard & Poor’s index of home construction companies rose less than 1 percent today, after falling earlier as much 3.2 percent. Lennar fell 1.3 percent to $11.11 in New York Stock Exchange composite trading and Centex Corp. rose 5 cents to $9.43. Brakes in Place: Centex, the Dallas-based homebuilder being bought by Pulte Homes Inc.for $1.3 billion, stopped construction last year at its Morningside development in Fort Pierce, Florida. It has sold 135 homes starting at $185,000 and won’t start building in the project until demand recovers, said David Webster, a company spokesman.