KeNo's Housing and Economic Portal: Sunday October 25 Housing and Economic stories

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TOP STORIES:

City and Country of San Diego – Making desperate attempts to steal money from their citizens due to budget deficits:

· Parking-meter proposal to be sent to full council - (www.signonsandiego.com) A proposal that could lead to higher rates and longer hours at city parking meters is moving ahead. A San Diego City Council committee voted 3-2 yesterday to forward the plan to the full council for consideration. Council members Carl DeMaio and Marti Emerald dissented. DeMaio called the proposal a blatant “money grab” as the city faces a $179 million budget deficit for next year. The plan calls for amending the municipal code to allow city officials to set the rates and times for parking meters. The Mayor's Office says it would rely on community parking groups to recommend any changes. A city report shows that the proposed changes — keeping meters on until 11 p.m. and operating them on Sundays — would increase the city's net revenue by nearly $1.4 million annually.

· Deadline to claim money from county approaching | local-news - (www.sandiego.com) Taxpayers and others owed money by the county have less than two weeks to file claims for more than $650,000. If claimants don't file the appropriate paperwork by Oct. 19, the county gets to keep the money, Treasurer-Tax Collector Dan McAllister said. “It is sad to see that people are not stepping up and claiming the money we owe them,” he said in a news release. “These are monies that rightfully belong to people, and we simply need to give it back before the deadline.” The county has $432,752 in unclaimed property-tax refunds and $224,183 in overpayments to various county departments in the past three years. Those owed the money are listed online at bit.ly/SDowes and bit.ly/SDowes2 .

Lobbyists Stew After Being Bounced From Boards - (www.cqpolitics.com) tide of anger and dismay is rippling down K Street as the Obama administration implements a new policy limiting the roles of lobbyists on federal advisory committees. The policy change, described by the White House as the next step in President Barack Obama ’s drive to limit influence-peddling in Washington, could affect hundreds of lobbyists who serve on the panels, which were created by Congress in the 1970s to provide private-sector advice to the government. By removing a key point of access to the administration, many lobbyists will be less useful to their clients, who will be forced to appoint others to take up the slack. And the information about federal government intentions gleaned from committee meetings will now be unavailable to many lobbyists as they strategize on how to work various issues. “There is fury,” said a lobbyist who sits on one of the committees. “Absolute fury.” K Street veterans say they sit at the intersection of policy wonk-dom, Washington savvy, and the needs of business, and are therefore best suited to populate the panels. But the White House views the move as a key step in rolling back what officials see as the open-door policy for K Street created in previous years. According to a senior White House official, the panels have been excessively dominated by lobbyists. “It is one of the ways special interests have historically shaped policy to the detriment of the public interest,” he said. The policy was announced quietly Sept. 23 in a blog post on the White House Web site by the White House special counsel for ethics and government reform — also known as the “ethics czar” — Norm Eisen. “The White House has informed executive agencies and departments that it is our aspiration that federally-registered lobbyists not be appointed to agency advisory boards and commissions,” Eisen states. He goes on to say that “it is our hope” that lobbyists already on the panels not be reappointed. The Commerce Department and Office of the U.S. Trade Representative took the White House “aspiration” to heart almost immediately, telling members of the panels in a letter last week that lobbyists will no longer be appointed to panels and that those on them will be out as the committees are rechartered in 2010 and 2011. The letter, obtained by Roll Call, was signed by Commerce Department Industry Trade Advisory Center Director Ingrid Mitchem. It states: “If you are requesting consideration for reappointment, you will need to send to me a supplemental statement in writing, by letter or via e-mail, affirming both that: 1) you are not a federally-registered lobbyist, and 2) that you understand that if reappointed, you will not be allowed to continue to serve as an ITAC member if you become a federally-registered lobbyist at any time during your appointed tenure to the committee.” The instructions will decimate the ranks of lobbyists on the trade committees, which help guide U.S. negotiators’ objectives as they pursue trade deals with other countries. One source estimated that about 130 of 330 people on the trade committees are lobbyists. Other federal agencies affected by the new policy continue to consider how they will implement it. Administration allies in labor and elsewhere will not be spared. “The President recognizes that some lobbyists advocate for public interest goals shared by this Administration,” Eisen wrote. “Nevertheless, the President made a commitment to the American people to reduce the influence of lobbyists in Washington.”

The rich bail faster on mortgages - (articles.moneycentral.msn.com) Wealthy but 'underwater' homeowners are giving up on paying their mortgages as a financial tactic, a study finds. Those with smaller loans are less likely to do so. Increasingly, homeowners with good credit and no late payments are making what appears to be a strategic decision to walk away when their home's value falls below what's owed. "The American consumer has had a long-held taboo against walking away from the home, and this crisis seems to be eroding that," concludes a report on research by Experian, the credit agency, and Oliver Wyman, a management consultant company.

The better their credit rating, the more likely homeowners were to default. The trend is most pronounced where prices have fallen furthest: Florida and the West, especially California. The finding -- that 588,000 borrowers appear to have strategically defaulted in 2008, a 128% increase from the year before -- surprised the researchers. Piyush Tantia, who conducted the research for Oliver Wyman, and Charles Chung of Experian spotted the trend while analyzing 24 million credit files to see what they could learn about mortgage delinquency. Strategic defaulters stand out among the 14 million to 15 million "underwater" mortgages, the researchers said, because they:

· Pay all their bills consistently and on time until abruptly stopping mortgage payments with no attempt to get current again.

· Keep current on other debts after defaulting on the mortgage.

· Keep up payments on home equity lines of credit, sometimes drawing out cash, before defaulting on both the first mortgage and credit line.

This "sophisticated" combination of moves and timing suggests borrowers are employing foreclosure as a calculated financial strategy, said Tantia and Chung. They conclude that 18% of the borrowers with mortgages 60 days past due in the fourth quarter of 2008 were acting strategically, up from 3% -- "barely noticeable," the report says -- in late 2004. Most defaults, however, are driven by financial distress. Defaults due to troubled finances grew from 31% to 51% of loans in the same time frame.

China calls time on dollar hegemony - (www.telegraph.co.uk) You can date the end of dollar hegemony from China's decision last month to sell its first batch of sovereign bonds in Chinese yuan to foreigners. Beijing does not need to raise money abroad since it has $2 trillion (£1.26 trillion) in reserves. The sole purpose is to prepare the way for the emergence of the yuan as a full-fledged global currency. "It's the tolling of the bell," said Michael Power from Investec Asset Management. "We are only beginning to grasp the enormity and historical significance of what has happened." It is this shift in China and other parts of rising Asia and Latin America that threatens dollar domination, not the pricing of oil contracts. The markets were rattled yesterday by reports – since denied – that China, France, Japan, Russia, and Gulf states were plotting to replace the Greenback as the currency for commodity sales, but it makes little difference whether crude is sold in dollars, euros, or Venetian Ducats. What matters is where OPEC oil producers and rising export powers choose to invest their surpluses. If they cease to rotate this wealth into US Treasuries, mortgage bonds, and other US assets, the dollar must weaken over time. "Everybody in the world is massively overweight the US dollar," said David Bloom, currency chief at HSBC. "As they invest a little here and little there in other currencies, or gold, it slowly erodes the dollar. It is like sterling after World War One. Everybody can see it's happening." "In the US they have near zero rates, external deficits, and public debt sky-rocketing to 100pc of GDP, and on top of that they are printing money. It is the perfect storm for the dollar," he said.

New FHA Rules Make Life Tough For Condo Sellers - (www.squarefeetblog.com) Beginning, October 1st, the FHA has instituted new rules around loans on condos. The full letter is embedded below. The new rules are pretty dramatic, particularly for new condo and vacation-unit developments seeking FHA approval. The rules require at least 50% of the units in the project to have been sold for new product, and completely drops projects which are not intended to be primary residences. Additionally, consider the fact that the FHA guaranteed about 25% of the mortgages made in the United States this year. The requirements, some of which are detailed below, are part of an effort by the FHA to reduce risk. Just look at some of these rules:

· First projects which are no longer eligible at all:

o Condominium Hotels (this was a stupid concept to begin with)

o All projects not deemed to be used primarily as residential

· Now look at one of the conditions the lender has to “avoid or mitigate” against:

o Potential noise issues, where the property is located within 1000 feet of a highway, freeway, or heavily traveled road, within 3000 feet of a railroad, or within one mile of an airport or five miles of a military airfield.

· And finally, look at some of the requirements that pertain to Condominium Project approvals:

o No more than 25 percent of the property’s total floor area in a project can be used for commercial purposes. The commercial portion of the project must be of a nature that is homogenous with residential use, which is free of adverse conditions to the occupants of the individual condominium units.

o No more than 10 percent of the units may be owned by one investor. This will apply to developers/builders that subsequently rent vacant and unsold units. For two and three unit condominium projects, no single entity may own more than one unit within the project; all units, common elements, and facilities within the project must be 100 percent complete; and only one unit can be conveyed to non-owner occupants.

o No more than 15 percent of the total units can be in arrears (more than 30 days past due) of their condominium association fee payment.

o At least 50 percent of the total units must be sold prior to endorsement of any mortgage on a unit. Valid presales include an executed sales agreement and evidence that a lender is willing to make the loan.

o At least 50 percent of the units of a project must be owner-occupied or sold to owners who intend to occupy the units. For proposed, under construction or projects still in their initial marketing phase, FHA will allow a minimum owner occupancy amount equal to 50 percent of the number of presold units (the minimum presales requirement of 50 percent still applies). Secondary residences can only be included if it meets the requirements of 24 CFR 203.18(f)(2). If the owner-occupancy ratio includes presales, FHA requires an executed sales agreement and corresponding evidence that a lender is willing to make the loan and the buyer intends to occupy the unit. A separate owner-occupancy certification is also required in the FHA case binder for loans where the Individual Condominium Unit Appraisal Report, Fannie Mae Form 1073, does not contain the required data or the condominium project is proposed or under construction.

OTHER STORIES:

The New Job Search: Lots Of Interviews—And Then Silence - (www.cnbc.com) “Hiring managers are increasingly prone to shopping,” one expert told the New York Times. “Even if the person across the table is great, there might be someone else even better.”

Corporate Communism - (www.dailybail.com)

'Baby Boomer' credit defaults soar - (www.nzherald.co.nz)

Treasury Moves to Offer Rewards for Short Sales - (www.dsnews.com)

Racing for the Homebuyer's Tax Credit? See These Tips - (www.cnbc.com)

Investors Are Showing They're Not Afraid of the Fed - (www.cnbc.com)

Affordable housing a boon for social investors; down 50%-70% in Marin- (www.csmonitor.com)

Commercial Losses Loom, Office Rents Fall - (www.blogs.wsj.com)

Hotel defaults, foreclosures rise in California - (www.latimes.com)

Buyers realise houses still out of reach in India too - (www.indiatimes.com)

Dollar Hysteria - (www.informationclearinghouse.info)

US Economy Rebounded Strongly in Third Quarter: Poll - (www.cnbc.com)

Oil Next Week: What Traders Will Be Watching - (www.cnbc.com)