KeNo's Housing and Economic Portal: Sunday March 21 Housing and Economic stories

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TOP STORIES:

What to do when a bank is a deadbeat? - (marketplace.publicradio.org) The Obama administration is open to forcing banks to reduce the principle some homeowners owe on their mortgages. That was the word from a top Treasury official at a congressional hearing this week. No specifics on whether that might also apply to condo owners in danger of foreclosure. Condos pose a unique problem: If your neighbors don't pony up, you're still on the hook. From Chicago Public Radio, Ashley Gross reports.

ASHLEY GROSS: When Dee Hutchinson bought her condo, let's just say this was not part of the plan.

DEE HUTCHINSON: Oh my God, this is the worst. She and several others have just walked into a foreclosed condo upstairs from where she lives. The smell almost knocks us over. Hutchinson opens the fridge, and it's covered with maggots.

HUTCHINSON: Oh my God. I've never seen anything like this before. Hutchinson's here to take stock of the damage, as she and her neighbors try to save the building. Foreclosures emptied out two-thirds of the 27 units here. By last winter, most other owners had stopped paying their monthly dues. That left Hutchinson and two neighbors trying to shoulder the costs all on their own.

HUTCHINSON: I was having a fear of waking up one morning, and I would be the only one in the building. It just scared me.

One neighbor says she even paid an extra $2,700 to keep the gas on. But that wasn't enough -- and it was shut off last April for six months, leaving the entire building with no heat or hot water. By the beginning of this year, banks owned 10 of the foreclosed units, and they're legally responsible to pay condo fees of about $200 a month. But collecting from banks has been almost as tough as from the original owners. Hutchinson says she didn't even really know where to start.

HUTCHINSON: I personally wanted to go after the banks myself but, you know, I can't just, you know... I wouldn't even know where to go.

So they turned to a lawyer, Ebony Wilkerson. She started chasing banks to get them to pay overdue assessments, but Wilkerson says it's tough.

Greece Now, U.K. Next as Scots Ready for Pound Plunge - (www.bloomberg.com) While the eyes of the world focus on Greece’s debt crisis, investors in Edinburgh are busy preparing for the U.K. to be next. Turcan Connell, which caters to rich families, expects the pound to lose between 20 percent and 30 percent against the dollar once investors turn their sights on Britain as the government sells a record amount of debt. Sterling slid to a 10- month low versus the U.S. currency today. “Alarm bells were ringing in Greece for a long time and when it happened, it happened very quickly,” Haig Bathgate, head of strategy at Turcan Connell, said at the company’s offices in the Scottish capital. “The U.K. is in a similar predicament. It could be hit very hard.” Money managers in Edinburgh, where investment decisions have been made on behalf of insurers, pensioners and the wealthy for two centuries, are maneuvering to protect assets from the U.K. economy as it limps out of its worst recession on record. Bruce Stout, whose Murray International Trust Plc in Edinburgh has doubled over the past five years, said the chance of a plummeting pound are “better than even” and his biggest holdings are in Asia and Latin America. He called sterling a “very vulnerable currency.”

Qatar Real Estate: Tepid Demand Following Property Crash - (www.nuwireinvestor.com) 2009 saw a record decline in Qatar property prices, as tepid demand led to huge plunge in residential values and rents. Meanwhile, a wave of major upscale projects has swamped the market, and population growth is waning. Further price deflation is likely in 2010 despite Qatar's fundamental economic strength and rapid expansion. See the following article from Global Property Guide for more on this. The Qatari property market has witnessed an unprecedented slump this past year. Property demand from expatriates and wealthy holidaymakers has dropped sharply, and house prices and rents have fallen by double-digit figures. In the absence of official house price statistics, it is very difficult to gauge how much house prices have actually dropped. Jones Lang LaSalle estimates that house prices in Qatar have fallen by about 30% in 2009 from a year earlier. Other local realtors claim that house prices plunged by as much as 40% in 2009, while rents crashed by 25% to 30%.

Soros Unhappy With Obama’s Bailouts - (online.wsj.com) Billionaire investor George Soros, who helped U.S. President Barack Obama raise money for his presidential campaign in 2008, said Sunday he wasn't happy with Mr. Obama's handling of the financial crisis. Mr. Soros said the government should have taken over U.S. banks instead of bailing them out, a move he suggested would have been more popular with Americans. "The solution that he found to the financial crisis, which was to effectively bail out the banks and allow them to earn their way out of the hole, was, in my opinion, not the right solution," Mr. Soros said in an interview with CNN. "He should have compulsorily replaced the capital that was lost." After taking office at the start of 2009, Mr. Obama stuck to plans implemented by his predecessor George W. Bush to rescue banks by buying toxic assets from them and injecting capital into struggling lenders. As the financial sector recovered, the Obama administration put banks through stress tests to determine how much new capital they would need to withstand a severe recession, but steered clear of nationalizing them. Mr. Soros said China took a better approach to dealing with the financial crisis by forcing its banks to increase their minimum capital requirements. He suggested that Beijing has in recent years been more successful in its handling of economic policy than the U.S.

The Impact of Prop 13: Death For California - (www.kpbs.org) MAUREEN CAVANAUGH (Host): I'm Maureen Cavanaugh, and you're listening to These Days on KPBS. And Prop 13 is our topic, too. As California struggles to pinch together the funds to cover one huge budget shortfall after another, as state services are strangled to the point that entire programs are on the chopping block and state workers are furloughed, some say now may finally be the time to re-evaluate Proposition 13. Prop 13 was passed by voters back in 1978 to limit increases in property tax and reduce legislators’ ability to raise any tax with a simple majority. Its impact on California has been dramatic and lasting, and some claim Prop 13 ushered in a nationwide backlash against government spending. As part of our Envision San Diego project, we’re taking a look at Prop 13, the biggest tax revolt in California history. I’d like to welcome my guests. Joanne Faryon, KPBS Envision reporter. Good morning, Joanne.