KeNo's Housing and Economic Portal: Friday April 2 Housing and Economic stories

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TOP STORIES:

Detroit family homes sell for just $10 - (www.telegraph.co.uk) The once thriving industrial city has suffered a dramatic decline following the global economic crisis. According to Tim Prophit, a real estate agent, the crisis has led to a unprecedented portfolio of homes, but they are failing to sell. He said there were homes on the market for $100 (£61), but an offer of just $10 (£6) would be likely to be accepted. Speaking on a BBC 2 documentary, Requiem for Detroit, to be screened on Saturday, Mr Prophit said: "The property is listed by the city of Detroit as being worth $35,000 (£22,000), but the bank know that is impossible to ask. "This part of town has got a lot of bad press in the media because it featured in Eminem's film 'Eight Mile', but that particular road is fifteen minutes up the road and that is a long way in Detroit." Homes offered in viewing brochures as early 1920s example of colonial architecture would once have made handsome homes but are no longer sought after. Mr Prophit, of The Bearing Group, said: "This house was foreclosed by the bank a couple of months ago and was offered to us to sell. "But we can only put the boards up on the windows to protect the property, we can't be here 24 hrs a day to stop the squatters and the crack addicts from moving in.

Bank sued for seizing Pa. woman's house and parrot - (www.miamiherald.com) Bank of America has apologized to a Pittsburgh-area woman after one of its contractors allegedly trashed her house and took her parrot while wrongly repossessing her home. Forty-six-year-old Angela Iannelli sued the bank Monday. She claims her mortgage was up-to-date when one of the banking giant's contractors damaged furniture, took her pet parrot, Luke, and padlocked her Allison Park door in October. In a statement, the bank says it "sincerely apologizes" and has tried for months to resolve the issue. The bank says it has "zero tolerance for this kind of error" and says it will quickly review the lawsuit's allegations and consider any hardship that resulted. The woman says she eventually got her bird back after repeated calls to the bank.

Readers Share Tales of Foreclosure Schemes, Mortgage Misfortune - (www.huffpostfund.org) That nearly half of the tips we received dealt with loan modification or foreclosure rescue schemes came as no surprise -- complaints about advance-fee loans and credit repair schemes ranked 9th among those compiled in 2009 by the Federal Trade Commission, and the agency noted a 12 percent spike in fraud-related cases last year. Loan Modification, Foreclosure Schemes: In one case, a woman from Mesa, Ariz. , was persuaded by a direct-mail advertisement to pay a lawyer up front for loan modification assistance. "The fee was $3800 to submit a home modification loan package... He did (at least he said he did) and I never heard anything more until about six months later I received a letter saying he was out of the home modification business and that I had $137.50 coming to me over and above the expenses it took him to submit. I was declined."

Germany is tired of paying Europe's bills - (www.slate.com) Sometimes they cut to the essence of the story, those tabloid headline-writers, even when they haven't got the quotation exactly right. What the German politician being quoted in the Bild article cited above actually said was, "A bankrupt party must use everything he has to make money and serve his creditors. … Greece owns buildings, companies and several uninhabited islands, which can now be used to repay debt." What he meant, though, was more accurately reflected in that Bild headline: The Germans are fed up with paying Europe's bills. They don't want to bail out the feckless Greeks with their flagrantly inaccurate official statistics; they resent being Europe's banker of last resort; they object to the universal demand that they plug the vast holes in the Greek budget deficit in the name of "European unity"; and for the first time in a long time they are saying it out loud. Not only are tabloids demanding the sale of the Acropolis,Frankfurter Allgemeine Zeitung, Germany's deeply serious paper of record, has pointed out that while the Greeks are out protesting the raising of the pension age from 61 to 63, Germany recently raised its pension age from 65 to 67: "Does that mean that the Germans should in future extend the working age from 67 to 69, so that Greeks can enjoy their retirement?'

Big Unfinished House Is in Foreclosure - (www.voiceofsandiego.org) A few details emerged about the unfinished house in Point Loma I wrote about yesterday. It looks like the project on Plum Street is in the first stages of foreclosure. The owner, Francisco Mendiola, was hit with a notice of default Feb. 19, according to public property records. I tried calling Mendiola on Tuesday but none of the numbers I could find for him were in service. It doesn't appear to be the first major project that's run into trouble for Mendiola. He and another architect, Jess Gonzales, led a development team that built a lavish manor called "Essencia" on La Jolla's Hillside Drive, listing it in 2006 for $21.5 million. San Diego Magazine gushed over the six-bedroom, seven-bath, spec house -- meaning the developers built it with no particular buyer in mind -- in a spread in 2007. That wasn't the only time the house made headlines. In a 2008 article, the Union-Tribune's Roger Showley revealed that the home -- by then a "beautiful white elephant" -- had fallen into foreclosure. [T]he ultramodern house has ... a wine cellar, home theater, saltwater vanishing-edge pool, high-tech wiring and the curvilinear architectural form that Concepto Design Group specializes in. ... Proud of their work, the partners rejected several offers they considered too low and held out for the gold. That turned out to be a major blunder.

U.S. Taxpayers on the Hook for $5 Trillion of Fannie, Freddie Debt - (www.dailybail.com) House Financial Services Chairman Barney Frank caused a bit of an uproar Friday when he suggested the U.S. government does not guarantee the debts of Fannie Mae and Freddie Mac. Rep. Frank later recanted and backed a Treasury Department statement reassuring investors that, yes, Fannie and Freddie Mae debt is guaranteed by the U.S. government. "Going forward," he said in a statement, we "will make sure that there are no implicit guarantees, hints, suggestions, or winks and nods...we will be explicit about what is and is not an obligation of the federal government." But after years of winks and nods, there's no doubt that Fannie and Freddie now enjoy an explicit guarantee, according to most observers. The U.S. government placed Fannie Mae and Freddie Mac in conservatorship in September 2008: "This means that the U.S. Taxpayer now stands behind $5 trillion of GSE debt," according to the Congressional Research Service. The problem is that $5 trillion of so-called agency paper is not treated as if it is a debt of Uncle Sam for accounting purposes, says Richard Suttmeier, chief market strategist at Niagara International Capital and ValueEngine.com. "Get it on the balance sheet - that's where it belongs," Suttmeier says. "Add it to the $14.2 trillion in [federal] debt and let's move on."

OTHER STORIES:

The Real-Time Indicator That Says The Consumer Is Already Rolling Over - (www.businessinsider.com)

Eurozone could risk 'sovereign debt explosion' - (www.telegraph.co.uk)

Financial Chaos Will Last Many Years - (www.newsmax.com)

Are Shipping Numbers Masking A Stealth Commodities Selloff? - (www.businessinsider.com)

The Dark Side of House Subsidies - (www.nytimes.com)

Banks captured government, robbing taxpayers to pay private housing debts - (www.doctorhousingbubble.com)

The myth of mortgage interest deduction - (www.articles.moneycentral.msn.com)

Mortgage Principal Writedown Won't Save Housing - (www.cnbc.com)

Rising interest rates and balloon payments can make loan modifications unacceptable - (www.sun-sentinel.com)

Remodeling? It's a waste of money - (www.articles.moneycentral.msn.com)

Are unemployment benefits no longer temporary? - (www.washingtonpost.com)