KeNo's Housing and Economic Portal: Monday April 12 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Nashville School Board Privatizes Bus Drivers And Groundskeepers - (www.tennessean.com) Boos erupted from the 150 or more people attending the Metro school board meeting Tuesday night as board members narrowly approved a $633 million budget that cuts hours for some 600 bus drivers and contracts out all janitor jobs and groundskeeping work. As the meeting went on, the crowd became more and more agitated. When the budget proposal passed, quiet mumblings rose to shouts. Someone yelled, "How can you sleep at night?" Then, most of the audience rose and filed out of the boardroom, chanting a call for the dismissal of Schools Director Jesse Register, who put together the proposal. For the school board to stand up to that mob really says something - most likely, that voters are fed up with taxes.

Bill to slash pensions for new government workers flying in Springfield - (www.chicagobusiness.com) A bill that would sharply cut pensions for government employees is all of a sudden moving at lightning speed through the Illinois General Assembly. But, even though it only would apply to newly hired workers, it reportedly would give huge budget relief to Chicago Public Schools, which has threatened mass teacher layoffs to fill a nearly $1-billion hole. Under terms of legislation moved to the passage stage Wednesday morning by House Speaker Michael Madigan, newly hired workers generally would be able to retire at age 67, up from as early as 55 now. In addition -- again, only for newly hired workers -- benefits would be capped on the average salary of eight of their last 10 years of work, compared to four of 10 years now. And the annual inflation adjustment would be the lesser of 3% or half of inflation, far under the 3% minimum figure in law now. The legislation, which may go to the House floor for a final vote on Wednesday evening, also would apply the pension only to the first $106,000 of annual pay.

52% in California Say Public Employee Unions Significantly Strain Budget - (www.rasmussenreports.com) Most likely voters in California (52%) believe public employee unions place a significant strain on the state’s struggling budget, according to a new Rasmussen Reports telephone survey in the state. Just 24% disagree and say the unions are not a budget strain. Another 24% are undecided. The majority of voters in the state (53%) oppose unions for public employees, while 43% are in favor of them. Those numbers include 19% who are strongly in favor and 28% who strongly oppose these unions.

Lawmaker after ‘pension’ abuse - (www.smdailyjournal.com) A state lawmaker wants to end the practice of public employees abusing the state’s pension system by boosting their final salaries before retirement by cashing out on vacation time or administrative leave, for instance, to get higher monthly payments. Senate Bill 1425, co-authored by state Sen. Joe Simitian, D-Palo Alto, aims to curtail the problem of pension spiking amongst public employees and “double dippers,” those who retire with substantial pensions and then pursue similar jobs often at the same public agency. Some estimates consider the practices a $100 million loss to state taxpayers. “I think the public is willing to pay for a decent retirement for someone with years of service,” Simitian said. “I don’t think the public wants to pay the equivalent of two full-time paychecks to someone working in the same job.” In 25 years of public service, Simitian has never heard the level of anger and frustration from the public on the issue as he has in the past year, he told the Daily Journal. “It is a disservice to the public and other public employees and undermines the public’s confidence and support for the entire system,” Simitian said. Simitian anticipates some pushback on his legislation but he is not the only one looking to curtail the high cost of public employee pensions. A group has formed in Menlo Park aimed at putting a pension reform measure on the city’s November ballot. Citizens for Fair and Responsible Pension Reform say the current rules Menlo Park operates under in paying its employee’s retirement cost will eventually bankrupt the city. Under current rules, an employee can receive 81 percent of his salary for life starting at age 55. The reform group’s ballot measure intends to move the number down to 60 percent of an employee’s salary at age 60. The measure, however, excludes police department employees.

Some homedebtors facing prospect of repeated foreclosures - (www.latimes.com) Aided by flimsy lending practices, many borrowers got into real estate investing during the boom years. Now they're defaulting on multiple properties. Every morning at 6 a.m., Brenda Duchemin kneels down on two plush throw pillows in front of a carved teak shrine in her Diamond Bar home and chants. In front of a cluster of oranges, a small teacup and a golden lotus flower on the shrine, the slight 53-year-old tries to expel the negative images: the two homes she and her husband, Mohammad Ashraf, lost to foreclosure auctions last month, the bankruptcy petition they were forced to file in 2009, and their ongoing battle to stay in their spacious and airy home, which is furnished with soft blankets, leather couches and Elvis commemorative plates on the walls. Daily chanting helps her karma, Duchemin says, which is currently not in such a good state. "We don't know what we did in a past life to bring this out," she said, a slight Boston accent tinting her speech. "I must have been a horrendous person down the line." Though signs of recovery in the housing market are emerging, thousands of people throughout the Southland are still in a precarious position on the brink of foreclosure, struggling with monthly bills and mortgage payments.

Trust, Underwater - (www.nytimes.com) I could handle the financial ramifications of hearing ‘‘no'' from a bank, but nothing in my experience had prepared me for the succession of emotions that came with it. I will admit to feeling inadequate, even a little embarrassed, in the moments after I put down the phone and pondered these conversations. I imagined myself suddenly as the loan applicant in all those 20th-century movies, the ones where the guy sits in the well of some august, oak-paneled bank and pleads his desperate, not very persuasive case to a granite-faced banker on the other side of the desk. My father had paid off a 30-year mortgage in five years by foregoing carpets and new cars, and yet here I was: the prototypical American consumer of my generation, just another shaky borrower aspiring to live beyond his means. I replayed in my head the exchange with one broker who reluctantly offered that he knew of a small bank in Pennsylvania that might just be persuaded to open the kind of credit line I was seeking — if he personally vouched for me. I felt like an addict looking to score. C'mon, you must know someone who's willing to do this. . . .

US Headed For Commercial Real Estate Crash Of Unprecedented Magnitude? - (www.beforeitsnews.com) Will commercial real estate be the next shoe to drop in the ongoing U.S. financial crisis? While most eyes are on the continuing residential real estate disaster, the reality is that the state of the commercial real estate market in America could soon be even worse. Very few financial pundits are talking about this looming disaster but they should be. The truth is that U.S. commercial property values are down approximately 40 percent since the peak in 2007 and currently approximately 18 percent of all office space in the United States is now sitting vacant. That qualifies as a complete and total mess, but the reality is that the commercial real estate crisis is just starting. In fact, the commercial real estate market is likely to get a whole lot worse. It is being projected that the largest commercial real estate loan losses will be experienced in 2011 and the years following. Some analysts are estimating that losses from commercial real estate at U.S. banks alone could reach as high as 200 to 300 billion dollars. To get an idea of how rapidly the commercial real estate market is unraveling, just check out the chart below....

OTHER STORIES:

Trichet: IMF Bailout for Greece 'Very, Very Bad' - (www.cnbc.com)

Does Intra-Day Reversal Signal End To Melt-Up? - (www.cnbc.com)

Should You Buy or Rent? - (realestate.yahoo.com)

Renters' advantage - (www.thenewstribune.com)

Sale Fraud, Squatter Stimulus, and Buying Before Foreclosing - (www.mybudget360.com)

More Ugly Housing Data - (www.safehaven.com)

CA Housing is Double-Dipping Right Now! - (www.mhanson.com)

House values in Phoenix may fall again because of 'shadow inventory' - (www.azcentral.com)

Many South Florida house sellers still asking too much - (www.miamiherald.com)

Credit scores can drop after getting loan help - (finance.yahoo.com)

Cramer: What Greek Debt Really Means for US Stocks - (www.cnbc.com)