KeNo's Housing and Economic Portal: Sunday April 4 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Florida, 4 other states rush $1.5B in cash to worst real estate gamblers - (www.sun-sentinel.com) The five states hardest hit by the foreclosure crisis have been given only weeks to plan how to spend $1.5 billion in federal funding announced by the Obama administration last month. Guidelines issued under the U.S. Treasury Department's Fund for Hardest Hit Housing Markets on March 5 gave housing finance agencies in California, Arizona, Florida, Nevada and Michigan just six weeks to come up with plans on how to spend their share of the money. The rush could be problematic for the states, especially because Treasury is seeking "innovative" measures to help families facing foreclosure. But some experts have been urging the administration to try the approach, believing it will be helpful and that it can be done quickly. "This is long overdue, allowing the use of more innovative techniques," said Ken Rosen, a real estate professor at University of California at Berkeley's Hass School of Business. The guidelines give wide leeway to the state Housing Finance Agencies charged with doling out the money to design programs tailored to their region's circumstance. The money can be spent, for example, to help families who can't pay their mortgages because of job losses, unable to refinance because plunging home values have left them "underwater," or to give relief from second mortgage payments. California's Housing Finance Agency, for example, is looking at areas of the state that have been hardest hit, like the Central Valley and Inland Empire area southeast of Los Angeles, spokesman Ken Giebel said. The agency is getting the most cash, $700 million.

It's Official: The US Housing Downturn Has Resumed in Earnest - (www.huffingtonpost.com) The year 2009 was the year of reflation theories and bubble blowing. Theses of "Green Shoots", catching the bottom, and QE reigning supreme were the order of the day. Sure enough, asset prices (nearly all of them) went one direction, straight up. We all saw it coming, but guys like me who actually count the money and rely on the fundamentals didn't believe it was a sustainable gain. It wasn't a bull market, but a bear market rally. After nearly one year, the reflationists have had their hay day, or have they? One thing that I have been proven correct on thus far is the housing market. Despite what was probably at least a trillion dollars of effort directed at suspending real estate and real estate related assets, prices are resuming their downward slide after falling 28% nationwide, peak to trough, and over 50% in some areas.

$35 million house assessed at $3.2 million - (lagunahomes.freedomblogging.com) A home currently asking $35 million in South Laguna Beach has a strange history, according to the Southern California MLS.

The home, located at 31887 Circle Drive, was listed March 17, 2006 with the following listing prices:

· $33.9 million

· $31.9 million

· $33.5 million

After 575 days on the market, the listing was canceled on October 18, 2007. The home was listed again January 21, 2008 for $2.9 million. Then the listing expired May 21, 2008. Then, it was listed Feb. 17 at $35 million. Offering only 3 bedrooms, 3 baths and a 5,640-square-foot lot, the position on the promontory and panoramic views are the driving force behind the price of the home. The assessed property value of this oceanfront home is $3,289,744.

Young couples must work 3 times longer to pay off house than 50 years ago - (www.nzherald.co.nz) The average Kiwi has to work nearly three times harder to pay off the average house than they did 50 years ago. Figures compiled by Bernard Hickey of interest.co.nz show that to pay for the average home of $350,000, someone on the average wage has to work for 17,680 hours. Based on a 40-hour working week and not allowing for spending on anything else or taking interest into account, that works out to about eight-and-a-half years' hard slog. In 1960, by comparison, the average home cost just $6639. Although the average wage was a measly $1.05 an hour, compared with $19.79 today, paying off a house would take 6332 hours, or just a little over three years. The numbers prove that "those people who say 'in the old days, we had it much tougher than you young punks' are wrong," Hickey points out.

FHA challenged on projected risk to taxpayers - (www.washingtonpost.com) The Federal Housing Administration will need taxpayer money because it failed to properly project how borrowers with FHA-backed loans are affected by job losses and diminished equity in their homes, New York University professor Andrew Caplin told a House panel Thursday. The agency, which insures lenders against defaults, has nearly depleted the cash it must set aside to deal with unexpected losses. But a recent audit of FHA's finances concluded that the agency will not need taxpayer money except in two catastrophic scenarios. Caplin said the audit ignored the risks posed by FHA borrowers who owe far more than their homes are worth and yet managed to refinance into new FHA-backed loans. It treated those borrowers as if they were trouble-free, even though they would be vulnerable to foreclosure if they suffered a financial setback, said Caplin, who co-wrote a study on this topic with the Federal Reserve Bank of New York. Also at the hearing, FHA officials said the higher fees and tougher credit requirements that it plans to impose on new borrowers in fiscal 2011 will generate $5.8 billion for its cash reserve. But the Congressional Budget Office estimate is closer to $1.9 billion. The FHA said it is confident about its projections.

Greek riots: People take to streets to protest government - (www.dailymail.co.uk) Street clashes broke out between rioting youths and police in central Athens today as tens of thousands demonstrated during a nationwide strike against the cash-strapped government. Hundreds of masked and hooded youths punched and kicked motorcycle police, knocking several off their bikes, as police responded with volleys of tear gas and stun grenades. The violence spread after the end of the march to a nearby square, where police faced off with stone-throwing anarchists and suffocating clouds of tear gas sent patrons scurrying from open-air cafes. Police say 16 suspected rioters were detained and two officers were injured. Rioters used sledge hammers to smash the glass fronts of more than a dozen shops, banks, jewelers and a cinema. Youths also set fire to rubbish bins and a car, smashed bus stops, and chopped blocks off marble balustrades and building facades to use as projectiles. Organisers said some 60,000 people took part in the protest. But an unofficial police estimate set the crowd at around 20,000 - including those that took part in a separate, peaceful march earlier Thursday. Police do not issue official crowd estimates for demonstrations. Thursday's strike - the second in a week - brought the country to a virtual standstill, grounding all flights and bringing public transport to a halt.

OTHER STORIES:

New round of foreclosures threatens housing market - (www.washingtonpost.com)

Houseowners take cash for keys to escape debt - (www.msnbc.msn.com)

How Strategic Default Could Save Our Economy - (www.blog.youwalkaway.com)

Swiss Central Bank Openly Discourages Mortgage Lending - (www.irvinehousingblog.com)
Something From Nothing - (www.Mish)

Realtors lie about when to buy - (www.mobile.nytimes.com)

The Foreclosure Shadow Market Grows - (www.motherjones.com)

Kern County, CA Property Value Per Sqft Back to 2002 - (www.kerndata.com)

Wall Street: Inside the Collapse - (www.cbsnews.com)

Planet Money Tracks Its Very Own Toxic Asset - (www.npr.org)

Rental investors braving a dismal apartment market - (www.latimes.com)

The Going Gets Tougher For Borrowers - (www.nytimes.com)