KeNo's Housing and Economic Portal: Saturday May 22 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Homeless Dropouts From High School Lured by For-Profit Colleges - (www.bloomberg.com) Their visit spurred the 23-year-old Rollins to fill out an online form expressing interest. Phoenix salespeople then barraged him with phone calls and e-mails, urging a tour of its Cleveland campus. “If higher education is important to you for professional growth, and to achieve your academic goals, why wait any longer? Classes start soon and space is limited,” one Phoenix employee e-mailed him on April 15. “I’ll be happy to walk you through the entire application process.” Rollins’s experience is increasingly common. The boom in for-profit education, driven by a political consensus that all Americans need more than a high school diploma, has intensified efforts to recruit the homeless, Bloomberg Businessweek magazine reports in its May 3 issue. Such disadvantaged students are desirable because they qualify for federal grants and loans, which are largely responsible for the prosperity of for-profit colleges. Federal aid to students at for-profit colleges jumped to $26.5 billion in 2009 from $4.6 billion in 2000. Publicly traded higher education companies derive three-fourths of their revenue from federal funds, with Phoenix at 86 percent, up from just 48 percent in 2001 and approaching the 90 percent limit set by federal law. Biweekly Stipend: The privately held Drake College of Business, which trains people to be medical and dental assistants, relied on taxpayers for 87 percent of its revenue in 2007. Almost 5 percent of the student body at its Newark, New Jersey, branch is homeless, says Jean Aoun, director of admissions and student services there. Late in 2008, it began offering a $350 biweekly stipend to students who show up for 80 percent of classes and maintain a “C” average. “It’s basically known in the community: If you’re homeless, and you need some money, go to Drake,” says Carmella Hutson, a case manager at the Goodwill Rescue Mission in Newark, where about 20 clients have enrolled at Drake in the past two years. “It would put money in my pocket, help me buy a car,” adds Jerome Nickens, 45, who lived at the mission when he talked to a Drake representative but decided not to enroll.

Watch Gulf Coast Fisherman Flip Out At BP Town Hall Over Oil Spill - (www.businessinsider.com) Here's a great little taste of the PR disaster BP has on its hands right now. A rep from the company came to Bayou LA Batre Alabama to talk with fisherman, but refused to take questions, leading to a hot and raucus night. Eventually the rep was forced offstage. The fisherman who lost their season are furious.

GMs phony loan repayment - (www.foxnews.com) A handful of lawmakers are accusing General Motors of misleading the public by continuing to claim as part of its advertising blitz that the auto giant has repaid its government loans "in full." A handful of lawmakers are accusing General Motors of misleading the public by continuing to claim as part of its advertising blitz that the auto giant has repaid its government loans "in full." General Motors has been running ads on all the major networks claiming the company repaid its $6.7 billion U.S. government loan "with interest five years ahead of the original schedule." General Motors Company CEO Ed Whitacre can be seen in the ad walking through an auto plant as he touts the company's progress. But lawmakers, and even the inspector general for the bailout fund GM borrowed from, point out that General Motors only repaid the bailout money by dipping into a separate pot of bailout money. They say the company did not actually use its own earnings to make the early payment and are questioning why executives are making such a big deal out of it. "The hype is not the reality," Sen. Charles Grassley, R-Iowa, wrote in a column on FoxNews.com over the weekend. "It is far from clear how GM and the Obama administration could honestly say, much less trumpet in prime time television ads, that GM repaid its TARP (Troubled Asset Relief Program) loans in any meaningful way." Grassley wrote a letter last week to Treasury Secretary Timothy Geithner expressing his concerns and asking for more information about why the company was allowed to use bailout money to repay bailout money. The $6.7 billion is also just a fraction of the $52 billion General Motors received in government aid. Grassley said lawmakers are being told government losses on GM are expected to exceed $30 billion. The TARP inspector general, Neil Barofsky, bluntly told the Senate Finance Committee during a hearing last week that the repayment "is just other TARP money" and lawmakers should not "exaggerate" the feat. "It sounds like they're kind of like taking money out of one pocket and putting it in the other to do that," Sen. Tom Carper, D-Del., said at the hearing.

Did Fuld Understate His Pay to Congress? - (www.businessweek.com) Before Lloyd Blankfein of Goldman Sachs Group Inc. took his place, Richard S. Fuld Jr.’s angry face was the universal symbol of Wall Street greed. On Oct. 6, 2008, three weeks after Lehman Brothers Holdings Inc. filed the largest bankruptcy in U.S. history, Lehman’s former chief executive officer found himself before Representative Henry A. Waxman, the California Democrat who chaired the House Committee on Oversight and Government Reform. Waxman has stared down plenty of CEOs over the years, yet this had to be one of the most intense confrontations of his career. “Mr. Fuld will do fine,” Waxman said. “He can walk away from Lehman a wealthy man who earned over $500 million. But taxpayers are left with a $700 billion bill to rescue Wall Street and an economy in crisis.” Fuld said he was a victim, not an architect, of the collapse, blaming a “crisis of confidence” in the markets for dooming his firm. Reckless management had nothing to do with it. “Lehman Brothers,” he said, “was a casualty.”

Greek Protesters Firebomb Police - (www.businessinsider.com) Fresh Greek protests erupted ahead of new austerity measures as we discussed here. For a sense of how bad things are, see the video below where ranked police are hit by a protester's firebomb. Keep in mind this rage is happening before substantial austerity measures have even taken effect.

Four of nation's top 10 foreclosure cities in CA Central Valley - (www.centralvalleybusinesstimes.com) Cities in California, Florida, Nevada and Arizona once again account for all top 20 foreclosure rates in the first quarter among metropolitan areas with a population of at least 200,000 even while the majority of those top metros report decreasing foreclosure activity from the first quarter of 2009, according to a report Wednesday evening from RealtyTrac Inc., an Irvine-based foreclosure information company. Four out of the Top ten cities are in the Central Valley. Modesto is ranked second in the nation with 5,138 homes or 2.93 percent of all housing units in foreclosure in the first quarter. Modesto’s foreclosure activity decreased 13 percent from the first quarter of 2009, but the metro area still documented the nation's second highest metro foreclosure rate, with one in every 34 housing units receiving a foreclosure filing (2.93 percent). Stockton is ranked fifth, with 6,327 homes in foreclosure, or 2.77 percent of the city’s homes. Merced is sixth. It had 2,307 homes in foreclosure in Q1 or 2.76 of all homes. And Bakersfield is in ninth in the nation, with 6,343 homes in foreclosure or 2.33 percent of all housing units, says RealtyTrac.