KeNo's Housing and Economic Portal: Thursday May 27 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Rich farmers get most cash - (news.yahoo.com) Lawmakers crafting a sweeping farm bill in 2008 promised it would cut government payments to wealthy farmers. Two years later, little appears to have changed. Data being made public Wednesday shows that the wealthiest farmers in the country are still receiving the bulk of government cash, despite claims from lawmakers that reforms in the bill would put more money in the hands of smaller farms. At the same time, a series of exemptions written into the bill has made it more difficult for the public to find out who is receiving what. Lawmakers writing the $290 billion bill included several provisions aimed at cutting down on government subsidies to the wealthiest farmers. They sought to eliminate a loophole that allowed farmers to collect higher payments and they set income limits for those who received subsidies. Though those new laws may have cut down on payments to some farmers, others have been able to find ways around them. Such subsidies to the nation's largest farms are a mainstay of congressional politics and an eternal frustration to those who want to eliminate them. A powerful coalition of farm-state members of Congress have successfully defended their constituents' interests in farm bill after farm bill.

Greece Erupts Again as Austerity Measures Pass - (www.cnbc.com) Protesters have clashed with police outside Greece's Parliament after lawmakers passed a new austerity bill that will secure vital loan aid for near-bankrupt Greece. Riot police in Athens fired tear gas to drive off stone-throwing youths. Tens of thousands demonstrated Thursday, a day after extensive rioting marred a protest during a nationwide general strike against the new cutbacks. Three people died Wednesday after getting trapped in a burning bank torched by rioters. Lawmakers approved the austerity bill in a 172-121 vote allowing Greece to tap into euro110 billion ($140 billion) in bailout loans from euro-zone countries and the International Monetary Fund. Speaking to the house before the vote, Prime Minister George Papandreou said there was no time to lose in reforming Greece's broken economy, whose debt and deficit problems have triggered a wider crisis threatening the entire 16-nation euro zone.

US Government Now 96.5% of the Mortgage Market - (www.smirkingchimp.com) If You Were NOT Paying for Your Neighbor's Mortgage, How Many Home Sales Would There Be? The US government IS the US housing market. The US Government underwrote 96.5% of the mortgages in the 1st quarter 2010, up from 90% 2009. How many homes do you think would have sold without the US government intervening in the mortgage markets through Fannie, Freddie, Ginnie and the FHA? Do you think mortgages rates would be 5.12% without the US government writing 96.5% of the mortgages? Would mortgages be this low without the Fed holding interest rates at near 0% at you the savers expense, and the Fed buying $1.2 trillion in securitized mortgages so, among other things, Fannie and Freddie can keep buying up pumped out mortgages?

Scenes From the Greek Protests - (www.cnbc.com)

Greek Debt Crisis May Be 'Going Global: El-Erian - (www.cnbc.com) Problems with Greek debt are about to spread to other countries and could infect the US unless the nation tackles its own mounting problems, Pimco's Mohamed El-Erian told CNBC. About an hour or so after El-Erian spoke, global stocks sold off sharply with major US averages shedding more than 3 percent. Speaking as Greek austerity measures won enough votes to be approved by parliament, El-Erian offered a stern warning about the potential of the crisis to escalate into something resembling, though not duplicating, the 2008-09 financial crisis. "We've seen a crisis start in a country—Greece—become regional, impact the whole of the Euro zone and is on the verge of truly going global," said El-Erian, CEO of the world's biggest bond fund. He said the debt is a "transmission mechanism to go from country to region to global. So we should take this very seriously."

Drowning in mortgage debt - (money.cnn.com) A transfer in 2005 landed Air Force major Richard Hallbeck, his wife, and two kids in Southern California smack in the middle of the real estate bubble. Home prices in the area had doubled in the past five years and were still climbing. So the Hallbecks swallowed hard and bought an $845,000 four-bedroom in a suburb of Long Beach. The $3,800 monthly payment was high but affordable on two incomes. (Laurie, now 37, worked as a claims adjuster.) And they figured the market was so strong that when they had to move again, they'd at least break even. "Our house actually appraised over what we paid for it," Richard, 42, recalls wistfully. Since then, area sale prices have fallen 26% -- when properties sell at all. Meanwhile, the recession cost Laurie her job, and the payment on the couple's adjustable-rate mortgage will jump $800 in July. Next year Richard will face mandatory retirement from the Air Force, and his pension will be a third of his current $117,000 income. All that's got the Hallbecks anxious to move to a more affordable city -- like Dayton, where they used to live. But they're just as anxious about how much they could lose on the sale of their house. A similar home down the street lists for $655,000, $21,000 less than the Hallbecks' outstanding mortgage. At that price, the couple would be out $231,000, including their down payment and closing costs. "The stress has really worn on us," Richard says.