KeNo's Housing and Economic Portal: Thursday July 22 Housing and Economic stories

Wednesday, July 21, 2010

Thursday July 22 Housing and Economic stories

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TOP STORIES:

Modify loan or declare bankruptcy? - (www.chicagotribune.com) Financially struggling homeowners say they're just being shrewd when they file for Chapter 7 to escape a mortgage. Cash-strapped, jobless and denied a loan modification, Del Phillips faced the same straits as millions of homeowners who risk losing their homes to mortgage lenders. Some have struggled unsuccessfully to keep their homes, and others have just walked away. Phillips decided he wanted revenge and was willing to ruin his credit record for it. When a short sale didn't work out as planned, the 32-year-old Chicagoan opted for Chapter 7 bankruptcy liquidation, a move that will leave Phillips with little except for the scant possessions in his one-bedroom condo. It also will leave his lender, Chase, with little except for, eventually, a condo that has lost value. Meanwhile, Phillips continues to live there, mortgage-free. "I don't feel shameful for what I've done," Phillips said. "I've gotten past being shameful

Analysts Question Fannies Threat on Mortgage Defaults - (www.nytimes.com) Fannie Mae’s decision to begin punishing people who walk away from their unpaid mortgages could prove difficult to sell to the public and might be impossible to execute, housing and lending experts said Thursday. The big mortgage financing company, which owns or guarantees millions of mortgages, announced on Wednesday that it would sue homeowners who have the capacity to pay but default anyway. It also said it would prevent these strategic defaulters from getting a new Fannie Mae-backed loan for seven years, which could potentially shut millions of buyers out of the market.

Five States Get U.S. Funds To Make Housing More Expensive - (online.wsj.com) The U.S. Treasury Department said Wednesday it had approved five states' plans to aid homeowners in the hope of thwarting foreclosures in communities hit hard by the recession. State housing agencies in Arizona, California, Florida, Michigan and Nevada will receive a total of $1.5 billion from the Obama administration's "Hardest Hit Fund." "These states have identified a number of innovative programs that will make a real difference in the lives of many homeowners facing foreclosure," said Herbert Allison Jr., Treasury assistant secretary for financial stability. Proposals approved Wednesday include programs to help struggling homeowners who owe more than their homes are worth by reducing the principal owed on their loans; to help unemployed or underemployed homeowners make mortgage payments; to facilitate the settlement of second liens, short sales or deeds in lieu of foreclosure; and help with payments in arrears. The fund—dubbed the Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets—was established in February. It aims to provide assistance to states with the highest shares of their populations living in counties in which the unemployment rate exceeded 12% in 2009. Arizona is set to receive $125.1 million, California $699.6 million, Florida $418 million, Michigan $154.5 million and Nevada $102.8 million.

Florida woman files BP claim over botched house sale - (www.mcclatchydc.com) Finally, Joan Dickinson was about to sell her Anna Maria home. The island resident had her two-bedroom house on the market for about two years before buyers came forward with an offer she was willing to accept. Then, the unthinkable happened. The buyers walked. "In my contract, the reason they stated they were not going to close on the home was the BP oil spill," said Dickinson, whose beachfront home is listed for $848,000. "I was supposed to close my home on May 17, and May 7, the buyers walked away. Every month I'm here in my home past May 17 it's an economic damage."

Lehigh Acres: Florida's lesson in unregulated growth - (www.tampabay.com) Hoping to jump start the economy, Florida lawmakers have eased the rules on developers. Many won't have to pay for their projects' impact on roads. It will be easier to get approval to destroy wetlands. Next up: a study of whether developers should have to prove there's a need for new homes before revving up the bulldozers. As lawmakers undo Florida's growth management regulations, it's useful to look back to a time when government didn't get in a developer's way. Back when Art Deco was new, sun, women and opportunity drew Gerald Gould from his native New York to Miami. A high school dropout who had served in the Navy, Gould fast-talked his way into a job with an ad agency. Soon he was hanging out with a major client, millionaire Lee Ratner. Riding horses together on Ratner's ranch east of Fort Myers, the two weekend cowboys talked about ways Ratner could dodge taxes on his Florida retreat.