KeNo's Housing and Economic Portal: Sunday September 19 Housing and Economic stories

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TOP STORIES:

Credit card use plunges as hard times drag on - (www.usatoday.com) Americans have sharply reduced their use of credit cards, and some analysts believe the trend will continue even after the economy has fully recovered. The Federal Reserve Board reported this week that credit card borrowing fell at a 6.3% annual rate in July. The last time borrowing with credit cards increased was in August 2008. Separately, a survey by Javelin Strategy & Research found that 56% of consumers used credit cards in 2009, down from 87% in 2007. Credit card usage could fall as low as 45% this year, the report said. Reasons for the decline:

· Economic uncertainty. "People are being extraordinarily cautious because of concerns about a double-dip recession, and jobs not being returned," says Javelin President James Van Dyke. Consumers are opting for debit cards, because they're "one of those mechanisms that allows you to spend what you have," says Martha Doran, an accounting professor at San Diego State University.

· Less available credit. To reduce their risks, lenders have slashed consumers' credit limits, in some cases by as much as 90%, says Robert Livingstone, president of IdealCost.com, a consulting firm based in West Palm Beach, Fla. Under a provision in the credit card reform bill, most college students can't get a credit card without a co-signer.

For Better or For Worse, "Let's Get Real!" - (finance.yahoo.com) What's your mood on the economy these days? Take jobs: Are you feeling better about job growth after private employers added more jobs than expected in August -- or worse because the unemployment rate actually went up from 9.5% to 9.6%? How about GDP? Are you doing worse after a revised report of GDP showed growth slip in the second quarter from 2.4% to 1.6% -- or better because all major areas of demand actually moved slightly higher? New GDP forecasts for the rest of this year and next may swing your mood yet again. A panel of 50 economists cut GDP expatiations -- for the third month in a row -- for the rest of this year and next. This is no ordinary recession like so many would have you believe, says Scott Bleier of Create Capital. It is time to "get real" and stop believing all the "catch phrases." "There is no 'double-dip,' there are no 'green shoots,' there was no recovery," he says. "There are simply segmented pieces of the economy muddling along and getting better or staying the same." Bleier argues that there was no recovery in the first place to "dip" from.

Real estate investor files for bankruptcy - (www.sanluisobispo.com) A group of banks is suing Patrick Aurignac to recover hundreds of thousands he owes. Real estate investor and broker Patrick Aurignac — who has lost about $10 million worth of his San Luis Obispo properties to foreclosure — has filed for personal Chapter 7 bankruptcy. His total assets are around $167,000; his outstanding debts are estimated at almost $8.5 million, according to his bankruptcy documents filed July 30. Aurignac is suing San Luis Trust Bank for foreclosing on property near Cal Poly that he claims pushed him over the brink. Others, including Rabobank, Founders Community Bank and American Express Centurion Bank, are suing Aurignac for allegedly breaching his contract with them as they attempt to recover hundreds of thousands of dollars worth of unsecured loans to the businessman, according to Aurignac’s filings. “It’s a very emotional time,” he said in an interview last week. “I’ve been in the real estate business for 20 years. I have friends and business acquaintances in the business up to 60 years. Everyone I talk to has never seen such a drastic and horrible depreciation in the real estate market and a credit crunch as this.”

Burglarized House? Oakland Police Want You to Know 'We're Not Coming' - (www.legalblogwatch.typepad.com) Via the free copy of USA Today that was left in my hotel room this morning comes this money quote from the Oakland, Calif. police on the effect of budget cuts in that city: "If you come home to find your house burglarized and you call, we're not coming." Clear enough? Cutbacks in places like Oakland have forced police to prioritize crimes as never before, and to simply "stop responding to fraud, burglary and theft calls as officers focus limited resources on violent crime." What happens if your home is broken into? In places including Oakland, Tulsa and Norton, Mass., you now must file your own report online (here) or in writing. USA Today reports that Oakland laid off 80 officers from its force of 687 last month; Tulsa has lost 110 officers to layoffs and retirements (it is now down to 739 officers) and no longer sends officers to the scene of larceny, fraud and car theft. Here are some of the other crimes for which Oakland says it will no longer be sending officers to the location unless it is "in-progress or there is a suspect on-scene:"
• Lost Property
• Theft
• Vandalism
• Vehicle Burglary
• Vehicle Tampering
• Residential Burglary
• Identity Theft
• Annoying and Harassing Phone Calls
• Barking Dog
• Violation of a Restraining Order
• Reporting a Runaway
• Violation of a Court Order
• Violation of a child custody order where one parent failed to return the child at a specified time.

What happens when your HOA becomes hostile? - (www.sfgate.com) In condo complexes, the Home Owners Association, or HOA, can be a great relief: major expenses are shared; rules agreed on makes everyone's life easier. On the other hand, a hostile HOA can be a bit like the mafia. The following cases illustrate the power an HOA can have. This power should give anyone considering a home with an existing HOA pause, since those people making up the association may or may not be like-minded, friendly, or even reasonable. Even with your closest neighbors, it's all business In 2007, a Texas couple fell behind in their HOA dues. The husband had suffered traumatic brain injury at his railroad job; the wife had a skin condition causing swelling and open sores on her body. With bills piling up in every corner, HOA dues lost priority in the couple's life. But instead of taking the usual route by filing a lien on the property, meaning that Dan and Elaine Lambert would not be able to sell their home until they paid their dues, their HOA evicted them and seized their home. Reporter Brian Collister of WOAI wrote: Instead of filing a lien and leaving it at that, the Heritage Hills HOA took the unusual step of foreclosing and selling the house. The Lambert home sold at a public auction on the steps of the Bexar County Courthouse. The house valued at $156,000 sold for only $2,200. Sadly, as more people fall on hard times and fail to pay their association dues, this HOA tactic of seizing homes and selling them as foreclosures has increased across the country. Also in Texas, condo owner Kent Hern recently waged a legal battle with his HOA which had tried to take his home based on a few hundred dollars owed in fees. After extended litigation, he won.

OTHER STORIES:

Labor-Market Woes in U.S. Prompt Reductions in Growth Forecasts - (www.bloomberg.com)

Jobless Claims in U.S. Decreased 27,000 to 451,000 Last Week - (www.bloomberg.com)

Economists cut U.S. growth forecast again - (www.reuters.com)

30-year mortgage rate inches up to 4.35%, off decades-low - (www.usatoday.com)