KeNo's Housing and Economic Portal: Thursday September 30 Housing and Economic stories

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TOP STORIES:

Ally Financial legal issue with foreclosures may affect other mortgage companies - (www.washingtonpost.com) Some of the nation's largest mortgage companies used a single document processor who said he signed off on foreclosures without having read the paperwork - an admission that may open the door for homeowners across the country to challenge foreclosure proceedings. The legal predicament compelled Ally Financial, the nation's fourth-largest home lender, to halt evictions of homeowners in 23 states this week. Now it appears hundreds of other companies, including mortgage giants Fannie Mae and Freddie Mac, may also be affected because they use Ally to service their loans. As head of Ally's foreclosure document processing team, 41-year-old Jeffrey Stephan was required to review cases to make sure the proceedings were legally justified and the information was accurate. He was also required to sign the documents in the presence of a notary. In a sworn deposition, he testified that he did neither. The reason may be the sheer volume of the documents he had to hand-sign: 10,000 a month. Stephan had been at that job for five years. How the nation's foreclosure system became reliant on the tedious work of a few corporate bureaucrats is still a matter that mortgage lenders are trying to answer. While the lenders may have had legitimate cause to foreclose, the mishandling of the paperwork has given homeowners ammunition in their fight against foreclosure and has drawn the attention of state law enforcement officials.

Cash-Strapped Spain Struggles With High Cost of Power - (www.nytimes.com) On one side, angry coal miners are striking to force the government to save their jobs from a torrent of inexpensive imports. On another, the solar power industry, which was once booming, complains that it is being crippled by the mere prospect of an end to generous state subsidies. The natural gas and nuclear industries are having their own problems. Meanwhile, the shortfall accumulated since 2000 between the cost of power generation in Spain and what regulated rates bring in is expected to reach 20 billion euros, or $26.7 billion, by the end of the year — a bill the government, with its ailing public finances, can no longer afford. A new energy strategy to raise self-sufficiency at an affordable cost was to be delivered before the summer break. But the government, which is aiming to erase the tariff deficit by 2013, has not yet presented any sort of plan. Critics say that in trying to please everyone, Prime Minister José Luis Rodríguez Zapatero is pursuing conflicting goals.

Summers to Step Down - (online.wsj.com) Lawrence Summers, the economist who helped design and secure President Barack Obama's top economic policy priorities, will return to Harvard University at the end of the year. Mr. Summers will be the third top economic official to leave the administration, following the president's first budget chief and his first Council of Economic Advisers chairman. Two people familiar with the matter said the president is considering a senior corporate executive as a successor to lead the National Economic Council, answering criticism that the Obama administration lacks private-sector experience and is aloof from corporate America. Former Xerox Corp. chief executive Anne Mulcahy quickly emerged as a leading candidate to replace Mr. Summers, though White House officials caution that no decisions have been made yet. A senior administration official confirmed that Ms. Mulcahy had dinner in Washington Friday evening with senior presidential adviser Valerie Jarrett. She is highly thought of within the administration, the official said, where she serves on the President's Economic Advisory Board.

Blockbuster expected to file Chapter 11: source - (www.reuters.com) Blockbuster Inc is preparing to file for Chapter 11 bankruptcy within the next few days, a source familiar with the video rental chain's plans said on Wednesday. The Dallas-based retailer said earlier this year it would close nearly 10 percent of its stores. Customers have moved away from renting films through its outlets in favor of online services such as Netflix. It is carrying some $900 million of debt, according to filings with the U.S. Securities and Exchange Commission. The company is working with debtholders on a plan, under which it would continue operating but shutter hundreds more stores, said the source, who was not authorized to speak publicly about the situation. A bankruptcy filing is expected as early as Wednesday. The details were originally reported in the Wall Street Journal. Under the proposed plan, senior bondholders would convert about $630 million of debt into equity of the restructured company. The other bondholders would be wiped out, according to this source.

Star Reporter Quits Yahoo Because They Wouldn't Let Him Write About Big White House Salaries - (www.businessinsider.com) Yahoo News editor Andrew Golis says star reporter John Cook is quitting to re-join Gawker because "he prefers the license Gawker gave him to add his opinions into his reporting to the scale and credibility Yahoo! News could offer." John tells AOL's Jeff Bercovici that's hogwash. He says he quit Yahoo because they censored him like crazy. Bercovici reports: In one instance, Cook was forced to bowdlerize a quotation from New York Times reporter James Risen; he was told that referring to masturbation, even euphemistically, was unacceptable. On similar grounds, he was prohibited from writing about the conservative website Free Republic hosting child pornography. Most glaringly, he was told that a proposed story on the Obama Administration raising the salary of White House staffers by 9% lacked the necessary balance; it was killed.