KeNo's Housing and Economic Portal: Tuesday September 14 Housing and Economic stories

Monday, September 13, 2010

Tuesday September 14 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Ore. man pleads bankruptcy fraud, hiding gold - (www.seattlepi.com) An Oregon man has pleaded guilty to bankruptcy fraud, including concealment of gold, silver and ownership of a vintage pickup truck. Federal prosecutors said 69-year-old Donovan Lindhorst of Gresham had about $82,000 in cash, gold bullion and other assets in a home safe that was found during a court-approved inspection by his bankruptcy trustee. Lindhorst also concealed transfers of assets to his son totaling $190,000 and $182,000 to his wife. Among his assets were a 1928 Ford Roadster pickup and real estate in Battle Ground, Wash. Lindhorst was placed in involuntary bankruptcy in October 2007 by the Roofers Local 49 Welfare Fund because he failed to make appropriate contributions to various employee benefit plans.

Desperate Consumers Stop Paying Mortgage to Pay Credit Cards - (www.dailyfinance.com) Normally, it would be considered a positive sign that people are reducing their credit card debt load. But a series of statistical releases this week confirms an ominous new trend among desperate consumers: They have stopped paying their mortgages but are continuing to pay off their credit cards so they can continue to buy staples, like food. "People are trying to free up cash so they have it on a daily basis," says Theodore W. Connolly, a bankruptcy attorney in Boston who has just published a new book on the problem, The Road Out of Debt: Bankruptcies and Other Solutions to Your Financial Problems. "People are getting fearful again and are worrying about just paying for their groceries and doing the laundry." More People Fall Behind on Mortgage Payments...: The Mortgage Bankers Association reported Thursday that the percentage of mortgages that have fallen one month behind is growing. In the first quarter of 2009 the rate was 3.77%, which then fell to 3.31% by the end of that year. But in the second quarter of 2010, the number has gone up again to 3.51%.

Corruption Reform: Reduce Government Housing Subsidies - (www.nbnnews.com) Finance Reform Effort Draws Advocates of Reducing Government Support for Housing: Advocates of reducing the government’s support for housing are a growing concern for the nation’s home builders as the Obama Administration moves forward to develop a comprehensive housing finance reform proposal that it plans to deliver to Congress at the start of next year. Among the diverse perspectives provided by panelists at the Aug. 17 Conference on the Future of Housing Finance, there were those who offered the view that housing has been too heavily subsidized by the government, to the detriment of the performance of the U.S. economy, reported NAHB Third Vice Chairman Rick Judson, who was a participant at the day-long meeting in Washington, D.C. Criticism was also heard that housing subsidies should be shifted to rental housing from homeownership and from higher-income to low-income beneficiaries. “There should be strong concern over the number and diversity of voices seeking reductions or redirection of subsidies going to housing in the tax and mortgage finance systems,” said Judson.

Reluctant landlords in metro Detroit rent to pay mortgages - (www.freep.com) Tom Youngblood Jr., 38, lived every landlord's worst nightmare with his first rental -- he learned all about eviction law when his tenant wouldn't pay up. "She paid me the first month, and then October rolled around and she started giving me empty promises," he said. "My first taste of it was tough." The human resources director for Detroit Testing Laboratory in Warren is among hundreds of homeowners across metro Detroit becoming reluctant landlords because they can't sell their homes. About 20% of metro real estate transactions now are leases, compared with fewer than 5% in a normal market, said Dan Elsea, president of brokerage services for Real Estate One in Southfield. Youngblood rented only because he couldn't sell his St. Clair Shores home after 26 months of trying. He and his wife, Andrea, had already purchased a larger home in Macomb Township.

The Unbearable Lightness of the Bank Accounting Cover Up - (www.dailybail.com) Why Covering up Fraud Losses Impairs Economic Recovery: Bad bankers, bad regulators, and bad politicians love to cover up losses, fraud, and bank failures. The snake oil peddlers pushing for a cover up scream that if losses are recognized capitalism will collapse. Recognizing losses “causes” bank failures (ponder that “logic”). Bank failures cause other banks to fail. Selling bad assets of failed banks is invariably described as a “fire sale” that causes further falls in asset values, which causes more banks to fail, which causes more assets to be sold, which causes – the end of life as we know it. If the snake oil guys are correct then financial markets aren’t fragile, they’re friable – a few bank failures away from crumbling. The solution under this logic is to lie about asset values and pretend that insolvent banks are healthy.