KeNo's Housing and Economic Portal: Monday October 18 Housing and Economic stories

Sunday, October 17, 2010

Monday October 18 Housing and Economic stories

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TOP STORIES:

Senator Harry Reid Calls On Total Foreclosure Halt In All 50 States - (www.businessinsider.com) Senator Harry Reid has now called for a total halt to foreclosures in all 50 states, according to CNBC. Yesterday he called for a halt in Nevada, but it makes sense to make this a national issue. We don't think he'll be the last one to make this call, and in fact it won't even be that controversial when it happens, because the banks are doing it themselves voluntarily at this point. This mess is just getting started.

Reston-based company MERS in the middle of foreclosure chaos - (www.washingtonpost.com) As courts across the country face a wave of foreclosures, a name little known to the public has cropped up on thousands of court filings as a stand-in for prominent banks, lenders and mortgage servicers. Mortgage Electronic Registration Systems, headquartered in a nondescript office building in Reston Town Center, has flourished quietly over the past decade, saving financial firms hundreds of millions of dollars by helping them avoid the time and expense of filing mortgage documents and paying fees each time a loan changes hands. Its motto: "Process loans, not paperwork." But lawyers throughout the country increasingly are challenging that approach, questioning whether the company has the legal right to foreclose on homes, on the grounds that it doesn't actually own mortgages. And the argument is gaining traction with some judges. Yet without proper paperwork to establish ownership, banks and other lenders have also faced legal difficulties with seizing homes when borrowers default. The result in some cases has been the use of flawed and fraudulent documents in foreclosure cases. Concerns over improper paperwork have prompted some of the nation's largest lenders and several states to halt foreclosures until companies can provide proof that they own the mortgages and have a right to seize the homes.

Halt in Foreclosures a New Blow to Home Sales - (www.nytimes.com) Amanda Ducksworth was supposed to move in to her new home this week, a three-bedroom steal here in central Florida with a horse farm across the road. Instead, she is camped out with her 7-year-old son at her boss’s house. Like many buyers across the country, Ms. Ducksworth was about to complete the purchase of a foreclosed house when it suddenly went off the market. Fannie Mae, the giant mortgage holding company that buys loans from commercial lenders, is pulling back sales of homes that might have been foreclosed in bad faith. “I gave up my rental thinking I would have a house,” said Ms. Ducksworth, a 28-year-old catering assistant. “Now I’m sharing a room with my son. What the hell is up with that?” With home sales this past summer at the lowest level in more than a decade, real estate is ill-prepared to suffer another blow. But as a scandal unfolds over mortgage lenders’ shoddy preparation of foreclosure documents, the fallout is beginning to hammer the housing market, especially in states like Florida where distressed properties are abundant. “This crisis takes a situation that’s already bad and kind of cements it into place,” said Joshua Shapiro, chief United States economist for MFR Inc., an economic consulting firm.

S.&P. Says Cost to Care for Elderly Will Spiral - (www.nytimes.com) Credit analysts at Standard & Poor’s said on Thursday that the cost of caring for the world’s aging populations would be “on an explosive path” and could swamp the budgets of many countries in the next 40 years unless governments accelerated belt-tightening efforts that are already proving highly unpopular. Demographers have long known that more than a billion people would reach retirement age by 2050. Standard & Poor’s new research, published Friday morning in London, tried to predict how their mass departure from the work force and increasing frailty would affect their nations’ economies and their governments’ ability to borrow. The agency looked at the economies of 49 countries, which it said accounted for about two-thirds of the world’s population.

U.S. Two-, Five-Year Yields Fall to Record Lows on Fed Outlook – (www.bloomberg.com) Treasury two- and five-year note yields slid to record lows as data showing U.S. employers cut more jobs than forecast last month spurred speculation the Federal Reserve will buy more bonds to stimulate the economy. Ten-year note yields fell to the lowest level since January 2009 as investors bet the floundering labor market signals weaker-than-expected growth in the broader economy this year. Yields have slid this week as investors speculated the Fed will purchase more assets, a strategy called quantitative easing. Barclays Plc said it expects “an incremental large-scale” purchase program to start next month. “You can’t support a consumer-based economy unless you have jobs,” Pacific Investment Management Co.’s Bill Gross, manager of the world’s biggest bond fund, said today during a radio interview on “Bloomberg Surveillance” with Tom Keene. “It’s a strong signal for Fed QE 2. It’s their last weapon.”