KeNo's Housing and Economic Portal: Saturday October 9 Housing and Economic stories

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Lost in the system that took the house - (www.washingtonpost.com) Luis Fernandez's foreclosure documents never looked quite right. Critical papers regarding his Orlando home were missing dates, and some signatures appeared to him to be forged. The mortgage had been sold so often - including once in the middle of the foreclosure process - that at times it was hard to tell which company was trying to seize the house. He challenged the foreclosure in court but failed. Now, as Fernandez seeks to appeal his eviction and get his home back, he has learned that the law firm representing the banks is under investigation for fabricating foreclosure documents. And his file was signed by Jeffrey Stephan, a document processor who made headlines last week for approving what could be hundreds of thousands of cases without verifying whether the foreclosures were justified. Fernandez says he longs for the days when homeowners knew the bankers holding their mortgage and could work out a compromise when hard times hit. Today, he said, it's like "fighting a machine." "You feel like you're alone and getting beaten up by the system," said Fernandez, 59, who missed three monthly payments after a heart attack nearly ruined his greeting card business.

Cal-Berkeley's Athletic Department Gets Shredded By State Budget Cuts - (www.businessinsider.com) UC-Berkeley has announced that they are eliminating five varsity teams in order to trim their shaky budget and also bring the school in line with Title IX requirements. A storied history and championship performances were no protection against the axe. Among the team's that have been demoted to club status: men's baseball (which has been playing at the school since 1892) and men's rugby, which has won 25 national championships since 1980. You don't have to major in math at Berkeley to know that's pretty good. Like most schools, Cal's athletic expenses outstrip their revenues--in this case, by about $12 million a year--which is typically made up by student fees and discretionary funds from the university proper. The move will save the Bears $4 million next year, but it's not just about the money. The rugby team actually covers its own expenses. But with 61 young men on the roster, it presents a simple solution to trimming the disparity between male and female athletes at the school. (Two women's sports--gymnastics and lacrosse--were also cut.) With football taking up most of the spots, it would hard for a non-revenue team of that size to survive anywhere.

Muni borrowers at risk as loans expire - (www.ft.com) Local governments and other borrowers in the $2,800bn US municipal bond market could be squeezed when a wave of bank facilities expire in the next few years, Moody’s Investors Services said in a report published on Wednesday. Some may have to renew these arrangements or refinance at higher rates at a time when they are already facing budget deficits. related to the economic recession and greater spending needs for social programs, pensions and healthcare. The expiry of the bank arrangements will coincide with a period of uncertainty as financial institutions examine the implications of US financial regulation and Basel III, a confluence of events that could reduce the availability of such facilities and raise their cost.The magnitude of the expirations also increases the competition among borrowers for bank capital and investor interest. “While some borrowers are actively planning for facility expirations, those most at risk are not doing so,” said Lisa Martin, the report’s author.

Irish Banks Hooked on ECB as Lenihan’s Cure Fails: Euro Credit - (www.bloomberg.com) Irish Finance Minister Brian Lenihan persuaded lawmakers two years ago to back a guarantee of the country’s financial system to give banks time to wean themselves off European Central Bank and government life support. Instead, the banks are growing more dependent on the ECB. The cost of insuring Irish government debt against default has soared to a record as bond buyers shun Irish lenders, forcing the Dublin-based parliament to debate extending a guarantee of all deposits and most bank securities as the original pledge expires today. The consequences of adding bank liabilities to Ireland’s 87 billion euros ($118 billion) of sovereign debt “are huge,” said Mike Soden, the former chief executive officer of Bank of Ireland Plc and the author of “Open Dissent,” a book on the financial crisis. The nation’s borrowing costsare surging because “the markets are much quicker than the thinking power of the Department of Finance or anybody else,” he said. The banks’ failure to find alternative funding sources in the capital markets is stoking investor concern that the state may be overwhelmed by bailout costs. The banks are “tied to the sovereign,” Lenihan said in a Sept. 22 speech to a parliamentary committee.

Irish, Portugal Bonds Lead Peripheral Debt Lower on Bank Bailout Concern - (www.bloomberg.com) Irish bonds plunged, leading losses by European debt, on concern the region’s banks may need additional funding. The drop pushed the yield on Irish two-year notes to the highest since Bloomberg began collecting the data in 2003 after Standard & Poor’s said the cost to bail out Anglo Irish Bank Corp. may exceed its previous estimate. The yield subsequently pared its rise on speculation central banks bought the debt. The difference in yield, or spread, between Portugal’s 10-year bonds and German bunds widened to a record. “Anglo Irish is still hanging over Irish debt and we’ve got the Portuguese fiscal situation, which is just unclear,” Peter Chatwell, a fixed-income strategist at Credit Agricole Corporate & Investment Bank, said on Bloomberg Television’s “Countdown” with Maryam Nemazee today. “Spreads are going to be pushing out wider.”