KeNo's Housing and Economic Portal: Thursday October 21 Housing and Economic stories

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Congress puts rest of America on the hook for overpriced Calif. houses, again - (www.cnbc.com) There wasn't much fanfare, and it literally happened in the cover of night, but sometime after midnight Thursday morning, the U.S. Congress passed an extension of the increased Fannie/Freddie/FHA loan limits for high cost housing markets to a maximum $729,750. Big deal, right? Well, yes. The higher loan limits for high-priced housing markets were instituted back in 2008, when President George W. Bush signed the Housing and Economic Recovery Act. At the time, the mortgage market had crashed entirely, and the only games left in town were Fannie, Freddie, and FHA. They each had a loan limit of $417,000, which knocked an awful lot of potential borrowers out of the game. The move was designed to moderate the credit crunch and promote borrowing and buying. Since the peak of the housing boom in 2006, home prices are down 28 percent (S&P/Case-Shiller). That means many higher-priced markets aren't quite so high-priced anymore. Of course there are still hot spots, many in California, where the median home price is well over $417,000, but the national median home price currently stands at $178,600 (National Association of Realtors).

California Has to Delay Bills to Avert IOUs - (www.bloomberg.com) California may have to issue IOUs unless lawmakers agree to delay paying some of the bills that accumulated as Governor Arnold Schwarzenegger and legislative leaders negotiated a budget compromise, a spokeswoman for the controller’s office said. The deferrals are needed because California racked up $8.4 billion of delinquent bills as it operated without a spending plan for more than three months, said Hallye Jordan, spokeswoman for Controller John Chiang. That’s more than the $5 billion bridge loan Treasurer Bill Lockyer is lining up from a group of Wall Street banks to tide the state over. Schwarzenegger and top lawmakers said Oct. 2 that they agreed on how to close a $19.1 billion deficit and end a stalemate that has left the most populous U.S. state without a spending plan since the July 1 start of its fiscal year. Chiang said repeatedly that a prolonged impasse could force him to issue IOUs for a second-straight year in order to conserve cash to make priority payments such as debt service.

Plainfield, IL Real Estate Market is Worse Than You Can Imagine - (plainfield.patch.com) Whereas the national foreclosure rate is one in 381 and the state's is one in 314, the village's is one in 84, RealtyTrac numbers show. I happened to be driving past a string of "For Sale" signs in a pretentious Plainfield subdivision when I heard the news. Despite reports that the recession is over and a general feeling that the worst is behind us, the radio newscaster informed me, RealtyTrac had just released numbers showing the month's 95,364 home repossessions in August hit an all-time high since the online foreclosure listing site started tracking figures in 2005. Plainfield Patch reported on a similar story last week. It was a bleak summer for homeowners (and sellers) here, too, with more than half of houses sold in August being homes that were "distressed," meaning the houses were either in foreclosure or pre-foreclosure. I had to see it for myself. So I took a deep breath and called up RealtyTrac's page on Plainfield. But wait. There's more, I found. One news story is not enough to bear all the bad news. The RealtyTrac page on Plainfield has enough sad statistics, it seems, to keep a whole squad of reporters writing all weekend.

Company Stops Insuring Titles in Chase Foreclosures - (www.nytimes.com) A major title insurance company has stopped insuring homes foreclosed by JPMorgan Chase, another sign that the controversy over the legal practices of the big lenders is starting to influence the housing market. The company, Old Republic National Title Insurance, told its agents Friday that it would not write policies on foreclosed Chase properties until “the objectionable issues have been resolved,” according to a memorandum sent out by the firm’s underwriting department. A Chase spokesman declined to comment. Old Republic executives did not return calls for comment. The title insurer, which is based in Minneapolis, said earlier in the week that it would not write policies for properties that had been foreclosed by another big lender, GMAC Mortgage.

Policeman charged with damaging house after being foreclosed on - (www.pe.com) In what could be a first in Riverside County, a former homeowner is charged with a crime in connection with damage to a property in foreclosure. A San Diego police officer and his wife have been charged with a felony in the trashing of their six-bedroom tract home, which was in foreclosure, in the French Valley area of southwest Riverside County. From stones smashed off the facade to dye poured on carpets, the damage totaled $200,000, according to court records. The extent of the damage and the "obvious malice" pushed the case into the realm of criminal behavior, Riverside County sheriff's Sgt. Mike Hatfield said.

Las Vegas faces deepest slide since 1940s - (www.msnbc.msn.com) There are many cities across the country that are beginning to see the first glimpses of the end of the recession. This is not one of them. The nation’s gambling capital is staggering under a confluence of economic forces that has sent Las Vegas into what officials describe as its deepest economic rut since casinos first began rising in the desert here in the 1940s. Even as city leaders remain hopeful that gambling revenues will rebound with the nation’s economy, experts project that it will not be enough to make up for an even deeper realignment that has taken place in the course of this recession: the collapse of the construction industry, which was the other economic pillar of the city and the state.