KeNo's Housing and Economic Portal: Tuesday October 12 Housing and Economic stories

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TOP STORIES:

Savers told to stop moaning and start spending - (www.telegraph.co.uk) Savers should stop complaining about poor returns and start spending to help the economy, a senior Bank of England official warned today. Older households could afford to suffer because they had benefited from previous property price rises, Charles Bean, the deputy governor, suggested. They should "not expect" to live off interest, he added, admitting that low returns were part of a strategy. His remarks are likely to infuriate savers, who are among the biggest victims of the recession. About five million retired people are thought to rely on the interest earned by their nest-eggs. But almost all savings accounts now pay less than inflation. The typical savings rate has fallen from more than 2.8 per cent before the financial crisis to 0.23 per cent last month. Mr Bean said he "fully sympathised". But he continued: "Savers shouldn't necessarily expect to be able to live just off their income in times when interest rates are low. It may make sense for them to eat into their capital a bit." He added: "Very often older households have actually benefited from the fact that they've seen capital gains on their houses." In an interview with Channel Four News on Monday night, he said that savers "might be suffering" from the low Bank Rate. But they had done well from higher rates in the past and would do so again.

Former bank rep gets the runaround from Capital One - (www.latimes.com) A onetime spokesman for Bank of America has trouble getting to the bottom of why Capital One dropped him out of a rewards card program, telling him all his points had been forfeited. When a former bank executive gets the shaft from a big bank, it's tempting to see this as a satisfying turn of the karmic wheel. But I'm not mean-spirited, so I'll just say, "Welcome to the consumer club, dude." Michael Chee, 44, used to be a senior spokesguy at Bank of America. He and I dealt with each other on a number of columns. These days, Chee handles communications for White Memorial Medical Center in Los Angeles. But it's his status as a Capital One credit card customer that's pertinent here. And his story highlights the importance of reading the fine print that typically accompanies bank mailings. Not doing so can lead to big changes to your account. "It's death by a thousand paper cuts," Chee told me. "This is how banks try to slip things past customers."

Newport Coast land in foreclosure $6 million - (mortgage.ocregister.com) A lot in Crystal Cove that was planned for the site of a 20,000 square foot custom home with a 2,000-bottle wine cellar and a pistol range is in foreclosure at $6,207,766.95. The website of C & R Developers contains this description of the project: “An almost one acre lot and plans for a 20k sqft house … This one-of-a kind estate will have 200° views from Abalone point in Laguna Beach to the Orange and Los Angeles County city lights. Including Catalina Island and Newport Harbor. “33 Highwater will have four elevator serviced floors, ( two above ground level and two below ), plus a 250 sqft. tower … a regulation racquetball court, pistol range, large daylighted game room and a two thousand bottle wine cellar that connects to a château like tasting room.” You can see more on the property on the C & R Developers website.

Hawaii residential subdivision heads for auction - (www.staradvertiser.com) Michael Fuchs had many hits as a former chief executive of HBO, but his dabbling in Hawaii real estate development appears headed for a bad ending. Unsold pieces of the Ke Kailani luxury residential subdivision developed by Fuchs at Mauna Lani Resort on the Big Island are scheduled for a Nov. 18 foreclosure auction. Three local lenders, led by Bank of Hawaii, claim that Fuchs defaulted on $52 million in loans he took out to develop the project featuring 39 single-family home lots and 12 condominiums mostly fronting three golf fairways of Mauna Lani's South Course. The planned auction involves 25 single-family home lots, land planned for eight condominium units and two completed condo units -- all of which are being offered in bulk, not separately.

Tax auctions look 'like government-sponsored loan-sharking' - (www.bnd.com) A group of Madison County Board members announced Monday they're launching an investigation into the county's property tax auctions. The auctions were the subject of a News-Democrat investigation, which showed that former Madison County Treasurer Fred Bathon took in about $140,000 in campaign donations from investors who bought delinquent property tax debts. Those investors routinely were allowed to buy people's tax debts at an 18 percent penalty rate -- the highest allowed under state law. The investors took in up to $200,000 apiece in penalties for some years. County Board members Jean Myers, of Troy, Mike Walters, of Godfrey, Bill Meyer, of Hamel, Hal Patton, of Edwardsville, Chris Wangard, of Troy, and Chris Slusser, of Wood River, all Republicans on the Democrat-controlled County Board, said they have started a fact-finding process. They also encouraged affected property owners to call a hotline set up to report complaints about the process. The number is 917-3705.