KeNo's Housing and Economic Portal: Monday November 8 Housing and Economic stories

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Fed is dumpster for banks' smallpox-blanket-grade mortgage bonds - (www.kunstler.com) The latest version of Pretend - going on a couple of weeks now - is the nation whistling past the graveyard of mortgage documentation fraud while skeletons dance around everything connected with the money system. Halloween came early this year. The USA is getting to look like one big Masque of the Red Death, so I suppose it's convenient that our pop culture has been saturated with vampires, zombies, and werewolves for a decade, coincident with the self-cannibalizing of our economy. Something in the zeitgeist told us to get with the program of a twilight existence. We're well-schooled now in the ways of the undead, operating under cover of darkness, going for the neck at every opportunity, even eating our young - if you consider the debt orgy, both private and public, as a way to party like it's 1999 by consuming your children's' future. The big banks leading the charge of the anthropophagi are making like it's no big deal that notes representing money lent have become mysteriously dissociated from the mortgages that secure them. In the good old days, these things traveled in pairs, like boy-and-girl, Laurel and Hardy, a horse and carriage. It made for straight-forward property transfers, where Person A could be confident he was buying something free and clear from Person B. What a quaint concept, free and clear!

99 Weeks: When Unemployment Benefits Run Out - (www.cbsnews.com) The economic jam we're in has topped even the Great Depression in one respect: never have we had a recession this deep with a recovery this flat. Unemployment has been at nine and a half percent or above for 14 months. Congress did something that it has never done before - it extended unemployment benefits to 99 weeks. That cost more than $100 billion, a huge expense for a government in debt. But now, for many Americans 99 weeks have passed and there's still no job in sight. Some have taken to calling themselves the "99ers." "60 Minutes" and correspondent Scott Pelley went to several communities in search of the 99ers, but we didn't expect to find such a crisis in Silicon Valley, the high tech capital that many people hoped would be creating jobs. If you want to understand why the economy is stalled, come to San Jose, Calif., and talk with 99ers like Marianne Rose. "I remember it coming close to like six months. I was saying, 'I can't believe I'm out of work this long.' Then the year mark hit. And I just started just panicking seriously. Now that it's over two years I can't believe it. I just, I can't believe it," she told Pelley.

Backdoor Foreclosure Via Insurance - (mindonmoney.wordpress.com) Each year since 2000, my insurance carrier increased the insured amount by at least 5%, and some years as much as 12%. When my policy came up for renewal last spring, I was stunned by what all that compounding had done. I was expected to pay for three times as much insurance on the house as I could get for selling it. And that puts zero dollars valuation on the 2.5 acre lot in a nice neighborhood that the house sits on. I called my agent, and said I’d like to lower my coverage to a number that roughly 25% more than my mortgage, a number that I could easily use to build a replacement if my house burnt to the ground. Seems reasonable, right? Wrong. The only way I was going to be able to insure my house for less was to change companies. OK. After changing companies (and saving a few bucks), the new company sent around a young (mid-20′s) inspector who apparently came from some third party insurance inspection service. A month or so after the inspector came by, I got a letter forwarded to me by my insurance agent with several suggestions.

US banking regulators in new foreclosures probe - (www.bbc.co.uk) US banking regulators will carry out their own investigation into whether lenders were wrong to repossess hundreds of thousands of homes. The Federal Reserve chairman, Ben Bernanke, says regulators will look at whether mortgage companies cut corners on their own procedures when they moved to foreclose on people's homes. Attorneys General in all 50 US states are already looking into the issue. Meanwhile, US existing home sales grew by 10% in September. 'Uncertainty': The National Association of Realtors said home sales rose to a seasonally adjusted annual rate of 4.53 million. The annual rate has risen from July's rate of 3.84 million, which was the lowest in 15 years. Since September 2005, home sales have fallen by 37.5% from their peak annual rate of 7.25 million. It is feared sales could fall further if potential lawsuits from former homeowners, who are claiming banks made errors in seizing their homes, make potential buyers cautious about purchasing foreclosed properties.

A $10 million house in bubble days is now a $5 million house - (www.reuters.com) Across the city's wealthy suburbs, from Tony Hancock Park to coastal Malibu, sales in the $5 million-plus range are up 15% year-over-year, according to Joyce Flaherty, a broker at real estate firm Coldwell Banker. "A $10 million house in the bubble days is now a $5 million house," she explains. "Prices were outrageously inflated, and now they're plummeting. After unsuccessfully shopping their property for years, sellers have been forced to get realistic." Overall, southern California home prices have declined 43% since the 2007 peak, according to DataQuick, a San Diego real estate research firm. Some of the markdowns are impressive. A $30 million Bel Air property was marked down to $21.9 million before eventually closing escrow at $19.5 million in January. Paramount chairman and CEO Brad Grey managed to unload his $29 million estate for $21.5 million in June. The William Randolph Hearst estate, a 50,000-square-foot mansion sitting on 3.7 flat acres above the Beverly Hills Hotel, is back on the market for $95 million. Three years ago, the compound was listed at $165 million.