Tuesday November 16 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

BOA Gets $20 Billion Warning Letter From Insurance Industry - (www.livinglies.wordpress.com) On September 2, 2010 Bank of America was warned about their liability in shady securitizations, mortgages and foreclosures. The letter states directly that some 50% of all loans including HELOCS “qualify for repurchase by BOA in the securitizations insured by them.” It estimates liability of at least $10-$20 Billion just for members of AFGI (Association of Financial Guaranty Insurers). “While BOA has publicly announced its intention to contest its representation and warranty obligations on a “loan by loan” basis, AFGI submits that this defensive posture will soon prove ineffective in shielding BOA from the financial, accounting, legal and other implications of its massive obligations to our industry members.” The implications of that statement are enormous. The insurers are saying that BOA has liabilities far in excess of what BOA has publicly disclosed and that the AFGI members intend to collect. The implications regarding “ownership of the loan” are even more dire for pretender lenders like BOA. This letter clearly provides corroboration of the fact that the receivables were securitized and not the actual notes or mortgages.

Foreclosure Mess Even Worse in 'Nonjudicial' States - (www.dailyfinance.com) In 23 states, before a lender can foreclose on a homeowner for defaulting on a mortgage, it must take the homeowner to court. As we've seen, even with judicial review that process has still been shot through with problems. But for a troubled homeowner in California, Texas and 25 other "nonjudicial" states, the robo-signing scandal and foreclosure mess are even more dangerous because the lender doesn't have to go to court to foreclose. Fraudulent paperwork can be used with impunity unless the homeowner is in bankruptcy, which is a judicial process, or unless the homeowner is represented in the foreclosure by an attorney who knows what to look for. Similarly, solving the problem in these non-judicial, or "deed of trust," states will be correspondingly harder: Simple solutions like changing the rules of legal practiceas New York has done, won't work. There is an existing solution, however: criminal prosecutions. In California it's illegal to file the fraudulent documents, and in Texas it sure seems to be. But don't hold your breath waiting for a massive crackdown. Meantime, to see why homeowners in nonjudicial states face a more perilous situation (as the pictured protesters in Los Angeles are trying to publicize), here's a closer look at the problem in both California and Texas, two non-judicial states that combined are home to 1 in 5 Americans:

Foreclosure Freeze Cuts Sales, Supply in Hardest-Hit States - (www.bloomberg.com) U.S. home foreclosure sales are slowing in the states hardest-hit by the real estate crash as banks review their practices and delay seizures. In Arizona, California and Nevada, foreclosure auctions on courthouse steps, known as trustee sales, are down 42 percent since Sept. 20, according to ForeclosureRadar, a real estate tracking service in Discovery Bay, California. In Florida’s Miami-Dade and Broward counties, fewer foreclosures have led to 18 percent declines this month in the number of repossessed homes listed for sale, said Ron Shuffield of Esslinger, Wooten, Maxwell Inc., a realty firm based in Coral Gables, Florida. In a real estate market where as many as 7 million homes face foreclosure or have already been seized by lenders, according to Zillow Inc., a clog in the pipeline may delay a housing recovery, which won’t occur until home prices stop falling. That could in turn postpone a U.S. economic recovery. Distressed properties accounted for 31 percent of all U.S. home sales last month, RealtyTrac Inc. said Oct. 14.

Keep government out of housing - (www.commercialappeal.com) First, as a matter of principle, when the government gives low-interest loans to individuals to purchase homes, it obtains funding for the loans through taxes or borrowing against future generations. Why does one individual's desire to own a home entitle him or her to the product of my labor, or to that of future generations? It must be recognized that the government has no wealth of its own, as all wealth is the product of a human being's capacity to think and engage in productive activity. Second, the government does not have the capacity to comprehend or predict the snowball effect that an influx of funds into a sector of the economy will have on the market. A prime example of this fact is the housing crisis. While the government was by no means the sole cause of the crisis, it is now clear that lending by Fannie Mae and Freddie Mac, combined with Alan Greenspan's reckless policy of keeping interest rates at artificially low levels, were major contributing factors.

OTHER STORIES:

On election day, make sure we don't throw the bums in - (www.latimes.com)

White collar recession, blue-collar depression - (www.marketwatch.com)

Amid mortgage mess, owners blindsided - (www.washingtonpost.com)

How the Banks Put the Economy Underwater - (www.nytimes.com)

Do the Rich Need Coddling? - (www.motherjones.com)

How to End the National Debt in One Day - (www.youtube.com)

Orange County daydreaming prices to increase 50 percent by 2016 - (www.doctorhousingbubble.com)

Australians swoop in on U.S. foreclosures - (www.money.cnn.com)

Don't Think Housing Matters Like It Used To - (www.businessinsider.com)

3.8% tax on real estate transactions applies ONLY to PROFITS over $500,000 - (www.snopes.com)

To keep college debt to minimum, don't think of it as surefire investment - (www.boston.com)

Hedge-fund Manager Criticizes Bernanke, Warns Of Hyperinflation - (www.nasdaq.com)
US Hears Echo of Japan's Woes - (www.nytimes.com)