KeNo's Housing and Economic Portal: Thursday December 30 Housing and Economic stories

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Cincinnati Threatens to Outsource Entire Police Department - (Mish at globaleconomicanalysis.blogspot.com) Cincinnati, like every union-plagued city in the country is having huge budget problems over untenable union wages and pension benefits. Big problems call for big actions. I am pleased to report that several thinking members on the Cincinnati City Council proposed to outsource the entire police department to the local sheriff's association. Unfortunately, the mayor nixed the idea. The Cincinnati Enquirer reports City-county police merger proposed: Three Cincinnati City Council members floated a proposal Wednesday to shift city police patrols to the Hamilton County Sheriff’s Office as a way to help plug a $60 million deficit in the city budget and avoid 275 police and firefighters layoffs. But just as quickly as council members Roxanne Qualls, Wendell Young and Jeff Berding pitched the plan – which Hamilton County Sheriff Simon Leis supports – it seemingly died. Council currently does not have enough votes to override a threatened veto by Mayor Mark Mallory, who in a letter to Leis said he sees the proposal as “a brazen and shameless attempt at union-busting” that he will never support.

For the unemployed, the dream’s a nightmare - (www.ibtimes.com) Work hard and play by the rules and you'll get ahead. That's been an article of faith, since at least the birth of this nation, in what has come to be called the American dream. That's now a shattered dream for millions of Americans, according to a new study released by Rutgers University. "This recession is not as bad as the Great Depression, but it's a close cousin," said Carl Van Horn, director of Rutgers' John J. Heldrich Center for Workforce Development, and co-author with Cliff Zukin and Jessica Godofsky of The Shattered American Dream: Unemployed Workers Lose Ground, Hope, and Faith in their Futures. "This study reveals what happens when you have a long, tough recession," Van Horn said. "It changes people's thinking and people's attitudes. There is now an air of resignation and pessimism." According to government figures, close to 10 percent of the American workforce is unemployed. The actual ratio is higher, experts say, because many people have stopped looking for work and go uncounted. The Rutgers report notes that 8.5 million jobs have been lost in what is being called the Great Recession.

Opening the Bag of Mortgage Tricks - (www.nytimes.com) ALL the revelations this year about dubious practices in the mortgage servicing arena — think robo-signers and forged signatures — have rightly raised borrowers’ fears that companies handling their loans may not be operating on the up and up. But borrowers aren’t the only ones concerned about potential mischief. Investors who hold mortgage securities are increasingly worried that servicers may be putting their interests ahead of those who own the loans. A servicer might, for example, deny a loan modification to a borrower because it also owns a second mortgage on the same property and doesn’t want to write down that asset, as required in a modification. Levying outsize default fees is another tactic — the fees typically go to the servicer, not the lender, but they can still propel a property into foreclosure more quickly. And foreclosures aren’t a good outcome for investors. Last week, a jury in federal district court in Reno, Nev., awarded a group of 50 mortgage investors $5.1 million in punitive damages against defendants in a loan servicing case. Although the numbers in the case aren’t large, its facts are fascinating. Indeed, the case exposed some of the tricks of the servicers’ trade.

NJ Turnpike Authority Privatizes Toll Collection - (www.app.com) More than 200 union members and leaders packed the New Jersey Turnpike Authority's meeting Wednesday to oppose a plan to outsource toll collectors' jobs on the Garden State Parkway and Turnpike to private contractors next spring. "Over the years, the union has worked together to help the Turnpike solve its problems," said Franceline Ehret, president of Local 194 of the International Federation of Professional and Technical Engineers, which represents 1,200 authority employees. "We urge you to hold off putting out the request for proposal and allow us to work it out." Ehret and other speakers said outsourcing will take what are now middle-class jobs and reduce them to minimum-wage jobs, which would negatively affect the state and local tax bases and the economy. Authority officials said the union will have a chance to submit a proposal as a private contractor.

Newly Built Ghost Towns Haunt Banks in Spain - (www.nytimes.com) It is a measure of Spain’s giddy construction excesses that 250 row houses carpet a hill near this tiny rural village about an hour by car outside of Madrid. Most of these units have never sold, and though they were finished just three years ago, they are already falling into disrepair, the concrete chipping off the sides of the buildings. Vandals have stolen piping, radiators, doors — anything they could get their hands on. The Bank of Spain says the banks have about $240 billion in “problematic exposure” out of $580 billion invested in real estate and construction, a situation, they say, the banks are capable of handling. The boom and bust of Spain’s property sector is astonishing. Over a decade, land prices rose about 500 percent and developers built hundreds of thousands of units — about 800,000 in 2007 alone. Developments sprang up on the outskirts of cities ready to welcome many of the four million immigrants who had settled in Spain, many employed in construction.