KeNo's Housing and Economic Portal: Tuesday April 5 Housing and Economic stories

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TOP STORIES:

Michigan first to act as states weigh reductions in unemployment benefits - (www.washingtonpost.com) Michigan moved Thursday to significantly cut its unemployment program, becoming the first of what could be a flurry of debt-laden states to reduce aid even as high jobless rates persist. The Michigan measure reduces the maximum period a person can receive state unemployment benefits from 26 to 20 weeks, the lowest in the nation, officials said.Gov. Rick Snyder (R) indicated Thursday that he would sign the bill. The state’s economic troubles, aggravated by the recession and its shrinking manufacturing base, have turned Michigan into a bellwether of bust. Its unemployment rate stands at 10.7 percent — one of the worst in the country. The move comes as other Republican-dominated legislatures, including in Florida and Arkansas, are weighing similar efforts to restrict payments to the jobless, and states such as Wisconsin, Ohio and Indiana are implementing far-reaching, controversial plans to close budget gaps.

U.S. Postal Service announces sweeping job cuts, district office closures - (www.washingtonpost.com) The U.S. Postal Service announced Thursday that it will reduce its workforce with layoffs and offers of buyouts and will close seven district offices from New England to New Mexico to help address record losses. The reorganization, designed to eliminate 7,500 administrative, executive and postmaster jobs this year, came as a commission that is evaluating the Postal Service’s plan to eliminate Saturday delivery concluded that one in four letters would be delayed by not just one but by two days. The independent Postal Regulatory Commission also said that postal officials underestimated the losses the agency would suffer from handling less mail— and overestimated the cost savings. Five-day service and a smaller workforce are among the Postal Service’s strategies to become solvent after losses of $8.5 billion in fiscal 2010, the result of declining mail volumes. Projected losses for 2011 are $6.4 billion. Once buyout decisions aimed at administrative staff are final in April, the agency plans to eliminate the jobs of thousands of postmasters and supervisors, many through layoffs, officials said.

Portugal Said to Need as Much as $99 Billion in Bailout - (www.bloomberg.com) A bailout for Portugal may total as much as 70 billion euros ($99 billion), two European officials with direct knowledge of the matter said, as credit-rating cuts threatened to deepen Portugal’s debt woes. Preliminary calculations put the cost of a lifeline from 50 billion to 70 billion euros, said the officials, who declined to be named because the issue is confidential. Portugal continued to rule out a rescue after the parliament’s rejection of budget cuts led Prime Minister Jose Socrates to offer to quit. Downgrades by Fitch Ratings and Standard & Poor’s dealt a further blow, as European Union leaders called on Socrates and the opposition parties to unite behind belt-tightening measures that might spare Portugal from becoming the third euro country to tap emergency aid.

IMF Said to Be Discussing Activation of $583 Billion Crisis Lending Pool - (www.bloomberg.com) The International Monetary Fund is working on activating itscrisis lending pool, a move aimed at showing it has enough liquidity to help bail out countries in need and stabilize the global economy, two IMF officials said. Countries that contribute to the pool, with new members including China and India, are seeking an agreement on how much of the credit line’s $583 billion should be made available and for how long, according to one official, who spoke on condition of anonymity because the talks are not public.

Four States Consider Legislation Barring Distressed Sales as Comparables - (www.appraisalinstitute.org) Four states – Illinois, Maryland, Missouri and Nevada – are considering legislation that would prohibit or restrict the use of “distressed sales,” such as foreclosures and short sales, as comparable sales as a part of a residential real estate appraisal. The Missouri legislation, known as House Bill 292, would prohibit appraisers from using a property that has been sold at a foreclosure sale as a comparable. Similar to the Missouri proposal, the Illinois legislation would prohibit appraisers for the next five years from using as a comparable sale “a residential property that was sold at a judicial sale at any time within 12 months.” The Nevada legislation would prohibit the use of foreclosures and short sales. The prohibitions contained in the Maryland legislation are somewhat broader and include any property that was sold under “duress or unusual circumstances, such as a foreclosure or short sale.” There is, however, conflicting language in the Maryland legislation that appears to allow for the use of distressed properties as comparables if the appraiser takes into account factors such as the motivation of the seller, the condition of the property and the property’s history or disposition before the sale. Appraisers in Maryland will oppose this legislation during a hearing March 29.