KeNo's Housing and Economic Portal: Wednesday April 27 Housing and Economic stories

Tuesday, April 26, 2011

Wednesday April 27 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Lenders prove too powerful to be prosecuted - (www.firsttuesdayjournal.com) Lenders are still getting away with highway robbery, according to Nobel Prize winning economist and New York Times Op/Ed columnist, Paul Krugman. Krugman eviscerates the banking industry and the wealthy class with a powerful reminder that although an economic recovery is under way, there has yet to be a final reckoning. More than a moralistic call for lender atonement, Krugman adroitly identifies the phenomenal role reversal that has taken place between the accused and their accusers. He reveals how the banking industry has managed to demonize those who seek to prosecute them for their abuses. In the past it was real estate brokers and appraisers; now it is others. Rather than cheering-on the attorneys general (AGs) as they pursue lenders for restitution via a recently proposed settlement, congressmen, the press and of course lenders themselves, are branding the settlement as “extortion,” and a “shakedown” that will threaten the economic recovery. Such rhetoric is brazenly employed against the AGs who have repeatedly exposed the gross improprieties of lenders.

Cocaine smugglers laundered billions through Wachovia bank - (news.yahoo.com) Somehow, the major banks in the United States have gone from serving as the main bulwarks of credit and entrepreneurial pluck to the moral equivalent of a James Bond villain. There were, for instance, the jaw-dropping mortgage frauds detailed by "60 Minutes" just last night. There was last week's report on a group of Citibank-affiliated debt collectors actually killing a customer in Indonesia in a dispute over a credit card bill. And there's the long-running but demoralizing story of the unjustified efforts of large banks to foreclose on active-duty soldiers. Now comes this: Wachovia Bank -- which merged with the West Coast banking giant Wells Fargo in 2009, in one of the many industry moves sparked by the 2008 mortgage meltdown -- seemingly looked the other way while some of the world's biggest drug lords funneled billions through the bank's holdings. As one federal prosecutor put it, the arrangement "gave international cocaine cartels a virtual carte blanche to finance their operations."

60 Minutes - The Next Housing Shock - (www.youtube.com) Synopsis: The Next Housing Shock: As more and more Americans face mortgage foreclosure, banks' crucial ownership documents for the properties are often unclear and are sometimes even bogus - a condition that's causing lawsuits and hampering an already weak housing market.

FHA loans decline while VA loan use increases - (www.centralvalleybusinesstimes.com) The share of borrowers using government-insured FHA home loans fell to its lowest level in 27 months in February, based on an analysis of 20 large housing markets nationwide by DataQuick Information Systems of La Jolla. The trend likely reflects a combination of factors, including tighter lending criteria for the low-down-payment loans, says DataQuick in its report Monday. In February, 33.3 percent of the purchase mortgages used in those 20 metro areas were FHA-insured, down from 38.2 percent in February 2010. Last month's figure was the lowest since FHA loans made up 33.0 percent of the purchase loan market in November 2008. In Sacramento, the only Central Valley metro area included in DataQuick’s study, 4.7 percent of home loans in February were VA loans and 35.7 percent were FHA. In February 2010 in Sacramento, 4.3 percent of home loans were through the VA and 45.3 percent were FHA, says DataQuick. For the current housing cycle, FHA loans nationwide peaked at 41.1 percent of all home purchase loans in November 2009. Since then, FHA's share of purchase mortgages has eroded fairly steadily, says DataQuick.

Fed's Artificially Low Interest Rates Murder The Elderly - (online.wsj.com) Forrest Yeager, a 91-year-old resident of this seaside community, had been counting on his retirement savings to last until he died. The odds are moving against him. With short-term bank CDs paying less than 1%, the World War II veteran expects his remaining $45,000 stash to yield just a few hundred dollars this year. So, he's digging deeper into his principal to supplement his $1,500 monthly income from Social Security and a small pension. "It hurts," says Mr. Yeager, who estimates his bank savings will be depleted in about six years at his current rate of withdrawal. "I don't even want to think about it." Mr. Yeager is among the legion of retirees who find themselves on the wrong end of the Federal Reserve's epic attempt to rescue the economy with cheap money.