KeNosHousingPortal.blogspot.com
TOP STORIES:
Why is Fed forking over $220M to wives of two Morgan Stanley bigwigs? - (www.rollingstone.com) But if you want to get a true sense of what the "shadow budget" is all about, all you have to do is look closely at the taxpayer money handed over to a single company that goes by a seemingly innocuous name: Waterfall TALF Opportunity. At first glance, Waterfall's haul doesn't seem all that huge — just nine loans totaling some $220 million, made through a Fed bailout program. That doesn't seem like a whole lot, considering that Goldman Sachs alone received roughly $800 billion in loans from the Fed. But upon closer inspection, Waterfall TALF Opportunity boasts a couple of interesting names among its chief investors: Christy Mack and Susan Karches. Christy is the wife of John Mack, the chairman of Morgan Stanley. Susan is the widow of Peter Karches, a close friend of the Macks who served as president of Morgan Stanley's investment-banking division. Neither woman appears to have any serious history in business, apart from a few philanthropic experiences. Yet the Federal Reserve handed them both low-interest loans of nearly a quarter of a billion dollars through a complicated bailout program that virtually guaranteed them millions in risk-free income.
Ron Paul Forecast the Housing Bubble in 2002 - (www.wtffinance.com) While Democrats and Republicans welcomed big government policies that subsidize the real estate market, Congressman Ron Paul warned about the dire consequences of such interventionist anti-free market policies. In response to the expansion of the FHA program that President Bush announced, Ron Paul addressed the House on July 16, 2002 with a speech where he proposed his pro-free market approach to housing and credit:
“Mr. Speaker, I rise to introduce the Free Housing Market Enhancement Act. This legislation restores a free market in housing by repealing special privileges for housing-related government sponsored enterprises (GSEs). These entities are the Federal National Mortgage Association (Fannie), the Federal Home Loan Mortgage Corporation (Freddie), and the National Home Loan Bank Board (HLBB). One of the major government privileges granted these GSEs is a line of credit to the United States Treasury. According to some estimates, the line of credit may be worth over $2 billion. This explicit promise by the Treasury to bail out these GSEs in times of economic difficulty helps them attract investors who are willing to settle for lower yields than they would demand in the absence of the subsidy. Thus, the line of credit distorts the allocation of capital. More importantly, the line of credit is a promise on behalf of the government to engage in a massive unconstitutional and immoral income transfer from working Americans to holders of GSE debt.
Calif.Mortgage Defaults on the Rise - (www.baycitizen.org) The number notices of mortgage default in California rose in March to their highest level since October 2010, up 17.3 percent since the previous month to 26,615 filings, according to a report released Tuesday by the website ForeclosureRadar.com. At the same time, foreclosures fell 3.3 percent. Locally, the picture was mixed. Notices of default were up 34 percent in Santa Clara County and 28 percent in Contra Costa County between February and March, but remained relatively flat in both Alameda County and San Francisco. (However, the number of actual foreclosures in San Francisco shot up more than 30 percent to 209.) All of this means the region's real estate crisis is still far from over, which isn't surprising if you've been listening to the CEOs of big banks like Bank of America. The nation's largest mortgage servicer told a gathering of 50 state attorneys general on Tuesday that more foreclosures are inevitable. “We’re reaching a point where some customers will be dealing with the reality that despite the myriad programs and the best efforts of everyone in this room, and of our teammates working with these customers, foreclosure may be unavoidable,” BofA's CEO Brian Moynihan told the gathering.
Unintended costs from servicer settlement - (www.housingwire.com) The pending settlement from federal regulators and the 50 state attorneys general could stretch foreclosure timelines out by almost another year, swelling the foreclosure inventory and pushing mortgage rates higher, according to a study from three economists provided to HousingWire. The study was published this week by Charles Calomiris, a professor at Columbia Business School, Eric Higgins, a professor of finance at Kansas State University, and Joseph Mason, a finance professor at Louisiana State University. They said the servicer settlement, which could reportedly force lenders to accept principal write-downs, mandatory modifications and fines totaling as high as $25 billion, would only entice more borrowers to strategically default and further cramp a still limping housing recovery. Felix Salmon, a financial blogger for Reuters, calls the claims "ridiculous" and pointed out that a footnote in the study shows funding for the research came from the financial services industry, including those "affected by the proposed settlement." Salmon went on to claim that some of the points used by the economists are not accurate, including the proposal to write down modifications for those not in default. However, the negotiations are still ongoing.
Foreclosures in Silicon Valley take nearly a year to complete - (www.contracostatimes.com) Banks foreclosed on hundreds of homeowners in Santa Clara and San Mateo counties in March, even as thousands more are stuck in a foreclosure process that is now taking nearly a year to complete -- the longest time since the housing crisis began. The slow pace has added to a backlog of more than 14,000 homes in the foreclosure process in the two counties, according to a report on March foreclosure activity released Tuesday by a real estate research service. That represents a huge number of homes that are either empty and have been taken over by lenders or where owners have stopped making payments. The foreclosure process at every step continues to be slowed by a "robo-signing'' scandal last year that was recently settled by major lenders, said Sean O'Toole, chief executive of ForeclosureRadar, the Discovery Bay information service. Lenders had stopped most foreclosure activity to investigate charges they were skipping important legal steps in the foreclosure process.
OTHER STORIES:
History bodes ill for stock market - (www.marketwatch.com)
Medicare isn't the problem. It's the solution. - (www.robertreich.org)
BA CEO Says don't consider house an asset - (www.msnbc.msn.com)
Realtor on tax advantage of owning a house - (www.patrick.net)
Congress could cut deficit to zero in 8 years by literally doing nothing - (www.slate.com)
Fed orders biggest banks to shape up mortgage servicing - (www.centralvalleybusinesstimes.com)
Bureau of Labor Statistics helps Fed ignore most important budget item - (www.doctorhousingbubble.com)
The Fed Rescue Program Too Bizarre to Be True - (www.bloomberg.com)
America's Rental Housing - The Key to a Balanced National Policy - (www.jchs.harvard.edu)
No comments:
Post a Comment