KeNo's Housing and Economic Portal: Sunday June 19 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

For the Jobless, Little U.S. Help on Foreclosure - (www.nytimes.com) The Obama administration’s main program to keep distressed homeowners from falling into foreclosure has been aimed at those who took out subprime loans or other risky mortgages during the heady days of the housing boom. But these days, the primary cause of foreclosures is unemployment. As a result, there is a mismatch between the homeowner program’s design and the country’s economic realities — and a new round of finger-pointing about how best to fix it. The administration’s housing effort does include programs to help unemployed homeowners, but they have been plagued by delays, dubious benefits and abysmal participation. For example, a Treasury Department effort started in early 2010 allows the jobless to postpone mortgage payments for three months, but the average length of unemployment is now nine months. As of March 31, there were only 7,397 participants. “So far, I think the public record will show that programs to help unemployed homeowners have not been very successful,” said Jeffrey C. Fuhrer, an executive vice president of the Federal Reserve Bank of Boston.

Swing states still struggling after housing bust pose challenge to Obama reelection - (www.washingtonpost.com) Toby Tobin’s luxurious three-bedroom condominium speaks to an unsustainable vision of the good life that not long ago lured people in droves, transforming this once sleepy retirement community into a boomtown. Tobin’s place at the Tidelands complex looks out on the Intracoastal Waterway, and the beach is just minutes away. In January, he picked it up in a short sale for $170,000 — less than a third of the $587,500 the original owner paid in 2005. Similar developments in distress dot the lush landscape in Palm Coast, the hub of Flagler County. Once they fueled a virtuous cycle of rising property values, new projects, new residents and new jobs that made Flagler the fastest-growing county in the nation. Now they offer vivid evidence of an economy gone bad in ways that are proving difficult to repair. Two years after the recession officially ended, the jobless rate in this county one hour south of Jacksonville was 13.8 percent in April — down from 14.5 percent in March but still the highest in Florida — and officials are at a loss for ways to turn things around. Past economic troughs may have been characterized by old cities with idled assembly lines and abandoned factories. This one is defined by places such as Flagler where half-built subdivisions have little hope of ever being filled and thousands of carpenters, landscapers, mortgage brokers, furniture salespeople and interior designers thrown out of work have little hope of regaining their jobs.

Portuguese vote in shadow of bailout - (www.reuters.com) Portugal's center-right Social Democrats (PSD) won Sunday's general election, booting out Prime Minister Jose Socrates' Socialists after they sought a 78-billion-euro bailout that will bring deep austerity, exit polls showed. Exit polls by three television stations gave the Social Democrats between 37 and 42.5 percent of the vote, far ahead of the Socialists who scored between 24.4 percent and 30 percent. "These are clear results which the Socialist Party wants to recognize. All the results point to a win for the PSD and a defeat for the Socialists," Economy Minister Jose Vieira da Silva said shortly after the exit polls were published. The election ends a period of political uncertainty that started with the collapse of the Socialist government in March and led Lisbon to become the third country in the euro zone to seek a bailout after Greece and Ireland.

EU Preparing New Rescue Package for Greece - (www.bloomberg.com) European Union officials will focus on preparing a new aid package forGreece that includes a “voluntary” role for investors after the EU and the International Monetary Fund approved the fifth installment of Greece’s 110 billion-euro ($161 billion) bailout. “I expect the euro group to agree to additional financing to be provided to Greece under strict conditionality,” Luxembourg Prime Minister Jean-Claude Juncker said after meeting with Greek Prime Minister George Papandreou in Luxembourg on June 3. “This conditionality will include private-sector involvement on a voluntary basis.” Papandreou agreed to 78 billion euros in additional austerity measures and asset sales through 2015 to secure the 12 billion-euro bailout payment and meet conditions for receiving an additional rescue package. He agreed to make “significant” cuts in public-sector employment and establish an agency to manage accelerated asset sales, according to a statement released in Athens on June 3. The plan is fueling popular opposition and protests across Greece.

Greek, European officials agree on additional cuts - (www.washingtonpost.com) Greece has agreed to speed its sale of state-owned property and cut billions of dollars more from its budget to satisfy requirements for promised loans from the International Monetary Fund and other European countries. The additional steps in a year-old economic overhaul come as the government in Athens copes with a public hit hard by recession and previous government cuts while trying to satisfy demands by the IMF and European officials to meet the budget targets established last year in return for a $160 billion financial bailout. That program has slipped behind schedule, and Greece needs perhaps $40 billion or more in additional loans to pay its bills and avoid defaulting on payments to its bondholders. The IMF and European authorities are hoping to avoid a Greek default for fear of the shock it would deliver to world financial markets. In separate statements, Greek, IMF and European officials said that after initial talks they had agreed on the additional steps Greece would take to meet the budget and economic targets established last year.