KeNo's Housing and Economic Portal: Thursday June 16 Housing and Economic stories

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This Brand New $105 Million High School In Riverside, California Is Too Broke To Hold Any Classes - (www.businessinsider.com) Work on Riverside, California's Hillcrest High School will be wrapping up this fall. It's a state of the art learning institution, with a robotics lab, digital smart boards, and fully wireless Internet. Unfortunately, the city can't afford to turn on the lights or allow any students to enroll. According to the L.A. Times, the school has no set date to open, though it was designed to help absorb the overflow of students from other districts. The students lined up to attend Hillcrest will be sent to La Sierra High School instead, a facility already at double-capacity with 3,400 kids. Construction on Hillcrest began in 2007 with the sale of $196 million in bonds and was almost impossible to halt once the economy began to turn. The $3 million the closed school will save the state does not include the $1 million required to secure and maintain the campus. Kenneth Young, Riverside's superintendent of schools, said his districts have lost more than $1 billion in combined state funding. His is not the only county to close schools, many districts across the state have been forced to close institutions open just a few years. "I think we've bottomed out as far as the economy, but here's the thing: The state budget is still out of balance," Young said. "That's where the funding comes from … so that means things might not get better any time soon

Yield on 10-Year Treasury Falls Below Critical 3% - (www.cnbc.com) U.S. Treasury debt prices rallied Wednesday after weak data on jobs and factory activity drove fears that the economic recovery could be derailed, pushing the yield on the 10-year note below 3 percent for the first time in nearly six months. The data, which came in well below expectations, suggested the economy is facing more than just a soft patch and drove speculation that the Federal Reserve will step in again to stimulate growth after its second round of stimulus, known as QE2, is completed at the end of this month. "What you have received today is fueling the perception that the economy is rolling over. You have to look at these economic data that point to lower yields," said Eric Green, chief of U.S. rates research and strategy at TD Securities in New York.

BofA CEO Says Foreclosure Deal Will Take Time - (www.cnbc.com) A settlement between a coalition of federal and state agencies and U.S. banks over foreclosure practices will take longer to hammer out than many expect,Bank of America Chief Executive Brian Moynihan said Wednesday. Moynihan, speaking at a Sanford Bernstein conference in New York, said talks with state attorneys general, the U.S. Department of Justice and other agencies are progressing, but the number of parties involved slows down the discussions. "The time frame keeps moving out because you have 50-plus people involved by definition," he said. "I think it will take longer than people will think." BofA, the largest U.S. mortgage servicer, and several other big mortgage lenders have been engaged in discussions since last fall to settle allegations that the industry cut corners in repossessing homes from delinquent borrowers. In April, the largest U.S. banks, including BofA, settled with federal bank regulators, including the Federal Reserve, the Office of Thrift Supervision and the Office of the Comptroller of the Currency.

Girl Loses $300K Inheritance Because Her Aunt Gave It All To Guy Who Said World Would End - (www.businessinsider.com) Doris Schmitt was 78 when she died alone in Queens, on May 2. After a lifelong struggle with alcoholism and watching both her children die from drug abuse she spent her final years listening to Harold Camping and Family Radio. Content knowing her aunt found comfort in the program and its host, Schmitt's niece Eileen Heuwetter, never gave the subject much thought. Not until she found out her aunt left nearly her entire $300,000 estate to Family Radio. According to CNN, Heuwetter and her sister were each left $25,000, but she wasn't aware who Camping was. She said she first realized this was the same group when she saw buses driving around New York City the weekend before the supposed end of the world, spreading the doomsday message. "I'm looking at these brand new buses drive around with Family Radio's name on them, saying 'Doomsday is May 21', and I said, 'Oh my god, this is who my aunt gave all of her money to," Heuwetter said. "I didn't know he was so crazy, and at this point I was incensed that this man was going to get everything my aunt had left."

S.E.C. Case Stands Out Because It Stands Alone - (www.nytimes.com) At the height of the housing boom, the 26th floor of Goldman Sachs’s former headquarters on Broad Street in Lower Manhattan was the nerve center of Goldman’s fast-growing mortgage trading business. Hundreds of employees worked closely in teams, devising mortgage-based securities — billions of dollars’ worth — that were examined by lawyers, approved by management, then sold to investors like hedge funds, commercial banks and insurance companies. At one trading desk sat Fabrice Tourre, a midlevel 28-year-old Frenchman who was little known not just outside Goldman but even inside the firm. That changed three years later, in 2010, when he achieved the dubious distinction of becoming the only individual at Goldman and across Wall Street sued by the Securities and Exchange Commission for helping to sell a mortgage-securities investment, in one of the hundreds of mortgage deals created during the bubble years. How Mr. Tourre alone came to be the face of mortgage-securities fraud has raised questions among former prosecutors and Congressional officials about how aggressive and thorough the government’s investigations have been into Wall Street’s role in the mortgage crisis.