KeNo's Housing and Economic Portal: Sunday September 4 Housing and Economic stories

Saturday, September 3, 2011

Sunday September 4 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Homedebtors feeling 'trapped' in struggling Florida housing market - (www.palmbeachpost.com) Gloryann Torres misses her family in the northeast part of the country. She wants to move closer to them but the 65-year-old feels "trapped" in her Florida home. "It's like the jail is closing behind me. I'm just not happy here. I want to be away and there is no way I can afford to take this hit," she said. Torres paid off her $87,000 West Palm Beach condominium years ago. She feels that she would get less than half of that money back if she sold in today's market. "That is the great irony. People who bought homes that they couldn't afford are being helped out," said Torres. Housing experts said that there are likely many more people just like Torres in South Florida. Paul Baltrun believes that Torres did everything right but that there is little help for her situation. He said any federal funding help is often for people having trouble with their mortgages.

Tea Party Rep: Bank Should Have Known I Wouldn't Repay $2.2M Loan - (tpmmuckraker.talkingpointsmemo.com) Tea Party aligned Georgia Rep. Tom Graves (R), who castigates Washington for fiscal irresponsibility, reached an out of court settlement Wednesday after he was sued for defaulting on a $2.2 million loan -- which his attorney argued is the bank's fault for lending him the money in the first place. Graves and his business partner Chip Rogers -- who is the state Senate's Republican majority leader -- took out a $2.2 million loan from the Bartow County Bank in 2007 to buy and renovate a local motel. The project soon went belly-up. The bank, which has since failed and had its assets taken over, sued Graves and Rogers for defaulting. The two Republicans then countersued, "accusing [the bank] of improperly declaring the loan in default after reneging on a promise to refinance it at more favorable terms," according to Jeremy Redmon and Aaron Gould Sheinin of the Atlanta Journal-Constitution .

Investors shrug off warnings that Phoenix housing market hasn't hit bottom - (www.eastvalleytribune.com) While recent news from the financial markets has not been good, there is an upside to the housing market in the Valley: There really is nowhere to go but up. "We are still at the bottom, though whether we have reached the bottom is argumentative," said Jay Butler, professor emeritus at the W.P. Carey School of Business at Arizona State University. The numbers correspond with his assessment. According to data obtained from ASU Realty Studies, housing resale numbers in Maricopa Country dropped from more than 112,700 in 2009 to just under 107,000 in 2010. "Single-family (housing) is still dominated by foreclosure activity," Butler said. "Owner-occupant, which are usually the big-time buyers of homes and sellers, aren't participating because current homeowners are probably underwater or would have a difficult time selling their home."

The higher education bubble has popped - (www.csmonitor.com) A college degree once looked to be the path to prosperity. In an article for TechCrunch, Sarah Lacy writes, "Like the housing bubble, the education bubble is about security and insurance against the future. Both whisper a seductive promise into the ears of worried Americans: Do this and you will be safe." But the jobs that made higher education pay off during the inflationary boom, kicked into high gear by Nixon waving goodbye to the last shreds of a gold standard, came primarily from government and finance. In 1990, 6.4 million people worked for federal, state, and local governments. By 2010, that number had grown almost 6 times — to 38.3 million — with many of these jobs being white-collar. In 1990, the financial sector was less than 7.5 percent of the S&P 500. By 2006, this sector had grown to 22.3 percent of the S&P, and that year the financial sector constituted 45 percent of the index's earnings.

Mortgage fraud hits New York City hard as economy tanks - (www.nydailynews.com) With the U.S. housing market down, mortgage fraud is up - and New York is near the top of the heap when it comes to getting fleeced, a new FBI report said. Mortgage fraud schemes were on the rise in 2010, the last year for which data is available, as a sputtering economy, high unemployment, increasing delinquencies and foreclosures and limited credit availability created a breeding ground for scammers to take advantage of harried homeowners and the system, according to the bureau's Mortgage Fraud Report. "The current and continuing depressed housing market will likely remain an attractive environment for mortgage fraud perpetrators, who will continue to seek new methods to circumvent loopholes and gaps in the mortgage lending market," said the report, which was released yesterday. "Mortgage fraud enables perpetrators to earn high profits through illicit activity that poses a relative low risk for discovery," the report said. The number of pending investigations for mortgage fraud was 3,129 in 2010, a 12% increase from 2009 - and a 90% spike from 2008.