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House Is Gone but Debt Lives On - (online.wsj.com) Joseph Reilly lost his vacation home here last year when he was out of work and stopped paying his mortgage. The bank took the house and sold it. Mr. Reilly thought that was the end of it. In June, he learned otherwise. A phone call informed him of a court judgment against him for $192,576.71. It turned out that at a foreclosure sale, his former house fetched less than a quarter of what Mr. Reilly owed on it. His bank sued him for the rest. The result was a foreclosure hangover that homeowners rarely anticipate but increasingly face: a "deficiency judgment." Remains of the Debt: Forty-one states and the District of Columbia permit lenders to sue borrowers for mortgage debt still left after a foreclosure sale. The economics of today's battered housing market mean that lenders are doing so more and more. Foreclosed homes seldom fetch enough to cover the outstanding loan amount, both because buyers financed so much of the purchase price—up to 100% of it during the housing boom—and because today's foreclosures take place following a four-year decline in values. "Now there are foreclosures that leave banks holding the bag on more than $100,000 in debt," says Michael Cramer, president and chief executive of Dyck O'Neal Inc., an Arlington, Texas, firm that invests in debt. "Before, it didn't make sense [for banks] to expend the resources to go after borrowers; now it doesn't make sense not to."
The Intriguing Politics Behind California's New Assault On The Banks - (www.businessinsider.com) The latest big headache for the banks: California AG Kamala Harris has pulled out of 50-state talks to come up with a settlement to foreclosure-gate/robo-signing issues. This probably kills the whole idea of a national settlement, since a) more states will likely drop out of the talks and b) banks aren't going to be eager to make a big settlement that doesn't ultimately make them immune from more legal liability. David Dayen over at FireDogLake notes an interesting development: foreclosure fraud has become a big, salient political issue. Earlier yesterday, Gavin Newsom — who is a potential rival to Harris for the state's governorship in 2014 — sent a letter demanding that she not accept a "bad deal" on foreclosures. What's more notes Dayen, Harris previously has been a big political ally of Obama, who by all accounts wants to get this bank issue settled. So the bottom line: All around the country, it's good politics to hold the banks' feet to the fire. And of course, that's just more bad news for the banks themselves.
Greece to Miss Deficit Targets Despite Austerity - (www.cnbc.com) Greece will miss a deficit target set just months ago in a massive bailout package, according to government draft budget figures released on Sunday, showing that drastic steps taken to avert bankruptcy may not be enough. The dire forecasts came while inspectors from the International Monetary Fund, EU and European Central Bank, known as the troika, were in Athens scouring the country's books to decide whether to approve a loan tranche. Without that installment, Greece would run out of cash as soon as this month. The 2012 draft budget approved by cabinet on Sunday predicts a deficit of 8.5 percent of gross domestic product (GDP) for 2011, well short of the 7.6 percent target.
Casino Giants Struggle Against Volatile Credit Markets - (online.wsj.com) Volatile credit markets have made financial maneuvering difficult for debt-burdened casino companies, casino industry financial officers said at a conference Saturday. Credit has become particularly difficult to access in recent weeks, they said. Marc Falcone, the chief financial officer of Station Casinos Inc, said two banks that hold debt his company's debt—Deutsche Bank and J.P. Morgan Chase & Co.—had intended to sell the majority of the loans in the past 30 days. "There's been zero appetite from institutions to sell the debt," Mr. Falcone said. "What we're hearing from those two institutions is that it's a pretty difficult financing market even for relatively attractive credit profiles." Deutsche Bank and JP Morgan also co-own the company, which operates casinos in Las Vegas catering to Las Vegas residents and elsewhere. The banks didn't immediately respond to requests for comment via email. Mr. Falcone made the comments at an International Association of Gaming Advisers conference in Las Vegas. His remarks, as well as those of other participants, underscore the difficulty casinos are having accessing credit markets even as Las Vegas and some other U.S. casino markets show signs of slow recovery from a deep downturn. Jonathan Halkyard, chief financial officer for Caesars Entertainment Inc., a company that owns casinos in Las Vegas and throughout the country, said the bigger ongoing problem is volatility in the markets. Caesars, along with several other highly leveraged casino companies, has been heavily active in credit markets throughout the recession in an effort to address the company's heavy load.
The FAA Is About To Run Out Of Money AGAIN Due To Senate Stalemate - (www.businessinsider.com) For the second time in as many months, the Federal Aviation Administration may temporarily furlough some 80,000 employees if Congress can't reach a deal to extend the agency's funding by Friday night. Sen. Tom Coburn (R-OK) has held up passage of the funding extension bill, which would appropriate additional money for the FAA and federal highway transit projects, citing an objection to one component of the transit side of the legislation. The House unanimously passed that bill Tuesday, and the Senate has until midnight on Friday to also pass it before funding for the FAA runs out. Complicating matters, Majority Leader Harry Reid (D-NV) accused Coburn of putting a hold on a $7 million FEMA emergency funding bill that, due to procedural rules, must be voted on before the Senate can move on to the FAA bill. Since the Senate passed a cloture motion on Tuesday to move ahead on the FEMA bill, they must tackle that bill first unless Reid punts on it, something he has so far refused to do.
Greece confirms it will miss deficit targets - (www.reuters.com)
Deficit targets missed in Greek budget draft: sources - (www.reuters.com)
Greek deficit projected at 8.5 percent of GDP - (finance.yahoo.com)
China Manufacturing Gain Negates Hard Landing as Price Pressures Moderate - (www.bloomberg.com)
China Manufacturing Index Rises for Second Month on Exports - (www.bloomberg.com)
Slovak government challenged to find EFSF backing - (www.reuters.com)
China paper urges Europe get act together on debt crisis - (www.reuters.com)
Greek cabinet prepares big budget cuts - (www.ft.com)
Strikes hamper Greek rescue effort - (www.ft.com)
Fed’s Bullard Says Central Bank Could Ease Further If U.S. Economy Weakens - (www.bloomberg.com)
U.S. economic recovery tied to European debt crisis - (www.washingtonpost.com)
Kodak Has ‘No Intention’ of Ch. 11 Filing; Said to Weigh Options - (www.bloomberg.com)
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