KeNo's Housing and Economic Portal: Sunday October 2 Housing and Economic stories

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TOP STORIES:

BofA keeping Countrywide bankruptcy as option: report - (www.reuters.com) Countrywide Financial's lawsuit losses could compel parent Bank of America Corp (BofA) (BAC.N) to put up the unit on the bankruptcy block, Bloomberg reported citing four people with knowledge of the firm's strategy. The bankruptcy option exists because the bank maintained a separate legal identity for the subprime lender after buying it in 2008, said the people, who declined to be identified because the plans are private. However, a filing is not imminent and the executives are aware that the move could backfire and cast doubt on the largest U.S. bank's financial strength, Bloomberg cited the people as saying. Charlotte, North Carolina-based Bank of America has lost more than $22 billion from its consumer mortgage division in the last four quarters, in large part because of loan losses and legal settlements linked to Countrywide.

States struggle for financing to meet road needs - (finance.yahoo.com) The Hoover Dam, one of the world's great engineering feats, is marred by roads with traffic so jammed along the Nevada-Arizona border that it tells a different story about the political will to maintain 21st century infrastructure. The road leading to the dam cannot accommodate the torrent of tourists and spills them into the overwhelmed little town of Boulder City. Nevada lawmakers are trying to find a private company to build a $400 million bypass because the state can't afford it. The phrase "you can't get there from here" is increasingly apt nearly everywhere one turns. America's roads, highways, bridges and transit systems are falling apart. Even those not in disrepair are often so crowded that a horse and buggy might seem faster. Cities and suburbs are outgrowing their infrastructure far faster than local governments can find the money to fix them. While the problem is plain to all, the money and the political will to fix it isn't there. Two congressionally mandated commissions and a slew of experts and committees have said the nation needs to double, even quadruple, what it spends each year to maintain and repair its aging transportation infrastructure and expand to accommodate population growth. So there's the rub. No one likes traffic jams and potholes. No one wants people to die because an unsafe bridge has collapsed. But raising federal gas and diesel taxes or boosting tolls and fees isn't popular, either.

Greek PM cancels U.S. trip as debt crisis deepens - (www.reuters.com) Greek Prime Minister George Papandreou canceled a planned visit to the United States on Saturday to deal with a deepening crisis at home, days before European Union and IMF inspectors decide on further funding for the debt-ridden country. Finance Minister Evangelos Venizelos rushed to allay fears the canceled trip signaled imminent default, saying such talk was "ridiculous," but the conservative opposition seized the opportunity to demand snap elections, fanning fears Greece lacks the will needed for tough measures ahead. "The comments and analyses about an imminent default or bankruptcy are not only irresponsible but also ridiculous," Venizelos said in a statement. "Every weekend Greece ... is subject to this organised attack by speculators in international markets." Papandreou was in London, en-route to United Nations and International Monetary Fund (IMF) meetings, when he decided to turn back after discussing developments with Venizelos, government officials said.

Time to refinance — again? - (www.washingtonpost.com) With mortgage rates at record lows, even people who refinanced just last year are looking to take out a new mortgage, mostly because they are the lucky few who can qualify for one. The average rate on a 30-year fixed-rate mortgage has recently dropped closer to 4 percent, hitting 4.09 percent this week — the lowest level since Freddie Mac started tracking the data in 1971. The 15-year fixed-rate mortgage, a popular refinancing tool, fell to an all-time low of 3.3 percent on average, Freddie Mac reported. Still, refinance activity has been constrained by tough lending standards, a weak job market and eroding home values — all of which have kept millions of homeowners on the sideline. That leaves lenders chasing after a limited number of good credit quality borrowers who have enough equity in their homes to qualify for a new loan. The effect is a more polarized refinancing market that has been particularly unforgiving to those who have watched their neighborhood home prices tumble through no fault of their own, even if they have good credit and a steady income. Meanwhile, the group of homeowners whose home values have held up are able to take advantage of lowered rates again.

U.S. Struggles for Traction on Europe Crisis - (online.wsj.com) U.S. officials, heading into another round of discussions this week on Europe's debt crisis, are meeting resistance to their efforts to help contain the turmoil. Greece is facing urgent pressure to get its affairs in order to prevent a debt default that could light a financial fire across the euro zone. Later this week, U.S. and European finance ministers will gather with others from the Group of 20 industrial and developing nations in Washington to discuss ways to ensure European government-debt woes don't escalate into a wider crisis for banks and financial markets on the Continent and beyond. European officials, struggling to pass unpopular bailout measures at home, are increasingly sensitive to being seen as swayed by outside influence. And U.S. officials, facing resistance at home to supporting a European bailout, have little leverage to force tougher action as the euro-zone crisis weighs increasingly on U.S. markets and business confidence. "We don't have much in the way of either carrots or sticks," said Edwin Truman, a senior fellow at the Peterson Institute for International Economics and a former Treasury and Federal Reserve official.