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Mortgages Are Hiding the Truth About House Prices - (www.businessweek.com) At first blush, home buying
looks quite affordable right now. New data from real
estate website Zillow (Z) show that if a person earning the
median income of $52,513 buys a home at the median price of $157,400, he would
spend just 12.6 percent of his income on mortgage payments. That’s more than
one-third less than the prebubble averages, when a mortgage on a median-priced
home would cost about 20 percent of a median income. Seems good, right? But
that affordability is masking a problem—houses are overvalued. From 1988
through 1999, median home values averaged 2.6 times the median annual income.
As the bubble kicked into gear, prices pushed up to almost four times income.
With the crash, that ratio has come down—but not far enough, largely because
incomes have been stagnant, if not declining, in recent years. Home values are
now at three times the median income—that’s 15 percent higher than they have
historically been, relative to what Americans earn.
Govt
refinancing program extended two years. - (www.marketwatch.com) Troubled homeowners will have
another two years to use a government refinancing program, which has been
extended through the end of 2015, officials said Thursday. The Home
Affordable Refinance Program, which enables refinancing for borrowers who owe
more on a mortgage than their home is worth, had been slated to expire at the
end of this year. “We are extending the program so more underwater borrowers
can benefit from lower interest rates,” said Edward DeMarco, acting director of
the Federal Housing Finance Agency, which regulates federally controlled
mortgage buyers Fannie Mae fn FNMA and
Freddie Mac FMCC . To qualify, loans must be
backed by Freddie or Fannie. Also, Fannie or Freddie must have bought the loan
by May 31, 2009.
J.C. Penney Said to Hire Blackstone to Raise $1 Billion - (www.bloomberg.com) Myron Ullman is just a few
days into his return as chief executive officer of money-losing department
store J.C. Penney Co. (JCP) and he’s already
come to one important conclusion: the chain needs cash. J.C. Penney Co. hired Blackstone Group LP (BX) to help it
raise at least $1 billion, said people with knowledge of the situation, as the
retailer tries to recover from its worst annual loss in more than 25 years. The
third-largest U.S. department-store chain is exploring a range of options to
raise the money, including selling a stake to some private-equity firms, said
the people, who asked not to be identified because the process is private. The
Plano, Texas- based company also is interviewing other outside advisers to help
it preserve cash, said one of the people.
Ruling in Portugal Poses Question Elsewhere: Can Courts Upend
Austerity - (www.nytimes.com) Portugal was once seen as a
role model in the euro debt crisis as its conservative government stuck to the
stringent terms of a 78 billion euro bailout negotiated with international
creditors two years ago. But it has now earned a very different distinction as
the test case of the limits of the austerity plans that have been prescribed
across Southern Europe. Last Friday, Portugal’s constitutional court struck
down four of nine contested austerity measures that the government had
introduced as part of its 2013 budget. The measures rejected by the court
represented between 1 billion euros and 1.4 billion euros, or $1.8 billion —
more than a fifth — of the 5 billion euro austerity package of spending cuts
and tax increases. Among its rulings, the court drew a line on cuts aimed
specifically at civil servants, who it said were being singled out for
punishment and therefore discriminated against.
Why US Jobs Market Is Going to Get a Lot Worse - (www.cnbc.com) Friday's jobs report came
in well below expectations, raising concerns that the recovery in the world's
largest economy is weakening. March's participation rate was at its lowest
since 1979, according to the U.S. Bureau of Labor Statistics. Just 88,000 jobs
were added to the economy last month, although the unemployment rate
fell to 7.6 percent from 7.7 percent in February. "In the labor market, at
least, we see a real risk of even worse news down the line," Ian
Shepherdson, chief economist at Pantheon Macroeconomic Advisors said in a
research note on Monday. Weakening labor demand, not rising layoffs, is the key
problem with the U.S. economy, according to Shepherdson. The weakening demand
is mostly coming from smaller firms that are below the radar of the Institute
for Supply Management (ISM) survey, which reflects national factory activity.
[Pinto] Is the Fed Blowing a New Housing Bubble? - (online.wsj.com)
JPMorgan Profit Increases 33%, Beats Estimate on Mortgage Fees - (www.bloomberg.com)
JPMorgan Profit Increases 33%, Beats Estimate on Mortgage Fees - (www.bloomberg.com)
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