Wednesday October 28 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Small U.S. firms face credit squeeze as crisis drags - (www.reuters.com) Small companies create more than half of America's jobs, but the entrepreneurs who drive this part of the economy continue to complain that access to credit two years into the recession remains scarce. Small business owners say banks remain extremely wary of risk and a world away from the carefree lending that inflated an epic boom in housing values that went bust and pushed America into its worst economic downturn in decades. They say their home equity lines of credit have been cut, business credit lines withdrawn and credit card limits slashed. Still profitable firms complain of a major pullback by banks, which many warn will leave a U.S. economic recovery stillborn. "It's like we've gone back 15 years in time," said Carmine Ryan, who founded Ryan Bros Coffee in San Diego with his brothers Tom and Harry in the early 1990s, using credit cards. "We have a proven track record, we pay our bills early and we're profitable," he said. "But banks are so gun-shy now that no one would touch us. They're just sitting on the money." The Ryans developed a wholesale coffee business and opened a second coffee shop earlier this year. After they opened it, they sought a loan of $120,000 to finance operations. Nonprofit lender CDC Small Business Finance was able to arrange a $90,000 loan. The rest they had to come up with themselves. "This is not the way it should be right now," Harry Ryan said. "Banks should be lending to people like us." A few miles away, Yi Ping Lai runs an online business, Heart to Heart Gifts, which sells toys and decorations ranging in price from $6 to $100 for girls up to six years of age. Last year, her sales passed $1 million. With the downturn, her revenue will end up about 50 percent lower this year. But she will still turn a profit, she says. In August, she got a letter from her bank canceling her $55,000 business line of credit. She said the bank cited routine credit checks that had reduced her credit score. "All of those credit checks were for legitimate personal reasons," Yi said. "For instance, I move apartment and my landlord ran a credit check on me. I tried to explain that to the bank. But they said I was now a risky option for them." The bank later restored $20,000 in credit. But Yi said she is being hampered in developing a new product line. "I need that cash flow for my business," she said. Susan Lamping, a senior community loan officer at the nonprofit CDC in San Diego, helped Yi obtain $35,000 in credit.

Latvia Will Seek Agreement to Appease Bailout Donors - (www.bloomberg.com) Latvia is considering budget cuts involving reducing spending and raising taxes in a last-minute effort to satisfy its international loan donors, Finance Minister Einars Repse said after today’s Cabinet meeting. The government is planning on increasing revenue by 180 million lati ($375 million) and cutting expenditure by 320 million lati, Repse told reporters in Riga. Details won’t be made public until a final agreement has been reached within the Cabinet and with the lenders, probably within a week, he said. The measures represent “a fiscal consolidation that will satisfy” the International Monetary Fund, the European Union and Sweden, who had insisted on 500 million lati in budget cuts, said Prime Minister Valdis Dombrovskis. The IMF, the EU and Sweden agreed to give Latvia a 7.5 billion-euro ($11 billion) loan in December and urged the government to adopt tougher austerity measures. Swedish PrimeMinister Fredrik Reinfeldt, who holds the EU presidency, on Oct. 5 said Latvia “must correct” its deficit while Riksbank Governor Stefan Ingves has said the country risks being “left in the cold.” European Union Monetary Affairs Commissioner Joaquin Almunia will visit Riga tomorrow. ‘Sneak In’: “They’re in the clear for the time being, but similar temporary disagreements will likely recur,” said Richard Segal, a fixed-income desk strategist at Knight Libertas U.K. “There is a history of Latvian politicians becoming complacent and trying to sneak in lower budget cuts, which the EU and IMF notice at the last minute. I wouldn’t rule this out in future.” International admonitions grew more strident in tone after Latvia said it could achieve a targeted 8.5 percent deficit of gross domestic product in 2010 by cutting 325 million lati off the budget, 175 million lati less than the IMF, the EU and Sweden had demanded. Latvian coalition parties are ready to discuss a tax on real estate, which Parliament voted against sending to committee stage on Sept. 17, the Diena newspaper reported today. All coalition parties agreed to introduce the tax when they signed agreements with the EU and IMF.

Foreclosures Grow in Housing Market's Top Tiers - (online.wsj.com) New data suggest that foreclosures are rising in more expensive housing markets. About 30% of foreclosures in June involved homes in the top third of local housing values, up from 16% when the foreclosure crisis began three years ago, according to new data from real-estate Web site Zillow.com. The bottom one-third of housing markets, by home value, now account for 35% of foreclosures, down from 55% in 2006. The report shows that foreclosures, after declining earlier this year, began to accelerate in the late spring and that more expensive homes have more recently accounted for a growing share of all foreclosures. "The slope of that curve in recent months is much sharper than it was recently," said Stan Humphries, chief economist for Zillow. Rising foreclosures among more-expensive homes could create added pressure for a housing market that has shown signs of stabilizing in recent months as sales of lower-priced homes pick up. The Zillow research compared homes against the median values for their local market and broke each market into three tiers by value. Zillow then looked at the share of monthly foreclosures in each tier over the past decade. Foreclosures are rising in more expensive markets as home values in those areas fall, leaving more homeowners with mortgages that exceed the value of their properties. Prime loans accounted for 58% of foreclosure starts in the second quarter, up from 44% last year, according to the Mortgage Bankers Association. Subprime mortgages accounted for one-third of foreclosure starts, down from one-half last year. The prime category includes so-called exotic mortgages that were increasingly used to buy more expensive homes, including interest-only mortgages that allowed borrowers to defer principal payments during an initial period. Borrowers often aren't able to refinance out of these products because the drop in home values has left them with little equity in their homes.

California Debt Unnerves Investors as Taxes Plunge $2 Billion - (www.bloomberg.com) A $2.1 billion drop in California tax collection is opening a hole in Governor Arnold Schwarzenegger’s budget only three months after lawmakers in the most-populous state slashed spending for the second time in a year. General fund revenue in the state accounting for 13 percent of the U.S. gross domestic product dropped to $19.4 billion during the fiscal year’s first three months, according to figures Democratic Controller John Chiang released Oct. 9. The total for the period ended Sept. 30 trailed by $1.1 billion, or 5.3 percent, forecasts in the annual budget the Republican governor signed July 28. “This reinforces that state’s budget problems aren’t over, and as the year goes on, we’re likely to see growing budget deficit projections,” said David Blair, an analyst with Pacific Investment Management Co. in Newport Beach, California, which invests $20 billion in municipal bonds. “This clearly is going to continue to put pressure on the Legislature and the governor.” The latest report underscores how states including California, the largest municipal bond issuer in the U.S., are still dealing with fallout from the recession even as the economy begins its recovery. The state last week was forced to raise yields to attract buyers to a $4.1 billion debt sale, after cutting the issue from $4.5 billion. California’s decision helped push up borrowing costs in the municipal market by the most in almost four months even as states prepare new issues of taxable Build America Bonds, whose sales already total $40.2 billion. The Treasury pays 35 percent of interest costs for the debt, part of the federal economic stimulus plan approved in February. Losing Jobs: State governments are particularly hard hit by a continuing loss of jobs, which dampens the income- and sales-tax collections upon which they depend. From April through June, states and localities recorded a 12 percent tax revenue decline from a year earlier, the third consecutive quarterly drop, according to the U.S. Census. The national unemployment rate in September was 9.8 percent, the highest since 1983, according to the U.S. Labor Department.

Government Gears Up for Second Stimulus - (apnews.mynews.com) Confronted with big job losses and no sign the U.S. economy is ready to stand on its own, Democrats are working on a growing list of relief efforts, leaving for later how to pay for them, or whether even to bother. Proposals include extending and perhaps expanding a popular tax credit for first-time home buyers, and creating a new credit for companies that add jobs. Taken together, the proposals look a lot like another economic stimulus package, though congressional leaders don't want to call it that. Democratic leaders in Congress and the White House say they have no appetite for another big spending package that adds to the federal budget deficit, which hit a record $1.4 trillion for the budget year that ended last week. But with unemployment reaching nearly 10 percent, many lawmakers are feeling pressure to act. Some of the proposals come from the Republicans' playbook and focus on tax cuts, even though they, too, would swell the deficit. "We have to do something for the unemployed, politically and economically," said Rep. Charles Rangel, D-N.Y., chairman of the tax-writing Ways and Means Committee. The House already has voted to extend unemployment benefits an additional 13 weeks for laid off workers in the 27 states where the jobless rate is 8.5 percent or above. Senate Democrats reached a deal Thursday to extend the benefits an additional 14 weeks in every state. Both proposals are paid for by extending a federal unemployment tax. Also on the table: extending subsidies for laid-off workers to help them keep the health insurance their former employers provided, known as COBRA. The current program, which covers workers laid off through the end of the year, costs nearly $25 billion. Congressional leaders haven't settled on the length of an extension, or how to pay for it. Several bills would issue extra payments to the more than 50 million Social Security recipients, to make up for the lack of a cost-of-living increase next year. One bill would set the one-time payments at $250, matching the amount paid to Social Security recipients and railroad retirees as part of the stimulus package enacted in February. The payments would cost about $14 billion and would be paid for by applying the Social Security payroll tax to incomes between $250,000 and $359,000 in 2010. Currently, payroll taxes apply only to the first $106,800 of a worker's income.

34 Banks Not Paying Their Quarterly TARP Dividends - (www.usatoday.com) The U.S. taxpayers' investments in smaller banks are increasingly at risk. In a sign that more banks are under great pressure from the recession, 34 financial institutions did not pay their quarterly dividends in August to the Treasury on funds obtained under the Troubled Asset Relief Fund (TARP). The number almost doubled from 19 in May when payments were last made, and also raised questions about Treasury's judgment in approving these banks as "healthy," a necessary step for them to get TARP funding. "The banks are not paying their dividends because they are worried about preserving capital," says Eric Fitzwater, associate director of research at SNL Financial. The Treasury Department says it cannot force an institution to pay dividends. "For some banks, it may be prudent to exercise their right not to pay dividends in a particular month, and we respect their right to do so," says Meg Reilly, a Treasury spokeswoman. "To draw any broader conclusions about the state of the banking sector from one month is highly premature and speculative." However, a lot of smaller banks are already under stress. Weighed down by foreclosures and delinquencies, 98 banks have failed so far this year, vs. 25 for all of last year. Besides insurer American International Group and lender CIT Group, most of the other non-payers are smaller institutions that received $400 million or less in TARP funds. Top Republican on the House Financial Services Committee, Rep. Spencer Bachus, R-Ala., says: "We must ensure taxpayers are repaid." Some say Treasury might have been too hasty in approving some banks for TARP funds. "Perhaps the Treasury made assumptions that were a little bit too rosy," says Walter Todd, who invests in banks at Greenwood Capital. "My question is also whether the Treasury is staffed adequately to handle this tremendous undertaking." Treasury has given $365 billion to 700 institutions from TARP. AIG, to which the government has pledged $180 billion, has accumulated $1.6 billion in unpaid dividends. And CIT, which received $2.3 billion from TARP, said in a regulatory filing that it is restructuring its debt and seeking approval from bondholders for a pre-packaged bankruptcy. If that happened, it would wipe out the entire government investment.

OTHER STORIES:

Dylan Ratigan on Corporate Communism – (www.dailypaul.com)
US Forces Abandon Isolated Afghan Base After Ambush - (apnews.mynews.com)
Who's Behind the Sneak Attack on the Dollar? - (www.politico.com)
FHA May Need a Bailout - (www.nytimes.com)
Elizabeth Warren: Wall Street's Worst Nightmare - (www.motherjones.com)

Euro Erases Declines Against Dollar, Strengthens to $1.4734 - (www.bloomberg.com)

U.S. Stock-Index Futures Rise; GE, Advanced Micro Shares Gain - (www.bloomberg.com)

Dollar Reaches Breaking Point as Banks Shift Reserves - (www.bloomberg.com)

Option Grants Draw Scrutiny - (online.wsj.com)

Carry trades - (www.ft.com)

Racing the Clock to Avoid Foreclosures - (www.washingtonpost.com)

India’s Output Surges, Policy Tightening More Likely - (www.bloomberg.com)

Two Americans Share Nobel in Economics - (www.nytimes.com)

Consumer spending at 71% of GDP as other sectors shrink - (www.usatoday.com)

St. Louis Fed’s Bullard Urges Rule to Guide Asset Purchases - (www.bloomberg.com)

Blackstone plans portfolio IPOs: source - (www.reuters.com)

Tuesday October 27 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Property transfers lock in lower tax assessments in CA - (www.pe.com) County assessors are increasingly worried that the historic drop in property values in the Inland area and around the state will turn out to be more than just a temporary blow to government coffers. Millions of properties statewide have been temporarily reassessed to reflect their lower market value. Under state law, property owners will pay reduced taxes until the market recovers and the property returns to its base value. But assessors and other tax officials say there are signs that some property owners are going a step further: using back-and-forth ownership transfers to trigger a property reassessment and lock in a much lower level of property taxes. Court rulings give assessors the power to ignore such transfers. But identifying them is not easy, they say. They worry that large numbers of changes could cost governments significant amounts of future property-tax revenue, a major part of government budgets. "It's a little scary, actually," said Larry Ward, the assessor in Riverside County, where the assessed value is down $16.2 billion for 2009-10. "Theoretically, somebody changing ownership could mean a lot of difference in tax value." There are no estimates on how many properties have been permanently reassessed to lower values after change-of-ownership transfers. Assessors, though, have started reviewing their records and recently asked state tax authorities to weigh in. Three weeks ago, the state Board of Equalization issued an advice letter telling assessors they could decline to reassess a property if they conclude it was little more than a paper shuffle meant to trigger a reassessment. But officials said detecting such transfers would take hundreds of staff hours. "It's kind of a loophole in the law," said Dennis Draeger, the assessor of San Bernardino County, which also has seen large drops in assessed value. "We've got our eyes open but some of them may never be discovered."

Debt: From American dream to American nightmare - (www.oregonlive.com) Kevin and Annette Martin celebrated their 15th anniversary by getting foreclosed out of their Newberg house. Kevin's homebuilding business collapsed in the recession, and they couldn't pay the mortgage. Their bank, JPMorgan Chase, rejected the Martins' request for a mortgage modification and took legal possession of the house Aug. 19. On their anniversary two days later, the Martins and their two young children moved in with Kevin's aunt in her small condominium in Charbonneau. They're broke, unemployed and visibly stunned at their rapid plunge from the middle class to the newly poor. A bomb of debt vaporized the Martins' once-comfortable life. The heavy load of leverage they had assumed in hopes of grabbing their piece of the pie proved their undoing. "I believe in the American dream, the white picket fence and the whole thing," said Kevin, 38. "But now, we're just in survival mode. For 14 months, it's been survival mode." A year has passed since the peak of the great financial panic of 2008. Regulators and analysts alike spent much of September pontificating about the economy's regained stability. Thanks to a multitrillion-dollar bailout, much of the financial sector has regained an uneasy equilibrium. Some banks that seemed on death's door less than a year ago earned record profits this past spring. But for many individual Americans, 2009 feels a lot like the depression that we supposedly averted. The unprecedented transfer of wealth from taxpayers to the financial industry has done little to improve the prospects of millions of people who have lost their jobs, their homes and much of their wealth. Even their sense of security is gone…. Household debt doubles: The current economic wreckage has its roots in a sweeping change in American behavior dating to the late 1980s. Between 1965 and 1985, household leverage -- measured by the ratio of debt to personal disposable income -- hovered between 55 to 65 percent. It more than doubled in the ensuing years, reaching a zenith of 133 percent in 2007, according to a paper issued in May by Lansing and Reuven Glick, economists at the Federal Reserve Bank in San Francisco. For people who wondered how their friends and neighbors afforded their McMansions, BMWs and high-end club memberships, it may well have been courtesy of their always-obliging debt merchant. Much of the debt was mortgage-related, the loans backed by escalating home prices. In 1995, Americans took out $3.3 trillion in mortgage and home equity loans. Ten years later, the total topped $10.4 trillion. The surge in debt is attributable, in part, to what Lansing politely calls "credit industry innovation and product development." Translated, that means that some lenders dropped any pretense of cautious loan underwriting. In an era when most lenders simply bundled their loans and peddled them to the secondary market, a buyer's ability to make mortgage payments seemed of minor importance. No one could lose, as long as home values were going up every year by double digits.

Owners No More - (www.nytimes.com) Indeed, in the absence of a rising market to ease the pain of having property, owners might be excused for wondering what it would feel like to surrender the keys and become a renter again. Would it be a relief — or an unnerving loss of control? A comedown, or, in the aftermath of the housing debacle, a fashionable, politically correct choice? Moving from owning to renting seems to teach some people that they just weren’t meant to be renters, while others find it liberating. “I love it,” said Kim Lipstein, 38, who unshackled herself from her Upper East Side co-op last spring. “I feel the weight of the world is off my shoulders.” Ms. Lipstein and her husband, Evan, 46, waved goodbye to the 850-square-foot two-bedroom one-bath apartment they shared with their children, Samantha, 7, and Jayda, 5, after their plans to combine it with another unit fell apart. Working with Wendy Jodel, a vice president at Citi Habitats, they sought to buy something larger. But they walked away from an accepted offer on a 1,400-square-foot two-bedroom because the maintenance was too high, the reserves too low, and their younger daughter would have been wait-listed for the nearest public kindergarten. By late May, eager to settle into a school zone with enough seats, the Lipsteins signed a year’s lease on a three-bedroom three-bath 1,400-square-foot apartment in the Public School 158 zone, near York Avenue and East 87th Street, for $5,200 a month. “It’s not perfect, but it’s freshly painted, the floors are redone and the kitchen is fresh,” said Ms. Lipstein, who described the postwar part-time doorman building as “nice, not really nice.” But the amount of space — and plumbing — is luxurious: No longer must she tell her girls to line up to go to the bathroom, or to tiptoe across the floors. “I don’t have to worry that when my children make noise, I’m going to get a letter from the owners downstairs,” Ms. Lipstein said.

Walnut Creek, CA realtor convicted of enslaving nanny - (www.sfgate.com) A Walnut Creek real estate agent has been convicted of charges that she lured a Peruvian nanny to the East Bay with promises of a better life but instead kept her as an indentured servant for nearly two years. Mabelle de la Rosa Dann, 46, also known as Mabelle Crabbe, kept the nanny a virtual prisoner, cut her off from Spanish-speaking media and rationed her food, authorities said. She was found guilty Thursday by a federal jury in Oakland of forced labor and other charges. U.S. District Judge Claudia Wilken is to sentence her Jan. 13. "No person should ever be forced to live in a world of fear, isolation and servitude," said John Morton, an assistant secretary for the U.S. Immigration and Customs Enforcement agency. Dann helped bring Zoraida Pena-Canal, 30, of Peru into the United States on a three-month visitor's visa in July 2006, authorities said. Pena-Canal had worked for Dann's sister and Dann as a housekeeper and nanny in Peru several years earlier, investigators said. Prosecutors said Dann lured Pena-Canal here with the promise that she would live in a large house with her own bedroom and private bathroom. Dann allegedly said she would pay Pena-Canal $600 a month after deducting the cost of the plane ticket for the first five months. Instead, Pena-Canal knew almost no world outside Dann's 900-square-foot apartment on Ygnacio Valley Road in the Cypress Creek apartment complex in Walnut Creek, where the two women lived with Dann's three children, Special Agent Jennifer Alderete of Immigration and Customs Enforcement wrote in an affidavit filed in federal court.

Poor investments dig a hole local residents and banks can't climb out of - (www.starnewsonline.com) During the mid-decade real estate boom, the exuberance of lenders and borrowers alike took hold here with a feverish intensity. But after the market turned stone cold, two local banks failed – Wilmington’s Cape Fear Bank and Cooperative Bank. One local couple’s legal problems provide a rare peek inside the region’s financial sphere during the investing frenzy that seized the area and ultimately led to the banks’ collapse. Over a 14-month period, the two failed banks and four others in Wilmington lent a total of $21 million to two novice real estate investors – drugstore owners John Davie and Charlene Waggett, according to court documents. There have been no charges or allegations of wrongdoing on the part of the Waggetts, who filed for personal Chapter 11 bankruptcy protection on May 19. They owe unsecured creditors more than $12 million, according to a disclosure report filed in bankruptcy court last month. John Waggett, when contacted this week, would not speak for attribution. The Waggetts’ bankruptcy attorney, Trawick “Buzzy” Stubbs of New Bern, described the couple as “a good, hard-working family who got caught up in the hype of the investment boom like many other investors.” Their Chapter 11 filing and a current lawsuit filed against them March 19 by BB&T provide a snapshot of the times. HEADY DAYS: Area home prices shot up, especially in beach areas, where speculative builders and investors moved in, many to make a quick profit flipping properties. Some beach homes doubled in value in a couple of years. When the market crashed, Wilmington suffered more than other North Carolina cities because its prices rose the most, banking experts say. As a matter of fact, the only bank failures in North Carolina since 1991 have been in Wilmington. The Waggetts, who own Seashore Discount Drugs and Winter Park Discount Drugs – and appeared in TV commercials for their businesses – were respected and well-known in the community as successful businesspeople. And John Waggett even served on Cape Fear’s board of directors, resigning in November 2007. At the same time the Waggetts plunged into the boom, so did “bankers, appraisers and a lot of other people involved in the real estate business,” Stubbs said this week. A timeline of loans to the Waggetts in 2005 and 2006 shows a string of financings on several properties – duplexes, condominiums and land – all but one in Carolina Beach.

US corruption system is based on lobbyist access - (www.huffingtonpost.com) Bill Moyers' show is always illuminating, but tonight's is one that no one should miss. When I spoke to Bill yesterday he described it as "a moment of truth-telling that could ignite the public's passion for Wall Street reforms that have been strangled in the crib by the big banks and their bought-and-paid-for politicians." Below are two clips from the show and the transcript of an exchange Moyers has with Kaptur and Johnson about the special phone-a-friend relationship Tim Geithner has with the heads of Citigroup, J.P. Morgan, Goldman Sachs, and what it says about how the system works -- for Wall Street. And tune in to PBS tonight at 9:00 pm ET to watch. BILL MOYERS: Let -- let's look at this story that just-- I just read from the Associated Press this week about how Treasury Secretary Geithner is on the phone several times a day with a select group of very powerful Wall Street bankers, especially Citigroup, J.P. Morgan, Goldman Sachs. He will talk to them when Members of Congress have to leave a message on the answering machine. And these are the bankers who helped bring on this calamity and who are now benefiting from it. What does that say to you? MARCY KAPTUR: That says to me that-- Wall Street and Washington is a circuit. And because Mr. Geithner headed the New York Fed that that historic relationship, unfortunately, continues. And it gives them special access and special power to influence policy. SIMON JOHNSON: Well, I think it really tells you how the-- the system works. The system is based on access and is based on-- on what-- on Wall Street shaping Washington's view of what's important. It's the people who are very close to Mr. Geithner before-- when he was the head of the New York Fed. Before he became Treasury Secretary. These people have unparalleled access. And in a crisis, when everything is up for grabs, you don't know what's going on, the people who-- who will take your phone calls, right, in government-- and people who are gonna be standing in the oval office, making the key decisions. That-- that's the-- that's the heart of the system. That's the-- the heart of how-- you get your agenda through, by changing their worldview. MARCY KAPTUR: And they also move people. In other words, Mr. Geithner came from the New York Fed, he came from Wall Street, and he becomes Secretary of the Treasury. His-- his-- predecessor, Mr. Paulson, came from Goldman Sachs, and he becomes Secretary of Treasury. You can go back decades, and you will see that there's this-- revolving door between Wall Street and Washington. And I recently asked Chairman Bernanke of the Federal Reserve, "Let me ask you a question. Would you be willing to consider a reform where the Cleveland Fed would have equal power to the New York Fed, in terms of how the Fed is run?" And his answer was, "No." BILL MOYERS: And why did you ask that question? MARCY KAPTUR: Because I think we need to democratize the Fed. I think that my region of the country, which is suffering so heavily from these decisions that were made by Wall Street and Washington, we need to have voice. And our bankers, who didn't do the bad things. Our community bankers, who are having to pay higher fees-- shouldn't be treated this way. Why should the people who did it right be penalized for those that did it wrong?

OTHER STORIES:

Stanford University looks to sell $1 billion in assets - (money.cnn.com)

Soros to invest big in 'green' projects - (money.cnn.com)

Banks still stuck with the junk - (money.cnn.com)

Maui Condo Prices Drop - (www.honoluluadvertiser.com)

Some CA state retirees rake in pensions and paychecks - (www.latimes.com)

One year after market crash, Silicon Valley residents still hurting - (www.contracostatimes.com)

Arizona Rents Falling - (www.azcentral.com)

North Texas condo markets are in big trouble - (www.star-telegram.com)

Graying Brentwood, TN has glut of big houses - (www.tennessean.com)

Goldman Faces PR Dilemma Over Huge Bonuses - (www.cnbc.com)

UK to Sell up to $23 Billion in Government Assets - (www.cnbc.com)

New York Fine Dining Down but Not Out - (www.cnbc.com)

Working-Class Men May Blame Woes on Democrats - (www.cnbc.com)

Job competition toughest since recession began - (www.sfgate.com)

The FHA, VA, USDA Foreclosure Time Bomb - (www.homedebtors.blogspot.com)

Rich Uncle Pays Your Mortgage - (www.mises.org)

"Sell" for Research Renegades Becomes Business Off Wall Street - (www.bloomberg.com)

Mistakes in policy did not just happen. The banks lobbied for them! - (www.buffalonews.com)

Photo Of Buyers Following Realtor Advice - (www.photobucket.com)

Paid Lobbyists Protect Price Gougers, Fight Plans to Cut Medical Costs - (www.nytimes.com)

Monday October 26 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

L.A.'s garment industry goes from riches to rags - (www.latimes.com) Weak consumer spending and a lack of financing are the latest blows to the once-thriving industry, which is also coping with new environmental regulations and consumer safety rules. The reality television show "Project Runway" this season is putting the spotlight on Los Angeles, where designers toil in a loft downtown, competing to win $100,000 to start their own clothing line.
The local industry could use the boost. L.A.'s once-flourishing garment design and manufacturing industry is shedding jobs as quickly as a mohair sweater loses its fur. Weak U.S. consumer spending is generating less demand for the services of the people who stitch, cut and sew clothing in Los Angeles County. Garment manufacturers are finding it tough to get credit. Some, like American Apparel Inc., are dismissing employees whose papers aren't in order as the government keeps a closer eye on workers' immigration status. New environmental regulations are requiring textile mills to reduce their emissions, while makers of children's clothing are finding it costlier to comply with federal consumer safety requirements. "It's a pretty lengthy list of headaches out there for apparel companies," said Jack Kyser, founding economist of the Kyser Center for Economic Research at the Los Angeles County Economic Development Corp. "These are several bottles of aspirin-worthy problems." As recently as a decade ago, downtown L.A.'s apparel industry was thriving. At the peak in 1996, more than 119,000 textile and apparel workers toiled in the Los Angeles County industry, the nation's largest. But trade agreements that lifted tariffs on foreign-made apparel encouraged U.S. manufacturers to shift production to Mexico and Central America, where wages are significantly cheaper. Meanwhile, China has become a low-cost, mass-production juggernaut, with industrial cities dedicated to a single product such as socks. Textile and apparel employment in Los Angeles County has slipped to about 58,000 workers currently, according to the California Employment Development Department. The industry has lost 6,000 jobs in the last three years. Garment contractor Luis Diaz, owner of Luis Diaz Designs, has operated in the Merchant's Exchange Building in downtown Los Angeles since 2004. On a recent morning, in an airy room where spools of brightly colored fabric line the walls, a few workers sat stitching lace bathing suits and leather bracelets. The workroom is less crowded than it was a year ago, when Diaz employed a dozen workers. "Now, it's really tough," said Diaz, who also designs his own lines of silk-and-leather suits and pink polka-dot purses. "I do the jobs of four people -- I answer the phone, I train the workers, I supervise." This month, he couldn't afford his $2,000 rent, so he asked his landlord for a $300 reduction. Even with the discount, Diaz won't be able to pay his rent until mid-month, although he usually pays at the beginning of the month.

Realtor and builder lobbies corrupt Congress, raise prices, bankrupt gov't- (www.nytimes.com) Democratic Congressional leaders are working with the White House to extend an expiring $8,000 tax credit for first-time home buyers, and aides said Wednesday that they were considering making it available to current homeowners who purchase a new residence. Extending and possibly expanding the popular home-buyers credit, which is due to expire after November, is high among options for further stimulating the economy and creating jobs, Congressional aides said, though a White House official said it was only briefly mentioned on Wednesday in an Oval Office meeting between President Obama, Speaker Nancy Pelosi of California and Senator Harry Reid of Nevada, the Senate majority leader. The Democratic leaders met with the president to discuss a broad range of options to combat persistent high unemployment, officials say. The existing credit for first-time home buyers will expire at the end of next month if not extended, and two other components of the economic safety net — unemployment compensation and health care benefits for those who have been out of work for long periods — will expire at the end of the year. Besides the likelihood of extending those measures, which were part of the $787 billion stimulus law earlier this year, the president and Congress were also weighing additional steps, given projections that jobs will continue to be lost into the middle of next year despite signs of economic recovery, possibly driving the unemployment rate above 10 percent. But they insist that any package will not add up to a second stimulus package, a prospect that would invite Republicans’ attacks on the effectiveness of the first. Keeping the home-buyers credit and broadening it has been a priority for real estate agents and the home builders lobbies, and for Mr. Reid, who faces a tough re-election race next year in a state that has been among the hardest hit by the housing crisis since mid-2007. In a statement after the White House meeting, Mr. Reid said the government should “continue efforts to strengthen the housing market by extending the home-buyer tax credit.” By the time it is scheduled to expire, for home purchases that close before Dec. 1, the home-buyers credit will be responsible for nearly 400,000 sales of new and existing homes, out of total sales of 1.4 million, said Mark Zandi, chief economist at Moody’s Economy.com. That is roughly in line with estimates from the National Association of Realtors. Mr. Zandi, who formerly advised Senator John McCain, Republican of Arizona, and is now consulted by Democrats in the administration and in Congress, has advocated extending the credit through next August and making it available to all home buyers. Allowing the credit to expire this year would result in a decline in sales of homes that are not facing foreclosure just as sales of foreclosed homes are expected to pick up, Mr. Zandi said in an interview, “putting further downward pressure on house prices.”

Latvia on the edge - (www.bloomberg.com) Latvia’s plan to cap mortgage holders’ liability has damaged the Baltic state’s chances of convincing investors it can meet the terms of its bailout and avoid a devaluation, said James Oates, chief executive officer of investment company Cicero Capital. “By trying to change the legislation so that the debts can only be limited to the collateral total, that kind of gives the game away, and that, together with the Swedes’ saber-rattling, they really are out there on the edge now,” said Oates, former head of east European equities at UBS AG, by phone from Tallinn, Estonia. Prime Minister Valdis Dombrovskis on Oct. 6 asked for law changes that would limit the liability of single-home owners to the value of the collateral, citing “the situation in the financial markets and the increasing problems with the borrowers.” Stockholm-based Swedbank and SEB AB, the largest banks in the Baltics, are wrestling with widening loan losses in the region. About 90 percent of all Latvian loans are in euros. Swedbank fell as much as 2 percent and traded 0.4 percent lower at 61 kroner at 1:55 p.m. in Stockholm. SEB rose 0.2 percent to 44.70 kroner. The krona rose as much as 0.5 percent against the euro and traded at 10.3156. Credit default swap spreads on five-year Latvian debt fell 1 basis point to 520, according to CMA DataVision prices at 10 a.m. in London, after rising 41 basis points yesterday. A decline signals a lower perceived credit risk. ‘Credibility’: Latvia today sold about 1.5 million lati in three-month bills at an average yield of about 10.497 percent, and 200,000 lati of 12-month paper with a yield of 14.75 percent, according to Kristaps Strazds, head of trading and capital markets at SEB’s Latvian unit. Yesterday, the Treasury sold about 2.04 million lati in three-month and 12-month paper, and failed to sell six-month notes. Six-month paper wasn’t offered today. Latvia is struggling to cut its deficit to satisfy the European Commission, International Monetary Fund and the Swedish government, the biggest creditors in its 7.5 billion-euro ($11 billion) bailout. Latvia must “restore credibility so the state could finance itself again without international support,” European Monetary Affairs Commissioner Joaquin Almunia said on Oct. 6. Swedish Finance Minister Anders Borg said on Oct. 2 that political signals from Latvia were “worrying” and that the “patience of the international community is very limited.” ‘Aggressive’: A possible devaluation of the lats may affect the whole euro area and lead to “more aggressive attacks” against the currencies of EU members outside the euro area, Oates said. “A sudden spike in the risk premium for states inside the euro zone may put serious pressure on some member states, notably Ireland and Greece -- yet these are still protected by their membership of the single currency,” he said. “It is the non-euro currencies, such as the Swedish krona and Danish krone and the zloty that may end up taking more collateral damage.”

Latvian Hookers Signal No Recovery for Economy - (www.bloomberg.com) When the economy starts to lift itself out of this recession, what will be the leading indicator that tells us we have turned the corner? Some people track the price of shipping to gauge the health of global trade. Others look at the supply of freshly minted money pouring out of central banks. A few will say that signs of life in the housing markets are evidence of a recovery. Forget them all. The one lesson we can draw from the global credit crisis is that all the traditional ways of measuring the state of the economy are about as useful as a bottle of suntan lotion in a snowstorm. So here are two benchmarks we should all be monitoring more closely: extramarital affairs and the price of Latvian hookers. Both are telling us that there is still plenty of trouble ahead. These two measures were proposed recently as reliable economic barometers, and they warrant consideration. Economists often say “animal spirits” play a role in keeping the wheels of the business cycle turning. They have given little advice on how we should measure those spirits. Now we may have the answer. In the U.K., a Web site called www.illicitencounters.co.uk allows married people who are planning to play a few matches away from home to meet up with each other. It has at least 300,000 members, indicating that the British have more on their minds than just the work expenses of politicians and the threat of unemployment. Bull-Market Affairs: The Web site crunched its traffic and membership numbers and found that there was a big increase in both when there was a turning point in the FTSE-100 index, which measures the leading companies listed in London. When the market collapses, people plot affairs. And when the bulls rage, the same thing happens. When it is trading sideways, they stick with their partners. “It has to do with people’s confidence levels,” says Rosie Freeman-Jones, a spokeswoman for the site. “When the markets are up, they think they can have an affair because they feel they can get away with anything. When the market hits the bottom, they are looking for a way to relieve the pressure.” In a similar vein, John Hempton, who runs the financial blog Bronte Capital, has monitored the health of the Baltic economies based on the price of Latvian sex workers -- currently about 30 lati ($60) for the standard service. “The contractual terms of prostitution are short (an hour, a night) and entry to the industry is unconstrained,” he says. “That means that the prices are very flexible.” Price Collapse: True enough. His argument is that since the prices have collapsed by about two-thirds in a year, Latvia and the other Baltic states are still in big trouble with deflation lurking. This benchmark may well be a valid way to get a snapshot of the economy. If prostitution was legal in all countries, it would probably make a good index for central banks to track. There could be few better ways of checking when we will flip from inflation to deflation and vice versa.

Unemployed without a lifeline - (money.cnn.com) move in Congress to extend benefits for the unemployed has been slowed as lawmakers debate who should qualify. As thousands of jobless Americans lose their weekly unemployment checks every day, Congress is still debating who should qualify for a benefits extension. Two weeks after the House passed an extension, Senate Democrats Thursday introduced a bill to lengthen unemployment insurance by up to 14 weeks in all states. Those living in states with unemployment levels greater than 8.5% would receive an additional six weeks. The proposal would be funded by extending the longstanding federal unemployment tax levied on employers through June 30, 2011. "This agreement recognizes the need to extend unemployment benefits for workers in every state whose unemployment benefits have run out or will do so in the next several weeks," said Senate Majority Leader Harry Reid, D-Nev. The Senate proposal differs significantly from the House measure, which lengthens benefits by 13 weeks only for those in high-unemployment states. The House bill would extend the tax through next year. Senate Republicans, who have expressed general support for extending benefits, blocked the Senate from quickly passing on Thursday. "I have no doubt that [at] the appropriate time we'll be able to work out some kind of agreement," said Sen. Jon Kyl, R-Ariz. "But our side is going to need some time to look at it." That pushes consideration of the bill into next week. If the measure makes it through the Senate, it must then be reconciled with the House version. As Congress debates the measure, 400,000 people ran out of benefits in September and another 208,000 are set to lose them this month, according to the National Employment Law Project. Some 1.4 million people will stop receiving checks by year's end if Congress doesn't act, according to the employment law project. The chorus calling for a benefits extension grew louder after the government reported on Friday that unemployment hit a 26-year high of 9.8% in September. Employers shed a higher-than-expected 263,000 jobs last month. The "employment report is a marching order for Congress to pass unemployment benefit extensions to all states, quickly," Christine Owens, executive director of the National Employment Law Project, said last week. "With six unemployed workers seeking jobs for every available opening out there, the path to recovery remains steep."

Congressional leaders fight against posting bills online - (www.washingtonexaminer.com) As Congress lurches closer to a decision on an enormous overhaul of the American health care system, pressure is mounting on legislative leaders to make the final bill available online for citizens to read before a vote. Lawmakers were given just hours to examine the $789 billion stimulus plan, sweeping climate-change legislation and a $700 billion bailout package before final votes. While most Americans normally ignore parliamentary detail, with health care looming, voters are suddenly paying attention. The Senate is expected to vote on a health bill in the weeks to come, representing months of work and stretching to hundreds of pages. And as of now, there is no assurance that members of the public, or even the senators themselves, will be given the chance to read the legislation before a vote. "The American people are now suspicious of not only the lawmakers, but the process they hide behind to do their work," said Michael Franc, president of government relations for the Heritage Foundation, a conservative think tank. At town hall meetings across the country this past summer, the main topic was health care, but there was a strong undercurrent of anger over the way Congress rushed through passage of the stimulus, global warming and bank bailout bills without seeming to understand the consequences. The stimulus bill, for example, was 1,100 pages long and made available to Congress and the public just 13 hours before lawmakers voted on it. The bill has failed to provide the promised help to the job market, and there was outrage when it was discovered that the legislation included an amendment allowing American International Group, a bailout recipient, to give out millions in employee bonuses. "If someone had a chance to look at the bill, they would have found that out," said Lisa Rosenberg, who lobbies Congress on behalf of the Sunlight Foundation to bring more transparency to government. The foundation has begun an effort to get Congress to post bills online, for all to see, 72 hours before lawmakers vote on them. "It would give the public a chance to really digest and understand what is in the bill," Rosenberg said, "and communicate whether that is a good or a bad thing while there is still time to fix it."

OTHER STORIES:

Video - Dr Lacy Hunt, an internationally renowned economist - (www.abc.net.au)

Derivatives still pose $trillion risk to markets - (www.huffingtonpost.com)

Pessimistic commentators remain anything but convinced by the stock market rally - (www.economist.com)

ECB faces an interest rate 'trap'. - (www.bloomberg.com)

The Mortgage Money Machine - (theautomaticearth.blogspot.com)

Income concentration: Top heavy - (www.economist.com)

Housing Overhang/Shadow Inventory = Enormous Problem - (PDF - matrix.millersamuel.com)

House Sellers in U.S. Cut Prices by $28.4 Billion - (www.bloomberg.com)

Foreclosures mark pace of enduring U.S. housing crisis - (www.reuters.com)

Go Ahead, Walk Away - (www.thebigmoney.com)

Apartment Vacancy Rate Set to Break Record - (www.usnews.com)

Residential Apartment Glut Hurts Investors - (www.etfdb.com)

Despite Housing Slump, Mortgage Lenders Making Record Profits From Fees- (www.huffingtonpost.com)

Roubini says housing market hasn't bottomed - (news.yahoo.com)

Fannie And Freddie Scheme To Help Independent Mortgage Lenders Grow- (www.businessinsider.com)

FHA Shortfall Seen at $54 Billion May Lead to Bailout - (www.bloomberg.com)

FHA may be setting up repeat of housing bubble, lawmakers worry - (www.latimes.com)

Commercial Real Estate May Be Next Victim of Recession - (www.pbs.org)

The Cost of Corporate Communism - (www.huffingtonpost.com)

Sunday October 25 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

City and Country of San Diego – Making desperate attempts to steal money from their citizens due to budget deficits:

· Parking-meter proposal to be sent to full council - (www.signonsandiego.com) A proposal that could lead to higher rates and longer hours at city parking meters is moving ahead. A San Diego City Council committee voted 3-2 yesterday to forward the plan to the full council for consideration. Council members Carl DeMaio and Marti Emerald dissented. DeMaio called the proposal a blatant “money grab” as the city faces a $179 million budget deficit for next year. The plan calls for amending the municipal code to allow city officials to set the rates and times for parking meters. The Mayor's Office says it would rely on community parking groups to recommend any changes. A city report shows that the proposed changes — keeping meters on until 11 p.m. and operating them on Sundays — would increase the city's net revenue by nearly $1.4 million annually.

· Deadline to claim money from county approaching | local-news - (www.sandiego.com) Taxpayers and others owed money by the county have less than two weeks to file claims for more than $650,000. If claimants don't file the appropriate paperwork by Oct. 19, the county gets to keep the money, Treasurer-Tax Collector Dan McAllister said. “It is sad to see that people are not stepping up and claiming the money we owe them,” he said in a news release. “These are monies that rightfully belong to people, and we simply need to give it back before the deadline.” The county has $432,752 in unclaimed property-tax refunds and $224,183 in overpayments to various county departments in the past three years. Those owed the money are listed online at bit.ly/SDowes and bit.ly/SDowes2 .

Lobbyists Stew After Being Bounced From Boards - (www.cqpolitics.com) tide of anger and dismay is rippling down K Street as the Obama administration implements a new policy limiting the roles of lobbyists on federal advisory committees. The policy change, described by the White House as the next step in President Barack Obama ’s drive to limit influence-peddling in Washington, could affect hundreds of lobbyists who serve on the panels, which were created by Congress in the 1970s to provide private-sector advice to the government. By removing a key point of access to the administration, many lobbyists will be less useful to their clients, who will be forced to appoint others to take up the slack. And the information about federal government intentions gleaned from committee meetings will now be unavailable to many lobbyists as they strategize on how to work various issues. “There is fury,” said a lobbyist who sits on one of the committees. “Absolute fury.” K Street veterans say they sit at the intersection of policy wonk-dom, Washington savvy, and the needs of business, and are therefore best suited to populate the panels. But the White House views the move as a key step in rolling back what officials see as the open-door policy for K Street created in previous years. According to a senior White House official, the panels have been excessively dominated by lobbyists. “It is one of the ways special interests have historically shaped policy to the detriment of the public interest,” he said. The policy was announced quietly Sept. 23 in a blog post on the White House Web site by the White House special counsel for ethics and government reform — also known as the “ethics czar” — Norm Eisen. “The White House has informed executive agencies and departments that it is our aspiration that federally-registered lobbyists not be appointed to agency advisory boards and commissions,” Eisen states. He goes on to say that “it is our hope” that lobbyists already on the panels not be reappointed. The Commerce Department and Office of the U.S. Trade Representative took the White House “aspiration” to heart almost immediately, telling members of the panels in a letter last week that lobbyists will no longer be appointed to panels and that those on them will be out as the committees are rechartered in 2010 and 2011. The letter, obtained by Roll Call, was signed by Commerce Department Industry Trade Advisory Center Director Ingrid Mitchem. It states: “If you are requesting consideration for reappointment, you will need to send to me a supplemental statement in writing, by letter or via e-mail, affirming both that: 1) you are not a federally-registered lobbyist, and 2) that you understand that if reappointed, you will not be allowed to continue to serve as an ITAC member if you become a federally-registered lobbyist at any time during your appointed tenure to the committee.” The instructions will decimate the ranks of lobbyists on the trade committees, which help guide U.S. negotiators’ objectives as they pursue trade deals with other countries. One source estimated that about 130 of 330 people on the trade committees are lobbyists. Other federal agencies affected by the new policy continue to consider how they will implement it. Administration allies in labor and elsewhere will not be spared. “The President recognizes that some lobbyists advocate for public interest goals shared by this Administration,” Eisen wrote. “Nevertheless, the President made a commitment to the American people to reduce the influence of lobbyists in Washington.”

The rich bail faster on mortgages - (articles.moneycentral.msn.com) Wealthy but 'underwater' homeowners are giving up on paying their mortgages as a financial tactic, a study finds. Those with smaller loans are less likely to do so. Increasingly, homeowners with good credit and no late payments are making what appears to be a strategic decision to walk away when their home's value falls below what's owed. "The American consumer has had a long-held taboo against walking away from the home, and this crisis seems to be eroding that," concludes a report on research by Experian, the credit agency, and Oliver Wyman, a management consultant company.

The better their credit rating, the more likely homeowners were to default. The trend is most pronounced where prices have fallen furthest: Florida and the West, especially California. The finding -- that 588,000 borrowers appear to have strategically defaulted in 2008, a 128% increase from the year before -- surprised the researchers. Piyush Tantia, who conducted the research for Oliver Wyman, and Charles Chung of Experian spotted the trend while analyzing 24 million credit files to see what they could learn about mortgage delinquency. Strategic defaulters stand out among the 14 million to 15 million "underwater" mortgages, the researchers said, because they:

· Pay all their bills consistently and on time until abruptly stopping mortgage payments with no attempt to get current again.

· Keep current on other debts after defaulting on the mortgage.

· Keep up payments on home equity lines of credit, sometimes drawing out cash, before defaulting on both the first mortgage and credit line.

This "sophisticated" combination of moves and timing suggests borrowers are employing foreclosure as a calculated financial strategy, said Tantia and Chung. They conclude that 18% of the borrowers with mortgages 60 days past due in the fourth quarter of 2008 were acting strategically, up from 3% -- "barely noticeable," the report says -- in late 2004. Most defaults, however, are driven by financial distress. Defaults due to troubled finances grew from 31% to 51% of loans in the same time frame.

China calls time on dollar hegemony - (www.telegraph.co.uk) You can date the end of dollar hegemony from China's decision last month to sell its first batch of sovereign bonds in Chinese yuan to foreigners. Beijing does not need to raise money abroad since it has $2 trillion (£1.26 trillion) in reserves. The sole purpose is to prepare the way for the emergence of the yuan as a full-fledged global currency. "It's the tolling of the bell," said Michael Power from Investec Asset Management. "We are only beginning to grasp the enormity and historical significance of what has happened." It is this shift in China and other parts of rising Asia and Latin America that threatens dollar domination, not the pricing of oil contracts. The markets were rattled yesterday by reports – since denied – that China, France, Japan, Russia, and Gulf states were plotting to replace the Greenback as the currency for commodity sales, but it makes little difference whether crude is sold in dollars, euros, or Venetian Ducats. What matters is where OPEC oil producers and rising export powers choose to invest their surpluses. If they cease to rotate this wealth into US Treasuries, mortgage bonds, and other US assets, the dollar must weaken over time. "Everybody in the world is massively overweight the US dollar," said David Bloom, currency chief at HSBC. "As they invest a little here and little there in other currencies, or gold, it slowly erodes the dollar. It is like sterling after World War One. Everybody can see it's happening." "In the US they have near zero rates, external deficits, and public debt sky-rocketing to 100pc of GDP, and on top of that they are printing money. It is the perfect storm for the dollar," he said.

New FHA Rules Make Life Tough For Condo Sellers - (www.squarefeetblog.com) Beginning, October 1st, the FHA has instituted new rules around loans on condos. The full letter is embedded below. The new rules are pretty dramatic, particularly for new condo and vacation-unit developments seeking FHA approval. The rules require at least 50% of the units in the project to have been sold for new product, and completely drops projects which are not intended to be primary residences. Additionally, consider the fact that the FHA guaranteed about 25% of the mortgages made in the United States this year. The requirements, some of which are detailed below, are part of an effort by the FHA to reduce risk. Just look at some of these rules:

· First projects which are no longer eligible at all:

o Condominium Hotels (this was a stupid concept to begin with)

o All projects not deemed to be used primarily as residential

· Now look at one of the conditions the lender has to “avoid or mitigate” against:

o Potential noise issues, where the property is located within 1000 feet of a highway, freeway, or heavily traveled road, within 3000 feet of a railroad, or within one mile of an airport or five miles of a military airfield.

· And finally, look at some of the requirements that pertain to Condominium Project approvals:

o No more than 25 percent of the property’s total floor area in a project can be used for commercial purposes. The commercial portion of the project must be of a nature that is homogenous with residential use, which is free of adverse conditions to the occupants of the individual condominium units.

o No more than 10 percent of the units may be owned by one investor. This will apply to developers/builders that subsequently rent vacant and unsold units. For two and three unit condominium projects, no single entity may own more than one unit within the project; all units, common elements, and facilities within the project must be 100 percent complete; and only one unit can be conveyed to non-owner occupants.

o No more than 15 percent of the total units can be in arrears (more than 30 days past due) of their condominium association fee payment.

o At least 50 percent of the total units must be sold prior to endorsement of any mortgage on a unit. Valid presales include an executed sales agreement and evidence that a lender is willing to make the loan.

o At least 50 percent of the units of a project must be owner-occupied or sold to owners who intend to occupy the units. For proposed, under construction or projects still in their initial marketing phase, FHA will allow a minimum owner occupancy amount equal to 50 percent of the number of presold units (the minimum presales requirement of 50 percent still applies). Secondary residences can only be included if it meets the requirements of 24 CFR 203.18(f)(2). If the owner-occupancy ratio includes presales, FHA requires an executed sales agreement and corresponding evidence that a lender is willing to make the loan and the buyer intends to occupy the unit. A separate owner-occupancy certification is also required in the FHA case binder for loans where the Individual Condominium Unit Appraisal Report, Fannie Mae Form 1073, does not contain the required data or the condominium project is proposed or under construction.

OTHER STORIES:

The New Job Search: Lots Of Interviews—And Then Silence - (www.cnbc.com) “Hiring managers are increasingly prone to shopping,” one expert told the New York Times. “Even if the person across the table is great, there might be someone else even better.”

Corporate Communism - (www.dailybail.com)

'Baby Boomer' credit defaults soar - (www.nzherald.co.nz)

Treasury Moves to Offer Rewards for Short Sales - (www.dsnews.com)

Racing for the Homebuyer's Tax Credit? See These Tips - (www.cnbc.com)

Investors Are Showing They're Not Afraid of the Fed - (www.cnbc.com)

Affordable housing a boon for social investors; down 50%-70% in Marin- (www.csmonitor.com)

Commercial Losses Loom, Office Rents Fall - (www.blogs.wsj.com)

Hotel defaults, foreclosures rise in California - (www.latimes.com)

Buyers realise houses still out of reach in India too - (www.indiatimes.com)

Dollar Hysteria - (www.informationclearinghouse.info)

US Economy Rebounded Strongly in Third Quarter: Poll - (www.cnbc.com)

Oil Next Week: What Traders Will Be Watching - (www.cnbc.com)

Gold as Armageddon insurance - (www.blogs.reuters.com)

A killing of cash - (www.theautomaticearth.blogspot.com)

House values improve with higher walkability - (www.sfgate.com)

Sick for Profit - (www.sickforprofit.com)

Five capitalist democracies & how they do health care - (www.pbs.org)