foreclosure search

You've without doubt seen all of them or read them. Glossy ads or four-color advances in magazines and magazines promising to show you every one of the juicy information regarding successful real estate investing. And all you have to do to learn all these real property investing surface encounters chuck russo secrets is to pay a rather high sum for a one-or two-day seminar.




Often these kinds of slick real-estate investing seminars claim that you can make wise, profitable property investments with absolutely no money lower (other than, of course, the large fee you pay for the seminar). Now, how interesting is in which? Make a make money from real property investments you created using no cash. Possible? Not most likely.




Successful investment requires cashflow. That's the character of any type of business or perhaps investment, especially property investing. You put your cash into a thing that you hope and plan can make you additional money.




Unfortunately too few newbies for the world of real estate investing think that it's the magical form of business exactly where standard company rules do not apply. Simply set, if you would like to stay in real-estate investing for more than, say, a day or two, then you're going to have to come up with money to use and make investments.




While it could be true in which buying real estate with no money down is straightforward, anyone who's even made a basic real estate investment (like buying their own home) understands there's a lot more involved in real-estate investing that can cost you money. For illustration, what about any essential repairs?




So, the primary rule people not used to real property investing ought to remember is always to have obtainable cash supplies. Before you decide to actually carry out any real estate investing, save some cash. Having just a little money in the bank once you begin real est investing surface encounters chuck russo can help you make more profitable real estate investments in rental properties, for example.




When real-estate investing within rental attributes, you'll want to be able to select simply qualified tenants. If you've no cash flow when real-estate investing inside rental properties, you may be pressured to take in a much less qualified tenant since you need somebody to cover you money to enable you to take treatment of maintenance or lawyer fees.




For any kind of real estate investing, meaning local rental properties or even properties you buy to resell, having cash reserved can permit you to ask for a higher value. You can ask for a higher price from the real estate investment because an individual surface encounters chuck russo won't feel financially strapped as you wait for an offer. You won't be backed into a corner and forced to accept just any offer because you desperately need the money.




Another downfall of many new to real-estate investing is actually, well, greed. Make the profit, yes, but will not become so greedy that you ask with regard to ridiculous leasing or second-hand rates on all of your real est investments.




Those a new comer to real est investing must see real estate investing as a business, NOT a spare time activity. Don't believe real property investing is going to make you abundant overnight. What company does?




It requires about half a year to decide if real estate investing set for you. If you have decided in which, hey I really like this, then provide yourself a couple of years to truly start earning profits. It usually takes at the very least five years to become truly successful in property investing.




Persistence is the key to be able to success in real-estate investing. If you might have decided that property investing is made for you, surface encounters chuck russo keep plugging away at it and the rewards will be greater than you imagined.












(h/t Heather at VideoCafe)

It is a truism rarely acknowledged in this country: the single most important infrastructure investment we can make for the future is in education. I'm not talking about retrofitting the buildings or constructing more classrooms. No, we provide for the future by educating our young people, preparing them to become productive members of society. Study after study shows that the higher one's education level is, the higher the median income and the less likely one is to suffer unemployment.

But we're not doing that. No, in these austerity times, politicians clamor to cut services and jobs. Teachers are demonized. Vouchers are touted as the answer, when it's simply a way to privatize profits away from public schools. Hell, some GOP would be happy if we eliminate the Department of Education altogether.

A rare and welcome progressive appearance on the Sunday shows, Rep. Maxine Waters bemoans the disconnect between what politicians say we need to focus on and what they're really doing about it:

To tell you the truth, the plight of education in this country is shameful. Just a few days ago I learned that more cities, more states are reducing the number of education days down to four instead of five. And I could not help but stop and think, "Is this America? Is this the country that said and continues to say that education is a top priority?" Why are we not investing more in education? Why do we have dropouts? Why do we have educational systems that are failing? Why is it that we have a situation where many of our young people will not be able to compete in this high technological society because they're not properly educated? And so, no, we do pay lip service to education. We don't really invest in it, and that's got to change. But let me just say this, Americans want to work. This joblessness is not only hitting the middle class, but it is hitting all classes. It is absolutely unconscionable what is happening in the minority communities. When we look at this no jobs haven't been created in August and we find in the African-American community it has increased from 16 percent, 15.9, 16 percent, up now 16.7 percent, and now we're going to talk about cutting government by $1.5 trillion, this new 12 committee membership that we have after the raising the debt ceiling debate? And that means that we're going to lose more jobs, that means more people are going to be unemployed. The African-American rate will probably go up to about 20 percent. I don't know how our country can sustain that kind of...

Of course, David Gregory interrupts her at this point, because Lord know, the plight of the African American community doesn't concern him. But then again, he has the gall to say that we only play lip service to the importance of education. You know, the same guy who only pays lip service to journalism and who spent the better part of the last two years telling his viewers that Americans cared about the deficit when poll after poll proved him a lying hack with a corporate agenda.

D I V O R C E the Fed.

Now. Uncontested. Just cut the ties that bind us to the slavery.

 

but then the idiots in congress, and the "Current Resident" on 1600 Penn Ave, would have full control, in which case, the skids would be greased even more. Well, that might not be entirely true, since most of those bastards are nothing but mere marionettes, with their strings being yanked at every move, by the likes of soros et al, you know the ones ...."new world order" lovers who are aiding in the dismantling of the once Great US, and serving it piece by piece to china, however, the same zealous ideologues and true enemies of the US, fail to notice that that marvel called EU is crapping out, approaching the full blow-out point, at which time most of their 'contents' gleefully ingested as ingredients of the delicious EU, will be excreted, and when the end result will hit the proverbial fan .... duck and cover.

Unfortunately, what Gross has become is a splendid specimen of the 'grownup hippies' who in the 60's and 70s were raising hell, in the name of a better America, while now, a decent number of them, to varying degrees, having become 'fat cats', forgot how they were able to amass their fortunes, and instead of uniting and contributing however possible to returning the country on the path to prosperity, are now, continuing to chase an easy buck, by financing our adversaries, and most likely our enemies, based on their propaganda they already consider us their enemy - all to the detriment of the quality of life during the 'golden years' for some of us, as well as the quality of life (or lack thereof) for our children and future generations.

Once Heli-Ben got rates to 4% yet the economy continued its tanking trajectory, the politicians should have pulled their heads out of their asses, and begin serious work on policy intervention aimed entirely at rebuilding the domestic manufacturing base, which is all but gone, as well as ensuring that any fed provided liquidity remains 100% - or close to it - in the US.

Given the facts revealed by the Bloomberg recently released Fed back-door loans, makes me wonder if Uncle Ben himself is not among the facilitators of the "new world order"?!

So me thinks anyway.

Duck 'n cover everyone.

foreclosure search

As investors search for yield anywhere and everywhere, bonds are trading in uncharted territory. Please consider Obama Wins Low Yield as Markets Shrink Aiding Deficit

Bond investors seeking top-rated securities face fewer alternatives to Treasuries, allowing President Barack Obama to sell unprecedented sums of debt at ever lower rates to finance a $1.47 trillion deficit.

Shrinking credit markets help explain why some Treasury yields are at record lows even after the amount of marketable government debt outstanding increased by 21 percent from a year earlier to $8.18 trillion. Last week, the U.S. government auctioned $34 billion of three-year notes at a yield of 0.844 percent, the lowest ever for that maturity.

Spending by companies and consumers has slowed as the economy has shown signs of weakening. Companies in the Standard & Poor’s 500 Index have stockpiled a record $2.3 trillion of cash and equivalents. Company borrowing slid 29 percent in the first half of the year to $528 billion amid a dearth of business investment, Bloomberg data shows.

Piles of Cash Equates to Piles of Debt

Companies are piling up cash alright. However, the flip side of that cash is debt.

Moreover, analysts mistake that cash for willingness to expand. The reality is corporations do not want to get trapped like they did in 2008, unable to borrow.

For more on corporate cash levels, please see Are Corporations Sitting on Piles of Cash?

Individuals are also hoarding cash. The U.S. savings rate reached 6.4 percent in June, up from 1.7 percent in August 2007, the start of the financial crisis.

Are Individuals Hoarding Cash?

Individuals are not really "hoarding cash" either. Instead they are paying down debt. Most do not realize that by definition, paying down debt constitutes "saving".

For most wage earners, the savings rate is after-tax salary minus personal consumption expenditures (PCE). For a more precise definition, please see What's Behind The Soaring Savings Rate?

“There’s been a collapse in both consumer and business credit demand,” said James Kochan, the chief fixed-income strategist at Menomonee Falls, Wisconsin-based Wells Fargo Fund Management, which oversees $179 billion. “To see both categories so weak for such an extended period of time, you’d probably have to go back to the Depression.”

Food Stamps and Unemployment Insurance Mask Depression

I believe we are in a depression now. The key difference is food stamps and unemployment checks have replaced bread lines.

We also have hundreds of thousands of people living in their homes without making payments on their mortgage or home equity lines. The slow foreclosure process encourages more to do the same.

“The diminishing supply” of alternatives to Treasuries “is giving Washington an opportunity to continue with its fiscal irresponsibilities,” said Mark MacQueen, partner and portfolio manager at Austin, Texas-based Sage Advisory Services, which oversees $8.5 billion. “The only way to tell Washington and America ‘no more’ is a weak dollar, which eventually leads to higher interest rates.”

“We are slowly playing a fool’s game as rates go further down to unsustainably low levels,” said Dan Shackelford, a money manager who helps oversee $15 billion in fixed-income assets at T. Rowe Price Group Inc. in Baltimore.

Thoughts on the Fool's Game

If you are managing $15 billion thinking it is a "fool's game", then in my opinion you ought not be doing it. It seems to me there is a lack of fiduciary responsibility if one is investing client money in a "fool's game".

What the hell - Anything for a fee!

I do think corporate bonds, especially most junk is playing for the greater fool. In regards to treasuries, there is going to be an exit problem for sure, but that could be years away. In Japan, yields stayed low for a decade. Why can't it happen here?

Yields certainly might stay low for an extended period. Whether or not they do remains to be seen. I happen to like long-term treasuries right now, but certainly not as much as when the 10-year was at 3.75% and bears were foolishly shorting treasuries like mad.

The government isn’t the only one getting a good deal. Armonk, New York-based International Business Machines Corp., the world’s biggest computer services provider, sold $1.5 billion of three-year notes on Aug. 2 with a coupon of 1 percent, the lowest of the more than 3,400 securities in the Barclays Capital U.S. Corporate Index of investment-grade company debt.

Portland, Oregon, sold about $408 million in sewer-system revenue debt on Aug. 11, with utility bond yields at the lowest level on record. Yields on 10-year, AA rated tax-exempts backed by utility revenue stood at 3.02 percent on Aug. 10, according to Bloomberg Fair Market Value data. That’s the lowest since the index was created in November 1993.

“We are in unchartered territory,” said [William Larkin, a fixed-income money manager in Salem, Massachusetts at Cabot Money Management]. “We are pushing and pulling levers that we don’t understand the full implications.”

Uncharted Territory

This is indeed uncharted territory thanks to the Fed pushing and pulling levers in a manner it does not understand. William Black, a former bank regulator, is one person who does understand. Black says U.S. Using "Rally Stupid Strategy" to Hide Bank Losses - Will Produce Japanese Style Lost Decade.

I agree with his assessment.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

I think that if you trace HAMP to the source you will find this was an invention of the bureaucrats at the Treasury who fooled both the public (and probably Obama, perhaps the new Secretary) and even the banksters. If you read the implementing instructions it becomes clear this is a maze that few can find an ‘approved’ entry to or exit from. Just the ‘dictionary’ was 136 lines with 10 cells on an Excel spreadsheet (190kb). I was looking at the fifth revision.

HAMP did forestall a few foreclosures, but it took jumping through hoops. Only a small sum went to the service folks and the rules were changed quarterly. On the banks side they wanted it to work as it could put off the loss while it was in HAMP. It was badly implemented because it was like that pea and shell game. I got a headache reading through all the ‘rules’ and categories and realized this lacked a hard and fast rule. It was ‘optional’ for the bank and the borrower.

It is fair to blame the banksters for most of the failure, but the Treasury was most at fault and those folks who created it are the crats who are not swept away with a changed administration. These critters do either retire or seek jobs with those who must figure out the rules.

I’m giving Obama and maybe even Timothy a pass on this one.. they had a lot on the plate and let the crats do the chores. Congress is who I’ll blame.. they should have never raised the lending limits that Fannie and Freddie could provide as that’s what sent this bubble aloft. People have to have jobs that pay enough to pay these loans. They did not and even as we see from this tale.. people have tried and can’t due to a host of issues.. but folks… a $2,600@ payment is only part of home ownership. You need a net income of $10,000@ month to service such a debt. Clearly a lot of folks were to blame.

‘Wanting’ this house is not planning so as to afford it. People acted imprudently and now we’re ALL going to pay and pay and pay. The lawyers and banksters never pay, which is why they need to be REGULATED. That is worth getting angry over. Home ownership was never (after maintenance, taxes and insurance) going to appreciate more than 1-2% a year.. if you maintain and update. The whole idea of buying houses that will eat your income to the extent these folks have was NUTS.

Yes it was also a stall tactic, but that’s not a bad thing given the mess we’re all in. Congress are who we need to rail on. Fannie and Freddy need to go away. Local banking isolated from the ‘products’ is what we need back. They worked and worked with the borrower. Today the investors are detached and suckers too.

eric seiger

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foreclosure report

From The Daily Capitalist

Existing Home Sales

Today's report that existing housing sales plummeted 27% in July should not come as a surprise.

Consider the fact that we are coming off of the greatest boom-bust credit cycle in world history. The focus of that cycle was residential housing which resulted in massive overbuilding of homes. Now we are seeing the inevitable result of the housing boom — the housing bust which requires the liquidation of this malinvestment.

From 2001 to 2006 housing starts jumped 40%, from about 1.6 million units per year to 2.250 million units per year. That period coincided with a massive expansion of the money supply by the Fed. When the cheap money stopped, the ride ended, and projects that, but for the cheap money were unprofitable, went broke.

The liquidation phase is never pretty but it is necessary for recovery. And that is why the government has been unable to prop up the housing market, except temporarily though tax credits. You can't push a string as they say, and the inevitable process of liquidation is continuing after the tax credits expired in April.

According to the National Association of Realtors report, demand for existing single-family housing dropped to a 15 year low. The 27% drop was the biggest one-month drop since 1968. Sales dropped 29.5% in the Northeast, 22.6% in the South, 25% in the West, and 35% in the Midwest. June sales figures were revised downward to 5.26 million homes from 5.37 million previously reported.

Courtesy The Wall Street Journal

The important existing inventory index increased to 12.5 months from 8.9 months. Which means it will take a year to sell off existing inventory, a substantial jump and a significant problem for the market. Normal inventory is a 4 to 6 months supply. While prices had appeared to have stabilized (median home prices rose 0.7% to $182,600 in July) because of the tax credits and speculator competition for foreclosure sales, this inventory glut will put negative pressure on prices. Ultimately I believe foreclosure speculators will create a floor under prices (based on the level of activity I have seen), so I don't think the downside will be drastic.

Jobs Reports

Last week's report on initial claims showed a MoM jump of 25,000 claimants, a 6% increase over the previous week. The 500,000 claims was a 9-month high. Initial claims had dropped to 439,000 in February, 2010, then flattened out showing a stalled recovery, and has been climbing since July.

A brighter statistic was that continuing claims were down 13,000 for the week of August 7. The four-week average is 4.527 million, the lowest since the peak in March, 2009.

Courtesy The Wall Street Journal

The bulk of job cuts have been in small companies:

Tomorrow the Q2 GDP revision will be released, Fed Chairman Ben Bernanke will speak at the Jackson Hole conference, and perhaps the FDIC will release the Q2 Quarterly Banking Profile ...

From Binyamin Applebaum at the NY Times Economix: An Autopsy of Fannie Mae and Freddie Mac

Here’s a last-minute option for summer reading material: An autopsy on Fannie Mae and Freddie Mac by their overseer, the Federal Housing Finance Agency.

The report aims to inform the continuing debate in Washington about the future of the government’s role in housing finance. It’s not hard sledding, just 15 pages of bullet points and charts. And it does a good job of making a few key points:

1. Fannie and Freddie did not cause the housing bubble. ...

2. This was not for a lack of trying. ...

3. Importantly, the companies’ losses are mostly in their core business of guaranteeing loans, not in their investment portfolios.

From the Atlanta Fed: Financial Highlights

Click on graph for larger image in new window.

From the Atlanta Fed:

Peripheral European bond spreads (over German bonds) have risen since the August FOMC meeting.

In fact the Greece-to-Germany, and the Ireland-to-Germany, bond spreads are near the levels reached during the May financial crisis.

Here is my post on the MBA Q2 delinquency report: 14.42% of Mortgage Loans Delinquent or in Foreclosure . This graph (from the earlier post) shows the delinquency rate by "bucket" (30 days, 60 days, 90+ days, and in foreclosure process):

The total percent of loans delinquent or in the foreclosure process declined only slightly in Q2 from Q1 - and the rate is the second highest on record.

Loans 30 days delinquent increased to 3.51%, and this is about the same levels as in Q4 2008 (slightly below the peak of 3.77% in Q1 2009).

Delinquent loans decreased in all other buckets - especially in the 90+ day bucket. MBA Chief Economist Jay Brinkmann suggested the decline in the 90+ day bucket was because of some successful modifications - since the lenders reported the loans as delinquent until the modification was made permanent.

CoreLogic reports on negative equity in Q2. Here is my earlier post CoreLogic: 11 Million U.S. Properties with Negative Equity in Q2

This graph shows the negative equity and near negative equity by state.

Although the five states mentioned above have the largest percentage of homeowners underwater, 10 percent or more of homeowners with mortgages in 33 states and the D.C. have negative equity.

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foreclosure auctions

The Real Housewife Foreclosure Auction: Own a Piece of Teresa Giudice

The poor orange hair monster from Bravo's Real Housewives of New Jersey is bankrupt. She's selling her mansion, and now basically everything she and her husband own, including their freaking wedding rings, is being auctioned off. Lots of pics below.

The Real Housewife Foreclosure Auction: Own a Piece of Teresa Giudice

The poor orange hair monster from Bravo's Real Housewives of New Jersey is bankrupt. She's selling her mansion, and now basically everything she and her husband own, including their freaking wedding rings, is being auctioned off. Lots of pics below.

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App review: BBC <b>News</b> on iPad &amp; iPhone | Econsultancy

Despite concerns expressed by commercial rivals, the BBC's first iPhone and iPad apps were released last week, with BBC News the first release.

Sony unveils 24mm F2, 35mm F1.8 and 85mm F2.8 Alpha lenses <b>...</b>

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Analyst: Nintendo 3DS to revolutionize industry | The Digital Home <b>...</b>

Wedbush analyst Michael Pachter predicts in an investor note that the 3D portable-gaming device will justify game price tags of $29, vs. today's blended average of $25. Read this blog post by Don Reisinger on The Digital Home.

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Despite concerns expressed by commercial rivals, the BBC's first iPhone and iPad apps were released last week, with BBC News the first release.

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Sony unveils 24mm F2, 35mm F1.8 and 85mm F2.8 Alpha lenses: Sony has released three prime lenses for its Alpha SLR system. First up is the eagerly-awaited Carl Zeiss Distagon T* 24mm F2 SSM, which we saw in prototype form at PMA.

Analyst: Nintendo 3DS to revolutionize industry | The Digital Home <b>...</b>

Wedbush analyst Michael Pachter predicts in an investor note that the 3D portable-gaming device will justify game price tags of $29, vs. today's blended average of $25. Read this blog post by Don Reisinger on The Digital Home.

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bank foreclosure

If you received a foreclosure notice this year, you're not alone. According to tracking firm RealtyTrac, 1.6 million properties received a foreclosure filing -- defined as default notices, auction sale notices and bank repossessions -- during the first half of 2010. The good news: that number is down 5% from the previous six months. The bad? It's up 8% from the first half of last year. And RealtyTrac doesn't see any relief coming, as a "massive number of distressed properties and underwater loans continues to sit just below the surface."

While June's total of 313,841 properties with foreclosure filings marked a 3% decrease over the previous month, the news wasn't exactly good for the housing market (not to mention the owners of those 313,841 properties).

“The second quarter was a tale of two trends,” said James J. Saccacio, chief executive officer of RealtyTrac. “The pace of properties entering foreclosure slowed as lenders pre-empted or delayed foreclosure proceedings on delinquent properties with more aggressive short sale and loan modification initiatives. ...

“The midyear numbers put us on pace to exceed 3 million properties with foreclosure filings by the end of the year, and more than 1 million bank repossessions. The roller coaster pattern of foreclosure activity over the past 12 months demonstrates that while the foreclosure problem is being managed on the surface, a massive number of distressed properties and underwater loans continues to sit just below the surface, threatening the fragile stability of the housing market."

The top foreclosure locations: Nevada, Arizona and Florida, with California, Utah and Georgia just behind.

1.65 Million Properties Receive Foreclosure Filings in First Half of 2010

The information is based on April data and is therefore consistent with
the CS report. Both New York and Florida are at the top of the list of
states with the longest period between initial default and final
foreclosure. For the nation as a whole the number of days has nearly
doubled over the past few years. NY and Florida are 31% and 21% higher
than the national average.



This is not a coincidence. This is cause and affect in action. I live in
metro NYC and own property in S.Fl. I see what is going on. There are
many middle to upper price homes on the market that have not seen an
offer for more than a year. A good number of these are already in
default. The borrowers are underwater and there is nothing they can do. A
HAMP style ReFi accomplishes nothing. I know people in both areas who
have contacted their lender and have been told to come up with an
acceptable short sale or deed in lieu transaction. The borrowers have
been told by the bank(s) that if they do not cooperate they will have
their credit wrecked and be subject to default judgments. So the
borrower puts the house on the market and hopes for an offer that is
acceptable to the lender. In the mean time they stay in the home for up
to two years and pay very little (if anything) on the old mortgage.
There is substantial evidence that these people are buying IPhones and
going on vacation with the money they are saving by not paying the debt.
Some thoughts:



-This “extend and pretend” at its worst.



-The lenders will not let this continue forever. The day of reckoning is
coming. It well be felt in all of the states. It will be felt hardest
in the states that have the highest days to foreclosure numbers.



-As a former owner is foreclosed they will be forced to rent. Given that
few in this category are paying any meaningful amount of their current
monthly mortgage it is likely that they will have less disposable income
post foreclosure.



-My conclusions:





(A) RE in Fl and NY is going to tank this fall.



(B) Consumer demand for things from clothes, gadgets and leisure is
going to suffer an out sized decline.



(C) The extend and pretend policy is catching up with us. This approach
was a “buy some time” idea in the hope that things would work out. They
have not worked out. We are about to pay the price for that failure.



If we revert to more traditional levels in the ratio of initial default
and foreclosure we are going to hit an economic wall. This is just one
more thing stacking up against us.

formulated

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foreclosure investing

Across the United States, newspaper headlines lead with stories about
financial reform. Members of Congress want to better regulate Wall
Street and to take on the fat cats at the big banks, with their golden
parachutes and big bonuses, who took our hard-earned tax dollars in
the form of a federal bailout, despite the fact that they got us in to
this mess in the first place. And Congress is right to take on the
big banks - reform at the national level is long overdue and obviously
needed. But in the hubbub that is the national overhaul, the seeds of
this reform, the work done at the state and local level, cannot be
overlooked nor can we let up on this work. True reform of our banking
and financial systems will take pressure and action at every level and
across the nation.

Americans are fed up with billionaires who are bilking us for all we
are worth, making the middle class the biggest losers. Our friends
and neighbors have lost their homes, found out that the pensions or
retirement savings they worked for are gone and are struggling to find
work in the worst economy of our lifetimes. In the meantime, Wall
Street is back to business as usual, posting new profits, while those
on the other side of the deals have lost their homes, their jobs, and
their retirement savings.

With all of the anger and distrust of Wall Street, we have hit a place
where we are ready for a basic cultural shift - one that turns away
from looking at our investments and banking solely on the basis of
short-term profits, and toward the production of true long-term
growth: by investing our funds in economic growth opportunities that
directly impact our communities.

We cannot let this historic opportunity pass us by. We must channel
our inner Howard Beale and scream from our windows, "I'm
mad as Hell, and I'm not going to take it anymore" - our outrage must
be heard, not just in words but in action.

At the City level, leveraging this cultural shift means investing our
money in banks that are helping grow Main Street by offering small
business loans, working with homeowners to renegotiate mortgages when
they're faced with foreclosure, and opening up bank branches and the
cycle of credit in under-served areas, by creating local versions of
the Community Reinvestment Act standards. After all, what good does
it do Los Angeles if the banks in which the bulk of our tax dollars
sit in are reinvested in another City, far away?

That's why the Los Angeles City Council unanimously supported my proposal to create Responsible Banking Standards in Los Angeles,
based on a Philadelphia model put in place in 2002. Los Angeles alone
has a cash and pension portfolio of over twenty-five billion dollars,
which allows us to leverage these investments in such a way to benefit
the residents of our city - not just through the rate of return, but
by looking at how the banks and financial institutions reinvest in our
community. The ordinance will require that any bank looking to do
business with Los Angeles would have to submit a report to the City
Treasurer who, in turn, would grade the banks based on their
investments in Los Angeles.

And we're not the only ones - cities including Boston, Carson,
Charlotte, Dallas, Denver, Independence, Muskegon and Watsonville are
all looking into creating similar standards for Responsible Banking.
And this week, Boston City Councilor Felix Arroyo is hosting a
Council hearing to examine how the Boston City Council can hold big
banks accountable in their city. The States of California,
Massachusetts, Minnesota, New Mexico, Ohio and Washington are also all
considering or have implemented sweeping financial reforms, including
looking at the creation of State-run banks or investing only in
State-chartered banks.

The anger is palatable and the time for reform is now.

We've lost our trust in the banks that took our bailout money, and let
hundreds of thousands of homes fall into foreclosure.

We've lost our trust in Wall Street, where companies gained enormous
profits, betting on the demise of investments.

We've lost trust in the rating agencies, when 93% of the
subprime-mortgage-backed securities issued in 2006 for which they gave
AAA ratings are now "junk" status.

The only way that trust is going to be restored is with sweeping
reform. That's why Congress must pass substantive financial reform,
so that Americans can begin to believe again. But at the same time,
reform - just as powerful - must come from the cities and states.
Collectively, our leverage is enormous. I introduced a resolution at
the National League of
Cities in support of local reform, because I know the power we
could have if we banded together. Local and state officials know the
pain of our constituents, and know the benefit that can be derived
from holding banks and financial institutions more accountable.

The notion that we can create real change is not just pie in the sky.
The City of Philadelphia has had their policy in place since 2002, which has resulted in
increased consumer and small business lending to historically
under-served areas of that city. And on April 16, Massachusetts State
Treasurer Timothy Cahill announced that the State of Massachusetts
will begin divesting $243 million in taxpayer dollars from three of
the nation's largest banks - Bank of America, Citibank, and Wells
Fargo. The decision came after the banks were asked, and refused, to
voluntarily comply with an 18% interest rate cap on credit cards and
other consumer borrowing for Massachusetts residents. The cap, which
is required of all Massachusetts state-chartered banks, does not apply
to federally-chartered banks.

These actions are just the beginning of our cultural shift. More
Cities and states are needed to create real pressure on the banks. I
urge every City to create standards for how tax-payer dollars are
invested and find ways to ensure that the dollars are going to banks
and financial institutions that are behaving well.

Shouting may not get what we want - but you can bet that billions and
billions of dollars taken elsewhere will get banks' attention.

We are mad as Hell - and we don't have to take it any more.

Hard to say who the worst member of Congress is. But there are few short lists that would exclude narrow-minded and extremist Minnesota religious fanatic Michele Bachmann. However, today isn't about Bachmann. You want Bachmann, you go to DumpBachmann; no one does it better. At the time of the 2008 election, Bachmann was just as odious as she is today. Blue America didn't get involved in that race though because her opponent simply seemed... "better than Bachmann." That standard is too low for us.

And today we're going to meet state Senator Tarryl Clark (below in the comments section), a hard working leader with a proven track record who would be a great candidate whether she were running against Michele Bachmann, or just some garden variety Republican.

People say this suburban/exurban district mostly north of the Twin Cities is too red for a Democrat. But that isn't true. Bush won it in 2004 with 57% and 4 years later McCain took 53% but, the district has also voted to elect Amy Klobuchar to the Senate-- and against Mark Kennedy, the kook who represented the district before Bachmann. And in the 15th senatorial district near St Cloud, the part Tarryl represents-- and which was a GOP bastion before she came along-- the vote totals in that 2006 race were very interesting. Because she knows what it means to work hard and work smart, and with a very committed Wellstone-style of campaigning, Tarryl outpolled everyone on the ballot:

Clark 15581 (56.30%)

Klobuchar 14980 (53.45%)

Pawlenty 14307 (51.1%)

Wetterling 13082 (46.81%)

Bachmann 12542 (44.88%)

MN-06 has the most devastating unemployment rate in Minnesota and the worst foreclosure crisis in the state. But Bachmann has neither understood nor been sympathetic to her constituents finding themselves in a jam because of the vicissitudes of an economy buffeted by disastrous conservative ideological experimentation. She has not only not contributed to finding solutions to these very real problems, she has tried to capitalize of politicizing them.

Tarryl's reaction, as a state legislator, has been the exact opposite. Instead of running around the country and ranting and raving at tea parties, she proven herself an effective leader for the people she represents, working to secure the funds to upgrade the facilities at Saint Cloud State University, working to ensure Central Minnesota’s nursing homes are paid fairly, working to establish a special law enforcement unit to fight gang activities in Central Minnesota.

Tarryl’s been a champion for issues including early childhood and higher education, health care, serving veterans, protecting Minnesotans from predatory lenders, and investing in the local communities that make America strong. Because of that her colleagues elected her to serve as the Senate’s Assistant Majority Leader. Bachmann's colleagues have recognized her as a clown and have tasked her with going on Fox to stir up divisiveness and animosities.

Tarryl’s record of results on reducing unemployment:

• Created 22,000 jobs with last session’s bonding bill

• Helped small businesses add new jobs with Angel Investor Tax Credits

• Authored the Central Minnesota Bioscience Initiative to bring jobs in the biotech industry into the 6th district

• Authored economic development bill that improved workforce development (job training) and expanded the Small Business Growth Acceleration Program, and entrepreneur and small business development grants.

Tarryl’s record of results on reducing foreclosure:

• Authored legislation to protect seniors from predatory lenders and reverse mortgages

• Helped families in keep their homes with the MN Subprime Borrowers Relief Act

• Authored legislation to reduce the burden of property taxes on middle class families

Tarryl is the newest member of the Blue America family. If you can volunteer for her campaign, there's a sign up form here and if you can help the campaign financially, she's on the Blue America endorsed candidates list.

Mike Fuljenz Mike Fuljenz

foreclosure sales

This week's shocking existing home sales and new home sales data are a reminder that government support for the housing market is starting to unwind. The bad data we saw this week was just the beginning of a 'hangover' from our recent housing stimulus binge:

Goldman's Jan Hatzius:

The effect of federal mortgage modification programs has also started to wane. Data reported from the Treasury this week indicate that the number of canceled modifications in the Home Affordable Modification Program (HAMP) jumped significantly, while the rate of new modifications has declined to a fraction of the previous pace. Most of these loans have not yet entered foreclosure, and it appears that many will enter non-federal modifications. That said, the effect of this program is nevertheless starting to reverse, from one that absorbed would-be distressed supply from the market, to one that will at some point add it back.

But we still have ultra-low mortgage rates... (In fact, the lowest mortgage rates ever in recorded history)

The third source of policy support for the housing market-low mortgage rates-remains intact, however. While the conforming spread has risen by roughly 30bps from its low point at the end of the Fed's MBS purchases in March, it is still significantly below normal levels. Since most of the effect of the Fed's purchases appears to come from the stock of MBS holdings, we don't expect this source of support to fade soon. However, GSE reform discussions that get underway later this year and become more intense early in 2011 could present a new risk to this last source of temporary policy support.

Still, as government support fades, Goldman is forecasting falling housing prices out to 2012:

Last year, we estimated that federal housing policies-the homebuyer tax credit, mortgage modification programs, and the Fed's MBS purchases-boosted house prices by about 5%, with the implication that the fading of these policies would lead to renewed price declines in 2010. Earlier this month we updated our house price forecast; we expect a 3% decline in the Case-Shiller 20-city index this year and another 1% in 2011 (see Jari Stehn, "House Prices Have Not Bottomed Yet", US Economics Analyst 10/22, June 4, 2010). Reports this week back up the notion that the first two of these supports have begun to fade, though the third remains largely intact:

The homebuyer tax credit hangover is happening:

Collapsing mortgage applications presaging collapsing existing home sales...

Collapsing new home sales...

Basically, don't be surprised if home prices go nowhere, at best, for a long time.

(Via Goldman Sachs, The Unwinding Of Federal Housing Stimulus Is Underway, Jan Hatzius, 23 June 2010)

Citing reduced electrical demand American Electric Power will keep 10 units off line most of the year.

American Electric Power Inc., one of the nation's biggest power generators, says 10 of its smaller, coal-fired generating units will remain off line for much of the year because of lower demand for electricity.

The company said the units will be kept in "extended startup status," during off-peak months beginning Tuesday. The plan will allow the company to redeploy workers at several coal-fired units projected to run less frequently over the next few years.

During peak months of July, August and January, these units will be available as they have been in the past.

The recession has dampened demand for electricity, especially from industrial customers. Electricity demand fell for the past two years, the first time that has happened since 1949.

Price Wars at Walmart

Inquiring minds note Wal-Mart cuts prices to boost sales.

Wal-Mart is counting on $1 ketchup bottles and sub-$4 cases of Coke to re-ignite sales in America.

The sharp cuts at U.S. stores, which came ahead of the Memorial Day holiday weekend, have already pushed rivals such as Target into price wars. And the markdowns are expected to keep coming throughout the summer.

Wal-Mart is bearing the cost of some of the deep price cuts, not its suppliers, according to Bill Pecoriello, an analyst who heads ConsumerEdge Research LLC, based on discussions with industry officials.

According to Pecoriello, on a basket of five food items, from Coke to Lay's potato chips, the total price was $11.23 at Wal-Mart, 24 percent less than it was a year ago. It's also almost 14 percent lower than Kroger and almost 26 percent lower than Safeway, according to Pecoriello's estimates. The firm gathers pricing data representing 15,000 stores across the country.

That doesn't include Wal-Mart's move to lower cans of name-brand Coke and Pepsi further in the past few days, from the announced discounted price of $5 to as low as $3.77 in certain markets. The original price was $6.98 for a 24-pack.

Pecoriello noted in his report that Target was selling 12 packs of soda for $2, roughly matching Wal-Mart's price, while Kroger was selling 12 packs for $2.50, less than a year ago.

When an item you like is on sale, buy 5-10 times as much of it as you normally would, making a point to only buy items on huge sales. Otherwise, If you mind the price of meat, most everything else will take care of itself.

Please get a freezer for storing meat. Sale prices on meat have not gone up for a decade. Food is a tremendous bargain.

Foreclosure Life Raft

Sales at Walmart and Target are chicken feed compared to having a mortgage and not paying it. Please consider Owners Stop Paying Mortgage ... And Stop Fretting About It

For Alex Pemberton and Susan Reboyras, foreclosure is becoming a way of life — something they did not want but are in no hurry to get out of.

Foreclosure has allowed them to stabilize the family business. Go to Outback occasionally for a steak. Take their gas-guzzling airboat out for the weekend. Visit the Hard Rock Casino.

“Instead of the house dragging us down, it’s become a life raft,” said Mr. Pemberton, who stopped paying the mortgage on their house here last summer. “It’s really been a blessing.”

The average borrower in foreclosure has been delinquent for 438 days before actually being evicted, up from 251 days in January 2008, according to LPS Applied Analytics.

More than 650,000 households had not paid in 18 months, LPS calculated earlier this year. With 19 percent of those homes, the lender had not even begun to take action to repossess the property — double the rate of a year earlier.

In some states, including California and Texas, lenders can pursue foreclosures outside of the courts. With the lender in control, the pace can be brisk. But in Florida, New York and 19 other states, judicial foreclosure is the rule, which slows the process substantially.

In Pinellas and Pasco counties, which include St. Petersburg and the suburbs to the north, there are 34,000 open foreclosure cases, said J. Thomas McGrady, chief judge of the Pinellas-Pasco Circuit. Ten years ago, the average was about 4,000. “The volume is killing us,” Judge McGrady said.

Even without the burden of paying $938 a month for her decaying house, Mrs. Pemberton is having a tough time. Most of her customers are senior citizens who pay only $8 for a cut, and they are spacing out their visits.

“The longer I’m in foreclosure, the better,” she said.

In Florida, the average property spends 518 days in foreclosure, second only to New York’s 561 days. Defense attorneys stress they can keep this number high.

Both generations of Pembertons have hired a local lawyer, Mark P. Stopa. He sends out letters — 1,700 in a recent week — to Floridians who have had a foreclosure suit filed against them by a lender.

Even if you have “no defenses,” the form letter says, “you may be able to keep living in your home for weeks, months or even years without paying your mortgage.”

For borrowers like Jim Tsiogas, the benefits of not paying now outweigh any worries about the future.

“I stopped paying in August 2008,” said Mr. Tsiogas, who is in foreclosure on his house and two rental properties. “I told the lady at the bank, ‘I can’t afford $2,500. I can only afford $1,300.’”

One and a Half Years of Not Paying Rent

The average length of time for the foreclosure process in Florida and New York is over 18 months. For Mr. Tsiogas who stopped paying $2,500 a month, that comes to $45,000 in found money.

That's quite a chunk of change to spend at Walmart or better yet to save up for a few year's rent when you finally do lose your property.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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