bubbleinfo.com

More from HW:

The FHFA set off a firestorm of discussion in 2011 when it announced an REO-bulk sales initiative that aims to repair the hardest-hit housing markets by selling off bulk assets to investors who have the ability to turn those properties into rentals.

The FHFA, as conservator for the government-sponsored enterprises, says investors can now enter the pre-qualification process to establish whether they have the financial ability and property-management capacity to bid on transactions during the initial pilot phase of the program.   

“This is an important step toward increasing private investment in foreclosed properties to maximize value and stabilize communities,” said FHFA acting director Edward DeMarco. “I am grateful for the collaborative effort by the many stakeholders including investors, nonprofit organizations, and state and local government officials, who have worked together on this Initiative.”

Investors who qualify will be able to purchase pools of foreclosed properties for the purpose of turning those homes into rentals.

The pre-qualification process will identify which investors have the expertise to manage the properties and the financial capacity to deal with the homes for a long period of time. Investors who participate have to sign agreements, promising to keep certain aspects of the deals confidential.

Investors who want to pre-qualify, can click here for information.

These congressmen sure get antsy about being investigated by one of their own. From HW:

An investigation by Rep. Darrell Issa, R-Calif., into the Countrywide VIP loan program that allegedly gave connected policymakers in Washington sweetened mortgages has become increasingly hushed in recent weeks.

The “Friends of Angelo” investigation has been waged over three years now. Previous subpoenaed information from members of Congress went to ethics committees in both chambers. But Sens. Kent Conrad, D-N.D., and former Sen. Christopher Dodd, D-Conn., were cleared by the committees of knowingly taking any such loans from Countrywide. Rep. Edolphus Towns, D-N.Y., denied any wrongdoing as well.

“We’re beyond ethics here,” Issa said during House oversight committee hearing September 2009 chaired by Cummings. “We are at a point where the American people at least should know who they gave money to or benefit to, how they did it, and so on.”

Frustrated with a lack of action from the committee — chaired by Towns at the time — Issa requested the panel hold hearings on the allegations rather than deferring to the ethics committee.

In February, as committee chair, Issa issued a subpoena for documents, emails and other information from Bank of America, which bought Countrywide in 2008, regarding past dealings with members of Congress.

But in December, Issa went to the ethics committee with his findings and did not publicly disclose the names of the four lawmakers he found to be allegedly linked to the VIP program. Two Republicans from California, Reps. Howard McKeon and Elton Gallegly, acknowledged being two of the four Issa mentioned to the ethics committee.

No hearings have been scheduled over the findings, and Democrats claim the discovery of Republican links to the program prompted less public proceedings. But a spokesman for the committee said recent revelations have not altered the course of the investigation at all. With a Republican majority in the House, Issa as the committee’s chair can issue subpoenas and conduct interviews on his own accord, the spokesman said, changing the dynamic from when Issa needed to publicly call on members to move the investigation forward.

A spokesperson for McKeon said in a statement that McKeon was “shocked and angry to hear this” and denied ever meeting or speaking to former Countrywide CEO Angelo Mozilo.

In a letter to Issa Tuesday, Rep. Elijah Cummings, D-Md., reversed his earlier stances on the matter and called for more public disclosures from the investigation, even revealing some details from the subpoena. Documents gathered from the investigation show communications between Countrywide executives Stephen Brandt and Maritza Cruz as they prepared McKeon’s documents. Both Cruz’s and McKeon’s signatures are on the documents, according to Cummings.

Cummings also revealed an internal email at Countrywide from Brandt that alleges Mozilo’s role in approving McKeon’s loan. 

“Per Angelo — ‘take off 1 point, no garbage fees, approve the loan and make it a no doc,’” Brandt wrote to staff, according to Cummings’ letter.

In the letter, the Maryland representative also said evidence from the subpoenas show Mike Farrell, a former lobbyist for the Mortgage Bankers Association, directed McKeon to the Countrywide VIP program.

Read the rest of this entry »

Hat tip to JD for this this along, from the wsj.com:

Ben Bernanke lives in a three-bedroom, 2,100-square-foot, attached town house near the Capitol. It has an appraised value of roughly $850,000, not far from the $839,000 he paid for it in 2004. A public record search shows he owes $672,000 on the home, after refinancing his mortgage twice.

One refinancing was in late 2009. The other was in late September, shortly after the Fed announced a new program, known as “Operation Twist,” which aimed to drive down long-term interest rates.

Mr. Bernanke holds a 30-year mortgage. He was required to send proof of employment, including pay stubs, before the bank approved the loan, according to a person familiar with the matter.

After a decade in Washington, Mr. Bernanke doesn’t seem to have been swept up by the nation’s capital.

He occasionally shoots baskets in the Fed’s dreary, underground gym. The closest he came to showing a wild side was when he was a professor at Princeton: He bought a Chrysler Sebring convertible, according to someone who knows him.

On most nights he’s home with his wife, Anna, reading on his Kindle after dinner, say people who know him. In the past 18 months, he has told others, he has read 200 books on the Kindle.

Lately he’s read about pre-World War II Germany, “In the Garden of the Beast,” and a room-by-room guide to a 19th-century British home, Bill Bryson’s “At Home.”

He doesn’t read books about the financial crisis. When asked in September if he had seen a recent HBO movie about it, he said he hadn’t: “I saw the original.”

For more click here:

http://online.wsj.com/article/SB10001424052970204336104577094700478530784.html

Hat tip to Susie for sending this along from the latimes.com:

California Atty. Gen. Kamala Harris is attracting increasing pressure from powerful Golden State players to reject a major settlement with U.S. banks accused of wrongful foreclosures.

Lt. Gov. Gavin Newsom has joined a group of California union leaders, activists and politicians in calling the direction of negotiations “a deeply flawed settlement proposal with the banks at the heart of the nation’s mortgage crisis.”

Harris has emerged as a key player in pursuing the nationwide settlement with major U.S. banks accused of wrongfully foreclosing on homeowners. She has been urged to take a hard line by consumer groups seeking help for homeowners devastated by the mortgage crisis.

A spokesman for Harris, Shum Preston, declined to comment Thursday on a letter by the newly formed group Californians for a Fair Settlement. But last week he said the attorney general is “listening keenly to what the California public has to say on this issue and rigorously evaluating any settlement proposals.”

Harris has been negotiating with the five largest mortgage servicers for months as part of a coalition of attorneys general and federal agencies seeking to hammer out a deal surrounding allegations that banks committed widespread foreclosure errors. Those involved in the talks see Harris’ participation in any settlement as crucial because of California’s size and because so many home repossessions are concentrated in the state.

The letter by Californians for a Fair Settlement, which The Times obtained Thursday, calls on Harris to reject a settlement that lacks significant principal reduction for troubled California homeowners, has overly broad liability release language that would hamper future investigations into bank practices and would require banks to pay about $20 billion.

The group, in its letter, called that amount “outrageous” and “a figure which might not even be enough to cover damages for the state of California, let alone the entire country.”

Other signatures included those of Rep. Maxine Waters (D-Los Angeles); Joshua Pechthalt, president of the California Federation of Teachers; Zenei Cortez, president of the California Nurses Assn.; Richard Hopson, chairman of the Alliance of Californians for Community Empowerment; and Steve Matthews, executive director of Service Employees International Union Local 721.

The pressure comes as foreclosures in California and other parts of the West have begun to surge anew. Significantly more properties entered the foreclosure process during August in the nation’s hardest-hit markets, including battered parts of inland California and other areas in the West, as Bank of America Corp. stepped up its activity in states where a court order is not needed to take back a home.

Hat tip to Daniel for sending this along, from Spiegelonline:

The people who could ultimately give Greece the coup de grace are not the kind to throw stones or Molotov cocktails, and they have yet to torch any cars. Instead, they are people like 60-year-old beverage distributor Angelos Belitsakos, people who might soon turn into a real problem for the economically unstable country. Feeling cornered, he and other private business owners want to go on the offensive. But instead fighting with weapons, they are using something much more dangerous. They are fighting with money.

Belitsakos is a short, slim and alert man who lives in the middle-class Athenian suburb of Holargos. He is also the physical and spiritual leader of a movement of businesspeople in Greece that is recruiting new members with growing speed. While Greece’s government is desperately trying to combat its ballooning budget deficit by raising taxes and imposing new fees, people like Belitsakos are putting their faith in passive resistance.

The group’s slogan is as simple as it is stoic: “We Won’t Pay.”

This business owners’ absolute refusal to pay any taxes resembles an uprising of the ownership class, rather than the working class, a rebellion of the self-employed business owners who have long been the backbone of Greek society. These are not the people who weaseled their way into Greece’s oversized civil service; these are people who put their money in the private sector, working 12-hour days, seven days a week. Or so Belitsakos says.

Standing in his small store, Belitsakos makes a sweeping gesture and says that the people in his movement no longer have a choice. “The state will kill us,” he says. “We’re acting in self-defense.” Then he starts to do the math. Over the last two years, his sales have massively shrunk as 60 of the tavernas and restaurants he used to make deliveries to have terminated their contracts with him. At the same time, the government has raised the value-added tax (VAT) twice while imposing a never-ending series of new fees. He mentions the €300 ($406) one-time fee for the self-employed, a two-percentage-point boost in the VAT, a €180 solidarity levy for the unemployed and a property tax that is “easily a few hundred euros every year.”

The taxes are part of Athens’ last ditch effort to avoid drifting into insolvency and to live up to the promises of austerity it delivered to the European Union. The country’s vast debt means it is already reliant on the steady drip of aid it receives from a €110 billion rescue package passed last year, with a second such package likely to be passed this fall. But each payment from the fund is dependent on progress being made on the effort to clean up the country’s finances.

That progress has been halting at best. In an effort to move the process forward, the government of Prime Minister Giorgios Papandreou has recently announced it intends to cut thousands of more civil servant jobs. And it introduced a controversial one-off property tax which has angered many. Several other taxes and fees have also been introduced.

Belitsakos calls them “charatzi,” a word from Ottoman times that can perhaps best be translated as “loot” or “compulsory levy.” The term is meant to indicate taxes levied arbitrarily and without justification, such as the tithe once paid to feudal lords. “But I can’t and won’t pony up. It’s wrong,” Belitsakos says. “Don’t you understand?”

The situation finally drove Belitsakos to write a letter to the head of the local tax authority in the name of his group. “We see ourselves facing a whole series of new taxes,” he wrote. “We are protesting and enraged.” He went on to charge that the only purpose behind the new fees was the “dispossession and impoverishment” of the Greeks and that he was now forced to resist. Briefly put, he wrote: “We won’t pay.”

Belitsakos says the tax official he handed the letter to was understanding and friendly. The fact that the civil servant put on a brave face might have something to do with all the TV cameras that were present. But, in a place like Greece, it is also entirely possible that the official was simply not all that surprised that someone would announce they were evading their taxes.

As well-known analyst Babis Papadimitriou puts it, the average Greek may well love his country, but he views the state apparatus as a power that one can and should plunder. Papadimitriou says that while the European average for VAT taxes that are evaded is 10 percent, the rate in Greece is roughly 30 percent. About a third of the entire economy happens off tax-authority radars.

These days, even communists, unionists and leftists are raising a public outcry against the new taxes. This week, Aleka Papariga, the general secretary of the Communist Party of Greece, said that the only way to stop the complete bankrupting of the people was for them to not pay the “charatzi.” In fact, financial resistance had now become the supreme civic duty, she said.

In an interview with SPIEGEL ONLINE, Greek Economy Minister Michalis Chrysochoidis said: “The question is how we can create a feeling of solidarity. One for all and all for one, that’s what it’s about now.” Still, Chrysochoidis would not answer his own question. For the moment, he said, it doesn’t look like the government can count on many of their fellow Greeks being willing to sacrifice themselves for the interest of the state. In fact, people are abandoning the government in droves.

Belitsakos, the beverage distributor, can’t and won’t play a role in rescuing his country no matter what. The reason has nothing to do with patriotism. Instead, it has to do with his mistrust of the government in Athens and “international financial capitalism” and the fact that, despite having once studied mathematics, he still can’t fathom the amount of money at stake here.

Belitsakos stresses that his plan is to refuse to pay any and all taxes and fees. If he has to, he says he will either go broke, to jail or both. He is convinced that there are thousands upon thousands who think just like he does and that, in the end, the Greeks will win this battle that they never chose.

The only question is what they really have to win.

From the U-T:

A water agreement between Carlsbad and San Diego County will mean clean drinking water for residents but could ultimately defer some of the city’s redevelopment dreams.

City Council members Tuesday approved a contract with the San Diego County Water Authority to ensure that Carlsbad will keep receiving property taxes from the long-anticipated desalination plant set to be built on its south coast if the county takes over operations within the next 10 years.

A stipulation of a prior contract, however, has been thrown out and the guarantee of a $5.5 million payment from the county to the city’s redevelopment agency has gone by the wayside.

A contract signed in 2005 required the county to contribute nearly $6 million to the city’s redevelopment agency in exchange for some of the rights to the purified water. The terms of the contract approved Tuesday could mean the delay of street enhancements like the realignment of Carlsbad Boulevard, studies into how to lessen the effect of power plants on the coastline and improvements and additions to the city’s boardwalk.

Debbie Fountain, Carlsbad’s housing and neighborhood services director, said the city has not yet decided which projects will have to be halted.

“The city is losing a good degree of those benefits, and it still is a favorable project for the city,” said Mayor Matt Hall during Tuesday’s meeting. “But I am saddened that we lost a lot of the things we had anticipated to be benefits for the city.”

Like other California cities, Carlsbad relies on property taxes to fuel its redevelopment agency, the organization charged with defining blight and eliminating it. That money typically goes toward low-income housing, revitalization of the Carlsbad Village and other beautification projects that dot the city’s landscape.

Read the rest of this entry »

Will Carless continues his investigative report on how the City of San Diego is blowing millions:

In late 2008, as foreclosures flooded the local housing market and the nation’s economy hovered on the brink of meltdown, the San Diego City Council scrambled for ideas to tackle the crisis here.

Desperate to show leadership on a red-hot political issue, it turned to its affordable housing agency for help.

The San Diego Housing Commission responded with a plan: It could buy foreclosures and tackle the city’s epidemic head-on. But the commission, which is overseen by a board of unelected appointees, first wanted to be set free.

The agency wanted to buy properties without the City Council’s approval. Waiting as long as 90 days for the council to approve the bids would unnecessarily delay highly competitive deals that had to be done quickly, the commission argued.

The City Council agreed. At a March 2009 public meeting, it approved a new policy for the agency, handing it the power to spend public money buying property with radically reduced oversight. Given that this was about fighting the foreclosure crisis, Councilmen Tony Young and Ben Hueso reasoned that cutting down on bureaucracy made sense.

“Now we’re actually going to address this issue,” Young said then.

In the two and a half years since that meeting, however, the Housing Commission has rarely used its new power to buy foreclosures.

The agency has bought just eight foreclosed single-family homes and one foreclosed apartment building in that time. That’s 45 units out of 756 units the commission has bought or built since then.

Rather than mopping up after the foreclosure crisis, the agency has instead used its new freedom to spend more than $70 million buying non-foreclosed apartment buildings and lending developers tens of millions of dollars to build new affordable apartments.

The commission has been able to make those deals while bypassing the City Council, avoiding the public scrutiny it once would’ve faced.

Click here for the full story:

http://www.voiceofsandiego.org/public_safety/pavement/article_f7093c46-cdbd-11e0-b20d-001cc4c03286.html

Let’s go slightly off-topic on Friday, and wonder how budget cuts will affect housing in the future. Hat tip to Daniel for sending along this opinion piece from the latimes.com:

It’s a seldom discussed fact how heavily dependent Sacramento is on Washington’s borrowed money.

The same goes for California schools and local governments.

They’re all huge targets as Congress takes aim at federal debt.

It’s unlikely the Obama administration would have defaulted on U.S. Treasury bonds even if Congress had remained gridlocked on debt ceiling legislation. Stiffing bondholders would have irreparably tarnished the nation’s image abroad. Instead, Washington would have slammed it to the states and federal contractors.

That’s the sort of thing Sacramento habitually has done after failing to pass a budget on time. It has stuck it to local governments, schools, nursing homes, vendors — almost anyone except bondholders.

There’s a lot of federal money for Washington to retrieve in state capitols, especially California’s.

The dirty little secret is that California’s current state budget is not $85.9 billion, the size of the much-debated, deficit-plagued general fund. You’ve got to add in the special funds ($34.2 billion) — much of them fed by fees dedicated for specific purposes — plus bond money ($9.4 billion). That totals $129.5 billion, but it still ignores federal dollars.

The real state budget includes an additional $79.2 billion in federal largesse, representing 38% of total state spending. This brings the grand total to $208.7 billion.

So the state of California is getting a nearly $209-billion spending program while putting up less than $130 billion itself.

“It’s extremely significant,” notes state Assembly Budget Committee Chairman Bob Blumenfield (D-Woodland Hills). “If it were not for federal spending and the stimulus package, the recession in California would have been dramatically worse. The impact on schools and state services would have been devastating.”

Read the rest of this entry »

Our old friend Will Carless has completed an investigative report on building affordable housing in SD.

Click here for the full report, and an excerpt:

In Barrio Logan, in the shadow of the Coronado Bridge and under the watchful eyes of the Chicano Park murals, bright yellow backhoes busily cleave away the soil.

It’s here, in one of San Diego’s poorest neighborhoods, that the city will get its newest government-sponsored housing project: the Estrella del Mercado, a 92-unit apartment building that will sit above shops and restaurants and adjacent to a Latino-themed supermarket, all part of the Mercado del Barrio development.

The project has been a long time coming. The community waited for more than two decades while local government agencies put together one deal after another, only to watch those projects fall apart without a single hole being dug or nail being nailed.

The $44 million apartment project will cost an average of $477,743 per unit, 90 percent of which will be paid by taxpayers. That’s twice what private developers say they’re spending to develop high-end apartments in the city today.

A few miles away, in Mission Valley, a private developer said he’s building top-shelf apartments for $225 a square foot. Another developer currently building upscale apartments downtown said his total cost is $275 a square foot.

The Estrella del Mercado apartments will cost $542 a square foot.

Taxpayers have poured almost $600 million into two dozen housing projects in the city of San Diego since 2007. A three-month voiceofsandiego.org investigation showed that, again and again, these projects are wildly more expensive than private developments.

Read the rest of this entry »