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Jason Fitzgerald: Ask Not What Occupy Wall Street Will Do Next; Ask How We Will Change The Status Quo

by Jason Fitzgerald on January 6, 2012

Huffington Post…

“I wonder what Occupy Wall Street is going to do next…” So goes the refrain that punctuates many conversations about Occupy Wall Street today. The refrain marks a quiet, barely acknowledged shift in the Occupy movement’s place within the national imagination. On the one hand, there have been very few headlines to emerge under the OWS. label in the last month or so. Occupy Our Homes and Ports, the fight over Duarte Park, the short-lived re-occupation over New Year’s, and Occupy Iowa have all gotten some attention, but they have failed to recapture the energy of late October/early November. On the other hand, we’ve come a long way since the days when people crowed about the lack of “demands” from the Occupy Wall Street activists. Now they’re a known entity — identified not by policy positions but by a general political attitude and a collection of images and phrases. Some people believe “they” are simply hibernating for the spring, while others expect that the presidential campaign will spark new protests, most likely over the summer. OWS, in other words, has become a character in a reality television show for which many Americans cannot wait for the next episode. Put differently, Occupy Wall Street, and its companion “the 99%,” have become something like brands. I don’t mean to say that the occupation has been corporatized; rather, OWS has become like a brand in a more fundamental sense. A brand is a fact that can be consumed, or that can be used to motivate consumption, because it is not up for debate. A good brand doesn’t raise questions, it simply is. Nike is that shoe company that makes sneakers for athletes and puts a swoosh on everything it sells. Starbucks is that coffee place you can find anywhere with the caffé mochas you love so much. Bank of America is that dependable bank with ATMs all over the city that is (allegedly) way too powerful to go bankrupt. One can have all kinds of arguments over whether Nike, Starbucks, or Bank of America are good or bad, or do good or bad things, but no one is arguing about what they are, exactly. Occupy Wall Street is the people who are fighting the good fight. It is that left-wing activist thing that puts up tents, sponsors rallies, makes YouTube videos, uses the human mic, holds general assemblies, and gets Michael Moore excited. And ‘the 99%’ is the have-nots, the disadvantaged masses, the not-elites, the protagonist in the class war; ‘the 1%’ is the elite, the powerful, the villain. There’s another word for the transformation from an abstract and indefinable collection of facts and interpretations into a concrete and not-up-for-debate “thing” — the process is called reification . Marxists love the word, which is why most people have never heard of it these days, but it’s the key principle behind the making of a brand. And whatever you want to call the brandlike concretization of OWS, it must be acknowledged before engaging in any more serious discussion of politics in 2012. The first step to recapturing the potential of Occupy Wall Street is to resist its reification, and we can do that by remembering that the power of the Zuccotti occupation was in how much it didn’t make sense. A month and a half after the end of the New York encampment, let’s try thinking of Occupy Wall Street not as an organization but as a claim: that private interest is a public problem . It worked like this: Wall Street is a private space that pretends to be a public space (just like Zuccotti Park — the poetry was in the homology). On Wall Street, meaning the stock market, any adult can become a part-owner of a private company, so that the corporate world seems to offer itself to the democratic masses to be carved up according to its whims. But the truth is that the stock market solidifies power for the wealthy few, who, alone, can afford enough shares to hold sway in boardroom meetings — and, by extension, in the halls of Congress via lobbyists and corporate donations. For the rest of us, the stock market is both the lottery and the illusion of influence (assuming we can afford to “play” at all). Still, the health of the stock market is taken to be an indicator of the health of the nation as a whole. Occupying Wall Street means calling the stock market’s bluff: It means shaming the private sector for pretending to be public, and demonstrating that the public good cannot be served by private interest. The reason “demands” were hard to come by in the early days was that Occupy Wall Street’s claim delegitimized the stock market and corporate power altogether. If that were to be taken seriously, the means by which our nation conducts its business would be in jeopardy, and something else — something unknowable in advance — would have to take its place. The immensity of that change might feel like a revolution, but it is necessary for the well-being of America and the globalized world. So Occupying Wall Street was not a crazy scheme that a group of activists did for attention. They did it for us. If the stock market is really going to be a seat of power in contemporary society, then we all have a stake in what happens there. If Wall Street is king, then Wall Street is ours, and the activists were holding our spot. The state knew this, so it dispatched some of its employees to arrest a few of us, to pepper spray a few others, and then, finally, on a cold November night, to throw all of us out. Today, the distribution of power — you could call it the state, the oligarchy, the 1%, the “system,” or whatever — has got what it wanted. Wall Street and Occupy Wall Street comfortably co-exist. Everyone is happy that the good guys are still fighting, regardless of where they are or how many of them there are left. The stock market bell rings every morning, and both state and federal legislators continue to claim the low market numbers and the rising debt as excuses to gut public programs. Occupy Wall Street is another label everyone can wear to a New Year’s Eve party or talk about with their left-leaning friends. And journalists can do their due diligence by covering new Occupy actions as footnotes to the main event: election season. Instead of asking what Occupy Wall Street is going to do next, we should be asking what kinds of public claims can yet be made that will challenge the status quo, that will confuse people by baldly suggesting that private is public, and that everyone, not just those who can buy into the system, matter. We will know that we have succeeded in cracking the brand-status of Occupy Wall Street when we are no longer speaking about “it” and waiting for “them” to do something new. Instead, we will be talking once again about “us.” Jason Fitzgerald is earning a doctorate in Theater and English at Columbia University. This is his second essay on the meaning of Occupy Wall Street, for Off the Bus .

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Jason Fitzgerald: Ask Not What Occupy Wall Street Will Do Next; Ask How We Will Change The Status Quo

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Arthur Bruzzone: Occupy’s major message misfire

by on December 14, 2011

Huffington Post…

SAN FRANCISCO, CA — The Occupy Wall Street message has been effective. They initially chose the right common enemy. The banks and bank bailouts angered not just the student demonstrators. The banks and financial giants generated anger among home owners, those who owe more than their homes are worth, millions who have lost their homes, or watched bank bailouts, or saw their jobs eliminated or threatened by the subsequent recession. Targeting the banks and government bailouts was an effective common theme. But for a second time, Occupy demonstrators have targeted West Coast ports. A total media misfire. Ports are not banks. They provide jobs to minorities, and independent contractors. The demonstrations alienated union dock workers and teamsters delivering containers, and muddled their primary message. Worse, the demonstrations closed the West Coast’s leading job-generating export, the port of Oakland. They were unable to stop work at the primary import ports of Los Angeles and Long Beach. The Occupy movement, or those who participated in effort to close down West Coast ports violated several of Saul Alinksy’s direct action rules: First, find a message and persist. Second, don’t alienate your base; find a common enemy that unites the community. Third, if you’re going to conduct a symbolic demonstration, target the most guilty, not the most accessible. Fourth, don’t cause rifts in the movement – an action must be transparent and draw consensus. Finally, your primary goal must be to turn public opinion in your favor through effective symbolic demonstration. Let’s evaluate the ports action. First, don’t alienate your base, in this case, affected port workers and those who identify with blue collar workers. There are a total of 5,734 trucks registered at the Port of Oakland, according to Chief Wharfinger Chris Peterson. Many of these truck drivers missed out on essential daily wages during the port shut down. Peterson conveyed the reaction of an independent trucker named James, who declined to give his last name, and works at the port of Oakland every day. He said a shutdown will simply back up the work for later in the week. “Right now I work 11 to 13 hours a day, but I will have to work 14 hours,” James purportedly said. The Teamsters Union, which is the largest transportation union in the country and has publicly supported the Occupy protesters in the past, did not support the December 12 port shutdown. “If they shut down the port, then the truck drivers are not going to be working and they won’t get paid. The longshoremen who operate the cranes — they get paid whether the port is open or not,” explained Doug Bloch, the political director of Teamsters Joint Council 7 in Oakland. “It’s one thing to camp out on City Hall and it’s another thing to shut down global trade. We’re in support of going after the one percent, but we need to protect the 99 percent too,” said Bloch. Second, choose the right target for demonstration. “Export Products, Not Jobs” read one sign held at the Oakland port demonstration. But the Port of Oakland is one of the leading export ports on the West Coast. Roughly 57% of Oakland cargo represents U.S. exports, including farm products from the Central Valley. To protest imports, the logical target would be the Southern California ports, Los Angeles and Long Beach. Those ports were hardly affected by demonstrators because the container terminals there are scattered over miles of waterfront within the massive San Pedro harbor. Oakland was easily disrupted, but was the wrong target. Next, demonstrations should unite, not split the movement. Based on posts at the Occupy Wall Street website, the port demonstrations have caused a rift. Examples: From TechD: “It caused several of us to leave Occupy Seattle… the message was good… until this crap happened in California…All they did was hurt the workers, and that is sad…” From TechJunkie: “They’re hourly workers. They missed shifts. They did not get paid. This movement cost workers money. Shutting down the port made it harder for members of the 99% to feed their kids.” Dozens of others question the port action. And finally, to be effective, demonstrations should rally the general populace. Yet, on the same day of the port demonstrations, Gallup released a major poll. An overwhelming 64 percent of people surveyed said big government was the biggest threat to the country, compared to just 26 percent who said big business is their gravest concern, and 8 percent who picked big labor. So, despite months of demonstrations, generally highly focused and broad based, Americans reserve their contempt for government. Not ports. Not even the banks. In summary, if the Occupy movement continues to be hijacked by special interest or splinter groups, they will lose what support they garnered by their persistence and message.

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Arthur Bruzzone: Occupy’s major message misfire

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Martha Coakley: A Stronger Voice for Accountability

December 7, 2011

In the last four years, more than five million people in our country have lost their homes to foreclosure. That’s millions of people who have lost their most valuable possession and seen their families uprooted. It’s caused property values to crater and the number of abandoned properties to skyrocket. It’s caused people to buy less and invest less, their retirement savings to plummet, and millions of jobs to be lost. In short, the foreclosure crisis is at the root of the economic mess we find ourselves in. And just when you think things are starting to turn around, there are millions more families on the brink of foreclosure poised to continue the downward spiral. It is why addressing this foreclosure crisis, and helping people stay in their homes, is the single most important task we face in returning to a healthy economy. This week, as part of those efforts, our office filed a lawsuit against the five major banks to hold them accountable for their serious misconduct in executing unlawful foreclosures against homeowners. Here’s why. Certainly there are many people and institutions that share the blame for this mortgage crisis. Government failed to set the proper safeguards, regulators failed to be an effective watchdog, and people were too eager to purchase homes when their financial situations should have dictated otherwise. But throwing gasoline and a match on this economic powderkeg were the Wall Street firms and large banks that deceptively gave out loans they knew were destined to fail, and then further sold those risky loans for billions in profits. When the economy collapsed, it was the banks that were bailed out by taxpayers, while individual homeowners and investors were left on their own, and they are still taking on water. We’ve now learned that the large banks didn’t even follow the basic rules of law to execute foreclosures. They have admitted to fraudulently signing foreclosure documents, or robosigning. They made deceptive promises to give people loan modifications, and then abruptly changed course and foreclosed on them. And they’ve unlawfully foreclosed on many families in Massachusetts without even holding the mortgage notes themselves. The large banks have charted this destructive path, sending devastating ripples throughout our economy, but yet have resisted real accountability at every stage. Banks may think they are too big to fail, or too big to care about the devastation of their actions, but they are not too big to follow the law. From day one of this crisis, our office has been focused on achieving that accountability. We’ve brought landmark cases for banks’ predatory lending practices, including Fremont and Option One. We’ve also filed three of the handful of securitization cases brought in the entire country, including first-of-their kind actions against Goldman Sachs, Morgan Stanley, and RBS. Overall, our office has secured more than $600 million in relief for Massachusetts consumers and helped keep more than 24,000 people in their homes. Our experience was shaped our approach to the servicing fraud issues that are currently the subject of negotiations between the five major banks and Attorneys General across the country. When the negotiations began, I was hopeful that a strong resolution could be achieved. But the banks have failed to offer meaningful and enforceable relief to homeowners for their deceptive conduct. And they’ve attempted to obtain broad liability relief for seemingly every imaginable unlawful conduct that may have occurred. The banks have had more than a year to demonstrate they understand the full scope of their role in this economic mess, but they have failed to do so. That is why we have filed suit against them and said “enough is enough.” Our suit seeks accountability against the banks for cutting corners and rushing to foreclose without following the rule of law. We are confident in our case, and we are moving forward with our litigation aggressively. Whether through the courts, or through negotiation, we will accept only one result — achieving real accountability for the banks’ misconduct and real relief for Massachusetts homeowners. The large banks haven’t acknowledged the devastation they have caused homeowners and our economy, and they haven’t been listening to us or others who seek accountability. Through this lawsuit, that voice for accountability is even stronger.

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Most Occupy New Orleans Protesters Leaving Park Peacefully

December 6, 2011

NEW ORLEANS — Scores of police officers marched into an encampment of protesters and homeless people across from City Hall before dawn Tuesday, forcing the dozens of occupants out and removing tents in a peaceful eviction that drew loud, sometimes raucous complaints but did not result in violence. “You people are treasonous!” one protester shouted as more than 100 uniformed officers moved through the makeshift camp grounds at Duncan Plaza, a city block of green space that has been home to the loosely knit Occupy New Orleans movement since Oct. 6. City officials had accommodated the protesters for weeks, allowing the tents – some nothing more than tarps or sheets of plastic thrown over ropes strung between trees – to stand unmolested and even providing portable toilets. But New Orleans Mayor Mitch Landrieu had warned Friday that it was time for the around-the-clock encampment to end. Police had been distributing flyers warning that the park could no longer be used as a camp ground and, on Tuesday around 4 a.m., began ringing the park with barricades in preparation for the eviction. The move by police came ahead of a hearing later Tuesday during which a federal judge was to consider a request by protesters to issue a temporary restraining order blocking the city from evicting them and an injunction that would allow them to continue their around-the-clock occupation. Police could be seen escorting some of the protesters out of the camp. One protester was arrested for failure to leave and constructing on a public space, police chief Ronal Serpas said. The man told police he wanted to be arrested, Serpas said. Another man was taken to the hospital complaining of chest pains. There were no signs of the violence that has accompanied other, larger evictions in other cities where the offshoots of the Occupy Wall Street movement have taken hold. “I know that they think they’re doing a good thing because they’re not in here beating us with nightsticks or spraying us with mace. But wrong is still wrong,” said Jasmine Bailey, a spokeswoman for the protesters. But Serpas and other city officials said the protesters were violating the law with makeshift structures in the park and by staying in the park after 10:30 at night. The protesters’ lawsuit says evicting them from the park would violate their constitutional right to peaceful assembly and freedom of speech. Serpas said police have identified 35 homeless people at the camp that they are trying to provide assistance for. The encampment – dozens of tents, an information booth and a covered area where food was served – dates back to an Oct. 6 “Occupy New Orleans” march that drew well over 200 marchers representing a variety of causes. They said they were protesting proposed cuts in Medicare spending, the war in Afghanistan, perceived corporate greed and a variety of other social ills in a spin-off of New York’s Occupy Wall Street demonstrations. Although police in body armor and helmets were on a side street, out of sight of the encampment, the officers moving through the park before sunup Tuesday were in regular uniforms with holstered sidearms. One had a bullhorn and was ordering the park’s occupants to clear out. Once the occupants were out, trash trucks moved in to start clearing debris. Protester Verrick Bills of New Orleans said there was no violence or undue force used by police in the eviction. “They have been very polite, very nice,” Bills said. ___ Associated Press writer Mary Foster contributed to this report.

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Richard (RJ) Eskow: They’re Sacrificing Us to Save Wall Street — But "Occupy Our Homes" Could Change That

December 6, 2011

This week 60 Minutes gave viewers a good look at the widespread criminality that created the Wall Street mortgage boom and led to our ongoing financial crisis. They also saw some of the overwhelming evidence of illegal activity on the part of big banks, and were reminded that none of those banks’ executives have been prosecuted. As ugly as the situation is, there is some logic behind the government’s actions — and its inactions. They’re acting on a tragically incorrect (but internally coherent) set of assumptions that can be summed up in one sentence. It goes something like this: “To preserve the health of the American economy, banks must be allowed to keep preying on their consumers.” That’s it. That’s the logic. But there are two exciting ‘Occupy’ developments this week that could change the equation — ‘Take Back the Capitol’ in the District of Columbia, and Tuesday’s ‘Occupy Our Homes’ events around the country. Think of them as complementary actions: One is taking place at the site of our greatest government power. The other is bringing the action to homes where people have been victimized by bankers. People may not realize it, but there’s power in those homes, too. The Logic of Injustice Despite their destructive behavior, the people who bailed bankers out and are giving them a free pass for their crimes aren’t necessarily evil or corrupt. Well, okay, people like this guy are. But others have merely been so infected by misguided economic thinking that they really believe that the only way to save the economy is to keep shafting consumers and pampering mega-bankers. The thinking goes something like this: Our largest banks are too big to fail, and since we lack the will or the motivation to break them up or regulate them we must protect them at all costs. We’ve propped them up with TARP, quantitative easing, and $7.7 trillion in secret Federal Reserve loans, but they’re still shaky as hell. If we prosecute any of their executives, their stock prices will fall and they’ll collapse again. And they’ll take the entire economic system with them. That leads to some grotesque miscarriages of justice. Nobody at Wells Fargo has been indicted for money laundering, for example, despite the fact that the bank has paid millions to settle charges of laundering cash for the Mexican drug cartels that have murdered more than 35,000 people. As an experienced bank investigator working for the Senate observed, “There’s no capacity to regulate or punish them because they’re too big to be threatened with failure.” The Bailout Nobody Knows And banks don’t just need protection from their own criminality. They also need protection from their own lousy management. Their balance sheets are filled with toxic risks from their long run of incompetence, negligence, and greed. That’s where you and I come in. Some powerful folks are afraid the banks will fail if they’re forced to write off the bad loans on their books, or to stop profiting from loans sold deceptively or irresponsibly. TARP may be over, but there’s another massive bank rescue going on. Who’s funding it? We are. Every time we pay a usurious interest fee on a credit card, we’re propping up the banks. Every time we make another month’s payment on an underwater mortgage, we’re propping them up too. Every time we pay an overpriced consumer loan of any kind, we’re making another payment into the consumer-funded bailout that’s keeping the big banks afloat. It would be great if politicians in Washington stopped using American consumers to subsidize banks that shouldn’t even exist. But they haven’t. That’s where “Occupy Our Homes” comes in. Occupy Our Homes Tuesday, December 6, has been declared a National Day of Action to Occupy Our Homes . Its goal is to focus attention on the corrupt banking practices that led to the mortgage boom and today’s ongoing economic misery for most of the 99 percent. It’s also a day for helping people in our communities who have been victimized by predatory lending, criminal bank forgery, unfair or illegal foreclosure practices, and other bank abuses that victimize the public. Occupy Minnesota has already occupied an illegally-foreclosed home, and plans to do the same thing with another home tomorrow. Here in Los Angeles, where an inspiring victory has already taken place, OccupyLA will help two brave families re-occupy their illegally foreclosed homes . One of those homes belongs to a three-earner family that includes a gainfully employed woman with cerebral palsy named Ana Wison. Ana’s household clearly seems capable of making its mortgage payments, but her bank’s foreclosing anyway. And in one of ironies that have become all too common, the bank in quesion is none other than that Mexican drug cartel money-laundering outfit, Wells Fargo. The Occupy movement hopes to focus the public’s attention on people like Ana Wison. In the words of the Dylan song : “Things should start to get interesting right around now.” Demonizing the Victim Resisting illegal foreclosures is a good first step. It brings attention to Wall Street’s criminality, venality, and plain old inhumanity toward the people they call their”customers” – but treat like serfs. It does something else important: It counteracts the brainwashing, driven by Wall Street and dutifully echoed by the media, which has demonized the victims of bank misbehavior. (We were trying to fight that brainwashing back in 2008, without much luck.) The Occupy movement has already won several battles in that war. If the public’s attention can now be focused on people like Ana Wison, that can be a powerful blow against the Wall Street/corporate media “they deserve it” hype. What about the millions of people who have suffered because of the banks’ predatory mortgage lending but aren’t behind in payments or in the foreclosure process? We need to re-open the debate about the fairness of forcing any underwater homeowners to pay underwater principal on homes that their banks knew, or should have known, were going to decrease in value. After all, the same conglomeration of banks and corporate media that demonize homeowners as “greedy” and “irresponsible” spent most of the last twenty years convincing people that real estate was a sure-fire investment. Banks made an extraordinary amount of money off the bubble they created. The total mortgage amount outstanding in this country went from $6.2 trillion in 2002 to $11.9 trillion in 2009, a meteoric rise. And while banks feed off the Federal Reserve’s unusually low rates, they’ve renegotiating very few home loans. Consumers also owe nearly three quarter of a trillion dollars in credit card debt, much of it being paid at unconscionable rates of 12 percent to 29 percent – while their banks enjoy rates from 0 percent to 3 percent, thanks to the government institutions created by those same consumers. Occupy Our Homes. Occupy Our Credit Cards. Occupy Our Payday Lending … What will happen if consumers stopped blaming themselves? What if they demanded that the banks take responsibility for their irresponsible and/or predatory lending? What if they refused to stop this country’s perverse economic role reversal, where customers have become the ATMs while banks keep making the withdrawals? If 10% of America’s homeowners declared a mortgage strike it would rock the banking world. If everybody paying exorbitant credit card interest declared a moratorium on payments all at once, Wall Street would change forever. Think about it: “Occupy ALL Our Homes.” “Occupy Our Credit Cards … Our Payday Loans … Our Buy-and-Drive Loans …” I’m not saying these are necessarily the right tactics, although they very well may be. But what’s most important is that we understand that consumers have far more power than we usually realize – provided we act together. Many of Washington’s leaders will cringe at the thought, of course. “That could hurt our biggest banks,” they say. It would be tempting to reply, You say that like it’s a bad thing. Here’s a better response: Then start planning to break them up in an orderly fashion. We’re done living a life of indentured servitude just so we can subsidize their greed. Those are the discussions that we should be having. If powerful people on Wall Street and in Washington aren’t worried about Occupy Our Homes , they’re not paying attention. But with any luck, they soon will. ______________________ (If you’ve been a victim of mortgage abuse you can tell your story here . If you want to find an Occupy Our Homes event near you, you can look for one here .)

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Banks May Have Illegally Foreclosed On Nearly 5,000 Military Members

November 29, 2011

Even those people putting their lives on the line for their country may not be safe from the American foreclosure crisis. Ten lenders are reviewing close to 5,000 foreclosures of homes belonging to active-duty service members in an attempt to discover if they were carried out improperly, according to data from the Office of the Comptroller of the Currency, cited by the Financial Times . The OCC’s report is based on projections prepared by the lenders and and their consultants. Bank of America said it is reviewing 2,400 foreclosures of homes belonging to active-duty service members and Wells Fargo said it’s looking at nearly 900 cases. Citigroup is reviewing 700 foreclosures, the bank said. The Servicemembers Civil Relief act aims to protect active-duty members of the military from financial difficulty, including through measures that restrict foreclosures on properties owned by active-duty military members. Still, as the OCC data indicates, thousands of active-duty members of the armed forces have lost their homes while fighting abroad. Bank of America and Morgan Stanley reached deals with the Justice Department earlier this year, agreeing to pay more than $20 million to settle claims that they foreclosed on more than 175 active-duty service members without court orders. They’re not the only ones. JPMorgan Chase also admitted to illegally foreclosing on the families of 27 active-duty military members earlier this year and has very publicly attempted to give the families back their homes or compensate them for damages if the house was sold. The bank also agreed to pay $27 million in cash to about 6,000 active-duty service members who were overcharged on their mortgages, Bloomberg reports. Illegal foreclosures have affected service members like U.S. Army Sgt. James Hurley who lost his house to foreclosure while he was serving in Iraq. Tim Collette said in June that he had been negotiating with JPMorgan Chase since 2008 to save his house from foreclosure while his son was serving in Iraq. Though illegal foreclosures may be some of the most egregious examples of lenders mistreating service members, banks have wronged members of the military in other ways. An October lawsuit claims that 13 banks and mortgage companies charged hidden and illegal fees from veterans trying to refinance their homes.

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Cities Where Mortgages Are Staying Afloat

October 30, 2011

President Obama recently announced he would extend the nation’s mortgage refinancing program in an effort to provide relief to homeowners whose mortgages are worth more than the value of their homes. With 11 million underwater households no one can claim the housing crisis over. However, some regions have survived the crisis better than others. In those areas, home values are either stable or rising, and unemployment is below the national average.

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One Factor Keeping Obama Afloat Ahead Of 2012

September 24, 2011

By KRISTEN WYATT, ASSOCIATED PRESS (AP) DENVER — People like Christine Alonzo are keeping President Barack Obama afloat and giving his political team hope that he can win re-election despite high unemployment and sour attitudes about his policies and the country’s future. Alonzo volunteered for Obama during the 2008 campaign. A few months after Obama’s victory, she lost her job. She’s still looking for work. Instead of blaming Obama for the economic crisis, she’s volunteering full time to help him capture a second term. “It’s tough out there,” Alonzo says. But, the 43-year-old adds, “I don’t think our president’s had enough time to get us back to where we need to be.” She still likes him even though she’s not hot about the state of the country. “He’s got the intelligence, the drive, to get this country back on track.” This is a factor any Republican challenger must consider: Public opinion polls routinely show that Americans like the president personally even though they don’t agree with his policies, even if hurt by them. People who have lost their jobs or homes during Obama’s presidency nonetheless say they want him to succeed and, what’s more, they’re working to help re-elect him because of the affinity they feel for him. “A lot has not been accomplished, we know that,” said Kathleen McKevitt of Jerome, Idaho, who lost her job just before Obama took office and has struggled to find full-time work. “That doesn’t mean we don’t like Obama.” It’s a bright spot in an otherwise dreary political environment for the incumbent. There are fears the country may fall back into a recession. The unemployment rate is stuck at a stubbornly high 9.1 percent. Foreclosures are rampant. The effect on Obama’s job-performance rating: They’ve fallen to the mid-40s, a low point. Democrats acknowledge it could be even worse if not for the high marks Obama gets for who he is compared with the low marks for what he does. “There are a lot of people out there who like the president, who think he is a good, decent person who is trying hard. They may have issues about the economy. They may have issues about the direction of the country. But there are a lot of voters out there who are giving him the benefit of the doubt,” said Mo Elleithee, a Democratic strategist in Washington. “Heading into the election year being well-liked puts him in a good position as he begins to make the contrast with the other side.” A recent Associated Press-GfK poll showed that nearly 8 in 10 people considered Obama a likable person, and slightly more than half said he understands the problems of ordinary people. Even among those who said the United States is headed in the wrong direction, 43 percent had a favorable opinion of the president, 10 points higher than his job approval rating among that group. Obama’s advisers point to his favorability ratings as an asset when the eventual GOP nominee tries to make the case for change in the White House in 2012. “They’re going to tell you that everyone’s left the president, no one likes Obama anymore. They are so totally wrong,” Obama’s national field director, Jeremy Bird, told volunteers in Denver recently. “Yes, people are frustrated with the economy, with jobs. But when they look at the president, the president’s character … they’re all in support,” To be sure, there are plenty of people who are sitting out the campaign this time. Liberal activists have complained about Obama’s handling of issues such as taxes and the government’s borrowing limit. They’ve criticized the president for not being more aggressive with Republicans in Congress. Many said they will focus their energies on state and local races next year. Some supporters recently gathered to be trained by Bird as Obama volunteers in Denver, where Obama accepted the Democratic nomination in 2008 at Mile High Stadium. Campaign staffers reminded them of the affinity they felt for Obama, showing a video of his rousing address to the 2004 Democratic National Convention in Boston. That’s where the future president outlined his compelling life story and said his rise would be possible only in America. The pitch got a nod from 60-year-old volunteer Betsy Daniel of Denver. “When the debt ceiling debate was going on, it was tough sledding,” Daniel said. “But we feel like we’re working for a better America, so we keep going. Sure, there isn’t the same enthusiasm. But I have every reason to believe we’re laying the groundwork for it.” For the president, that groundwork includes a Western visit to keep his fans engaged. Obama, who was scheduled to leave Washington on Sunday, planned to raise money in Seattle and the San Francisco area before a town hall-style event Monday at the Computer History Museum near the headquarters of social networking site LinkedIn in Mountain View, Calif. Additional fundraisers are set for San Diego and Los Angeles before the trip ends with a speech in Denver on Tuesday where he intends to promote his jobs plan. Denver-based political strategist Jill Hanauer said the president has two objectives: convince supporters on the left that he’s serious about pushing tax increases for the rich to pay for his $447 billion jobs plan, while sending signals to independent voters that they should trust him to keep trying to turn around the economy. “If voters feel he’s authentically trying to make things better, that works for him,” said Hanauer, founder of Project New West, a consulting firm with liberal clients. “Some folks can maybe be disappointed in him, but he’s a likable person.” That’s what helps keep McKevitt coming back to him no matter how frustrating the search for full-time work is. She’s moving to Carson City, Nev., this month to volunteer full time for him. “You look at the president, and you see a family man facing a great, great hardship on all fronts. People understand that,” said McKevitt. She lost her editing job at a weekly newspaper that folded shortly before Obama was elected and she recently won a campaign essay contest to have lunch with the president. “People like how reasonable he is, and people feel that. He’s a soul kind of guy, with depth.” Heather Barr of Phoenix, a 41-year-old real estate agent in Arizona, didn’t volunteer for Obama in 2008. But seeing the housing collapse up close compelled her to get involved this time. She lost her home a month ago and is living in an apartment. She doesn’t blame Obama but rather is giving him the benefit of the doubt. Said Barr: “I know things aren’t great. People are concerned, obviously. But what I hear is, people want to give the president more time. This economic trouble that we’re in didn’t happen overnight.” For Deborah Holland of Albuquerque, N.M., a personal feeling of connection to the president overrides thoughts about Obama’s performance and the economy, even with the stress of a precarious job situation. The 50-year-old cobbles together work as a caterer, cake decorator and office manager, even though she has a law degree. “When we first got to know him in 2008, it was evident he came from humble beginnings,” Holland said. “And I think a lot of us can relate to that. We feel comfortable with that.”

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Bank Of America Keeping Bankruptcy An Option For Mortgage Unit

September 17, 2011

Countrywide Financial’s lawsuit losses could compel parent Bank of America Corp (BofA) (BAC.N) to put up the unit on the bankruptcy block, Bloomberg reported citing four people with knowledge of the firm’s strategy. The bankruptcy option exists because the bank maintained a separate legal identity for the subprime lender after buying it in 2008, said the people, who declined to be identified because the plans are private. However, a filing is not imminent and the executives are aware that the move could backfire and cast doubt on the largest U.S. bank’s financial strength, Bloomberg cited the people as saying. Charlotte, North Carolina-based Bank of America has lost more than $22 billion from its consumer mortgage division in the last four quarters, in large part because of loan losses and legal settlements linked to Countrywide. In August, American International Group Inc (AIG.N) sued BofA for over $10 billion, saying the bank was liable for Countrywide’s mortgage bonds as its legal successor. (Reporting by Shravya Jain in Bangalore, editing by Bernard Orr) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Obama Administration Puts Pressure On NY AG

August 22, 2011

Eric T. Schneiderman, the attorney general of New York, has come under increasing pressure from the Obama administration to drop his opposition to a wide-ranging state settlement with banks over dubious foreclosure practices, according to people briefed on discussions about the deal.

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Low Home Prices Mean It’s Cheaper To Buy Than To Rent In Many Cities

August 16, 2011

As the national real estate slump deepens, home prices in many cities have crossed a worrisome milestone. It’s cheaper to buy a home than to rent one in 74 percent of the country’s largest 50 cities, according to the real estate site Trulia — findings that confirm the national epidemic of depressed housing prices remains in full swing. Trulia’s research, which compared the median list price and median rent for two-bedroom apartments, condos and townhomes in America’s 50 largest cities, found that renting is more expensive than buying in dozens of markets, particularly in Miami and Las Vegas, as well as Mesa, New Mexico, and Arlington, Texas. In a minority of cities, including New York, Seattle, Kansas City and San Francisco, it’s still more expensive to buy than to rent. A spate of recent studies have shown that home prices remain low throughout the U.S. Earlier this month, the real-estate company Zillow reported that average prices were down 6.2 percent from a year before , and aren’t expected to touch bottom until 2012. Data from CoreLogic and Case-Shiller showed similar declines between 2010 and 2011. Low home prices are seen as delaying a recovery in the housing market, and by extension a turnaround in the broader national economy. When home values are low, homeowner wealth sinks accordingly, and many consumers end up spending less money than they might in a more prosperous market. Meanwhile, prospective homebuyers are more likely to delay a purchase if they believe prices will continue to fall. On Tuesday, figures from the Commerce Department showed that construction on new homes fell 1.5 percent in July — not as sharp a decline as economists had expected, but still an indication that the housing sector is far from rehabilitated. A number of forces stand in the way of a housing recovery, including high unemployment, falling wages and a growing inclination among homeowners to save for retirement, rather than try to upgrade to a better house. Last month, Morgan Stanley released data showing that the U.S. home-ownership rate is only 59.7 percent if delinquent borrowers are excluded from the count — an all-time low, and one that may herald a nationwide shift toward becoming a “rentership society” instead of an ownership society, a Morgan Stanley strategist said at the time.

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Progress Reversed: Economy Tips Toward Recession With Little Relief In Sight

August 3, 2011

NEW YORK — Three years after the worst economic downturn in generations, the American economy increasingly appears vulnerable to another recession. Months of slow growth and external shocks have wounded the economy to a critical extent, economists say. After Washington lawmakers agreed to raise the nation’s debt ceiling in exchange for hundreds of billions in federal spending cuts over the next decade, investors breathed only momentary relief. They quickly changed focus to the increasingly ugly fundamentals: Gross domestic product is barely growing, the unemployment rate is high, home prices are falling and the manufacturing sector is suffering, with little relief in sight. A stream of data in recent days vividly portrays a sick economy. One more obstacle, experts say, might put an end to growth. “The economy has so little momentum that if something were to happen — if there were some exogenous shock — that might tip us into recession,” said Mark Vitner, a senior economist at Wells Fargo. Many economists say it is too early to write off the fragile recovery, arguing that in such an enormous economy, growth is an almost organic process. Disappointing manufacturing numbers, for instance, do not on their own signal a broader economic slowdown, Ian Shepherdson, chief U.S. economist at High Frequency Economics, said in a recent note. But even the optimistic experts suggest that a prolonged period of slow growth is a likely outcome, even if the United States manages to avoid a second recession. The economic situation may be worse than the headline numbers make it seem. Economic output grew at an annual rate of just 0.85 percent in the first half of the year, the government announced Friday. Growth in the first three months clocked in at a meager 0.4 percent. Officially, at least, the economy is not in a recession. But dig below those numbers, and the outlook is more grim: Seen in relation to population growth, gross domestic product has hardly expanded at all this year, Wells Fargo economists said in a research note Tuesday. By this measure — known as real gross domestic product — growth actually shrank in the first quarter, at an annual rate of 0.4 percent, Wells Fargo said. It then grew at an annual rate of 0.6 percent in the second quarter. Small wonder, then, that the current slowdown feels like an outright recession to many Americans. “If you’re one of the unlucky people who have lost their job and are struggling to find another one, I’m pretty sure that to your mind there’s been no recovery at all,” said Paul Dales, senior U.S. economist at Capital Economics. The unemployment rate has ticked steadily upward for three straight months, reaching 9.2 percent in June. And with more companies planning to lay off workers, economists expect July’s reading to be similarly gloomy. When fewer members of the workforce have jobs, less money circulates through the economy, and general economic progress slows. A job loss can cause a person to default on their mortgage, which can lead to a foreclosure. That in turn can further depress home prices, again weakening the broader economy. In a widely circulated research note this week, Goldman Sachs economist Andrew Tilton described a formula for predicting recession. If the unemployment rate rises to 9.3 percent in July and stays that high in August, that means the economy has either already entered recession, or will do so within six months, Tilton said. Experts see an economy vulnerable to shocks. Bill Gross, who manages the world’s biggest bond fund at PIMCO, said the economy had stalled, in a Tuesday interview on Bloomberg TV . He stopped short of predicting a return to recession, but called the current situation a “tipping point.” Larry Summers, former Treasury Secretary and recently head of the White House’s National Economic Council, said in a Reuters column Tuesday there’s a one-in-three chance the economy will revert to recession, “if nothing new is done to raise demand and spur growth.” Government stimulus programs, such as the payroll tax cut and unemployment benefits, are set to expire at the end of the year. The deficit-reduction deal passed this week doesn’t renew them, instead enacting a decade of cuts. “The economy’s problem remains a lack of aggregate demand,” author Bruce Bartlett, who was a senior policy analyst under President Ronald Reagan, said in an email. “The unwinding of the 2009 stimulus has already had a depressing effect on growth, and any further fiscal contraction from the budget deal will make matters worse.” Economic growth this year will likely average less than 2 percent, said John Richards, head of strategy at Royal Bank of Scotland in the Americas. “Empirically, growth at that level is not a stable long-run point,” Richards said. “You move off it rapidly, in one direction or another.” Financial markets reflect the dismal mood. Stocks have taken a relentless beating in the past couple weeks, with investors eying the fight in Washington over raising the government’s debt ceiling. After days of selling, the Standard & Poor’s 500 Index at Tuesday’s close had erased all of the gains it had made so far this year. If stocks hadn’t risen Wednesday, the Dow Jones Industrial Average would have logged its longest losing streak since 1978, Bloomberg News reported . Perhaps a more telling indicator is the interest rate on Treasury debt, which plunged this week to fresh lows. Yields on the 10-year note fell to the level of early November, when the Federal Reserve was beginning a massive stimulus program, Bloomberg data show . Falling Treasury yields are typically a sign that investors foresee a weak economy, as they clamber for a safe-haven investment. Fears that the Treasury might default, which were hardly reflected in the data to begin with, are now wholly irrelevant, as the darkening economic picture pushes rates down, economists say. Indeed, there’s been little cause for hope in the stream of data released in the last few days. Consumer spending , a key driver of growth, fell in June, the government said Tuesday. It was the first decline in nearly two years. On Monday, the Institute for Supply Management announced that activity in the manufacturing sector hardly increased at all in July. New orders in manufacturing actually shrank, for the first time since June 2009, the ISM said. Manufacturing, used as a gauge for the health of the economy, had been showing strength earlier in the year. But now, that seems to have changed. At Vista Metals, a manufacturer outside Pittsburgh, orders shrank by about 15 percent in June, according to Mark Shelleby, the company’s treasurer. “This may be more of a fundamental decline in demand than just summer doldrums,” Shelleby said. Others in his field see the slowdown as seasonal, he said. But Shelleby insists it’s based on the weakening economy. “I hope I’m wrong,” he said.

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Hemanshu Nigam: Nightmare Renters From Airbnb

August 2, 2011

Until recently, the name Airbnb was not something tossed around in the average news cycle or dinner party. However, since a story recently broke about malicious use of rented property and Airbnb’s apparent woeful management of the crisis, the name is everywhere… and not in a good way. Airbnb describes itself as a company engaged in “unlocking unique spaces worldwide.” Through its web portal, the company allows people the world over to exchange housing, essentially turning private residences into mini-hotels, renting out their homes and finding residences to for short-term rental. The service has proved useful for thousands of successful exchanges but truly atrocious stories are emerging about how this can go wrong. Here’s the short version of what happened. A host (EJ) rented her home to people who contacted her via Airbnb. When she returned, there seemed to be no end to the damage she encountered. There were holes in doors and walls, items from shoes to an iPod were stolen, and her whole home was covered in powdered bleach. They even, allegedly, stole her identity. Soon after, another victim came forward and told his story of horror . While these stories are truly awful, they should serve as a strong reminder for companies and users. (Note that the CEO of Airbnb provided this response to these stories .) Online, we can get lulled in to a false sense of security. We start to think that, because someone signed into a site or setup an account, they must be honest and reputable. This is why it’s critical to always exercise extreme caution when engaging in person with someone you have only met online. In the real world, we would never hand over the keys to our house without some serious ID and references and assurances. The same should be true online. Here are just a few other ways to help you keep yourself and your home safe and secure if you’re using rental sites like Airbnb: • Secure people: Look for ways that security initiatives have been engaged on the site. Does the site offer background checks for renters, in the same way that SitterCity offers them for caregivers? Does the site separate out those who have been vetted from those who have not? • Assurances: Look for ways the site plans to handle ‘security breaches.’ Does the site have a process for compensation in the event of damage? Does the site offer or suggest short-term insurance options to cover loss? • Organization history: Tech start-ups can have a brilliant idea, but don’t always build-in crisis response mechanisms to help a customer. Does the site you’re considering have clearly delineated departments for helping users? Is there a helpdesk that responds to your inquiry? Does the site provide an emergency contact number that is available 24/7? • Check networks: It is ideal if you know the person you are renting to and great if you have mutual contacts who can be references. Since this may not always be possible, does the site provide other mechanisms to allow community vetting? Like so many other online services, rental sites can offer us convenience and help. As consumers, we must ask the right questions so that sites also proactively embrace safety and security.

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Homeowners Associations Cause Trouble In Retirement Communities

July 11, 2011

— The Inlet House condo complex in Fort Pierce, Fla., was once the kind of place the 55-and-older set aspired to. It was affordable. The pool and clubhouse were tidy, the lawns freshly snipped. Residents, push-carts in tow, walked to the beach, the bank, the beauty parlor, the cinema and the supermarket. In post-crash America, this was a dreamy little spot. Especially on a fixed income. But that was Inlet House before the rats started chewing through the toilet seats in vacant units and sewage started seeping from the ceiling. Before condos that were worth $79,000 four years ago sold for as little as $3,000. And before the homeowners’ association levied $6,000 assessments on everyone – and then foreclosed on seniors who couldn’t pay the association bill, even if they didn’t owe the bank a dime. Normally, it’s the bankers who go after delinquent homeowners. But in communities governed by the mighty homeowners’ association, as the sour economy leaves more people unable to pay their fees, it’s neighbor versus neighbor. “What the board is doing is trying to foreclose on people to force people out the door,” says Mike Silvestri, 75, who stopped paying his dues at Inlet House in protest over what he considers unnecessary and unaffordable assessments. He and others say there were cheaper ways to deal with the rat infestation and leaky sewage that led the board to order up a costly plumbing overhaul. “They are bamboozling old people. I’m old, but I’m not senile,” he says. In the past, housing associations have gained infamy for dictating everything from the weight of your dog (one mandated a diet for a hound) to whether you can kiss in your driveway (not if you don’t want a fine). Homeowners’ associations have served as the behavior police, banning lemonade stands, solar panels and hanging out in the garage. One ordered a war hero to take down his flag because of a “nonconforming” pole. Another demanded that residents with brown spots on their lawns dye their grass green. Now, past the faux regal gates, beyond the clubhouses, many property owners in associations owe more than their homes are worth. Some are struggling to pay their bills after they lose a job. Others have had their pay cut. So they’ve stopped paying their association dues. To combat the rise in delinquencies, boards are switching off utilities, garnishing income and axing cable. They are yanking pool passes and banning the billiard room. And, in the most extreme cases, they are foreclosing. “The treacherous part is that homeowners’ associations are acting like a local government without restraints, and they have this extraordinary power,” says Marjorie Murray, a lawyer and founder of the Center for California Homeowner Association Law. Today, one in five U.S. homeowners is subject to the will of the homeowners’ association, whose boards oversee 24.4 million homes. More than 80 percent of newly constructed homes in the U.S are in association communities. And of the nation’s 300,000 homeowners’ associations, more than 50 percent now face “serious financial problems,” according to a September survey by the Community Association Institute. An October survey found that 65 percent of homeowners’ associations have delinquency rates higher than 5 percent, up from 19 percent of associations in 2005. Associations set rules for their communities. They levy monthly dues, typically between $200 and $500, and cover the costs of services that a municipal government usually takes care of: road repair, streetlights, sewage systems. If an association’s budget is strained or major repairs need to be done, the board can levy a “special assessment” on top of those dues. And when one homeowner doesn’t pay those fees, all the other homeowners have to pick up the cost. The rise in delinquencies comes as banks are taking over foreclosed homes and then leaving them vacant more often than ever. Taken together, these shortfalls are resulting in higher fees for all of the other homeowners – and massive financial angst for association boards. Before now, associations rarely, if ever, foreclosed on homeowners. But today, encouraged by a new industry of lawyers and consultants, boards are increasingly foreclosing on people 60 days past due on association fees, says Evan McKenzie, a former homeowner association attorney who is now a University of Illinois political science professor and the author of the book “Beyond Privatopia: Rethinking Residential Private Government.” The government does not keep statistics on how often homeowners’ associations initiate foreclosures. But a nonprofit research group found that association-initiated foreclosures in the Houston area jumped from 500 in 1995 to 2,200 in 2007. Most association-related foreclosures in Texas do not go through the judicial process, so the group’s analysis represented only a fraction of the foreclosures that housing associations have initiated. In exchange for adhering to the rules, homeowners got safe communities with clubhouses, pools and tennis courts. But what many didn’t realize when they bought their homes was that the fine print gave the association the right to foreclose – even over a few hundred dollars in unpaid dues. All the association board has to do is alert its attorney to place a lien on the property to start the process. The home can then be auctioned by the board until the bank eventually takes ownership. Homeowners typically have no right to a hearing. “These are banana republics,” McKenzie says. The problems in some communities are resulting in more scrutiny. In Nevada, the FBI is investigating corruption in elections of association boards. In Utah and Arizona, legislators are trying to pass bills that would root out the use of debt-collectors who are alleged to have used thug-like tactics to strong-arm residents into paying fees. State legislatures in California, Arizona, North Carolina, Texas and Florida have taken up legislation that would clamp down on foreclosures. Not everyone thinks the tactics are out of line, though. “When people are not paying their assessments, they’re not shortchanging some giant multinational corporation. They are taking money directly out of the pockets of their neighbors,” says Andrew Fortin, head of government affairs for the trade group the Community Associations Institute. So the neighborhood feuds are escalating. At Inlet House, one resident claims her fellow senior citizens have turned into vigilantes, vandalizing her car in retaliation for not paying her dues. In all, 17 of the 60 units are in various stages of delinquency. Paul Gray, a fastidious budgeter, paid off his mortgage long ago and paid all but $2,500 of the Inlet House assessment. The association initiated foreclosure proceedings. A few days after he received the foreclosure notice, Gray suffered another stroke, three friends say. Now he is in a nursing home. He has since paid off the $2,500. His home, worth $89,000 in 2006, is for sale for $18,500. In the meantime, the board, facing $172,000 in costs from nonpayers, has had no choice but to raise dues by an extra $50 a month to an average of $375. Between the assessment and increased dues, some residents complain that they pay more than they would to rent a plush oceanfront spread down the street at the posh Fontainebleau condo complex. Association manager Janice Stinnett, who is also an Inlet House resident, says she isn’t to blame, the nonpayers are. “It’s unfair that everyone is paying extra to cover these deadbeats,” she says. The board is continuing to make the plumbing repairs that made the assessments necessary to begin with. It will soon issue another special assessment to cover the costs. To homeowners who opposed the repairs on the grounds that they were too expensive, the entire picture adds up to a crime. Says Silvestri, “What these associations are doing is illegal. It’s a fraud.”

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Underwater Mortgages Are Sinking Home Values:

July 3, 2011

The underwater mortgage problem will probably deteriorate before it improves. Home inventory level is still at an extraordinary high. The Wall Street Journal reports that it would take 103 months to “sell off all the foreclosed homes in banks’ possession, plus all the homes likely to end up there over the next couple years, at the current rate of sales.” The size of that excess inventory, in addition to homes that are for sale under normal circumstance, should keep home prices low for several years. That leaves people with mortgages greater than the value of their homes trapped in a financial vice. And in the following ten states, people are feeling it the most.

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Poll Shows Where Americans Stand On Looming Debt Crisis

June 25, 2011

WASHINGTON — It might be time for another midnight ride by Paul Revere, this time warning “the creditors are coming.” Americans seem not to have awakened to the fast-looming debt crisis that could summon a new recession, imperil their stock market investments and shatter faith in the world’s most powerful economy. Those are among the implications, both sudden and long-lasting, expected to unfold if the U.S. defaults on debt payments for the first time in history. Facing an August deadline for raising the country’s borrowing limit or setting loose the consequences, politicians and economists are plenty alarmed. The people? Apparently not so much. They’re divided on whether to raise the limit, according to an Associated Press-GfK poll that found 41 percent opposed to the idea and 38 percent in favor. People aren’t exactly blase. A narrow majority in the poll expects an economic crisis to ensue if the U.S., maxed out on its borrowing capacity, starts missing interest payments to creditors. But even among that group, 37 percent say no dice to raising the limit. In Washington’s humid air, talk of a financial apocalypse is thick. There are warnings of “credit markets in a state of panic,” as the House Budget Committee chairman, Rep. Paul Ryan, R-Wis., put it, causing a sudden drop-off in the country’s ability to borrow and pushing the government off a “credit cliff.” He was characterizing a report by the government’s nonpartisan Congressional Budget Office that warns of a “sudden fiscal crisis” in which investors might abandon U.S. bonds and force the government to pay steep interest rates and impose spending cuts and tax increases far more Draconian than if default were avoided. The dire warnings appear to be falling on unconvinced ears, at least so far. Call it doomsday fatigue. In recent times, Americans heard that things were going to go haywire with the turn of the millennium, and they didn’t. They were primed for post-Sept. 11 terrorist plots that did not unfold. They’ve seen Congress, a lumbering body that gets fleet of foot at the last minute, come to the brink time after time, only to pull something out of its hat. Recently, a partial government shutdown was averted in that manner. To Robin Knight, 50-year-old teacher from Gilbert, Ariz., who’s trying to stay informed on the debt crisis, Washington’s tendency to cry wolf and stage histrionics on issues of the day isn’t helping. “It should be very easy to understand,” she said, “but I think there are so many skewed views and time given to people screaming that it can be hard to follow.” As during the lead-up to the government shutdown that didn’t happen, tortured negotiations are under way. Republican leaders are insisting on huge spending cuts as a condition for raising the debt limit. This position finds solid support from Republicans in the poll and backing from a plurality of independents. President Barack Obama is pushing for increased tax revenue to be part of the deal, and that insistence led House Republican leader Eric Cantor of Virginia to walk out of the negotiations this past week. About half of Democrats in the poll said the debt limit should be raised regardless of whether it’s paired with a deal to cut spending. The survey found no significant differences by education, age, income, or even by party, in perceptions of whether a crisis is likely if the limit is not increased. There was widespread dissatisfaction with how Obama is dealing with the deficit – a new high of 63 percent disapproval on that subject – and an even harsher judgment of how both parties in Congress are doing on the issue. A deal would permit the government to resume borrowing more than $100 billion a month to pay its bills. Paradoxically – or “perversely,” as Federal Reserve Chairman Ben Bernanke put it – the absence of a deal would not stop the nation’s debt from climbing. Bernanke said the stain on U.S. creditworthiness would drive up deficits simply by saddling the country with higher interest rates on borrowing. Deficit hawks at the Committee for a Responsible Federal Budget say a 1 percentage point jump in interest rates paid by Washington would increase deficits by $1.3 trillion through 2021, essentially adding a year’s worth of red ink. Although people in the poll betray plenty of concern about the debt, the prospect of a calamity-triggering default if the debt deadline is not met in August clearly is not dominating their calculations. The AP-GfK poll, as do many surveys over time, points to a divide in how people see the country and their own lives. The poll was conducted June 16-20 by GfK Roper Public Affairs and Corporate Communications. It involved landline and cellphone interviews with 1,001 adults nationwide and had a margin of sampling error of plus or minus 4.1 percentage points. Although 80 percent ranked the economy as poor, 63 percent also said the financial situation in their own household was good. Also, 70 percent predicted the economy will improve or stay about the same in the next year. A majority says it’s a good time to put money into real estate. Altogether, it’s not unlike the bumper sticker sported on some cars when the world as we know it was supposed to end back in May: “After the Rapture, can I have your car?” ___ AP Polling Director Trevor Tompson, Deputy Polling Director Jennifer Agiesta, News Survey Specialist Dennis Junius and writer Stacy Anderson contributed to this report. ___ Online: Poll results: http://www.ap-gfkpoll.com

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Housing Recovery Begins When Foreclosures Turn To Closings

June 17, 2011

Before anyone starts talking about a housing recovery, the conversation needs to shift from foreclosures to closings. For months, the only “good news” out of the relentlessly stagnant U.S. housing market has been reports that foreclosures are slowing. On Thursday, for instance, RealtyTrac reported that foreclosure filings in May fell for the eighth straight month and are down 33% from a year ago. But that was inevitable given the fact that there is a finite number of homes in America and record numbers of foreclosures were filed in 2009 and 2010 as homeowners struggled to pay their mortgages during the worst of the recent financial crisis. Simply put, it was almost statistically impossible for the number of foreclosures to keep rising. The numbers eventually had to go down so there’s really nothing positive to glean from these figures. Barry Bramlett, president of Equity Depot LLC, which compiles real estate data in Georgia, compared the steady decline in foreclosures to an army that on each successive day of a battle loses fewer soldiers. “You start out with a large number of soldiers and on the first day of battle a large number are lost. The next day there are fewer soldiers to lose so fewer are lost, and so on and so on,” he said. A battle with lots of casualties seems an apt metaphor for the current housing market. And there doesn’t seem to be any end in sight for this war. Last week Ara Hovnanian , CEO of the giant homebuilder Hovnanian Enterprises (NYSE: HOV), sought during a conference call with analysts to ease concerns that the prolonged housing slump was taking a heavy toll on his business. He said at one point, “We remain confident that we have the liquidity to weather the remainder of this downturn, and will continue to position ourselves in preparation for the inevitable housing recovery.” But when is inevitable? No one seems to know. Jay Butler, an associate professor of real estate at Arizona State University, said it all depends on your definition of recovery. According to Butler, for many Americans recovery will mean that their mortgages are no longer ‘underwater,’ an increasingly common predicament in which homeowners have seen the value of their homes fall so much that they owe more than their home is worth. Underwater mortgages have been cited as a primary reason so many homeowners have defaulted on their loans, forcing foreclosure. The thought being, why continue to make monthly payments on a $400,000 mortgage when the house is now worth only $300,000?  Underwater mortgages have also cut into the housing market because homeowners who owe more than their homes are worth can’t sell without incurring significant losses. Butler said that, for others, the key to a recovery will be when “the housing market is driven by owner-occupants, not foreclosed properties.” “Typically, when one thinks of housing the main theme is people wanting to buy a place for their family. Now, foreclosures are the dominant force,” he said. Butler said recovery could be “many years down the line” in hard hit areas of the country such as Phoenix. In less beleaguered regions such as Texas, perhaps not as long, he said. There are many obstacles that need to be overcome, some of them specific to the industry itself as the pendulum has swung sharply from the lax lending standards of a decade ago to a markedly different lending environment today. Now, potential homeowners face increasingly tougher loan-qualification guidelines, lower limits on U.S. Federal Housing Administration-backed mortgages and higher down-payment requirements. While a common-sense approach to lending might have avoided the catastrophic fallout from last decade’s housing bubble, the sharp turn in the other direction is now acting as an impediment to lifting the housing market out of its doldrums.   The rest of the economy isn’t helping either. “It’s been two-and-a-half years and we’re still heading down,” said Steve Palm, president of Smart Numbers, an Atlanta-based real estate data firm. That trajectory isn’t expected to change if unemployment continues to hover above 9%. “Housing will not lead us out of this thing,” said Palm. “We’ve got to get businesses to start hiring.” A significantly reduced unemployment rate is widely seen as the lone economic index that could single-handedly affect the housing market. But in lieu of that unlikely scenario it will take jumps in a range of housing-related data points — sale closings, homes under contract, building permits, etc. — before anyone is convinced the housing market is turning around. Bramlett said none of those numbers is likely to move higher while a huge glut of housing inventory remains. “Nothing is going to change while there’s that glut,” he said. “Until that changes I don’t see anything driving any prices upward.” But jobs are the key. High unemployment bleeds across all sectors of the economy and has impacted housing in particular. Said Bramlett: “There is no mobility right now, people aren’t moving for jobs. It used to be that when you got a better job you got a better house. Now no one is getting that better job so they’re not moving into that better house. It’s unchartered territory at the moment.”

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theGrio: Dream of black home ownership fading

June 10, 2011

After peaking at 50 percent in 2006, the African-American homeownership rate has now fallen to 44.8 percent, Census Bureau data show. By comparison, the homeownership rate for whites in the U.S. is 74.1 percent, and the nation’s overall homeownership rate currently stands at 66.4 percent.

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Nearly Half Of America Says U.S. Nearing Great Depression: CNN Poll

June 9, 2011

Some economists might be worried about a double-dip recession, but a large number of Americans have an even worse scenario in mind. Approximately 48 percent of Americans say they think that a Great Depression is either very or somewhat likely to occur within the year, according to a CNN Opinion Research Poll , the highest percentage of respondents that have stated that level of certainty since CNN first started asking the question in October 2008. Respondents’ fear that they would soon become unemployed also spiked to an all-time high of 30 percent. That stands in contrast another post-recession low: the 18 percent that said they either recently became unemployed or are related to someone who recently became unemployed. The seeming contradiction might be explained by the average length of unemployment now hitting an all-time high, as The New York Times recently reported. That Americans seem apprehensive about their economic futures should not be surprising considering the recently lackluster job creation. Last month, the private sector created only 54,000 net jobs while public sector employment actually saw a net decrease in jobs, according to the Bureau of Labor Statistics . Housing prices have also continued to fall , reaching new lows during 2011′s first quarter according to Standard & Poor’s/Case-Shiller Index . Confidence in the future is essential for economic growth, says economist Thomas Boston. “If you are concerned about job security, you are not likely to make the purchase, no matter how low interest rates might be,” Boston wrote in the online publication Black Enterprise . “The same logic holds for business owners deciding whether to undertake a new investment.” The high percentage of Americans that say they believe that there will be an economic depression should raise alarm bells in and of itself, says CNN polling director Keating Holling. “That’s not just economic pessimism,” Holling told CNN, reflecting on the polling results, “that’s economic fatalism.”

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Will success spoil Crown Heights? | Real Estate Foreclosures – For …

June 5, 2011

Will success spoil Crown Heights? Posted On Sunday, 05 Jun 2011 By Everything Real Estate – Crain’s New York Business . Under REAL ESTATE NEWS. Will success spoil Crown Heights? Nizjoni Granville has called Crown Heights home for 30 years, but her time there may be running out. … Laura Shin – Blue Wolf Capital Partners :Charles P. Miller, 50, has joined the private equity firm as a partner , responsible for originating opportunities and managing portfolio companies. …

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Labor costs may change construction industry | Real Estate …

June 5, 2011

Labor costs may change construction industry. Posted On Sunday, 05 Jun 2011 By Everything Real Estate – Crain’s New York Business . Under REAL ESTATE NEWS. Labor costs may change construction industry …. Laura Shin – Blue Wolf Capital Partners:Charles P. Miller, 50, has joined the private equity firm as a partner, responsible for originating opportunities and managing portfolio companies. He was formerly an equity partner at Patton Boggs.Manhattan Moto. …

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Boehner’s Big Foreclosure Problem

June 2, 2011

Regina Moore has lived in her Hamilton, Ohio, home, in the heart of House Speaker John Boehner’s district, for 50 years. Her husband passed away in 2005, and in 2008 she took out a new $72,000 mortgage so she afford to pay her medical bills. She had a steady job, having worked at the Champion Printing Company in Cincinnati for more than two decades. Her monthly payments on her $86,000 home amounted to about $450. It was a simple mortgage for a simple home — no exploding payments or swimming pools. But last year, at the age of 70, Regina lost her job, and her $1100 a month Social Security payment wasn’t enough to make ends meet. She called her son, Jeff, who works three part-time jobs, to ask for help. “She had a mortgage on her home and just couldn’t afford to pay the bills anymore,” Jeff said. “She went through a period where she was embarrassed. She didn’t want to say that she couldn’t get a job or couldn’t pay her mortgage. And finally it got to a point where she was facing foreclosure and called me.” While Jeff, a local housing group and a lender ultimately helped Regina modify her mortgage so she could stay in her home, many of her fellow Ohioans haven’t been so fortunate. Hamilton, about 45 minutes outside of Cincinnati, has one of the highest foreclosure rates in Butler County. And Butler County has been a foreclosure hotspot for years. Along with the Cleveland and Columbus areas, Cincinnati and its surroundings have seen the predatory subprime binge come and go and now watch as the crumbling job market pushes more and more homeowners into financial ruin. In February, Butler County featured the highest foreclosure rate of any county in Ohio, according to RealtyTrac data. In March, it had the second-highest rate. “In the beginning, we really saw more loans that we thought had predatory features,” said Sister Barbara Busch, a Catholic social justice worker who serves as Executive Director of a Cincinnati-based homeowner advocacy group called Working In Neighborhoods that does extensive work in Butler County. “When we first started doing this, I would say 70 percent of the people who came through for counseling were in the subprime market. But in 2008 and 2009, it started slanting toward option-ARMs, and then in 2010 we saw a large number of unemployed, where the loans themselves weren’t so bad, but people had just lost their jobs.” Others who work with struggling homeowners say the same thing: The initial wave of mortgage problems was due to people unable to manage exotic or high-risk mortgages, but the current problem simply involves people losing jobs in a weak economy who can’t pay their bills. “In certain communities in Butler County there was a fair amount of predatory lending,” said Stephanie Moes, an attorney with the Legal Aid Society of Southwest Ohio. “But most recently, it’s homeowners who are still struggling with the economic downturn. These are homeowners who have done everything right in the sense that they were careful about the kind of mortgage they got, they didn’t buy a property they couldn’t afford, but now they’re facing long-term unemployment.” THE SPEAKER IS SILENT Over the past three years, lawmakers across Ohio have pressed for foreclosure relief, often crossing party lines to do so. But Boehner has never joined the effort. When Rep. Steve Chabot, a fellow Republican whose district borders Boehner’s and shares many of its economic hardships, backed a 2008 bill to grant relief to homeowners in bankruptcy courts, Boehner refused to sign on. When Democrats passed a separate foreclosure prevention bill later that year, Boehner blasted it as ” a bailout for scam artists and speculators .” When banks briefly halted foreclosures amid the robo-signing scandal last November, President Barack Obama vetoed a bill that would have made it easier for banks to push through improper foreclosures and harder for homeowners to show they had been wronged. Boehner, along with 168 Republicans and 16 Democrats, embarked on a failed effort to override that veto, even at a time when Ohio’s own Attorney General had begun suing banks for fraud. Boehner is rarely pressed on housing issues publicly, even though the foreclosure crisis marches on unabated. While his office declined multiple invitations to comment for this story, the House Speaker made the case for his opposition to foreclosure aid in a recent appearance on CBS News’ Face The Nation. “Over the last couple years, Congress has really set up four programs to help with those mortgage problems,” Boehner told CBS’ Harry Smith . “And unfortunately, none of those have worked. And all they’ve really done is dragged out the length of time for the market to clear the problems.” The argument holds for programs like President Barack Obama’s Home Affordable Modification Program (HAMP), which anti-foreclosure activists have long criticized for being overly reliant on big, reluctant banks to implement it. Still, in many housing markets — especially in Ohio, and especially within Boehner’s own district — there is simply nothing left for “the market to clear.” Regina Moore’s $86,000 home isn’t an anomaly in the region, even though it’s worth much less than the median U.S. home price of $169,900, according to Zillow data . Ohio never experienced the rabid run-up in home prices that states like Florida and California went through, but its foreclosures drive down home prices further than any other state. The average Ohio foreclosure in 2010 sold for 43 percent less than an ordinary home sale, a discount more than 50 percent below the national average, according to RealtyTrac data . Today, the average foreclosure sale price statewide is $77,795. “If people are trapped in houses where they can’t pay their mortgage but can pay something, you can prevent areas from becoming desolated by foreclosed and abandoned homes, which drive down prices for everyone,” said economist Dean Baker, co-director of the Center for Economic and Policy Research, a left-leaning research group. Boehner’s job as House Speaker includes partisan duties beyond Ohio’s eighth district, a southwestern swath of the state that encompasses six counties from the Cincinnati suburbs to sparsely populated farmland. Boehner is also tasked with leading the GOP’s Congressional agenda and spearheading a host of corporate fundraising efforts critical to the party’s campaign operations. As foreclosures have steadily ravaged the eighth district, Boehner has raked in millions of dollars in campaign cash from the financial sector. And Boehner consistently votes with Wall Street on major policy issues. He voted in favor of the bank bailout in 2008, and opposed financial reform legislation in 2009 and 2010, even as he socialized with such major financiers as JPMorgan Chase CEO Jamie Dimon in an effort to raise campaign cash. Over the course of his career, Boehner has raised $4,261,340 from the finance, insurance and real estate industries, according to data from the Center for Responsive Politics. In the first quarter of 2011 alone, after Boehner became Speaker of the House, his fundraising operations secured $638,742 from the same sector for his campaign, his political action committee and then the Republican Party, according to data compiled by Paul Blumenthal of the Sunlight Foundation. MODIFICATION MORASS When Jeff Moore learned about his mother’s mortgage problems, he contacted a foreclosure counseling group called Empowering and Strengthening Ohio’s People , which helped him apply for relief from a new program called Restoring Stability. The program uses the state’s Housing Finance Agency to provide up to $15,000 to help struggling borrowers catch up. Restoring Stability is one of seventeen foreclosure relief programs working with money from the Hardest Hit Fund. Drawing from a small portion of the federal funds allocated for the 2008 bank bailout, HHF lets state governments devote funding to helping homeowners avoid foreclosures. And unlike other TARP programs, including Obama’s HAMP initiative, the Ohio government actually requires banks to sign a legally binding contract with the state, creating clearly defined obligations: the bank gets money, but the mortgage must be modified. It took seven months, but the program worked for Regina Moore. Central Mortgage, Moore’s lender, cancelled her foreclosure and agreed to a plan that will keep her from losing her home. Housing counselors in Ohio say that Restoring Stability is, in many ways, an improvement over HAMP. While it still relies on banks to follow through with modifications, the state’s Housing Finance Agency processes paperwork to determine whether a borrower qualifies for the program or not. That prevents banks from losing key documents, botching the analysis or using the modification process to abuse borrowers with predatory fees (all common complaints from borrowers working with HAMP). But the program has serious flaws. Jeff said he couldn’t understand why it took seven months for his mother’s paperwork to be approved. It wasn’t terribly complicated, he said; either the numbers worked, or they didn’t. The program’s managers acknowledge the slow start. While they began accepting applications for aid in September, they were unable to actually help anybody until they had worked out legal agreements with different banks. “We were overly optimistic about how fast we could get this up and running,” said Cindy Flaherty, director of homeownership for the Ohio Housing Finance Agency. Restoring Stability managers have spent much of this year automating software to allow applications to be processed faster. Things do seem to be picking up speed: After approving aid to 400 borrowers in the first three months of the year, another 400 received help in April. The program currently has 1,000 more approvals in the pipeline. Even the Moores’ seven-month process compares very favorably to HAMP. According to a new report from the Government Accountability Office, it takes about half of HAMP borrowers more than seven months just to hear if they’ve been approved for a trial modification, which doesn’t include the time it also takes for the actual trial modification offer to be put through or for borrowers to secure permanent mortgage relief. But the biggest problem with Restoring Stability isn’t its sluggish start. It’s the basic design of the relief borrowers receive. Regina Moore will get about $12,000 to make up for missed payments, and the Ohio Housing Finance Agency will cover all of her mortgage payments for six months. When that six month period is up, Regina will have to work out a permanent modification plan with her bank. So far, the Moores say their bank, Central Mortgage, a division of Arvest Bank, has worked with them and has been cooperative with the modification efforts. Central Mortgage said the Restoring Stability program was “a helpful tool” for keeping borrowers in their homes. “I really don’t have anything bad to say about Central Mortgage,” Jeff Moore said. “They just wanted to get their loan paid. She really wasn’t being taken advantage of, she just couldn’t afford to pay her bills.” Ohio, like 26 other states, requires banks to obtain a court order to foreclose. It’s a protection for borrowers that helps prevent banks from evicting the wrong families. If you want to challenge a foreclosure, you can. But you need a lawyer, and families on the brink of losing their homes often can’t afford attorney fees. “In Ohio, a homeowner is a party to a court case in a foreclosure, and naturally, it’s difficult for anyone to proceed in a court case without a lawyer,” said Aneel Chablani, director of advocacy with Advocates for Basic Legal Equality , a legal aid group based in Toledo, northeast of Boehner’s district. Chablani says that ABLE’s five in-house attorneys can handle about 20 foreclosures at a time free of charge to homeowners, nowhere near enough to tackle the thousands of cases they are asked to represent each year. Last year, the Treasury Department’s lawyers determined that the 2008 bank bailout legislation forbade the use of federal bailout funds to cover distressed borrowers’ legal costs even though banks and hedge funds have been allowed to use bailout money for their own legal costs. For homeowners, a lawyer can be the difference between keeping their home and losing it. Even Jeff Moore had to hire an attorney to clear his foreclosure with the helpful Central Mortgage, and he’ll almost certainly need legal help when it comes time to negotiating a permanent deal with the bank for his mother. Big banks, by contrast, are frequently combative throughout the entire foreclosure process. The Legal Aid Society of Southwest Ohio (LASSWO) is currently suing Bank of America on behalf of 12 families, including at least one in Boehner’s district, for filching on loan modification agreements that it made during an October 2009 in-person “borrower outreach” program in Cincinnati. The Treasury Department sponsored the event as part of its HAMP program. After detailing a modification for the borrowers, Bank of America employees promised the families that they’d receive final paperwork in a few weeks, according to lawyers for LASSWO. When the homeowners didn’t hear back, LASSWO checked in with Bank of America. The lender denied attending the event, according to LASSWO, which filed a lawsuit against the bank last summer on behalf of the families. The suit hasn’t been resolved, and Bank of America declined to comment for this story. The company’s political action committee and its employees have donated $42,825 to Boehner’s political projects since the lawsuit was filed, according to the Sunlight Foundation. “It’s next to impossible to have a constructive discussion with a bank or a loan servicer, especially if you don’t have a lawyer available,” said Mary Asbury, executive director of the Legal Aid Society of Greater Cincinnati. In December, in what may well prove to be the final major foreclosure relief vote on Capitol Hill, Congress voted on allowing states to use Hardest-Hit Funds on legal aid. Ohio and the other states weren’t requesting more money, they were asking for some of the funds they had already been granted to be approved for legal aid, effectively overturning the Treasury’s opinion on the matter from last year. At the final hour, Treasury Secretary Tim Geithner even lent his support to the bill. Legal aid funding is a key lynchpin for ensuring that borrowers get long-term relief, but it amounts to peanuts in comparison with the $700 billion TARP legislation. Ohio only wanted $5 million of its $570 million funding to go toward legal fees. Nevertheless, the vote failed. “It was a huge disappointment,” said Asbury. And the vote failed even though six Republicans crossed the aisle to support the plan; two from Florida, one from Alaska and three from Ohio. Ohio Republican Rep. Steve LaTourette, who declined to comment for this story, even worked the floor as he tried to win over more Republican supporters. According to Democratic aides, Boehner was a top target for support. Knowing that his district and his state were facing serious foreclosure trouble, they actively courted the GOP leader, hoping that on this issue, at least, they might be able to win him over. If the top House Republican backed the bill, others might join, so the thinking went. But Boehner rebuffed efforts to divert some of that federal funding to help borrowers in foreclosure litigation. As the vote approached, Boehner’s spokesman, Michael Steel, launched a broadside against the entire effort. “This bill re-opens the TARP bailout fund for ‘legal aid’ programs, which could result in millions of taxpayer dollars being pumped into groups similar to ACORN,” he told HuffPost . The Hardest Hit Fund is, nevertheless, moving forward. So far it has spent only about one percent of its total funding authorization of its $570 million budget. With its current funding, the program could deliver help for up to 60,000 homeowners in Ohio, provided that banks continue to cooperate. But much of that relief may ultimately be short-lived without legal assistance for borrowers. And Ohio needs all the help it can get. “The foreclosure problem is just symptomatic of what’s going on with the economy,” said Jeff Moore. “I watch the news channels, I read a ton on the internet and I hear that things are rebounding and the economy’s getting better. But it’s not good. The economy is not in good shape.”

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Student Housing Gains Respect » Commercial Real Estate » FeedRE

May 31, 2011

The 28-year commercial real estate broker specializes in the sale and joint venture of retail, office and ground up development in Southern California. Algermissen… Investors Jump Back Into Rebounding Hotel Market …

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Real Estate | Gauntlet Commercial Real Estate Capital Closes $6 …

May 31, 2011

“We are looking for equity investors and property owners in downtown Los Angeles to possibly joint venture with or who are looking to sell,” said Elzufon.Gauntlet Commercial Real Estate Capital is a boutique investment …

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Coldwell Banker Commercial NRT: Jason Toll | Florida Real Estate …

May 30, 2011

… built small bay warehouses and invested in existing industrial projects through equity partnership . Toll, who has over 13 years of experience in the real estate industry and is a graduate of the University of Central …

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Grubb & Ellis Receives Listing Standards Notice from NYSE

May 25, 2011

    SANTA ANA, CA (May 25, 2011) – Grubb & Ellis Company (NYSE: GBE), a leading real estate services and investment firm, today reported that on May 19, 2011, it was notified by the New York Stock Exchange that it is not currently in compliance with the NYSE’s continued listing standards, which require an average market capitalization of not less than $50 million over 30 consecutive trading days and shareholders’ equity of not less than $50 million.     The company intends to notify the NYSE that it will submit a plan within 45 days from the receipt of the NYSE notice that demonstrates its ability to regain compliance within 18 months.   Upon receipt of the company’s plan, the NYSE has 45 calendar days to review and determine whether the company has made a reasonable demonstration of its ability to come into conformity with the relevant standards within the 18-month period, or whether it will require the company to do so within a lesser time period.   The NYSE will either accept the plan, at which time it will specify the applicable time period within which the company has to come into compliance.   Thereafter, the company will be subject to ongoing monitoring for compliance with this plan.   Alternatively, should the NYSE reject the plan, the company will be subject to suspension and delisting proceedings. The company’s business operations, SEC reporting requirements and debt instruments are unaffected by the notification.   During any cure period, the company’s shares will continue to be listed and traded on the NYSE, subject to its compliance with other NYSE continued listing standards, and a “.BC” indicator will be affixed to the GBE ticker symbol.   The company previously announced in April that it had been notified by the NYSE that it was not in compliance with the NYSE’s continued listing standard as the minimum average closing price of the company’s common stock fell below $1.00 per share for over 30 consecutive trading days.   The company is in the process of developing a plan to comply with this continued listing standard as well.   In March, Grubb & Ellis announced that it had engaged JMP Securities to explore strategic alternatives, including the potential sale or merger of the company.   Contact : Janice McDill, Phone: 312.698.6707                                       Email:   Janice.mcdill@grubb-ellis.com           

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EastGroup Properties Announces 126th Consecutive Quarterly Cash Dividend

May 25, 2011

JACKSON, MS, May 25, 2011—EastGroup Properties (NYSE-EGP) announced today that its Board of Directors declared a quarterly cash dividend of $.52 per share payable on June 30, 2011 to shareholders of record of Common Stock on June 17, 2011.   This dividend is the 126th consecutive quarterly distribution to EastGroup’s shareholders and represents an annualized dividend rate of $2.08 per share. EastGroup Properties, Inc. is a self-administered equity real estate investment trust focused on the development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States with an emphasis in the states of Florida, Texas, Arizona and California.   Its strategy for growth is based on its property portfolio orientation toward premier business distribution facilities clustered near major transportation features. EastGroup’s portfolio currently includes 28.3 million square feet. EastGroup Properties, Inc. press releases are available at www.eastgroup.net .   For more information, please contact: David H. Hoster II (top right photo), President and Chief Executive Officer, (601) 354-3555 or N. Keith McKey, Chief Financial Officer, at same number.

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Marcus & Millichap Capital Corp. Arranges $9.3 Million Multifamily Refinancing Loan

May 25, 2011

ANAHEIM, CA – Marcus & Millichap Capital Corporation (MMCC) has arranged $9,370,000 in refinancing for an 84-unit multifamily property in Anaheim. Rick Padilla (top right photo) , a senior director in the firm’s Long Beach office, arranged the financing. “Before coming to MMCC, the borrower was turned down for refinancing by half-a-dozen lenders, including his existing lender,” says Padilla. “He was told that his property’s rents were above market, that the property was not of agency quality and that his net worth, liquidity and experience were insufficient to qualify for an agency refinancing loan.” “MMCC’s longstanding relationships with agency lenders, and our ability to draw upon market data produced by Marcus & Millichap’s local investment sales agents and research department, helped overcome these hurdles and meet our client’s objectives,” concludes Padilla. The loan is for 10 years, amortized over 30 years with a fixed interest rate of 5.75 percent. The LTV is 75 percent.   Press Contact : Stacey Corso, Marcus & Millichap Capital Corporation (925) 953-1716   www.mmCapCorp.com

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Robert Scheer: Access Journalism: The Movie

May 25, 2011

It is not true, as a Wall Street Journal reviewer claimed, that the HBO movie version of Andrew Sorkin’s book Too Big to Fail was “Too Boring to Watch.” On the contrary, the problem with the film, featuring excellent acting and taut direction, as with the richly anecdotal book, is that it is all too effectively misleading. Fortunately, if viewers have already watched Inside Job , the spot-on Academy Award winner, they will not be led too far astray by this film’s adulation of the likes of Henry Paulson and Timothy Geithner. Paulson is portrayed as an eminently decent man, troubled by the imperfections of the TARP bailout, and when he throws up off camera in one scene it is not at all suggested that perhaps he could be disgusted that the misery he brought to the world had left him a billionaire. When he resigned his position as head of Goldman Sachs to become treasury secretary, he cashed in $485 million in Goldman stock and was saved from a $100 million tax liability because he was entering government “service.” The film barely mentioned that Paulson was the head of Goldman Sachs when his company deceptively packaged and sold the collateralized debt obligations (CDOs) based on the subprime and Alt A mortgages that proved so toxic. As Paulson concedes in his memoir, after George W. Bush appointed him treasury secretary, the president asked plaintively as the economy was crumbling: “How did this happen?” In Sorkin’s book, it is stated that the treasurer “disregarded the question, knowing that the answer would be way too long.” But in his memoir, Paulson provides a clearer insight: “It was a humbling question for someone from the financial sector to be asked — after all, we were the ones responsible.” No such honesty has yet emerged from Geithner, who was an undersecretary of the treasury during the Clinton years, when he worked closely with his bosses, first Robert Rubin and then Lawrence Summers, to pass the radical deregulation hinted at but never fully explained in either the Sorkin book or the film. There is scant reference to the obliteration of the Glass-Steagall Act, a repeal that permitted the too-big-to-fail merger of companies such as Travelers and Citicorp, which became Citigroup — a company that had to be bailed out with $50 billion in taxpayer money. Nor is there any reference in the film to the fact that Rubin, mentor to both Summers and Geithner, went on to help run that new megabank at a salary of $15 million a year. Geithner, who later became head of the New York Fed, a job obtained with the effusive recommendations of both Rubin and Summers, worked to salvage Citigroup from the mess its packaging of toxic mortgages had created. Geithner is lionized in both Sorkin’s book and the film version. As Nancy deWolf Smith put it in the Wall Street Journal : “Some viewers who remember the book may be galled again by the portrayal of certain characters. For instance, Timothy Geithner (Billy Crudup), then president of the Federal Reserve Bank of New York, still comes across as a blameless saint and Wunderkind with a compassionate finger on the pulse of the victimized ordinary man.” The fawning in the book is embarrassing, as in the description of Summers and his treasury assistant in the Clinton years going off to tennis camp, with Sorkin noting, “Geithner, with his six-pack abs, had a game that matched his policy-making prowess.” Not to be overlooked is “his usual firm, athletic handshake.” That policy prowess must extend to the destructive CDO deregulation that Geithner and Summers pushed through Congress and that, in an image in the movie, we see Bill Clinton signing into law. That legislation, not specifically referenced in Sorkin’s book, was called the Commodity Futures Modernization Act (CFMA). It banned the application of any existing regulation or regulatory agency authority to the emerging market in CDOs that turned out to be disastrous. These were the same CDOs that AIG backed with phony insurance “swaps,” resulting in the Geithner-led $170 billion bailout of the company with the money passed through to Goldman and the other banks covered by AIG. Neither the CFMA nor the heroic and incredibly prescient Brooksley Born, then chief of the Commodity Futures Trading Commission, whose dire warnings about the new financial gimmicks were effectively silenced by the CFMA, are mentioned in the index of Sorkin’s book. At the end of HBO’s film about how skillfully Henry Paulson, Ben Bernanke and Timothy Geithner managed to force the top banks to accept $700 billion in bailout money, the question is posed as to whether the banks so saved would turn around and lend money to save the homes of ordinary folks. The outcome was quite the opposite. The economy remains in deep trouble thanks in considerable measure to the “bankers-first” priorities that Geithner and Summers brought with them to the Barack Obama presidency. The housing industry is deeply depressed, new home construction starts this year are expected to match the lowest point since records first were kept in 1963, housing values are predicted to decline at least 5 percent more this year, and without an improvement in housing there will be no significant increase in consumption or jobs. Further, on the day HBO premiered the film, the New York Times reported that the top banks now have an inventory of foreclosed homes that is twice as high as when the crisis began four years ago, and, “In addition, they are in the process of foreclosing on an additional one million homes and are poised to take possession of several million more in the years ahead.” The film and the book, by centering on TARP, make that bailout the big deal, and when the bailout money was paid back to free the bankers’ bonuses from regulation, it was celebrated by Geithner as “the most effective government program in recent memory.” Rubbish! As Paul Atkins and two other members of the Congressional Oversight Panel on TARP wrote in a blistering WSJ column exposing the TARP settlement: “It hides the full story of the government’s financial crisis effort, of which TARP is but a minor part”; the major part being the $1.1 trillion in toxic mortgages that the Fed purchased from the banks, the $380 billion bailout of Fannie Mae and Freddy Mac, and the loan guarantees of “other Fed and FDIC programs [that] added another $2 trillion of taxpayer money at risk to the 19 stress tested banks alone.” And then there is the 50 percent run-up in the national debt, thanks to the banks’ savaging of the economy that will haunt us for decades to come. Perhaps the main value of the book and film is the instruction they provide on the limits of mainstream journalism in the decade that led up to the meltdown. Sorkin, who rose to be a business editor at the Times , covered Wall Street deal-making in exquisite detail, relying on an access journalism that has often proved deeply flawed in traditional business news coverage. What was largely ignored as it was unfolding was the story of the unbridled power of Wall Street financiers over the political process that caused this tragedy for so many tens of millions who have lost jobs and homes.

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HFF closes sale of and arranges financing for office building in northwest Houston

May 24, 2011

      HOUSTON, TX – HFF announced today that it has closed the sale of and arranged financing for 4600 Highway 6 North (top left photo), a three-story, 53,037-square-foot office building in northwest Houston. HFF marketed the property on behalf of the seller, the Brookfield Real Estate Opportunity Fund, a division of Brookfield Asset Management.   Rockwell Management Corporation represented the buyer in the purchase of 4600 Highway 6 North for an undisclosed amount.   HFF arranged the acquisition financing through ViewPoint Bank.   Renovated in 2007-2008, 4600 Highway 6 North is 82 percent leased to tenants including JPMorgan Chase and the Attorney General’s Office.   The property is located between Interstate 10 and Highway 290 on State Highway 6 in west Houston. Brookfield Asset Management Inc., focused on property, renewable power and infrastructure assets, has more than $100 billion of assets under management and is co-listed on the New York and Toronto Stock Exchanges under the symbol BAM and on NYSE Euronext under the symbol BAMA. www.brookfield.com. Rockwell is a full-service management firm that provides services in due diligence, construction, renovation, marketing, bookkeeping, property and asset management. The HFF investment sales team representing the seller was led by senior managing director Dan Miller (lower  right photo)  and associate director Trent Agnew .   The HFF debt team was led by associate director Colby Mueck. Contacts:     H. Dan Miller, CCIM, SIOR, HFF Senior Managing Director, (713) 852-3500,      M. Colby Mueck, HFF Associate Director, (713) 852-3500, cmueck@hfflp.com dmiller@hfflp.com Kristen M. Murphy, HFF Associate Director, Marketing, (713) 852-3500 krmurphy@hfflp.com           

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Marcus & Millichap Capital Corp. Closes $7.5 Million Multifamily Refinancing Loan in New Jersey

May 24, 2011

    SOMERS POINT, N.J., May 24, 2011 – Marcus & Millichap Capital Corporation (MMCC) has secured a $7,500,000 refinancing loan for a 214-unit multifamily property in Somers Point, N.J, according to Michael J. Fasano (top right photo), vice president and regional manager of the firm’s New Jersey office. Joshua Lipsey (middle left photo) , an associate director in MMCC’s New Jersey office, delivered the financing for the loan. “MMCC delivered a rate that was well below agency pricing,” says Lipsey. “We were able to craft the terms of the transaction in order to meet our client’s needs. “This included working with the bank to allow the borrower to pay down a portion of the principal each year without penalty. We were also able to lock the interest rate at application for an extended period of time in order to help our client avoid defeasance costs on the existing debt,” adds Lipsey. “When state registration issuance delays threatened to derail the closing, we were able to coordinate the re-inspection with the New Jersey Department of Community Affairs to complete their review, abatement and the issuance of a new five-year registration,” continues Lipsey.   “When the property condition report raised potential issues, our team, in collaboration with the bank, was able to remove a significant property improvement reserve. With the support and hands-on engagement of the client, all repairs and improvements were completed within 30 days at a fraction of the potential contemplated reserve,” Lipsey goes on. “When clients come to MMCC, they want to know that we will take all the necessary steps to get to the closing table,” concludes Lipsey. “This transaction is another example of our commitment to meeting that expectation and of the value-added services we provide in the execution of acquisition and refinancing for our clients.” The loan is for 10 years with a fixed interest rate, amortized over 30 years and nonrecourse.   Press Contact: Stacey Corso, Marcus & Millichap Capital Corporation (925) 953-1716 www.mmCapCorp.com

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Arizona’s Only Beachfront Resort to Mark Memorial Day Weekend with Opening of State’s Largest Infinity Pool

May 24, 2011

  LAKE HAVASU CITY, AZ — Nautical Beachfront Resort (top left photo) , Arizona’s only beachfront resort hotel, will open the state’s largest infinity pool, “WET,” Friday May 27, just in time for the Memorial Day Weekend.   In honor of the occasion and to kick off the holiday weekend, members of the city’s VFW Post 9401 have been invited to be the first residents to get WET at 4 p.m. “We like to have fun at Nautical Beachfront Resort, but we’re also mindful that Memorial Day is a meaningful holiday,” said Tim Peters , general manager.   “So, we wanted to honor our local veterans by inviting them to christen our pool.   American soldiers are often the first to respond in times of crisis, this time they can be the first ones in on the fun.” WET, a free-form pool roughly the size of a stadium Jumbotron and filled with 108,000 gallons of water, is part of the first wave of property enhancements planned by the resort’s owners, RW Partners LLC of Phoenix.   A new arrival center, scheduled to open later this summer, is also under way.   Media Contact :   Lauralee Dobbins/Chris Daly, 703-435-6293, Lauralee@Dalygray.com

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Grubb & Ellis Facilitates 60,000-SF Office Lease Renewal in Clearwater, FL

May 24, 2011

  TAMPA, FL– Grubb & Ellis Company (NYSE: GBE), a leading real estate services and investment firm,   announced that it represented Meridian Development Group in CCS Medical Inc.’s 60,000-square-foot office lease renewal at Meridian Concourse Center (top left photo) , located at 4800 140th Ave. N in Clearwater.   James Moler (middle right photo) , CCIM, and Paula Buffa (lower left photo) , RPA, CCIM, both senior vice presidents with Grubb & Ellis’ Office Group, exclusively represented the landlord in the transaction.   Brent Miller with Jones Lang LaSalle represented the tenant.   “CCS Medical evaluated numerous options in the market for the consolidation of their operations,” said Moler.   “Our building was looked at very favorably due to the overall quality of the asset, the responsiveness of property management and the long-standing relationship between the owner and the tenant.”   “We put a lot of resources into the development and management of our properties,” said Steven Kossoff, managing director, Meridian Development Group, “but our tenant relationships are just as important.   Flexibility and attention have been cornerstones for us since we began and have helped us make it through this tough market.”   Meridian Development Group owns and manages 1.5 million square feet of Class A and B office, flex and industrial assets located across west-central Florida.   Meridian Concourse Center is comprised of four buildings totaling 214,000 square feet.   4800 140th Avenue totals 60,000 square feet; all of which CCS Medical currently occupies.   The property’s central Tampa Bay location provides convenient access to both Pinellas and Hillsborough Counties and is adjacent to the St. Petersburg/Clearwater Airport.     For more information, contact   Moler at 813.830.7963 or james.moler@grubb-ellis.com   or Buffa at 813.830.7887 or   paula.buffa@grubb-ellis.com   or Rachel Andreozzi, Phone: 561.893.6296, rachel.andreozzi@grubb-ellis.com

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Equity Investment Services Sells Flowood Office Complex (REO)

May 23, 2011

  ORLANDO, FL— Nicholas Ledvora (top right photo)  and Christopher Savino middle  left photo) , Managing Directors with Equity Investment Services (EIS), successfully closed the sale of two bank owned office buildings totaling 29,274 square feet and located in Flowood, MS. Ledvora and Savino represented both the buyer and seller in the above referenced transaction. EIS brokered this transaction in association with Brandon Brown with TL Brown Properties of Jackson, MS.   “Like all distressed sales, this transaction was a great move for both the buyer and seller. Zions Bank was able to liquidate a non-performing asset and the buyer acquired a solid investment well below replacement value with plenty of upside.” said Ledvora on the transaction.   Mr. Ledvora and Mr. Savino are currently representing Zions First National Bank and other National lenders in a number of REO dispositions throughout the Southeastern United States.   Equity Investment Services is a full service commercial real estate investment advisory company based in Orlando, Florida. Our group was strategically created to serve the needs of its clientele.  EIS represents owners in the dispositions and acquisitions, leasing and professional management of shopping centers, office buildings, industrial properties, single tenant net leased investments and multi-family properties.   For more information, visit: www.EISRE.com .   Contact: Alana L. Champagne Operations Manager Director of Property Management Phone: 407.573.0711 ♦ Fax: 407.573.0710 Email: AChampagne@EISRE.com   or Nicholas Ledvora (o) 407/573-0711 nledvora@eisre.com Website: www.EISRE.com

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French See Dominique Strauss-Kahn As Victim Of Plot

May 22, 2011

PARIS — Forget what the New York prosecutor says about Dominique Strauss-Kahn. The doubters in France are legion and the country is abuzz with conspiracy theories. Did Strauss-Kahn bring on his own ruin at a luxury Manhattan hotel? Or did his political enemies in France set him up in a sinister plot to undo the known womanizer who was a top contender to become France’s next president? From the moment that Strauss-Kahn’s arrest for the alleged sexual assault of a chambermaid flashed around the world, doubts emerged in France. A week later, with evidence still under wraps and the accused and the accuser silent, speculation abounds. A poll Thursday suggested that a majority of French, 57 percent, think Strauss-Kahn was the victim of a plot. In a country where low blows pepper the political culture, where people think politicians will do almost anything to keep their perks and where President Nicolas Sarkozy’s approval ratings are sinking relentlessly, a plot against the increasingly powerful IMF chief seems plausible to many. “The trap, you cannot not think of it,” Cooperation Minister Henri de Raincourt conceded on Radio France International a day after the arrest. “But we must let justice follow its course without any prior assumptions.” Strauss-Kahn himself is reported to have voiced fears of a setup involving an alleged rape victim last month with a journalist. And then there are the precedents. Former conservative Prime Minister Dominique de Villepin is now in a slander trial that grew out of accusations he had wind of a dirty tricks campaign against Sarkozy in 2004 and failed to stop it. Sarkozy has said he believes the scheme was meant to upend his 2007 presidential bid. Doubts are still raised over the 1994 suicide, in his office at the presidential Elysee Palace, of the man considered former Socialist President Francois Mitterrand’s closest counselor, Francois de Grossouvre. And there are those who wonder, nearly two decades later, who really aimed the gun in the 1993 suicide of former Prime Minister Pierre Beregovoy. Strauss-Kahn’s fall from grace on May 14 was brutal. It came minutes before his trans-Atlantic flight for a meeting, as chief of the International Monetary Fund, with German Chancellor Angela Merkel. The 62-year-old Socialist who led popularity polls for next year’s presidential race insists he is innocent and has resigned from his job at the IMF to fight the charges. He was indicted by a grand jury on charges including criminal sexual abuse and attempted rape for allegedly attacking a 32-year-old maid, a West African immigrant, in his suite at the Sofitel. Strauss-Kahn is now under house arrest in Manhattan, watched by armed guards and tracked with an electronic bracelet, as he prepares his defense. The French press and Internet forums are flooded with questions from those who suspect a setup or are true believers in his innocence. _ Why would he call the hotel from the airport to recover a forgotten cell phone if he was guilty? _ Why not simply arrange for a female companion rather than assault a maid? _ Why would a maid enter Strauss-Kahn’s presidential suite unaccompanied? “At this stage of the investigation, the hypothesis of a manipulation cannot be swept aside,” sociologist Michele Fize wrote in Sunday’s Le Monde newspaper. Le Monde also quoted the director general of the top French firm handling housekeeping in luxury hotels as saying a maid could be fired for entering an occupied room alone. Luxury hotel maids know the protocol: knock, wait, announce oneself, knock again, open the door slightly, said Marie-Francoise Litaudon of the Francaise de Service Group. Socialist allies thought they saw bids to damage Strauss-Kahn’s image weeks before the arrest, when paparazzi arrived in April to photograph him getting into a flashy Porsche. It wasn’t his car, it belonged to a friend, but that elitist image won’t sit well with Socialist voters. That was followed by an allegation in the France-Soir newspaper that Strauss-Kahn wore $35,000 suits. “There is a campaign against the personality of Dominique Strauss-Kahn,” Socialist lawmaker Jean-Marie Le Guen told Europe-1 radio only hours before the Frenchman was arrested. A journalist for the left-leaning newspaper Liberation said the politician himself foresaw dirty tricks in the upcoming presidential campaign and confided in an off-the-record meeting April 28 the three obstacles he faced: “money, women and my Jewishness.” “Yes, I love women … So what?” journalist Antoine Guiral quoted him as saying. Strauss-Kahn even predicted one possible line of attack against him – “a woman raped in a parking lot who has been promised 500,000 or a million euros to invent such a story,” Guiral quoted him as saying. A poll by the CSA firm showed that 57 percent of 1,007 adults questioned at their homes believed Strauss-Kahn was “certainly” or “probably” the victim of a plot, compared to 32 who felt this was “certainly” or “probably” not true. Those polled May 16 were of all levels of education, it said. No margin of error was provided but it would be plus or minus 3 percentage points for a poll of that size. Bruno Cautres, an analyst at CEVIPOF, a think tank of the prestigious school Science Po where Strauss-Kahn taught for years, says the enormity of the affair and the wave of “this is impossible” remarks by Socialist Party figures may have colored national opinion in favor of a plot theory. “Whatever the country, there will always be those who believe in a plot (to explain) a dramatic phenomenon,” he said. “That is a natural tendency because this phenomenon seems unexplainable and we seek explanations.” Strauss-Kahn’s reputation as a successful womanizer makes an alleged sexual assault even less credible because he had ample access to willing women, doubters say. The French barely shrugged when the IMF investigated Strauss-Kahn for a 2008 affair with an employee then absolved him of wrongdoing. “We have a political culture by which we will pardon a lot of politicians for behavior in private life and not necessarily make the equation that bad behavior in private life equals bad behavior in political life,” said Cautres. Cautres himself dismissed the notion of a plot. “Who would organize it … given the risk of a leak, of a spectacular revelation?” he asked. However, Strauss-Kahn’s defense team will surely be looking for that “banana peel” that centrist politician Dominique Paille suggested may have been strategically dropped. What about that tweet on Strauss-Kahn that set off a frenzy in France from a Science Po masters student who belonged to the youth wing of Sarkozy’s conservative UMP party? “A pal in the United States just let me know that DSK was arrested by police in New York an hour ago,” Jonathan Pinet tweeted at 22:59 p.m. Paris time (2059 GMT, 4:59 p.m. EDT) on May 14. The timing would be shortly after Strauss-Kahn was escorted off on an Air France plane in New York. Rejecting any conspiracy ties, Pinet later explained his information came in a Facebook chat with a friend who has another friend who works at the Sofitel in New York – and who likely mistook the happenings there hours earlier for the actual arrest.

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In Flood’s Crosshairs, A Community Waits

May 20, 2011

BUTTE LA ROSE, LA. –- The evening chorus of bullfrogs, crickets and screech owls along the waterfront has seemed louder these last few nights. The homes are empty. The music and chatter from neighbors has disappeared. The electricity is almost entirely switched off, plunging the remaining holdouts of this hideaway community into pitch-black nights illuminated only by the moon and stars. In the heart of the nation’s largest swamp, Butte La Rose lies in the direct path of floodwaters unleashed last Saturday from the Morganza Floodway, an effort to divert the Mississippi River’s force away from Baton Rouge and New Orleans. But before the water rises here, it must spread out over hundreds of square miles of cypress swamps and bottomlands. The people of Louisiana have become attuned to disasters over the years, yet the slow creep of rising water through this untamed region has even the hardiest natives on edge. “Growing up down here, you become acclimated to hurricanes. It’s fast-moving,” said full-time resident Michelle McInnis, a native of Hackberry, La., a town walloped by Hurricane Rita more than five years ago. “It’s mentally anguishing, this slow rise of the water … and knowing you can’t come back for six weeks.” A surprising number of full-time residents live in this Atchafalaya Basin town, a collection of both dowdy trailer homes and million-dollar fishing retreats with names like “Bar-B-Que and Drink a Few” and “Dad’s Pad When Mom’s Mad.” There are two ways in to Butte La Rose: a ramp down from Interstate 10 and a floating bridge. By Saturday, the bridge will be off limits, leaving only entrance. The handful of stores and bars close one by one. Local sheriff deputies Army National Guard Humvees constantly patrol the area, making daily rounds to warn anyone left that a mandatory evacuation remains in effect. The daily checkups have become a sort of joke for Randy Moncrief. He’s vowed to watch over “Timbuktu,” the two-story red waterfront home owned by his father, until he either runs out of food or can no longer tolerate bathing in the canal behind the house. “Cleanliness is gonna drive me out, if anything,” Moncrief said. “I’ve got plenty of shotguns. I’ll kill me a rabbit, a gator, a deer, whatever.” Before it comes to that, Moncrief has stocked up freezers and coolers with nearly ten pounds of red beans and rice with sausage, a full frozen brisket, 20 pounds of shrimp and loads of deer sausage. He’s not sure exactly what he’ll do for the next three or four weeks. “It’ll be some long days,” he admitted. His truck is gone, left on higher ground. He has a four-wheeler to traverse high water, if needed. Randy Moncrief on his porch Moncrief is a product of the Atchafalaya Basin, a wild region of swamplands and marshes west of the Mississippi River. His grandparents trapped nutria and muskrat for years at a “camp” in the middle of the swamp, accessible only by shallow-draft boats. He said he’s used to being surrounded by water. But in recent days, nature has started to rear its head. Snakes appear in greater abundance, along with alligators. Moncrief was tending to a plant in the backyard three days ago when a snake bit his hand. Shining a flashlight on the canal behind his house at night reveals numerous pairs of red alligator eyes lurking in the waters. Moncrief is one of only a handful of people in Butte La Rose planning to ride out the flood. Most escaped in a frenzy last weekend when the Army Corps of Engineers opened the floodway at Morganza. Last Saturday and Sunday, the two-lane road leading out of town was backed up for hours, jammed with a long procession of trucks and trailers hauling everything out. Some hired contractors at the last minute to jack up their houses, an attempt to buy another few feet. Many left signs tacked to their homes, staking out their territory. One read, “Nothing left worth stealing.” The mood this week has been much calmer. McInnis and her boyfriend have been packing up their belongings slowly. She marks the calendar each morning with the new flood heights. It began May 3 at 15.5; the water now sits at 20.94. Within a week it’s expected to rise another five feet. On Friday, the couple headed out of town to stay with relatives. They shut the power off behind them, not knowing when they would return. “You have to respect Mother Nature 100 percent,” McInnis said. “You can’t think that you’re going to go against her and win. Because you will not.”

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In Mississippi Delta, Dreams Of Bountiful Harvest Wash Away With Flood

May 13, 2011

CARTER, MISS. — Where the rolling green hills of Mississippi give way to the fertile flatlands of the Delta, Bernie Jordan bounced down a dirt road in his white pickup truck, surveying thousands of acres of farmland that, until recently, looked to be a bumper crop. But thoughts of a bountiful September harvest are all but erased from his mind. Now he focuses on saving anything he can, as a historic plume of Mississippi River water courses through some of the America’s most productive natural farmland. In just the past day, Jordan’s soybean fields have transformed into lakes; his cornfields have been swallowed by nearby streams; weeds begin to choke his cotton fields, but he sees no reason to spend money to kill them. “I haven’t hardly gotten any sleep in the past week,” said Jordan, 53, a fourth-generation Delta farmer. “And when I do, I wake up and say, ‘Is this bad dream over?’” Ironically, many of the Delta farmers most at risk are like Jordan, with land at least 30 miles from the Mississippi River. The backwater streams and tributaries are causing the biggest problems so far, particularly the Yazoo River, which snakes through many of the farmlands in the area. As the crest of the river makes its way farther south, its sheer force puts pressure on major tributaries, causing those rivers and streams to back up and overflow where no levees exist to hem in the waters. Jordan, like many in the flat lowland plains along the river, is fighting a battle on two fronts: work and home. He oversees a tractor planting cotton on the highest ground he has, a last-ditch effort to salvage a portion of this season’s crop. At the same time, he and his neighbors are building massive, makeshift dirt levees around their homes. “Once this is over and the water is gone, I hope I get to take a bulldozer and push ‘em down, and they don’t get a drop of water,” Jordan reflected. “I don’t want to be the fourth generation, only to lose it to something I can’t control.” Like many who have lived in the historic floodplain of the Mississippi River, Jordan knows well the complicated relationship between man and nature. The river is the lifeblood of the region, depositing rich soils over the plains for thousands of years. But over time, settlers and eventually the federal government constructed more and more sophisticated levees to allow settlement and modern-day agriculture in the region. The 1927 flood devastated the Mississippi Delta and led to a major overhaul of the federal flood control system along the river. Yet this year’s flooding threatens to be worse. In Vicksburg, Miss., one of the closest river towns to Jordan’s farm, the historic height was 56.2 feet, in 1927. He remembers the 1973 flood from when he was in high school, when his father lost nearly half his annual yield. The height then was 51.6 feet. The river at Vicksburg on Thursday already reached higher than that, at 54.8 feet, and next week’s crest is estimated to be 57.5 feet, an all-time recorded high. “I’ve been working 32 years trying to acquire things and accumulate something, and now it’s all in jeopardy,” Jordan said. In a cruel twist of fate, Jordan decided not to take out much in crop insurance this year for his cotton, because in previous years, after droughts he hadn’t been deemed worthy of getting a claim. He hopes there may be some kind of amnesty. Just down the road from Jordan, third-generation farmer Rob Coker, 48, busily harvested winter wheat a full two weeks ahead of time. He wasn’t actually sure if anyone would buy it. Typically, wheat needs to grow tall enough to dry out in the open air and winds. If it’s sold too young or too wet, it can easily rot and ruin. This season, Coker said he had no choice but to harvest what he could, when he could. “This will all be under water next week,” Coker said over the rumble of his John Deere combine, a massive mower that separates the grain from the chaff. “It’s either that, or give up.”

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Government May Force Big Banks To Reduce Loan Balances For Distressed Homeowners

May 11, 2011

The nation’s five largest mortgage firms may be forced to reduce loan balances for distressed homeowners as part of an agreement with state attorneys general and the Obama administration to settle claims of faulty mortgage practices, a top state official involved in the negotiations said Tuesday. The proposal is part of a set of remedies banks would have to agree to in order to settle the state and federal probes launched last autumn, which found that the largest mortgage firms illegally seized the homes of at least dozens of borrowers and engaged in shoddy practices that short-changed troubled borrowers. Mortgage principal reductions would comprise part of a larger fine levied on Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and Ally Financial. Penalties could reach $30 billion, officials said. The forced reduction of mortgage principal as a penalty against flawed past practices has proven contentious. Some Republican attorneys general have objected, as have some Republican members of Congress. On Tuesday, however, a state official told The Huffington Post on condition of anonymity that the option “very much remains on the table.” While officials have not determined how much would be exacted from the banks — and specific dollar amounts to settle the probes have not yet been discussed between the state and federal governments and the banks — the proposal to compel financial firms to cut loan balances is part of one of two documents circulated Tuesday at a hotel in northern Virginia, where bankers, state officials and policy makers from the Obama administration began a three-day meeting. The targeted banks have argued vociferously, both in private discussions and in public, that they opposed cutting distressed homeowners’ principal balances. During meetings two weeks ago, representatives from such banks conducted a presentation which they claimed illustrated that mandating principal reductions would not prevent a significant number of new foreclosures and would be harmful to the general economy. The banks said “it would trigger a stampede of strategic defaults,” an official familiar with one of the two discussions said at the time, referring to instances in which borrowers who can afford to make good on their obligations choose not to. Strategic defaults are much more common in the business world than among homeowners, according to experts who study the issue. Homeowners generally feel a moral obligation to continue making their payments, whereas corporations view the breaking of contracts as pure business decisions. Government officials questioned the banks’ assumptions and fought back against their claims. The other document circulated Tuesday outlines standards that mortgage firms would have to adhere to for current and future borrowers, like forcing banks to ensure they have the right documentation when they move to repossess homes. The document was revised from an earlier draft first circulated in early March, The Huffington Post reported last week . The standards are a response to investigations launched last fall after the nation’s largest lenders voluntarily halted home seizures when faulty document practices — like so-called “robo-signing” — came to light, erupting into a nationwide scandal. Currently, no national standards govern how mortgage firms should treat borrowers who fall behind on their payments or default on their obligations. Congress has taken up the matter, and officials generally agree on how mortgage firms should treat borrowers. Tuesday’s bipartisan meeting included the Washington Attorney General Rob McKenna (R) and Colorado Attorney General John Suthers (R), who called in remotely. Top officials from Florida’s and Texas’ attorney general offices, both led by Republicans, attended, along with the Democratic attorneys general from Delaware, Iowa, Illinois, North Carolina and Connecticut. Top officials from the Treasury Department, Department of Justice and the Department of Housing and Urban Development were also present.

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New Report: Nearly Half Of Chicago Mortgages Are Underwater

May 10, 2011

Newly released statistics show a mortgage crisis that is only deepening in the nation’s third-largest city, with staggering numbers of homeowners in dire straits. Almost half of mortgages in the greater Chicago area are now “underwater,” according to the study by Zillow. That means that homeowners owe more than the value of their homes, a product of plummeting housing prices. The proportion of underwater mortgages in Chicago, 45.7 percent, is eighth-highest among the nation’s 25 largest metropolitan areas, and pales in comparison to the devastating 68.4 percent of underwater mortgages in Phoenix, Arizona, the nation’s highest among big cities. But the speed with which underwater mortgages have grown in the area is much more disconcerting. Just last quarter, the figure was only 38.6 percent; a year ago, it was just under 32, reports Chicago Real Estate Daily . “Home value declines are currently equal to those we experienced during the darkest days of the housing recession,” Zillow Chief Economist Stan Humphries said in a press release accompanying the report. Prices were buoyed temporarily by the federal home-buyer tax credit, but with that credit’s expiry, the floor has again fallen out from under the market. Indeed, the Chicago Tribune reports that both home sales and prices dropped sharply in the first quarter . Sales were down 9.9 percent from a year ago, and the median price of a home was down to $155,000, down 11 percent from the same time a year ago.

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Preeti Vissa: The Crisis of the Day

May 5, 2011

Is it just me, or does the news lately seem like an endless stream of crises that come and go in a flash? Japan! Libya! The deficit! Obama’s birth certificate! Bin Laden! I, too, believe that many of these are serious issues that deserve attention and sympathy, but the drumbeat of daily emergencies is enough to leave one breathless. And confused. Confused enough, in fact, not to notice that at least one old crisis hasn’t gone away. Indeed, Congress has been busy making it worse. In the recent budget deal, Congress and the administration did away with $88 million in funding for nonprofit agencies that counsel families struggling to keep their homes and avoid foreclosure. Maybe that doesn’t seem important, but as this article from Painesville, Ohio makes clear, it has real-world consequences. For one thing, it endangers many who are currently obtaining loan modifications, which may require the completion of credit and homeowner counseling as a condition for the modification to go through. If that counseling isn’t available because the agencies doing it lost their funding, what happens to these homeowners? The need for this sort of help and counseling for homeowners is only going up as the ongoing tsunami of foreclosures continues, but the future of such assistance is very much in doubt. Congress could and should restore this funding in the 2012 budget, but that’s by no means a done deal. And unlike ginned-up controversies about things like presidential birth certificates, this crisis is real, with consequences that literally include families and children being thrown out into the streets. If we must cut spending, does it always have to be from help for the poor and vulnerable? Even when what happens to the most economically vulnerable is going to affect us all? Consider: A Government Accountability Office review of Defense Department weapons procurement released in March found a “staggering” array of weapons programs soaring wildly over budget , amounting to tens of billions of dollars. Without wading into the debate about what weapons are needed, it’s a given that our military will buy tanks, planes, etc. Is it too much to ask that we get our money’s worth, that our money not be wasted due to mismanagment? It’s hard to stomach losing a comparatively tiny appropriation aimed at keeping families in their homes while simultaneously reading that contracting waste is burning through piles of money equal to the GDP of some small countries. While we’re at it, maybe it’s time to glance away from this morning’s crisis-of-the-day — whatever it is — and remember the ongoing foreclosure crisis that continues to decimate American communities, whether the media notice or not.

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Banks Illegally Foreclosed On Dozens Of Military Borrowers

May 5, 2011

WASHINGTON — Two of the nation’s largest mortgage firms illegally foreclosed on the homes of “almost 50″ active-duty military service members, according to a Thursday report by the Government Accountability Office. The report does not identify the two mortgage companies. GAO investigators attributed the finding to federal bank regulators, who recently completed a three-month probe into allegations of improper foreclosures carried out by the nation’s 14 largest home loan servicers. The GAO report, which focused on problems in the mortgage industry and the lack of federal oversight, is the first official study to feature a partial tally of military families whose homes have been illegally seized. The 50 or so wrongful foreclosures were discovered during regulators’ review of only about 2,800 loans that experienced foreclosure last year. Millions of other foreclosures in recent years have not been reviewed by regulators. More than 2.8 million homes received a foreclosure filing in 2009, and nearly 2.9 million residences got one last year, according to RealtyTrac, a California-based data provider. Federal bank supervisors “could not provide a reliable estimate of the number of foreclosures that should not have proceeded,” they said in their April report on improper mortgage servicing. Two months earlier, the head of the Office of the Comptroller of the Currency, which oversees national banks like JPMorgan Chase and Bank of America, said that only a ” small number ” of home seizures should not have occurred. The large number of wrongful foreclosures identified by the GAO from such a small sample suggests that the problem could be more widespread. As foreclosures have surged to record levels, banks and other mortgage firms have been caught ill-equipped to handle the ever-increasing workload, Treasury Department and Federal Reserve officials have repeatedly said. Due to years of under-investment by banks in their mortgage processing operations, regulators and experts have found that shortcuts were taken and procedures were not followed. Homeowners are bearing the brunt of these decisions. Improper mortgage practices affecting military borrowers are ” perhaps the most egregious cases ,” wrote five Democratic lawmakers in a joint letter Thursday to bank regulators. “The idea of wrongfully forcing service members’ families from their homes while their loved ones are risking their lives to protect our country is not only unconscionable, it’s illegal,” said Sen. Al Franken (D-Minn.), one of the co-signers, in an emailed statement. Members of the armed forces on active duty are covered by the Servicemembers Civil Relief Act , a law designed to protect them from financial distress. The legislation restricts foreclosure of properties owned by active-duty members of the military. Violations are handled by the Justice Department’s civil division. The Justice Department has reportedly said it’s investigating allegations of improper foreclosures on service members that were commenced by mortgage subsidiaries of Morgan Stanley and Deutsche Bank AG, two of the world’s largest banks. Bank of America recently announced it would change the way it handles military borrowers. A 50-state coalition of attorneys general and bank supervisors along with the Obama administration are also in talks with the nation’s five largest mortgage firms — Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial — to resolve allegations of wrongful foreclosures and improper mortgage practices. Fines could reach up to $30 billion, according to people familiar with the matter. JPMorgan Chase disclosed in February that it had improperly foreclosed on the homes of 18 military families. Stephanie Mudick, an official at the nation’s second-largest bank by assets, told a House panel that the lender had either rescinded the foreclosure sale or reached a settlement for 12 of those military borrowers, and was working through the rest. The firm’s mistakes were a ” painful aberration ,” Jamie Dimon, JPMorgan’s chairman and chief executive, said in a February statement. In April, the bank agreed to pay $56 million to settle claims of improper mortgage practices when dealing with military borrowers. On Thursday, JPMorgan spokesman Tim Keefe said that the bank had found additional cases of military families whose homes were illegally seized. Although he did not specify the exact number, a separate JPMorgan official said the total was less than 30. Keefe said the bank had committed to providing new homes and full forgiveness of any mortgage debt owed to the lender for these borrowers. By taking shortcuts in processing troubled borrowers’ home loans, the nation’s five largest mortgage firms have saved more than $20 billion since the housing crisis began in 2007, according to a confidential presentation prepared for state attorneys general by the nascent Bureau of Consumer Financial Protection inside the Treasury Department and obtained by The Huffington Post in March . In February, Holly Petraeus, who leads the bureau’s unit overseeing military borrowers, sent a letter to the chief executives of the nation’s 25 largest banks urging them to follow the law when it comes to dealing with service members. “I appreciate your assistance in ensuring that your bank does not overlook its obligations -– legal and otherwise -– to your military customers,” wrote Petraeus, whose husband, David, leads U.S. forces in Afghanistan.

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LA Dodgers Latest Victim of Financial Crisis

April 29, 2011

The recent financial crisis, brought about largely by a lethal mixture of negligently lax lending standards and often less-than-candid borrowers, has claimed another victim – the venerable Los Angeles Dodgers baseball franchise and the team’s legions of fans. At the same time, add Frank and Jamie McCourt, the Dodgers’ deeply tanned and high-living owners, to the list of notorious villains that have slunk from the ruins. In about the time it takes to play an old-fashioned double header, the McCourts journeyed from newly-minted toasts of Los Angeles to joining the ranks of disgraced Wall Street executives like former Lehman Brothers CEO Richard Fuld and Angelo Mozilo , the founder of mortgage giant Countrywide Financial . The reasons are fairly simple and entirely symptomatic of an era in which everyone seemed determined to believe that real estate prices would never fall. In short, the McCourts, erstwhile Boston real estate developers, took advantage of a reckless lending environment to obtain a giant loan that left them so deeply leveraged it has apparently pushed them to the brink of default. Sound familiar? It should. It’s the same thing countless Americans did last decade, using sketchy credit information to obtain mortgages for houses they couldn’t afford, and then using the paper equity in those homes to fund lifestyles they also couldn’t afford. Meanwhile, they were leveraging themselves into deeper and deeper holes. Millions of them have lost their homes to foreclosure. Fuld and Mozilo lost their companies to bankruptcy and a fire sale, respectively. Now the McCourts, currently embroiled in a nasty divorce, could very well lose their team. Last week Major League Baseball moved to seize control of the Dodgers, appointing a trustee to oversee day-to-day operations of a franchise believed to be carrying more than $430 million in long-term debt, according to court records. “I have taken this action because of my deep concerns regarding the finances and operations of the Dodgers and to protect the best interest of the club, its great fans and all of Major League Baseball,” commissioner Bud Selig said in a statement. The arrangement reportedly requires baseball to approve any Dodger expenditure above $5,000. It was a shocking turn of events for the storied franchise, the same organization which under the stewardship of the O’Malley family in 1947 tore down the racial barrier in baseball and, a decade later, brought big-time professional sports to the West Coast. Ironically, when the McCourts purchased the team from News Corp .’s ( NASDAQ : NWSA) FOX division in 2004, many in Los Angeles were relieved to see the team pass from corporate ownership back into the hands of a family-run business: the McCourts would be the new O’Malleys, it was hoped. But that dream has turned into a nightmare, not least because the McCourts didn’t remain a family for long. In fact, it was their vicious divorce battle – essentially a battle for control of ownership of the team — that revealed to the team’s horrified fans the harsh reality that the couple were essentially using the Dodger brand to fund an exceedingly extravagant lifestyle. Michael D’Antonio, author of Forever Blue , a book on Walter O’Malley’s Dodgers, said the difference between the O’Malleys and the McCourts is that the former saw the team as an investment and the latter as “an ATM.” “Walter built the team as a sports enterprise and a business enterprise. He clearly recognized that, besides the product he put on the field, good will was his major asset,” said D’Antonio. “Even more than any business I can imagine, sports teams thrive based on their relationship with their customer. You need to have people love you,” he said. For decades, Los Angeles fans loved their team and loved the team’s owner. “It’s what’s known as ‘the Dodger way’ and it means fair but all out play. It also stands for the best in everything – whether it’s a spring training facility or the Dodger Dogs sold at Dodger Stadium. The idea was to give Los Angeles something that was first class in every respect. That was the product O’Malley delivered,” D’Antonio said. In hindsight, the current mess might have been predicted given the circumstances surrounding the sale of the team to the McCourts in 2004 for $430 million. A lawyer representing Frank McCourt in the divorce proceedings once referred to the purchase as “one of the most highly leveraged acquisitions in the history of major league baseball,” adding that McCourt himself had “put not a penny of cash” into the deal. According to the Los Angeles Times, McCourt had to borrow $145 million from FOX to get the deal done. His only collateral was a handful of parking lots in Boston. The team actually flourished under the new ownership, taking on a high profile manager in Joe Torre and making a string of playoff runs led by the flamboyant and wildly popular outfielder Manny Ramirez. “McCourt got a good product onto the field, but the relationship between the entity called the Dodgers and the community of Los Angeles deteriorated under his ownership,” said D’Antonio. “I think fans sensed a different style. Fans experienced the ballpark and team management as less accessible, less committed to the community, less devoted to doing everything right.” In 2009, just days after the team was eliminated from the playoffs, the McCourts announced they were separating. After that all hell broke loose. McCourt promptly fired his wife, whom he had installed as the team’s CEO in happier days, and it’s only gotten uglier since then. As has been widely reported in Los Angeles media, the bitter divorce proceedings have revealed that the couple used the team as their personal piggy bank. Frank drew a $5 million salary and paid Jamie $2 million. A couple of their kids were on the payroll as well, pulling down six figure salaries. Two Malibu homes were purchased, side by side and reportedly valued at $46 million. Meanwhile, ticket and concession prices rose each year, making it more difficult for fans to attend the games. “Where the McCourts fell down was in their approach to the team as an LA institution,” said D’Antonio. “I think people feel that. People feel they were too focused on the revenue streams and not enough on what the Dodgers meant to their fans and the city.” It seems Dodger fans may not have to suffer the McCourts much longer.

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Rent Or Food? Soaring Costs Forcing Americans To Choose

April 26, 2011

NEW YORK — Around 10 million American households — or one in every four families that rent their homes — could have to chose between paying rent, buying groceries or keeping current with bills, according to a report released Tuesday. The number of households spending more than 50 percent of their income on rent and bills jumped by 2.6 million over the last decade, according to a Harvard Joint Center for Housing Studies report . Economists generally consider “affordable” rent to cost about 30 percent of a tenant’s income. When housing costs hit certain levels, many Americans are forced to choose between rent and food. “In real terms, it means more people have less money to spend on household necessities such as food, health care, or savings,” Eric Belsky, director of the Harvard Joint Center for Housing Studies, said in the report. Households which spend 50 percent or more of their income on rent also spend almost 40 percent less on food and over 50 percent less on health care than households with more affordable rent. “In the last decade, rental housing affordability problems went through the roof,” Belsky said in the report. “And these affordability problems are marching up the income scale,” he added. Already, rising rents mean the household budgets of working-class and middle-class families are under strain. Growing numbers of middle-income, and lower-middle-income renters are spending between 30 percent and 50 percent of their incomes on rent. And the report found that rents could start to soar as the recovery takes hold. Belsky said that after a boom, the rental market took a brief hit during the recession. “Rental housing costs went up and up. There was a brief dip in 2009, now they’ve moved up again,” he told The Huffington Post. Affordability could become such a problem, Belsky said, that even financially secure Americans could start to struggle to make rent. Even before the recession, rent increases and growing bills outpaced many stagnant salaries. Now, with modest improvements in the job market, there is renewed upward pressure on rents. Many former homeowners who faced foreclosure are now looking to rent, and people who ordinarily would have bought homes are struggling with tighter mortgage lending, while others are waiting for home prices to sink even lower. Mortgage lending for apartment buildings — the multifamily sector — was severely hit during the financial crisis, and financing for the sector has dropped by $40 billion, according to the report. Since 2008, the only refinancing for loans on apartment buildings has come from federally-backed sources: Fannie Mae, Freddie Mac and the Federal Housing Administration. And for Americans with lower incomes, the availability of federally protected affordable housing is shrinking. The report found 700,000 affordable rental units had either been removed from federal programs or demolished since the mid 1990s, with very little new housing being offered at the lower end of the rent scale.

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Accused Mortgage Scammer Loses His Wacky Website After Court Order

April 25, 2011

Accused mortgage-modification fraudster Howard Shmuckler has lost the website he used to call his accusers “the real scammers.” Even though Shmuckler had been indicted and repeatedly sued for charging homeowners for modifications he never delivered, he maintained his website until a court order went against him earlier this month. Shmuckler charged homeowners thousands of dollars in upfront fees on the promise he would get them mortgage modifications to help them stay out of foreclosure. Yet, hundreds of his clients never received mortgage modifications, according to the Maryland government and attorneys representing homeowners in Virginia, where the now-defunct Shmuckler Group had been based. But, at www.HowardShmuckler.com — which redirected to www.TheyKilledTheSavior.com — Shmuckler maintained that he’d been a savior for more than 900 homeowners. “No, Howard Shmuckler cannot, does not and never claimed to grant Eternal Salvation or save a Soul from Eternal Damnation,” Shmuckler’s site said. “Did Howard Shmuckler and The Shmuckler Group, LLC save nearly a thousand (1,000) HONEST families from being out on the street – from being evicted from their homes once they fell behind on their mortgage payments? YOU BET HE DID!” The Federal Trade Commission outlawed upfront fees for mortgage assistance services at the beginning of 2011 in an effort to shut down a growing industry that preys on struggling homeowners unable to win help from indifferent banks and mortgage-servicing companies. Homeowners who want help dealing with their lenders can get free assistance from housing counselors certified by the U.S. Department of Housing and Urban Development. Virginia resident Hassina Ansary sued Shmuckler in 2009 for charging her $2,000, but doing nothing while her home slid into foreclosure. A Virginia jury took her side and order Shmuckler to fork over $686,600. Instead, he paid her a tribute on his website, with a picture of the “evil monkey” from the TV-series “Family Guy” pointing an accusatory finger at a picture of Ansary. The header on the page warned: “BEWARE – THE REAL SCAMMERS.” The page also included a long list of names, presumably former clients, described as “FRAUD MASTERS.” Shmuckler’s site accused Ansary of receiving rental income from investment properties, which Ansary denied in the defamation suit that resulted in the site going down earlier this month. A Virginia judge ruled in Ansary’s favor, and Ansary’s attorney said she entered into separate agreements with the companies that hosted the site. Shmuckler, who previously told The Huffington Post to check out his site in lieu of an interview, could not be reached on Monday. In an ironic twist, Shmuckler is now fighting to save his own home: Last summer Ansary filed a civil complaint to force him to sell his Virginia Beach house to pay the judgment she’d been awarded as a victim of his scam.

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Barack Obama Debt Reduction Plans Run Into Economic Reality

April 22, 2011

LOS ANGELES — President Barack Obama headed west to sell his big picture deficit-reduction plan. But many people are waiting for a quick fix to their own economic problems caused chiefly by persistent unemployment and the crippled housing market. Audiences in California and Nevada understood why it’s important to get a handle on the deficit over the long term. Yet they made clear that the economic recovery hasn’t fully taken hold in ways that are meaningful to them. As Obama shifts into re-election mode, he will need to show that he hasn’t lost his focus on jobs even as the conversation in Washington swings to paying down what the nation owes. An audience member at Obama’s town hall meeting Wednesday at Facebook headquarters in Palo Alto, Calif., summarized how the increased attention on red ink looks to the public. “At the beginning of your term you spent a lot of time talking about job creation and the road to economic recovery,” the questioner told the president. “Since then, we’ve seen the conversation shift from that of job creation and economic recovery to that of spending cuts and the deficit.” “I would love to know your thoughts on how you’re going to balance these two going forward, or even potentially shift the conversation back,” she added. Obama said that unless lawmakers get the country’s long-term finances under control, more immediate economic gains could prove difficult. “If we don’t have a serious plan to tackle the debt and the deficit, that could actually end up being a bigger drag on the economy than anything else,” Obama said. The economy has rebounded since the early days of Obama’s presidency. But the unemployment rate is 8.8 percent and millions of jobs cut during the recession haven’t returned. A questioner at Obama’s town hall meeting in Reno, Nev., on Thursday said both he and his wife were out of work. The faltering housing market has left many homeowners owing more on their loans than their homes are worth. Prospective homeowners are struggling to find the money to buy. A question submitted for Obama online during the Facebook town hall put the public’s frustration simply: “The housing crisis will not go away.” Obama didn’t reject that assessment. He said the housing market was the “biggest drag” on the economy. Factor in rising gasoline prices and it’s no surprise that many people are feeling squeezed from all sides. In an Associated Press-GfK poll from March, 90 percent of those questioned said the economy was a top priority. The poll found that 76 percent see budget and deficit issues as extremely important or very important. The poll was conducted before Obama and Rep. Paul Ryan, R-Wis., announced competing plans for bringing down the deficit. Obama’s plan would cut spending by $4 trillion over 12 years and raise taxes on the wealthy. House Republicans have passed a plan that would cut nearly $6 trillion from the deficit, in part by overhauling Medicare and Medicaid. Obama and Republicans have accused each other by turn of pitching “radical” plans, and there are few indications of where they’ll find room for compromise.

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Mortgage Debt Relief For Distressed Homeowners Won’t Hurt Big Banks, IMF Says

April 15, 2011

NEW YORK — A broad mortgage debt-relief program for distressed homeowners would not significantly impact the nation’s four biggest banks, according to a report released this week by the International Monetary Fund. Bank of America, JPMorgan Chase, Citigroup and Wells Fargo have enough money to withstand the resulting losses, IMF economists projected in their report . The findings cast doubt on the notion that a broad-based program to reduce troubled homeowners’ mortgage debt would hurt the nation’s financial system. If the four lenders established a year-and-a-half long program to reduce debt on first mortgages by 15 percent for borrowers at risk of foreclosure, and also worked to lower loan balances by 30 percent until 2015 for seriously-delinquent borrowers and those in foreclosure, they’d face little consequence, the IMF said. “Our stress tests highlight the capital strength of U.S. banks,” the organization said in its report, noting the lenders’ ability to manage “even under a severe shock.” State attorneys general and some federal agencies are seeking to penalize the nation’s five biggest banks for abusing homeowners and breaking federal rules and state laws during the foreclosure process. Officials are pursuing as much as $30 billion in fines. Federal bank regulators at the Office of the Comptroller of the Currency object to those efforts, instead pursuing modest fines and a redesign of how mortgage firms treat borrowers to ensure abuses don’t occur going forward. Some Republicans in Congress have argued that a broad-based mortgage relief program would hurt banks’ balance sheets and impede lending. The costs associated with a widespread principal reduction effort — which would impact millions of homeowners — as forecast by the IMF is significantly greater than what is currently under discussion by state and federal officials in the foreclosure abuse probes. The nation’s five largest mortgage firms have saved more than $20 billion since the housing crisis began in 2007 by taking shortcuts in processing troubled borrowers’ home loans, according to a confidential presentation prepared for state attorneys general by the nascent consumer bureau inside the Treasury Department and obtained by The Huffington Post . The report, prepared by the Bureau of Consumer Financial Protection, suggests the $20 billion figure should be used as a starting point in settlement discussions with the targeted firms. Many more billions would likely have to be levied as penalties to discourage the firms from taking a similar approach in the future and compensate homeowners for abuses, including reducing distressed borrowers’ loan balances, some officials have argued. The IMF’s projections came as part of a report that touched on the problems afflicting the nation’s housing market. Purchases of new U.S. homes dropped in February to the slowest pace on record, according to the Commerce Department. Prices declined to the lowest level since 2003, according to the National Association of Realtors. About 6.9 million homeowners were either delinquent or in foreclosure proceedings in February, according to Lender Processing Services, a Florida-based data provider. More than 2.8 million homes received a foreclosure filing in 2009, and nearly 2.9 million residences received a foreclosure filing last year, according to RealtyTrac, a California-based data provider. Government programs designed to reduce monthly mortgage payments — like the Obama administration’s signature effort, the Home Affordable Modification Program — have had limited success. Industry programs to mitigate foreclosures have had a similarly lackluster result. “The primary shortcoming has been the inability to induce the payment reductions needed to address borrowers’ high-debt profiles and/or the principal reductions to address the large negative equity position of many homeowners,” the IMF said in its report. Nearly a quarter of homeowners with a mortgage owe more on that debt than their homes are worth, according to CoreLogic, another real estate data provider. Underwater homeowners collectively owe $751 billion more than their homes are worth. “As a result, modified loans have had high redefault rates, slowing homeowners’ efforts to de-leverage and restore their credit scores and lengthening the foreclosure process,” the IMF wrote in its report. The average borrower in foreclosure has been delinquent for 537 days before eviction, up from 319 days in January 2009, according to LPS. “These considerations suggest that more structural policies, such as renegotiation or some form of debt reduction — including writedowns of mortgage principal by banks — may be needed,” the IMF wrote in its report. The international organization said its analysis “suggests that banks in the United States have room to take such measures, which could help relieve some of the problems in residential real estate markets.” Representatives from 10 state attorneys general offices, along with officials from the Justice Department and the Department of Housing and Urban Development, met with banks again this week, the second time they’ve discussed the ongoing investigation with bank representatives, Associate U.S. Attorney General Tom Perrelli said on a conference call with reporters on Wednesday. A settlement that includes reducing distressed homeowners’ mortgage balances is still on the table, officials said, despite banks’ objections.

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Preeti Vissa: Emergency: Budget Deal Throws Struggling Homeowners Under the Bus

April 14, 2011

As attention inside the Beltway shifts to President Obama’s 2012 budget plan outlined in his speech Wednesday, there’s danger that a critical provision in the 2011 continuing resolution — the last-minute deal that avoided a government shutdown — will be ignored. In that deal, housing counseling funding has been zeroed out . So in the middle of the housing crisis, the funding which enables the local, HUD-approved housing counseling agencies that are often the only source of competent and impartial help for people struggling to avoid foreclosure will disappear. Simply put, hundreds of thousands of families who could be helped to keep their homes won’t get that help, and won’t get a chance to save their homes. This is a disaster that will ripple through whole communities, further dampening the already-feeble recovery, which is already being held back by a weak housing market. Just what do these counselors do? According to the National Council of La Raza, HUD-approved housing counseling agencies have provided the following assistance to people struggling to keep or obtain housing since fiscal year 2009: Provided more than 4 million families with individual housing counseling Counseled more than 420,000 pre-purchase households, resulting in 185,000 who purchased homes or are homeownership-ready Worked to prevent mortgage delinquency for 2.6 million households, with nearly 834,000 avoiding foreclosure Supported 413,000 with post-purchase (non-foreclosure) services, 168,000 of whom refinanced or obtained reverse mortgages, and Assisted more than 590,000 renters and homeless individuals to resolve tenant issues or find shelter I understand that fixing the nation’s budget problem is hard and will require sacrifices, but dismantling such critical housing assistance in the midst of the foreclosure crisis is insane. It’s like being on a sinking ship and selling off the lifeboats to raise money. Congress is scheduled to debate the continuing resolution tomorrow, so time is of the essence. Here are some numbers you can call to let your representatives know that this sort of false economy is a tragic mistake and should be removed from the continuing resolution before it’s adopted. Where To Call: House of Representatives: 1-800-962-3524. Ask for your representative Senate: 1-800-962-3524. Ask for both of your senators White House: 1-202-456-1414. Ask for the Comment Line

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Pat Choate: Banks Still Acting Badly

April 13, 2011

The big banks are still mugging America. They do so because they can, and they can because they pour tens of millions of dollars into our Presidential and Congressional elections. Their political contributions politically exempt them from our criminal laws and serious regulatory oversight. As William Grieder notes in The Nation , they are “too big to prosecute.” Since the financial crisis began more than three years ago, not a single financial executive has gone to jail, despite massive evidence of criminal fraud. When the evidence of criminal activity is so overwhelming that the Justice Department must act, the Administrations of George W. Bush and Barack Obama have chosen to defer prosecutions and impose civil fines that are rarely more than wrist slaps. The Bush Administration settled 108 such corporate cases through deferment and the Obama Administration did 53 in its first two years. Grieder points out that the refusal of the Bush and Obama Administration’s to hold corporate executives accountable, with no prospect of serious jail time or heavy personal fines merely continues the status quo… “so the corporate crooks will do it again.” In fact, the crooks never stopped “doing it.” Scott Pelley reported in a recent a 60 Minutes episode (4/1/2011) on how the same banks that got most of the TARP bailout monies were forging mortgage recall documents. When the big banks engineered the devastating mortgaged back securities that created the Great Recession several years ago, they sped the processing by eliminating most of the paperwork. When the economy collapsed and millions of jobless workers were unable to pay their mortgages, the banks began unraveling these securities and quickly discovered they could not prove their ownership. What did the banks do? They hired companies, such as one named Docx, that hired low-level unemployed workers off the street, paid them $10 per hour, sat them at a table, and handed them a pen which the workers used to sign phony mortgage documents as fast as they could. To speed up the signing, one of these processing mills used the short and easy to sign name of a worker named Linda Green . All the signers wrote her name again and again on these phony mortgage documents at a personal pace of 4,000 signatures per day. Among the papers they signed was the vital assignment of mortgage, which transferred the home ownership to the bank. The phony documents identified these robo-signers as vice presidents and executives of various banks. Low wage notaries then validated the signatures. The owners of many homes seized with these fake documents were not in default. Some owners owed nothing. Yet, their homes were seized and they were thrown into the street. The Attorney Generals in 50 states are investigating these big banks, with the prospect of major criminal and civil lawsuits forthcoming. Once again, however, the banks are getting the Obama Administration and Congress to let them off the hook. The U.S. Treasury is negotiating a deal with the banks in which they neither admit nor deny guilt, agree to better train their workers and henceforth to obey the law. The banks’ obvious goal is to preempt any state indictments. Federal indictments are not a worry to them. There is more. Congressional friends of the banks have tucked another bailout into the American Invents Act (the patent bill) that zipped through the Senate in March with a 95-5 vote and now awaits action in the House. Billions of dollars are at stake. Many of the major banks have been using patented business methods without permission of the patent owners or payment to them. The financial industry has persuaded the Obama Administration and the Senate and House Judiciary leaders to retroactively change Patent Office rules in a way that makes it impossible for these patent owners to enforce their Constitutional rights against the banks’ infringement. In effect, the Congress is voiding issued patents on behalf of the big banks. As all this suggests, America’s big banks are still out of control. In today’s corrupt political environment, the only way for We the People to stop this predation is to vote out of office those in the banks’ pay, whether it be a president, a senator or a representative. A slow and difficult process, for sure, but ultimately an effective one.

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JPMorgan Chief Gets $19 Million Raise

April 8, 2011

NEW YORK (By By Clare Baldwin and Jonathan Stempel) After piloting the No. 2 U.S. bank through the financial crisis relatively unscathed, JPMorgan Chase & Co Chief Executive Officer Jamie Dimon is now being extremely well rewarded. Dimon’s total compensation jumped nearly 1,500 percent to $20.8 million in 2010 from $1.3 million a year earlier, based on the U.S. Securities and Exchange Commission’s compensation formula, a regulatory filing showed. Dimon did even better in terms of the value of money and shares actually received: his salary, bonus and stock and options from grants made largely in previous years that were actually exercised in 2010 were worth around $42 million. By way of comparison, real median U.S. household income was just $49,777 in 2009, according to the U.S. Census Bureau. Large pay packages for bankers who oversaw transactions that brought the world economy to the brink of collapse in 2008 have become a flash point for investors. Anger has eased, but banker pay remains a sensitive issue, especially toward lenders that took taxpayer bailout money. Many analysts view JPMorgan as the healthiest of the largest U.S. commercial banks, having skirted the worst of the credit losses that hurt many rivals including Bank of America Corp and Citigroup Inc. They credit the 55-year-old Dimon, who became chief executive on December 31, 2005, for having enabled JPMorgan to quickly repay its $25 billion of bailout money. JPMorgan is also one of the first big banks to raise its dividend after passing a second Federal Reserve “stress” test. However, Dimon has criticized regulatory reforms by the Obama administration, saying they could crimp growth. In his annual shareholder letter posted on the bank’s website, Dimon said JPMorgan could earn $22 billion to $24 billion in a “more normal” environment, up from $17.4 billion in 2010. He said profit has fallen short because mortgage losses have been “extraordinarily high,” at $4 billion a year and that such losses will remain “elevated” for a while. THREE YEARS TO SELL HOME Dimon’s 2010 salary remained at $1 million. He was also awarded a $5 million bonus, nearly $8 million in stock awards and $6.2 million in option awards, according to the SEC’s compensation formula. His 2010 compensation also included $579,624 worth of perks, including $421,458 of “moving expenses,” $95,293 to use company aircraft and $45,730 for personal automobile use. Most of the rest went toward home security. Like many Americans who have had trouble selling their homes, Dimon did too. The moving expenses relate to the sale in 2010 of Dimon’s Chicago-area home, in which he had lived while heading Bank One Corp that was sold to JPMorgan in 2004. Dimon put the home up for sale in 2007 when his family moved to New York. Dimon’s total compensation in 2010 fell short of the $35.8 million he was awarded in 2008, according to the SEC formula. Goldman Sachs Group Inc Chief Executive Lloyd Blankfein saw compensation jump to $14.1 million in 2010 from $1 million, another regulatory filing shows. Other bank CEOs had lower compensation in 2010. Wells Fargo & Co’s John Stumpf saw compensation fall to $19 million from $21.3 million. Bank of America’s Brian Moynihan saw compensation fall 70 percent to about $1.9 million, although in early 2011 he got a $9.1 million bonus. Citigroup CEO Vikram Pandit’s compensation was $1 in 2010, but his salary alone has risen to $1.75 million in 2011. JPMorgan shares closed down 0.5 percent at $47.40 on the New York Stock Exchange on Thursday. (Reporting by Clare Baldwin and Jonathan Stempel; editing by Tim Dobbyn, Martin Howell and Dhara Ranasinghe) Copyright 2010 Thomson Reuters. Click for Restrictions .

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Homebuilder Beazer Becoming Used-Home Landlord

April 6, 2011

Beazer Homes, one of the country’s largest homebuilders, is expanding beyond new home sales with the launch of a ‘Pre-Owned Homes’ division. Beginning in the Phoenix market that has a large inventory of distressed and foreclosed homes, the new division plans to acquire, improve and rent recently built, previously owned homes within select communities in markets in which the company currently operates. Having completed its first acquisitions…

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