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- Housing fix has strong enemies – latimes.com
We've covered both sides of the Richmond, California eminent-domain controversy. Here's the most aggressive pro-Richmond plan piece we've seen in the mainstream press.
The federal government and the banking industry have failed to bring mortgage relief to homeowners in need. Richmond's plan to use eminent domain would help fill the void.
By Michael Hiltzik. August 30, 2013, 7:17 p.m.
One way to judge the virtues of the city of Richmond's initiative to use eminent domain to help its strapped mortgage borrowers is by the hysterical reaction of the banks and investors holding the mortgage loans.
Wells Fargo & Co. and Bank of New York have sued the East Bay city in federal court to throttle the plan even before its birth. (A court hearing on their request for an injunction is set for Sept. 13.)
They've enlisted federal regulators in their hand-wringing over the damage little Richmond (pop. 105,000) might wreak on the mortgage market nationwide. The real estate interests have even cajoled some of their housebroken congressmen, such as John Campbell (R-Irvine), into introducing legislation to stop Richmond in its tracks.
Michael goes on to describe why he thinks the Richmond plan is good and fair, etc.
He writes, "… with the help of the San Francisco investment firm Mortgage Resolution Partners, the mortgages would be extinguished and refinanced so their balances would come to about 95% of the homes' current market value, on average."
Just to be clear, the Richmond deal would be an exclusive for "Mortgage Resolution Partners," which firm would stand to make huge sums if the deal were to be duplicated around the nation.
If a city is going to do this plan, shouldn't it let the contract out for bid to qualified bidders?
Read the source article … http://www.latimes.com/business/realesta te/la- fi-hiltzik-20130901,0,627924,full.column
- Mortgages will remain hard to get until common sense returns | Inman News
By Lou Barnes. Contributor. Aug 30, 2013
…six years after mortgage misbehavior stopped cold, we still do not have a national understanding of what happened, laboring in ignorance, score-settling, and the entirely successful effort by Wall Street investment bankers to dodge accountability.
1. Pre-bubble, every mortgage bank and broker was contractually obliged to repurchase any loan with deficient underwriting, whether it defaulted or not.
How many of them went bankrupt and unable to repurchase loans? Isn't that what skin in the game is designed to help prevent: moral hazard?
Read the source article …
- Related Group plans 4 more towers – Business – MiamiHerald.com
Is it a bubble forming, or is this time different?
Posted on Friday, 08.23.13. By Martha Brannigan
In Miami and Miami Beach, Related alone already has under construction four condominium projects with 924 units and four others with 1,349 units in the works, according to company data. Thousands of units are going up in Miami as a phalanx of other developers also rush to attract wealthy Latin American investors willing to make hefty deposits and pay steep prices on pre-construction condominiums.
With the pace of condo development hitting high gear, some experts wonder how much is too much.
"The question now becomes: 'Is Related going to overbuild the market this decade like they did last decade?' " said Jack McCabe, an independent housing analyst and CEO of McCabe Research & Consulting Inc. in Deerfield Beach.
Related and other developers insist that the substantial deposits required from buyers distinguishes this cycle from the fateful bubble that wrecked South Florida's economy. More skin in the game keeps speculators out and ensures more measured development, the argument goes.
Read the source article … http://www.miamiherald.com/2013/08/23/35 81968/related-group-plans-4-more-towers. html
- Calculated Risk: Fannie Mae: Mortgage Serious Delinquency rate declined in July, Lowest since December 2008
By Bill McBride on 8/30/2013 04:14:00 PM
The Fannie Mae serious delinquency rate has fallen 0.8 percentage points over the last year, and at that pace the serious delinquency rate will be under 1% in just under 2 years. Note: The "normal" serious delinquency rate is under 1%.
Read the source article …
- Why India's Economy Is Stumbling – NYTimes.com
By Arvind Subramanian ["a senior fellow at both the Peterson Institute for International Economics and the Center for Global Development, is the author of "Eclipse: Living in the Shadow of China's Economic Dominance."]
The current government, which took office in 2004, has made two fundamental errors. First, it assumed that growth was on autopilot and failed to address serious structural problems. Second, flush with revenues, it began major redistribution programs, neglecting their consequences: higher fiscal and trade deficits.
Published: August 30, 2013
Structural problems were inherent in India's unusual model of economic development, which relied on a limited pool of skilled labor rather than an abundant supply of cheap, unskilled, semiliterate labor. This meant that India specialized in call centers, writing software for European companies and providing back-office services for American health insurers and law firms and the like, rather than in a manufacturing model. Other economies that have developed successfully — Taiwan, Singapore, South Korea and China — relied in their early years on manufacturing, which provided more jobs for the poor.
Just think if India had done what it did in the service and software sectors but had also focused upon basic manufacturing to employ the poorest. Will they do it now?
Read the source article … http://www.nytimes.com/2013/08/31/opinio n/why-indias-economy-is-stumbling.html?_ r=0
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