Housing Doom

Foreclosure modifications aren’t helping as their proponents advocated, and in fact may be making things worse:

The number of delinquent homeowners on track for help dropped from January to May, and 20 percent of those whose mortgage terms were renegotiated this year have now fallen behind once again, according to a report based on data from 13 of the nation’s 20 largest servicers of subprime mortgages.

The State Foreclosure Prevention Working Group, composed of 11 states’ banking regulators and attorneys general, concluded that loan servicers have not developed long-term, sustainable tactics to stave off foreclosures. New York and the Conference of State Bank Supervisors are members.

"Servicers appear to have reached the ‘low hanging fruit’ of subprime loans facing interest rate resets, while not developing effective approaches to address the bulk of subprime loans which are in default before interest rate resets," the report said. "The mortgage industry’s failure to develop systematic approaches to prevent foreclosures has only spurred declines in property values and further increased expected losses on mortgage loan portfolios … We fear continued reactive approaches will lead to another wave of … preventable foreclosures."

As long as home prices are declining, it is likely that loan modifications will be insufficient.  Some folks simply should not have been put into a mortgage for various reasons, and they will continue to have problems. Additionally, with a cooling economy, rising unemployment is going to create problems for some homeowners, regardless of modification.

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Just in case you wanted to know how your congressman voted yesterday so you can either congratulate or blast them for their choice, here’s the list.

Look for this list again the day before the election-  in case you need it for reference. :  )

Democrats who voted yes

Gary Ackerman, Thomas Allen, Robert Andrews, Michael Arcuri, Brian Baird, Tammy Baldwin, Melissa Bean, Howard Berman, Marion Berry, Timothy Bishop, Sanford Bishop, Dan Boren, Leonard Boswell, Rick Boucher, Allen Boyd, Robert Brady, Corrine Brown, Lois Capps, Michael Capuano, Dennis Cardoza, Russ Carnahan, Yvette Clarke, James Clyburn, Steve Cohen, Jim Cooper, Jim Costa, Bud Cramer, Joseph Crowley, Danny Davis, Susan Davis, Artur Davis, Diana DeGette, Rosa DeLauro, Norman Dicks, John Dingell, Joe Donnelly, Michael Doyle, Chet Edwards, Keith Ellison, Brad Ellsworth, Rahm Emanuel, Eliot Engel, Anna Eshoo, Bob Etheridge, Sam Farr, Chaka Fattah, Bill Foster, Barney Frank, Charles Gonzalez, Bart Gordon, Luis Gutierrez, John Hall, Phil Hare, Jane Harman, Alcee Hastings, Brian Higgins, Ruben Hinojosa, Chris Van Hollen, Rush Holt, Mike Honda, Darlene Hooley, Steny Hoyer, Steve Israel, Eddie Johnson, Paul Kanjorski, Patrick Kennedy, Dale Kildee, Ron Kind, Ron Klein, James Langevin, Rick Larsen, John Larson, Sander Levin, David Loebsack, Zoe Lofgren, Nita Lowey, Tim Mahoney, Carolyn Maloney, Edward Markey, Jim Marshall, Doris Matsui, Carolyn McCarthy, Betty McCollum, Jim McDermott, James McGovern, Jerry McNerney, Michael McNulty, Kendrick Meek, Gregory Meeks, Charles Melancon, George Miller, Brad Miller, Alan Mollohan, Gwen Moore, Dennis Moore, James Moran, Patrick Murphy, Christopher Murphy, John Murtha, Jerrold Nadler, Richard Neal, James Oberstar, David Obey, John Olver, Frank Pallone, Nancy Pelosi, Ed Perlmutter, Earl Pomeroy, David Price, Nick Rahall, Charles Rangel, Silvestre Reyes, Laura Richardson, Mike Ross, Dutch Ruppersberger, Tim Ryan, John Sarbanes, Jan Schakowsky, Debbie Wasserman Schultz, Allyson Schwartz, Joe Sestak, Albio Sires, Ike Skelton, Louise Slaughter, Adam Smith, Vic Snyder, Zachary Space, Jackie Speier, John Spratt, John Tanner, Ellen Tauscher, Edolphus Towns, Niki Tsongas, Nydia Velazquez, Maxine Waters, Melvin Watt, Henry Waxman, Anthony Weiner, Robert Wexler, Charles Wilson

Republicans who voted yes

Spencer Bachus, Roy Blunt, John Boehner, Jo Bonner, Mary Bono, John Boozman, Kevin Brady, Henry Brown, Ken Calvert, Dave Camp, John Campbell, Chris Cannon, Eric Cantor, Michael Castle, Tom Cole, Ander Crenshaw, Barbara Cubin, Tom Davis, David Dreier, Vernon Ehlers, Jo Ann Emerson, Terry Everett, Mike Ferguson, Vito Fossella, Wayne Gilchrest, Kay Granger, Wally Herger, David Hobson, Bob Inglis, Peter King, Mark Kirk, John Kline, Ray LaHood, Ron Lewis, Jerry Lewis, Daniel Lungren, Jim McCrery, John McHugh, Buck McKeon, Gary Miller, John Peterson, Chip Pickering, Jon Porter, Deborah Pryce, Adam Putnam, George Radanovich, Ralph Regula, Thomas Reynolds, Hal Rogers, Mike Rogers, Paul Ryan, Jim Saxton, Pete Sessions, Christopher Shays, Michael Simpson, Lamar Smith, Mark Souder, Tom Tancredo, Fred Upton, Greg Walden, James Walsh, Dave Weldon, Joe Wilson, Heather Wilson, Frank Wolf

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It took me over an hour to realize this wasn’t a joke. Zach Wells is a young, struggling Canadian poet and Via Rail porter who until recently lived just down the hill from me near The Park. I can guarantee every one of you that he has not the faintest conception of what he just did.

!! HOUSING DOOM ADVERTISEMENT !!

In Anything But Hank! Rachel Lebowitz and Zachariah Wells combine the whimsical humour of Lewis Carroll with the adventure-narrative balladeering of Robert Service to spin an unforgettable tale of a baby — and a pig! — in search of a name. Their quest takes them from the city to the mountains, as they seek an audience with the Wizard and his baby-naming Mexican beaded lizard. The story, accompanied by the gorgeously lush paintings of Eric Orchard, is a delight for readers of all ages.

more details below …

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There once was a moment in Canadian history. Never mind the details.

Criticism was directed at the way the Accord was reached. They believed it lacked public sanction. The ten premiers and the prime minister came to be seen as "11 men in suits," dealing the future of the country behind closed doors. Of course, historically that always had been the case, but in the post-Charter of Rights age this came to be seen as undemocratic.

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Well what do you know….

Sept. 29 (Bloomberg) — The $700 billion financial rescue plan is being rejected as voting continues in the U.S. House.

The vote was at 207 to 226 as the tally was held open while congressional leaders sought to persuade lawmakers to switch sides.

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The red ink continues to run in the streets of Washington:

WASHINGTON (MarketWatch) — The Federal Reserve on Monday announced that it was providing more liquidity into global money markets to ease recent strains. The Fed said it was boosting the size of its auctions of liquidity to commercial banks and the size of its swap agreements from a number of foreign central banks to $620 billion from $290 billion. In addition, the Fed announced a new forward auction to provide lending to banks over the year-end. "These steps are undertaken to mitigate pressures evident in the term funding markets in the United States and abroad," the Fed said in a statement. "By committing to provide a very large quantity of term funding, the Fed actions should reassure financial market participants that financing will be available against good collateral, lessening concerns about funding and rollover risk," the Fed added. Central banks stand ready to do more, the statement said.

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This is the point in the movie where the Empire always invokes Sovereign Default and enters a precipitous and irreversible decline. However …

Out in central bank land the number of fingers [1] seems to be just about keeping up with the number of holes in the dike [2] while the Ugliest Financial Bailout in Recorded History™ looks like it might barely [3] hold things together for a while.

But the most important aspect to this crisis has nothing to do with any of that — it’s the confidence and will of the American saver.

A consensus has been building among bubble bloggers, and that is that there is no way in God’s Earth that any of the authorities can stop a run on deposits like chequing accounts and money market funds if US customers want to take their money out now. And since we’ve reached the point in the financial cycle where foreign savers have stopped buying US instruments and have inexorably begun to sell them, the only solution is for Americans and America [4] to aggressively build wealth and save starting right now and for at least the next decade.

Few people remember that America’s greatest 20th century song-writer was a young lady from The Bronx. She’s talkin’ to ya now, and if a couple of million people hit this YouTube today we might just get through this thing.

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Here’s a great audio interview with economist Nouriel Roubini, who says the U.S. bank rescue plan is "very flawed".  Roubini reminds us that this just isn’t the $700 billion plan being sent to Congress today, there are other bailouts as well:

• Bailout plan $700B

• FHA/Housing $300B

• Term Auction Loans $200B

• JPMorgan repayments $87B

• AIG takeover $85B

• Money Market Insurance $50B

Roubini says the bailout might be good for the market to rally for a few days, but then "fundamentals will kick in". Losses will continue. He says "it’s expensive, and doesn’t do the job."

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If the term "foreclosure" evokes a picture in your mind of smaller, older properties sporting lots of plywood, you are behind the times.  Foreclosures have moved north of the million dollar mark in Las Vegas:

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Last night The New York Times had,[1]

Talks Implode During a Day of Chaos; Fate of Bailout Plan Remains Unresolved.

And this morning the editor of The Economist (in an e-mail that arrived half a day late) shared this judgement:

Rarely has a single piece of financial regulation seemed to matter so much. Hank Paulson’s bail-out plan, which is currently struggling to get through Congress, stands out not just for its size—$700 billion and counting—but also because of its importance. No rescue was ever going to be perfect, but we argue this week that this one needs to be passed. The potential cost of producing nothing, or too little too slowly, includes a financial collapse and a deep recession spilling across the world: those far outweigh any plausible estimate of the bail-out’s cost.

OK Doomers, it’s your turn now.

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