CA PC AG plays with FIRE

What could possibly be the social, economic or political incentive for the government of the State of California to negotiate a better deal for its underwater homeowners than could the other 49 states acting in concert? The California state Legislature including executive officers may be the only political body in the country more in the thrall of finance, insurance and real estate (FIRE) special interests than the US Congress.
State Attorney General Kamala Harris, leader of the go-it-alone policy, seems like a competent criminal prosecutor. However, given her connections to President Obama and his connections to Wall Street (and the imperious demand for a $1-billion campaign war chest), we suggest the California settlement might well be more favorable to FIRE than the settlement negotiated by the vast majority of states...which would put Harris in a favorable fund-raising position for her next statewide campaign.
Badlands Journal editorial board
Washington Post
Calif. attorney general pulls out of 50-state mortgage foreclosure settlement talks with banks
Associated Press
SACRAMENTO, Calif. — California Attorney General Kamala Harris said Friday that she will not agree to a settlement over foreclosure abuses that federal officials and other state attorneys general are negotiating with major U.S. banks.
Her announcement is the latest to undermine a resolution that had been in the works between the banks and attorneys general in all 50 states. Other states including New York also have expressed reservations about the deal, which would help keep people in their homes and compensate borrowers who faced improper foreclosures.
The agreement was supposed to settle claims of poor mortgage and foreclosure practices, including document fraud known as “robo-signing” — approving documents in foreclosures without actually reading them.
However, Harris said the pending deal is “inadequate for California homeowners” and gives bank officials too much legal immunity.
The state is being asked as part of the settlement “to excuse conduct that has not been properly investigated,” she wrote, promising to continue her own investigation.
Without agreement from the nation’s most populous state — and one of the hardest hit by foreclosures — the settlement could end up doing little to resolve the issue. Foreclosure fraud class-action lawsuits are also piling up against major banks across the country.
Harris noted that more than 2.2 million California residents are underwater, meaning they owe more on their mortgages than their homes are worth. Since the negotiations began 11 months ago, foreclosures have begun against more than 560,000 additional California homes.
“No state has been harder hit than my home state of California,” Harris wrote in a letter to Associate U.S. Attorney General Thomas Perrelli and Iowa Attorney General Tom Miller, who have been leading the talks.
Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. are among the banks that have been involved in the talks.
“We will continue to work with all parties, including our customers to restore home ownership nationally and locally,” Wells Fargo spokeswoman Vickee Adams said, adding that the bank has helped more than 700,000 people nationwide with new low cost loans or modifications.
JPMorgan Chase spokesman Thomas Kelly and a Bank of America spokesman Lawrence Grayson declined to comment.
Harris said California will go it alone in negotiating a settlement with the banks that would keep more families in their homes. She also promised to seek regulations and legislation to prevent future problems.
Assistant Iowa Attorney General Patrick Madigan said California had been an important part of the negotiations, which already have had lasting effects, delaying foreclosures in many states.
“However, the multistate effort is pressing forward and we fully expect to reach a settlement with the banks,” he said in a statement. The settlement will still be presented to all 50 states, he said.
States need to move quickly to prevent more foreclosures, Madigan said.
“Providing relief after the foreclosure crisis is over would be a hollow victory indeed,” he warned.
Merced Sun-Star
Cardoza, lawmakers say administration not doing enough to address Valley problems…MICHAEL DOYLE, Sun-Star Washington Bureau
WASHINGTON -- The Obama administration continues to frustrate Central Valley lawmakers, who charge the White House with doing too little, too late for the region's foreclosure epidemic.
And these are fellow Democrats talking.
On Thursday, the long-simmering tensions boiled over again as 17 unhappy House members, including Reps. Dennis Cardoza, D-Merced; Jim Costa, D-Fresno; and Doris Matsui, D-Sacramento, confronted one of the president's top housing honchos. The lawmakers wanted new programs, but they didn't get them.
"I am dismayed that there is no program that will adequately address the housing crisis," Cardoza said following the meeting, adding that the administration shows a "lack of understanding and lack of urgency ... that's unacceptable."
The 17 House members, all Democrats and most of them from California, had summoned Edward DeMarco, acting director of the Federal Housing Finance Agency, to a private Capitol Hill briefing on what the administration planned to do next for California's housing woes.
In a meeting punctuated by loud voices and an occasional fist pounding on the table, according to participants, DeMarco absorbed the rhetorical punches and then promised to come back by the end of the month with a new plan.
"He knows we're not satisfied," Costa said. "He knows we're sick and tired of the administration's inability to provide meaningful fixes for the housing crisis."
DeMarco, and the Obama administration in general, already had irked the Valley lawmakers. Last month, the administration sent lower-ranking officials to meet with the House members who had asked to meet with DeMarco himself.
The apparent brush-off particularly displeased California representatives, whose congressional districts are frequently described as "ground zero" for the mortgage and foreclosure crisis. Foreclosure rates in the Merced, Modesto, Stockton and Sacramento metropolitan areas have consistently ranked in the top 10 nationwide.
The Bush administration, too, had angered the region's lawmakers with mortgage assistance programs they deemed inadequate and poorly targeted. At one point, Merced failed to land targeted mortgage assistance funds though it ranked second in the nation for foreclosures.
But DeMarco, a longtime federal employee with a doctorate in economics, has a difficult balancing task. While lawmakers press for more help with their constituents' mortgages, his responsibilities include protecting what remains of Fannie Mae and Freddie Mac, the mortgage giants now under federal conservatorship.
"The model on which they were built is now broken beyond repair," DeMarco said at a housing conference in North Carolina last month.
The Obama administration has previously tried several mortgage assistance programs. The Home Affordable Modification Program, begun in 2009, has helped cut interest payments or made other revisions to about 357,000 mortgages nationwide. The Home Affordable Refinance Program has helped about 838,000 homeowners refinance.
In his North Carolina speech, DeMarco called the number of mortgages refinanced through the Home Affordable Refinance Program "meaningful" but acknowledged it was also "fewer than expected." One new proposal under discussion has been to expand HARP so that some borrowers could refinance into lower-rate loans even if they owe greater than 125 percent more than what their home is worth.
"There are several challenging issues to work through here and the outcome of this review is uncertain," DeMarco said in his North Carolina speech.
On Thursday, lawmakers said DeMarco cautioned the plan he will return with might only be able to help 600,000 to 1 million homeowners nationwide. One of the meeting's organizers, Rep. Elijah Cummings, D-Md., estimated this might only cover about one-tenth of the national need.
"There's so much left to be said," Cummings said. "There's so much left to be done."
CoreLogic: Merced home prices fell 6,7% in August from 2010, including distressed sales…Sun-Star staff
SANTA ANA--CoreLogic (NYSE: CLGX), a provider of information, analytics and business services, today released its August Home Price Index (HPI) which shows that home prices in the U.S. decreased 0.4 percent on a month-over-month basis, the first monthly decline in four months
In Merced, home prices, including distressed sales, declined by 6.7 percent in August 2011 compared to August 2010 and declined by 6.8 percent* in July 2011 compared to July 2010. Excluding distressed sales, year-over-year prices increased by 0.7 percent in August 2011 compared to August 2010 and increased by 1.2 percent* in July 2011 compared to July 2010.
According to the CoreLogic HPI, national home prices, including distressed sales, also declined on a year-over-year basis by 4.4 percent in August 2011 compared to August 2010. This follows a decline of 4.8 percent* in July 2011 compared to July 2010. Excluding distressed sales, year-over-year prices declined by 0.7 percent in August 2011 compared to August 2010 and by 1.7* percent in July 2011 compared to July 2010. Distressed sales include short sales and real estate owned (REO) transactions.
National Highlights as of August 2011 Including distressed sales, the five states with the highest appreciation were: West Virginia (+8.6 percent), Wyoming (+3.6 percent), North Dakota (+3.5 percent), New York (+3.2 percent), and Alaska (+2.2 percent). Including distressed sales, the five states with the greatest depreciation were: Nevada (-12.4 percent), Arizona (-10.7 percent), Illinois (-9.6 percent), Minnesota (-7.8 percent), and Georgia (-7.2 percent). Excluding distressed sales, the five states with the highest appreciation were: West Virginia (+10.7 percent), Mississippi (+4.8 percent), Hawaii (+4.4 percent), North Dakota (+4.2 percent), and Kansas (+3.7 percent). Excluding distressed sales, the five states with the greatest depreciation were: Nevada (-8.8 percent), Arizona (-8.3 percent), Delaware (-4.9 percent), Michigan (-4.3 percent), and Minnesota (-4.2 percent). Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to August 2011) was-30.5 percent. Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -21.0 percent. Of the top 100 Core Based Statistical Areas (CBSAs) measured by population, 80 are showing year-over-year declines in August, eight fewer than in July.
Census: Housing bust worst since Great Depression…HOPE YEN, Associated Press
WASHINGTON The American dream of homeownership has felt its biggest drop since the Great Depression, according to new 2010 census figures released Thursday.
The analysis by the Census Bureau found the homeownership rate fell to 65.1 percent last year. While that level remains the second highest decennial rate, analysts say the U.S. may never return to its mid-decade housing boom peak in which nearly 70 percent of occupied households were owned by their residents.
The reason: a longer-term economic reality of tighter credit, prolonged job losses and reduced government involvement.
Unemployed young adults are least likely to own, delaying first-time home purchases to live with Mom and Dad. Middle-aged adults 35-64, mostly homeowners who were hit with mortgage foreclosures or bankruptcy after the housing bust in 2006, are at their lowest levels of ownership in decades.
Measured by race, the homeownership gap between whites and blacks is now at its widest since 1960, wiping out more than 40 years of gains.
"The changes now taking place are mind-boggling: the housing market has completely crashed and attitudes toward housing are shifting from owning to renting," said Patrick Newport, economist with IHS Global Insight. "While 10 years ago owning a home was the American Dream, I'm not sure a lot of people still think that way."
He noted the now-diminished roles of mortgage buyers Fannie Mae and Freddie Mac, which for decades at the urging of government helped enable loans to borrowers with poor credit, many of them minorities. In a shift, the Obama administration earlier this year said it would move from a longtime government focus on promoting homeownership for all and instead steer people with low incomes toward renting where appropriate.
Congress has been considering whether to eliminate the federal tax deduction for home-mortgage interest, a popular incentive to home-buying that's been in place since the early 20th century.
Given depressed housing values that could continue for at least another four to five years, it now makes more sense in most cases to rent than own, Newport said.
Nationwide, the homeownership rate fell to 65.1 percent - or 76 million occupied housing units that were owned by their residents - from 66.2 percent in 2000. That drop-off of 1.1 percentage points is the largest since 1940, when homeownership plummeted 4.2 percentage points during the Great Depression to a low of 43.6 percent.
Since 1940, the number of Americans owning homes had steadily increased in each decennial census due to a mostly booming economy, favorable tax laws and easier financing. The one exception had been 1980-1990, when ownership remained unchanged at 64.2 percent.
Broken down by state, 41 states saw declines in home ownership since 2000, many of them in the South and West where foreclosures were more common. They were led by South Carolina, Alabama, Florida, Mississippi and North Carolina. On the other end of the scale, states with higher shares of vacation homes owned by affluent baby boomers saw small increases in ownership, including New Hampshire, Hawaii, Alaska and Vermont.
The U.S. housing crisis is far worse than the experience in most Western industrialized nations, which, unlike the U.S., did not foster markets of subprime lending to promote homeownership. The U.S. continues to maintain a relatively high rate of homeownership, surpassed only by countries such as Spain, Ireland, Australia and England.
"In the U.S., there's still a strong cultural pull toward homeownership, because in normal times it's always been seen as a way to build net worth and equity," said Dan McCue, research manager at Harvard's Joint Center for Housing Studies. But with many former homeowners now renting, he said, clearly that dynamic has changed: "It puts a renewed focus on rentals, and on ways to create new opportunities for low-income households to build their wealth."
Blacks, who as a whole have lower income and higher unemployment than other groups, were particularly set back by the housing bust. Their homeownership rate fell from 46.3 percent in 2000 to 44.3 percent; among whites, the rate dipped slightly from 72.4 percent to 72.2 percent. Whites are now on average 1.63 times more likely than blacks to own a home, the widest gap since 1960.
Among all minorities, homeownership in the U.S. rose slightly over the past decade to 48 percent from 47.4 percent, boosted by more home buying among the younger and larger Hispanic population. Hispanic homeownership increased from 45.7 percent to 47.3 percent.
In all, nearly 44 percent of all renters in the U.S. are minorities, compared with only 22 percent of homeowners. Broken down by state, minorities make up more than half of all renters in 10 states and the District of Columbia, up from 6 in 2000 - with the new states being New York, New Jersey, Mississippi, Louisiana and New Mexico.
"There is no doubt that a large part of the white-minority economic divide is reflected in the disproportionate minority representation among the nation's renters," said William H. Frey, a demographer at Brookings Institution, who analyzed the race data. "The recent financial crises, including large numbers of subprime loans to African Americans, has dramatically widened the white-black homeownership disparity."
Other census findings:
-Homeownership rates decreased in each region of the country over the last decade. Midwesterners were most likely to own a house, at 69.2 percent, followed by Southerners at 66.7 percent, Northeasterners at 62.2 percent and Westerners at 60.5 percent.
-For the fourth census in a row, West Virginia had the highest homeownership rate, at 73.4 percent. The District of Columbia, with its high share of single twenty- and thirty-somethings who rent, had the lowest at 42 percent.
-While homeowners were the majority in most of the nation's metropolitan areas, they were outnumbered by renters in many of the nation's largest cities. They included New York City, where renters made up 69 percent of households, Los Angeles at 61.8 percent, Chicago at 55.1 percent and Houston at 54.6 percent.
By age, the highest ownership rate nationwide is for those 65 and older, about 77.5 percent. Older Americans are more likely to own their homes debt-free and thus be less exposed to the foreclosure crisis. Still, their homeownership rate is down slightly from a 2000 peak of 78.1 percent.
Among adults 34 and younger, homeownership was nearly 40 percent, the highest since the mid-1990s. For adults in the 35-44, 45-54 and 55-64 age groups, homeownership rates fell to their lowest since at least 1980.
Peter Francese, founder of American Demographics magazine who is now analyst for the MetLife Mature Market Institute, believes Americans aren't completely giving up on homeownership. He noted millions of young adults are delaying home-buying while they temporarily double-up with their parents, representing pent-up demand for houses that will surface once the job market begins to recover.