U.S. Home Prices Fall at Highest Annual Rate Last Quarter
U.S. Home Prices Fall at Highest Annual Rate Last Quarter
International herald Tribune
A widely watched index showed Tuesday that U.S. home prices tumbled by the sharpest annual rate on record in the fourth quarter and in December.
The Standard & Poor's/Case-Shiller U.S. National Home Price index for 20 cities plunged 18.2 percent during the quarter from a year earlier, the largest drop since the data began to be compiled 21 years ago. Prices have fallen to levels not seen since the third quarter of 2003.
U.S. Clears Path to Bank Takeovers
Washington Post
The Obama administration yesterday revamped the terms of its emergency aid to troubled financial firms, setting a course that could culminate with the government nationalizing some of the country's largest banks by taking a controlling ownership stake.
Administration officials said the change, which allows banks to repay the government with common stock rather than cash, is intended to give banks more capital to withstand a continued deterioration of the economy, and not to nationalize the banking system.
Mortgage Bailout Declared Futile
Orange County Register
Bob Simpson, president of Imarc Investors Mortgage Asset Recovery Co., an Irvine firm that investigates why home loans go bad, says no federal mortgage rescue plan can save people from having gotten in too deep. Simpson says he’s seen thousands of people fail to pay mortgages for which they were not qualified. He anticipates seeing tens of thousands more this year, no matter what the government does.
In Maricopa, Ariz., a Paradise Found and Lost
Wall Street Journal
Builders rushed into this one-time agricultural crossroads during the housing boom. They put up beige stucco houses on winding streets, with names like Heavenly Place and Good Vibrations Lane. They lured young people who couldn't afford homes in nearby Phoenix or its costly suburbs. The population soared to 37,000 last year from 1,400 a decade ago, making Maricopa one of the nation's fastest-growing towns.
Now, it's become a dead end for some of those people.
"We're trapped," says Tracy Campbell, as she watches her 2-year-old daughter romp on a playground. Along a nearby highway, young men hired by a local real estate brokerage wave red signs touting "Homes From $69 K."
Can't Pay or Won't Pay?
The Economist
No part of the financial crisis has received so much attention, with so little to show for it, as the tidal wave of home foreclosures sweeping over America. Government programs have been ineffectual and private efforts not much better.
Now it is Barack Obama’s turn. On February 18th he pledged $75 billion to reduce the mortgage payments of homeowners at risk of default. Lenders who help people to refinance their mortgages will receive matching subsidies from the government. These could reduce a borrower’s monthly payments to as little as 31% of their income, and last for up to five years.