Spike in Interest Rates Could Choke Recovery
US Sen Offers Bill To Expand Home Buyer Tax Credit
Wall Street Journal
A tax credit currently limited to certain first-time home buyers would expand dramatically under legislation introduced by U.S. Sen. Johnny Isakson, R-Ga. Under the legislation, any buyer of a home — not just first-time home buyers — would be eligible for a tax credit worth 10% of the purchase price up to $15,000. A tax credit passed into law earlier this year is worth only $8,000 and is limited to individuals and couples making no more than $75,000 and $150,000 respectively. The legislation, which Isakson introduced Wednesday, quickly attracted co-sponsors from both parties, including Senate Banking Committee Chairman Christopher Dodd, D-Conn.
Spike in Interest Rates Could Choke Recovery
Washington Post
Rising long-term interest rates are making it more expensive for home buyers, corporations and the U.S. government to borrow money, threatening to further stifle an already weak economy. In just the past two weeks, the rate on a 30-year, fixed-rate mortgage has risen to 5.6 percent from 4.9 percent, ending a boom in refinancing and working against a budding recovery in the housing market. Rates on corporate borrowing have also risen, making it more expensive for companies to expand. And the government has been forced to pay more to finance its deficit.
US Mayors Urge States to Require Mortgage Mediation
Reuters
Mayors from five U.S. cities called on Thursday for states to pass laws that would require mortgage lenders to negotiate with borrowers who are threatened with foreclosure. The mayors of New York City, Los Angeles, Miami, St. Louis and Oakland, California, said mandatory mediation offers the best hope of stemming a national foreclosure crisis that led to an 18 percent surge in foreclosure filings in May compared with a year earlier. The mayors aim to follow up on a year-old program in Philadelphia that brings lenders and borrowers together under court supervision, and has allowed more than 70 percent of participating homeowners to remain in their homes.
What Happened in Phoenix
Fortune
Did you happen to see the latest home-price stats from S&P/Case-Shiller, or did you avert your eyes? Here's what struck me: As of March 2009, every metro area in Case-Shiller's 20-city index, without exception, has fallen double digits from its peak. Ten are down more than 30%. Eight have dropped more than 40%. Las Vegas is down 50%. Phoenix? It doesn't get any worse than Phoenix. According to Case-Shiller, between June 2006 and March 2009 the average house in Phoenix lost a staggering 53% of its value. Possibly during the Great Depression, but almost certainly at no time since then, have house prices in a major metropolitan area fallen by more than half. It's almost unbelievable. Brother, tell me you didn't buy a house during the boom in Phoenix!
Failed Banks Dot Georgia's Vista
Wall Street Journal
The U.S. government's decision to let 10 big financial companies repay their taxpayer-funded investments is a break in the clouds for the banking system. In Georgia, though, the storm is raging unabated. The state is home to just 4% of all U.S. banks, but 20% of the nation's bank failures since August. More banks have collapsed in Georgia than in any other U.S. state, even foreclosure-racked California and Florida. Six Georgia banks have been seized by regulators this year, burned by too much expansion in the past decade and bad real-estate bets.