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Articles
Second-Mortgage Standoffs Stand in Way of Short Sales, WSJ
Most first mortgages, like Mr. Trujillo's, are guaranteed by government-controlled mortgage giants Fannie Mae and Freddie Mac or held by other investors in mortgage securities. Second mortgages and other junior liens are typically owned by banks and credit unions.
Banks are reluctant to write down second mortgages because many are still current, even if the borrowers owe more than the value of their homes. They may also be able to pursue borrowers' assets after foreclosure."If I'm the second-lien holder, I may say, 'You know what, I want to see if I can hold out for a better deal,' " said Greg Hebner, president of MOS Group Inc., an Irvine, Calif., company that contacts troubled borrowers on behalf of lenders and servicers.The result is a "chicken game" between investors that leads to unnecessary foreclosures, said Jon Goodman, a real-estate lawyer and investor in Boulder, Colo...."This is an all-parties-lose scenario," said Brian Flock, a real-estate agent. "There is no housing recovery when this happens."
By Nick Timiraos, Nov. 27, 2010 WSJ
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11/27/10 wsj
Advice For the Rich in 2011: Hide, WSJ
Setting aside their supporters in Congress, the rich don’t have many friends these days. They’re seen by an angry public as criminals, bailed-out bonus babies or wealth-hoarding tax-avoiders who have rigged the system in their favor.So what can the rich do to win back the public’s respect? Robert Guest, business editor of the Economist, has some suggestions on what the global elite should do in 2011.“They could start by recognizing how unpopular they are,” he writes. “In 2011 the masses will be furious at the mess the world is in, and will blame not only big bankers but the global elite in general.”
By Robert Frank, Nov. 24, 2010 WSJ The Wealth Report
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Shadow Inventory of Homes Rising, WSJ
The “shadow inventory” of unlisted bank-owned homes and potential foreclosures increased to 2.1 million units in August, up 10% from one year earlier, according to new estimates from CoreLogic, a real-estate research firm.That’s around eight months of supply, compared to a five-months’ supply one year ago.By contrast, the inventory of all unsold homes listed for sale totaled 4.2 million units in August, unchanged from one year ago. Together, that means the visible and shadow supply of homes stood at around 6.3 million in August, or around 23 months of supply at the current sales pace.Mark Fleming, chief economist at CoreLogic, says that weak housing demand “is significantly increasing the risk of further price declines in the housing market.” Delays in the foreclosure process, including those brought on by banks’ inability to file the proper legal paperwork, threaten to exacerbate that trend.
By Staff, Nov. 22, 2010, WSJ
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11/22/10 WSJ
Signs of Swagger, Wallets Out, Wall St. Dares to Indulge, WSJ
A study by the influential compensation expert Alan Johnson says broadly that bonuses will be up 5 percent this year across all financial services companies, with employees in some businesses like asset management getting increases of 15 percent.
Two years after the onset of the financial crisis, the stock market is recovering and Wall Street’s moneyed elite are breathing easier again. And this means in some cases they are spending again — at times cautiously, but sometimes with a familiar swagger.It’s true that firms scaled back the corporate excesses, like fancy retreats and private jets, for which they were vilified as a brutal recession gripped the country. Many of those constraints remain in place, like flying commercial on business trips, or more limited private car service for employees.But when it comes to personal indulgences, there are signs that the wallets are beginning to open up. Traders and executives say that jobs seem much more secure. Businesses whose fortunes ebb and flow with the financial markets are thriving again.
By Suzanne Craig and Kevin Roose, Nov. 23, 2010 WSJ
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Dow Hits Pre-Crisis - Pre-Lehman Bankruptcy - Level, WSJ
Central Bank's Spending Binge Stokes Global Rally; 'Don't Fight the Fed'
Global financial markets cheered the Federal Reserve's plans to spur the U.S. economy Thursday, driving commodity and bond prices higher and propelling the Dow Jones Industrial Average to levels last seen before Lehman Brothers collapsed two years ago.The Dow surged nearly 220-points to its highest level since September 2008 thanks to the Federal Reserve's plan to buy $600 billion in treasurys. Bob O'Brien and Kristina Peterson has details and tell us why gold prices also hit a new record. Interest rates and the dollar tumbled in response to the Fed's decision Wednesday to buy $600 billion of U.S. Treasury bonds, helping fan fresh rallies in oil, gold and Asian stock markets. Major U.S. companies including Coca-Cola Co. and Dow Chemical Co. raced to take advantage of the low rates, selling at least $12 billion of new debt.
By Mark Gongloff, Nov. 5, 2010 WSJ
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11/05/10 wsj
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