New Breakthrough "Magic Code" Makes Your Site Money!

Just Released: A New "Magic Code" that when added to any site you have causes your site (or even any site) to magically start making money.

No joke. This discovery was made by a New York doctor who for the last 10 years used it secretly to do everything from offset his advertising costs, to just adding it to 1,000's of webpages and amass a personal wealth now of nearly $100 million cash!

And now he's decided to allow you and everyone else to share in it (and since he stands nothing more to gain by keeping "you" in the dark about it).

As it turns out, a number of the largest online firms such as Alexa, and even a good number of the top 100 sites ranked on the entire Web are already using this amazing, but very simple secret.

Alexa, for instance, adds this code to a number of their webpages and it allows them to automatically generate an "extra" $90,000 a month in profits – and that for just a single webpage!

If you had 10 such pages that each did likewise, you'd "magically" get $900,000 every 30 days just poured into your pocket!

And most important: You should instantly recognize the fact that since a firm like Alexa (as well as about 34% of the Web's top 100 sites) is using this, then you too should be using it.

But here's what may SHOCK you the absolute very most ...

* It takes you just 45 seconds to add this code to any webpage

* Once added you do NOTHING further – but money just starts pouring in!

And remember ...

Just in case you think this isn't for real, firms like Alexa and others in the top 100 wouldn't be using it (but they are; so what does that tell you?)

If you are wise and want to make your webpages pay you money automatically simply by adding just a simple string of 1-line code to any webpage, then you had best go here immediately:

~~~> http://www.nitehawkdigital.com/magic_code.html

Why the need to RUSH? ... Simple:

The guy giving this out is letting just about another 500 to maybe 600 people at best find out about this, and then he's deliberately going to "pull the rug out from underneath" anyone else trying to get it!

I know, I know ... That sounds very cruel and unfair.

But that's his doing; so rather than argue with him it would probably just be a better idea to just go there and grab it so that at least "you" don't get left out in the rain, right?

But fair warning, in case you stumble upon this too late, just don't be shocked to see it's no longer available.

NAB will shock Wall Street

The National Australia Bank's decision to write off 90 per cent of its US conduit loans will have dramatic repercussions around the world. Wall Street will be deeply shocked when they understand the repercussions of what NAB has done.
It is clear global banks have nowhere near provided for their exposures to US housing loans which in the words of John Stewart are experiencing a “meltdown”.

We are now way beyond sub-prime. NAB says that it is suffering a 55 per cent loss on American housing loans – an event that has never happened in the history of a developed country in recent memory. This is an unprecedented event and means that the cost of bailing out the US financial system is now far beyond the highest estimates. A US recession is now locked in, but more alarmingly, 55 per cent loan losses point to the possibility of a depression.

It means the cost of bailing out housing exposures to the two mortgage insurers will be so great that it will leave no room to bail out anything else and there are several US banks that are now in big trouble. NAB says that the dislocation in the residential market is separate from the corporate market, but the flow on is inevitable.

While global banks have been writing down their balance sheet assets, few have tackled their conduit exposures which are off balance sheet but to which they are ultimately liable.

More

San Diego metro area's March total down 20.5%

Auction

An important home-price indicator was down a record 14.1 percent in March compared with a year earlier in metro areas around the country and down 20.5 percent in San Diego, Standard & Poor's reported yesterday.

The S&P/Case-Shiller Home Price Index for San Diego has dropped for 30 straight months on a month-by-month basis and 20 straight months year over year. “The steep downturn in residential real estate continues,” said David M. Blitzer, Standard & Poor's index committee chairman, in a statement. “There are very few silver linings that one can see in the data.”

Unlike measures of median prices, Case-Shiller looks at the change in prices, property by property, over time to try to estimate the change in values of similar properties in a particular market.

The San Diego index, set at 100 in January 2000, now stands at 185.44, down from the peak 250.34 in November 2005. That means that at the peak homes were worth 2½ times their 2000 value but have since fallen back 25.9 percent to today's level.

New Wave of Mortgage Failures Could Create Nightmare

When Domenico Colombo saw that his monthly mortgage payment was about to balloon by 30 percent, he had a clear picture of how bad it could get.

His payment was scheduled to surge by an extra $1,500 in December. With his daughter headed to college next fall and tuition to be paid, he feared ending up like so many neighbors in Ft. Lauderdale, Fla., who defaulted on their mortgages and whose homes are now in foreclosure and sporting "For Sale" signs.
Colombo did manage to renegotiate a new fixed interest rate loan with his bank, and now believes he'll be OK -- but the future is less certain for the rest of us.

In the months ahead, millions of other adjustable-rate mortgages like Colombo's will reset, giving them a higher interest rate as required by the loan agreements and leaving many homeowners unable to make their payments. Soaring mortgage default rates this year already have shaken major financial institutions and the fallout from more of them, some experts say, could spread from those already battered banks into the general economy.

The worst-case scenario is anyone's guess, but some believe it could become very bad.

"We haven't faced a downturn like this since the Depression," said Bill Gross, chief investment officer of PIMCO, the world's biggest bond fund. He's not suggesting anything like those terrible times -- but, as an expert on the global credit crisis, he speaks with authority.

"Its effect on consumption, its effect on future lending attitudes, could bring us close to the zero line in terms of economic growth," he said. "It does keep me up at night."

HousingPANIC: There Goes the Neighborhood

Welcome to real estate hell - Phoenix Arizona has 20,000 empty homes for sale, with failed flippers unable to find renters now desperate to dump


But what about the 21 reasons to bank on the Phoenix Ponzi Scheme?

What about the year round golf and sports stars?

This story should remind everyone reading why you should NEVER listen to a realtor on commission. Especially the stupid ones.

Note in this article is by the Arizona Republic's "Rolodex-of-Realtors" Catherine Reagor (remember her and her incompetent bubble reporting?). And yes, she quotes a couple of ramen-eating-realtors desperately trying to spin. But now it's all just so laughable.

Of Valley homes for sale, a third sit empty - 20,000 vacant homes pushing prices lower

Vacant homes are a big reason why Valley home prices are falling.

At least one out of every three homes for sale across metropolitan Phoenix is empty, and owners are motivated to cut prices to sell.

Many empty houses are owned by investors who can't find renters and need to sell. Others are owned by people who moved to other houses in the Valley or elsewhere and can't afford two mortgages. Some empty homes for sale are new houses that home builders are offering deals on. And a growing number of vacant houses are owned by lenders that foreclosed on the properties and want to cut their losses by selling them quickly and often cheaply.

"There's a whole collection of must-sell sellers in the Valley's housing market now," said Jim Sexton, president of the Phoenix real-estate firm John Hall & Associates. "It's a great time to buy, but sellers have a lot of competition now."

Home Sales and Prices Fall Sharply

Sales of new homes plunged in August to their slowest pace in more than seven years as tighter credit and rising inventories continued to weigh down the housing industry. The grim statistics could foreshadow further economic weakness in the fourth quarter, analysts said.
The median price for a new home was down 7.5 percent from a year earlier, to $225,700, the steepest monthly price drop since December 1970.

The sales figures were released as KB Home, a large Los Angeles builder, reported a $35.6 million loss in its fiscal third quarter, or 46 cents a share, in contrast to a profit of $153.2 million, or $1.90 a share, in the period a year earlier. KB Home had a 32 percent drop in revenue, to $1.54 billion.
The company’s chief executive, Jeffrey T. Mezger, said in a statement yesterday: “Our third-quarter results reflect the seriously challenging market conditions that prevail for home builders across most of the nation. At this time, we see no signs that the housing market is stabilizing and believe it will be some time before a recovery begins.”
“Anybody that’s expecting a turnaround in housing anytime soon is going to be disappointed,” said Mike Schenk, a senior economist at the Credit Union National Association. “It’s going to be a long, slow process.”

Economist predicts housing downturn (......

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Economist predicts
housing downturn
May spiral into 'most severe
since the Great Depression'

An economist who has long predicted this decade's housing market bubble would deflate said the residential real estate downturn could spiral into "the most severe since the Great Depression" and could lead to a recession.

The Cost Of Living is Driving Us Out!!!

Renters Squeezed By Housing Shortage
On 2 Coasts, Renters Squeezed by Lack of Affordable Housing

STAMFORD, CT -- This isn't how Simon and Jennifer Morris envisioned married life sharing a charity-subsidized suite with four other hard-up families, abiding by a curfew and other rules that make them feel they are back in high school.

But for a working-class couple with two small children, trying to stick it out in their pricey hometown, housing options are few.

They abandoned their previous one-bedroom apartment when the rent rose from $1,200 to $1,425.

Public housing has long waiting lists, so they moved into a shelter for dislocated families in a converted YMCA.

The goal: Save enough money to move south and buy a home where costs are lower.

Around them, southwestern Connecticut's Fairfield County is booming, due partly to an influx of investment banks. New housing projects routinely cater to the affluent.

"But everybody forgets the poor guy...the one ----who pumps your gas, ----who builds your hotel, ----who bags your groceries," said Simon Morris, a 35-year-old carpenter.

"The cost of living is driving us out."

On both coasts of the United States, and many cities in between, hundreds of thousands of renters face comparable plights.

The home mortgage crisis has received far more notice, but experts say the ranks of renters with dire housing problems are growing faster than the ranks of defaulting homeowners.

The Center for Housing Policy reports that the number of working-family renters paying more than half their income for housing has soared from 1 million to 2.1 million since 1997.

Overall, advocacy groups say there are 9 million low-income renter households and only 6.2 million units they can reasonably afford.

"These people spend huge portions of their income on their housing," said Sheila Crowley, president of the National Low Income Housing Coalition.

"They don't do things that we all would like to do save money to buy a house, or for college or retirement.

It's a very day-to-day existence."

In the Stamford area, a breadwinner needs to earn more than $30 an hour to afford the rent of a typical two-bedroom apartment, the highest figure in the nation.
******************
San Francisco ranks a close second placing immense burdens on residents such as schoolteacher Meagan Devine and retiree Jose Morales.

Devine, 30, lives with her sister, who is eight months pregnant, and brother-in-law in a one-bedroom apartment in San Francisco's Sunset district.

She sleeps on the couch and spends weekends at her parents' house in a distant suburb, where she keeps her clothes and books.

In October, she'll begin housesitting for family friends in Berkeley, who will be on sabbatical until Jan. 1.

After that? She isn't sure.

Devine isn't an itinerant hippie or recent college grad trying to map a career path.

She's a professional with a master's degree in math, and could likely command a six-figure salary at a Silicon Valley engineering firm.

But since college, she has yearned to be a teacher.

After getting her master's, she taught the children of crop pickers.

Since 2002, she's been a math instructor at Balboa High School, once a hardscrabble school on the city's south side.

Test scores and morale are on the rise, and Devine feels she's making a big difference by teaching pre-calculus and algebra to the diverse student body.

"I don't ever want to leave Balboa I'd love to retire from here," Devine said as she stacked papers following the afternoon bell.

"The only problem is I can't afford to live here on a teacher's salary."

After taxes and a $350 deposit into a retirement fund, she takes home about $2,500 per month.

One-bedroom apartments in desirable neighborhoods near friends and public transit start around $2,000 per month.

Studios start around $1,500.

Devine said she'll likely settle for roommates a fate she didn't envision for herself after college, and a far cry from her dream of home ownership.

Technically, she could afford her own modest apartment but she wants to heed the standard advice and not spend more than a third of her income on housing.

That's not easy;

Commercial Real Estate in U.S. Poised for 15 Percent Price Drop

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U.S. commercial real estate prices may fall as much as 15 percent over the next year in the broadest decline since the 2001 recession as rising borrowing costs force property owners to accept less or postpone sales.

``People aren't willing to do deals right now,'' said Howard Michaels, the New York-based chairman of Carlton Advisory Services Inc., which has arranged financing for real estate purchases including the Lipstick Building in midtown Manhattan. ``The expectation is that prices will come down.''

``There are so many deals falling apart,'' said David Lichtenstein, chief executive officer of Lakewood, New Jersey- based Lightstone Group, an owner of more than 20,000 apartments and 30 million square feet of office and retail space. ``People who can get out are getting out.''

Home Foreclosures Almost Double in July as Rates Rise

Aug. 21 (Bloomberg) -- U.S. homes facing foreclosure almost doubled in July as property owners with adjustable-rate mortgages saw their payments rise and were unable to refinance because of the subprime crisis, RealtyTrac Inc. said.
Lenders sent 179,599 notices of default, scheduled auctions or bank repossessions last month, a 93 percent increase from a year earlier, Irvine, California-based RealtyTrac said today in a statement. California, Florida, Michigan, Ohio and Georgia accounted for more than half of the country's total filings.
An increase in foreclosures will add more homes to the market and further erode values. U.S. home sales dropped to a four-year low in the second quarter and prices fell in a third of U.S. cities, according to the National Association of Realtors. In June, a nearly nine-month supply of houses was on the market, double that of two years ago.
``Home equity has been a major factor in consumer spending, and the major concern is we'll go into a recession as that equity dries up,'' said Susan Wachter, professor of real estate at the University of Pennsylvania's Wharton School in Philadelphia. ``Consumer spending drove us out of the last recession in 1991, and we might see a reversal of that now.''
`A Little Worse'

U.S. Housing Starts Dropped in July to 10-Year Low

Aug. 16 (Bloomberg) -- Builders in the U.S. started work on the fewest homes in a decade in July as the industry showed no sign of recovering from an 18-month recession.

The greater-than-forecast 6.1 percent decrease to an annual rate of 1.381 million followed a 1.47 million pace in June, the Commerce Department said today in Washington. Building permits also fell to a 10-year low.

Stock markets worldwide have tumbled on concern subprime mortgage defaults will bankrupt more lenders and destabilize the financial system. U.S. consumer spending, which makes up more than two-thirds of the economy, may weaken as falling real- estate prices and limits on borrowing prevent owners from tapping home equity, economists said.

``Even the most ambitious homebuilders will think twice about initiating new projects,'' said Lindsey Piegza, an analyst at FTN Financial in New York. ``Falling prices, sluggish demand, and dwindling mortgage credit availability will continue to weigh heavily on residential construction.''

Economists had forecast a decline in housing starts to a 1.4 million unit pace, from an originally reported 1.467 million in June, according to the median of 75 forecasts in a Bloomberg News survey. Estimates ranged from 1.35 million to 1.47 million. Construction was down 21 percent from July 2006.

Permits, a sign of future construction, decreased 2.8 percent to a 1.373 million annual pace, the lowest since October 1996. They were also forecast to drop to a 1.4 million rate, according to the survey median, with projections ranging from 1.375 million to 1.441 million.

Toll Brothers Inc., the largest U.S. luxury-home builder, said Aug. 8 that third-quarter revenue dropped 21 percent as the new credit restrictions reduced the pool of potential buyers.

``With the uncertainties roiling the mortgage markets right now, the pace of home sales could slow further until the credit markets settle down and sort themselves out,'' Robert Toll, chief executive officer of the Horsham, Pennsylvania-based company, said in a conference call with analysts. ``If the economy gets worse, I think that you could see a much lengthier downturn for housing.''

Fleckenstein (and others) State the Deflation Case

SPOT GOLD DOWN $7.00+ THIS MORNING?

DEFLATION?

"....Given all our problems related to debt, I thought it might be worthwhile, particularly for new readers, to provide a brief history leading up to where we are now.

Taking a big step back, the Bank of Japan acted foolishly throughout the 1980s, which caused that country to experience enormous real-estate and stock bubbles. Japan's stock bubble was really a residue of its real-estate bubble -- actually a credit bubble, as the banks lent money to any corporation with a pulse. (Does that sound familiar?)

Then the institutions that lent the money took forever to write off the bad loans. That's why Japan's real-estate market, stock market and economy did so poorly for more than a decade.

Free money exacts a price

After [the dotcom] bubble, Greenspan took a page out of the Bank of Japan's book and lowered rates to 1%. That helped precipitate the housing bubble here that ended in 2005.

As to why the unwinding has taken so long to commence, only recently has the cause become clear: the mark-to-model fantasy employed by those who have bought the sliced-and-diced mortgage paper.

But the fantasy is unraveling as these structured-credit products are now slowly being marked to market. Just as virtually every subprime-mortgage lender has blown up, Alt-A lenders (the next rung up the ladder creditwise) will blow up -- and, ultimately, many hedge funds will blow up, though we're in the early days of that process.

In the years since our equity bubble peaked, trillions of dollars' worth of debt have piled up throughout corporate America. So now, as we enter recession, we will experience not just a weak economy, real-estate market and stock market, but the exacerbating effect of a mountain of bad debt, completing the analogy to Japan of the 1990s.

Like it or not (and I suspect he might not because he did not use the D-Word itself) Fleckenstein described how and why a Japanese style deflation is headed for the US.

This explains in part why it feels so treacherous right now. If the markets have decided that too much credit is too easily available, as it appears they already have, then the Fed can simply lower rates to make credit more available. Problem solved. But what if there are two separate but related forces at work: tightening lending standards and reduced credit appetites? Then the Fed has something more serious on their hands.

The key in all of this is not inflation, as most believe. The Fed says they are most worried about inflation risks, but the reality is that they are most worried about deflation risks. Always. Always deflation. The Fed has no choice but to always remind us that the risks are tilted toward inflation, just as the Treasury Secretary, whichever one happens to be in office at the time, must always say that the U.S. maintains a strong dollar policy, even if monetary policy and fiscal policy are conspiring to devalue the dollar.

As for equities, when the dollar begins to rise, and it appears the Fed finally will begin to cut rates, as they inevitably must to try and sustain credit consumption, then it's time to worry. That means deflation is winning.

Addendum

My friend who posts on Kitco under the alias "Trotsky" just pinged me with this comment: "absolutely correct - this at the root of the misunderstandings out there. because credit is used as a money substitute in the financial markets, it acts as an inflationary force in the asset markets (and this spills over into the real world as the imaginary wealth thus created leads to overconsumption and malinvestments), but it is all ephemeral - in the end, it is still credit, not money. as soon as money is needed in lieu of credit, such as has now happened in the CMO and CDO markets, it becomes clear that the money simply isn't there."

Aug 8, 2007
Mike Shedlock / Mish
email: Mish
http://globaleconomicanalysis.blogspot.com/

Countrywide profit sinks, defaults rise

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LOS ANGELES - Countrywide Financial Corp. said Tuesday its second-quarter profit shrank by nearly a third as softening home prices led to rising delinquencies and mortgage defaults among the most creditworthy borrowers.

The huge mortgage lender was forced to take impairment charges as it braced for the possibility of more people failing to make their mortgage payments.

Countrywide also said the market will become increasingly challenging as loan production subsides while lenders compete with one another more fiercely.

"This is a huge battleship and it's headed in the wrong direction," Chief Executive Angelo R. Mozilo said during a lengthy conference call with Wall Street analysts.

"Looking to the second half of 2007, we expect difficult housing and mortgage market conditions to persist," he said.

The news sent shares of the Calabasas-based company sliding $3.56, or 10.45 percent, to close at $30.50 on Tuesday.

The rise in credit-related costs were primarily related to the company's investments in prime home equity loans, Mozilo said.

Unlike subprime loans, which target borrowers with spotty credit histories, prime loans are typically available only to those with solid credit profiles who are considered less risky.

The rise in delinquencies and projections of more defaults led Countrywide to write down the value of securities backed by prime home-equity loans by $388 million in the quarter, reducing earnings by 40 cents per share.

Where are The riskiest housing markets?

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A new report projects home-price declines for the next two years. The riskiest markets are in Florida, California, Nevada and Arizona. Here's how to ride out the hard times.

By Marilyn Lewis
As if the housing market isn't bleak enough. The Standard & Poors' Case-Shiller Home Price Index reported in late June that home prices dropped more in the first quarter of this year than at any other quarter in the last 17 years. Now, a report from PMI Mortgage Insurance says home values could decline across much of the country for at least two more years.

There's a 34.6% chance on average that home prices will drop in the nation's top 50 markets in the next couple of years, according to PMI Mortgage Insurance's new U.S. Market Risk Index, which heavily factors in recent price volatility.

How far and how fast prices actually fall remains to be seen. But the report underscores the fact that today's market is decidedly different from that of recent years, when homeowners could bank on rapid home-value appreciation. (See the report or hear a podcast here.)

Headed for decline

Not surprisingly, the riskiest markets identified by the index are located in areas that saw rapid price appreciation, a reduction in affordability followed by a rapid decrease in the rate of price appreciation. Of the 15 biggest cities with the greatest risk for price decline -- with more than a 50% chance of lower home values by mid-2009 -- five were in California and four were in Florida.

What to Do When Purchasing and Leasing Your First Investment Property

You've weighed all of the pros and cons, thought about it for months and read every reference material you could get your hands on. In short, you're ready to purchase an investment property and you're ready to do it now. However, how can you get started?

1. Know what type of property you'd like to purchase. Would you like to rent out a home to a nice family or buy an apartment building for several tenants. Decide what you would like to buy before you go looking. It will save you time in the long run.

2. Once you've located a property, try to get the most for the least amount. Spending the money to have an inspection done will allow you to have more chips at the bargaining table, especially if you can repair things yourself or have associates that can do it cheaply.

3. Put an offer on the property and secure financing. Obviously, this is an important step. Once you've agreed to the terms of the sale and secured the financing, you are set.

4. After the property is yours, you'll want to make it appealing for potential tenants. Make any necessary repairs, install new carpet and paint the walls. Tenants look closely at these details and it can be a make or break deal.

5. Price your property right. Think about what you'd like to charge for rent, taking mortgage costs, utilities and maintenance into consideration. Then take a look at what similar properties in your area are renting for. If you are considering putting rent at $1200 per month when others are renting their property for $1000, find out why their rent is cheaper and make adjustments accordingly. Don't price yourself out of the market or you'll risk having a vacant house.

6. Visit with a lawyer to draw up a leasing contract. You'll want to make sure all terms are spelled out before taking on tenants. What happens if something is broken or ruined during their lease? Who is responsible for the repairs? What happens if a crime occurs on your property? You'll want to spell out liability to protect yourself and your investment.

7. Figure out what you'll do if the home is vacant for an extended period of time. How will you cover your costs if you have no tenants.

All of these are important factors to consider before taking on your first property and tenant. Remember that you want to make this a positive and possibly money-making experience. If you don't have a plan in place before the unexpected occurs, you could face losing a lot of money in the process.

"The Power" of A Real Estate Formula

It was a simple real estate formula. The ads ran in our small-town newspaper for years before I realized exactly what was going on. They were always the same: A house for sale with 5% down and payments of 1% of the purchase price. Maybe a three bedroom home for $90,000, for example, with $4,500 down and $900 per month payments.

When a friend started doing the same thing he explained the process to me. It was a way to get a great return on capital, and it was the opposite of buying with no money down. There is no down payment at all when you buy, because you buy for cash.

The Simple Real Estate Formula

You probably know that when you buy for cash, you can often get a much better price. With no financing contingencies in the offer, and the promise of a faster closing, sellers are willing to sell for less. You can offer $95,000, for example, on a house that might be worth $108,000. If you can't get it for less than, say, $99,000, you walk away - there are always other opportunities.

Once you buy the house, you put few thousand into high-return repairs and improvements. These might include paint, carpet, and maybe asphalt for a dirt driveway. For our example, we'll say you spend $5,000. Let's suppose the house is worth $116,000 now. You're ready for the next important step in this real estate formula.

You put it up for sale, targeting buyers who can't get financing easily. You provide the financing. Because you are making it easy for the buyer, you can get more than the $116,000 value for the home - and do it without paying a realtor's commission. Let's say you sell it for 123,000. The buyer needs a down payment of just 5%, or $6,150, and makes monthly payments of $1230 per month. You charge higher interest than the going rates at the banks, of course.

This is a win-win situation. Your buyer is able to buy a home instead of renting, and you get a capital gain of perhaps $16,000 after expenses, plus good interest. Your total rate of return will often be over 20%!

In our town, the first to do this consistently were a father and son team of lawyers. They saved money by doing their own foreclosures when necessary. Once they foreclosed, they raised the price and sold the home all over again.

They made millions. Did you know that if you can get an average return of 18% on your money, you'll turn $75,000 into more than one million dollars in about fifteen years? That's the power of a good real estate formula.

Solutions for the Subprime Lending Crisis

There are solutions for the subprime lending crisis that entail making changes to the way lenders are handling this crisis. There are distinct groups of individuals that are causing this foreclosure epidemic. First, there is the homeowner who got a "teaser interest rate" that was affordable at the time but became unaffordable when the interest rate adjusted. In addition to the teaser interest rates, lenders started a policy of "no documentation of income" or no-doc loans that did not require borrowers to show proof of their income and are now referred to as "liar's loans". The problem was that homeowners couldn't afford the payment if there were any increases due to taxes, insurance, or an interest rate adjustment.

Next, there are individuals that purposely chose low-interest rate, interest only, and even negative amortization (neg-am) loans with the intent of flipping the property after one or two years and taking a huge capital gain. In the past few years, these "speculators" became trapped, either unable to sell or renting them with negative cash flows. The most viable option for these investors was to give the property back to the lender by foreclosure rather than bleeding monetarily every month.

Another typical foreclosure involved a homeowner cleverly refinancing his property but never making a payment and in effect selling his home to the lender, by taking out his equity on the refinance. There is a lingering question about whether these homeowners had "intent" to defraud the lenders, but that is better left to another discussion. And lastly, there are true personal hardships that resulted in foreclosure. Our estimates are that 95% of these homeowners want to keep their homes but are unable to reinstate the back payments.

Lending institutions can resolve many of these foreclosure issues by:

* Having counselors available to work with the homeowner for a solution. Possible solutions include loan modification (putting the late payments and costs on the end of their loan, accepting partial payments of the amount due until paid, reducing the interest rate adjustment(s), freezing the interest rate for the term of the loan, getting a deed in lieu of foreclosure in exchange for giving the homeowner a credit for a rental truck when they vacate, accepting partial mortgage payments for a limited time, assistance with applying for and getting government assistance including grants that could reduce the loan, and doing financial planning and credit counseling.
* If the borrower is an investor who can no longer afford the loan, the lender should get a deed in lieu of foreclosure, or a loan modification that is workable for both the lender and the investor which would be paid when the property was sold or refinanced.
* If a homeowner refinanced and never made a payment, the lender should request a deed in lieu of foreclosure and if the homeowner refuses, the lender should get a judgment after the foreclosure auction and collect this judgment. If fraud is suspected, the case should be pursued by local authorities for prosecution.
* True hardship cases should be handled on an individual basis with the interest of the borrower in mind. Loan modification and any other reasonable offers of help should be used to help resolve the problem. If a solution is impossible, a deed in lieu of foreclosure should be requested with a minimal compensation for moving expenses.

While certain banking regulations preclude some of these solutions Congress and the Federal Reserve must quickly realize the nature of this crisis and its resemblance to the former Savings and Loan crisis. Immediate action should be taken before it becomes expensive for every taxpayer. To their credit, a number of insightful lenders have already taken steps to have counseling staffs on hand and work with homeowners. Now is the time to take more aggressive action before hundreds of thousands of homeowners find themselves no longer owning a home or even homeless.

More Trouble in Subprime Mortgages

WASHINGTON, June 14 — Delinquencies and foreclosures among homeowners with weak credit moved higher in the first quarter, particularly in California, Florida and other formerly hot real estate markets, according to an industry report released on Thursday.

The report, published by the Mortgage Bankers Association, came as the Federal Reserve held a hearing on what regulators could do to address aggressive abusive lending practices. Also Thursday, the latest survey showed that mortgage rates this week reached their highest level in almost a year; the national average for a 30-year mortgage was 6.74 percent, up from 6.53 percent last week, according to Freddie Mac, the mortgage giant.

After housing boom, glut may lead to bust in Spain

MADRID: Javier Usua and Ruth Graneda never got out of the car when they visited Sanchinarro and Las Tablas, two of Madrid's biggest new suburban developments. The concrete-block buildings and empty streets were all they needed to see.

"We came to look at apartments but found ghost towns," said Usua, a 27-year-old taxi driver. "You'd need to drive miles for a loaf of bread or cigarettes, and my girlfriend found it creepy and unsafe so we turned around and left."

Pulte to ax nearly 1,900 jobs

After downsizing, builder to employ only 300 in Mich.

Pulte Homes Inc., in the latest major downsizing by a Michigan-based company, announced late Tuesday that it was cutting about 16 percent of its work force, or nearly 1,900 jobs.

The Bloomfield Hills-based company, one of the nation's largest and most successful homebuilders, has been hit hard by the nation's slumping housing market.