The Wire

Housing foreclosures doubled from a year ago

American homes are being foreclosed in numbers double what they were just a year ago according to Bloomberg News:

The number of US homes entering foreclosure in the first quarter doubled from a year earlier as property prices stagnated and owners struggled to refinance mortgages.

Owners of 168,829 homes in the first three months of 2007 got notices that lenders had filed for foreclosure due to failure to pay loans or liens, Foreclosures.com said yesterday.

That compares with 83,154 homes in the same period of 2006, the Sacramento, Calif.-based research firm said.

A four-year high in mortgage payment delinquencies and the failure or sale of 50 subprime mortgage companies, which provide loans to people with poor or limited credit histories, have made credit less available.

The inability of homeowners to refinance their debt has added to the rise in foreclosures.

The foreclosures are not limited to a specific geographic part of the country either.  They appear widespread:

Riverside County, Calif., had a 172 percent rise in homes entering the foreclosure process in the first quarter, the company said.

Foreclosures.com said other counties showing big increases were Clark County, Nev., which includes Las Vegas (143 percent); Los Angeles County, Calif., (92 percent); Miami-Dade, Fla. (90 percent); and Cook County, Ill., where Chicago is located (44 percent).

Posted by Staff on Tuesday, April 17 | 1650 comments | Permalink

More on Economic Inequality

Daily Kos has a great post on economic inquality by MissLaura.  The post features commentary by Senator Webb and John Edwards and some great tables.  And as we said here last week, in 1965 CEOs of major US companies made 24 times more than the average worker - by 2005, this was 262.  Some people use an even higher figure (ours comes from the Economic Policy Institute) but any way you slice it, it's out of whack.

Posted by Web Team on Monday, April 16 | 3864 comments | Permalink

Senator Baucus makes “significant change” on fast-track trade

Noting that Senator Max Baucus is under pressure in his home state of Montana for his position on trade, The Hill reports that Baucus has backed off his view that the Senate should renew the President's authority: 

In a significant change of position, Senate Finance Committee Chairman Max Baucus (D-Mont.) now says it is not currently necessary to extend President Bush’s fast-track trade authority.

Baucus, the top Democrat on trade, told reporters Friday there is no immediate need to extend fast-track, which makes it easier for the White House to negotiate trade deals. The authority expires at the end of June and Bush and other administration officials have urged Congress to extend it.

But Baucus argued that the administration is not currently negotiating any new trade deals. “Once agreements start to come down the pike, then there will be a need for us to address [fast-track],” Baucus said.

This is a shift from January when the senator, who has been under pressure in Montana to reject an extension of fast-track, wrote in The Wall Street Journal that Congress should renew fast-track authority with some changes.

In the Jan. 4 column, Baucus wrote that trading partners would not negotiate with the U.S. unless Congress granted the president fast-track.

That is the same argument Bush repeatedly has made in calling on Congress to extend fast-track.

On Friday, Baucus said he is focused on extending another program expiring this year that is meant to help workers negatively affected by trade. The senator stated that it was urgent to pass an improved version of the trade adjustment assistance program with increased healthcare benefits for workers who lose their jobs due to trade. He also said legislation improving this assistance should “travel by itself” and not be attached to bills liberalizing trade.

The pressure in Montana appears to have had an impact on Baucus.  Last month, They Work For US ran radio ads targeting Baucus on trade issues.

Montana’s state Senate, which is controlled by Democrats, approved a resolution earlier this year asking Congress to create a replacement for fast-track, which prevents trade deals from being amended. Liberal groups have sought to highlight differences on trade between Baucus, who is seen as generally pro-trade, and freshman Sen. Jon Tester (D-Mont.). 

Posted by Staff on Friday, April 13 | 974 comments | Permalink

Common Sense on CEO Salaries

For years CEOs have been gaining more and more of the economic pie and the 1980s, 1990s and 2000s have all been exceptionally prosperous for executives, especially in comparison to other workers.  According to the Economic Policy Institute, in 1965 CEOs of major US companies made 24 times more than the average worker - by 2005, this was 262 - a CEO was making 262 times more than the average worker!  Put another way, the median CEO pay increased by 186.2% between 1992 and 2005 while the average worker's wages rose just 7.2% during the same period.  So let's think about this...if you were a CEO making $200,000 a year in 1992, you were likely making nearly $575,000 in 2005, but if you were making $40,000 in 1992, you were making about $42,880.  Hmm.  That sucks.  How much did your salary increase from 1992 to 2005?  Howie Klein recently did an excellent post on executive salary as well.

Today many CEOs, who already pull in enormous salaries and extensive benefits, stock and "goodbye" packages-have again stacked the deck in their favor by backdating their stock options.  Even The Wall Street Journal cited this as similar to placing a "bet on a horse race after it is over."   Even Bush is talking about "lavish salaries and bonuses for corporate executives".

This is a basic issue where we need to hold Democrats feet to the fire.  H.R. 1257, the Shareholder Vote on Executive Compensation Act introduced by Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, is one step in the right direction.  It would allow shareholders to have an advisory vote on executive compensation, and take one important step toward opening up the process around CEO pay packages.  A shareholder voice in the executive compensation process will encourage boards of directors to consider shareholder interests before approving questionable compensation plans. 

The House Financial Services committee gave H.R. 1257 at 37-29 vote with all Democrats present voting in favor (go here and here for details on the mark-up).

We expect that H.R. 1257 will get the same treatment when it hits the House floor.

Posted by Web Team on Thursday, April 12 | 3829 comments | Permalink

As mortgage scandal’s impact widens, NY Times calls for accountability

Action is needed.  The mortgage scandal's impact is spreading far beyond those directly affected by foreclosures.  This has unfolded without intervention by the government.  All we've gotten from Congress is a new bankruptcy law that benefited the financial industry:

As families are ruined, whole neighborhoods are imperiled. A Chicago study found that a foreclosure on one home lowered the price of nearby single-family homes by 1.44 percent, on average. The more foreclosures, the greater the effect. Vacancies are a particular problem because home buyers and businesses shun areas with vacant homes, while the cost for abandoned property must be borne by municipal taxpayers, draining resources at a time of need.

Congress and state governments have to assess the extent of irresponsible and predatory lending in the subprime market, and determine whom to hold accountable. They must also come up with rescue plans for families and communities in harm’s way.

Posted by Staff on Wednesday, April 11 | 2131 comments | Permalink

Lack of oversight allowed massive mortgage fraud

The mortgage scandal continues to grow.  Today's Washington Post reports that lack of regulation has played a key role in this growing problem.  As the Post found, because of the lack of oversight, many Americans are being adversely impacted by the continuing fallout:

Many experts have concluded that the nation's real estate boom of recent years was fueled in part by weakened lending standards that sparked excessive demand and drove up prices. Now, some are worried that the looser standards may have permitted a boom of another kind -- a big expansion of mortgage fraud.

No one knows exactly how extensive the crime has become, but new data from the federal government suggest that it has jumped tenfold since 2000. Prosecutors are finding cases all over the country in which sham transactions, based on fraudulent appraisals, led to homes changing hands at far above their real value. Mortgage lenders failed to carry out the most elementary safeguards.

In some neighborhoods, mortgage fraud became so extensive that it drove up overall home prices. That is what happened in Atlanta. Hill, 50, was convicted last month in what authorities call one of the biggest mortgage-fraud cases in U.S. history. It involved 400 fraudulent loan applications; nearly $100 million in mortgages; and 120 closing attorneys, appraisers, mortgage brokers and others who prosecutors say were in on the scam.

Who was overseeing the banking industry?  Congress and the Bush administration put a lot of effort in to passing the onerous bankruptcy law that benefited the financial industry.  Maybe if they put as much energy in to regulating the financial industry, some of this could have been avoided.  Instead, it seems the financial repercussions of the growing mortgage scandal are really just starting to be felt by more and more American families. 

Posted by Staff on Tuesday, April 10 | 1258 comments | Permalink

Sen. Stabenow, Rep. Levin to fight U.S.-South Korea free-trade agreement

Not so fast on the free-trade agreement the Bush administration reached with South Korea.  That's what two influential members of Congress from Michigan are saying according to The Hill:

Michigan lawmakers are threatening to block a South Korean trade agreement completed last weekend by the administration because of opposition from the auto industry, which contends the deal will not balance auto trade between the countries.

“We haven’t counted the votes yet, but I can say this will be a very hard fight,” Sen. Debbie Stabenow (D-Mich.) said in an interview with The Hill. In a prepared statement, Stabenow said she would do “everything in my power” to defeat the Korea free-trade agreement (FTA).

Rep. Sandy Levin (D-Mich.), who chairs the Ways and Means trade subcommittee, also said he would oppose the deal unless it is changed in the 90 days before the administration signs it.

Posted by Staff on Monday, April 09 | 1347 comments | Permalink

Americans are ahead of their leaders on free trade issues

Congress will soon be debating a reauthorization of the President's "fast track" authority for international trade agreements.   In the last election, fair trade was a winning progressive issue -- and the newly elected members are demanding a say in developing labor and environmentally friendly trade policy.  They're reflecting the wishes of the voters in that regard, as was shown in last month's NBC/Wall Street Journal poll courtesy of The Polling Report. 

That poll, conducted March 2 - 5, 2007, asked,  "Do you believe that the United States is benefiting from the global economy, is being harmed by the global economy, or do you think the global economy has had no impact on the United States one way or the other?" By an almost two to one margin, the answer was the United States is being harmed: 48% responded "harmed" compared to 25% who replied "benefiting."     

Americans want fair trade.  In the next couple months, that's what we expect Congress to deliver.        

Posted by Staff on Friday, April 06 | 729 comments | Permalink