As Foreclosures Continue ... & Water is running short

[Cees Binkhorst]

REPLY TO: D66 at nic.surfnet.nl

Hoe kunnen 70% van de huiseigenaars 'onder water zijn' als de staten in
het zuid-westen een chronisch water tekort hebben?

Zo chronisch dat de zalmen al een paar jaar niet meer terugkomen!

Groet / Cees

PS. M.a.w. waarom bouwen en behouden als je er op langere termijn niet
kunt wonen?

March 1, 2010
Editorial
As Foreclosures Continue ...
http://www.nytimes.com/2010/03/01/opinion/01mon1.html

President Obama went to Henderson, Nev., the other day to show Americans
that he was responding to the cries for help from struggling homeowners
(and maybe give a boost to Senator Harry Reid’s re-election). He
announced a $1.5 billion effort to prevent foreclosures in five states
hard-hit by the housing bust — Nevada, Arizona, California, Florida and
Michigan — by feeding money into programs that would be developed and
carried out by the housing agencies in the targeted states.

The audience in Henderson applauded the announcement, and understandably
so. In Nevada, unemployment is 13 percent and 70 percent of homeowners
with mortgages owe more on their homes than they are worth; in industry
parlance, they are “underwater.” Since a combination of joblessness and
underwater loans is the main driver of foreclosure, Nevadans are clearly
at high risk of losing their homes, as are homeowners in the other four
states.

So it was good to see Mr. Obama focusing aid where it is needed most.
But two big concerns remain. First, the new plan must be implemented
quickly and efficiently for it to be more than a public relations ploy,
and as yet there is no timetable. More broadly, it is still not clear
whether the administration realizes that the importance of the plan lies
not just in what it might do for a handful of states but in the
direction it should set nationally.

The administration’s $75 billion antiforeclosure program, which
subsidizes lenders to rework bad loans, has been a big disappointment.
One reason is that its usual method of modifying loans — lowering the
monthly payment by reducing the interest rate — does not work well for
jobless and underwater borrowers. Unemployed homeowners often cannot
make even reduced payments and underwater borrowers need principal
reductions to succeed over the long run, not lower rates.

And yet, the administration has resisted calls to revamp its program,
citing cost and complexity. Another obstacle is that banks are generally
loath to modify loans by reducing principal, which would require them to
take big upfront losses that they would prefer to postpone.

In at least a tacit acknowledgment of those issues, Mr. Obama
specifically said that the five-state effort is intended to aid
homeowners who are out of work and underwater. To help jobless owners,
states could use the money for loans to cover mortgage payments, an
approach used successfully in Pennsylvania. With unemployment expected
to remain high for a long time, Mr. Obama should consider a national
program of that kind.

It is less clear how the new fund would help underwater borrowers. Why
would states be successful in negotiating principal reductions when the
administration has not been able to persuade or compel the banks to do
them? Still, now that Mr. Obama has set the aim of helping underwater
borrowers, it is up to the administration — by working with states or by
revamping its own efforts — to make it happen. The banks won’t like it.
But the alternative is more foreclosures, further price declines and —
as the housing market continues to wobble — an endangered economic recovery.

By itself, Mr. Obama’s new plan for Nevada and the other states is too
small to make a meaningful dent in foreclosures. But by aiming to help
unemployed and underwater borrowers, it is headed in the right
direction, if the administration is willing to set a new course.

Seven Western States Discuss Water Shortage
http://www.lasvegasnow.com/Global/story.asp?S=4431216

Representatives from seven western states are in Las Vegas to discuss an
important water shortage plan and how it affects the Colorado River.
They met in closed-door meetings at the Westin hotel and casino
brainstorming on ways to divide the water from that river.

Right now, Nevada, Arizona, California, Colorado, New Mexico, Utah and
Wyoming all use water from the Colorado River. Tracy Bower, with the
Southern Nevada Water Authority, said, "The Colorado River provides
90-percent of Southern Nevada's water supply, so it's largely important
for our community just like it is for six others states in the west."

Bower says all the states involved are pulling together in developing a
plan. "The states do work well together. What they're here to discuss is
what would happen if the drought continues, and there was a water
shortage on the river. How would each state take on that shortage,"
Bower continued.

Bower says this meeting is closed to avoid distractions and get to a
faster resolve. "There are a lot of issues they want to discuss, and
they want to make sure people are free to talk about their concerns and
talk about their ideas."

The Colorado has been suffering from a drought for the last couple of
years. Bower says a distribution plan is needed from all the states that
depend on the Colorado River for water. "What they're here to discuss is
what would happen if the drought continues, and there was a water
shortage on the river. How would each state take on that shortage?"

If the seven states do not develop a plan by Feb. 2, the U.S. Department
of the Interior will impose water-use guidelines. If this does happen,
the federal interior department has to the end of 2007 to mandate to the
states how the water will be divide among them.

The closed-door meetings were held Sunday, Jan. 29 and Monday, Jan. 30.
A plan is expected to be drawn up Tuesday, Jan. 31.

Email reporter Chris Saldaña at csaldana at klastv.com

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