One in 465 homes in the Houston area received a foreclosure filing in March, according to a new report from RealtyTrac Inc.
That’s 53 percent higher than the number of filings in March 2009, and 29 percent higher than the number of filings in February of this year, according to RealtyTrac’s U.S. Foreclosure Market Report.
RealtyTrac is an Irvine, Calif.-based private marketer of foreclosure properties.
In Texas as a whole, 1 in 617 homes received a foreclosure filing and the nation as a whole saw 1 in 352 filings.
Foreclosure filings were reported on 367,056 properties in March, an increase of nearly 19 percent from the previous month, an increase of nearly 8 percent from March 2009 and the highest monthly total since RealtyTrac began issuing its report in January 2005.
“Foreclosure activity in the first quarter of 2010 followed a very similar pattern to what we saw in the first quarter of 2009: A shallow trough in January and February followed by a substantial spike in March,” said James Saccacio, chief executive officer of RealtyTrac.
“One difference, however, is that the increases were more tilted toward the final stage of foreclosure, with REOs (bank repossessions) increasing 9 percent on a quarterly basis in the first quarter of 2010 compared to a 13 percent quarterly decrease in REOs in the first quarter of 2009.”
Procter & Gamble Co. and Kroger Co. topped the list of eight Greater Cincinnati and Northern Kentucky firms that made repeat appearances on the Fortune 500 list this year, joined by insurance/financial services firm American Financial Group.
Fortune ranks companies based on annual revenue. Walmart Stores ranked at No. 1, with $408 billion in revenues.
P&G ranked 22nd, down from 20th in 2009, with $79.7 billion in revenue versus $83.5 billion last year; and Kroger ranked 23rd, down from 22 last year, with $76.7 billion in revenues, up from $76 billion a year ago.
Other firms on the list included:
• Macy’s Inc. at 103, down from 98, with $23.5 billion in revenues, down from $25 billion last year;
• Fifth Third Bancorp at 248, up from 302, with $9 on line pay day loans.5 billion, up from $8.6 billion;
• Ashland Inc. at 280, up from 310, with $8.1 billion, down from $8.4 billion;
• Omnicare at 347, up from 392, with $6.2 billion, down from $6.3 billion;
• Western & Southern Financial Group at 420, up from 441, with $5 billion, down from $5.4 billion;
• General Cable Corp. at 469, down from 396, with $4.4 billion, down from $6.2 billion;
• American Financial Group at 478, with $4.3 billion in revenues.
AK Steel, which had ranked at 334 in 2009, fell off the list this year.
A Congressional panel investigating the causes of the financial crisis criticized two former leaders of Citigroup on Thursday for failing to understand the risks that eventually brought the company to its knees.
In testimony before the Financial Crisis Inquiry Commission, Charles "Chuck" Prince, former chief executive of Citigroup, apologized for his role in the crisis that roiled the U.S. economy.
"I’m sorry that the financial crisis has had such a devastating impact on the American people," Prince said. "I am deeply sorry that our management — starting with me — was not more prescient and that we did not foresee what lay before us."
Prince, who was CEO from 2003 to 2007, retired after Citi announced that it would write off up to $11 billion in losses related to its holdings of risky mortgage-backed securities. The bank eventually lost an estimated $30 billion on such securities and was forced to take a $45 billion bailout from the government.
Prince’s remarks came on the second day of this week’s three-day meeting of the commission, which was established last year to investigate the causes of the crisis. The hearings are aimed at exploring how the issuance of trillions of dollars worth of risky subprime mortgage debt contributed to the financial meltdown.
In addition to Prince, the commission heard from Robert Rubin, who was a board member and a top adviser at Citi until the end of 2009.
Rubin, who was Treasury Secretary under President Bill Clinton, said he had been concerned that market "excesses" would lead to a downturn. But he acknowledged that most regulators misjudged how severe the threats to the economy were.
"We all bear responsibility for not recognizing this, and I deeply regret that," he said.
In their defense, both executives argued that the scope of the crisis could not have been fully anticipated, echoing remarks former Federal Reserve chairman Alan Greenspan made before the commission Wednesday.
However, at least two of the 10 bipartisan commission members were not satisfied with the responses provided by the former Citi executives.
"It seems to me that, at the end of the day, the two of you in charge of this organization did not seem to have a grip on what was going on," said Commission chairman Phi Angelieds. "I’m not so sure apologies are as important as assessment of responsibility."
Bill Thomas, a former Republican Congressman who is vice chairman of the commission, criticized the panelists for reaping huge rewards while being out of touch with the risks Citi traders were taking.
Thomas said Prince and Rubin earned a combined $150 million over a four-year period when things were going up. "But that same team, on the way down, didn’t have a nickel clawed back," he added.
Rubin responded that Citi did not pay him a bonus in 2007 and 2008, per his request.
In response to an earlier question, Prince said the bulk of his pay was in the form of Citi stock, which he said he still holds today.
"My interests were aligned 100% with stockholders," he said. "I saw a substantial part of my net worth disappear because my company suffered as a result of these problems."
The problems he referred to stemmed from Citi’s exposure to "super-senior" collateralized debt obligations, which were considered at the time to be the safest CDOs. These securities were backed by mortgages, in some cases subprime loans, which were believed to be at low risk of default.
However, after the housing bubble burst in 2008 and the financial markets went into a tailspin, the value of CDOs plunged and Citi was left with billions of dollars worth of illiquid assets.
Prince reminded the panel that most banks, regulators and rating agencies considered super-senior CDOs safe.
"In hindsight, it’s very hard to see how these structured products could have been accepted in the way they were accepted," he said.
In his testimony, Rubin said the main lesson of the recent crisis was that "the financial system is subject to far more downside risk that almost anyone had seen."
He said the private sector should take steps to avoid repeating the mistakes of the past, but he maintained that the government also needs to overhaul how it regulates the financial system.
"Financial reform is imperative," Rubin said.
Among the reforms he suggested was "resolution authority," which would give the government power to break up institutions considered to be too big to fail. Rubin also called for constraints on leverage, derivatives regulation and increased consumer protections.
Colorado legislators on Thursday changed a bill cracking down on payday lenders to allow the businesses to make more money from their loans, but opponents said that the amendment did not do enough to keep a large number of those shops from closing their doors.
House Bill 1351, sponsored by Rep. Mark Ferrandino, D-Denver, would limit the amount of interest that payday lenders can make off of loans. It was approved on a 7-4 vote by the House Judiciary Committee, with Democrats backing it and Republicans opposing it, and is headed next for debate on the House floor.
Under current law, payday lenders can charge a finance charge of $20 per $100 on the first $300 loaned and $7.50 per hundred dollars after that until the loan has reached its maximum $500 limit. The average payday loan in 2008 was $391, with an average annual interest rate of 317 percent, according to the nonpartisan Colorado Legislative Council.
HB 1351 originally proposed capping the annual percentage rate on each loan at 36 percent. However, Ferrandino amended the bill Thursday to increase that number to 45 percent APR and added a provision allowing a loan-origination fee of $10 per $100 lent for the first loan made to a person in any 12-month period.
The changes came after payday lenders, who made more than $566 million in loans in 2008, complained that the reduction in profits they would be able to make would shut down many of their businesses and put thousands of people out of work during an economic downturn. A number of Democrats have spoken against the potential effects of the bill as well.
Under current law, Ferrandino argued, lenders can make $75 off of a two-week loan, while his new bill would reduce that amount to $58.63, much higher than the $6.90 they could have made under the original HB 1351. The goal of his bill, he said, is to stop lenders from making large amounts off of future loans that keep borrowers in a perpetual cycle of debt.
"If people are using this responsibly for short-term loans, they‚re making close to what they're making before," Ferrandino said.
However, Rep. Steve King, R-Grand Junction, said that without that income on future loans, lenders will lose large amounts of money and be forced to shut their doors.
"We‚re talking about $1.75 on a $100 loan," King said of the change from 36 percent to 45 percent annual interest that lenders can charge. "It's still going to kill jobs. It's still going to cause businesses to go out of business."
The bill also would require the question to be referred to voters on the November ballot before the law were to take effect.
Job cuts accelerated in March, driven by planned reductions on government payrolls, a report released Thursday showed.
Employers announced plans to cut 67,611 jobs in March, according to outplacement firm Challenger, Gray & Christmas Inc. That’s up 61% from February, when 42,090 jobs were lost, the lowest level in nearly four years.
"Unfortunately, many people are still jobless and many businesses still shuttered," said John Challenger, chief executive officer of the firm, in a statement. "This combination is having a significant negative impact on state and local tax revenues and, in turn, leading to continued downsizing in this sector."
Government job cuts led March’s surge, accounting for nearly 75% of the total jobs shed. Year to date, government job losses have made up about a third of all announced cuts.
There were 50,604 announced government job cuts in March, and the United States Postal Service alone plans to reduce its workforce by 30,000 workers this year through retirement and attrition. The rest of the government jobs will be shed by state and local agencies suffering from budget shortfalls.
But overall the trend was still positive. March job cuts were down 55% from the same month a year ago, when 150,411 cuts were announced.
In the first quarter of 2010, a total of 181,183 job cuts were announced, the lowest first quarter total since 2000 and down 69% from the first quarter of 2009.
A separate report Wednesday from payroll processor ADP showed that private-sector employers cut payrolls by 23,000 jobs in March, marking the smallest monthly decline since February 2008. ADP’s report does not include government jobs.
The report sets the stage for the highly anticipated monthly jobs report from the government due Friday. The Labor Department is expected to show a gain of 190,000 jobs in March, compared to the 36,000 lost in February. Economists forecast the unemployment rate will remain unchanged at 9.7%.
Treasurys came off earlier lows and were mostly flat Tuesday afternoon as optimistic investors prepared for monthly jobs data that is expected to show robust growth in the labor market.
What prices are doing: The benchmark 10-year note edged up slightly to 98-1/32, driving the yield down to 3.86% from 3.87% late Monday. Bond prices and yields move in opposite directions.
The 30-year bond rose 25/32 to 98 with a yield of 4.75%. The 5-year note edged up to 99-6/32 with a yield of 2.60%. The 2-year note fell to 99-9/32 with a yield of 1.07%.
What’s moving the market: Treasury prices were lower earlier on hopes of a positive jobs report.
The Labor Department will release the March jobs data Friday. Economists expect employers added 190,000 jobs to payrolls during the month and that the unemployment rate will hold steady at 9.7%.
Treasurys, which are perceived to be safe haven investment, tend to fall on strong economic data.
Meanwhile, the Conference Board reported that the consumer confidence index rebounded in March, after falling sharply during the previous month, which also pressured Treasurys.
What analysts are saying: "Yields are moving higher in anticipation of good employment data," said Peter Cardillo, chief market strategist at Avalon Partners. "If we see job growth above 100,000, and a downtick in total unemployment, that will put pressure on Treasurys and yields will respond to the upside."
He added that the 10-year yield could push beyond 4%, a key psychological level, on Friday’s data.
"Consumer confidence also took a big leap today, and that number is negative for the bond market," Cardillo said.
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