News Cut: March 5, 2009 Archive

A mortgage-help 'stress test'

Posted at 7:28 AM on March 5, 2009 by Bob Collins (0 Comments)

President Obama has unveiled the Homeowner Affordability and Stability Plan yesterday. It is supposed to help 9 million people with their mortgage problems.

Are you one of them?

THE REFINANCING PLAN

Is your loan owned or guaranteed by Fannie Mae or Freddie Mac? If not, it won't help you. There is another part of the plan that might, however.

Is your mortgage at least 5 percent more than the value of your home? It has to be. A survey on Wednesday said up to 20 percent of us are in this predicament.

Is your mortgage on a home you occupy? If it's an apartment building, are there fewer than five units?

Are you up to date on your payments. Better be.

According to the Obama plan, "you should call your mortgage servicer or lender (the organization to whom you make your monthly mortgage payments) and ask about the Home Affordable Refinance application process. The number is on your monthly mortgage bill or coupon book."

MORTGAGE MODIFICATION PLAN

Did you get your mortgage before Jan. 1, 2009.

Do you owe $729,750 or less on your first mortgage?

Have you had a big increase in the mortgage payment, or a reduction in your salary, or medical bills that have created your inability to continue your mortgage?

Is your current mortgage payment is more than 31 percent of your gross monthly income?

Those are the general requirements for one or both plans. Keep in mind the program will not reduce the amount you owe.

Your mortgage "service provider" isn't required to participate in the plan unless it is receiving bailout money.

If you're going to go through the process of getting mortgage help, I'd like to chronicle your journey. Please get in touch with me.

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Surprise!

Posted at 8:00 AM on March 5, 2009 by Bob Collins (11 Comments)
Filed under: Economy

Why are economists so constantly surprised? It's becoming the tag line for just about every economic story lately: "... than economists expected." As in -- mostly -- "worse than economists expected." They're supposed to be the smartest people in the room.

Today's invocation, as cited by the Associated Press:

The number of laid-off workers receiving unemployment benefits has jumped to an all-time high near 5 million while new jobless claims remain well above 600,000. Both figures were worse than expected and new projections from the Federal Reserve show unemployment rising for the rest of this year.

Three days ago the government released the monthly report on consumer spending. Economists got it wrong... again:

The Commerce Department says consumer spending rose 0.6 percent in January, even better than the 0.4 percent gain that economists expected.

This comes on top of last week's bombshell that the economy shrank at the end of 2008 more than...well, you know...

The Commerce Department report released Friday showed the economy sinking much faster than the 3.8 percent annualized drop for the October-December quarter first estimated last month. It also was considerably weaker than the 5.4 percent annualized decline economists expected.

"Analysts" (economists who drive nicer cars, basically) don't get off the hook, either. Take today's earnings report from Target:

Discount retailer Target Corp. says its same-stores sales fell 4.1 percent in February. That was better than analysts had expected.

Wall Street, which hates to be surprised, is reacting to today's surprise in the way to which we've yet to become accustomed. Perhaps the solution is for economists to predict that things will be worse than they expect, then take the bounce when Wall Street is pleasantly surprised.

Granted it's not sound economic theory, but since when has that been a problem?

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Prop 8 goes to court

Posted at 11:04 AM on March 5, 2009 by Bob Collins (5 Comments)

The California Supreme Court is hosting today's top story.

The court is hearing arguments on three lawsuits intended to overturn last November's voter approval of a ban on gay unions.

The hearing begins at noon (central time) and you can watch it online here, although there's a pretty fair chance the servers will collapse under the weight of the audience demand.

If that doesn't work, try SFGTV or SFGTV2.

All of the court documents for these cases can be found here.

On Twitter, NPR's Carrie Kahn will provide Twitter updates. However, she is "tweeting" from outside the courthouse.

Of course, there'll be no decision today on the question of whether the the vote in November amended the state's constitution or revised it.

American Public Media's Frank Stoltze, who works for KPCC, provided this backgrounder on today's hearing.

(Photo: David McNew/Getty Images)

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Bank pushback and sports stadiums

Posted at 11:59 AM on March 5, 2009 by Bob Collins (3 Comments)
Filed under: Economy, Sports

This week, TCF Bank announced it's giving back the federal bailout money that it didn't want in the first place.

Theirs is not the only "pushback" to the government money and the accompanying nosing around that politicians are doing.

On the Web site, The Biz of Baseball Pete Toms well captures the sentiment that sports marketing is the new "whipping boy" of the recession. The subject? Naming rights for stadiums.

As far as I know, TCF did not get much political grief for its deal with the new University of Minnesota Football stadium naming rights, for which it paid $35 million. But it appears to be one of the few that have escaped.

Two major banks (other than TCF) with homes in Minnesota are in the naming rights business, including those who have accepted bailout money, according to the Sports Business Journal.

Wells Fargo & Co.
$25.0 billion in bailout funds
Wells Fargo Arena in Des Moines, Iowa ($11.5). Wells Fargo Arena at Arizona State University ($5 million). Also has marketing deals with five MLB clubs; five NBA clubs; San Francisco 49ers and Seattle Seahawks; Minnesota Wild; multiple minor league teams; Western Athletic Conference; deals at approximately 15 colleges, including Arizona, Southern California and Texas

U.S. Bancorp
$6.6 billion in bailout money
Naming rights at U.S. Bank Arena in Pittsburgh ($3 million). U.S. Bank Arena in Cincinnati. Also sponsors PGA U.S. Bank Championship Milwaukee; Seattle Mariners; Minnesota Timberwolves; Utah Jazz; Denver Broncos; Minnesota Vikings; Big Ten and Pac-10 conferences; six college athletic programs

The pressure to pull back from sports marketing is affecting the already-questionable math used by proponents of publicly financed sports stadiums.

Less than one year ago, professional sports was anticipating a group of stadium naming rights deals which would command unprecedented dollars. The Mets deal remains in place (at least temporarily) but has generated vast amounts of negative attention for the sponsor. The Yankees deal collapsed. Interest in the naming rights for the Cowboys and Giants/Jets stadiums appears slight. On a smaller scale, the Washington Nationals will soon begin their second season of play in Nationals Park, still with no naming rights sponsor.

BofA sponsorship chief Ray Bednar was quoted in SBJ, "We may have seen a sea change in the acceptable way to develop and nurture and maintain and grow relationships using client B2B entertainment."

Whether or not that change is temporary or permanent will have an enormous impact on professional sports.

It all adds up to increasingly unlikely sell for a new stadium for the Minnesota Vikings, whose lease at the Metrodome expires in 2011, thanks to a lousy economy, the disappearance of naming rights money, and a Legislature that has little interest in asking taxpayers to pony up a dime for a new stadium.

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Alice Rainville, 1928-2009

Posted at 5:01 PM on March 5, 2009 by Bob Collins (1 Comments)
Filed under: Icons

Alice Rainville, who died on Thursday, was the first woman to serve as the Council president in Minneapolis and she loved the north and northwestern neighborhoods of the city.

The news of her passing sent me scurrying to the MPR digital archive in search of past interviews with her. I was not disappointed. I found an interview that MPR's Dan Olson did with her when she stepped down from the Council after 22 years.

"I had great respect for the taxpayer," she said in the interview, recorded when she left the Council. "I don't want any of my dollars spent frivolously and I always would tell the Council, 'You are the guardians of the public purse,' and I don't want to be the people's banker. I only want government to assess what the needs are and fund them, but not to have a comfort blanket over government so that we never have to have a stomach ache or headache about where the money is going to come from. I think that government should be quite lean, but not mean. I think government has to be very cautious in that role because it's easy when just by a vote you can increase the dollars people have to send to you."

Here's the interview which aired on January 2, 1998:

(h/t: Sylvia Mohn)

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Funeral stories

Posted at 5:53 PM on March 5, 2009 by Bob Collins (1 Comments)
Filed under: Life

From what I understand, there was some discussion in ye olde newsroom about whether the death of Garrison Keillor's brother constitutes "news." The story ended up on our Web site.

I think the death of everyone's brother should be news, but only if the story is written by a brother or sister, the people who knew them best.

Former Star Tribune columnist Nick Coleman is on Morning Edition tomorrow with Cathy Wurzer and he talks a bit during the interview about covering funerals. "I love funeral stories," he said. "They're not just sad and grieving, but you hear so many great, wonderful, funny, touching stories at funerals. The press rarely covers someone's funeral. You should be sad and happy if you're alive in this world because that's the kind of world we live in."

All of that is a prelude to tell you that Keillor has written a touching tribute to his brother.

When your brother dies, your childhood fades, there being one less person to remember it with, and you are left disinherited, unarmed, semi-literate, an exile. It's like losing your computer and there's no backup. (What it's like for the decedent, I can't imagine, though I try to be hopeful.) If I had died (say, by slipping on an emollient spill and whacking my head on a family heirloom anvil), I believe Philip, after decent mourning, would've gone about locating a replacement.

If your brother dies, improvise. Someone you run into who maybe doesn't fit the friendship profile but his voice is reedy like your brother's, the gait is similar, he takes his coffee black and his laugh is husky, he starts his sentences with "You know," and the first words out of his mouth are about boats. I didn't run into him in Rome but I'm sure he's out there someplace.

I may start stopping in at some funerals, just to write about the people we didn't know, and wish we had.

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Minnesota's mortgage meltdown

Posted at 8:33 PM on March 5, 2009 by Bob Collins (0 Comments)
Filed under: Economy

How bad is the mortgage foreclosure and delinquency problem here? Bad, but not as bad as the rest of the country, according to a report released Thursday by the Mortgage Bankers Association.

In the West North Central area -- Minnesota, Iowa, Kansas, Nebraska, Missouri, and the Dakotas -- 6.7% of all mortgages were past due in the last quarter of 2008, that's the lowest of all the geographical regions. Six percent of mortgages in Minnesota were past due. Just 3 percent of mortgages here were in foreclosure.

Nationally, almost 8 percent of mortgages were past due.

But the situation gets much worse for subprime mortgages -- the mortgages given primarily to people with low credit ratings. Twenty percent of those mortgages in Minnesota were past due in the 4th quarter; 15 percent were in foreclosure.

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