A good place to change things would be the completely pathetic job local and state politicians do in retaining local businesses. I can clearly remember when Willamette Industries was headquartered here in Portland. They accounted for about 500 mostly higher paying corporate headquarter type jobs. When they were up against a hostile buyout deal; Katz and the rest of the Oregon economic bobblheads did NOTHING to help avoid the takeover. Of course, what most of them seem to ignore is that when those 500 jobs left NOTHING was coming in to take their place.

I heard a Stimson Lumber company spokesperson say Stimson Lumber has been shifting its assets out of Oregon and into Idaho. The election of Governor "retread" was said to be demoralizing as it is a sign of Same-o-Same-o state fiscal policies.

This second wave of foreclosures was inevitable, due to the particular way in which many mortgages were structured when they were made several years ago.

All of this was explained by someone who appeared well over a year ago on either Charlie Rose or the PBS News Hour. I forget the details, but he predicted that a second major wave of foreclosures would start right around now because of some timing factor built into those ill-fated loans.

This foreclosure mess is not over. And from what I'm seeing now, I don't think a lot of these lenders learned there lesson. We are at a point now where the economic outlook is getting somewhat better and lenders are hedging their bets on a full recovery and trying to be the first one out there lending again. That way they can drive business to them by saying, "hey, we'll take a chance on you." While I speak mostly from the commercial realm, I'm not only worried that lenders have reverted back to their old underwriting standards, I'm worried they are now even looser.

Also, some of the artificial supports to the housing market provided by the government--homebuyer credit, keeping interest rates near zero, buying mortgage bonds, etc.--have either ended or have run their course of helpfulness. They kept some struggling homeowners afloat or allowed them to make a few more months of mortgage payments, but now that those lifelines don't help anymore the owners in the direst straits are giving up.

President Obama pledged U.S. help for Greece today after their disastrous dealings with Goldman Sachs, and now we're seeing more of the effects of Wall Street's derivatives fraud on the U.S. economy.
Thank goodness these bankers are on our side - imagine if they had put their own greed ahead of the good of the country.

I noticed that BoA is largely responsible. You may have read last week how they tried to foreclose on a home that the owners had paid cash for - BoA wasn't owed a dime. The case went to court, BoA lost and refused to pay the judgement, so the homeowners got a couple of sheriff's deputies and foreclosed on a BoA branch.

It's suddenly news around here that Texas, which was supposed to be immune to the real estate crunch, is having a problem with foreclosures this year. Now, we lucked out slightly because Texas law forbids home equity loans that aren't actually being used for improving the house in question (one of the biggest reasons why California's and Nevada's foreclosures are so bad came from the homeowners who looked at their equity as credit cards), but not by much. Now, we're getting hit for the same reason as everyone else: too many longterm unemployed who've exhausted their savings, too many houses sold at the height of the boom because "there's never been a better time to buy," and far too much real estate bought for investment instead of for residence.

In regards to "private sector job loss-in Portland...", I'm totally confused. Yesterday Mayor candidate Charlie Hales said on the radio that Portland has gained in jobs. Which is it? Is he talking about a one-month time frame where there's a gain of 3 jobs? Hasn't it been reported that public sector jobs have been lost in Portland too?

The real estate market is certainly odd and a bit scary these days. We just put our house on the market (close-in Southeast) for what seems a little over value, and to our surprise received multiple full priced offers. Now we're faced with the rent versus buy question. This seems like a knowledgeable bunch with a good sense of the Portland market; what would you do? One option is to walk with the profit, pay off all debts (including student loans) and rent for a while. The second is to buy again immediately, inevitably increasing our debt (the American way?).

Rent vs. Buy: You would be much better off to simply rent for a while. Way too much property on the market and sinking prices in the NW at that. By the way, make sure the real estate people qualified these so-called "buyers". Lots of deals don't get done because lenders are much more strict than in the past. When we sold out home in outer SE Portland in 2009, a buyer lost his job a week before closing time. So we had to wait three more months before a new buyer showed up. I would be especially wary of any FHA deals where the buyer wants you to pay a numeber of transaction costs. Good luck with the sale...And remember in this economy "cash is king".

Dave A.

I agree with most of your points except FHA is a strong strategy for getting a home sold. It all boils down the the figure at the bottom of the HUD-1 statement.

I've successfully talked over 60 clients NOT to sell now because of the weak sellers' market. However, I DO believe it is a great time to buy. Lots of inventory, great interest rates, banks that don't know how to properly price a property. But I'd be very, very selective.

"At a financial conference today, [JPM CEO Jamie] Dimon told Fed chief Ben Bernanke there's no longer any reason to crack down on Wall Street. 'Most of the bad actors are gone,' he said. '[O]ff-balance-sheet businesses are virtually obliterated, ... money market funds are far more transparent" and 'most very exotic derivatives are gone.'

Dimon said he worried that financial reform legislation is 'holding us back at this point' from a stronger economy."
http://www.readersupportednews.org/opinion2/279-82/6197-jamie-dimons-bizarre-idea-about-why-the-recovery-has-stalled

"JPMorgan Chase and the other giant banks on Wall Street are bigger than they were before. And now they're certain they're too big to fail. Without far stricter regulation they have every incentive to repeat their binge."

I should add something about Dimon asserting last February (MarketWatch) that the problem he foresaw during the quarters ahead was the banks having too much capital accumulation. And maybe something about the NYT reporting a few weeks ago that the banks have a problem because they own too much foreclosed property. But it's late and I'm tired. Besides, if someone doesn't know these things by now, he has not been paying attention.

Does anyone else recall the anecdote related by DSK -- the most recent IMF head, now under house arrest in NYC, in the film "Inside Job" -- about attending a meeting in 2008 with Henry Merritt "Hank" Paulson, Jr and American banksters during which the banksters begged for regulation?

@Rent vs. Buy: definitely rent.

Once the Chinese quit buying our 4.3% U.S. Treasury bonds (or the Fed quits printing money), mortgage rates will rise to 7% (or higher). That will take another 15% to 20% out of market value of sub-$300k single family homes.

Why? Because most sub-$300k buyers don't pay cash (they need a mortgage), and their focus is on their monthly payment, not the total cost of ownership (or contract price).

As interest rates go up, people have to borrow less money to maintain the same monthly payment. When you reduce the leverage available to mortgage buyers, there is downward pressure on home prices, especially when the price takers (REO's and short sales) make up 40% of the market.

Ditto for property taxes: the higher the "monthly" property tax, the less money the bank will qualify you to borrow.

It's hardly just OR:

"The S&P/Case-Schiller index fell to its lowest level since 2003 in a survey released last week. And Fed chair Ben Bernanke warned in a Tuesday speech that the housing sector's ongoing woes are exerting a major drag on the rest of the economy.

Robert Schiller, who co-founded the index, said today that a further decline in home values of 10 percent to 25 percent over the next five years 'wouldn't surprise me at all.'"
http://yhoo.it/j3yq4A

The federal government's efforts to encourage banks to renegotiate mortgages for the millions whose homes are under water have so far achieved negligible results in terms of removing the "major drag on the rest of the economy."