Homes foreclosure more than doubled in 1Q from 2007

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Tuesday April 29, 6:18 am ET, by Alex Veiga, AP Business Writer

Number of US homes facing foreclosure jumps 112 percent in first quarter from 2007 LOS ANGELES (AP) — The number of U.S. homes heading toward foreclosure more than doubled in the first quarter from a year earlier, as weakening property values and tighter lending left many homeowners powerless to prevent homes from being auctioned to the highest bidder, a research firm said Monday.

Among the hardest hit states were Nevada, Florida and, in particular, California, where Stockton led the nation with a foreclosure rate that was 6.6 times the national average, Irvine, Calif.-based RealtyTrac Inc. said.

Nationwide, 649,917 homes received at least one foreclosure-related filing in the first three months of the year, up 112 percent from 306,722 during the same period last year, RealtyTrac said.

The latest tally also represents an increase of 23 percent from the fourth quarter of last year.

RealtyTrac monitors default notices, auction sale notices and bank repossessions.

All told, one in every 194 households received a foreclosure filing during the quarter. Foreclosure filings increased in all but four states.

The most recent quarter marked the seventh consecutive quarter of rising foreclosure activity, RealtyTrac noted.

“What would normally alleviate the foreclosure situation in a normal market is people starting to buy properties again,” said Rick Sharga, RealtyTrac’s vice president of marketing.

However, the unavailability of loans for people without perfect credit and a significant down payment is slowing the process, he said.

“It’s a cycle that’s going to be difficult to break, and we’re certainly not at the breaking point just yet,” Sharga added.

The surge in foreclosure filings also suggests that much-touted campaigns by lawmakers and the mortgage lending industry aimed at helping at-risk homeowners aren’t paying off.

Hope Now, a Bush administration-organized mortgage industry group, said nearly 503,000 homeowners had received mortgage aid in the first quarter. Most of the aid was temporary, however.

Pennsylvania was a notable standout in the latest foreclosure data. The number of homes in the state to receive a foreclosure-related filing plunged 24.4 percent from a year earlier.

Sharga credited the decline to the state’s foreclosure relief measures, noting that cities such as Philadelphia put in place a moratorium on all foreclosure auctions for April and implemented other measures aimed at helping slow foreclosures.

Nearly 157,000 properties were repossessed by lenders nationwide during the quarter, according to RealtyTrac.

The flood of foreclosed properties on the market has contributed to falling or stagnating home values, yet lenders have yet to implement heavy discounts on repossessed homes, Sharga said.

Nevada posted the worst foreclosure rate in the nation, with one in every 54 households receiving a foreclosure-related notice, nearly four times the national rate.

The number of properties with a filing increased 137 percent over the same quarter last year but only rose 3 percent from the fourth quarter.

California had the most properties facing foreclosure at 169,831, an increase of 213 percent from a year earlier. It also posted the second-highest foreclosure rate in the country, with one in every 78 households receiving a foreclosure-related notice.

California metro areas accounted for six of the 10 U.S. metropolitan areas with the highest foreclosure rates in the first quarter, RealtyTrac said.

Many of the areas — including Stockton, Riverside-San Bernardino, Fresno, Sacramento and Bakersfield — are located in inland areas of the state where many first-time buyers overextend themselves financially to buy properties that have plunged in value since the market peak.

“California still hasn’t hit bottom,” Sharga said. “We have a lot of California homes that are in early stages of default that may not be salvageable because either there’s no market or financing available, or both.”

Arizona had the third-highest foreclosure rate, with one in every 95 households reporting a foreclosure filing in the quarter. A total of 27,404 homes reported at least one filing, up nearly 245 percent from a year ago and up 45 percent from the last quarter of 2007.

Florida had 87,893 homes reporting at least one foreclosure filing, a 178 percent jump from the first quarter of last year and a 17 percent hike from the fourth quarter last year. That translates into a foreclosure rate of one in every 97 households.

The other states among the top 10 with the highest foreclosure rates were Colorado, Georgia, Michigan, Ohio, Massachusetts and Connecticut.

RealtyTrac Inc.: http://www.realtytrac.com

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How to Steal Money from the Stock Markets

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Revealed: the dirty tricks of rogue traders
By Robert Winnett, The Daily Telegraph 3/21/08

A hedge fund based in London set up a “dirty-tricks unit” to manipulate share prices and get illicit information on companies in an attempt to make millions on the stock market, an insider has revealed.

  • Jeff Randall: Rumour Mill mafia is destroying our savings
  • Leader: HBOS mugging shows that crime pays
  • Email and Singapore call causes City frenzy
  • As the official hunt began for the rogue traders who tried to bring down Britain’s biggest mortgage lender, HBOS, The Daily Telegraph can reveal a whistle-blower’s account of how a multi-billion pound fund allegedly used illegal tactics to drive down stock prices.

    the dirty tricks of rogue traders

    Wanted: the trader who allegedly made £100m from the 17 per cent slump in HBOS shares
    Private detectives were allegedly employed to hack into executives’ emails and telephone records.

    Front companies were set up to allow the hedge fund traders to pose as independent researchers or journalists.

    Negative information on companies was then distributed to leading investment banks in the hope that rumours would spread and some share prices would fall.

    The hedge fund, which cannot be named for legal reasons, stood to make millions from “short-selling” the shares as they fell in value.

    The allegations – made in a sworn statement seen by The Daily Telegraph and which has been sent to financial regulators – will add to growing concern over the activities of rogue traders in the City.

    The Financial Services Authority, the City regulator, has begun a criminal investigation to find the trader who allegedly made £100 million from the 17 per cent slump in HBOS shares on Wednesday.

    white collar crimes pays big

    The shares fell after “malicious” rumours were spread in the City about the bank, sparking fears that the price had been illegally manipulated – a move described as “the modern day version of bank robbery”.

    FSA investigators are seeking emails sent to traders that are thought to have prompted widespread selling of HBOS shares. They claimed the bank was experiencing difficulties.

    advertisementIt has emerged that the rumours are thought to have originated in the Far East, with Singapore named as the most likely source. Nick Leeson, the notorious rogue trader responsible for the collapse of Barings Bank, also operated in Singapore.

    In a separate development, Credit Suisse, the investment bank, admitted that it had uncovered a separate £1.4 billion share-dealing scam by rogue traders – many of whom were based in London – who were trying to protect their bonuses.

    The Credit Suisse traders are understood to have sought to cover up their trading losses at the end of last year.

  • Shadows who move markets | What is short-selling?
  • London traders sacked in £1.4bn Swiss bank fraud
  • The revelations follow a week of turmoil in the global markets after the near collapse of the American investment bank Bear Stearns.

    Following a meeting with the major banks, it emerged that the Bank of England was considering helping to alleviate the financial crisis by easing the restrictions on banks seeking to borrow money from it.

    The accusations about the hedge fund form the most detailed account yet of the illicit activity carried out by the London office of a major international hedge fund. Such tactics are also thought to be used by other hedge funds.

    The sworn statement containing the allegations is understood to have been sent to the FSA last year although it is not known what action the regulator took.

    The document alleges that:

    – Employees of the hedge fund ordered an American-based private detective to hack into the corporate email systems of two firms in which the hedge fund had an interest

    – A bogus firm — with a phoney internet address — was established to allow employees to pose as independent researchers and approach company executives to garner information on their firms’ future financial prospects. The firm was also used to gain access to industry conferences.

    – A false website — with a bogus address — was also registered to allow hedge fund traders to pose as journalists. The offices of American politicians were approached by people claiming to be journalists to obtain information about potential new laws banning internet gambling that would hit British firms.

    – Jurors and their families in a sensitive legal case into whether a firm had exclusive patent rights in which the hedge fund had invested were “tapped up”. Money was allegedly paid to jurors’ families for information about jury-room deliberations.
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    ? – Hedge fund staff gathered “sensitive” negative information on firms in which they had an interest in the share price falling. This information was distributed to leading investment banks whose experts were encouraged to take a dim view of the prospects of the company’s shares. A German “media consultant” was also used to disseminate information.

    – A safe containing large amounts of cash was installed in the hedge fund’s office. Money was paid to “sources” providing valuable inside information. On one occasion, an anonymous informant was paid $50,000.

    The hedge fund at the centre of the allegations has offices in London’s West End and traders spent their staff Christmas party on a luxury cruise.

    It was set up by former senior executives from a blue-chip investment firm. However, from 2005, the “dirty-tricks unit” was staffed by former corporate investigators and investigative journalists hired from newspapers.

    Pressure is growing on the FSA to clamp down on the worst excesses of the hedge fund industry after a series of scandals culminating in the attempt this week to start a run on HBOS.

    The hedge fund “dirty tricks unit” exposed today was set up in London but operated around the world. It is alleged that this was to avoid tougher regulatory controls in New York.

    On Thursday, Britain’s biggest banks met with the Bank of England to urge them to loan more money to help alleviate the impact of the global credit crunch.

    The Bank, which agreed to some of the demands, released another £5?billion for the money markets. The stock market, which dropped slightly, is now closed until Tuesday.

    HBOS shares recovered on Thursday, closing up more than six per cent.

    the audacity of hope