Homeowners, Businesses and Farmers Begin to Suffer from Trump Shutdown

As the last post noted, some congressional Republicans are beginning to feel pressure from their constituents to vote to end the Trump created shutdown crisis.  A piece in the New York Times looks at the sectors of the economy that are beginning to suffer real harm and the forecasts that economic growth will be curtailed - all so Trump can please his hideous base.  What is in my view most sad is that Trump cares noting about those being harmed.  All that matters is boosting his ego and telling his racist, knuckle dragging base that he's "winning." The man is evil.  Here are article highlights:

The impact of a partial government shutdown began to ripple across the economy as it stretched into Day 17, with mortgage applications delayed, public companies unable to get approval to raise capital and thousands of Secret Service agents expected to show up for work without pay.

President Trump and congressional Democrats have made little progress in negotiations to end a shutdown that has affected about 800,000 federal workers, many of whom will miss their first paycheck this week, and who owe a combined $249 million in monthly mortgage payments, according to the online real estate firm Zillow.

The standoff is beginning to inflict pain on Americans, whose lives are affected, in one way or another, by the federal government. It is already the second-longest shutdown in history, behind the one that started in December 1995 and lasted 21 days.

The effects of a prolonged shutdown have some Wall Street economists predicting a hit to the United States economy.

The effects extend from the president’s inner circle, to Wall Street to farm country.

Virtually every employee with the Secret Service involved in investigations, security and the protective division, which protects Mr. Trump and dozens of other current and former government officials and their families, is required to work during the shutdown. And 6,000 of the organization’s roughly 7,000 employees will not be paid.

The same is true at the Securities and Exchange Commission, which has come to a standstill with “only an extremely limited number of staff members available to respond to emergency situations,” according to a shutdown plan posted on the commission’s website.

[C]raft brewers cannot get approval from the Bureau of Alcohol, Tobacco, Firearms and Explosives for new beer labels. And the Commerce Department has stopped processing requests from auto suppliers and other manufacturing companies seeking an exemption from Mr. Trump’s metal tariffs, leaving them uncertain over the price they will need to pay for key materials this year.

Farmers who planned to apply for subsidies to help mitigate the effect of Mr. Trump’s trade war must wait to get paid until the Agriculture Department’s Farm Service Agency offices reopen. And in neighborhoods across the country, as many as 39,000 federally backed mortgage applications may have already been delayed because of reduced staffing in federal agencies, according to Zillow estimates.

Several nonprofit organizations, including the Federal Law Enforcement Officers Association, are trying to aid Department of Homeland Security workers who need immediate help with a limited pool of cash and other resources, an officer with the group’s charitable foundation said. The Navy Federal Credit Union is offering no-interest loans to service members who face the prospect of missed paychecks.

Secret Service agents are growing increasingly anxious and angry about the shutdown, according to several current and former agents. . . . . “They are asking you to put your life on the line and not paying you — it’s ridiculous,” said Donald Mihalek, 49, a 20-year Secret Service veteran whose own retirement paperwork has yet to be processed because of the shutdown.

[C]orporate America will now have to wait for the government to reopen in order to move ahead with things like initial public offerings and pending corporate mergers that need approvals from regulators. . . .  A dearth of those deals could create financial hardships for midsize public companies that have fewer financial resources to draw upon.

The biggest and most far-reaching effect of the shutdown looms on Feb. 1. Trump administration officials say that funding for the Supplemental Nutrition Assistance Program, or SNAP, which provides food benefits for about 40 million people, will run out of cash by the end of the month.

Other food assistance programs are facing a more immediate cash crunch. The Special Supplemental Nutrition Program for Women, Infants and Children, known as WIC, has already been cut off, with state funds filling the gap as the shutdown drags on. WIC provides aid to an additional seven million low-income Americans who are considered to be at “nutritional risk.”

Mortgage Lenders Request Delay of New Mortgage-Disclosure Rule

Click image to enlarge - from New York Times

Those of us in the real estate industry have known for well over a year and a half that new rules implemented by the Consumer Finance Protection Bureau to improve residential loan disclosures and force lenders to ceasing handling closing on a last second, chaos basis were coming on August 1, 2015.  My employer, Liberty Title & Escrow has been getting ready for the change, purchasing new software, educating real estate agents and working with lenders to be prepared.  Now, mortgage lenders - who typically do little on a timely basis based on my experience - are asking for delays in the effective date of the new disclosure laws which, among other things would require closing statements to be provided to borrowers not less than three days before closing (currently, we often do not have final figures from lenders until mere hours before closing).  Not surprisingly, some of the biggest lenders are the worse to deal with.  The New York Times looks at efforts by lenders to continue their bad old ways for a while longer.  Here are excerpts:

New rules intended to make mortgage terms more transparent and easier for consumers to understand are scheduled to take effect on Aug. 1. But although the changes have been in the works for almost two years, the lending industry says it is not prepared for the shift.

So with two months to go, banks are asking for a delay in enforcement.

Outwardly, the new requirements seem fairly simple. Instead of the four different mortgage disclosure forms now required under the Truth in Lending and Real Estate Settlement Procedures Acts, borrowers will receive an initial Loan Estimate at the time of application, and a Closing Disclosure shortly before they sign off.

The new forms are just one part of a nearly 1,900-page rule created by the Consumer Financial Protection Bureau to strengthen protections after the mortgage crisis. Known in the industry as TILA-RESPA, for its integration of the two existing acts, the rule was finalized in November 2013, with an implementation date of August 2015.

The American Bankers Association, however, says its members aren’t ready. And it blames the vendors who supply the software and system upgrades needed for regulatory compliance.

In a survey released earlier this month, 79 percent of responding banks said their vendors either had not verified a delivery date for the software updates or had said the systems wouldn’t arrive before June.

The association supports legislation recently filed in the House that would prohibit enforcement of TILA-RESPA until Jan. 1, 2016. The bill would also prohibit anyone from filing a lawsuit against a lender for violating the requirements, provided the lender had made a “good faith effort” to comply.

More than 20 consumer groups have signed a letter opposing the legislation, however, saying that it was borrowers who need protecting, not lenders.

“Doesn’t the homeowner have the right to get a reasonably accurate disclosure in advance of closing?” said Alys Cohen, a staff attorney for the National Consumer Law Center.

Richard Cordray, the director of the Consumer Financial Protection Bureau, has so far held firm on the Aug. 1 implementation date. At a May 12 speech before the National Association of Realtors, he acknowledged that the coming changes represent “a major undertaking.” 

Personally, I hope the CFPB refuses to extend the implementation date.  Lenders have known this was coming and need to be held strictly liable.  I've seen lender "good faith efforts" and if they are given any leeway, they will continue to abuse the system, consumers and others involved in the closing process.  The irony is that years ago, we used to have settlement statements prepared well in advance of closing, but then many lenders got greedy, cut staff and/or hired incompetent processors.  The good, competent lenders should not be penalized by the unpreparedness of the bad ones who created the problem the CFPB rules seek to fix.

Are the Federal Government and Lenders Out to Destroy Housing?

The Virginian Pilot is reporting that in March 43% of home sales were foreclosures. This reality has several negative side effects: (1) neighborhood values are driven lower thus causing more homeowners to be "underwater" on the mortgages and (2) the bailout tab to the taxpayers increases. Yet these effects would seem to be the agenda of the federal government and the lenders as a whole. Why do I say this? Because lenders continue to refuse to enter into loan modifications to assist owners faced with plummeting prices and/or financial catastrophes that have impacted their ability to pay on loans. This refusal ultimately leads to a foreclosures sale where huge numbers of homes are taken back by lenders because no one buys the home at foreclosure. The next step is to have the foreclosed homes under the management of incompetent "management companies" where they languish until the home is transferred to HUD, Fannie Mae or Freddie Mac. Once the homes become the property of these government or semi-governmental agencies, they typically sell for 40-50% of their former value. One doesn't need to be a math genius to realize how devastating this is to neighborhood values. The best solution for troubled homeowners and the taxpayer would be for loan modifications to be widely utilized. The fact that they are not shows just how f*cked up the system has become. Here are some story highlights:
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Sales of foreclosed and distressed properties continued to fuel the housing market in South Hampton Roads in March, according to a report released Monday. Real Estate Information Network Inc. reported that 1,090 homes sold last month in the area, up 56.4 percent from February and 13.2 percent from a year ago. Three of every seven homes sold - or 43 percent - were bank-owned or were sold for less than the seller owed on the mortgage.
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That is the highest volume of foreclosures sales on record, up from 42 percent in February.

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As such sales increase, housing prices continue to fall. Last month, the median price of homes sold dipped to $175,000, down 5.4 percent from February and 15 percent from a year ago, the Virginia Beach-based multiple listing service reported.

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Vinod Agarwal, an economist at Old Dominion University, said that although foreclosures make up a small percentage of the housing market, they are selling fast because of the perceived value. "If you think you're getting a steal, you go for it," Agarwal said.

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Despite foreclosure sales, the market as a whole is still swollen with properties. Last month, 14,360 were for sale in Hampton Roads, up 1.3 percent from February and down 3.4 percent from a year ago. That represents about 10 months of inventory. Six months of inventory is considered normal.

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It's also taking longer to sell a home, on average. The average number of days a home stays on the market rose slightly in March to 107 days. That is the lengthiest average market time in more than four years.

Will "MERS" Create Another Blow to Residential Real Estate?

As homeowners, realtors and others continue to struggle with the the consequences of the residential real estate market meltdown (my firm's real estate related revenues are down over $100,000 and many realtors are facing bankruptcy) another possible issue of earth quake like proportions lurks over the horizon which could deal another huge blow to the industry and the economy. What is it? It's called MERS, which stands for Mortgage Electronic Registration Systems, and typifies the chaos in the mortgage industry where far too much documentation is missing and the actual owners of loans - i.e., those with the real legal right to foreclose on defaulted loans - may be unascertainable. It's a mess and is particularly ominous for those trying to effect loan restructures since servicers of loans are not the real noteholders who are the only ones who can agree to loan modifications. The result is that struggling homeowners cannot get answers or approval of restructures and find themselves with two options: bankruptcy and/or foreclosure - even though many of the foreclosures may in fact be invalid. Here are highlights from a New York Times article that looks at the looming debacle:
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[T]he MERS Corporation, claims to hold title to roughly half of all the home mortgages in the nation — an astonishing 60 million loans. Never heard of MERS? That’s fine with the mortgage banking industry—as MERS is starting to overheat and sputter. If its many detractors are correct, this private corporation, with a full-time staff of fewer than 50 employees, could turn out to be a very public problem for the mortgage industry.
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Judges, lawmakers, lawyers and housing experts are raising piercing questions about MERS, which stands for Mortgage Electronic Registration Systems, whose private mortgage registry has all but replaced the nation’s public land ownership records. Most questions boil down to this:
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How can MERS claim title to those mortgages, and foreclose on homeowners, when it has not invested a dollar in a single loan? And, more fundamentally: Given the evidence that many banks have cut corners and made colossal foreclosure mistakes, does anyone know who owns what or owes what to whom anymore?
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[T]he legal challenges to MERS, its practices and its records are mounting. The Arkansas Supreme Court ruled last year that MERS could no longer file foreclosure proceedings there, because it does not actually make or service any loans. Last month in Utah, a local judge made the no-less-striking decision to let a homeowner rip up his mortgage and walk away debt-free. MERS had claimed ownership of the mortgage, but the judge did not recognize its legal standing.
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“The state court is attracted like a moth to the flame to the legal owner, and that isn’t MERS,” says Walter T. Keane, the Salt Lake City lawyer who represented the homeowner in that case.
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And, on Long Island, a federal bankruptcy judge ruled in February that MERS could no longer act as an “agent” for the owners of mortgage notes. He acknowledged that his decision could erode the foundation of the mortgage business.
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[B]y the 1990s, the centuries-old system of land records was showing its age. Many county clerk’s offices looked like something out of Dickens, with mortgage papers stacked high. Some clerks had fallen two years behind in recording mortgages. For a mortgage banking industry in a hurry, this represented money lost. Most banks no longer hold onto mortgages until loans are paid off. Instead, they sell the loans to Wall Street, which bundles them into investments through a process known as securitization.
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MERS’s legal troubles, however, aren’t going away. In August, the Ohio secretary of state referred to federal prosecutors in Cleveland accusations that notaries deputized by MERS were signing hundreds of documents without any personal knowledge of them. The attorney general of Massachusetts is examining a complaint by a county registrar that MERS owes the state tens of millions of dollars in unpaid fees.
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Federal bankruptcy courts and state courts have found that MERS and its member banks often confused and misrepresented who owned mortgage notes. In thousands of cases, they apparently lost or mistakenly destroyed loan documents. The problems, at MERS and elsewhere, became so severe last fall that many banks temporarily suspended foreclosures.
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Alan M. White, a law professor at the Valparaiso University School of Law in Indiana, last year matched MERS’s ownership records against those in the public domain. The results were not encouraging. “Fewer than 30 percent of the mortgages had an accurate record in MERS,” Mr. White says. “I kind of assumed that MERS at least kept an accurate list of current ownership. They don’t. MERS is going to make solving the foreclosure problem vastly more expensive.”
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MERS is a legal fiction. If MERS owned nothing, how could it bounce mortgages around for more than a decade? And how could it file millions of foreclosure motions?
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The situation is a disaster. We are routinely asked to provide copies of documents from closings that occurred 4 0r 5 years ago - I suspect because entire loan files have been lost. In Virginia and many other states, to foreclose, one technically needs to be the holder of the ORIGINAL signed note - a standard that cannot be met when the loan file no longer exists or has been irretrievably lost.

Are We on the Eve of the Next Bank Crisis?

During the height of the real estate bubble, mortgage lenders threw underwriting standards to the wind and made all kinds of irresponsible loans. Worse yet, Wall Street assisted them by packaging toxic loans into "securitized investments" and sold the poisonous investments worldwide, making a financial killing in the process - all the while displaying no apparent concern for the potential consequences when borrowers were unable to pay loans ridiculously above their financial means. Now, based on what one is seeing in foreclosure litigation, the bottom may be about to fall out yet again. Why? Because mortgage lenders attempting to foreclose on properties often don't hold the mortgage note and sometimes the notes cannot even be found due to sloppy transfers of documents. The question is one of whether there will be any real consequences for those on Wall Street who helped create the nightmare. Based on what we've seen so far, likely not and the taxpayer will be the one to get stuck holding the bag yet again. Moreover, until housing recovers, don't expect any real economic recovery. West Law News & Insight has details on the forces in motion that could take down Bank of America and other huge lenders: Here are disturbing highlights:
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An important but little-understood player in the home foreclosure process, the Mortgage Electronic Registration Systems Inc., has been buffeted by a growing number of class-action lawsuits and unfavorable court rulings, a Reuters Legal review of Westlaw data shows. In addition, according to three sources, the company is under scrutiny by state attorneys general. The legal onslaught could prove to be a new drag on the still-sputtering U.S. housing market.
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The company, known as MERS, is an electronic registry of more than 66 million mortgage loans. Created in 1995 by major banks to facilitate mortgage securitization, MERS records the transfer of deeds and promissory notes and often acts as a representative, or "nominee," for financial institutions during public auctions of foreclosed properties. Its members include the largest U.S. mortgage providers and servicers.
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Since September, lawyers have filed class-action lawsuits against MERS on behalf of homeowners in Georgia, Florida, New York and Kentucky. The lawsuits allege that MERS did not have legitimate title to the foreclosed properties, so the foreclosures were fraudulent. Besides seeking damages, many of the lawsuits are asking for court orders to vacate all foreclosures in the states where MERS was involved. And in the last six months, judges in at least six states have halted foreclosures because they found that MERS either lacked standing to be an agent for mortgage firms or had improperly transferred ownership rights.
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The legal assault on MERS casts doubt on the ownership rights of countless foreclosed properties. And because foreclosed properties represent such a significant segment of the current housing market -- a full quarter of all homes sold in the U.S. during the second quarter were in foreclosure, according to RealtyTrac -- the broader housing market is exposed. "A lot of people who have bought homes or are looking to buy homes are going to have a lot of problems because of MERS," said Alan White, an associate professor at Valparaiso University School of Law in Indiana who has written extensively about foreclosures.
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In May, Kings County, New York, Supreme Court Judge Arthur Schack ruled that MERS had improperly transferred a mortgage to HSBC, when its own records indicated the party with a right to foreclose was Wells Fargo. MERS creates a "mortgage twilight zone," Schack said, calling arguments that the foreclosure in question was legitimate "incredible, outrageous, ludicrous and disingenuous." He dismissed the foreclosure and ruled that it could not be resubmitted.
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A class-action lawsuit filed Oct. 23 in Fulton County, Ga., claims MERS has no standing to initiate foreclosure proceedings. The lawsuit seeks damages and asks the court to invalidate foreclosures in Georgia where MERS was a party. Class-action complaints filed in federal courts in New York and Florida in September make similar claims.

It's the Housing Market Stupid

It's been about three years now that I have been stating that until the residential housing market is stabilized and prices stop falling, the economy is NOT going to truly improve. Nonetheless, the Obama administration doesn't seem to grasp that reality and measures implemented to date to assist homeowners have been abysmal at best. As one who has assisted homeowners facing foreclosure and those seeking to sell homes through "short sales" I have witnessed first hand that the programs just plain suck and the mortgage lender staff handling such properties are beyond incompetent. The result: more and more foreclosures that can drastically drive down neighborhood prices and in turn set off another whole round of owners who are now "underwater" on their mortgages. The Washington Post looks at this ongoing fiasco. Here are some highlights:
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A new wave of distressed home sales is rippling, more quietly this time, through American cities and suburbs. Its unsettling effects are playing out here in Manassas, along Brewer Creek Place, a modest, horseshoe-shaped street lined with 98 brick townhouses. Several years after the U.S. foreclosure crisis erupted, the U-Hauls are back. The last time, banks seized nearly every fourth house on the street through foreclosure. This time, homeowners are going another route: a short sale.
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Harris and her husband, both bartenders, paid what seemed to be a bargain price, $289,000, in 2008. But they have fallen behind on their mortgage payments, in part because her husband was out of work. Now they have a $246,000 offer for the home, and the balance on their mortgage is more than that. They want to accept the offer. All they need is their bank's okay. That kind of deal is called a short sale, and it's sweeping the country. In these deals, a lender allows a troubled borrower to sell a home for less than what's owed on the mortgage.
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For lenders, short sales are less expensive than foreclosures to handle and help ensure that homes transfer in good shape. And for the wider real estate market, these sales could help shore up the floor under housing values because homeowners - unlike with foreclosures - have a vested interest in getting the best price. That's because the higher the offer, the more likely the lender will approve the sale.
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Clearing the way for a short sale has often proved cumbersome because there can be so many parties to a potential deal. Aside from lenders, transactions may also have to be green lighted by investors who own the mortgages, local tax authorities, appraisal firms, escrow companies, homeowners associations, mortgage insurance companies and subordinate lien holders.

Foreclosure Rates Surge

While Wall Street has been bailed out with taxpayer funds and is back to giving itself absolutely obscene bonuses, the typical taxpayer who has lost their job, suffered a health care crisis that wiped out their financial capabilities or even lost tenants because of tenant job losses no relief is in sight. Worse yet, no one in Congress or the White House seems to much care beyond making pretty statements. Relief programs are basically a bust and the level of incompetence in mortgage and bank loss mitigation departments would make the Three Stooges look like rocket scientists. Half the time the right hand doesn't know what the left is doing within lenders as evidenced by a recent Bank of America loan where the homeowner - after losing her job for a number of months - finally had worked out a loan modification. The problem was, no one bothered to tell the arm of the lender doing the foreclosure work. The house was sold without my client's knowledge and she came home from her new job to find a notice on her door that the home had gone to foreclosure. Now, after many e-mails and phone calls, the sale is being rescinded - something that could thankfully be done since the deed had not been yet delivered to the purchaser at the foreclosure sale. Situations like this woman's are the norm, not the exception and lenders need to drastically hire more competent personnel to stop more tragedies that could be averted and which overall would SAVE lenders money and help STABILIZE housing prices. We need fewer obscene bonuses and more competent staffing NOW. Here are highlights from the Virginian Pilot on the surging level of foreclosures:
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LOS ANGELES (AP) -- A record number of U.S. homes were lost to foreclosure in the first three months of this year, a sign banks are starting to wade through the backlog of troubled home loans at a faster pace, according to a new report. RealtyTrac Inc. said Thursday that the number of U.S. homes taken over by banks jumped 35 percent in the first quarter from a year ago. In addition, households facing foreclosure grew 16 percent in the same period and 7 percent from the last three months of 2009.
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In all, more than 900,000 households, or one in every 138 homes, received a foreclosure-related notice, RealtyTrac said. The firm based in Irvine, Calif., tracks notices for defaults, scheduled home auctions and home repossessions.
Homeowners continue to fall behind on payments because they've lost their job or seen their mortgage payment rise due to an interest-rate reset. Many are unable to refinance because they now owe more on their loan than their home is worth.
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The Obama administration's $75 billion foreclosure prevention program has only been able to help a small fraction of troubled homeowners. About 231,000 homeowners have completed loan modifications as part of the Obama administration's flagship foreclosure prevention program through March. That's about 21 percent of the 1.2 million borrowers who began the program over the past year.
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Last month, the administration expanded the program, launching a plan to reduce the amount some troubled borrowers owe on their home loans and give jobless homeowners a temporary break. But the details of those programs are expected to take months to work out.

About 22% of Mortgages in Hampton Roads are 'Underwater'

Congress and the Obama administration can talk all they want about the recession easing but as long as the real estate industry remains crippled and families are faced with negative equity in their homes, the economy will NOT really rebound. Banks have been bailed out to the tune of billions of dollars, yet they are not passing that benefit on to homeowners in the form of loan modifications and work outs or new lending. The result is that more and more homes go into foreclosure and families file for bankruptcy.

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Equally bad, it has become so difficult the secure larger loans that houses over $350,000 to $500,000 that that segment of the market remains utterly dead. Combined with crushing medical costs and it is a recipe for continued economic disaster. Particularly hard hit are military families that bought homes using VA loans who put little or no money down at the time of purchase. I began a mantra that "it's the real estate market stupid" back in mid-2007 yet little has changed, Any current "surge" in home sales remains a trickle compared to a few years ago and is focused on lower end homes being acquired by first time buyers out to take advantage of the tax credit being offered. Until the banks begin loaning money in a serious manner again, do not expect the economy to recover. Here are highlights from the Virginian Pilot:
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More than 71,500 homeowners in Hampton Roads owed more on their mortgages than the homes were worth at the end of September, according to a report released Tuesday. That's nearly one in four local mortgage borrowers -22 percent - who are "underwater" on the loans, according to First American CoreLogic, which is based in Santa Ana, Calif., and tracks mortgages across the country.
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"Things have not gotten better," said Vinod B. Agarwal, an economist at Old Dominion University. "But things have not gotten much worse." Homeowners who purchased at the peak of the local housing boom, especially with little or no down payment or an interest-only loan, are the most susceptible to finding themselves underwater in a loan. Falling home values can erode any equity homeowners have in a newly purchased or refinanced home.
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Economists and real estate experts say that owing more on a home than it's worth is one of the most common precursors to foreclosure. Bank repossessions and foreclosure auctions in Hampton Roads have remained at high levels in recent months, and First American's report indicates foreclosure activity could grow, dampening the prospects of a quick housing recovery.
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Across the country, nearly 10.7 million homeowners - or 23 percent - owe more than their homes are worth, First American reported. The majority of such negative-equity mortgages are in states such as Nevada, Arizona, Florida, Michigan and California.
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Indicative of how bad things are, I received a holiday party invitation yesterday from a law firm specializing in bankruptcy work. Why? Because I have referred them so many clients in the last year. Outside of bankruptcy and foreclosure work, the legal industry is suffering severely too.

Obama's Failed Promises Shape Virginia Race

I have previously commented on the way in which I believe the broken campaign promises of President Obama and Congressional Democrats is threatening the loss of the Virginia governor's office and other offices to the Republicans. Now, the Washington Post has picked up on that story line demonstrating it wasn't just my imagination or that of aides to the Virginia Democrat candidates. I truly believe that Virginia may well return to red state status unless Obama and Congressional Democrats get off their asses and start delivering. I am beyond disgusted and it seems so are more and more Virginians who feel that voting Democrat has brought them nothing (other than not having Bible Spice as Vice President). Here are highlights from the Post story:

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For Cleland [a Northern Virginia realtor], it was another example -- one of many this day -- of the broken promises of a president who she thought would be different. Obama pledged to change a Washington culture that favored corporations and the connected and instead lift families such as the one sitting next to Cleland out of their economic funk. Rather, she said, Obama has backed billions of dollars to banks that continue to "act like they're broke" and started the country down a path that Cleland said she thinks will lead to more grief for the middle class. "He's just not as advertised," she said. "Nothing's changed for the common guy. I feel like I've been punked."

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There is no empirical evidence at this point in Virginia's race for governor showing tObama's policies are nonetheless having immediate consequences in the campaign as the candidates adjust their strategies to account for the president's controversial domestic agenda, which has overshadowed many state issues. hat huge numbers of voters think like Cleland and will respond by sending a message to Washington.

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But Obama's entry into the race presents a challenge for Deeds: How does he continue the momentum created by Obama, the first Democratic presidential candidate in more than four decades to carry Virginia, without being saddled with the baggage the president now carries?

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Supporters of the president say his efforts will pay off for Deeds. But Republicans are gambling that many of Virginia's middle-of-the road voters, who have backed Democrats in recent races, will be up for grabs as people grow more skeptical of Democratic leadership. "The mood is becoming just as lousy for the Democrats as it has been for us the last couple of years," said J. Kenneth Klinge, a longtime Virginia GOP strategist. "It's evening the playing field."

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The most stark evidence of Obama's failure, as Cleland sees it, is at her job at Long & Foster. Her workload consists of short sales, an arduous and often unsuccessful real estate maneuver that makes her feel less like a salesman and more like a social worker or lawyer.

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I echo Cleland's experience in the area of real estate business. As for LGBT Americans, Obama has delivered almost nothing. Obama needs to get his head out of his ass and wake up to what is happening. He is blowing an incredible opportunity and Virginia Democrats are going to be the sacrificial victims.

Hampton Roads' Rising Foreclosures Not Letting Up

Despite some uptick in refinances, the local real estate market remains devastated and the number of foreclosures continues to rise. Indeed, the only growth areas in the legal realm is in foreclosures and bankruptcies. While the President continues to roll out purported plans to save homeowners from losing their homes, the plans are not well explained - many lenders do not seem to even know the details - and the downward pressure on home prices continues unabated. For new first time home buyers the $8,000 tax credit does not seem to be doing much of anything to stimulate purchases. Unless and until lenders - many of whom have received billions in bailout funds - begin lending again in earnest, I do not see any looming recovery. It continues to be a bleak landscape for firms that work heavily in the real estate industry. Worse yet, commercial transactions appear to be slowing as well. Back in the summer of 2007 I said that the housing market was going to trigger disaster and it has. Sadly, nothing seems to be happening to stop the blood bath yet and so the downward spiral continues. Here are highlights from the Virginian Pilot.

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Foreclosure filings in Hampton Roads rose again last month, to the highest point on record, as many lenders continued to repossess and auction off homes in the area despite national efforts to stem foreclosures, a report to be released today found.

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Foreclosure prevention specialists in the area said the majority of the clients they see facing foreclosure have been put into that position because of a job loss. "Very few of the ones we're seeing now are people who were put into loans they couldn't afford," said John Allen, a vice president of The Up Center, a Norfolk organization that provides foreclosure prevention counseling. "It's almost always job loss, or reduction in hours, or something revolving around that."

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Dotty Acampora, a foreclosure prevention counselor for the nonprofit Virginia Beach Community Development Corp., has seen a similar trend in recent months. More than half of her current clients have recently lost jobs or had their hours cut back. "The problem is the lenders are just not going to work with someone who is unemployed," said Acampora, who spent nearly two decades as a mortgage banker and is a former president of the Tidewater Mortgage Bankers Association. "They're not going to do a typical forbearance, because unemployment is too widespread."

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For the second consecutive month, foreclosure activity nationally was at the highest point RealtyTrac has recorded.

Bush/Cheney's Parting Gift: Home Sales and Prices Drop at Record Pace

The economic gift of the Chimperator and the rubber stamp, more deregulation GOP Congress that he had for six and one half years just keeps on giving - bad news that is. Home sales and home prices dropped at a record rate last month and sadly things do not appear to be bottoming out as yet. As I have been saying since the summer of 2007 or longer, unless and until the residential real estate market is stabilized and turned around, the larger economy will continue to nose dive. Supposed foreclosure assistance is not yielding results and the banking institutions that have received billions of dollars in taxpayer funds are not passing the relief on to consumers either in terms of loan modifications or easing the difficulty many credit worthy borrowers are experiencing in securing loans. What may turn out to be a refinance boom may save some working in the real estate industry, but it will otherwise probably yield little boost to the economy. Here are some highlights from Reuters:

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The pace of existing home sales plunged a record 8.6 percent in November and prices fell a record amount as layoffs and a stock market crash worsened an already grim housing market, a real estate trade group said Tuesday. The median home price fell 13.2 percent on an annual basis, down for a fifth straight month to $181,300. It was the largest drop since the current data series began in 1968 and probably the largest since the Great Depression.

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The quickly deteriorating conditions in the job market, stock market and consumer confidence in October and November have knocked down home sales to another level," Yun [Lawrence Yun, the chief economist for the National Association of Realtors] said. "It is, therefore, imperative to provide incentives for homebuyers to get back into the market, Yun said.

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The housing malaise, which triggered a global financial crisis, has infected other sectors of the broader economy and sent unemployment rates higher. Analysts says stability in the housing sector is key to any recovery in the U.S. economy, which has been in a recession since late last year.