SACRAMENTO, CA – In the first quarter of 2008 home foreclosures in the United States reached a peak and the pain was felt by all types of borrowers, not just those with the now infamous subprime adjustable rate mortgages (ARMs).

While subprime borrowers led the pack in allowing their homes to go to foreclosure many so-called prime and alt-a borrowers were unable to consecutively make payments on their houses as well. According to the Mortgage Bankers Association (www.mbaa.org), .99 percent of home loans in America entered the foreclosure process in the January to March time frame. The number the previous year was .58 percent.

The trade association first began measuring loan delinquency rates in 1979, and this year’s results were the highest on record at 6.35 percent.

On a positive note, the Mortgage Banker’s Association senior researcher, Jay Brinkmann, predicted that most states should see a trailing off of foreclosure activity by years end. But, troubled states like California, Florida, Arizona, and Nevada, which saw record prices spikes in residential real estate values, may see their foreclosure woes persist well into 2009.

For the homeowner who is trying to sell a house in the current market the challenge can be finding a qualified buyer who is pre-qualified for a mortgage loan. Many buyers have reported that they are simply not able to get funding for a house purchase despite having good credit and down payments available.

Real estate and foreclosure expert Patrick McGilvray, J.D., president of Sacaramento, CA-based The Home Buying Center.com (www.TheHomeBuyingCenter.com) said, “For people looking to buy a foreclosure house there are opportunities aplenty. It’s important for these buyers, though, to get pre-qualified for a home loan before they go shopping because sellers, especially lenders with a large inventory of bank owned REO houses don’t want to spend time with people who aren’t ready, willing and able to buy.”

 By MIKE NIZZA

The Treasury secretary, Henry M. Paulson Jr., delivered a guardedly optimistic message to business leaders on Friday, saying that the economy was moving toward a rebound after months of malaise.

“We are still working through housing and capital markets issues, and expect to be doing so for some time,” he said in remarks at a conference sponsored by The Washington Post. “We also expect to see a faster pace of economic growth before the end of the year.”

Playing an important role, he said, would be roughly $100 billion in stimulus payments to Americans over the next few months.

“The fiscal stimulus will provide support to the economy as we weather the housing correction, capital markets turmoil, and higher energy and food prices,” he said.

Another important factor, he added, was a less rambunctious Wall Street. “The markets are considerably calmer now than they were in March,” he said.

Mr. Paulson also stressed that risks remained, albeit weaker ones.

“Some bumps in the road” are likely, especially in the housing sector, he said, but “we are closer to the end of the market turmoil than the beginning.”

Hours before his remarks, analysts debated the importance of housing figures from April.

New-home construction increased 8.2 percent last month, offering signs of life in a deeply troubled sector, the Commerce Department reported on Friday. But most of the gain came in multifamily housing, masking further bad news on single-family homes, whose groundbreakings dropped to a 17-year low.

Housing starts rose to a seasonally adjusted annual rate of 1 million. Construction of multifamily units surged 36 percent, compared with a 35 percent drop in March, a huge swing — and an average one in recent months, the agency said in a report.

While building permits were up 4 percent in both areas, ground was broken on 1.7 percent fewer single-family homes in April, to a seasonally adjusted annual rate of 692,000 from 704,000.

There were varied reactions to the new figures, with one analyst telling Reuters that “it’s a nice upside surprise” and another telling Bloomberg News that the trends remained “horrific.”

Michael T. Darda, of MKM Partners, said, “The bump in starts owes entirely to multifamily dwellings.” While the single-family figure was bad news, he also said it indicated that the builders were “rapidly taking supply off the market, which ultimately will lay the foundation for stabilization in the sector.”

The month-to-month figures may have been mixed, but the year-to-year comparisons left no doubt that housing was far from a full recovery. Overall housing starts plunged 30.6 percent compared with those in the month a year earlier, and permits sank by 34.3 percent.

Real estate industry feels heat as home values continue to fall in much of the nationSACRAMENTO, CA – Real estate continues to be a sore spot for the US economy as prices for single family homes were down 7.7% in the first quarter of 2008 compared to a year earlier.

The National Association of Realtors reported the recent numbers and indicated that this was the biggest yearly decline since they began record-keeping in 1982.  Median sales prices were down to $196,300 at the end of March, a 4.8% drop compared to Q4 of 2008.

In Sacramento, California prices fell more than 29% and the median dropped to $258,500.  Prices in Riverside, California dropped more than 27% to $287,100.

An internet real estate company based in Sacramento, www.TheHomeBuyingCenter.com, reported an increase in consumers requesting help with selling their houses as well as an increase in buyers who are looking for deals on foreclosure houses.  “Deals on foreclosure houses are one of our specialties, and we’re getting a lot of traffic to our website because of that,” said company president Patrick McGilvray.

The Home Buying Center reported that a lot of their activity is happening in the states hardest hit by the housing crisis that occurred in the wake of the subprime mortgage meltdown.  According to McGilvray the biggest numbers of homeowners seeking help, and buyers seeking deals, are occurring in California, Florida, Nevada, Ohio, and Michigan.

Foreclosure activity resulted in more than 155,000 homes taken back by lenders since last year, and mortgage payment delinquencies more than doubled during the time as well.

(Reporting by Jonathan Stempel; Editing by Andre Grenon)

Warren Buffett, the world’s richest person, said on Sunday the U.S. economy is in recession, “as I define it.”

Buffett’s comment was at odds with a U.S. Commerce Department report last week showing the economy grew at a 0.6 percent annualized rate in the first quarter.

“The U.S. is in recession as I define it,” Buffett said at a news conference. “I would define that as a situation where people are doing less well than they were three months, six months or eight months earlier and most businesses find themselves in that position too.

“If were are in a non-recession, I don’t think people want to see it going in the same direction as it is and saying it’s wonderful,” Buffett added.

By MICHAEL LIEDTKE, AP Business Writer

 Yahoo Inc. Chief Executive Jerry Yang has gotten what he wanted: a chance to prove his company is worth more than the $47.5 billion that Microsoft Corp. offered to buy the Internet pioneer.

It will be a daunting challenge, as Yang will be pointedly reminded Monday when investors are expected to show how little they think of Yahoo without a takeover bid on the table. Faced with resistance from Yang and the rest of Yahoo’s board, Microsoft withdrew its offer over the weekend.

Many analysts believe Yahoo’s stock price, which had climbed nearly 50 percent since Microsoft’s initial offer, will surrender most, if not all, of that gain, leaving the Sunnyvale-based company’s market value around $30 billion.

Disillusioned shareholders are bound to question whether the rejection of Microsoft’s sweetened $33-per-share offer was driven more by emotion and ego than sound business sense.

“Clearly there’s frustration,” said Darren Chervitz, co-manager of the Jacob Internet Fund, which owns Yahoo stock. “I am not even sure if Yahoo cares about its shareholders because they didn’t show much regard for shareholders’ best interests in this process.”

Despite such negative sentiment, Yahoo shares are unlikely to immediately fall back to their $19.18 pre-bid price, partly because some investors may still be holding out hope that the software maker will renew its takeover attempt if Yahoo continues to struggle.

Yahoo shares finished last week at $28.67, slightly below the $29.40 per share that Microsoft was offering before Chief Executive Steve Ballmer agreed to raise the offer to $33 per share in a last-ditch effort to get a deal done.

Accompanied by fellow Yahoo co-founder David Filo, Yang flew to Seattle Saturday to inform Ballmer that the company wouldn’t sell for less than $37 per share — a price that Yahoo’s stock hasn’t reached since January 2006.

Analysts and investors were left to wonder why the two sides couldn’t compromise at $35 per share.

“They really didn’t seem that far apart,” Chervitz said. “There is probably blame to go around on both sides, but I think most of it is in Yang’s hands.”

Monday’s anticipated shareholder backlash will put Yang on the hot seat as he tries to execute on a turnaround plan that he began drawing up nearly a year ago after he replaced Terry Semel as CEO amid shareholder angst about the company’s financial malaise.

“This squarely puts the pressure on Jerry Yang to deliver results and shareholder value,” Standard & Poor’s equity analyst Scott Kessler said. “You are going to see a lot of shareholders just throwing in the towel because they are going to realize it’s going to take awhile for the stock to get back to where it was Friday.”

Ballmer also will be under the gun to prove he can come up with another way to challenge Google Inc.’s dominance of the Internet’s lucrative search and advertising markets.

The unsolicited bid was widely seen as Ballmer’s admission that Microsoft needed Yahoo’s help to upgrade its unprofitable Internet division.

Analysts now expect Ballmer to use the money he had earmarked for the Yahoo acquisition to explore other possible deals with large Internet companies like Time Warner Inc.’s AOL and News Corp.’s MySpace and promising startups like Facebook Inc. and LinkedIn Corp. Microsoft already owns a 1.6 percent in Facebook, the second-largest social network behind MySpace.

But Ballmer is unlikely to be under as much duress as Yang because most analysts believe Microsoft’s stock price will rise Monday. The shares had declined 10 percent to $29.24 since Ballmer made the bid, reflecting concerns that the proposed marriage would turn into a complicated mess that would enable Google to grow even stronger.

Yang, 39, has promised that Yahoo’s development of a more sophisticated and far-flung Internet advertising platform will produce net revenue growth of at least 25 percent in 2009 and 2010. That would be a dramatic improvement, considering that Yahoo’s revenue rose by 12 percent last year and is expected to grow at about the same pace this year.

But analysts are skeptical about whether Yahoo will be able to hit those targets, raising the chances for a shareholder rebellion if the company stumbles during the next few months — a distinct possibility if advertisers curtail spending in a shaky U.S. economy, as many analysts fear.

As it is, Yang and the rest of Yahoo’s board almost certainly will face more lawsuits from incensed shareholders.

Even some of Yahoo’s own employees may be irritated because virtually all of them own stock options.

What’s more, Microsoft had planned to offer $1.5 billion in retention packages to the thousands of Yahoo employees it wanted to stay on after a takeover.

To help boost its short-term profits and its stock price, Yahoo is widely expected to form a long-term advertising partnership with Google.

Although the final details are still being ironed out, Yahoo wants to hire Google to place some of the text-based ads that appear alongside the search results on its Web site. It’s a task that Google already handles for scores of Web sites, including AOL and Ask.com.

Both Yahoo and Google have said they were encouraged with the results of a two-week trial run completed last month.

But turning to Google for help would be a humbling step for Yahoo after spending more than $2 billion to acquire and build its own technology.

An alliance between Google and Yahoo also would face antitrust hurdles because the two companies combined control more than 80 percent of the U.S. search advertising market.

Although Google’s superior technology would help boost Yahoo’s profits in the short term, some analysts worry it could be a mistake for Yahoo to surrender any control over such a lucrative piece of the online ad market.

Yahoo also has been exploring a possible merger with AOL’s Internet operations, but may now have to contend with a competing offer from Microsoft.

Yahoo also might attempt to placate shareholders by buying back stock.

Kessler believes Yang should use some of his estimated $1.9 billion fortune to personally buy more Yahoo stock even though he already owns 54.1 million shares, or 3.9 percent of the company.

“Jerry Yang really needs to put his money where his mouth is,” Kessler said. “If he really thinks Yahoo is worth $37 (per share), then he needs to step up and buy some shares when they are in the low $20.”

Even When She’s Not Touring, Britney’s Bringing in Big Bucks

Jan. 25, 2008 

Ever get the feeling somebody is making a whole lot of money off Britney Spears besides Britney Spears?

Portfolio magazine estimates the annual value of Britney Spears to the U.S. economy is 110- to 120-million dollars — and that’s when she isn’t even touring.

Portfolio estimates record companies, promoters and licensers make 30- to 40-million dollars because of endorsements, record sales and other business.

It estimates the paparazzi make 4 million dollars from selling photos of the Kentwood native. Celebrity tabloids, web traffic and other media make an estimated 75 million dollars off her in a year. A celebrity tabloid can sell as many as 33 percent more copies if Spears is on the cover.

Her ex-husband, Kevin Federline, pulls in a million dollars a year because of her, and not just the $35,000 a month from spousal and child-support payments. K-Fed reportedly gets $30,000 from nightclubs just to show up.