| Tough sell: Bankruptcy is possible for homebuilders during slump
Homebuilders such as Centex Corp. and Pulte Homes Inc. aim to survive an industrywide unraveling by selling houses at bargain prices, slashing jobs and scrapping growth plans.
But as the housing downturn worsens, experts say at least a few major U.S. homebuilders may end up bankrupt.Builders constructed more than 2 million housing units nationwide in 2005, the year the boom peaked. So far this year, housing starts have fallen to an annual rate of 1.2 million units through September, and economists expect the number to drop to an annual rate of 1 million by mid-2008.Some analysts foresee a shakeout similar to that of the early 1990s, when numerous builders went through bankruptcy, including Reston. Va.-based NVR Inc. and U.S. Home Corp. of Houston, now part of Miami's Lennar Corp.
P&Z votes to eliminate impact fee
The Plano Planning and Zoning Commission voted unanimously Monday to eliminate impact fees, hoping that the move will attract new construction to the area. The vote came at the request of the Plano City Council, which reviewed the matter last month.The Planning and Zoning Commission also acts at the Impact Fee Advisory Committee. City council has the final say.If the city eliminates the fee, it will be one of the first communities to do so, said Jeff Zimmerman, long range planner for the city.How and when to implement the change questions the city would have to have," he said. The issue is particularly thorny in subdivisions already under construction. If the city adopts a blanket end date, developers could halt planned projects, which haven't begun. For example, developers might not apply for building permits for new homes within an emerging subdivision.The city also could decide to continue the fee for projects already on the books."That could be a nightmare as far as administrating it," Zimmerman said.
Subprime's Return
There are now daily reports of US and other financial groups reporting billions of dollars in losses from dodgy US subprime mortgages and associated credit derivatives. Financial groups in Europe, Britain, Japan and even the US have been affected. but the main damage is appearing in the US where cash management accounts, the investment funds of states, towns and counties, not to mention corporate pension funds and the big names in finance like Merrill Lynch, Bank of America, Citigroup, Barclays, UBS are being revisited by big losses and the prospect of more to come. It's the credit crunch mark two, a replay of the August freeze, but without the drama of financial markets being hurt so violently. Instead its a steady erosion of value and earnings. We in Australia, facing towards Asia, will hopefully escape the full impact as China booms.
Millions lie about credit status
MILLIONS of Australians lie about their financial details when applying for credit with men almost twice as likely as women to make false declarations, a study has found. The study found as many as 2.7 million Australians had deliberately underestimated expenses and credit commitments, exaggerated their work history and overestimated the value of their assets to secure funds. The results of the study, conducted on behalf of credit reporting agency Veda Advantage, could also have implications for default levels. "Veda data reveals that defaults have significantly increased in the past 12 months,'' Veda Advantage spokeswoman Erica Hughes said. "We are concerned that families and individuals who are experiencing financial hardship may have overcommitted by misrepresenting their financial position on their credit application.'' According to the study, the most common way of lying on a credit application was underestimating expenses, with 1.3 million Australians having deliberately made false statements regarding their budgets.
IMF wipes out Liberian debt
Washington - The United States on Wednesday welcomed the elimination of Liberia's debt by the International Monetary Fund, saying it will help the struggling West African country rebuild its economy. US President George W Bush had urged the IMF to wipe out 842 million dollars in debt, an amount the lending institution was able to raise from member countries. The United States provided 391 million dollars in relief, the White House said. "Collectively this will unlock significant resources in support of the economic turnaround begun by President Ellen Johnson- Sirleaf," spokeswoman Dana Perino said. Liberia has begun emerging from two civil wars from 1989 to 1996 and 1999 to 2003 that devastated the country's economy. Johnson- Sirleaf was elected president in November 2005.
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