Real Estate Daily News Buzz is designed to give news snippets to readers that our (yet to be award winning) editors thought you could use to start your day. They come from various business perspectives, real estate, government, the Fed, local news, and the stock markets to save you time. Here you will find the headlines and what the news buzz for the day will be. The U.S. stock market finished slightly lower on Wednesday, adding to its losses so far this year. A survey on hiring did little to ease uncertainty about the health of the economy.
Thursday, the Dow Jones industrial average gained 108.88 points, or 0.7%, to 16,331.05. The Standard & Poor's 500 index rose 11.24 points, or 0.6%, to 1,872.01. The NASDAQ composite climbed 11.68 points, or 0.3%, to 4,319.29. Benchmark U.S. crude for April delivery dropped 94 cents to $99.43 a barrel on the New York Mercantile Exchange.
REPORT: DOJ FAILED TO ADEQUATELY PROSECUTE MORTGAGE FRAUD
The U.S. Department of Justice has repeatedly emphasized that prosecuting mortgage fraud is one of its top priorities, but the DOJ Inspector General released an audit showing that between 2009 and 2011, the agency had done little to fulfill its promise, HousingWire reported March 13. The audit indicated that the promised high levels of mortgage fraud prosecution never occurred. According to Inspector General Michael Horowitz, the agency exhibited a lack of efficient law enforcement and failed to prioritize mortgage fraud. He pointed out that the Federal Bureau of Investigation also was culpable in failing to target mortgage fraud. The FBI had $200 million in funding to fight mortgage fraud, yet the bureau categorized it as “low-crime” and therefore never made it a priority. Further, the Executive Office of United States Attorneys advised the DOJ auditors that they frequently misclassified and underreported mortgage fraud causes. The audit reported, “mortgage fraud cases are often coupled with other criminal activities and that, when initiating a case file, an [assistant attorney] may fail to include the mortgage fraud code if it is not the leading charge in a case,” HousingWire reported. The audit also noted that the DOJ repeatedly cited inflated numbers when it came to prosecutions, including an October 2012 pronouncement that the department had charged 530 criminal defendants and filed cases related to homeowner victim losses of $1 billion. In reality, the audit discovered only 107 charges against those allegedly committing mortgage fraud and found affected homeowners lost $95 million, well short of the claimed $1 billion, HousingWire reported.
BRIDGE LOAN FOR MONTEREY PINES SECURED
PHOENIX—Johnson Capital announces it has arranged an $8.1 million loan for a multifamily property in Peoria. Neal Churney and Adam Finkel in Johnson Capital’s Phoenix office arranged the loan. The borrower is an existing client who has worked with Neal Churney for many years in multiple transactions. The loan was funded by a local bank. It is a three-year loan with a fixed interest rate below 4% with full-term interest only. The property, called Monterey Pines, contains 216 units and was built in 1984 on 10 acres. Located at 8650 W. Peoria Ave., the property contains 24 residential apartment buildings with a mixture of large one-bedroom and two-bedroom units. Its amenities are high-end and include multiple swimming pools, spas, clubhouses, tennis courts, and a community tot and picnic area. Commenting on this transaction Neal Churney, senior vice president with Johnson Capital says, "This bridge loan helped the client acquire the asset and, through the lower interest only loan payments, increase their cash flow to put money back into the property and create additional value."
JW MARRIOTT STARR PASS RESORT TO BE SOLD AT AUCTION
According to public records, a notice of trustee sale for JW Marriott Starr Pass Resort and Spa has been filed. The owner, Starr Pass Resort Development, defaulted on a $145 million loan made in 2006. The financially beleaguered resort in the Tucson Mountains is slated for a June 6 auction on the steps of Pima County Courthouse.
CHEW ON THIS: GUM LOSES ITS POP
NEW YORK (AP) -- Gum seems as appealing as that sticky wad on the bottom of a shoe these days. It's not that Americans still don't ever enjoy a stick of Trident or Orbit, the two most popular brands. They just aren't as crazy about chomping away on the stuff as they once were, with U.S. sales tumbling 11 percent over the past four years. No one in the industry can pinpoint a single factor that's causing the decline — the theories include an unwillingness to shell out $2 or more for a pack in the bad economy or that advertising veered too far from underlining gum's cavity-fighting benefits. But the biggest reason may be that people simply have more to chew on. From designer mints to fruit chews, candy companies have invented plenty of other ways to get a sugar fix or battle bad breath and anxiety. The alternatives don't come with gum's unpleasant characteristics either, like the question of whether to spit out or gulp the remains. They're also less likely to annoy parents, co-workers or romantic interests.
JUST 11% OF US LONG-TERM UNEMPLOYED FIND JOBS
WASHINGTON (AP) -- A new study found that of Americans who have been unemployed for more than six months, just 11% of them will ever regain steady full-time work. The findings by Princeton University economists show the extent to which the long-term unemployed have been shunted to the sidelines of the U.S. economy since the Great Recession. During any given month from 2008 to 2012, barely more than one in 10 of the long-term unemployed had found full-time work. Their troubles were similar in states with high as well as low unemployment rates.
OBAMA ORDERS NEW ROUND OF SANCTIONS ON RUSSIA
WASHINGTON (AP) -- Seeking to intensify pressure on Russia, President Barack Obama on Thursday expanded U.S. economic sanctions against Moscow over its actions in Ukraine, targeting President Vladimir Putin's chief of staff and 19 other individuals, as well as a Russian bank that provides them support. Obama, warning of more costs to come for the Kremlin if the situation worsens, said he also had signed an executive order that would allow the U.S. to penalize key sectors of the Russian economy, including its huge energy business. Officials said Obama could act on that authority if Russian forces press into other areas of Ukraine, an escalation of the crisis in Crimea.
RUSSIAN ECONOMY, TYCOONS TAKE HIT IN CRIMEA CRISIS
MOSCOW (AP) -- Russia's most powerful businessmen waited for over an hour Thursday to hear from President Vladimir Putin, whose decision to annex the Crimean Peninsula has cost their companies hundreds of millions of dollars in market value. When Putin finally showed up, he spoke to them for five minutes — and gave them no reassurances that they or their companies will get any respite from the uncertainty created by the takeover of a piece of land of little value to them beyond national pride. Russia's economy has been pinched by the crisis over Crimea, even before the new sanctions the U.S. and Europe announced Thursday.
JET MYSTERY UNFOLDS AS ASIAN AIR TRAVEL BOOMS
HONG KONG (AP) -- The mystery of the Malaysia Airlines jet has unfolded in a region where air travel is undergoing supercharged growth. The still unknown fate of Flight 370, which vanished from on a nighttime flight from Kuala Lumpur to Beijing, has riveted the flying public and baffled experts. It happened amid a backdrop of increased travel as the middle class gets bigger, discount airlines proliferate and business ties in the region with the rest of the world deepen. The International Air Transport Association has forecast airline passengers to grow by 31% worldwide between 2012 and 2017. For Asia, that will mean the number of passengers increases an average of 6.3% each year, nearly three times as fast at the U.S.
NEARLY ALL MAJOR US BANKS PASS FED’ STRESS TESTS'
WASHINGTON (AP) -- All but one of America's 30 largest banks are better able to withstand a severe U.S. recession and global downturn than at any time since the financial crisis, the Federal Reserve has determined. Results of the Fed's annual "stress tests" showed Thursday that only Zions Bancorp failed to meet the Fed's minimum level of capital to withstand a crisis. The results showed continued improvement in banks' financial positions since the 2008 crisis, building on positive results last year. The 30 banks tested included Bank of America, Citigroup, JPMorgan Chase and Wells Fargo. The Fed will announce next week whether it will approve plans by some of the banks to increase dividends or buy their own stock.
IRS WATCHDOG SAYS PHONE SCAM IS LARGEST EVER
WASHINGTON (AP) -- More than 20,000 taxpayers have been targeted by fake Internal Revenue Service agents in the largest phone scam the agency has ever seen, the IRS inspector general said Thursday. Thousands of victims have lost a total of more than $1 million. As part of the scam, fake IRS agents call taxpayers, claim they owe taxes, and demand payment using a prepaid debit card or a wire transfer. Those who refuse are threatened with arrest, deportation or loss of a business or driver's license. The inspector general's office started receiving complaints about the scam in August. Immigrants were the primary target early on, but the scam has since become more widespread.
APPLICATIONS FOR US JOBLESS AID ON RISE
WASHINGTON (AP) -- The number of people seeking U.S. unemployment benefits rose 5,000 last week to a seasonally adjusted 320,000, which is close to pre-recession levels and suggests a stable job market. The four-week average of applications, a less volatile figure, fell 3,500 to 327,000, the lowest since late November, the Labor Department said Thursday. Applications are a rough proxy for layoffs. Their current pace suggests that companies are confident enough about economic growth to keep their staff levels.
SALES OF US EXISTING HOMES SLIP TO 19 MONTH LOW
WASHINGTON (AP) -- Sales of U.S. existing homes slipped in February to their lowest level since July 2012 as severe winter weather, rising prices and a tight supply of homes discouraged buyers. The National Association of Realtors said Thursday that sales declined 0.4 percent last month to a seasonally adjusted annual rate of 4.6 million. That was the sixth decline in the past seven months. Freezing temperatures and snowstorms likely kept many buyers from visiting open houses. And higher mortgage rates have weighed on sales since last fall.
STARBUCKS TO ROLL OUT BEER, WINE TO MORE CAFES
NEW YORK (AP) -- Starbucks plans to turn more of its cafes into a destination for beer and wine in the evenings. The coffee company says it is looking to expand alcohol sales to thousands of stores over the next several years. The chain first offered beer and wine at one of its Seattle cafes in 2010. This is now available in 26 cafes, with plans to reach 40 by the end of the year. It is part of the company's push to boost sales after the morning rush hour when people are getting their caffeine fix.
TW CABLE EXECS SET TO GET $135M 'GOLDEN PARACHUTE'
LOS ANGELES (AP) -- Departing Time Warner Cable Inc. executives are in line to receive "golden parachute" compensation totaling around $135 million as part of Comcast Corp.'s $45 billion acquisition of the cable operator. Shareholders are being asked to vote on the packages in a non-binding advisory vote. Time Warner Cable Chief Executive Rob Marcus is in line to receive $79.9 million, Chief Financial Officer Arthur Minson Jr. is set to get $27.1 million, Chief Technology Officer Michael LaJoie would get $16.3 million and Chief Operating Officer Philip Meeks is to receive $11.7 million. The amounts include cash, stock and benefits that the executives were to receive for the next two to three years and the final totals could change.