Friday Links Pity the Fool

Households shedding more debt in first quarter – MarketWatch

Households reduced their debts at a 2.4% pace in the first quarter, the second fastest decline on record. Mortgage debts fell a record 3.8%. Consumer credit, including credit cards, fell at a 1.6% rate. Outstanding debt has fallen eight quarters in a row and is now down 3.6% from the peak in 2008.

Outstanding debts can fall if households pay off principle, or if lenders write off debts are uncollectable. Default rates on mortgages and credit cards have surged during this recession.

Retail Sales decline in May – Calculated Risk

This is just one month, but this is a weak report.

Taleb: Debt Problems Are Worse Now Than in 2008 – Credit Writedowns

You can use stimulus as a way to control the deflationary impacts of the inevitable defaults, but the stimulus we have seen to date is not designed for that purpose. Rather, we have witnessed a transfer of private sector debts onto the public sector in an attempt to prevent recession and make the debt problem go away.  Instead, what has happened is the debt problem has moved from the private to the public sector.

Principal Reduction Avoids Re-Default More Than Rate, Term Mods: Deutsche – HousingWire

In particular, the occurrence of re-defaults in rate and term modifications is historically higher than that of principal reduction, according to a graph in that report…

Short sales — and ways to exploit them — rise in Sacramento – Sac Bee

Here’s how it works: A bank that holds the “second” loan, such as a home equity loan or down payment, asks a seller for more money without telling the lender that holds the primary loan. It’s an unrecorded deal outside the escrow process.

Bel-Air mansion fetches highest price this year for a U.S. residence – LA Times

The 48,000-square-foot French chateau exceeds the previous 2010 record of more than $46.5 million, although the final purchase price isn’t released.

CalPERS to resume seeking an additional $700 million in tax money – LA Times

California’s troubled, giant public pension fund is preparing to seek an additional $700 million from the state and school districts, after postponing a decision last month because of concerns about the state’s massive budget deficit.

The staff at the California Public Employees’ Retirement System is recommending the increase, and the pension fund board is set to reconsider it Tuesday. Several board members — including state Treasurer Bill Lockyer, who questioned the move last month — now are in favor of it.

Bay Area business leaders turn upbeat about economy – Mercury News

The responses of the 500 CEO’s and top executives in the nine Bay Area counties surveyed between April 26th and May 23rd show that overall, 58 percent think Bay Area economic conditions are better than six months ago, up 22 points from the last quarter’s survey. In addition, 63 percent said they expect a better Bay Area economy six months from now, up 16 points from last quarter.

Fate of S.F.’s Parkmerced complex in limbo – SF Gate

The owners of San Francisco’s massive Parkmerced apartment complex recently made what sounded like a surprising statement. They were in danger of defaulting on a $500 million mortgage, but planned to move forward with a $1.2 billion, multi-decade expansion project on the property.

A company verging on default could imagine restructuring its debt and then spending billions in the future, the owners said, due to the terms of their debt agreement, which provides for an intermediary to renegotiate the loan so that it can be paid off over time.

But according to real estate finance experts, the middleman, which is called a special servicer, is required to protect investors who are owed mortgage payouts – not the owners of the complex, its tenants or the city – leaving the fate of the 3,221-unit Parkmerced very much in question.

Rapper Chamillionaire Strategically Defaults – TMZ (HT Patrick)

TMZ has learned Chamillionaire lost the 7,583 sq. foot home — which he picked up for roughly $2 million back in 2006 — after failing to make several payments.

But, yesterday in New York we spoke with Chamillionaire — real name Hakeem Seriki — who told us he “decided to let that house go” because the real estate market had turned and the house had become a bad investment.

Chamillionaire also noted that he was never at the home because, “I was always on the road touring” adding, “I just didn’t feel like it was a good business investment to pay that much mortgage for a house I was never at.”

But Chamillionaire claims he’s far from broke — quipping, “I still got all the cars.”

Has the Mr. T Gold Indicator Given a Sell Signal? – Minyanville, Kevin Depew

So, here we are, the new A-Team film is opening and it seems like a perfect opportunity for Mr. T to capitalize on a little ’80s nostalgia and rejuvenate his career.