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Thursday, March 25, 2010

Principal Reduction, Greece Bailout and Other Stories

by Calculated Risk on 3/25/2010 08:37:00 PM

1) From David Streitfeld and Sewell Chan at the NY Times: U.S. Plans to Expand Aid to Troubled Homeowners

One major element of the program ... will strongly encourage lenders to write down the value of loans for borrowers in modification programs. Until now, modification programs have focused on lowering interest rates.
2) From the WSJ: Europeans Agree on Bailout for Greece
Leaders of the 16-nation euro zone ... backed a deal under which they and the International Monetary Fund would jointly bail out Greece should the country's debt troubles intensify.

The agreement won't immediately trigger a Greek rescue, but it lays the groundwork for both the first intervention by the IMF in a euro-zone country and a major relaxation of the tight restrictions on country-to-country bailouts that have been a feature of the currency union since its birth.
3) Tallest office tower in Seattle is "underwater", from Eric Pryne at the Seattle Times: Columbia Center misses mortgage payment
When [Beacon Capital Partners] bought the Columbia Center in April 2007 it was 89 percent leased. The firm paid $621 million, according to county records, and borrowed a total of $480 million to help pay for the tower.

... At the Columbia Center ... almost 600,000 square feet — nearly 40 percent of the building — is listed as "available" on online commercial real-estate database ... Its assessed value now is $380 million.
4) From Mary Ann Milbourn at the O.C. Register: 130,000 in Calif. due to lose jobless benefits
As many as 130,000 Californians are expected to exhaust their unemployment benefits within the next three weeks, based on estimates from the state Employment Development Department. About 3,300 already have fallen off the unemployment rolls.

Currently, the unemployed in California are eligible for up to 99 weeks of benefits — 26 weeks of regular unemployment plus four extensions and so-called FedEd relief.

Loree Levy, an EDD spokeswoman, said it was the first time in two years that the department is seeing large numbers of people running out of benefits.