Archive: September, 2010
The fourth-largest US home lender, "Ally Financial Inc.’s GMAC Mortgage unit" majority-owned by the US government after a 2008 bailout, "told brokers and agents to halt evictions tied to foreclosures on homeowners" in Pennsylvania, New Jersey, New York, Florida, Illinois and 18 other mostly East Coast and Midwestern states, reports Bloomberg here.
GMAC may need "corrective action" in some of its foreclosures, according to an internal memo whose contents Bloomberg said were confirmed by GMAC. "Brokers were told to immediately stop evictions, cash- for-key transactions and lockouts, according to the document..." Some transactions will be cancelled, others delayed.
Ally, formerly a part of General Motors Corp., is based in Detroit, with around 2,000 workers at its Fort Washington, PA office center.
NEW: "GMAC Mortgage is not suspending foreclosures," but "has temporarily suspended evictions and REO closings in certain states while we conduct a review of our processes and procedures," says GMAC spokeswoman Gina Proia.
ALSO: "A potential issue that was raised in a number of existing foreclosures challenging the internal procedure we used for executing one or more judicially required forms." GMAC is still foreclosing and has meanwhile developed a new, better way to evict, she added.
Pennsylvania legislators will weigh plans to give developer Bart Blatstein $45 million for a new hotel-mixed-use project near his Piazza at Schmidt's development in Philadelpha, along with more than $1. 2 billion in additional private adn public projects at the Navy Yard, development in the Art Museum area, Holy Family College, and many other places in Pennsylvania, if they can raise matching funds elsewhere, in Capital Budget House Bill 2291, read more here.
Philadelphia City Planning Commission meets Tuesday Sept. 21, 1 pm, upstairs at 1515 Arch St., to talk about, among other things:
- A "mixed-use research and retail" tower rising up to 280 feet, or 25 foors, on a parking lot on the northeast corner of 38th and Market Sts., in the University City Science Center. "We've been trying to get the Science Center to develop taller buildings," newly-promoted Planning Commission Executive Director Gary Jastrzab told me. Science Center's Jeanne Mell tells me the tower may rise just 12 stories. Goes before the Zoning Board on Wednesday.
- A 1576-student-bed dorm, dining hall and courtyard, at Temple University, on North Broad Street between Cecil B. Moore and Oxford. (Plus a "master plan" for Temple, fitting its state-subsidized growth more closely to Philadelphia guidelines.) Temple is flooded with students lately; private and subsidized builders have kept busy building them private housing on both sides of Broad.
- The planned Mormon Temple and genealogy complex (so the Latter-Day Saints can baptize your dead ancestors) on the parking lot at 1701 Vine St. The Temple will have "two big spires, no higher than" the cross atop the Roman Catholic Cathedral of Sts. Peter and Paul across Vine St., Jastrzab says.
- The Hunting Park West Plan, which would break the old factory district between North Philadelphia and East Falls into a warehouse (and surviving factory) zone east to Allegheney Ave.; an "entertainment and arts production district;" and a "neighborhood retail center" at the vacant former Tasty Baking Co. "We're trying to attract a grocery store for East Falls," says Jastrzab.
Dennis St. Germain, chief executive of I&I Sling Inc. and Slingmax Rigging Solutions, of Aston, Delaware County, says he's bemused to read President Obama and some in Congress saying they want to help U.S. manufacturing, in hopes of getting unemployed Americans back to work. If the government really wants to help U.S. factories, St. Germain says, it needs to do less, not more:
The United States is certainly the best place in the world to be born and live and anyone so fortunate should be happy and contented with their good fortune...
However, the government we have in place today is eroding our society and creating an unhealthy atmosphere for small business. It is no wonder we are in a recession and jobs are disappearing. The government is strangling small business.
As my colleague Andy Maykuth points out here, Sunoco boss Lynn Elsenhans, who's sold or shut several of Sunoco's lower-profit oil refining, chemical, trucking and (soon) steel-coke operations, is more interested in selling Cokes and smokes, along with its logistics and biofuels units.
"The retail business has been a consistent performer for Sunoco, generating steady income and good return on capital," Elsenhans told investors at a Barclays Capital energy-and-power investors' conference yesterday. "We believe we can unlock even additional values, through the growth of the network, and by improving our convenience offer."
If Sunoco wants more and bigger convenience stores, why not buy Wawa? "That is the first thought that came to my mind," says a Philadelphia investor whose family has done business with Sunoco's founding Pew family and Wawa's controlling Wood family over the years. "Wawa knows the model because they created it. It's a very good model." Though if the Woods wanted to sell, "this would be the year to sell because of the current cap gains rate."
Today's 15% capital-gains tax "sunsets at the end of 2010," notes Scott Isdaner, partner at Isdaner & Co. accountants in Bala Cynwyd. The tax on company-sale profits, like other capital gains, "would go back up" to 20%, or possibly more, unless Congress acts soon. So, generally, "it's time to accelerate the sale of your business, if you're looking to sell, and the price is right," says Isdaner.
College costs have flattened, which ought to mean less ridiculous tuition hikes in the years to come.
"The fiscal-year 2010 Higher Education Price Index calculation (shows) the inflation rate for colleges and universities was 0.9%, less than half the 2.3% rate" last year, and a big drop from the high levels earlier in the 2000s, says the Commonfund Institute, which polled 843 public and private college and universities and community colleges for its annual survey.
Utility costs plunged to -15%, from +14% the year before. Supplies and material expenses also crashed, as paper prices flattened.
And yet... College manager salaries still rose 2%, thought that's down from 5.4% last year. Clerical and service salaries rose 1.4%. Professor salaries rose just 1.2%.
Mark H. Zenher, Phialdelphia-based head of the Securities and Exchange Commission's municipal securities and pensions task force, at Bloomberg LP's Cities & Debt briefing in New York yesterday, explained why no person was named or censured by the SEC last month when it busted New Jersey for fraud and misrepresentation when it hid the state's true (huge) pension-fund liabilities from investors who bought its bonds in 2001-07.
Doesn't the SEC usually blame people, not just their employers, for not telling the truth? "In appropriate cases we will name names. New Jersey is different because it wasn't intentional fraud," Zehner said.
More busts on the way, he promised. "The whole point of disclosure is to let the investor decide what's important... I've seen people deliberately hide information on Page 400" so investors were less likely to find it. "The SEC has done a lot in this area (recently), it's not great, but it's better than it used to be."
Thanks to Blythe Posner of Ruder Finn, spokeswoman for the event, for her summary of Zehner's remarks.
The $24 billion Pennsylvania State Employees' Retirement System "will require continued improvement in the financial markets over the remainder of the year if the fund is to achieve its 8% (target) return for the calendar year," warned chief investment officer John Winchester in a statement yesterday.
In the first quarter, SERS earned just 0.6% on its investments, after a nearly 12% gain in the second half of 2009. Winchester said results improved in July and August but he's not predicting the fund will earn its target by year's end.
The fund lost around 8% of its investments in commodities (which it calls, surprisingly "inflation protection"); it lost 10% on foreign stocks; and 11% on U.S. stocks. It also claimed modest (but below fund target) profits on private equity, venture captial, bonds and real estate, which had fallen for the past two years.
SERS profits affects Pennsylvania's state budget because taxpayers are responsible for covering what investment profits and state worker "contributions" don't. The fund tries to keep its assets in step with long-term liabilities, but that's been hard since state legislators raised future retiree pensions (and their own) in 2001 without also boosting fund income.
Last month, the larger Pennsylvania Public School Employees' Retirement System said its funds lost 1.8% during the second quarter. PSERS is subsidized, not just by state taxpayers, but by local school district property taxes around the Commonwealth.