Foreclosure Nation

NEW YORK - Moody's on Wednesday warned it may downgrade some Aaa-rated U.S. states and municipalities if the country loses its top-notch rating or if federal funding falls significantly as part of a plan to reduce the nation's deficit. Most states and some municipalities rely on federal funding for...

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Republican governors have touted spending cuts as both fiscally responsible, and economically prudent. But a new analysis casts doubt on that narrative. In recent months, Gov. Scott Walker (R-Wis.) and Gov. John Kasich (R-Ohio) both claimed their budgets, heavy on the spending cuts, would pave the ...

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An estimated 1,000 teachers are expected to lose their job this week the Chicago Public School system struggles with a multi-million dollar budget deficit. Though the layoffs are part of the school system's annual cutback in teaching staff on account of school closings and declining enrollments, so...

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Democratic members of the Arizona legislature are going to donate their paychecks to the unemployed people they failed to help in a special session earlier this month. Arizona lost its eligibility for the final 20 weeks of benefits for the long-term jobless because lawmakers didn't tweak state law...

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Florida Realtors president, Patricia Fitzgerald, was in Canada last week with Gov. Rick Scott and other business leaders to encourage Canadian companies to do business in Florida, a move expected to benefit the state’s troubled real estate markets. “A large percentage of Florida property sales each...

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Attorneys general in 38 states are fighting a proposed class-action settlement they said could make it much harder for state law-enforcement officials to regulate debt collectors. The proposed settlement involves a February agreement by Encore Capital Group Inc., the nation's largest debt buyer by ...

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The U.S. Conference of Mayors and Wells Fargo Home Mortgage have joined forces to create a national alliance focused on foreclosure prevention, property disposition, homeownership promotion, and community development. The three-year initiative will address housing challenges with strategies and ou...

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It’s not just the federal government - the states are broke, too. The 50 state governments owe more than $1 trillion in unfunded pension contributions and health care obligations to retired public employees, according to an Associated Press survey of state-level budget data. And the worst may ...

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The California Housing Finance Agency said Wednesday that 20 mortgage servicing companies are now participating in the state’s Keep Your Home California program to assist families struggling to remain in their homes and avoid foreclosure. The $2 billion program is funded with federal dollars allot...

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California legislators put two bills aimed at addressing the state’s foreclosure problem to committee votes this week. Both failed to pass despite the fact that supporters of the proposed laws packed the hearing rooms at the state Capitol, but neither is completely dead. They have both been schedu...

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WASHINGTON -- David Micallef never thought he’d be involved in a labor dispute at age 25, much less assuming a lead role in one. But as president of his local fire union, Micallef has been leading his fellow firefighters in a long-running fight with the city of Harper Woods, Mich. Their beef? They s...

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Corporate pensions, municipal pensions, state pensions — each category has funds that have run out of money and certainly many are running low. The fate of the UAW pensions was a critical part of the US bailout of the auto industry. Eventually, the unions received equity in Chrysler and GM, among ot...

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CHICAGO -- Near the end of a two-day summit here that brought together mayors and federal officials to talk about city design, the mood turned confrontational. It started when Philadelphia Mayor Michael Nutter, in the middle of a Friday discussion on the federal government's role in city developmen...

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There was once a time when the biggest defenders of Meredith Whitney's over the top, doomsday prediction that 2011 would be the year that municipal bonds defaulted in cataclysmic proportions were to be found at a certain business television network headquartered in New Jersey looking to have her app...

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To date, not a single mortgage lender has been sent to prison for their role in the financial crisis. At least one borrower hasn't been so lucky. Charlie Engle, the drug addict-turned-ultra-marathoner profiled by New York Times columnist Joe Nocera this week, is currently serving a 21-month sentenc...

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The state budget squeeze is fast becoming a city budget squeeze, as struggling states around the nation plan deep cuts in aid to cities and local governments that will almost certainly result in more service cuts, layoffs and local tax increases. The cuts are widespread. Ohio plans to slash aid to...

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Prison isn't just about doing hard time. For many, it's about working full-time, too. These days, state governments seem ready to squeeze their captive workforces to plug budget gaps on the cheap. From the chain gang to the gulag, labor in the prison population predates our modern labor regulations...

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The size of American labor unions has fallen sharply in the last decade. Much of this has to do with the erosion of the US manufacturing base. The single best example of this is the decline of The Big Three automakers which ended with the bankruptcies of GM and Chrysler. The UAW gave up tens of thou...

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Lawmakers and governors in many states, faced with huge shortfalls in employee pension funds, are turning to a strategy that a lot of private companies adopted years ago: moving workers away from guaranteed pension plans and toward 401(k)-type retirement savings plans. The efforts come as the gove...

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When Ed Rendell became the mayor of Philadelphia in 1992, he started a fight with the city’s labor unions that will sound familiar to anyone who has been following the recent news from Wisconsin. In his inaugural address, Mr. Rendell, a Democrat, announced, “Philadelphia stands on the brink of total...

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Call it a sign of the troubled fiscal times, when governors are pushing for steep cuts in employee wages and benefits as they seek to restore their states to fiscal health. Whatever you call it, it amounts to a huge challenge. Many employees of cash-strapped states, such as New Jersey, Californi...

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For public workers in Wisconsin, there’s more bad news. Having lost the battle on collective bargaining, they may soon be asked to make more financial sacrifices. The state’s workers offered to start picking up part of the cost of their pensions and health insurance early in their showdown thi...

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US states have been making serious errors in forecasting their revenues during economic downturns, saddling lawmakers with new budget shortfalls as they try to allocate fewer resources, new research shows. According to a joint study by the Pew Center on the States and the Nelson A Rockefeller Insti...

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NEW YORK -- As cities across the nation struggle to balance their budgets, a chorus of experts has told investors to take cover. Economists, analysts and financiers have given speeches, released reports or made the television rounds arguing that cash-strapped municipalities will default on many bi...

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TRENTON, N.J. - The offensive by Republican governors to tackle the power of public employee unions sparked new clashes Tuesday as protesters descended on Ohio's capitol and Democratic lawmakers in Indiana fled the state to avoid a vote on anti-union legislation. Meanwhile, New Jersey Gov. Chris C...

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WASHINGTON — Deep spending cuts by state and local governments pose a growing threat to an economy that is already grappling with high unemployment, depressed home prices and the surging cost of oil. Lawmakers at state capitols and city halls are slashing jobs and programs, arguing that some pain n...

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NEWARK, N.J. -- Early on a recent Wednesday morning, a 23-year-old former cop named Robert looked out to his driveway and noticed his car was gone. He had left it idling out front, to warm it up amid the winter chill while he finished getting dressed, and had not imagined someone might steal it. L...

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As state and local governments face daunting pension shortfalls, some pension systems are taking controversial steps to stay solvent. As lawmakers in Wisconsin attempt to cut benefits, Illinois officials are taking a different approach: borrowing. In an effort to put money behind a fraction of the ...

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New York court officials outlined procedures Tuesday aimed at assuring that all homeowners facing foreclosure were represented by a lawyer, a shift that could give tens of thousands of families a better chance at saving their homes. Criminal defendants are guaranteed a lawyer, but New York will ...

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Try a little party game in which you ask your friends and neighbors where their tax dollars come from and where they go. Most will probably know their federal tax bite. They may also be able to tick off major federal spending programs like Social Security, Medicare, and national defense. It is likel...

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ZIEBACH COUNTY, S.D. — In the barren grasslands of Ziebach County, there's almost nothing harder to find in winter than a job. This is America's poorest county, where more than 60 percent of people live at or below the poverty line. At a time when the weak economy is squeezing communities across th...

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DETROIT - On a recent Tuesday afternoon, city hall was quiet and dim. The front desk was unattended. The receptionist, and most other city workers, had been furloughed again. If he had wanted to, Mayor Dave Bing could have looked out his 11th-story window at the Detroit River and the final vestige...

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Since he became mayor of Newark in 2006, Cory Booker has had to make cuts that previously seemed unthinkable. Under his watch, the city closed libraries, imposed furloughs on employees and, late last year, laid off about 13 percent of its police force. While the police department says there are n...

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Huge state budget shortfalls make for easy headlines about the $3 trillion municipal bond market. But old woes like abysmal disclosure and more recent wounds like damage to the safety net should worry the sector’s tax-wary investors more. Muni bonds, which pay interest that is generally exempt fro...

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IN 2010 37 states held elections for governor. It is a wonder anyone wanted the job—most states were submerged in fiscal chaos. Now the messy task of governing begins. Pat Quinn, the governor of Illinois, was one of the few candidates who advocated raising taxes. This month he more than fulfilled ...

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Will states soon begin defaulting on their debts, with further negative implications for localities and U.S. metropolitan areas? More people are beginning to ask that question, and it's a natural one given the genuinely disturbing state budget conditions my group has been anatomizing out West in...

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Will states soon begin defaulting on their debts, with further negative implications for localities and U.S. metropolitan areas? More people are beginning to ask that question, and it's a natural one given the genuinely disturbing state budget conditions my group has been anatomizing out West in...

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States are looking for relief. As they confront massive debts and diminished revenue, some state officials are trying to determine whether they could take a drastic and illegal step: declaring bankruptcy, the New York Times reports. Such a move, though currently out of the question, might free stat...

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AS the states dream up budget plans for a new year, some find themselves staring at deficits in the billions of dollars, vanishing federal stimulus funds, mounting health care costs, their own struggling cities and a canyon of underfunded pension liabilities ahead. That — meshed with images from t...

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Talk of introducing legislation allowing states to declare bankruptcy began in earnest in November. A speech by Newt Gingrich was followed up by a big Weekly Standard piece on the subject by David Skeel, and soon the meme filtered into the blogosphere. Unlike most political chatter, this kind of tal...

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SACRAMENTO, Calif. — If 2011 is hinting at a national recovery, there is little sign of it in statehouses across the country. States that already have raided their reserve funds, relied on borrowing or accounting gimmicks, and imposed deep cuts on schools, parks and public transit systems no longer...

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As the financial struggles of cities and states become ever more worrisome to investors, the market in their debt has hit its lowest level since the financial crisis, the Wall Street Journal reports. It's been a dismal few months for local governments. The market in their bonds fell every day this ...

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ALBANY — Democratic leaders in the State Assembly are signaling that they are ready to embrace a cap on local property taxes, which could clear the way for its passage this year. The cap, popular with voters in New York’s suburbs, who pay some of the highest property taxes in the nation, is one ...

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NEW YORK -- The children at Strong Place day care in Brooklyn can recognize a Van Gogh. They can discuss the effects of acid rain. Some of these preschool-aged kids can even read. But in July, if New York City sticks to its current plan, this learning will end. Strong Place is one of 16 city-fun...

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WASHINGTON — Cut spending, raise taxes and fees, and accept billions of dollars from Congress. That's been the formula for states trying to survive the worst economy since the 1930s. As Republicans prepare to take control of the House and exert more influence in the Senate, it's clear that option N...

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Clarification to This Article This article about the impact of the recession on state finances between 2008 and 2009 included a D.C. revenue figure that is not directly comparable to the Maryland and Virginia numbers cited. As the article said, the Census Bureau reported that revenue fell 28.4 pe...

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The recession blew a huge hole in the already shaky finances of state governments, causing them to lose nearly one-third of their revenue in 2009, according to a Census Bureau report released Wednesday. The severe drop in revenue resulted largely from the big investment losses experienced by sta...

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As labor costs continue to strain state budgets, governors and lawmakers have proposed monumental reforms to public labor unions, the New York Times reports. In some cases, the proposals would dissolve the unions altogether. Unions, which can bargain for high wages, health care and pensions, have...

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You know the story and you know the names: states like Illinois, New Jersey, New York, and California are supposed to be in huge financial trouble thanks to bloated governments, business-unfriendly regulations, and strong public sector unions. After a crisis-free 2010, investors are expected to pun...

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When the federal stimulus program was launched in early 2009, the city of Los Angeles was in dire straits, facing a shortfall of $427 million and the possibility of mass layoffs. City officials scrambled at the new source of funds, ultimately netting more than $630 million in stimulus grants. ...

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The nation's menu of crises caused by governmental malpractice may soon include states coming to Congress as mendicants, seeking relief from the consequences of their choices. Congress should forestall this by passing a bill with a bland title but explosive potential. Principal author of the Pub...

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Pensions, Some Residents Destitute A small town in Alabama, which has stopped paying its retirees' pensions, could be an early casualty in a coming pension disaster, the New York Times reports. As public pension funds across the nation suffer from years of underfunding, and from assets that lost ...

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Facing budget gaps and an aversion to new debt and taxes, states and local governments are slapping residents with an array of new fees—and some are applying them to nonprofits. That marks a sharp departure from long-standing tax exemptions mandated by state law or adopted on the theory that chu...

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The future looks bleak for state and local government budgets. Even as states struggle to cut services, many could soon be in the position of New Jersey, California and Illinois, facing billion-dollar deficits that, unlike the Federal deficit, must be filled. And there's no easy way to repair the b...

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Bill Cooper, the city manager of Hamtramck, Mich., surveyed the possible solutions to his looming budgetary catastrophe, all of them various flavors of bad. He could lay off firefighters or police officers, whose services comprise nearly two-thirds of the city's $18 million annual expenditures. The...

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Bill Cooper, the city manager of Hamtramck, Mich., surveyed the possible solutions to his looming budgetary catastrophe, all of them various flavors of bad. He could lay off firefighters or police officers, whose services comprise nearly two-thirds of the city's $18 million annual expenditures. T...

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The financial health of state and local pension funds has been transformed from a yawn-inducing topic to a frightening one in a few short years. By some measurements, the shortfall across the nation adds up to over $3 trillion or more than two years' worth of state and local tax revenues. In a few...

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In yet another sign of growing fiscal problems for states and municipalities, Detroit may be cutting key services in certain portions of the city, the WSJ reports. This could mean that city officials will be faced with the tough decision whether to repurpose or outright abandon certain sections of...

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NEW YORK — It's the other U.S. debt problem. States are scrambling to close $114 billion in budget shortfalls over the next year and a half. For now, they can borrow at curiously low rates in the bond market – but they better hurry. Lenders are still throwing money at the federal government desp...

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BOSTON — Financially strapped U.S. cities are increasingly turning to private universities, hospitals and other tax-exempt nonprofits for cash, but a new report finds methods of collecting payments in lieu of property taxes from these institutions often lack consistency and transparency. The report...

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Cities and states have had to pay Wall Street firms $4 billion since 2008 to get out of complicated interest rate deals that went sour, Bloomberg reports. After more than a decade of selling deals that were supposed to help local governments fund public projects, banks and insurance companies are...

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