John Temple, over at Civil Beat, put the recent self-congratulatory article by the Star-Advertiser through a bit of fact checking, with interesting results.
In contrast to the newspaper’s own glowing account, Temple relies on other published data to calculate continued erosion in both daily circulation and readership since the merger last year of the former Star-Bulletin and Advertiser.
Hmmmm. Browing around this morning I ran into this press release announcing that Fannie Mae is immediately moving all of its foreclosures in Hawaii into the judicial process. The move away from nonjudicial foreclosures comes in response to legislation reforming the foreclosure process passed during the 2011 legislative session.
In addition, according to the release, the mortgage giant may have to retract some non-judicial foreclosures that resulted in the lender taking back properties into its own portfolio as REO (“real estate owned”).
Due to potential title insurance issues, Fannie Mae may be required to eliminate certain recent REO acquisitions that resulted from non-judicial foreclosures. Upon being notified of any eliminations, servicers must immediately restart the matters as judicial foreclosures.
With the current state of the Judiciary budget, I don’t see how the courts are going to cope with new foreclosure cases moving over in the court system. Here’s one blogger’s take on the issue.
Remember back several years ago when the local news was proudly telling people that we wouldn’t face a foreclosure crisis becase local banks didn’t make subprime loans? Looking back, you can see that news consumers should have demanded more digging into that claim.
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Hawaii SB 651 was sponsored by state Representative Bob Herkes and Senator Roz Baker. It is worth noting that previous to this bill they were the same state legislators who sided more than their colleagues against local borrowers and supported the banks. In fact, in passing through previous legislation, Herkes pronounced “We need to save the banks.”
Why the apparent change of heart? Because new facts keep emerging about the banks.
The TARP was originally meant to bail out borrowers, not bankers, but Bush and then Obama (or more properly, Timothy Geithner, Bush’s appointee who was elevated to Secretary of the Treasury by Obama) made a shift to supporting the banks in the hopes that the banks would then take those federal loans and inject them into the economy, providing loans/liquidity. Instead, the banks just sat on that money as the economy tanked. But the economy tanked in part because even fully employed non-subprime borrowers found themselves ‘underwater’ on their mortgages and headed toward foreclosure, feeding the real estate free fall and leading more homes to go underwater and into foreclosure in a vicious cycle.
Now, as soon as the TARP expired recently, this became a topic of conversation in the press and a wake-call to politicians eager not to be perceived as pro-bank and probably at least a bit remorseful over their going along with the crowd, especially Democrats who imagined that their new President was progressive.
As for Freddie Mac and Fannie Mae, President Obama has been privately pushing for their abolition — as did President Bush. Which leads to the question: In what way is Obama really any different from Bush? If one strips away Obama’s window dressing — his relative youth, his urban credentials (Chicago), his academic pedigree, his eloquence, his dark skin — one ends up with the essence of George W. Bush. If one looks at Obama’s economic and foreign policy, one not only finds an inexperience that is much criticized, but a lack of curiosity so strikingly similar to Bush’s facile complacency. Their branding might be diametrically opposed (red state v. blue state), but the policies are basically the same.
I think there are statistics showing foreclosures by location in Hawaii on-line. I remember seeing a report on them within the last year. I don’t recall if you could determine the bank of origin. I think it could be correct that local financial institutions did not make sub-prime loans even if foreclosures are a problem. When people lose their jobs or have their pay cut severely, foreclosures rise even if the loans were not sub-prime when made.
Ian didn’t check his facts. 90% of the problems are with mainland financial institutions, not local banks.
while the loans on the books of local banks may be largely ok (except CPF that was bailed-out because of a toxic california portfolio) — that doesn’t mean there wasn’t a lot of bad loans written in Hawaii that were made part of those strange securities that represent some of the worst fraud in the history of Wall Street
You’re making my point. Hawaii was hit by those loans made by mainland banks, but local reporting focused on the performance of local banks. I should say, though, that I think the former Honolulu Advertiser did a better job at reporting problems early on.
Here’s what I wrote:
“Remember back several years ago when the local news was proudly telling people that we wouldn’t face a foreclosure crisis becase local banks didn’t make subprime loans? Looking back, you can see that news consumers should have demanded more digging into that claim.”
My criticism is that reporters relied on local “experts” or industry insiders, who were saying Hawaii would not be impacted because of local lending practices, apparently without independently checking data on the activity of those mainland lenders you refer to.
Examples? I just did a quick search.
Here’s the Star-Bulletin in September 2007:
My impression is that this wasn’t an isolated viewpoint, but the spin taken to bolster confidence among local banking and real estate circles. However, it meant that we didn’t see the widespread foreclosures coming soon.
There is a question that this reliance on industry insiders by local journalists for information on real estate and banking in Hawaii raises, namely is it a deliberate policy of misinformation? Articles on real estate in the local press typically only involve a couple of quoted sources, all of them industry representatives.
This puts the local press in the unenviable position of Ronald Reagan after the Iran-Contra scandal broke. The question on the mind of the nation was then “Is Reagan lying or is he incompetent?” As Reagan’s former NSA adviser Robert McFarlane explained, Reagan was informed of everything, and then Reagan would conveniently delete it from memory. Perhaps the local press is like that too: simultaneously ignorant and corrupt. Contrary to popular belief, small towns are much more corrupt than are big cities because in a small town everyone knows everyone else, and the powers that be can exert pressure up close and personal, and the population tends to be a little naive about how things really work. The local press might be thus compromised.
Local banks in general in the United States did not engage in sub-prime lending and, strictly speaking, this is true in Hawaii. But in a sense Hawaii is different because banks may be lending to families that are not poor, but they are buying real estate that is far beyond their means. They are overpaying.
Bankers and realtors are supposed to tell prospective home buyers to buy within their means, but this seems to be an alien practice in Hawaii. Again, is this omitted out of ignorance, corruption or both? These special interests do seem to believe that home prices in Hawaii are immune to falling prices. This is an “innocent” belief on the part of people who might not be that educated or well-traveled, and deep down don’t really understand how real estate markets work. But they also constantly exaggerate, and the other shoe has yet to drop in Hawaii’s economy because of their constant playing up of an over-valued market.
Ian, you suggest that there has been a long-standing complacency on the part of the local press to take the statements of the local real-estate status quo (bankers, developers, realtors, etc.) at face value. That may be true, the local press may have been too trusting and too lazy.
But what we have now with the Honolulu Star-Advertiser is outright propaganda. Here’s something from today’s SA.
http://www.staradvertiser.com/news/20110617_Mass_transit_can_liberate_us_from_stress_blogger_says.html
It’s a pro-mass transit fluff piece by a reporter who only rode the bus for two weeks.
It is neither a news piece, as it is categorized by the paper, nor is it really a well-reasoned editorial. It’s advertising by a writer who does not really use the product.
So not only do we have a history of journalistic incompetence in Hawaii, we also have a growing take-over of the local press by public relations.
Moreover, the journalists engaged in this don’t seem to see it.
Don’t you worry. All these maneuverings will be borne by the taxpayers one way or another.
I love it how *some* (thankfully not all) rich people whine about taxes and simultaneously hold their hands out for bailouts, discriminatory tax breaks and more money money money. The American way?
What’s Civil Beat’s online “circulation?”
They won’t tell.
How much money do they lose every day, week, month? No ads, and very few subscribers. Success?
It’s not just a matter of money.
It’s a matter of integrity. The SA is not really a newspaper, it’s increasingly one big advertisement for the local establishment. It’s a big version of the weekly restaurant section, where some of the “reviews” are really paid ads.
Obama has been more disappointing than Bush, possibly because there was so much expectation for change….all false campaign promises. Re-. elect Obama? I don’t think he will have the support. Thanks to the internet, there are less fools.
Thanks to the internet there are less fools???!!!
In my experience, the fools quotient has not diminished, and now they have the Internet bullhorn to spread their foolishness faster and farther to the gullible.
Mahalo Lopaka43! I was thinking the same thing!