Summers Predicts Job Growth by Spring

“Most professional forecasters are looking for a return to job growth by the spring,” he said in an appearance on “ABC’s “This Week with George Stephanopoulos.”
Mr. Summers, director of the White House’s National Economic Council, made his forecast one day before President Obama is scheduled to meet with banking executives at the White House in an effort to ratchet up lending to consumers and small businesses, to make it easier for homeowners to obtain mortgages and spur businesses to generate jobs.
Mr. Summers, Secretary of the Treasury at the end of President Clinton’s administration, said that “it doesn’t cost anything to encourage banks to expand the flow of credit to small businesses.” He said the president will remind them that given what the federal government did to bail out banks when they were in trouble, they have an obligation “to enhance lending across the country.”
“We were there for them and the banks need to do everything they can” to be sure they help American business and generate jobs, he said.
The nation’s unemployment rate stabilized in November, with only 11,000 more people losing jobs and the rate itself edging down to 10.0 percent from its yearlong peak the previous month. The ranks of the employed stood at 138.5 million in November and the number of unemployed still seeking jobs stood at 15.4 million. When the recession began in December 2007, 7.5 million Americans were unemployed and the jobless rate stood at 4.9 percent.
Mr. Summers said flatly that “everyone agrees the recession is over.” But at least one dissenter was Senator Mitch McConnell of Kentucky, the Republican minority leader, who said on CBS’s “Face the Nation” that, given a 10 percent national unemployment rate and 11 percent in Kentucky, “I don’t think it’s over.”
“I hope he’s right that we’re coming out of an economic slowdown, but unemployment is the key,” he added.
Mr. Summers, though, sounded a more upbeat tone.
“We were losing 700,000 jobs a month when President Bush turned the economy over to President Obama,” he said. But looking at the latest employment statistics, he said, by spring, “growth will be starting to turn positive.”
Asked what the Obama administration would be doing to create jobs, Mr. Summers said, “Every bill is going to be a jobs bill.” The president plans to spend $50 billion on repairing the nation’s infrastructure, and health care reform — the centerpiece of the Obama domestic agenda — too would help he economy by paring away the nation’s deficit, which he described as an $8 trillion shortfall over 10 years that “the Obama administration inherited.”
By JOSEPH BERGER
Published: December 13, 2009 , New York Times

IRS Sets New Rules for Tax Credit

The IRS has spelled out guidelines for eligibility for the home buyer credit when co-borrowers purchase a property.

• When a home-owning parent of an adult child co-signs for a mortgage and both names appear on the note, the IRS says that under some circumstances, the first-time home buyer can qualify for the whole amount.
• The IRS says the parent doesn’t qualify for any portion of the credit, but if the child hasn’t owned a home during the three years preceding the current purchase and can qualify based on income, he or she can be allocated the entire $8,000 credit.
• When unmarried individuals co-purchase a home and only one of them is eligible for the credit, then the full $8,000 can be allocated to the eligible buyer.

Source: Washington Post Writers Group, Kenneth R. Harney (12/04/2009)

Banks Start to Embrace Short Sales

Banks Start to Embrace Short Sales Even before the government put pressure on them to embrace short sales, more banks were starting to take their lumps, do the short-sale deals and move on.Three years into the housing meltdown, short sales have tripled to 40,000 in the first six months of 2009, compared to the same time period a year ago, according to data from the Office of Thrift Supervision and the Office of the Comptroller of the Currency.
Wells Fargo, Bank of America Corp., and JPMorgan Chase & Co. this year have hired and trained more staff to handle short sales and also developed software for expediting them. “It’s really finally dawning on banks that they’re better off with a short sale,” said Richard Green, director of the Lusk Center for Real Estate at the University of Southern California in Los Angeles. “I think banks were in denial.”
Source: Bloomberg, John Gittelsohn and Margaret Collins (12/4/2009)