Big Bank ‘Cash For Keys’ Foreclosure Program. NAR’s Shadow Inventory Map

According to a story in the Financial Times, “The five biggest US mortgage servicers were told this week at a private meeting with regulators to consider paying delinquent borrowers up to $21,000 each as part of a broader settlement of the foreclosure crisis…The industry-wide “cash for keys” program would involve the biggest servicers paying borrowers as an incentive to leave their homes.” “Banks would pay borrowers who are more than 90 days behind on mortgage payments up to $1,000 to seek independent financial advice and up to $20,000 in cash as a “fresh start” payment towards living costs in a new home. They would have to vacate their properties quickly and leave them in good condition.” Sheila Bair, FDIC chairman, raised the idea but people involved said it was not an official government proposal and was rejected strongly by some of the banks.

Here’s NAR’s state map on shadow inventory.

Overheard at work: “AT&T to wed T-Mobile. Following the ceremony, there will be no reception.”

Hopefully there is reception in rural areas – like Detroit. The Census Bureau has also been releasing the 2010 population counts for various states, including Michigan. Columbus and Indianapolis’s populations rose. Nearby Chicago’s population declined by almost 7% and Cleveland’s dropped by about 17%. But Detroit lost a quarter of its population over the last ten years. 25%! Detroit now has the same population that it had in 1910, before the auto industry boom. “Now’s not the time to look in the rear view mirror,” said Robert Ficano, the Executive for Wayne County, home of Detroit. I think that I will frame that quote.

In addition, the U.S. Census Bureau reports that state government tax collections decreased about $14 billion to $705 billion in fiscal year 2010, following a drop of $66 billion in 2009. According to the survey, corporate net income tax revenue was $38 billion, down 6.6%, while tax revenue on individual income was $236 billion, down 4.4%. General sales tax revenue was $224 billion, down 1.8%. For more information about this survey Census.