Deficit Talks Stumble Over Down Payment

WASHINGTON — For all the growing angst over the state of negotiations to head off a fiscal crisis in January, the parties are farthest apart on a relatively small part of the overall deficit reduction program — the down payment.

President Obama and the House speaker, John A. Boehner, are in general agreement that the relevant Congressional committees must sit down next year and work out changes to the tax code and entitlement programs to save well more than $1 trillion over the next decade.

But before that work begins, both men want Congress to approve a first installment on deficit reduction in the coming weeks. The installment would replace the automatic spending cuts and tax increases that make up the “fiscal cliff,” while signaling Washington’s seriousness about getting its fiscal house in order. That is where the chasm lies in size and scope.

Mr. Obama says the down payment should be large and made up almost completely of tax increases on top incomes, partly because he and Congressional leaders last year agreed on some spending cuts over the next decade but have yet to agree on any tax increases.

Republicans have countered by arguing for a smaller down payment that must include immediate savings from Medicare and other social programs. Republicans, using almost mirror-image language, have said that they do not want to agree to specific tax increases and vague promises of future spending cuts.

Senator Kent Conrad of North Dakota, chairman of the Budget Committee and part of a bipartisan “Gang of Six” senators who devised the two-stage process, said: “I think there’s a lot of confusion between the initial down payment and the framework. That’s for sure.”

The two biggest areas of dispute are tax increases and the big government health insurance programs, Medicare and Medicaid. On the health programs, neither side believes Congress could meaningfully overhaul them in the four weeks that remain before the fiscal deadline.

“Entitlement reform is a big step, and it affects tens of millions of people,” said Senator Richard J. Durbin, Democrat of Illinois, another architect of the two-stage framework. “It’s not just a matter of cutting spending in an appropriation. It’s changing policy. And that’s why I was reluctant to include it in the down-payment conversation. I want this to be a thoughtful effort on both sides that doesn’t jeopardize this program.”

But Republicans say that it is possible to make some initial changes to the programs in coming weeks. “There are simpler things that can be done,” said Senator Michael D. Crapo, Republican of Idaho and another Gang of Six member. “The real structural changes would come later.”

Mr. Crapo said Congress could agree on some additional cuts to health care providers and change the way inflation is calculated to slow not only automatic increases in Medicare and Social Security benefits, but also the annual rise in tax brackets.

Democrats instead argue that the down payment should consist of a combination of tax increases and cuts to programs outside Medicare, Medicaid and Social Security, like farm programs. Mr. Obama has pushed for a return to the top tax rates under President Bill Clinton.

Republican leaders have said that they are willing to raise new tax revenues — albeit not as much as Democrats want — but Republicans want taxes to rise by closing loopholes and curbing tax deductions and credits.

If the two sides are able to come to an agreement on the down payment, it would also likely fix targets for larger savings in the tax code and entitlement programs. The White House and Congress would then spend much of the next year trying to hash out the specific policy changes needed to hit those targets.

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Syria army pounds rebels around Damascus

BEIRUT — Fierce clashes and heavy government bombardment were reported Sunday on the outskirts of Damascus as the Syrian military pressed an offensive aimed at securing the capital and its vulnerable international airport.

Syrian warplanes and artillery pounded rebel-held positions to the south and east of the capital, opposition spokesmen said, continuing a pattern of heavy strikes that has continued for at least four days.

The government appears intent on creating a security cordon around the capital and along the road to the nation's international airport, where flights were interrupted last week because of clashes along the main airport road — which skirts several rebel-dominated districts. The government reportedly brought in troop reinforcements to secure the route to the airport, about 15 miles southeast of downtown Damascus.

The pro-government Al Watan newspaper reported Sunday that the Syrian army "has completely opened the gates of hell before all who would even consider approaching Damascus or planning to attack it."

Losing access to its international airport would be a major psychological and strategic blow for the beleaguered government of President Bashar Assad, which has seen a steady erosion of its territory.

In recent weeks, rebels have overrun a number of military bases, while also seizing oil wells and a hydroelectric facility. Rebels already control several border crossings into neighboring Turkey and large swaths of territory in northwestern and eastern Syria.

The official state news service reported Sunday that troops killed scores of "Al Qaeda terrorists" in various Damascus suburbs, including Zamalka and Dariya. The government routinely links rebels to Al Qaeda, though opposition commanders insist that brigades linked to Al Qaeda or inspired by Osama bin Laden's philosophy represent a small minority of the highly fragmented rebel force.

The recent fighting and bombardment near Damascus appear to be the heaviest in the capital since last summer, when the army cleared opposition fighters from much of the city in methodical, district-by-district sweeps. Many rebels retreated to working-class suburbs and semirural enclaves where they enjoy considerable support.

The government declared last summer's "cleanup" operation in the capital a major victory, but the renewed clashes suggest that the rebel force was not vanquished but mostly fell back outside Damascus to fight another day.

Inside Damascus, a series of car bombings — most recently on Saturday — have killed and wounded many civilians in recent weeks. The government has blamed "terrorists" for the attacks. The rebels deny targeting civilians and say car bombs are aimed at security installations.

Also on Sunday, government and opposition spokesmen reported that a car bomb exploded in a residential district in the central city of Homs, killing as many as 15.

The city, Syria's third most populous, has been under virtual government siege for months. Homs was a major focus of the armed rebellion before twin rebel operations last summer targeted the nation's two major cities, Damascus and Aleppo.

The opposition reports that as many as 40,000 people have been killed in the 20-month Syrian conflict. The government has not provided casualty figures.

patrick.mcdonell@latimes.com

Special correspondent Nabih Bulos contributed to this report.

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Young down by boardwalk for benefit show

NEW YORK (AP) — Neil Young said Sunday that he couldn’t see performing in the area devastated by Superstorm Sandy without doing something to help people who were affected by it.

Young and his longtime backing band, Crazy Horse, will hold a benefit concert for the American Red Cross‘ storm relief effort Thursday at the Borgata Hotel Casino & Spa in Atlantic City. The New Jersey coastline areas were hit hard by the storm in late October.

People in the New York area who suffered damage in the storm have been supporting him for 40 years, he said.

“I couldn’t see coming back here and just playing and have it be business as usual,” he said. Young is touring in the area, with concerts scheduled for Monday in Brooklyn and Tuesday in Bridgeport, Conn.

Minimum ticket prices for the standing-room show in Atlantic City will be $ 75 and $ 150, although Young notes there’s no maximum. He hopes to raise several hundred thousand dollars for the Red Cross.

Young said he was invited to join the Dec. 12 benefit at New York’s Madison Square Garden that will feature Bruce Springsteen, Paul McCartney, the Who, Kanye West and others, but had other obligations. Besides, there’s enough star power there, he said.

“It wasn’t going to make much difference whether I was there or not, so I decided to go someplace where I could make a difference,” he said.

Young performed at a televised benefit in 2001 following the Sept. 11 terrorist attacks, memorably covering John Lennon’s “Imagine.”

Fans can expect a two-hour plus rock show on Thursday with opening band Everest. No special guests are planned, although Young issued an invitation to “anyone who wants to come in and play with us that we know and we know can play.”

It’s hard to resist wondering whether Young’s epic “Like a Hurricane” will make it onto the set list, given the occasion.

“Anything’s possible,” Young said. “We have the equipment.”

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Some Economists Doubt Dire Effects From Tax Increases

As anxious investors assess their portfolios in light of expected tax increases on investment income, hedge fund manager Douglas Kass has a simple message: Relax.

Mr. Kass, the founder of Seabreeze Partners Management, thinks much of the investing world has overestimated how hard the markets and investors would be hit if tax rates on dividends and capital gains rise at the end of the year, as the White House has proposed.

Mr. Kass can look for support to several economists who have studied past changes in tax rates and found that the shifts had less of an impact on investor behavior than was initially expected.

That’s largely because a dwindling number of investors are subject to the taxes on investment gains that are set to rise at the end of the year, with most stocks held in accounts that are exempt from taxes.

For example, only 14.7 percent of American households have mutual funds in taxable accounts, down from as high as 23.9 percent in 2001, according to data from the Investment Company Institute.

Douglas A. Shackelford, an economist who has examined the 2003 legislation that lowered the tax rates on capital gains and dividends, said that when those changes were being put in place “people thought this would be revolutionary,” setting off a wave of changes in the way companies rewarded their investors, and how investors evaluated companies.

In the end, “it made a difference, but it certainly was not revolutionary,” said Mr. Shackelford, a professor of taxation at the University of North Carolina’s business school. The limited number of investors who were subject to the changes in 2003 has grown even smaller today, he said.

While data on the tax status of all stockholders is hard to come by, many economists agree than an increasing proportion of the entire equities market is now held by retirement investors whose holdings are not subject to current tax law; by foreign investors who don’t pay American taxes, or by institutional investors like insurance companies and pension funds that are exempt from taxes.

Sam Stovall, the chief investment strategist at S&P Capital IQ, said that even among individual investors who do pay the taxes, many have incomes under $250,000 and would not be subject to the increased rates on investment income proposed by the White House. The result Mr. Stovall is anticipating is that the coming changes will cause “a lot less of a hit than most people are making it out to be.”

Mr. Stovall and others who share his views are not discounting the potential disruption to the financial markets if the White House and Congress fail to reach any agreement on the broad set of tax increases and spending cuts scheduled to hit at the start of the year. The largest of these changes are not on investment income. An increase in the payroll tax, for example, could remove $95 billion from the take-home pay of Americans.

But even if a broad agreement is reached, many strategists are expecting that taxes will rise on investment income, with the White House proposing that for households earning over $250,000 the rate on dividends rise to a peak of 39.6 percent from the current 15 percent, and the rate on capital gains increasing to 20 percent from 15 percent.

Wealthy households will face an additional 3.8 percent charge on most investment income to help pay for the recent health care legislation.

Neil J. Hennessy, the founder of Hennessy Funds, said at a year-end investing event last week that if politicians allow the rates to rise as much as the White House has proposed, dividends will become much less attractive and there could have a “disastrous effect” on the willingness of investors to put money into stocks.

Some companies have already acted ahead of the changes, with Costco and Las Vegas Sands leading the way in issuing special dividends before the end of the year so their shareholders can take advantage of current tax rates. Some investors have sold off stocks that issue regular dividends expecting the companies to become less valuable once a greater proportion of dividend income is lost to taxes.

Andrew Garthwaite, an analyst at Credit Suisse, has predicted that if the White House’s view on investment taxes prevails, it could lead to a long-term reduction in the value of the Standard & Poor’s 500-stock index of as much as 5 percent. Mr. Garthwaite cautioned that the figure is likely to be lower, and that investors have already incorporated some of those losses into the market by selling stocks.

Mr. Kass disputed Mr. Garthwaite’s estimates in a note to clients, and said he was looking at market losses of at most 1.6 percent and more likely closer to 0.8 percent. Part of the disagreement arises from Mr. Kass’s contention that many people who are subject to tax are either uninformed about tax law — and unlikely to respond to changes — or more focused on the long-term performance of their portfolio than on short-term tax payments.

Mr. Kass said that even the losses he has predicted assume that wealthy people will be willing to cash out of their stock positions and stay out, something that he said is unlikely given the small returns available in other financial investments.

But an even larger source of misunderstanding has come from the difficulty of ascertaining the amount of all United States stocks held by people who will have to pay the new, higher tax rates. Foreign investors controlled 12.4 percent of American stocks in 2011, up from 8.8 percent in 2004, Treasury Department data shows.

Among the stocks that are held in the United States, 48 percent are held directly by households, down from 65 percent in 1988, according to Federal Reserve figures. And 40.7 percent of households have mutual funds in tax-exempt accounts.

But only some of these have income over $250,000 a year, and a portion of those people have their money in accounts protected from taxes. Eric Toder, a co-director of the Tax Policy Center, said as a result market prices should have little to do with the taxes paid on gains because prices are largely “being determined by tax-exempt investors and by foreign investors.”

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Tens of thousands of Islamists rally for Morsi in Cairo

CAIRO — Islamists in Egypt's capital rallied Saturday to support President Mohamed Morsi in what is emerging as a decisive battle with opposition forces in the country's messy political transition away from three decades of Hosni Mubarak's corrupt and undemocratic rule.

Tens of thousands of Muslim Brotherhood and ultraconservative Islamists marched in a counterdemonstration to an energized week-old protest across the Nile in Tahrir Square by opposition groups challenging Morsi's expanded powers. Islamists back the president for his religious ideology but say Morsi's central aim is to rid state institutions of the lingering influence of the Mubarak era.

"There are different segments of society here. Not everyone who supports Morsi is a radical Islamist," said Mohamed Hassanein, standing amid banners and the static of loudspeakers in front of Cairo University. "He is the president for all Egyptians. He is trying protect state institutions from remnants of the old regime."

Such have been the president's talking points since he took office in June. He and the Brotherhood explain his recent decree expanding his power and the frantic race by an Islamist-dominated assembly to finish a draft constitution as the path to parliamentary elections early next year to move the country forward. Morsi told the nation Saturday that a referendum on the constitution would be held Dec. 15.

"We hope to ascend into a new era of Egypt's history, to a bright future for our beloved people," the president said in an address to the assembly. "This is a breakthrough, the first truly representative constitution that protects the rights, freedoms and human dignity of all Egyptians."

The Brotherhood has painted many of those protesting against Morsi as Mubarak loyalists who have infiltrated a wider protest movement to disrupt Egypt's transition. That view is testament to the vast differences over how Morsi's supporters and detractors view the nation's troubled political climate, even as Cairo maneuvers to rise as a leading voice in the Arab world's changing political landscape.

Protesters in Tahrir accuse the president of overstepping his bounds, peddling conspiracies and accumulating power reminiscent of Mubarak while brushing aside court rulings to propel the Brotherhood's Islamist agenda. Morsi's supporters argue that he is a good man, if an inexperienced politician, who has been unfairly tainted by liberals and leftists in a dangerous counterrevolution.

Morsi and the Brotherhood face high stakes in coming weeks. Once an outlawed opposition movement, the Brotherhood is now the country's dominant political force. Yet it has made many missteps, reversing promises, angering opposition leaders and failing to stem economic turmoil. The march Saturday was a show of unity before the vote on the draft constitution, which, if not passed, would damage Morsi's credibility.

"I'm here to watch and see what is happening, not because I'm fully convinced of the president," said Walid Alnasr, an Egyptologist, standing in a tightening crowd of men with their ears bent toward him. "The country is suffering from years and years of corruption. Do you think these things can change in three or four or five months? The president is new. He should be given time."

As Alnasr spoke, a bearded man stood at the edge of the crowd, holding up a copy of the Koran in the sunlight. "God's law," he said, and walked away.

The rally was a mix of extremists, moderates, students, professionals, men in suits and peasants from the provinces, including one wearing a white turban who spoke of the need for sharia, or Islamic law, while others tried to hush him.

"Let somebody more educated speak," they said.

The peasant was undeterred: "We're not only here for Morsi. We're here for sharia."

Another man, Hamed Abdelhamid, said, "The people in Tahrir Square are only 1% of the population. They don't represent Egypt. Most of our population is religious and is behind the president."

But the nation's judiciary, notably the Supreme Constitutional Court dominated by Mubarak-era judges, has undercut Morsi and the Brotherhood's wider ambitions, in part by dissolving the Islamist-led parliament in June. The president's decree last month to place his office and the constitutional assembly above legal jurisdiction, a move meant to limit the court's power, drew outrage from Morsi's opponents.

The court was expected to rule Sunday to dissolve the assembly amid charges it was unrepresentative. Opposition groups say the proposed constitution is influenced by Islamic law and could set back civil rights. But with the assembly's work done, it remains uncertain what leverage the court has against a leader who has ignored its decisions.

Many of the Islamists at the rally showed contempt for the courts. A poster pictured a regal Morsi standing next to an unruly collection of caricatures depicting holdover officials from the Mubarak era, including a constitutional court judge made to look like Miss Piggy and Prosecutor-General Abdel Meguid Mahmoud, who resembled the Disney character Goofy.

"Morsi will save the nation," said Ayman Alshahat, a teacher waving a banner. "He will continue the revolution to take back state institutions.... This is for all Egyptian people. This is an invitation to negotiations that will move the country forward."

The opposition and the Islamists are far from compromise. The rally to support Morsi had been planned for Tahrir, but the Brotherhood switched venues to Cairo University to avoid clashes with antigovernment protesters. Brotherhood offices in several cities have been attacked and set ablaze, and officials fear more violence if tension is not eased.

There was no rancor at the Morsi rally, which with flapping flags and practiced chants was a model of sameness. Brotherhood security guards stood at barricades, checking bags and asking for identification cards. Police stayed far to the edges. Images of Morsi — thin graying beard, smile, face bordered by glasses — bobbed in the sunlight. A child with a microphone recited poetry.

"We need Morsi's decree at this critical time because remnants of the old regime are back in Tahrir Square," said Fatima Ibrahim, a black veil covering all but her eyes. "The square used to be for revolutionaries, but it is not anymore. It has been taken over by others. But we'll move forward as long as we stay behind the president."

As she spoke, Islamists chanted: "Bread. Freedom. Islamic sharia."

Across the river in Tahrir Square the chant was: "Bread. Freedom. Social Justice."

jeffrey.fleishman@latimes.com

Special correspondent Reem Abdellatif contributed to this report.

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App of the Week: Hooked

App Name: Hooked

Price: Free

Available Platforms: Android

What does this app do? Words with Friends, Angry Birds, Mahjong Connect – these are just a few of the popular apps in the Google Play Store for Android devices. For game app lovers, wading through the possibilities can be daunting.

Hooked, a game recommendation app developed by Hooked Media Group, can help.

“There are hundreds of thousands of apps out there people may really enjoy,” says Pita Uppal, CEO of the San Francisco based company.

Uppal, who recognizes people like to play with variety game apps but may have no idea what to try, likens Hooked to Netflix and Pandora rolled into one.

Once you download the app, Hooked analyses more than 40 factors, such as device type, the kinds of games a user has on his or her device, and usage statistics. By looking at what a consumer already has and how he or she is using those games, Hooked aims to offer users intelligent suggestions.

From the homescreen, select the menu button at the top and then search categories such as “Top Picks for You,” which provides a customized, star-rated list of recommendations. Press the tools key in the upper right hand corner and customize your recommendations by category, such as puzzle and racing, or by price.

Select “My Games”, and the app displays a dashboard of icons to help you understand your game activity. A folder icon, for example, shows what and how many games you have installed, and a clock icon tells you the amount of time you’ve spent playing a particular game. I spent an entire minute playing “Stupid Zombies.”

Logging in through Facebook or Google+ allows you to see what your friends and connections are playing, too.

Is it easy to set up? Yes, the 2.1MB app installs quickly. Log in with your account and go.

Should I try it? Hooked is like a personal shopper for game-loving app users, and the more you use it the more it understands what you might like. For the moment, it is only available for Android, but Uppal says the company plans to launch Hooked for iOS in the coming months.

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NBC sets premiere date for “Do No Harm” drama

LOS ANGELES (TheWrap.com) – NBC will premiere its new drama “Do No Harm” at 10 p.m. on January 31, NBC Entertainment chairman Robert Greenblatt said Friday.

The premiere date takes advantage of the one-hour series finale of “30 Rock,” which will air at 8 p.m. on that same night.

“Do No Harm” stars “Rescue Me” alum Steven Pasquale as Dr. Jason Cole, a neurosurgeon whose life is going swimmingly until his dangerous alter-ego emerges, hell-bent on creating havoc on Cole and those around him.

“January 31 will be a special night as one classic series will mark its finale with a great hour-long send-off episode while a promising new drama will make its debut on Thursdays,” Greenblatt said. “‘30 Rock’ is acclaimed as a legendary comedy and we will see a truly memorable and fitting last episode. In ‘Do No Harm,’ viewers will have a unique new dramatic storyline with an exciting new star in Steven Pasquale that takes them into dark and uncharted territory.”

To accommodate “Do No Harm,” “Rock Center With Brian Williams” will move to Fridays at 10 p.m., following “Dateline,” beginning February 8.

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Adderall, a Drug of Increased Focus for N.F.L. Players

The first time Anthony Becht heard about Adderall, he was in the Tampa Bay locker room in 2006. A teammate who had a prescription for the drug shook his pill bottle at Becht.

“ ‘You’ve got to get some of these,’ ” Becht recalled the player saying. “I was like, ‘What the heck is that?’ He definitely needed it. He said it just locks you in, hones you in. He said, ‘When I have to take them, my focus is just raised up to another level.’ ”

Becht said he did not give Adderall another thought until 2009, when he was playing in Arizona and his fellow tight end Ben Patrick was suspended for testing positive for amphetamines. The drug he took, Patrick said, was Adderall. Becht asked Patrick why he took it, and Patrick told Becht, and reporters, that he had needed to stay awake for a long drive.

Those two conversations gave Becht, now a free agent, an early glimpse at a problem that is confounding the N.F.L. this season. Players are taking Adderall, a medication widely prescribed to treat attention deficit hyperactivity disorder, whether they need it or not, and are failing drug tests because of it. And that is almost certainly contributing to a most-troubling result: a record-setting year for N.F.L. drug suspensions.

According to N.F.L. figures, 21 suspensions were announced this calendar year because of failed tests for performance-enhancing drugs, including amphetamines like Adderall. That is a 75 percent increase over the 12 suspensions announced in 2011 and, with a month to go in 2012, it is the most in a year since suspensions for performance-enhancing drugs began in 1989.

At least seven of the players suspended this year have been linked in news media reports to Adderall or have publicly blamed the drug, which acts as a strong stimulant in those without A.D.H.D. The most recent examples were Tampa Bay cornerback Eric Wright and New England defensive lineman Jermaine Cunningham last week.

The N.F.L. is forbidden under the terms of the drug-testing agreement with the players union from announcing what substance players have tested positive for — the urine test does not distinguish among types of amphetamines — and there is some suspicion that at least a few players may claim they took Adderall instead of admitting to steroid use, which carries a far greater stigma. But Adolpho Birch, who oversees drug testing as the N.F.L.’s senior vice president for law and labor, said last week that failed tests for amphetamines were up this year, although he did not provide any specifics. The increase in Adderall use probably accounts for a large part of the overall increase in failed tests.

“If nothing else it probably reflects an uptick in the use of amphetamine and amphetamine-related substances throughout society,” Birch said. “It’s not a secret that it’s a societal trend, and I think we’re starting to see some of the effects of that trend throughout our league.”

Amphetamines have long been used by athletes to provide a boost — think of the stories of “greenies” in baseball clubhouses decades ago. That Adderall use and abuse has made its way to the N.F.L. surprises few, because A.D.H.D. diagnoses and the use of medication to control it have sharply increased in recent years.

According to Dr. Lenard Adler, who runs the adult A.D.H.D. program at New York University Langone Medical Center, 4.4 percent of adults in the general population have the disorder, of which an estimated two-thirds are men. Birch said the number of exemptions the N.F.L. has granted for players who need treatment for A.D.H.D. is “almost certainly fewer” than 4.4 percent of those in the league.

The rates of those with the disorder fall as people get older; it is far more prevalent in children and adolescents. A report from the Centers for Disease Control and Prevention, using input from parents, found that as of 2007, about 9.5 percent or 5.4 million children from ages 4 to 17 had A.D.H.D. at some point. That was an increase of 22 percent from 2003. Boys (13.2 percent) were more likely to have the disorder than girls (5.6 percent).

Of children who currently have A.D.H.D., 66.3 percent are receiving medication, with boys 2.8 times more likely to receive medication. Those 11 to 17 years old are more likely to receive medication than younger children.

But Adderall, categorized by the Drug Enforcement Administration as a Schedule II controlled substance because it is particularly addictive, is also used by college students and even some high school students to provide extra energy and concentration for studying or as a party drug to ward off fatigue.

Dr. Leah Lagos, a New York sports psychologist who has worked with college and professional athletes, said she had seen patients who have used Adderall. She said she believed the rise in its use by professional athletes mimicked the use by college students. Just a few years ago, she said, it was estimated that 1 in 10 college students was abusing stimulants like Adderall and Ritalin. That estimate, Lagos said, has almost doubled.

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Widows Pushed Into Foreclosure by Mortgage Fine Print

Richard Patterson for The New York Times

Maria Ginise says she has developed dizzy spells from the stress of trying to save her mobile home from foreclosure in Deerfield Beach, Fla.

Geraldine Bates lost her husband to kidney failure last year. Now, she has fallen behind on her mortgage payments and is terrified that she will lose her home in Jacksonville, Fla.

Ms. Bates, 70, is caught in a foreclosure trap that is ensnaring widows across America: she cannot get help lowering her payments until her name is added to the mortgage note, but the lender says she must be current on payments before that can happen.

“I keep praying,” said Ms. Bates, who is fighting with the bank to stay in the four-bedroom house.

Just as the housing market is recovering, a growing group of homeowners — widows over the age of 50 whose husbands alone were holders of the mortgage — are losing their homes to foreclosure because of a paperwork flaw that keeps them from obtaining loan modifications.

In the latest chapter of the foreclosure crisis, homeowners over 50 are falling into foreclosure at the fastest pace of any age group, according to nationwide data, in part because women are outliving their spouses and are unable to cope with cuts in their pensions, ballooning medical costs — and the fine print on their mortgages.

While there are no exact measures of how many widows have entered foreclosure, figures compiled by AARP show the rate of foreclosures among people over 50 increased by 23 percent from 2007 to 2011, resulting in 1.5 million foreclosures.

A few lenders have tweaked their procedures to navigate the problem, and housing advocates are petitioning the Consumer Financial Protection Bureau to devise guidelines for lenders in situations that involve surviving relatives. Banks say that while the volume of delinquent mortgages means that they need a blanket policy to cover all homeowners who are behind on their payments, they are willing to work closely with widows.

Still, interviews with elder-care advocates, housing lawyers and borrowers suggest that the problem is spreading fast, propelled by an aging population. Legal aid offices in California, Florida, Ohio and New York say it is among the top complaints from clients. Billy Howard, a consumer lawyer in Tampa, Fla., said he had more than two dozen cases involving widows, up from virtually none before 2007.

“These women are essentially invisible,” said Gladys Gerson, a lawyer for Coast to Coast Legal Aid of South Florida.

At first glance, the issue seems little more than a logistical headache. To stay in the home, the surviving spouse needs to take over the mortgage. But to do that, most banks require that the borrower assuming the mortgage be up-to-date on payments. Housing advocates say that their clients, especially if one spouse experienced a prolonged illness, often find they are already thousands of dollars behind.

“Surviving spouses are trapped without a clear way to preserve their home,” said Arabelle Malinis, a lawyer at Housing and Economic Rights Advocates in California.

The conundrum is pushing some widows into foreclosure by choking off a lifeline that could save their homes. As of 2011, 6 percent of loans held by people over 50 were delinquent, up from about 1 percent in 2007, according to a July study by AARP, an advocacy group for Americans over 50. The study, which housing lawyers say accurately describes the tide of foreclosures on seniors’ homes, analyzed mortgage data over a five-year period.

Part of the problem, according to Debra Whitman, AARP’s executive vice president for policy, is that older Americans are saving less and borrowing more. Debt for Americans ages 65 to 74 is outpacing any other group, according to the Federal Reserve.

Some help is on the way. JPMorgan Chase, for example, allows surviving relatives to complete a loan modification and mortgage assumption simultaneously. And the consumer bureau is finishing rules to provide tighter oversight of mortgage servicing companies, which collect payments from homeowners.

Housing advocates say most of their widowed clients still remain in their foreclosed homes.

The trouble for Ms. Bates, of Jacksonville, Fla., began after her husband Robert, a World War II veteran, died last February. Mr. Bates had obtained a trial loan modification but died before he could make the first payment. Determined to make good on the hard-won plan, Ms. Bates said she notified HSBC, the servicer, of her husband’s death and sent in a check for $1,125.47.

Ms. Bates said she was devastated when the check was returned, with a letter explaining the money could not be accepted because she was not on the mortgage. Ms. Bates still owes roughly $131,000 on the original $140,000 mortgage. HSBC declined to comment on the case, but said in a statement, “HSBC has a strong commitment to home preservation and regards foreclosure as a last resort.”

Complaints from widows about botched forms, unanswered calls and the peculiar frustration of being asked repeatedly by servicers for the same documents echo the concerns that culminated in a $26 billion settlement in February over other mortgage flaws with the country’s five largest mortgage servicers.

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Student scores may be used in LAUSD teacher ratings

After months of tense negotiations, leaders of the Los Angeles Unified School District and its teachers union have tentatively agreed to use student test scores to evaluate instructors for the first time, officials announced Friday.

Under the breakthrough agreement, the nation's second-largest school district would join Chicago and a growing number of other cities in using test scores as one measure of how much teachers help their students progress academically in a year.

Alarm over low student performance, especially in impoverished and minority communities, has prompted the Obama administration and others to press school districts nationwide to craft better ways to identify struggling teachers for improvement.

The Los Angeles pact proposes to do that using a unique mix of individual and schoolwide testing data — including state standardized test scores, high school exit exams and district assessments, along with rates of attendance, graduation and suspensions.

But the tentative agreement leaves unanswered the most controversial question: how much to count student test scores in measuring teacher effectiveness. The school district and the union agreed only that the test scores would not be "sole, primary or controlling factors" in a teacher's final evaluation.

"It is crystal clear that what we're doing is historic and very positive," said L.A. Supt. John Deasy, who has fought to use student test scores in teacher performance reviews since taking the district's helm nearly two years ago. "This will help develop the skills of the teaching profession and hold us accountable for student achievement."

Members of United Teachers Los Angeles, however, still need to ratify the agreement. Many teachers have long opposed using test scores in their evaluations, saying test scores are unreliable measures of teacher ability.

The union characterized the agreement as a "limited" response to a Dec. 4 court-ordered deadline to show that test scores are being used in evaluations and said negotiations were continuing for future academic years. The deadline was imposed by Los Angeles County Superior Court Judge James C. Chalfant, who ruled this year that state law requires L.A. Unified to use test scores in teacher performance reviews.

In a statement, the teachers union also emphasized that the agreement rejected the use of the district's method of measuring student academic progress for individual instructors. That measure, called Academic Growth Over Time, uses a mathematical formula to estimate how much a teacher helps students' performance, based on state test scores and controlling for such outside factors as income and race. Under the agreement, however, schoolwide scores using this method, also known as a value-added system, will be used.

For individual teachers, the agreement proposes to use raw state standardized test score data. Warren Fletcher, teachers union president, said that data give teachers more useful information about student performance on specific skills.

Critics of using test scores in teacher reviews praised Los Angeles' proposed new system, saying it uses a wide array of data to determine a teacher's effect on student learning.

Deasy said he will be developing guidelines for administrators on how to use the mix of data in teacher reviews and has said in the past that test scores should not count for more than 25% of the final rating.

"This is a complex agreement and possibly the most sophisticated evaluation agreement that I have seen," said Diane Ravitch, an educational historian and vocal critic of the use of test scores in teacher evaluations. "It assures that test scores will not be overused, will not be assigned an arbitrary and inappropriate weight, will not be the sole or primary determinant of a teacher's evaluation."

Teacher Brent Smiley at Lawrence Middle School in Chatsworth said: "I will vote yes. I have no doubt that my union leaders negotiated the best they could, given the adverse set of circumstances they faced."

Labor-relations expert Charles Kerchner called the agreement "a shotgun wedding," but added, "I think it's unabashed good news."

He said it's notable that value-added measures and test scores have been accepted in some form by the teachers union.

"UTLA has moved beyond a strategy of just saying no to a strategy of trying to craft a useful agreement," said Kerchner, a professor at Claremont Graduate University.

The district is currently developing a new evaluation system that uses Academic Growth Over Time — along with a more rigorous classroom observation process, student and parent feedback and a teacher's contributions to the school community. The new observations were tested last year on a voluntary basis with about 450 teachers and 320 administrators; this year, every principal and one volunteer teacher at each of the district's 1,200 schools are expected to be trained.

The teachers union has filed an unfair labor charge against the district, arguing that the system is being unilaterally imposed without required negotiations.

Some teachers who have participated in the new observation process say it offers more specific guidance on how they can improve. Other educators — teachers and administrators alike — complain that it is too time-consuming.

The tentative agreement, acknowledging the extra time the new evaluations would take, would extend the time between evaluations from two to as long as five years for teachers with 10 or more years of experience.

Bill Lucia of EdVoice, the Sacramento-based educational advocacy group that brought the lawsuit, said he was "cautiously optimistic."

But he expressed dismay that the union did not reach agreement a few weeks earlier, which he said would have given L.A. Unified a shot at a $40-million federal grant. The district applied for the Race to the Top grant without the required teacher union support and was eliminated from the competition this week.

Negotiations over the tentative pact, however, nearly fell apart. Earlier this week, the union pulled away from the deal on the table, L.A. Unified officials said. And the district discussed holding a Monday emergency school-board meeting to craft a formal response to the court order in anticipation that no deal would be reached. The options included adopting an evaluation system without the union's consent.

Some members of the Board of Education, who also will need to approve the pact, praised the agreement for taking student growth and achievement into account but gauging this growth through multiple measures. Steve Zimmer said that, just as important, this milestone was achieved through negotiation.

School board President Monica Garcia praised the tentative deal as "absolutely, by all accounts, better than what we have today."

teresa.watanabe@latimes.com

howard.blume@latimes.com

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