2011 Chevrolet Cruze Eco Rated at 42 MPG Highway

Great, but look out for the Elantra

Chevrolet has announced that the EPA has rated the Eco model of its 2011 Chevrolet Cruz Eco at 42 MPG highway. It will be rated at 28 MPG city. GM is skilled at getting good highway economy ratings for its vehicles. Special aerodynamic enhancements and the 138 horsepower 1.4 liter turbocharged engine (and a manual transmission) are the special sauce that delivers the good MPG. The non-eco version of car with the same engine is rated at 24/36, the Eco with an automatic transmission is 26/37. The price of the Eco with destination is $18,895.

As it so happens, a couple of weeks ago, I had my first opportunity to go out and test drive cars in about two years. I had two primary targets, the Ford Fiesta, and the Chevrolet Cruze. I drove the Fiesta, and it was a nice little car. When I went to the Chevrolet dealer to drive the Cruze, Icouldn't get the attention of a salesperson, or any employee for that matter, for the 20 minutes I was in the showroom and out on the lot. They had two locked Cruzes on the lot. One stickered at $22,000+, and the other stickered at over $24,000. The Cruze may be a nice car, but at those prices, they're going to have to "put some money on the hood" to get buyers in the face of stiff competition. Also, if the idea behind the dealer cull was to enhance the customer experience, it certainly didn't work in my case.

For more information, check out this post at edmunds.com.

Picture Chevrolet via Edmunds.com

Mortgage Servicers and Foreclosures
Conflicts of Interest Hinder Workouts

Diane Thompson of the National Consumer Law Center (NCLC) has been a key player in helping consumer advocates battle the mortgage foreclosure crisis. Not only has she conducted training sessions throughout the country, she has produced analytical and training material that are some of the best in the business. It looks like she's finally starting to get some due credit.

Pro Publica features Diane's analysis in an article highlighting problems with mortgage servicers, especially conflicts of interest. For some time, NCLC has made available Diane Thompson's white paper, Why Servicers Foreclose When They Should Modify and Other Puzzles of Servicer Behavior. This should be required reading for legislators and policy makers. Below is a table from the article that highlights some of the conflicts of interest involving servicers that are keeping our foreclosure rate high and our recovery rate low.

Is President Obama the Victim of Robosigning?

Michael Redan of 4closurefraud.org thinks so. He looked up two satisfactions of mortgage from President Obama's property and found suspicious signatures and notarizations.

General Motors IPO Going Forward
"American" Ownership Likely to be Reduced

The GM initial public offering is moving right along. The company would like to sell $13 billion worth of stock at about $26-$30 per share. There appears to be a pretty decent market for the stock. Several sovereign wealth funds, including that of the Kuwait government, are among the most talked about purchasers of stock. Another is the Chinese automaker SAIC which might drop several billion dollars on GM stock.

BoA is FoS
Bank of America: How Cooked Are The Books?

Jonathan Weil of Bloomberg.com writes that Bank of America may be headed for serious problems, perhaps another bailout, months after returning $45 billion in TARP money to the federal treasury.

The problem comes down to the accounting for BoA's purchase of Countrywide Financial.n BoA is still carrying $4.4 billion of "goodwill" on its books going back to the Countrywide purchase even though it is clear that Countrywide never had a positive value, and BoA has discontinued the Countrywide name. The investing community values the company at less than the book value of its assets, and the biggest reason is doubts over the real value of $141 billion worth of Countrywide loans in BoA's portfolio. In my personal experience dealing with borrowers with Countrywide loans in what is probably an average market (not California, Arizona, Nevada or Florida), the real asset value of the Countrywide loans that I've seen is less than 80% of face value. From first hand and anecdotal reports by homeowners trying to get loans modified, my general impression is that BoA is mostly uncooperative and forces foreclosures that are in nobody's interest. You can expect this story to develop further in the coming months.

The "Slurpee Summit"

The hot fluff news of the day involves President Obama's talk of sharing a Slurpee with the Republican leaders. There's no question that a Slurpee is a good way to unwind at the end of a hard day at the White House. Ask Bill Clinton.

Aircraft Carrier vs. Cruise Ship

Here's a neat video of the British aircraft carrier HMS Illustrious docked next to a typical (not the largest) cruise ship, the Celebrity Century. I never thought I'd see an aircraft carrier look tiny.
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Aircraft Carrier Versus Cruise Ship - Click here for funny video clips

Need to Get out of a Timeshare - It's Easy
- If You're Dead

I was forwarded a link to a fluff piece from television station WPTV6 in Palm Beach Florida. The purpose of the article is to warn viewers against scam artists who want you to pay money to sell your timeshare. That's good, but ending advice is very misleading. They quote a well-circulated 2006 article from SmartMoney magazine titled Escape from Timeshare Hell that says it's easy to get out of a timeshare. Here are the 4 steps that SmartMoney says you can use to get out of a timeshare:


* Ask the condo developer if it buys shares back.
* List with a Realtor.
* Rent it out.
* Donate it to charity, for a tax break.

Great advice, too bad the chances of it working are about the same as me flapping my arms and flying home from work. I've never seen a condo developer buy a timeshare back. I've never seen a reputable Realtor list and sell timeshares. The covenants generally keep you from renting it out; however for additional fees, you can enroll in a swap program. The few charities that dabbled in taking timeshares have largely stopped, and to the extent they take them now, you have to have everything paid and pay an outside company a service charge to take the timeshare.

The Great Recession has really hammered timeshares and timeshare investors. Many of the "resorts" are on the Gulf of Mexico. Between oil spills and hurricanes, the resorts have faced huge capital expenditures and reduced tourism. This results in higher annual assessments. The annual assessments as well as a poor economy cause owners to default on their timeshare payments. This, in turn, can result in a death spiral where more and more expenses fall on fewer and fewer owners.

I've had more and more clients call with vexing timeshare problems, and I am convinced that there is no difference between a timeshare and a roach motel. You can get in, but you can't get out. The best solution that I've found is, believe it or not, to give the timeshare to a dying relative, a relative who isn't going to leave an estate, make sure the timeshare is transferred on the books of the resort to the relative, and when the relative dies, the timeshare problem dies too.

In my opinion, when it is up and running, the Consumer Financial Protection Bureau should take a very close look at timeshares. The ownership interests actually have more in common with securities than traditional land ownership. The perpetual obligations of timeshare ownership are unconscionable even if the other terms aren't.

Instead of the bad story from WPTV, I'm embedding a youtube video of a Nightline feature on the problems with timeshares.

Lindsay Lohan Can't Afford Rehab

This is a few days old now, but it was reported that Lindsay Lohan can't afford the court-ordered rehab at the Betty Ford Clinic.

If she can't afford the Betty Ford Clinic, maybe she can afford the Gerald Ford Clinic.

John Stewart: Restoring Sanity with Autotune