October 20, 2019

Mortgages: Awaiting Foreclosure Relief

The bill is intended to put an end to the “shadow docket” of pending foreclosure cases stuck in limbo for months or even years because lawyers for the lenders haven’t filed the paperwork necessary for them to move into court.

“Interest and fees are being racked up with every passing month,” said Jacob Inwald, the director of foreclosure prevention litigation at Legal Services NYC. “And there isn’t even a vehicle to try to resolve your problem, because once they’ve commenced a foreclosure action, you can’t talk to your lender because you’re in litigation.”

New York has a court-supervised mediation process to give homeowners a chance to work out a loan modification with their lender — “their best hope of making something happen,” Mr. Inwald said. But homeowners trapped on the shadow docket can’t begin that settlement process.

It was the state’s chief judge, Jonathan Lippman, who proposed a legislative remedy, along with the attorney general, Eric T. Schneiderman.

“We feel very strongly that the integrity of the court process is at stake,” Judge Lippman said. “It is our responsibility to ensure that these proceedings are meaningful and that everyone’s rights are protected.”

He estimated the foreclosure backlog at roughly 12,000 cases, though earlier estimates put it closer to 25,000. Either way, he added, “it’s far, far too many.”

The bill approved by the Legislature in June essentially makes a technical fix to a rule change sparked by the robo-signing scandal, in which lenders’ representatives were found to have signed off on foreclosure-related documents without verifying their accuracy. Lawyers filing foreclosure actions in New York must now submit a certificate affirming they have verified the accuracy of the documentation.

The problem is that when lawyers file foreclosure actions, they sometimes hold off on filing the mandatory affirmations, which prevents the cases from moving forward. The legislation would end this practice by requiring that the affirmations accompany foreclosure actions.

“You need to affirm straight up at the outset that you’re attesting to the accuracy of the documents,” said Sarah Ludwig, a director of the New Economy Project, a community advocacy group.

In a similar effort in June, over another required document, Mr. Schneiderman’s office sued HSBC Bank for allegedly stalling several hundred foreclosure cases by failing to file the document, called a request for judicial intervention.

Filing the request obligates the lender to attend a settlement conference within 60 days. The attorney general charges that in some cases, HSBC waited for more than two years to file such requests, charging interest and penalties all the while.

Foreclosure prevention advocates are urging Gov. Andrew M. Cuomo to sign the shadow docket legislation into law quickly to prevent the docket from growing longer. Even after signing, the bill wouldn’t become effective for another 30 days. A spokesman for the governor’s office said the legislation was under review.

Judge Lippman says he doesn’t attribute any “negative motivations” to lenders’ lawyers’ failure to file the required documents in a timely manner, but thinks the “proceedings have gotten off track.”

Ms. Ludwig takes a darker view. “The whole foreclosure process has just been riddled with improprieties and unfairness to homeowners,” she said. “I think this is part of that bigger morass.”

Article source: http://www.nytimes.com/2013/07/28/realestate/awaiting-foreclosure-relief.html?partner=rss&emc=rss

G.E. Profit Is Lifted by Jet Engines and Energy Equipment

G.E. notched strong earnings growth at units that make jet engines and equipment used in oil and gas production. Jeffrey R. Immelt, the chief executive, has worked to expand its presence in the energy industry in recent years.

The order backlog, watched by investors as an important indicator of future sales growth, hit a record high $210 billion in the fourth quarter, up from $203 billion in the third quarter.

“The backlog was a really good number. I didn’t expect to see a $7 billion, 3.5 percent rise in the backlog,” said Jack De Gan, chief investment officer at the Harbor Advisory Corporation, which holds G.E. shares. “Orders in the fourth quarter must have been really good for the industrial side.”

Orders rose 2 percent and would have been up 7 percent without a sharp drop in demand for wind turbines tied to the expected expiration of a tax credit.

Solid demand in China and other oil-producing countries helped offset unsteady economies at home and in Europe, Mr. Immelt said.

“We saw real strength in the emerging markets, and the developed regions stabilized,” Mr. Immelt told investors on a conference call.

The company, which is one of the world’s biggest makers of jet engines and electric turbines, said fourth-quarter earnings rose to $4.01 billion, or 38 cents a share, compared with $3.73 billion, or 35 cents a share, in the period a year earlier.

Factoring out one-time items, profit was 44 cents a share, a penny ahead of analysts’ estimates, according to Thomson Reuters.

Revenue rose 3.6 percent, to $39.33 billion from $37.97 billion a year earlier. Analysts had expected revenue of $38.76 billion.

Profit increased across all divisions, with the jet engine unit notching 22 percent growth, and GE Oil and Gas, which makes equipment used in energy production, up 14 percent.

Profit at the GE Capital finance arm, which is being scaled back, rose 6 percent.

“They saw some good organic growth in the industrial part of their business. GE Capital was a strong contributor,” said Oliver Pursche, president of Gary Goldberg Financial Services, a G.E. shareholder.

Over the last few years, G.E. has bolstered its position in the energy industry.

It has broadened its lineup of equipment used in oil and gas production and mining, with an eye toward capitalizing on surging natural gas production in the United States. G.E. also makes medical equipment and railroad locomotives.

At the same time, Mr. Immelt has concentrated on cutting costs across the company to try to raise operating profit to 15.8 percent of sales by the end of 2013.

Shares of G.E., which is based in Fairfield, Conn., rose 74 cents, or 3.5 percent, to $22.04.

Article source: http://www.nytimes.com/2013/01/19/business/ge-profit-is-lifted-by-jet-engines-and-energy-equipment.html?partner=rss&emc=rss

Staying Alive: Why I Manage My Own AdWords Campaigns

Staying Alive

The struggles of a business trying to survive.

Thank you to everyone who took the time to read “My AdWords Debacle” — and especially to those who left comments. I’d like to respond to some of the most commonly asked questions. So without further ado:

Why didn’t you spot the pattern sooner?

Am I just plain stupid? Not really. When I sat down to write these posts, the theme I had in mind was how difficult it was for this small-business owner to identify patterns in the blizzard of incoming data and to figure out what to do next. I hope that this idea wasn’t lost as the post changed into a story about AdWords.

Life doesn’t present itself as a tightly formed narrative. It’s my job as a blogger to turn messy reality into an entertaining and informative story. Unfortunately, the format of this blog precludes a full exploration of the many twists and turns along the way. For instance, the sales problem could have been presented as simply a random variation that is mathematically inevitable when incoming jobs range widely in size (which ours do, by a factor of 10). The sales data conform very well to this hypothesis, and that’s a pattern I have often seen in the past.

If I had decided to believe that story, then the post I wrote might have been about planning for inevitable downturns, and I could have expounded on how my cash management and backlog forecasting systems allowed me to ride out the dip without layoffs. Or the story could have been about how we were responding to incoming inquiries and what happened when I decided to completely overhaul our sales process. In fact, I did do that, and I believe that it had a large effect on our return to a profitable level of sales.

Or it could have been about how I responded to a big problem with a multi-pronged counterattack involving my marketing, my sales operations, our shop management, and my own financial planning. That’s what actually happened — I tried everything I could think of, and each change probably had some effect on the ultimate result. But that story is very difficult to tell, in particular as it is happening. It would be better suited for a book, where each thread in the narrative can be developed fully.

It’s also easy to forget that a story that took five days to recount took five months to develop. It’s hard to interpret data until you have enough to draw conclusions. And it’s hard to see how responses will work without giving them some time. It can take quite a while for a situation to develop to the point where it can be understood and even longer to see whether the fixes are working.

One commenter suggested that I could have avoided all of this by simply thinking about what might happen before I took action. Apparently, a little “scenario planning” allows one to see the future with perfect clarity. Really? I’d like to know what planet he lives on. Certainly not Earth, where even plans developed by the richest and smartest businesses and governments can go badly awry.

I’m sure that I am not the only small-business owner who tries lots of things to improve sales and operations. News flash: some of them don’t work and sometimes for reasons that aren’t readily apparent. Any plan you can think of has potential negative consequences. Sure, some plans are so stupid that their downsides would give anyone pause. For instance, I can clearly see that it would be a bad idea to heat my shop by setting my lumber supplies on fire. But then there are plans that seem perfectly reasonable, like introducing new products to see how they will do in the market. Sometimes they succeed, sometimes they fail. Sometimes the failure is complex and subtle. I can’t let that possibility keep me from trying things.

Why don’t you stop managing your own advertising and hire an expert?

Plenty of commenters took me to task for trying to run my own AdWords campaign. Oddly enough, 100 percent of them — by my rough count — were people who make their living as search-engine marketing consultants. But if I look beyond that fact, there is merit to considering the question.

AdWords, after all, is an extremely complicated program. Aside from the mysterious algorithms that drive search results and keyword quality scores, there is the incredibly complex set of controls and reporting functions that Google has provided. If I were starting from scratch today, I would hire someone to help, just as I have hired a bookkeeper and accountant to do my taxes, and a Web site developer to do my Web site. Please keep in mind, though, that I have been running the account for years and have reached a point where it is, by any reasonable standard, successful. If you measure gross sales as the metric by which R.O.I. is calculated, my return is between 15 and 20 to one. It’s worked well enough to expand the business for the last three years and, with improvements we are making to the way we handle inquiries, it should work even better in the future.

I get lots of calls and e-mails from S.E.M. consultants, even on weeks when I’m not writing about AdWords. I take the time to talk to quite a few of them, just out of curiosity. Most of them are reading from a script. “Hi, Paul. I’ve been looking at your Web site, and we think that with the proper help, we can get your search results onto the first page.” Dude, if you were actually looking at my Web site, you’d know that we are already at the top of free results for the search strings I care about.

“Hi, Paul. Did you realize that you could be saving money by optimizing S.E.O. results, which would let you turn off AdWords entirely?” No, pal, I don’t realize that because I don’t believe you, and my grand experiment last year proved that turning off AdWords was a bad idea for me.

“Hi Paul, did you know that optimizing your bids would save you money?”

“Really, that’s interesting. Suppose I’m spending $10,000 a month. How much could I save?”

“Up to 20 percent!”

“And how much would it cost me to hire you?”

“At that level of service, about $2,500 a month.” Sigh.

I had a phone meeting last week with an S.E.M. company that had been recommended by some colleagues. I had contacted them and given them read-only access to my AdWords account so they could look at whatever they wanted to look at. They commented that the campaigns were well organized and that all of the obvious things — split-testing ads, using negative keywords, separate ad groups and separate campaigns, etc. — were already in use. They suggested that I increase my budget to $15,000 a month to get more clicks. But I don’t need a consultant to tell me that increasing my spend by 50 percent will get me more traffic.

Here’s what I would want a consultant to do: First, tell me something I don’t already know about my campaign. Second, offer to provide services free for two months, so that I can see what the results are. I would happily agree to pay for those months, maybe even with a bonus, if the results were to my liking. Also, the consultant needs to be able to explain to me, up front, the thinking behind any suggested changes, and it has to make sense to me. I wouldn’t hire an accountant who believed that the government didn’t actually have the power to tax individuals, and I won’t hire an S.E.M. consultant whose view of how Google works conflicted with mine.

There’s another reason I continue to run my own AdWords campaigns — because I’m interested in it. I’ve always found that marketing is the most challenging and fascinating part of being in business. At its root is the whole concept of getting money, freely given, from people in exchange for the stuff that I have designed and built.

One of the main rewards of owning a small business is the ability to do something you like to do, and I like to think about complex problems. AdWords is just one part of a whole chain of interactions with clients that ultimately results in a sale. I need to understand it to think about how to keep the entire marketing operation working. If I outsource that piece of it, I am handing over a very important piece of our sales operation to people who neither know nor care about how the rest of the process works. There is no one better than I am, at this time, at overseeing our sales operation. I might well create a position within the company to do this, but I am not ready to outsource it.

What else did you do to fix the problem?

I did hire a consultant to examine our selling process and to recommend changes. This has been very interesting and has led to a marked upgrade in the way we respond to inquiries. I’ll be writing about this in the near future.

Are you going to diversify your lead sources?

A number of commenters were concerned that I rely so heavily on AdWords. That’s a legitimate point. In addition to beginning to explore exports and joint ventures, we are submitting (at long last) our application for a General Services Administration contract this month. If accepted, this will allow us to expand the business we do with the federal government. And I am finally beginning an organized effort to establish regular contacts with potential repeat customers. I’ll be writing about that, soon, as well.

Thank you again for your comments. Please feel free to address anything I have missed.

Paul Downs founded Paul Downs Cabinetmakers in 1986. It is based outside Philadelphia.

Article source: http://boss.blogs.nytimes.com/2012/10/31/should-i-manage-my-own-adwords-campaigns/?partner=rss&emc=rss

You’re the Boss Blog: Thinking About Layoffs Again

Staying Alive

The struggles of a business trying to survive.

Everyone else has gone, and I’m sitting in my office, checking our cash-flow numbers. Three weeks without sales mean much less cash on hand than usual (we normally expect to collect $20,000 a week in deposits). I’m not in trouble yet — we still have more than $150,000 in the bank — but next week I’m scheduled to pay my people, and that’s $35,000, every two weeks. And the news from the outside world is dreadful: Europe is collapsing, the stock market is collapsing, the government is likely to stop spending, it never ends.

And then all of a sudden, poof!, and there is a little devil on my right shoulder. Another poof! And there is a little angel on my left shoulder.

Devil: Those numbers, they stink.
Me: Tell me about it.
Angel: What do you mean? You are still up for the year — $44,000 more than on January 1.
Devil: But your backlog is disappearing. And the amount of cash that you know will be arriving in the next month is dropping, too. With your normal backlog of four to six weeks, you can count on $80,000 to $120,000 coming in. Now, you are down to two weeks, and you’ve only got $40,000 on the schedule. All of the cash you squirreled away since the beginning of the year is going to be gone in 3 weeks, and you’ll be dipping into your reserves.
Angel: But the reserve is more than $100,000, and something is bound to turn up before then. It always has in the past.
Me: I guess you forgot all those times it didn’t, and I had to dip into my own pocket or call my relatives and beg.
Devil: She always forgets that stuff. Maybe if you hadn’t kept it such a secret, she’d know.
Me: I hated doing that. It’s humiliating. I never want to talk about it.
Devil: Fantasizing about happy endings won’t help you now. Man up. Cut costs. Fire someone. You’ve got the staff to build $2.5 million per year, but your sales probably won’t top $2 million.
Angel: Aren’t you going to cut your own pay first, like you did in 2008? That would save some money, and you wouldn’t have to fire anyone.
Me: But I finally got my pay up to a reasonable number this spring, after nine years without a raise. And I have my kids’ college tuition to pay — it’s not like I’m living large. I still drive that ‘92 Camry, brown-bag my lunch, and wear thrift-shop clothes.
Devil: I hear you, brother. And it’s about time you wised up. You’ve worked yourself to the bone, and the company owes you more than $350,000 for all the times you covered payroll yourself. Not to mention what it owes your father and brother. Let someone else feel some pain. You’ve proven you can make money at $1.6 million in sales, using 11 employees instead of 14. Get out your knife and start cutting.
Angel: You are spending $520 dollars a day on advertising! Google doesn’t need more money. Cut that first!
Devil: Are you out of your mind? Google is where all of our sales come from.
Angel: But your site is on top of the free listings for a whole lot of valuable search strings. You don’t need to pay them anymore.
Me: Don’t you think that they put us on top of the free listings because we pay them so much money? Why would they just hand out those positions for nothing? I’m afraid that if we stop paying, then we end up on page 31. I really don’t want to find out if that’s true. I can’t afford to lose a single sale.
Devil: Remember when we turned off the campaigns for three days while we updated the site? Incoming calls dropped in half.
Me: Yes, I remember it perfectly. [He shudders.]
Angel: But that was before you revamped the site. Are you really going to cut your payroll? Layoffs are the reason our economy is in the toilet. Why don’t you just scale back work hours? If everyone worked 35 hours a week, you’d save thousands.
Devil: And all the jobs would be late, all the customers unhappy, and all the pre-shipment and final payments would be even further in the future. That will cost us more thousands.
Me: Workers really, really hate to have their pay cut. They like it a lot better if I get rid of people — that way they don’t have to suffer themselves, and the poor chump who got the axe quickly fades from memory.
Devil: So there you have it. [He rubs his hands.] Now, who are you going to get rid of?
Me: Hmmm. The problem is, everyone we have is a good worker. No dead wood in this shop. I’d hate to lose any of them. What if things turn around? We won’t be able to keep our backlog under control. Then we lose sales.
Angel: And just remember how hard it is to hire good people. What a crap shoot that is. You always complain about it. Even in a recession, you were lucky to find such a good crew. Smart bosses always keep their best people close at hand — you never want to send them to your competitors.
Devil: But if you run out of work, what are you going to do? You can’t pay them to do nothing. You’ll be out of money in a flash.
Me: I’m awfully sick of being broke. I don’t want to lose good workers. I can’t stop advertising.
Angel: Maybe our political leaders will take sensible and prudent steps that restore the people’s confidence, and they will start spending again, and the problem will solve itself?
Devil: You had me until you said “sensible and prudent.” We’re on our own with this one.
Me: Well, I don’t have to do anything for another couple of weeks. I guess I’ll just keep on keeping on and see what happens. Are you guys going to be around to kick around some ideas?
Angel: Absolutely.
Devil: Wouldn’t miss it.

Poof! They’re gone. I’m still staring at the numbers, which haven’t changed. What should I do?

Paul Downs founded Paul Downs Cabinetmakers in 1986. It is based outside of Philadelphia.

Article source: http://feeds.nytimes.com/click.phdo?i=e0bc69feb839ee54013dcaf5b18c8a65

You’re the Boss Blog: Why I’m (Still) Reluctant to Hire

Thinking Entrepreneur

An owner’s dispatches from the front lines.

The August jobs report that came out last week showed no job growth, and now President Obama and lots of other politicians are talking about how to create jobs. But I’m not sure they fully understand what prompts a business owner to hire someone — and why so many owners are still reluctant to hire, even if they think business might be improving.

Jobs are created when businesses get busy enough to need more workers. Businesses get busier when people buy things. People buy things when they need or want them and have enough money. And this is where the problem lies. Many people do not have enough money right now — for all kinds of reasons. Some have seen the value of their homes fall precipitously which may keep them from moving or from improving their house. Moving and improving generates business.

Zero job growth last month does not necessarily mean that business activity has slowed. In some cases, even business owners whose businesses have improved have decided not to hire, but to use overtime, build a backlog, or remain understaffed — even though each of these steps can be painful. Paying overtime costs more money. Delaying shipments or being understaffed can give your competitors an edge. Why would business owners do these things? Because these steps are safer than adding someone to the payroll, and these days safer feels better.

Right now, given the stock market fluctuations, the constant stream of scary news about the economy, and the even scarier politics we see in Washington, business owners are slow to hire new people unless there’s a very strong need. Think about what the owner faces if the business doesn’t materialize to justify the hire — like the horrendous task of laying people off, which scares the staff members who remain and produces a series of other costs. Many of us are just now recovering from our last round of layoffs, both emotionally and financially.

I sell home furnishings, custom picture framing and art. Although all of these industries have been affected, my business has been improving, and I’ve hired a few people this year. But I’m moving slowly. I can tell you one thing that is not going to get me to move faster: a payroll tax break. Why would anyone take on a new employee because of a one-year break on payroll taxes? Some owners might say they would do it — after all, who doesn’t want a tax break? — but the reality is that in most instances the owner would have hired that person anyway. Either you need someone or you don’t. If the government is going to spend money on jobs, I’d rather see it fix the streets and bridges, which really does create jobs (and inject money into the economy) — although whether that’s a good idea right now and whether the politics are plausible is another matter.

To make sense of this, you have to understand why even an owner who sees business improving might be hesitant to hire. Consider this situation:

You interview someone who has been out of work for 11 months. Let’s say he was in his previous job for 20 years, and now he’s regularly being told by job screeners that he is overqualified for the available position. In a good market, this person would not be available. You think it might actually be a good opportunity to bring someone valuable to your company — even though, because of his experience, you will have to pay him more money than you are accustomed to paying. You think it might be worth the shot, but your company is still in a precarious situation after the last few years. What do you have to lose, beyond the salary? Actually, you have quite a lot to lose. In fact, if it doesn’t work out, you could easily end up paying more in unemployment compensation than you do in salary.

If the new hire spends more than 30 working days with you but you have to let him go either because it’s not a good fit or because you were overly optimistic about the economy, he is eligible to collect unemployment. That, at least, is how it works in Illinois; the rules vary by state. Many people don’t realize that the government is not paying the bill for most of that compensation; companies are. The more people a company lays off, the more it pays in unemployment premiums. (I explained how this works in a previous post.)

In the above example, taking a chance on this person could cost a company $20,000 in increased unemployment premiums over the following three years. It makes sense for an employer to pay that kind of money for an employee who has been there for years. I understand and appreciate that unemployment compensation is an important lifeline for people who lose their jobs. But for 30 days? That’s a lot to ask — and it might even be counterproductive. In this environment, it just might be the difference in a decision not to hire someone. Business is about evaluating risks and rewards.

But that’s not all. After you let this employee go, he can go to the Equal Employment Opportunity Commission and file a complaint that he was fired because of his age. You will have to hire a lawyer. His lawyer will call your lawyer to try to settle. You will think, settle for what? For giving someone a chance? You will probably win, but that could take years and thousands of dollars in legal fees. This is why it’s safer — remember, safer is in — to not hire anyone and to continue working with a short staff. Is this good for the unemployed? The economy? The businesses? Anyone?

So what could the government do to encourage hiring? Here are two small suggestions:

First, stop punishing businesses for giving someone a chance. How about giving employers a six-month window before the company becomes liable for someone’s unemployment compensation? How about five months? Or four? But not 30 days. Of course, employees shouldn’t be punished either. If they are already collecting unemployment when they take a job, they should be able to resume collecting it if the job doesn’t work out –- but not at the expense of the business that gave them another chance.

And second, make the E.E.O.C. dismiss frivolous claims quicker. We all know that there are bad bosses doing things that need to be dealt with, but the example I’ve given is not uncommon — and it puts an unnecessary strain on small businesses that don’t have a legal department or even a human resources person for that matter.

This is my short list. Will these steps solve the problem and ignite a storm of hiring? No. But they will create a more hiring-friendly atmosphere while we wait for what we really need — an economy with people ready to spend money.

Jay Goltz owns five small businesses in Chicago.

Article source: http://feeds.nytimes.com/click.phdo?i=fa161c489670eb48b420f4caf954bed5

As Recovery Moves Ahead, G.E. Tops Expectations

The re-engineering of General Electric — a strategic overhaul begun in the depths of the financial crisis — remains on track and shows steady progress.

That, analysts say, is the underlying theme of the company’s second-quarter results on Friday, with profits and sales slightly surpassing Wall Street’s expectations.

G.E. has been slimming down its huge finance arm, GE Capital, while increasingly relying on its bedrock industrial businesses for long-term growth. The finance business is mending, with operating profits more than doubling in the second quarter from the depressed level of a year ago.

Indeed, GE Capital accounted for much of the profit improvement in the quarter. But industrial orders for equipment and services grew 24 percent during the quarter, and G.E.’s backlog of industrial orders reached a record $189 billion.

“GE Capital continues to get healthier, and industrial demand is picking up,” said Steven Winoker, an analyst at Sanford C. Bernstein Company. “That is the progression the company needs for the strategy to work.”

The solid second-quarter results from G.E., the nation’s largest industrial company, whose products range from jet engines to medical imaging machines, provide evidence of a gradually improving outlook for many industrial companies. Both Honeywell and Caterpillar reported sharply higher sales and profits on Friday and raised their earnings forecasts for the year. United Technologies and Goodrich also delivered strong results in recent days as well.

The strongest industrial growth for G.E., as for other large manufacturers, came in international markets, where revenue rose 23 percent in the quarter. Sales outside the United States account for 59 percent of G.E.’s industrial business.

“At least for companies that make advanced equipment that is often exported, there is a bit of manufacturing renaissance under way in the United States,” said Richard Tortoriello, an analyst at Standard Poor’s.

Still, investors did not reward the industrial companies on a skittish day in the markets. Honeywell and G.E. shares slipped, with G.E. off 12 cents, to close at $19.04. Caterpillar reported a 44 percent jump in earnings, but that was a few cents below Wall Street estimates, and its shares fell $6.45, to $105.15.

G.E.’s net income for the second quarter rose 21 percent, to $3.76 billion, up from $3.11 billion in the period a year earlier.

The company reported operating earnings per share — the measure of performance most closely watched by Wall Street analysts — of 34 cents a share, up 17 percent from 29 cents a share in the period a year earlier.

The average estimate of analysts, as compiled by Thomson Reuters, was 32 cents a share.

G.E. reported revenue of $35.63 billion, down 4 percent from the $36.93 billion it reported in the quarter a year earlier. The falloff was a byproduct of the company’s steps to narrow its focus, as it sold a majority stake in NBC Universal, the television network and movie studio, to Comcast. Excluding that from the year-to-year comparison, G.E.’s revenue would have increased 7 percent in this year’s second quarter.

The company’s revenue for the quarter was nearly $1 billion ahead of analysts’ consensus estimate of $34.7 billion.

GE Capital, which has aggressively shed bad debt since the financial crisis hit in the fall of 2008, reported a 1 percent decline in revenue, to $11.63 billion in the second quarter, while operating profits jumped to nearly $1.66 billion, up from $743 million in the period a year earlier.

Some problems remain, mainly in commercial real estate, where it lost $335 million. Still, that was an improvement from a loss of $524 million in the second quarter of last year.

“The turnaround is in place, and it is a smaller, more focused GE Capital today,” Keith Sherin, G.E.’s chief financial officer, said in an interview.

Despite the costly repair of its finance arm, G.E. has continued to invest aggressively to expand some of its industrial divisions.

In the last nine months, for example, the company has spent more than $7 billion on three acquisitions to bolster its oil and gas equipment business — Dresser, the John Wood Group and Wellstream Holdings. The companies make specialized equipment for oilfield and offshore production, widening G.E.’s range of offerings in that $10 billion-a-year unit.

In a conference call, Jeffrey R. Immelt, G.E.’s chief executive, suggested that there would be no more sizable acquisitions for a while. In integrating the new businesses, he said, “We have a lot on our plate already.”

Instead, he said, the company, which is based in Fairfield, Conn., will look to spend its extra cash on increasing the dividend and buying back shares.

G.E. has raised its dividend three times in the last year, to an annual level of 60 cents a share. But that is still less than half the $1.24 a share it had paid in early 2009, when the company had to sharply reduce its annual payout to shareholders to conserve cash. The move in 2009 was G.E.’s first dividend cut since the Depression.

Most of G.E.’s industrial businesses — aviation, transportation, health care, and oil and gas — showed solid improvement compared with last year. But profits were down 19 percent in its big energy business for power generation equipment — gas, steam and wind turbines. G.E. executives described that business as a cyclical laggard, with orders already accumulating, and sales and profits poised to improve later this year.

Over all, Mr. Immelt said, “We like our portfolio of businesses. We like the G.E. outlook.”

This article has been revised to reflect the following correction:

Correction: July 22, 2011

An earlier version of this article had an incorrect value for three General Electric acquisitions in its oil-and-gas equipment business. It was $7 billion, not $7 million.

Article source: http://feeds.nytimes.com/click.phdo?i=fce461f1923e6070c060d6976288e673

Banks Amass Glut of Homes, Chilling Sales

All told, they own more than 872,000 homes as a result of the groundswell in foreclosures, almost twice as many as when the financial crisis began in 2007, according to RealtyTrac, a real estate data provider. In addition, they are in the process of foreclosing on an additional one million homes and are poised to take possession of several million more in the years ahead.

Five years after the housing market started teetering, economists now worry that the rise in lender-owned homes could create another vicious circle, in which the growing inventory of distressed property further depresses home values and leads to even more distressed sales. With the spring home-selling season under way, real estate prices have been declining across the country in recent months.

“It remains a heavy weight on the banking system,” said Mark Zandi, the chief economist of Moody’s Analytics. “Housing prices are falling, and they are going to fall some more.”

Over all, economists project that it would take about three years for lenders to sell their backlog of foreclosed homes. As a result, home values nationally could fall 5 percent by the end of 2011, according to Moody’s, and rise only modestly over the following year. Regions that were hardest hit by the housing collapse and recession could take even longer to recover — dealing yet another blow to a still-struggling economy.

Although sales have picked up a bit in the last few weeks, banks and other lenders remain overwhelmed by the wave of foreclosures. In Atlanta, lenders are repossessing eight homes for each distressed home they sell, according to March data from RealtyTrac. In Minneapolis, they are bringing in at least six foreclosed homes for each they sell, and in once-hot markets like Chicago and Miami, the ratio still hovers close to two to one.

Before the housing implosion, the inflow and outflow figures were typically one-to-one.

The reasons for the backlog include inadequate staffs and delays imposed by the lenders because of investigations into foreclosure practices. The pileup could lead to $40 billion in additional losses for banks and other lenders as they sell houses at steep discounts over the next two years, according to Trepp, a real estate research firm.

“These shops are under siege; it’s just a tsunami of stuff coming in,” said Taj Bindra, who oversaw Washington Mutual’s servicing unit from 2004 to 2006 and now advises financial institutions on risk management. “Lenders have a strong incentive to clear out inventory in a controlled and timely manner, but if you had problems on the front end of the foreclosure process, it should be no surprise you are having problems on the back end.”

A drive through the sprawling subdivisions outside Phoenix shows the ravages of the real estate collapse. Here in this working-class neighborhood of El Mirage, northwest of Phoenix, rows of small stucco homes sprouted up during the boom. Now block after block is pockmarked by properties with overgrown shrubs, weeds and foreclosure notices tacked to the doors. About 116 lender-owned homes are on the market or under contract in El Mirage, according to local real estate listings.

But that’s just a small fraction of what is to come. An additional 491 houses are either sitting in the lenders’ inventory or are in the foreclosure process. On average, homes in El Mirage sell for $65,300, down 75 percent from the height of the boom in July 2006, according to the Cromford Report, a Phoenix-area real estate data provider. Real estate agents and market analysts say those ultra-cheap prices have recently started attracting first-time buyers as well as investors looking for several properties at once.

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