Residents whose homes have been damaged by tainted Chinese drywall may be eligible for a tax deduction similar to the one taxpayers can claim for damages caused by hurricanes, floods or fires, according to the Internal Revenue Service.

The final determination will be based on the results of investigations being conducted on the drywall by two federal agencies.

According to the information contained in the IRS link(below), a casualty loss "can result from the damage, destruction or loss of your property from any sudden, unexpected, and unusual event such as a flood, hurricane, tornado, fire, earthquake or even volcanic eruption."

IRS Topic 515 - Casualty, Disaster, and Theft Losses

Press Release

Acquires

The PNC Financial Services Group, Inc. (NYSE: PNC) and National City Corporation (NYSE: NCC) today announced that they have signed a definitive agreement for PNC to acquire National City for $2.23 per share, or an aggregate fixed amount of approximately $5.2 billion in PNC stock. Additionally $384 million of cash is payable to certain warrant holders. Total consideration approximates National City's market capitalization as of the close of business on October 23, 2008. National City shareholders will be entitled to 0.0392 share of PNC common stock for each share of National City.

PNC plans to issue to the U.S. Treasury $7.7 billion of preferred stock and related warrants under the TARP Capital Purchase Program subject to standard closing requirements. The U.S. Treasury Department approval of PNC's participation enables PNC to further strengthen its capital position, resulting in an estimated pro forma Tier 1 capital ratio for the combined company of approximately 10 percent.

"The acquisition of National City will increase our core deposit base to $180 billion, making PNC the fifth largest U.S. bank by deposits. At a time when core funding is key, we see our deposit strength as an important success factor. Upon closing the transaction, we will implement our successful business model and execute our strategies for managing risk, achieving cost efficiencies and growing high-quality revenue streams," said James E. Rohr, chairman and chief executive officer of PNC. "We believe this strategic combination will continue PNC's efforts to build capital strength and shareholder value. We are also gratified that we have been selected to participate in Treasury's Capital Purchase Program, which has helped to put this transaction on a very solid footing."

The transaction has an estimated internal rate of return to PNC of more than 15 percent and is expected to be accretive to PNC's earnings in the second year. PNC's fair value adjustments and provisions for future losses of National City's current loan portfolio will bring the cumulative impairment of these loans to approximately 17.5 percent. PNC will continue to liquidate non- core and impaired loans.

"The combined company will have greater scale and scope, enhancing service to our customers and communities and providing greater opportunities for our employees. This transaction is about two companies that fit well together in terms of geography, products and services," said Peter E. Raskind, chairman, president and chief executive officer of National City.

Upon closing the transaction, Raskind will be appointed a PNC vice chairman, and one National City director will join the board of the combined company.

In addition to ranking fifth nationally in deposits, the combination with National City is expected to place PNC fourth among U.S. banks in number of branches. It will give PNC the No. 1 deposit share position in Pennsylvania, Ohio and Kentucky and will rank the company No. 2 in Indiana and Maryland.

PNC expects to incur merger and integration costs of approximately $2.3 billion. The transaction is expected to result in the reduction of approximately $1.2 billion of noninterest expense through the elimination of operational and administrative redundancies.

Under terms of the agreement, PNC will acquire all outstanding shares of common stock of National City in a stock-for-stock transaction, which has been approved by the Boards of Directors of both companies. In connection with the transaction, National City has issued to PNC an option to acquire 19.9 percent of National City's common stock that becomes exercisable under certain specified circumstances. Corsair Capital, LLC, which owns approximately 7.8 percent of outstanding National City common shares, has agreed to vote all National City common shares it owns in favor of the deal and otherwise support the transaction. After closing, PNC intends to merge National City's banking affiliates into PNC Bank and they will assume the PNC Bank name. The merged entity will have its headquarters in Pittsburgh.

Based on PNC's closing NYSE stock price of $56.88 on October 23, 2008, the transaction values each share of National City's common stock at $2.23. The aggregate consideration is composed of a fixed number of approximately 92 million shares of PNC common stock. Additionally $384 million of cash is payable to certain warrant holders.

The transaction is currently anticipated to close by Dec. 31, 2008. The merger is subject to customary closing conditions, including both PNC and National City shareholders and regulatory approvals. Citigroup Global Markets Inc., JPMorgan Securities, Inc. and Sandler O'Neill + Partners, L.P. acted as financial advisers to PNC, and Wachtell, Lipton, Rosen & Katz acted as its legal adviser. Goldman Sachs acted as financial adviser to National City and Sullivan & Cromwell LLP acted as its legal adviser, and Cravath, Swaine & Moore LLP acted as legal adviser to the Board of Directors of National City.

CONFERENCE CALL AND SUPPLEMENTARY INFORMATION

Rohr and Chief Financial Officer Richard J. Johnson will hold a conference call for investors at 10:00 a.m. Eastern Time today regarding the announcement of the acquisition. Investors should call 5 to 10 minutes before the start of the conference call at 800-990-2718 or 706-643-0187 (international). The related presentation slides to accompany the conference call remarks may be found at http://www.pnc.com/investorevents. A taped replay of the call will be available for one week at 800-642-1687 and 706-645-9291 (international), conference ID 70844287. In addition, Internet access to the call (listen only) and to the presentation slides will be available at http://www.pnc.com/investorevents. A replay of the webcast will be available on PNC's Web site for 30 days.

The conference call may include a discussion of non-GAAP financial measures, which, to the extent not so qualified during the conference call, is qualified by GAAP reconciliation information that will be made available on PNC's Web site under "About PNC - Investor Relations." The conference call may include forward-looking information, which along with the presentation slides and this news release, is subject to the cautionary statements that follow.

National City Corporation, headquartered in Cleveland, Ohio, is one of the nation's largest financial holding companies. The company operates through an extensive banking network primarily in Ohio, Florida, Illinois, Indiana, Kentucky, Michigan, Missouri, Pennsylvania, and Wisconsin and also serves customers in selected markets nationally. Its core businesses include commercial and retail banking, mortgage financing and servicing, consumer finance and asset management. For more information about National City, visit the company's Web site at nationalcity.com.

The PNC Financial Services Group, Inc. (http://www.pnc.com/) is one of the nation's largest diversified financial services organizations providing retail and business banking; specialized services for corporations and government, including corporate banking, real estate finance and asset-based lending; wealth management; asset management and global fund services.

As the financial crisis hits Main Street America, nearly one in six US homeowners are finding themselves in the same position, threatening the US economy with a new wave of foreclosures and bankruptcies.

About 12-million US homeowners owe more than their homes are worth, compared with 6,6-million at the end of last year and slightly more than three million at the close of 2006, said Mark Zandi, chief economist at Moody's Economy.com.

"At the root it's 'the' problem," said Zandi. "If you're going to put your finger on the one thing that's gotten us into this fiasco, it's the fact that millions of homeowners are under water on their homes." Already, US consumer spending is slumping as homeowners find they can no longer take equity out of their homes to fund their lifestyles.

In a slowing economy, it doesn't take much to push an underwater mortgage into default.

"When you're under water and you have some kind of hit to your income or some kind of unintended expense, that's when you default. And so now we've got this noxious mix of millions of people under water and quickly rising unemployment," Zandi said.

Wasteland

Cape Coral, built over swampland near Fort Myers on Florida's palm-fringed Gulf Coast, was fertile ground for the real estate boom, which peaked across much of the United States three years ago.

It is now a wasteland, with barren strip malls, a bloated inventory of unsold or abandoned homes and ubiquitous for-sale signs that speak volumes about the plunge in housing prices and surge in mortgage defaults that triggered the US credit crunch last year.

With current home prices likely to decline on average by another 10%, Zandi said there will be 14,6-million homeowners underwater by September next year.

"House prices have collapsed and you've got many homeowners who bought homes in the last three years who put very little down or have been borrowing against their homes," said Zandi. "That's causing this to rise very rapidly."

Economists like Zandi worry that the underlying housing crisis could eventually prove much more costly to the US taxpayer than the $700-billion the US government has pledged to recapitalise banks and buy up distressed debt from financial institutions.

"The government is going to have to start filling this negative equity hole and that's just going to be a direct cost to taxpayers," Zandi said. "This is going to be the really costly part, I think, for taxpayers."

While the US government has focused its rescue on banks, it has done little to help individuals who are struggling to pay their mortgages, apart from the Hope Now programme, which has facilitated a few hundred thousand mortgage restructurings.

The government may have no option but to step in, especially if a rising tide of foreclosures and fall-off in property and other tax revenues endanger municipalities and local governments and force some into bankruptcy.

Both presidential candidates have outlined plans for relief for distressed homeowners but critics say they have been short on details and there appears to be little consensus about how best to help homeowners who are underwater.

*The Above is only a portion of the Article by Tom Brown from Reuters, Click here for a Link to Complete Rueters Article

Below is a solution that makes more sense then anything I've seen....it's called the "The Trickle-Up Plan"

which advocates "Foreclosure Vouchers?"

by Mark Thoma of the RGE

The Plan works as follows:

Give people a tax cut or rebate as in a standard fiscal stimulus package, the government would distribute to taxpayers mortgage foreclosure vouchers. These vouchers can be used either by homeowners to pay mortgages on homes in severe danger of foreclosure, or to help homebuyers to purchase foreclosed homes.

As with other stimulus packages, these vouchers would be distributed to taxpayers based on their incomes with those with the lowest incomes receiving the largest vouchers and those with incomes of, say, over $200,000 receiving nothing at all. ... The vouchers, however, could only be fully used by homeowners facing foreclosure or interested in buying a house in foreclosure.

For the majority of taxpayers who cannot use them, the vouchers could be sold on a secondary market... These vouchers would likely sell at a discount, perhaps of about 25%. Since the plan will increase demand for foreclosed housing, it will stop the fall of housing prices, thereby helping to end the housing crises and starting the economy on the road to recovery. ...Instead of a rescue scheme that relies on the benefits trickling down from Wall Street to Main Street, the benefits of this plan will trickle up from Main Street to Wall Street.

The Trickle-Up Plan would ... help keep people in their homes and create demand for housing currently in foreclosure. By doing so, it will help stop the fall in housing prices, and also increase the value of the lowest elements of the mortgage backed securities — precisely what governments wants to do.

The nation's largest mortgage lender, recently bought by Bank of America, settled "predatory lending" lawsuits with 11 states and will give back nearly $9-billion to Countrywide customers. Florida's lawsuit alleged Countrywide put people in mortgages they couldn't afford and misled them about rates and penalties.

In a deal meant to stave off home foreclosures, as many as 57,000 Florida homeowners could get $1-billion in relief from Countrywide Financial. The Countrywide effort is the most comprehensive, mandatory loan workout program since the mortgage crisis began last year.

The settlement came as Bank of America reported its third-quarter results Monday, earlier than planned, revealing a 68 percent drop in profit. It plans to boost capital by selling stock and halving its dividend.

How's this for justice?

October 6, 2008
Media Contact: Sandi Copes
Phone: (850) 245-0150

TALLAHASSEE, FL – Attorney General Bill McCollum today announced that Florida and several other states have reached a multimillion dollar agreement in principle with Countrywide, a newly-acquired subsidiary of Bank of America. The agreement includes a $150 million foreclosure relief payment program and loan modifications for thousands of homeowners, including more than 57,000 Florida homeowners with qualifying Countrywide mortgages.

“This agreement will bring much-needed relief to countless homeowners, including thousands in Florida,” said Attorney General McCollum. “I appreciate Bank of America’s commitment to rectify the situations created by Countrywide’s loan practices.”

The agreement, which is still being finalized by the participating states, could provide nearly $1 billion in total relief to Florida homeowners alone and up to $8 billion nationwide, including the realized relief from modified loans. Under the terms of the agreement, the following relief initiatives will be offered:

Home Retention Efforts

Countrywide will launch a new Loan Modification Program for qualifying owner-occupied subprime home loans and pay option adjustable rate mortgages (ARMs) to move borrowers into fixed-rate, fully amortizing loans that they can afford. Additionally, Countrywide will suspend foreclosures on all loans that meet the eligibility criteria while determining whether or not the borrower qualifies for a loan modification, and will waive all loan modification fees associated with a modification under the new program. Approximately 52,000 Florida borrowers are anticipated to receive a loan modification under this plan.

Foreclosure Relief

Countrywide will make cash payments to eligible individual borrowers who have lost their homes to foreclosure after experiencing an early payment default or after an interest rate reset. Early payment default is an indicator that the loan was not underwritten properly and the homeowner could not afford the loan from the beginning, and default after reset is an indicator that a loan was not written to the fully-indexed, fully amortizing rate. Approximately $150 million will be available nationwide with more than $20 million earmarked for Florida borrowers.

Countrywide will also make approximately $60 million in cash payments nationwide to any borrowers in foreclosure who agree to voluntarily leave their home at the time of foreclosure sale. Florida borrowers in foreclosure could receive up to $4 million under the relocation assistance program.

Other Relief

Countrywide will waive late fees for the delinquency that led to borrowers receiving loan modifications under the new program. Approximately $79 million in late fees will be waived nationwide, and $9.7 million will be waived in Florida. Countrywide will also waive prepayment penalties on subprime and pay option ARM loans owned by Countrywide. Approximately $56 million in prepayment penalties will be waived nationwide, and $8 million will be waived in Florida.

Once finalized, the agreement will resolve the allegations against the Bank of America-owned subsidiary in a lawsuit filed by Attorney General McCollum prior to Countrywide’s acquisition. The lawsuit asserted Countrywide put borrowers into mortgages they couldn't afford or loans with rates and penalties that were misleading. The company’s deceptive marketing practices were purportedly designed to sell costly loans while hiding or misrepresenting the terms and dangers. Bank of America acquired the company the day after the lawsuit was filed and has worked with the Attorneys General to resolve the allegations against its subsidiary.

In addition to Florida, participating states currently include Arizona, California, Connecticut, Illinois, Iowa, Michigan, Ohio, Texas, and Washington. Additional states may join the agreement in the coming days. Consumers can call Countrywide toll-free at 1-800-669-6607 for additional information.