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Sales of single-family homes in Massachusetts surged 37 percent in May, according to a new report by The Warren Group.

The year-over-year increase marked the fourth consecutive month of double-digit percentage increases, according to the report.

Single-family home sales jumped 36.8 percent to 4,452 from 3,255 last month. Year-to-date sales are up 29 percent, according to the Warren Group.

The median home price reached $290,000 in May, a 2.6 percent increase from $282,520 during the same month last year.

Condo sales increased 24 percent to 1,950, compared with 1,570 last May. The median selling price was relatively flat — $255,000, compared with $257,000 last year.

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AOL sold social network Bebo to a private investment group for an undisclosed sum on Thursday, after buying it for $850 million just two years ago.

The online media company unloaded almost all of Bebo’s assets to a Criterion Capital Partners affiliate. AOL deemed its remaining Bebo stock "worthless," but it will get a nice break from writing off its failed investment: AOL said it expects to record a tax benefit of $275 million to $325 million in the second quarter.

Though the companies did not comment on the value of the sale, The Wall Street Journal reported that it was "a small fraction" of what AOL paid to buy Bebo.

That drew a snarky reply from a man with intimate knowledge of overvalued acquisitions. AOL founder Steve Case tweeted his thoughts on the deal: "AOL buying Bebo for $850 million and then selling 2 years later for $10 million doesn’t seem like a winning strategy."

This isn’t the way AOL figured the deal would end. AOL had high hopes for Bebo as it tried to go toe-to-toe with social networking giants like Facebook and MySpace.

"We will be a social media powerhouse," said then-AOL CEO Randy Falco on a conference call with analysts in March 2008. "This deal is a game-changer."

The social network took off in the United Kingdom, but failed to gain any significant traction in the United States. Bebo had just 5 million U.S. visitors last month, compared to more than 130 million visits to Facebook, according to online traffic tracker comScore.

That failure to gain any momentum prompted AOL to cut its losses with Bebo. In April, the company announced it would either sell Bebo or simply close it down. AOL said that maintaining the site "would require significant investment in order to compete" with the likes of Facebook, Twitter and MySpace.

AOL, which was spun off by CNNMoney.com and Fortune parent company Time Warner in December, is in the midst of a turnaround effort from CEO and former Google executive Tim Armstrong. The company is trying to build up its content network and grow its ad revenue to compete with bigger online media companies like Yahoo (YHOO, Fortune 500).

Shares of AOL (AOL) fell slightly in morning trading on Thursday. 

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Main Street Capital Corp. has completed investments in two Houston companies totaling $15.3 million.

The Houston-based investment firm said it recently closed on a $7 million infusion in Harrison Hydra-Gen Ltd. to support its recapitalization and growth capital financing.

HHG manufactures mobile hydraulic-driven generators for the fire apparatus, oilfield service and aerial work platform markets. It markets itself as the largest provider of hydraulic generators to fire engine manufacturers in the United States bad credit payday loans.

Main Street (Nasdaq: MAIN) also invested $8.3 million in PPL RVs to support a recapitalization and growth capital financing.

PPL describes itself as one of the largest consigners of pre-owned recreational vehicles and online parts retailers in the United States. The company also services recreational vehicles and sells parts directly to consumers from its sales and consignment facility in Houston.

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Youth Entrepreneurs of Kansas has announced a $100,000 donation from Kansas City-based Tradebot Systems Inc.

The money will help students in Kansas and Missouri learn about the fundamentals of free enterprise and business as part of a year-long entrepreneurial class.

Tradebot Systems creates computer algorithms that analyze the stock market for investment purposes.

The company’s donation also will help YEK serve a growing number of students.

“YEK has had record pre-enrollment this year for the 2010-2011 class,” YEK Executive Director Kylie Stupka said in a news release payday advance online. “In fact, we expect to have a 43 percent increase in the number of students we serve this coming year. It is the extreme generosity of donors like Tradebot that allow YEK to help so many students.”

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A federal judge has halted the scheduled foreclosure auction of a prime piece of undeveloped D.C. real estate — for now.

If the judge, Ricardo Urbina, had not issued the eleventh-hour order, the old Hecht’s warehouse at 1401 and 1403 New York Ave. NE would have gone on the auction block on June 8, after the lenders, U.S. Bank and JPMorgan Chase Bank, declared the borrower, Wayne, Pa.-based developer Patriot Equities LP, in default on a $66 million acquisition and construction loan.

Under the terms of the loan agreement, Patriot had to lease 30 percent of its industrial space by April 9, 2009. To get the site in habitable condition, however, Patriot would need to spend about $3.1 million renovating portions of the 9.25-acre space.

Patriot alleges its lenders improperly cut off all funding on the loan before the leasing deadline was met.

In an earlier court filing, the lenders argued that they did not stop funding the loan until it was clear the leasing hurdle would not be met.

Noting that another buyer has made a binding offer to buy the property for more than Patriot owes, Judge Urbina sided with Patriot in this early phase of the litigation, finding that “the plaintiffs appear to have the better of this argument.”

The loan agreement states that “the loan is in balance if all remaining unpaid costs of the property … including the reserves … do not exceed the amount of the loan proceeds not yet advanced by the lenders.”

With the threat of immediate foreclosure now at bay, Patriot will resume its legal argument that the lenders improperly sought to renegotiate the loan terms after closing. The lenders are pursuing their own litigation against Patriot, claiming the company’s principals are personally responsible for millions of dollars of the allegedly defaulted loan.

For its part, Patriot is seeking at least $50 million in damages, plus punitive damages and a court order to block the looming foreclosure sale.

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The American Medical Association is launching an ad campaign pushing lawmakers to freeze a 21% cut to the fees doctors receive to treat Medicare patients.

The House voted May 28 to delay the cuts for 19 months, but the Senate did not take action before the Memorial Day recess.

The AMA’s TV, radio and print ads slam senators for failing to pass the "doc fix" before taking their week-long break. The group has a long history of pushing to reform the formula used to calculate Medicare payments to doctors.

The ads feature a lot of air travel imagery, implying that lawmakers are jetting off to luxe locales while their constituents suffer. More than 43 million Americans are covered under Medicare.

"With access to health care for seniors … hanging in the balance, what did the U.S. Senate do? They took a vacation," the ads say, urging Americans to call their senators and tell them to "get back to work."

The cuts were slated to take effect June 1, but the Centers for Medicare & Medicaid Services instructed its contractors to delay processing claims for 10 business days.

CMS implemented the delay in the hope that Congress will vote to freeze the Medicare reimbursement cuts retroactively, as it has done before.

"[Lawmakers] need to understand that the decisions made in Washington impact real people," said James Rohack, AMA president, in a conference call.

Doctors consider opting out of Medicare: Rohack went on to condemn the current payment rate formula, which federal law established in 1997 and says rates should be cut every year to keep Medicare in the black. But Congress has blocked those cuts in seven of the last eight years.

"Medicare payments are stuck where they were in 2001, while medical costs are up by 20% according to the government’s own data," Rohack said.

And 60% of Medicare physicians are considering opting out of the program in order to stay afloat, Rohack added.

The AMA wants the reimbursement formula to be overhauled as the baby boomers start to age into the Medicare system. Developing a new plan would now cost $212 billion, but that figure has quadrupled over the past five years. An overhaul in 2005 would have cost $49 billion, and that price tag will continue to grow exponentially as the issue gets kicked down the road.

"This Congress needs to do what past Congresses wouldn’t," Rohack said. "Look at the issue and fix this broken foundation once and for all." 

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Thunderbirds members Del Cochran and Mike Kennedy were honored by the American Junior Golf Association with the organization’s Digger Smith Awards for their role in hosting the Thunderbird International Junior.

This competitive junior golf event has been played annually since 2000 at Grayhawk Golf Club, where Cochran has been general manager since it opened in 1994. Kennedy is a longtime local Valley attorney and supporter of junior golf in the Valley payday advance lenders.

Over the years, the event has become one of the most prestigious on the AJGA tour. This year’s tournament will began Friday with a practice round with three competitive rounds Saturday through Monday.

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Rancho Cordova has been awarded grants totaling $400,000 by the U.S. Environmental Protection Agency to assess and mitigate pollution in the south Sunrise and Folsom Boulevard corridors.

The two brownfield assessment grants will be used to conduct environmental site assessments and to address issues with petroleum contamination. Brownfields are abandoned or under-used industrial and commercial properties where redevelopment is complicated by possible environmental contamination.

The sites contain an estimated 15 hazardous substances sites and 44 petroleum release sites, encompassing 6,445 acres within in the city.

It is the first time the city’s redevelopment agency has applied for the competitive grants.

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The Florida Office of Financial Regulation is taking issue with a blistering report that suggests it should have taken more of a role in helping to prevent the downfall of Eastern Financial Florida Credit Union.

The report by Crowe Horwath LLP, a respected banking consultant hired by the National Credit Union Administration’s Office of Inspector General, stated that both federal and Florida regulators could have taken steps to curtail the risky investment and lending practices at Eastern Financial. While the NCUA filed a response to the report that acknowledged it should have acted sooner, the OFR did not issue an official response.

Miami-based banking analyst and economist Kenneth H. Thomas said he found that surprising.

He noted that state regulators gave the credit union permission in 2005 to invest in the collaterized debt obligation (CDOs) that ultimately killed the credit union.

OFR spokeswoman Flora Beal said her agency did not sent Crowe Horwath a response to its report. Here’s how the OFR responded to the Business Journal’s questions about the matter.

OFR: The Florida Office of Financial Regulation (OFR,) does not agree with the conclusions made by Crowe Horwath LLP, who conduct the review for the National Credit Union Association (NCUA) Inspector General. In response to your specific questions, please see the Q&A below.

SFBJ: Did Florida regulators do anything to ensure that Eastern Financial comply with the restrictions it placed on CDO investments in its 2005 letter?

OFR: Yes. During the Office of Financial Regulation examinations, our examiners verified that all investments complied with the credit union's investment policy.

SFBJ: Have Florida regulators decided to place new restrictions on credit unions investing in CDOs, in addition to other complex investment vehicles?

OFR: No. There is no market for CDOs; therefore, no investments in CDOs are being made. CDOs are still permissible investment under state statutes. However, we would take into consideration the lessons learned from the market changes. Florida regulators continue to enforce statutory requirements for investment vehicles, while making every effort to ensure proper policies and procedures are in place to manage the risks associated with any complex investment vehicle.

SFBJ: How could Florida regulators not see the two large construction and development loans that were misclassified? (Eastern Financial provided a total of $60 million in loans to two South Florida developers, both of which ended up filing for foreclosure. The loans were not originally classified as risky construction loans, but as less risky member business loans) payday loan lenders.

OFR: During Florida's October 2006 exam, which reviewed financial documents through June 30, 2006, only one of the loans existed. At the time, that existing commercial loan was only weeks old, was properly secured and was not delinquent. Regulators did not have any reason for concern. Based on the alternating examination schedule, NCUA conducted the 2007 exam. The credit union's miscategorization (sic) was identified based on changes in the real estate market and the delinquent status of the loans. The issue was properly addressed and the loans were adversely classified assets in subsequent reports and examinations.

SFBJ: What steps did Eastern Financial take to hide the purpose of two rather large loans?

OFR: There is no evidence that the credit union's management made a deliberate attempt to hide the purpose of the loans.

SFBJ: Why weren't the examinations in 2006 and early 2007 more critical of the CDOs and the construction loans at Eastern Financial?

OFR: Through July 2007, CDOs complied with Florida statutes regarding the permissibility of the investment and were performing investments as to the payment of interest and principle. The crash of [the] CDO market during the third and fourth quarters of 2007 was unforeseen by everyone, including rating agencies, corporate investors, private investors and mainstream America. Regulators were no exception.

SFBJ: Has your office changed the way it conducts examinations to take a closer look at such problems?

OFR: There has been no change in the manner in which continue to enforce state financial regulations, conduct examinations and take every opportunity to inform management of known risks associated with certain types of investments and loans.

After reviewing the OFR’s statement, Thomas called it one of the weakest responses he’s seen by a regulator addressing a financial institution failure review.

He is concerned that the OFR said it has not changed the way it conducts examinations and that it hasn’t placed more limits on risky investments such as CDOs for credit unions.

"This should not be business as usual regarding the regulation of investments by credit unions,” Thomas said. “This should be a major wakeup call that we have to take a very hard look at where we allow credit unions to lend beyond their traditional lending areas and, especially, where we allow them to invest.”

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Marvell Technology Group Ltd. on Thursday reported first quarter net income of $206 million, or 30 cents a share, compared to a loss in the same quarter last year of $111 million, or 18 cents a share.

Santa Clara-based Marvell (NASDAQ:MRVL) had revenue of $856 million, a 64 percent increase over the year-ago quarter's $521 million.

Excluding items, the company would have earned $260 million, or 38 cents a share, compared to non-GAAP income in the year-ago quarter of $32 million, or 5 cents a share.

Analysts expected, on average, earnings if 37 cents a share on $845.8 million in revenue.

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