The Turkey Of The Year In California
The Press Telegram reports from California. “Delfa Robles, 68, a Long Beach resident and a member of the Association of Community Organizations for Reform Now, is facing foreclosure of the home where she and her family have lived for 13 years. ‘She tried to start a restaurant business a couple of years back, and due to financial difficulties, she lost the business and got behind on her house payments,’ she said through ACORN organizer David Mazariegos. ‘The only choice she has is to sell the house or file for bankruptcy, which she doesn’t want to do.’”
“The Robleses were given a variable mortgage rate from their lender, Wachovia, which has given the Robles family time to catch up on their payments.”
“‘They gave her a year to pay, but she has to pay the back mortgage and the monthly payments as they come, and they have raised her mortgage by $800,’ Mazariegos said. ‘She has a whole year to figure it out, and we will put a little bit of pressure on Wachovia to help her out. We made them ‘Turkey of the Year,’ for not working with the people.’”
The San Gabriel Valley Tribune. “California home sales climbed 117 percent in October as buyers took advantage of properties selling for nearly 40 percent less than the year before, according to an industry report released Tuesday. Some of the steeper declines include Altadena (-39.6 percent) and Baldwin Park (-37.7 percent). Bucking the trend, Alhambra saw its home values increase 13.4 percent to $482,000 in October, compared to last year.”
‘Thomas Berge Sr., whose Berge Co. Realtors and Appraisers has been in Alhambra since 1954, didn’t put too much weight in the Alhambra numbers. In reality, ‘the market in Alhambra has deteriorated dramatically,’ he said.”
The Voice of San Diego. “September home prices in San Diego County fell by 26.3 percent from the same month a year earlier, according to the most recent Standard & Poor’s/Case-Shiller index released Tuesday. That was a 34.4 percent drop from the market’s peak in November 2005. Prices are still about 64 percent higher than they were at the start of the decade. The index reports housing data with a two-month lag.”
“Real estate agent Camille Bruno in Bonita sells bank-owned homes in the South Bay, and named two sales where homes that previously sold for $1.3 million and $1.5 million sold in recent months in the $700,000 range. ‘They’re like 50 percent off, basically,’ she said. ‘Those same houses haven’t come down in North County as far as they have here yet.’”
“But Ed Mracek, real estate agent with Willis Allen in La Jolla, said the long-held supposition that the coastal neighborhood would stay untouched by housing trouble is going away and the La Jolla ZIP code is starting to see large price reductions, he said. He mentioned an oceanfront house that the sellers had listed for more than $25 million before recently lowering their asking price to $18.8 million. They paid $17 million for it, he said.”
“‘Sellers need to be realistic — the world kind of changed after the stock market crash,’ he said.”
The Union Tribune. “Some distressed sellers are offering great deals. Peter Toner, a broker with Prudential, said a 1,500-square-foot house in North County purchased for $498,000 four years ago is now listed at $289,000 as a short sale. Toner said the weakening economy is beginning to take a toll on neighborhoods that until now have been relatively unscathed by the foreclosure crisis, particularly along the coast.”
“‘I think it is spreading a bit,’ he said. “It just has taken longer. The people on the coast weren’t quite so involved in the dodgy loans.’”
The Recordnet. “Housing production in California last month was the lowest on record, down 45 percent from October 2007, according to the California Building Industry Association. The group wants some help for the industry - and thus, the economy - via a government stimulus. Joe Anfuso, CEO of Stockton-based Florsheim Homes, said he anticipates that the federal government will approve some type of tax credit for home buyers as a way to stimulate the economy.”
“‘The one thing I like is knowing that housing is at the forefront of the political landscaping,’ Anfuso said. ‘That’s the key.’”
“Tuesday’s announcement of another $800 billion bailout that’s designed to unfreeze the nation’s market for consumer debt has drawn mixed reviews from Southland business leaders, economists and political figures. Mike Spence is president of the California Republican Assembly, the state’s oldest and largest Republican volunteer organization.”
“‘The government is deciding who wins and who loses,’ Spence said. ‘Lobbyists are spending millions to make sure their industry gets a piece of the pie - that’s not how you recover economically.’”
“Larry Harris, a professor of finance and business economics at USC’s Marshall School of Business, agreed that the rescue plans thus far have been all over the map. ‘They’ve done so many different things … how can you not agree with some part of it?’ he asked, jokingly.”
“Still, Harris acknowledged that some kind of action has been sorely needed. ‘All attempts by the government to address the market problem are welcome as long as they don’t make the problem worse,’ he said. ‘We’re operating in an uncertain environment and it’s inevitable that mistakes were made and mistakes would be made if they didn’t act. We just have to trust in people who are wiser than us to decide on our behalf.’”
The Burbank Leader. “State lawmakers continued deliberations Tuesday on competing plans that could freeze foreclosure proceedings for up to 120 days. Richard Pittman, housing services coordinator at a nonprofit housing counseling agency, said the proposals could have negative consequences by simply extending the foreclosure process for homeowners who failed to do enough to stay in their homes.”
“‘In some cases it will buy them time for folks who may be out of work to get them started, and that’s great,’ he said. ‘But people are not necessarily looking at the big picture, and neither is the lender.’”
“According to a report, 1,337 homes in Burbank and 1,614 in Glendale are in various states of foreclosure. More than 309,000 homes in California are close to or are already in the process of being foreclosed upon.”
“‘We need to have some flexibility and relief to people who are facing imminent foreclosure,’ said Assemblyman Paul Krekorian, a Democrat whose district includes Burbank and Glendale. ‘What I’m going to be concerned about is encouraging lenders who have programs in place without discouraging additional credit from coming onto the market.’”
The Hi-Desert Star. “Two more banks with local branches, Pomona First Federal and Downey Savings, became the latest names on the list of failed institutions late Friday. PFF was the oldest bank in Southern California, founded in Pomona in 1892. After weathering over a century of financial disasters and staying out of the recent subprime mortgage debacle, analysts claim it was the last batch of unpaid millions in construction loans that drove shares down from a high of $40 two years ago to 36 cents last Friday. PFF had 38 branch offices in the counties of San Bernardino, Riverside, Orange and Los Angeles.”
“Bill Powers, Indian Wells-based president of Pacific Western, feels the pain for his struggling neighborhood institutions, but in a tough-love kind of way. ‘None of this is unexpected in our greed economy,’ Powers observed. ‘Greed takes a toll on everyone’s common sense.’”
“Powers attributed his bank’s financial soundness to ‘adhering to the basics of banking.’ ‘We didn’t do Freddie Mac or Fannie Mae,’ he said. ‘You don’t loan money to people who can’t pay it back.’”
“Still, Powers thinks ‘no one will go unscathed. This is a centipede economy,’ he said. ‘How many shoes have dropped so far? I don’t even know how many shoes the centipede has.’”
The Desert Sun. “For Debbie Lewis of Terra Lago, the $48.5 million Neighborhood Stabilization Program the Riverside County supervisors approved Tuesday can’t arrive soon enough. Lewis bought her $500,000-plus home in the country club setting of Indio when housing prices were at their high.”
“Now, as homes tumble into foreclosure and her home equity disappears before her very eyes, Lewis is part of a growing army of Coachella Valley residents seeking a return to stable, well-stocked neighborhoods.”
“One day last week, alone, notices of default were listed on properties in the Coachella Valley with mortgage defaults totaling $18.1 million. The next day, the troubled paper count on yet another round of properties heading toward the auction block stood at $3.1 million.”
“‘We lobbied heavily for the funding,’ said Fred Bell, executive director of the Desert Chapter of the Building Industry Association. ‘The primary goal is to make sure the maximum amount of money that can be allocated reaches the end-user.’”
The Daily Herald. “Many working people can’t get the credit they need, said Richard Pittman, a counselor with (a) nonprofit which offers personal credit counseling in Los Angeles. ‘We’re crossing our fingers that this will work,’ Pittman said. ‘If we don’t get the market moving again, the biggest industry is going to be soup lines.’”
“The small businesses that rely on loans to stay open need to see more liquidity in the credit markets, said Scott Hauge, president of Small Business California. ‘There have been situations where a guy went to have his credit line increased but instead they cut it in half,’ he said. ‘I’ve also heard about people who don’t even know their lines or credit cards have been cut until they try to use it. It’s a mess.’”
The Enterprise Record. “Builders, planners and real estate agents have seen a significant decline in the local housing market, with new construction taking the biggest hit. ‘The new home housing market is about as slow as we’ve seen in a long time,’ said Chris Giampaoli of Epick Homes.”
“Jason Bougie of the Butte Community Builders Association said the builders who are struggling are the ones that are sitting on unsold built homes. Locally that hasn’t happened much, but it was a big factor in the Sacramento area where corporate builders built hundreds of homes, he said.”
“Debbie Brodie, president of the Chico Association of Realtors, said plenty of loans are available for normal-priced homes, but she’s seen people have problems getting loans if they’re seeking a higher amount, have poor credit, or are trying to finance commercial loans or ‘anything outside the box.’ She said first-time buyers are able to get loans as long as they have good credit scores.”
“Bougie agreed. ‘All the while, it is the best time to buy a house. If I had money I’d buy a few of them.’”
Inside Bay Area. “Washington Mutual’s departure from Pleasanton could do more than eliminate 1,200 jobs and erode the local economy and office market: The exit could leave the failed thrift’s landlord in the lurch without rental payments. ‘We have the right to exit from those leases,’ said Gary Kishner, a Washington Mutual spokesman, said of the Pleasanton rental agreements. “Chase will not be making those lease payments.’”
“LBA Realty Fund, WaMu’s landlord at the Pleasanton office complex, would have to get in line with WaMu’s other creditors if LBA wishes to enter a claim to recoup at least some of its lost revenues from the unpaid lease.”
“The LBA group paid an estimated $66.5 million in June for the 217,000-square-foot complex. LBA used a previously established $150 million line of credit to finance the acquisition, according to Alameda County property records. That loan, obtained from Bank of America, would need to be paid to keep the Pleasanton buildings out of default, the county records show. The mortgage also is being used to finance other buildings in California, including a property in Fremont.”
“‘”LBA is a pretty deep-pocketed owner that is successful and has hit some home runs,’ said William Nork, a senior vice president who manages the Emeryville office of Cornish & Carey Commercial. ‘But who would have thought this would have happened? When LBA bought the building, WaMu was a real quality tenant.’”
