Home Front

The California Housing Finance Agency announced this morning that it's making new, less expensive 30-year fixed-rate loans for-first time homebuyers who meet low- and moderate income guidelines.

Details are here in this news release. More details are in this Web page from CalHFA, including county-by-county income limits for the program.

CalHFA Executive Director Steven Spears says the option helps qualified first-time buyers get around the some of today's extremely tight rules set by conventional lenders.

 Spears said: "Housing finance agencies around the country have historically played an important role in each state's housing market. With the disruption in the credit markets over the last two years, we have been limited in our ability to help finance home purchases. This new program offers California families another way to purchase their first home with reliable, fixed rate financing."

Those interested can check with a CalHFA-approved lender or call CalHFA at 1-877-922-5432.

Most small business owners in California are afraid the economy will go into a double-dip recession.

A survey released today by Citibank says 85 percent of the state's small business owners are concerned about a double dip.

The findings are in line with growing pessimism among some economists.

The survey added that 74 percent believe they've prepared themselves for another downturn. Some 67 percent say they've changed the way they're doing business, with many reducing their debt, increasing cash reserves or imposing hiring freezes.

Only 28 percent said their businesses are better off today than a year ago; 51 percent said they believe their business will do better over the next year.

WEDNESDAY A.M. UPDATE: Here is the story we wrestled together for this morning's print edition. Ocwen remained silent throughout and HomEq employees were told not to talk with the media. But it sounds as if the pink slips might begin this morning.

I got a call about an hour ago that subprime loan servicer HomEq is shutting down today or tomorrow? I don't have anything confirmed yet from its parent firm, Ocwen Loan Servicing. But an insider at HomEq said employees are in meetings today about the operation closing. And they have been ordered not to talk with the media or they will lose their severance pay.

This could mean several hundred layoffs eventually,if true, into a regional economy with 12.7 percent unemployment.

Here is Ocwen's second-quarter earnings report in which it says its purchase of HomEq in May is expected to close Sept. 1.  There are mentions in there of closing HomEq and spending $1.5 million to add new facilities. The firm notes on its web site that it outsources some of its loan modification work to Uruguay and India.

Near as we know HomeQ has about 1,000 employees in North Highlands and a couple hundred more in Raleigh, N.C.

It's still pretty fuzzy. If you can shed any light on this please call me at 916-321-1102 or email jwasserman@sacbee.com.

The numbers are different, but the story is the same. Too many Sacramento-area homeowners owe more than their houses are worth. Zillow said recently it's 38 percent of all mortgages.

But today, Santa Ana-based CoreLogic reported that 43.4 percent of mortgages in El Dorado, Placer, Sacramento and Yolo counties  are in a state of negative equity. Their owners owe more than the house is worth. CoreLogic says there are 214,468 homeowners in that predicament locally.

That's a huge number, but it's been coming down slightly.  CoreLogic's first quarter 2010 report said 44.8 percent of Sacramento-area mortgages were underwater.

There's no accounting I know of that explains how the two differ. Both used automated valuation systems to judge what houses are worth in the region against what's owed on them.

The best thing about Sacramento is it's not one of the cities in the Central Valley - or Las Vegas. Look at these numbers for other Highway 99 cities in the Central Valley Business Times.

Sept. 7 UPDATE: Thanks to all who mailed and called regarding this request. Here is the story that ran Sunday, Sept. 5 in The Bee.
Your intrepid Home Front reporter is in early stages of doing the be-all end-all account of the short sale lifestyle that has rooted itself in the Sacramento region. It's an upside down world where little adds up, and where common sense and logic are sometimes in short supply. Yet it's a cornerstone of how houses are bought and sold these days.

I had an enlightening interview this morning with broker Bill Joyce in Roseville, who gives his would-be buyer clients "The Speech." Essentially, he warns them they are entering real estate's version of burning deserts and stormy seas, where they must, above all, endure the punishment and frustration.

I have talked with a couple who lost almost a year of house hunting after getting fixated on a short sale in Natomas that finally went into foreclosure.

I talked with a seller who tried for a year to short sale his house in Elk Grove - and was yanked from the very jaws of foreclosure this month by real estate agents who salvaged a short sale Hail Mary at the last second.

These stories are commonplace in this new market. I'd like to hear a few more - especially what you might have put up with on the journey to finding the good deal you live in now. Or if you are still on that journey I'd love to hear a dramatic tale or two to include in what's shaping up to be a slice of life in our times. Feel free to call 916-321-1102 or drop a line at jwasserman@sacbee.com.

Township 9, a 65-acre transit-oriented development along Richards Boulevard north of downtown Sacramento, won top honors from the California Housing and Community Development Department as a "Catalyst Project," the HCD announced today.

Township 9, a mixed-use development that will include up to 3,000 residential dwellings along with offices and stores and parks, won a Gold award alongside Emeryville Marketplace in Emeryville, Mission Bay in San Francisco, the Village at Market Creek in San Diego and Fullerton Transportation Center in Fullerton.

The project on the site of a former cannery which is being demolished, aims to put thousands of transit-dependent residents in mid-rise buildings in one of the most efficient uses of land in the capital region. Developers are Nehemiah Corp. of America, along with Sacramentans Steve Goodwin and Ron Mellon. A new light rail station is opening next year to serve the project.

HCD, which has approved $30 million in state housing bonds for the project, said  Township 9 and 12 other Catalyst Projects across the state provide "great examples of how to build sustainable economically vibrant communities."

The state will monitor them to test strategies for "broad implementation throughout California."

Homebuilders in El Dorado, Placer, Sacramento and Yolo counties again applied the brakes in July on building new single-family houses, the California Building Industry Association reported this morning.

Builders in the four-county region applied for just 170 permits to start new single-family houses in July. That was down 43.9 percent from June's 303 construction starts - and 14 percent fewer than June 2009. The numbers speak to continued caution as federal and state first-time homebuyer tax credits have expired. 

Builders are also holding back in Yuba and Sutter counties, starting just three single-family houses in July. In June, they started work on 10.

 A year ago in July they started 13.

State tax credits up to $10,000 to buy new unoccupied homes in California, however, are still available, according to the California Franchise Tax Board. (Go deeper into the release for info on new-home credits). About $83 million of an available $100 million allocation provided for the credits remain.

Builders in El Dorado, Placer, Sacramento and Yolo counties are about even with last year for construction starts of single family houses and apartments and condos, says the CBIA analysis of numbers provided by the Construction Industry Research Board. Statewide, building permits are running 21 percent ahead of last year.

Here's how single-family starts have lined up so far in 2010:

 January - 225

 February - 117

March - 179

April - 188

May - 206

June - 303

July - 170  

 Source: Construction Industry Research Board

June's sales of 252 new homes managed to outperform May across the Sacramento region, but the longer-term trend is still negative. June continued a sustained pattern of year-over-year decline, the California Building Industry Association reported Monday.

The number of closed escrows was 16.6 percent lower than June 2009 in El Dorado, Placer, Sacramento and Yolo counties, said the CBIA.

The plunge was deeper in Yuba and Sutter counties. June's 11 sales were 69 percent below the same time last year.

Statewide, closings of 2,454 homes and condominiums fell 36 percent from a year earlier, according to data provided to CBIA by Hanley Wood Market Intelligence. Median sales prices of new California homes in June were up 3 percent from June 2009.

But prices remained about the same as last year in the four-county Sacramento region. They fell 10 percent in Yuba and Sutter counties.

Kris Vogt, managing broker of Coldwell Banker Residential Brokerage's Elk Grove operation, has been named president of the company's Sacramento-Tahoe regional office, Colwell Banker announced this morning.

He replaces fomer president and chief operating officer Bob Bronswick. Bronswick has run the operation for roughly the past five years.

Vogt will oversee operations of the region's largest brokerage with 14 offices and more than 700 sales associates, Coldwell Banker announced.

The company made the announcement in this news release.

The statewide unemployment rate for July was 12.3 percent, the Employment Development Department said today.

California lost 9,400 jobs during the month, mainly the result of temporary Census Bureau positions ending.

Sacramento's unemployment rate rose to 12.7 percent, up 0.3 percent, as seasonal school layoffs contributed to a 5,300 decline in jobs.

State officials noted that the private sector added 13,700 jobs in California. although it wasn't enough to offset the loss of government work. "There's kind of some good news buried in there," said Dennis Meyers, economist at the state Department of Finance.

He said California's private payrolls have added jobs six of the last seven months.

Still, the numbers underscore the weakness of the recovery. California's unemployment was third highest in the nation, according to the US Bureau of Labor Statistics. No. 1 was for the third straight month was Nevada at 14.3 percent, followed by Michigan at 13.1 percent.

We're a day away from the monthly checkup on the job market in California and Sacramento, and chances are the numbers will be less than inspiring.

If you'll recall, the number of jobs nationwide fell by 131,000 last month, and the state and local numbers tend to go in tandem with the national figures. While there was a small amount of private sector hiring nationally last month, the new jobs were more than offset by the government layoffs caused by the conclusion of the US Census count.

And as you may have heard, the economic news in general hasn't been too spectacular lately. The stock market tumbled again today, based on some weak economic data, and it's once again appropriate that the state and local unemployment results will be released the same day that Furlough Fridays resume. It's a reminder of the fragility of the economic recovery around here and the Sacramento area's continued dependence on state government.

In June, unemployment was 12.4 percent in greater Sacramento and 12.3 percent statewide.

Look for the July numbers on www.sacbee.com sometime around mid-morning.

July sales numbers from MDA DataQuick show almost 1,000 fewer closed escrows in July in the Sacramento area than June. Here is a first look online.

Here is the full chart with July sales prices and sales numbers for Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties.

Couple of quick updates here.

1) MDA DataQuick of La Jolla just reported that San Francisco Bay Area Home Sales fell sharply in July, hitting a 15-year for the month. That's similar to the Los Angeles region. DataQuick will report Sacramento-area sales within the hour.

2) Mortgage interest rates hit a new low of 4.42 percent for a 30-year fixed loan, mortgage giant Freddie Mac reported this morning.

Sacramento-based TrendGraphix reported this afternoon that home sales fell sharply in July across the Sacramento region as the stimulus power of tax credits eased and more buyers took a wait-and-see approach.

In a news release accompanying the newest statistics, Lyon Real Estate Chief Executive Officer Mike Lyon said, "Buyers took a step back to take advantage of the larger inventory at lower prices."

Lyon said the area has seen a big increase in the number of homes put on the market - and that listing prices have declined.

He said he expects escrow closings to "rebound in the next 60 days."

Latino homeowners have absorbed the worst in California's foreclosure crisis, and account for 48 percent of homes repossessed from late 2006 through 2009, the nonprofit Center for Responsible Lending reported today.

Its new study, Dreams Deferred, showed that Latino owners surrendered 301,086 homes to lenders - almost half the state's 625,356 foreclosures during the period.

About 11 percent of the state's foreclosures - 69,176 - occurred in El Dorado, Placer, Sacramento and Yolo counties.

Statewide, 41 percent of loans that resulted in foreclosure were made in 2006, said the report.

The CRL study said that Latino households, particularly in the hard-hit Central Valley, have suffered disproportionately. Latinos accounted for almost half the state's foreclosures, but are 21 percent of California homeowners and one-third of its adult population.

Half the state's foreclosures were tied to purchase loans and half to refinance loans, the study said.

Authors of the study said most of the repossessed homes were modest, averaging about 1,700 square feet.

The study says Latino and African-American households accounted for nearly six in every 10 homes repossessed in California. African-American households suffered 47,337 foreclosures, nearly 8 percent of the state's total.

Lenders repossessed 216,037 homes from non-Latino whites - 34.6 percent of foreclosures statewide. Asian Americans were 6.4 percent, with 39,718 foreclosures.

In what appears to be a national phenomenon likely to include Sacramento, we're seeing that July homes sales fell hard in metropolitan Los Angeles - largely due to end of the federal tax credits. Researcher MDA DataQuick reported the monthly numbers this morning.

"Southland home sales saw their biggest year-over-year drop in more than two years last month as the market lost most of the boost from the federal home buyer tax credits. The median sale price dipped for the second month in a row, the result of a shaky economic recovery, continued uncertainty about jobs, and the expiring tax breaks."

  California's once-vaunted homebuilding industry has lost 80 percent of the economic impact it had in 2005, says a new report from the California Homebuilding Foundation and Center for Strategic Economic Research. There are also 84 percent fewer employees working in residential construction than in 2005, the report said.

The new study said that new housing construction in California supported nearly 77,000 jobs and $13.8 billion in economic activity during 2009. That "represents just a fraction" of the 487,000 jobs and $67.7 billion in activity just a few years earlier in 2005, said the industry trade group, the California Building Industry Association.

The newest report adds statewide context to a Bee story early last month that noted that the Sacramento-area new-home market has come nearly to a standstill. Homebuilders have taken to say that their industry is enduring another Great Depression, far more severe than that stalking the rest of the economy.

"The problem faced by both lenders and the government is that they can neither afford to kick homeowners out, or bail them out."  - Sean O'Toole.

 As the housing market downturn and foreclosure mess runs on and on, it's almost impossible to fathom some of the behavior that keeps occuring. You know the story: The government proposes new programs and the banks and lenders turn in disappointing results. The people, especially the people struggling with loan troubles, are baffled why they aren't getting any help.

On the surface the response to this entire mess has been extremely difficult to read. But last week ForeclosureRadar's Sean O'Toole came as close to make sense of it all as anyone I've heard recently. Here's his commentary. It's an eye-opener, worth a read. ForeclosureRadar is based in Contra Costa County. It's an information service for people who buy houses on the courthouse steps.

Saturday's Bee contained this story about federal indictments involving an alleged $11.4 million real estate investment fraud scheme that involved eight people and scores of U.S. investors.

Most are members of the Bhamani family of Carmichael, owners of Heaven Investments.

There's more reading and details here in a news release from the U.S. Attorney's Office in Sacramento and more still here in the federal indictments.