The California Research Bureau and Public Policy Institute of California recently staged a one-day seminar on the issues of foreclosure and home prices in the state. Here is a link to the event page announced afterward. I had hoped to go to this, but events overran those plans.

 The link has several presentations and Powerpoints that offer lots of food for thought. I haven't had a chance to look at them all yet. But enjoy. There are some heavy intellects on the job here. 

Mercy! What a day this has been. We business staffers started full-tilt this morning toward a story on what the rescue bill might mean for struggling homeowners in the Sacramento area - and then, poof, the bill didn't pass. And then the stock market dived 777points! We switched gears and made calls to people in the region's financial community to check their pulse and see who might be on the ledge.

I went for a walk outside for 20 minutes and felt just overwhelmed with the rush of history. Every day brings something even more intense than the day before, a day when it felt like stomachs could not get any tighter. With the national election thrown in there are enough amazing developments every day to fill a month in ordinary times.

I then had a phone interview this afternoon with senior loan consultant Vicky Henderson at Vitek Mortgage. She talked about the incongruity of an explosive financial crisis at the very time that lenders have been closing deals like crazy.

"We had one of our biggest funding days ever on Friday," she said. Some of that rush comes as September ends and borrowers hurry to close escrow before the expiration of seller-funded down payment assistance. Henderson estimated that 40 percent of loans in the region use the assistance banned as of Oct. 1 by an omnibus national housing bill passed last summer

 That rush seems to say there is money out there for people who qualify for it. At Tri Counties Bank, COO Rick Hagstrom said the same by phone: He said we have money to lend, money that we want to lend, but there is a lack of demand because people just aren't sure yet. They are lacking in confidence about the future. Mike McGee, owner of  Winchester McGee Real Estate and Loans said the same Monday: he thinks this will be his biggest week in a couple of months as people come out of the woodwork to buy or refinance houses.

So....is it all true that the economy is frozen up and no one can get a loan for almost anything until Congress passes this rescue bill? I heard three area voices say there seems to be lots of options for those with clean credit histories.

I got a kick out of a story Henderson told about the uncertainty in borrowers' eyes.

"People that are putting something down are afraid they'll never get it back again. Home values continue to fall and they're concerned about that. They're also concerned if the mortgage company they're with will be around."

She said a customer came in to sign final documents and discovered that the lender was Countrywide. The borrower said, "But Countrywide doesn't exist anymore!"

  The loan agent explained to a rattled borrower that it was part of Bank of America now and was going to keep the name a while longer. The loan terms wouldn't change. It wouldn't really have any effect.  Yet I can only imagine how I'd react to that kind of surprise. I'd want to go outside, take a deep breath and think it through how this might be a trick of some kind. No one likes surprises at one of the biggest financial moments in your life.

That's the world we inhabit as the third quarter of this eventful 2008 drifts to an end.

And who can say what tomorrow will bring - to make today look like a walk in the park.

 

 

This morning on CNBC I listened to a Georgia member of the House Financial Services Committee who bemoaned that the language requiring help for struggling home owners is just more of the same we've had for a couple of years.

Sure enough. Going back and looking at the language I see a lot of use of the word "encourage," as in encourage loan servicers to modifiy more loans.

Now I wonder, too.

 

I have finally gotten onto the U.S. House Financial Services Committee Web site to see the bill being proposed for bailing out Wall Street financial firms by taking mortgage backed securities off their books.

It's been very difficult to get onto the site, with millions of others around the world wanting to take a look. (What a cool breakthrough in participatory democracy, by the way, to see this proposed legislation so quickly after being written and finalized).

So first off, here is a quick analysis of what the bailout bill aims to do for people headed toward foreclosure. It's hard to say yet how much of a difference this will make for Sacramento-area borrowers sliding toward the abyss. But it does offer more hope than they had this morning, I think. I can't tell you the number of people I have talked to on the phone in recent months, urging them to hang in there if they can, for the likelihood of more help being on the horizon as this progresses.

Here is the analysis of what everyone in negotiations agreed to on that front:
 
 Section 109. Foreclosure Mitigation Efforts.
For mortgages and mortgage-backed securities acquired through TARP, the Secretary must implement a plan to mitigate foreclosures and to encourage servicers of mortgages to modify loans through Hope for Homeowners and other programs. Allows the Secretary to use loan guarantees and credit enhancement to avoid foreclosures. Requires the Secretary to coordinate with other federal entities that hold troubled assets in order to identify opportunities to modify loans, considering net present value to the taxpayer.

Section 110. Assistance to Homeowners.
Requires federal entities that hold mortgages and mortgage-backed securities, including the Federal Housing Finance Agency, the FDIC, and the Federal Reserve to develop plans to minimize foreclosures. Requires federal entities to work with servicers to encourage loan modifications, considering net present value to the taxpayer.

Finally, here is the entire bill released earlier this afternoon. This is likely to be one of the more historic financial documents in the history of the United States.

Here is a quick one-page summary.

And here is a more detailed section by section analysis.
 
I expect we'll we taking a closer look at all this tomorrow for reports in Tuesday's paper.

Image of Capitol Hill: patentdocs.net

There are a million angles to this foreclosure crisis - which must be pushing up near 25,000 cases now in the eight-county Sacramento region - and here is another one.

  If you lost your home don't forget to re-register to vote.

  I wish I had thought of this first, but here is The New York Times with a story about foreclosed voters as the presidential election comes into view.

You have until Oct. 20 to register for this election: Here is a Q&A on the subject from the California Secretary of State's office:

What is the deadline to register to vote?

The deadline to register to vote is 15 days prior to each local and statewide Election Day. To be eligible to vote in the November 4, 2008, General Election, you must register to vote by October 20, 2008.

I have just moved. Am I required to re-register?

Your voter registration should always reflect your current residence. However, if you have moved from your home into a temporary residence that you do not intend to use as your permanent residence, you can continue to use your prior permanent residence where you were previously registered to vote as your address for the purpose of voting.

Image: Inthesettimes.com

 

 

California has received $529 million from the U.S. Department of Housing and Development to help rejuvenate neighborhoods hit hardest by foreclosures.

 That's the good news - including $18.6 million for Sacramento County, $13.2 mililon for the city of Sacramento and $2.3 million for the city of Elk Grove.

But California's U.S. senators are crying foul - expressing "deep disappointment" in gettting less money than Florida. "This makes no sense and is totally unacceptable," the pair write in a letter to HUD Secretary Steve Preston.

Here is the announcement from  The California Department of Housing and Community Development.

The entire list of grants is supplied here by  U.S. Rep. Doris Matsui, D-Sacramento.

 

I just finished reading this Wall Street Journal article on four possible scenarios that could arise from the current financial crisis. It's food for thought on a Friday.

It's still amazing me sometimes that a real estate blog can now range so deep into the economic and financial arena - but we all know why.

 This all started with housing in places like Sacramento - where people took on more than they could handle or were pushed into bad loans. The defaults that began in 2006 became foreclosures and a subprime credit crisis in 2007 and now, full tilt nerve wracking Wall Street drama in 2008.

 The scenarios outline in the story:

Credit Crunch

Dangerous Dollar

Japan-style deflation

Surprising resilience

The fierce and protracted struggle that has defined 2008 for the capital region's real estate industry concludes its third quarter next Tuesday.

 That seems a good milestone at which to assess this year's massive downsizing.

We'll be reporting a story soon on layoffs in the capital region's real estate business during those three quarters. Builders have shut down, title companies and mortgage offices have closed and thousands have hit the trail in search of new jobs.

If you're among them, we would like to hear how this has affected you. If you're a survivor we'd like to know how this has affected your office. All other thoughts and angles are welcome. Or leave a comment here.  

 Feel free to call me at (916) 321-1102 or send e-mail to jwasserman@sacbee.com.

 

 

It was "real estate day" as Gov. Arnold Schwarzenegger plowed through a list of mortgage bills, signing several and vetoing the one, AB1830, that would have cracked down the hardest on lending industry practices.

Here is the governor's veto message.

Reaction came fast: The bill's author, Assemblyman Ted Liu of Southern California, said it was a Win for Wall Street and a loss for Main Street.

The California Reinvestment Coalition, which pushed hard for the lending industry crackdown also weighed in with a  news release critical of the veto.

The California Mortgage Association representing mortgage brokers and lenders  hailed the governor's veto as a bold stroke. 

The California Association of Realtors also had praise for the governor's veto, calling it "true leadership."

 

  Finally, here is the governor's announcement of all the mortgage-related bills he did sign.

Image: techluver.com

That's what sources are telling reporters from The Housing Wire in a story filled with links to other stories about the contentious politics of this bailout. Earlier today it sounded like they had a deal. Now it sounds like they don't. This thing is tough sledding.

 

Hanley Wood Market Intelligence released detailed numbers earlier today on home building industry leaders in the six county area - El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties - through the first half of 2008.

Top five builders in the region, with sales and market share:

Centex Homes (Dallas)      364    12.2%
Beazer Homes (Atlanta)     278     9.35%
KB Homes (Los Angeles)   182     6.12%
Lennar Homes (Miami)       175     5.88%
D.R. Horton (Fort Worth)     172     5.78%


Here's the big master-planned communities where the most homes are selling and their market share of all sales:

WestPark (Roseville)            227     7.63%
Whitney Ranch (Rocklin)      131      4.40%
Westshore (Natomas)            89      2.99%    
Riverdale (West Sacramento)  83     2.79%
Plumas Lake (Olivehurst)        83     2.79%

Top five selling builder projects from January through June:

D.R. Horton - Sonora Springs, Natomas, 71 sales
Beazer Homes, Tesoro, Rancho Cordova, 53 sales
Beazer Homes, Bungalows at Capital Village, Rancho Cordova, 45 sales
Beazer Homes, Alderwood Lane, Antelope, 40 sales
KB Home, Woodshire Signature, Woodland, 40 sales
 
Image: Banks.com

This just arrived from the state Employment Development Department. If you're among thousands in real estate laid off this year it's an option:

 WHAT:  A "Put Your Talent to Work" job and resource expo designed to help unemployed workers in housing-related industries find jobs that require similar skills, along with training opportunities to help prepare them for new jobs.  The event is part of a Talent Transfer initiative to which Governor Schwarzenegger has committed $10 million to help out-of-work Californians and stimulate the economy.

WHO:  Laid off workers from the residential construction, mortgage, and real estate industries, more than 40 service providers and employers with immediate job openings, including Golden 1 Credit Union, the Census Bureau, Platt Electric, Primerica Financial Services, and a five-year construction project at Thunder Valley Casino.  Representatives of the Employment Development Department; California Workforce Investment Board; Employment Training Panel and other valuable resource providers will also be available to assist jobseekers.

WHERE:         Lions Gate Garden Pavilion

Grand Ballroom

5640 Dudley Blvd.

McClellan (Sacramento) CA 95652

                       

WHEN:            Thursday, September 25, 10 a.m. to 3 p.m.

 

WHY:  Job losses in the construction, mortgage, and real estate industries are fueling an increase in unemployment that is now affecting other areas of California's economy. The most recently released data continue to show that the housing and real estate industries are the key sources of the slowdown in state job growth over the last two years. The Talent Transfer initiative is designed to match the unemployed workers with in-demand occupations.  Residential construction workers could transfer their skills to jobs in commercial construction including highway, bridge, and other infrastructure projects.  Mortgage and real estate workers, for example, could find job opportunities in administrative fields and growth industries such as health care, green technology, and biotechnology.

 

I have noticed something subtle going on with language while listening to debate over the $700 billion proposed federal bailout of Wall Street.

Indeed, I just heard Treasury Secretary Henry Paulson say it again a few minutes ago before Congress - that this crisis is rooted in borrowers who took on mortgages they could not afford.

And then they began to default on them, leading us to where we are today.

 I do believe, given the evidence that has piled up the past two years, that it would be polite and truthful in this debate to add a sentence saying that lenders also pushed people into mortgages they could not afford. That would at least be honestly sharing the blame.

My reporting over the last couple years tells me that neither borrower or lender is blameless in this debacle.

 

 

 

 We're watching national developments on this mortgage bailout plan to see if it ends up helping homeowners, too. The Los Angeles Times reports that Democrats and the Bush Administration have struck a deal to add those endangered by foreclosures to the list for help.

DataQuick takes a look at August sales in the Bay Area.

Highlights:

• Sales stubbornly low because of high costs of "jumbo loans."
• Bank repos about 36 percent of sales.
• Biggest sales rushes are in outlying Contra Costa and Solano counties, where bulk of new homes and bank repos are.

I haven't looked closely at this, but stumbled across it during a Google Search. It's a piece CBS News did from Las Vegas looking at the presidential candidates and their views and approaches to the nation's mortgage mess.

 

 Here is the first online look at new MDA DataQuick statistics just released for August.
 In summary:

• Sales are down slightly from July, but well above Aug. 2007.
• This year's summer sales season (April through August) outpaced last year's by 3,558 home sales and came within 800 of 2006 summer sales levels.
• Median sales prices failed to fall further in Sacramento County for the first time since May 2007.
• Inventory of homes for sales also continues to decline.

Median sales prices in Southern California - Los Angeles, San Diego, San Bernardino, Orange, Riverside and Ventura counties - fell to $330,000 in August, down 34 percent from the same time last year. Same story as here: an extravaganza of discounted bank repos is driving down prices.

  Read all about it in the DataQuick Southland August Home Sales report.

  

TAHOE CITY, Calif. - Prudential California Realty announced the largest sale in the Tahoe Sierra Board of Realtors history, recorded at $20 million. The lakefront acreage at 2380 Sunnyside Lane in Tahoe City, California, has been the same family since the 1930s.

 The property includes a two-story main home with four appurtenant structures, all within 7 shoreline acres situated on the West Shore at Lake Tahoe. The land was listed by Alan Heoney, veteran top-producing broker from the company's Tahoe City office.

"The Aspens encompasses meadows, towering aspen groves, nature trails, Lake Tahoe and Ward Creek frontage on a secluded level parcel with a private pier and buoys," says Heoney, partner/associate broker, Prudential California Realty of Tahoe City

 "It is an expansive waterfront setting with land capability that offers dramatic residential and landscape opportunities."

 Market Watch carries this news release from Maryland-based AmeriDream Inc. that the House Financial Services Committee passed legislation to stop an Oct. 1 ban on down payment assistance provided by it and Sacramento-based Nehemiah Corp. of America. Scott Syphax, president and CEO of Nehemiah, also confirmed the bill's passage.

 Next step: the House floor and then the U.S. Senate

The Placer County Association of Realtors has issued its report on August home sales, showing a slight increase from July. The association tallied 422 closed escrows in August, up from 419 in July. They're also up 36 percent over the same time last year.

Indeed, sales in the first eight months of 2008 total 2,772, compared to 2,437 the same time last year. That's a 13.7 percent increase.

The new median sales price  where half cost more and half less - is $320,000. That's lowest since May 2003.

Only 7 percent of sales in Placer County were below $200K.

 

 

 

The bank-owned bottom of the market again dominated in August home sales activity in Sacramento County and the City of West Sacramento.

 The Sacramento Association of Realtors released new statistics showing that 42 percent of escrow closings in August were priced below $200,000. And 66 percent percent of sales were bank repos. 

Sales were down from July, which seems to indicate that July may be the peak for this year's sales blitz.

Escrow closings in August: 1,871, down from 1979 in July.

Median price for the monthy - where half sell for more and half for less: $218,000.

 Here is the August monthly summary and the month's sales by ZIP Code.

 

 

 

 

Fannie Mae and Freddie Mac have new chairmen of the boards. The federal government has the details in this news release. They have their work cut out for them.

 

 

A new drop in interest rates for home loans is the good news. The bad news is it's harder than ever to get a loan in the first place. Here for the top of the morning are a couple looks at the situation from Reuters and from The San Francisco Chronicle.

There is some new talk about a potential wave of refinancings from lower rates. We are likely to do a story on that for Wednesday's paper. If you're thinking of refinancing drop me a line.