Foreclosure alley

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Foreclosure Alley

For the past few years, the Inland Empire in Riverside County has been one of the fastest growing counties in the state - home to a major housing boom. But now the Inland Empire is pretty much the poster child for the foreclosure crisis. SoCal Connected tracked down some surreal sights associated with the crisis, including a guy who started a business turning abandoned, dead lawns green - with spray-paint.

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Op donderdag 2 oktober 2008 04:48 schreef Roi het volgende:
wow, een linkdump....

lijkt wel een gemiddeld TRU topic

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In hard times, tent cities rise across the country
Since foreclosure mess, homeless advocates report rise in encampments

Homeless encampments are springing up around the country, including this one next to the homeless shelter in downtown Reno, Nev.

RENO, Nev. - A few tents cropped up hard by the railroad tracks, pitched by men left with nowhere to go once the emergency winter shelter closed for the summer.

Then others appeared — people who had lost their jobs to the ailing economy, or newcomers who had moved to Reno for work and discovered no one was hiring.

Within weeks, more than 150 people were living in tents big and small, barely a foot apart in a patch of dirt slated to be a parking lot for a campus of shelters Reno is building for its homeless population. Like many other cities, Reno has found itself with a "tent city" — an encampment of people who had nowhere else to go.

From Seattle to Athens, Ga., homeless advocacy groups and city agencies are reporting the most visible rise in homeless encampments in a generation.

Nearly 61 percent of local and state homeless coalitions say they've experienced a rise in homelessness since the foreclosure crisis began in 2007, according to a report by the National Coalition for the Homeless. The group says the problem has worsened since the report's release in April, with foreclosures mounting, gas and food prices rising and the job market tightening.

"It's clear that poverty and homelessness have increased," said Michael Stoops, acting executive director of the coalition. "The economy is in chaos, we're in an unofficial recession and Americans are worried, from the homeless to the middle class, about their future."

Caught by surprise
The phenomenon of encampments has caught advocacy groups somewhat by surprise, largely because of how quickly they have sprung up.

"What you're seeing is encampments that I haven't seen since the 80s," said Paul Boden, executive director of the Western Regional Advocacy Project, an umbrella group for homeless advocacy organizations in Los Angeles, San Francisco, Oakland, Calif., Portland, Ore. and Seattle.

The relatively tony city of Santa Barbara has given over a parking lot to people who sleep in cars and vans.

The city of Fresno, Calif., is trying to manage several proliferating tent cities, including an encampment where people have made shelters out of scrap wood.

In Portland, Ore., and Seattle, homeless advocacy groups have paired with nonprofits or faith-based groups to manage tent cities as outdoor shelters.

Other cities where tent cities have either appeared or expanded include include Chattanooga, Tenn., San Diego, and Columbus, Ohio.


Robert Scott Cook, originally from Alaska, sits with one of his dogs, Zoey, at the tent city that sprung up next to the homeless shelter in Reno, Nev.

The Department of Housing and Urban Development recently reported a 12 percent drop in homelessness nationally in two years, from about 754,000 in January 2005 to 666,000 in January 2007. But the 2007 numbers omitted people who previously had been considered homeless — such as those staying with relatives or friends or living in campgrounds or motel rooms for more than a week.

In addition, the housing and economic crisis began soon after HUD's most recent data was compiled.

"The data predates the housing crisis," said Brian Sullivan, a spokesman for HUD. "From the headlines, it might appear that the report is about yesterday. How is the housing situation affecting homelessness? That's a great question. We're still trying to get to that."

In Seattle, which is experiencing a building boom and an influx of affluent professionals in neighborhoods the working class once owned, homeless encampments have been springing up — in remote places to avoid police sweeps.

"What's happening in Seattle is what's happening everywhere else — on steroids," said Tim Harris, executive director of Real Change, an advocacy organization that publishes a weekly newspaper sold by homeless people.

Homeless people and their advocates have organized three tent cities at City Hall in recent months to call attention to the homeless and protest the sweeps — acts of militancy, said Harris, "that we really haven't seen around homeless activism since the early '90s."

In Reno, officials decided to let the tent city be because shelters were already filled.

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Op donderdag 2 oktober 2008 05:16 schreef indahnesia.com het volgende:
Dat is echt heel bizar.. alsof die mensen gewoon opgelost zijn in rook. Alles blijft achter

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Op donderdag 2 oktober 2008 05:30 schreef santax het volgende:
Hehehe, toch moest ik wel even lachen toen ze het gras gingen verven. Dat vind ik toch wel typisch Amerikaans

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Credit Crisis Hitting Home: 'Everybody Cries Together'

Back in 2006, Stephanie Christmas ran a bustling turf business in Gainsville, Fla., with 40 employees. Credit flowed freely and the housing market was hotter than the scorching summer sun in Florida's 'gator country.

Now that seems like an eternity ago.

Christmas' Hendricks Turf farm, which delivers sod for landscaping projects, has seen business dry up with the housing slump. On top of that, Christmas can't get credit from the bank because her prime source of collateral—hundreds of acres of prime farmland—has lost much of its value with the real estate collapse. The family-run company is struggling to survive.


Danny and Stephanie Christmas on the Hendricks Turf farm near Gainesville, Fla.

"I don't think people truly understand the gravity," she says in a phone interview. "Nobody in my generation and even the generation before me has seen hard times, and I don't think it's something they can possibly fathom. You go down to the local diner for lunch and everybody cries together."

As the credit crisis spreads around the globe, it is reverberating back to Main Street in ways never seen before. Financial institutions large and small have grown unwilling even to lend each other money—much less their customers. As such, stories similar to the Hendricks Turf farm are being played out across America.

Although most people who have e-mailed CNBC.com say they've had no problems getting credit, some are feeling strapped. They speak of having pristine credit scores and solid balance sheets—yet hear again and again that there's no money to lend.

One construction company owner wrote about his 60-year-old family business that can't get financing to build. Another businessman talked about having his credit line frozen. Still another, a prospective new home-buyer, related a story of trying to get a new-construction loan and being told that home equity would no longer be accepted as credit towards a downpayment.

"This crisis affects Main Street more and more everyday," wrote "Dave" from Los Angeles, in a comment about the government rescue plan. "I don't want to see my company, my home equity as well as my 401k wiped out all in one shot if this funding is not approved."

Good Times, Bad Times

Before housing values started tumbling nationwide in 2005 and 2006, business for Christmas' family-run operation was good, almost too good.

"At the end of '06 is when the building really started slowing around here," Stephanie Christmas says. "At that time, it was literally a welcome breath of air. We were all exhausted. You were literally running a race you were never able to win."

But a slowdown turned to a virtual shutdown, and revenue for the company dropped about 70 percent in the two-year span. A staff of 40 will soon shrink to nine.

Simultaneously, the Florida housing market has fallen through the ground, presenting a double-edged problem for Hendricks Turf.

While the company lost business on one end because of the housing decline, it lost access to credit on the other end because its farmland was no longer worth much. It was a rural version of Wall Street's mark-to-market accounting dilemma: How can you mark something to market when there's no market?

"Mark-to-market means nothing now," Christmas says. "It's only worth what someone's willing to pay for it, and nobody's willing to pay for it."

"Where's the bottom for this thing?" she adds. "The problem is, in this area we still don't feel like we hit the bottom. That is absolutely terrifying."

To raise money, Hendricks Turf is holding what is referred to as an "absolute auction" on a 200-acre tract the family owns—awarding the property to the highest bidder no matter the price. It's a risky move that could end up with the land being severely undervalued. But Christmas and her family believe they it's their only recourse because of the lack of available credit.

The hope is not only to generate liquidity for the business but also to set a value for property in the Gainesville area that banks can use as a yardstick to start lending again.

"If this auction doesn't go the way we want it to," she says, her voice taking on emotion, "quite frankly I don't know what we're going to do."

Other Voices

Christmas is hardly alone with tales of credit woes from one end of the country to another.

"Eddie" from Brea, Calif., tells a familiar yet startling story of how even the most qualified borrowers are afforded little or no access to credit:

"Applied for a Super Jumbo Loan with a 735 Mid FICO score, 200K in liquid assets, 500K annual income. 1 million net worth and I was turned down."

And it's not limited to housing-related industries.

After auto companies released dismal sales results yesterday, "CD" wrote of how difficult it is to get car financing these days.

"I work at a dealership and we're having a very difficult time getting GOOD people financed. We had a couple with 750 beacon scores we couldn't get bought, and when you're a 750 you've done everything right. You've done what you are supposed to do. ... People want to believe that because they didn't over extend themselves they will be ok. They wont realize the problem until it slaps them upside the head and affects them personally."

Nikki, from Arlington, Va., had an issue with trying to buy a newly built home.

"We applied for a new home construction loan and despite of already having equity built into the total price, we were asked to put down 20% of the entire loan amount. In the past the construction loan always took into account the equity in the house as part of the down payment."

And "Jack" from Destin, Fla., relates another tale of businesses getting strangled by the lending freeze:

"Even though we are up to date and have never missed a payment, our credit lines have been 'basically' frozen. My 400,000 sq foot commercial project is sold out to some strong anchor clients and yet they too are having issues due to excessive financing scrutiny. My banker says regulators are forcing all banks to downgrade construction loans to sub-standard in my part of Florida. Perfect credit and a wonderful history do not matter.

"It is very hard to finance a big project like this out of pocket. Not good!"

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3 posh projects go bust as Valley dreams bite the dust

An empty lot has a commanding view of the partially built Diablo Grande in the hills west of Patterson. Nicotine patch mogul Donald Panoz spent $120 million to bring his dream – including two golf courses a vineyard and winery – to life. The project filed for Chapter 11 in March after the anticipated Bay Area transplants failed to materialize.


In the Central Valley these days, the bankruptcies and foreclosures don't just affect individual homeowners.

They swallow entire developments – and the people who conceive them.

Winchester Country Club in rural Placer County, which went into foreclosure and sent legendary Sacramento highway contractor C.C. Myers into bankruptcy protection, isn't the only lavish golf-course housing development to fall on hard times. Three massive high-end projects in the San Joaquin Valley have fallen into bankruptcy proceedings in the past two years.

The three insolvencies symbolize the California housing bubble at its most extreme. Combined, they have cost lenders and investors tens of millions of dollars – and offer clues about the roots of the financial crisis that has gripped Wall Street and the world's economies.

Each is striking in its own way:

• After Running Horse in Fresno collapsed, none other than Donald Trump jetted in with a possible rescue plan. He gave up months later. One of the original developers, accused of fraud, turned up dead in a Fresno motel last month.

• Bakersfield's McAllister Ranch defaulted on a $235 million loan from Lehman Bros., the investment giant whose Chapter 11 bankruptcy filing helped heat Wall Street's woes to their current boil. McAllister's only occupants are a herd of sheep grazing on a golf course designed by Greg Norman.

• Diablo Grande, in Patterson in Stanislaus County, is faring better. Like Myers' Winchester project, it's partly built out. But homeowners grumble about water-quality problems and plummeting values, and the project became a nightmare for original developer Donald Panoz, a pharmaceutical tycoon who made a fortune on the nicotine patch. He lost Diablo Grande after it filed for bankruptcy protection.

All three developments were designed to bring the luxury life to the Valley, and that's where the problem lies. Their struggles illustrate how hard it is to transplant $800,000 homes and designer golf courses to California's chronically depressed midsection.

Bakersfield boom turns to blues

While the housing boom brought money and diversification to a region too dependent on farming, the overall impact was somewhat hollow. The fundamentals of the economy didn't change. The Valley didn't generate nearly enough high-paying jobs needed to sustain such high-end developments as Running Horse.

"The markets were so overheated they were chasing any deal," said Fresno real estate consultant Robin Kane. "Part of the problem that always hurts us in the Valley, from Bakersfield to Stockton, is your employment and per capita income (are) not rising."

With the boom a faded memory, unemployment is creeping back up to the 10 percent range in much of the Valley. The real estate market is a disaster: Stockton had the nation's highest foreclosure rate in August, according to researcher RealtyTrac, followed by Merced and Modesto.

Developers of big projects are paying for what Kane and others said was a classic Valley mistake: They fell in love with the area's inexpensive land but ignored its troubling demographics. The Valley is still plagued by low incomes, a poorly educated work force and other ills.

"We're not another Silicon Valley," said Bakersfield real estate appraiser Gary Crabtree.

That didn't seem to matter when McAllister Ranch was taking shape in southwest Bakersfield. The city in 2005 had become the nation's single hottest housing market, as measured by price growth, thanks to a stampede of homebuyers from Los Angeles.

McAllister was going to be a big-time operation, with 6,000 homes and a host of amenities. Developer SunCal Cos. of Irvine borrowed $235 million from Lehman Bros. – part of a $2.2 billion war chest Lehman handed SunCal to develop properties throughout California and Nevada.

SunCal had a grand vision for Bakersfield. After buying out the original developer, it doubled the asking price for individual lots, to $115,000.

But once the market petered out, "those prices were no longer viable," said ex-project manager Darryl Tucker.

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Op zondag 12 oktober 2008 22:30 schreef Dulk het volgende:
hier ben ik echt even stil van...

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Op zondag 12 oktober 2008 22:33 schreef MouseOver het volgende:
Als je dit soort dingen leest vraag je je toch stiekem af of dat geld niet beter in die mensen dan in de banken gepompt kon worden.. hoewel dat eigenlijk sterk tegen m'n principes is.. Die afschrijvingen die de banken moeten doen zijn voornamelijk het gevolg van het feit dat de onderliggende hypotheken niet meer betaald kunnen worden.

Om die molensteen om de nek van de banken te kunnen halen springt de overheid flink bij. Als die de mensen zelf zou helpen zouden de afschrijvingen ook minder zwaar zijn. Door de variabele rente voor die hypotheken gedwongen te bevriezen voelen enerzijds de mensen die een te hoge hypotheek afgesloten hebben dit omdat die rente al gestegen was, en anderzijds voelen de banken dit doordat ze renteinkomsten mislopen. Op die manier wordt de pijn wat verdeeld en daarnaast leren beide partijen er dan mogelijk nog iets van.

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Orlando, Fla.
Foreclosures as percent of all homes: 0.65%
Mortgage write-off rate 2008: 3.89%
Mortgage write-off rate 2009 (projected): 4.38%
Percent change: 12.5%

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Oxnard, Calif.
Foreclosures as percent of all homes: 0.66%
Mortgage write-off rate 2008: 2.41%
Mortgage write-off rate 2009 (projected): 2.6%
Percent change: 11.7%

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Op donderdag 30 oktober 2008 11:20 schreef xxjosjex het volgende:
Bizar hoor dat een wereldmacht zo met hun mensen om gaat. Je hoort er bijna niks van op tv....
En de echte mensen die aan de macht kan het niks schelen want die hebben hun centen al die jaren binnengehaald.....