Tuesday, December 11, 2007

The Housing Boom's "Scorched-Earth Retreat"

From News10 (and video):

Sources told News10 Alliance Title Company is shutting down operations in the Sacramento area effective immediately. At one time, Alliance was the number one title company in Sacramento based on market share according to one longtime employee...One employee who was laid off Monday said she was told there's not enough work to continue supporting office operations. "I've never seen it this bad," she said.
From the San Jose Mercury News:
Washington Mutual, battling to extricate itself from a worsening mortgage quagmire, said Monday that it will chop 3,150 jobs, close nearly 200 home loan offices, shut call centers and double provisions for loan losses. The reeling bank will shut four home loan centers and one call processing center in the East Bay, three home loan centers in San Joaquin County and one home loan center in Solano County, a bank spokesman said...Among the local shutdowns, the bank revealed that it will close: Home loan centers in downtown Oakland, Dublin, Pleasant Hill,Lafayette, Stockton (two are being closed in that city), Manteca and Fairfield.
From the Modesto Bee:
Hiring in Stanislaus and Merced counties after the new year is expected to be more lethargic than last year, with less than one-fifth of employers projected to add jobs, according to a survey released today. Twenty percent of companies surveyed in the region said they expect to reduce employment in the three-month period starting in January, and 17 percent said they will add jobs, according to the quarterly Manpower Employment Outlook Survey.
...
[Cezanne] Mills said she started seeing some changes in hiring patterns in mid-2007, mostly in the financial sector tied to the housing market. Several mortgage and title companies either closed or scaled back their operations. "A lot of people with good skills were laid off because their company closed," said Mills, who estimates about 50 percent of the people who respond to Manpower job listings in Modesto used to work in the mortgage industry.
From the Christian Science Monitor:
Pushing up against almond groves and dirt-bike trails, the row of homes on St. Salazar Circle marks the furthest advance of Modesto's housing boom – and the start of its scorched-earth retreat. Brown, unwatered lawns of foreclosed homes compete with the green grass of neighbors still hanging on. Some of the structures, although new, are missing outdoor equipment like air conditioners, taken by metal thieves. One in 4 houses of the neighborhood stands empty, and mortgage defaults are certain to push even more residents, mostly Hispanic immigrants, out of their homes.
...
In the city made famous by the movie American Graffiti, the crisis is unfolding geographically. On its fringes, new neighborhoods, like the one surrounding St. Salazar Circle, the home-loan crisis has hit the hardest. Built during the height of the housing boom, they have the newest residents who paid the highest prices with the most exotic mortgages. After seeing prices rise 10 to 20 percent each year, they're now seeing prices slide downward.

"Right now, our dreams are being crushed," says Marisol Ramirez, a wife and mother of three who bought a home on St. Salazar last year for $370,000. Now, it's priced at $300,000 and the Ramirezes are likely to lose it. Their troubles began when their home was robbed, something that grew common in the neighborhood with the lack of work and the empty homes. That sent their insurance rates higher. Then her husband lost his job in home construction: No one is building these days. They haven't made a mortgage payment in three months on their 40-year, no-money-down loan. Now they are weighing whether to rent around Modesto or just return to Mexico.
...
Each day at the stroke of noon, Dean Roots arrives at the courthouse steps to read the 40 or so new homes put on the block....For months now, no more than a half-dozen onlookers have turned out for the ritual. On most days, no one even bids. "I try not to think about it because a lot of these people have brought it on themselves," Ms. Roots says.

14 comments:

Gwynster said...

Lander,

did you catch this piece?

Is California No Longer a High Job Growth State?
http://tinyurl.com/2l7er6

Jacob said...

And as bad as it is now, it will only get worse in 08.

California has plenty of job growth. Wal-Mart McDonalds are always hiring...

bubblemachine said...

Now they are weighing whether to rent around Modesto or just return to Mexico.

This is the question everyone is afraid to ask: How many of these home owners are illegal aliens?

KTM 300 said...

Return to Mexico? What? And he bought a $375,000 house? So this guy must make approximately $125,000 per year to cover PITI? Pushing a wheel barrow? I’ve nothing more to say.

smf said...

About the Mexican question from first hand knowledge.

1. Yes, a lot of illegals bought homes.
2. Some may return, but most prefer to stay.

There was a well known lack of people working in construction prior to the bubble. They are well paid jobs, but a lot of people were not interested in making a career out of blue-collar work.

This demand was nicely filled out by aliens, both legal and illegal. In a few short years, what used to be uncommon became common, that is hearing Spanish spoken at a work site.

And no, no one has any idea how many illegals there are.

Since most illegals get fake SSNs, employers don't feel the liability of hiring them. Plus, the government gets a nice surplus of funds that they don't have to pay back.

Last I read, there are about 9 million 'suspect' SSNs.

norcaljeff said...

I remember all these young women in Roseville, 19, 20 years old, no college, no training, no common sense, with $80K cars, $500K homes, and spending hundreds of dollars in an evening on wine, food, vacations, etc, by doing nothing but flirting and filing out paper work. Dreams really do come true. I wonder how long they will whine over having to actually work for a living, that is, if they can even find a job. Maybe they can just marry rich, as long as its not a realtor they marry.

KTM 300 said...

The people who brokered and negotiated contracts with illegals should be forced to answer for their crimes! We put people in prison for petty theft and writing hot checks, I just don’t see why someone with a RE license, or other certification should be treated any different. The court should take the license of anyone connected to writing a fraudulent loan. People who commit these crimes should be not only be fined, but forced to repay any losses even if it means selling their homes, their cars, their jewelry, taking their kids out of private school, etc. It seems that since the middle nineties, far too many people in our country think that their educations, licenses, birth rite, whatever, should enable them to be above the law. We cannot function as a society and a nation if everyone is on the take. If this behavior in our markets is permitted to continue, there will no faith in our markets. Fraud is a crime. It is not funny, it is not smart, or only an issue that little people without MBA’s, JD’s etc, need to worry about. The courts need to deal with white collar crime as harshly as possible.

Jacob said...

And too bad for them that they didn't save a penny and no matter what they made, they spent like they were making double or tripple that amount...

From flipping houses to flipping burgers... lol...

Mike said...

"what used to be uncommon became common, that is hearing Spanish spoken at a work site."

I remember back in 1999 when I purchased a new home in Elk Grove.

While the home was being built,
I went out to job site one day to ask some questions about options & completion date. There were 4-5 workers working on my purchased home, all seemed to be hispanic and not speaking English. I figured good portion of them were illegal immigrants.

I asked them some questions about the home and none of them could speak English well enough to answer me.

Finally, one of the worker just pointed to the trailer on the corner where the construction Sup. was. It seemed like the Sup. was the only non-hispanic (i.e. White guy) at the job site.

Most likely that situation got even more prevalent during the 2000-2005 boom.

smf said...

"The people who brokered and negotiated contracts with illegals should be forced to answer for their crimes!"

Only the real big ones will answer. The other 'little' ones will get a different type of justice...

Just imagine, one day you have a nice life, a lot of money, everything going for you...

...and then the dream ends...

...and you have years left of pathetic lifestyle, trying to go back to the glory of the good old days...soon...

...But the better days will never come...

...and then you realize that instead of spending all that money, you should have saved it. For all that money that went thru your fingers, and you have NOTHING to show for it...

I don't wish jail for a lot of these fraudsters. What they are about to go thru for several years will be punishment enough.

SacramentoCrash said...

NorcalJeff:

"I remember all these young women in Roseville, 19, 20 years old, no college, no training, no common sense, with $80K cars, $500K homes,"

They might be hookers and not borrowers.

Where else could they come up with that much money that quickly?

Were the loan underwriters that stupid?

SacramentoCrash said...

How do you like this dummy?

Better get used to orange jump suits Jean!

Guess you get the dummy of the week award Ms. Garcia.
_______________________________

First of many liar borrowers to get nailed by the feds:

SACRAMENTO, Calif. -- Jean Garcia, wife of convicted killer Mario Garcia, has been arrested on suspicion of wire fraud and money laundering, U.S. Attorney McGregor W. Scott announced Wednesday.

According to Assistant U.S. Attorney Matthew Stegman, who is prosecuting the case, the complaint alleges that Jean Garcia made false statements in a loan application for the purpose of obtaining a loan to refinance the house in which she and Mario Garcia lived, and then engaged in a monetary transaction in these criminally derived funds.

If convicted, the maximum penalty for wire fraud is 20 years in prison and a fine of up to $250,000, and for money laundering is 10 years in prison and a fine of up to $250,000 or twice the value of the money laundered, whichever is greater.


Mario Garcia was sentenced to 59 years to life earlier this year after being convicted of the killing of Christie Wilson.

Security cameras showed Wilson and Mario Garcia leaving Thunder Valley Casino in Lincoln in October 2005.

Wilson's body has never been found.

norcaljeff said...

Sactocrash, I knew a lot of them and worked in a building with more of them. They were all appraisers, mortgage brokers, loan "consultants" and title officers. They all pretty much made $10K/month or more. I knew only woman, about 23, no college education, who was put in charge of her own Title office. She ran the branch out of Rosevill and Reno. Made about $500K/year for the past 6 years not including bonuses and other "perks." You could call it the "Old Girls Club" because there were very few men even hired in these jobs. The hotter and more stupid they were the higher their incomes seem to go. I knew girls right out of high school that answered phones for these title companies making near 6 figures with bonuses that would make Gywnster blush. I knew it couldn't last. Money for nothing and the chicks are free. Well, in this case the chicks weren't free b/c if you didn't also make 6 figures and drive a German import you had no chance with them. Ah, but such as life. What comes around goes around and they were all finally getting a reality check this fall and will now have to go back to Denny's and wait tables and drive American cars as the repo man takes back their homes funded with play money. Someone ought write a screen play. Where is Michael "fat A$$" Moore you yon need him???

Gwynster said...

LOL Jeff, are you making fun of my expensive shoe vice?

I'm a big believer in financial karma. I think most of those types will filter back to the BA or LA because there won't be any big gmae hunting left here.