Real Estate Fraud Crackdown - 'Too Little Too Late'

From the AP:

[F]raud helped artificially inflate home values that have since come crashing to earth..."Let's not lose sight of the fact that there is immense criminal fraud involved in this financial crisis," said U.S. Attorney McGregor Scott, whose district spans California's vast Central Valley and is among those most affected by the housing bust. "It's a profound ripple effect that affects everyone."
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In Scott's California district, prosecutors have filed charges related to housing scams against 53 people in 15 ongoing prosecutions. They have another 15 active investigations against 68 individuals. They estimate hundreds of millions of dollars have been paid out by banks and other lenders because of mortgage fraud in the Central California district, which stretches from just north of Los Angeles to the Oregon border. "We're running out of bodies to handle these cases," said Scott, calling on Congress to approve more money for investigators and prosecutors. "We're just being overwhelmed."
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"I wish they had engaged in this earlier," [Paul] Leonard [director of the California office of the Center for Responsible Lending] said. "I think it's constructive to sort of root out these evil and malicious scams when they occur ... Given the state of the economy, it's too little too late."

From the Modesto Bee:

The economy appears to be in a "mini-depression" but could start growing again by mid-2009, the publisher of Forbes magazine told a Modesto audience Wednesday...[Rich] Karlgaard also said the housing market, especially depressed in the Northern San Joaquin Valley, is starting to turn around as buyers bid up underpriced homes.

From the Modesto Bee:

And then ... the crash. The bottom dropped out of the real estate market and almost without warning the nation itself fell into an economic sinkhole that seems to have no bottom...While Central Valley cities have been especially battered by the crashing real estate market, there's reason to hope we will recover faster than the rest of the country. Our economy is still based on agriculture, and agriculture will weather this storm better than many other markets.

From Sacramento News & Review:

It could get worse. Much worse. If unemployment continues to increase as the economy unwinds, by this time next year, the state may not be able to pay all of those who are eligible for [unemployment insurance] benefits, according to EDD spokeswoman Loree Levy.
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Combined with the recent wave of job losses from the collapsing housing bubble, [a]...structural gap [between payroll taxes and benefits] led to a 55 percent decrease in the fund during the past year. EDD forecasts a $2 billion-plus deficit next year, and double that figure by 2010.

In short, unemployment insurance, established in 1935 during the Great Depression as a component of President Franklin Delano Roosevelt’s New Deal program, may not provide workers enough protection from the present downturn, which many economists are already calling the next Great Depression.

From the Sacramento Bee:

"This year I told my mom, 'Don't be surprised if you receive a macaroni necklace as a gift made by me, not your 3-year-old grandson,' " said Shelly Hutchens of Sacramento. Hutchens was joking, but there's more than a bit of truth there, too. A state employee and mother whose husband is in the construction industry, Hutchens said her family and friends have felt the effects of a slumping economy. "We're at a different time. If you haven't been affected by the economy, you know someone who has," she said.

From the Sacramento Bee:

Office Depot will close two of its Sacramento-area locations today as part of a wide-ranging, cost-saving measure announced on Wednesday by store officials. Stores in Citrus Heights and Rocklin are among six California stores to be closed...About 40 full- and part-time employees at the Citrus Heights and Rocklin stores will be affected by the closures, said spokeswoman Melissa Perlman.

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