Sacramento Sorrow

Ok, here comes the Prime and Alt-A whiners. The bubble was obvious; if you participated you put yourself, your family, and your savings (assuming you used any for a purchase) at risk. Now we get a whole new breed of Shamers!

Ya' know, I remember a time when $500K was a LOT of money. But here's a guy that drank the kool-aid deeply. Go out and buy that $600K house on the golf course; live large; prices only go up; don't worry about the future. Well... it's time to give it all back.

Food for thought:
At the ripe old age of 55+, why would anyone want to take on crippling debt? As you approach your "golden" years you should be seeking security and zero debt.

2009-07-11: Mortgage defaults spread as even 'safe' borrowers falter
No longer is the real estate bust simply the result of exotic, subprime loans that doubled payments and blew up in homeowners' faces. As the Sacramento economy buckles, even the safest mortgages have become part of a new wave of loan defaults, experts say.

With capital-area job losses reaching 45,000 in the past year and unemployment at 11.1 percent, lenders, bankruptcy attorneys and debt counselors all say they're seeing rising delinquencies among prime borrowers with fixed-rate loans and good credit. Many of those slipping into trouble are state workers, the mainstay of Sacramento's economy.

There are 3.3 million of them in California – 56 percent of all mortgages. But nearly 4 percent were delinquent in the first quarter,

Already in the foreclosure process is Ron McClure of Roseville. He bought a $600,000 house at Sun City Roseville in 2003, using a prime, fixed-rate loan that cost him $3,200 a month.

That worked until the housing market collapsed. McClure, partner in a small home-building business, saw his income collapse with it. Six months ago, he stopped making payments on the house.
--------------

Here is the house:
7681 Rosestone Ln, Roseville, CA 95747
3 beds, 2.5 baths, 2,538 sq ft
Zestimate®: $455,000

Sold 08/15/2003: $600,000
2008 Property Tax: $6,757

Kern County - Record Foreclosures

Lets continue the Kern County NOD and Foreclosure record tracking for Bakersfield Bubble.
Record NODs HERE.

California Insolvency is Here (?)

We're insolvent, I guess. Let's see what happens.

2009-07-01: California Prepares to Issue IOU's
Sacramento (myFOXla.com) - California's controller will start paying many of the state's bills with IOUs as soon as Thursday after lawmakers failed to close the state's worsening budget deficit, adding a new measure of indignity to a state sinking deeper into dysfunction.

2009-07-01: BofA to accept California IOUs
Bank of America said Wednesday that it will accept IOUs from the State of California from its customers through July 10.

“To support our customers, while giving the government additional time to pass a budget, we will accept California state-registered warrants - or IOUs -from existing customers and clients,” the bank said. “Based on state disbursement estimates, we will accept the registered warrants through July 10.”

California Insolvency!

2009-06-30: Federal Judge Blocks Bankrupt California from Reducing Wages of State Workers
U.S. District Judge Claudia Wilken halted the wage cuts on June 25 in response to a lawsuit by the Service Employee International Union (SEIU) on behalf of 250,000--out of a total of 440,000--home care workers that it represents in California.

The judge ordered the state to keep paying the workers, referred to as In-Home Supportive Services Workers (IHSS), up to $12.10 in wages and benefits. [IHSS? WTF?]
...
The union argued that the IHSS program actually saves the state money because it keeps its users from going into nursing facilities that tend to be more expensive.

However, according to a California Senate Office of Oversight and Outcomes report this year, the IHHS program “lacks sufficient oversight and suffers from fraud and abuse.” [How shocking!!]
----
Ok, let's do the math... (assume 1000 work hours/year; half-time)

440,000 workers x $12.10/hour x 1000 hours/year = $5.3BILLION

2009-06-30: California poised to issue IOUs to vendors
So far, no banks have committed to honoring the IOUs, said Hallye Jordan, spokeswoman for state Controller John Chiang.

She said banks are probably waiting to see how much interest the state will pay on the IOUs – a figure that won't be decided until Thursday, the same day Chiang is scheduled to issue IOUs. The notes will total $3.36 billion, with about $500 million targeted for the private sector.

2009-06-24: California set to issue IOUs
"Next Wednesday we start a fiscal year with a massively unbalanced spending plan and a cash shortfall not seen since the Great Depression," Controller John Chiang said in a statement announcing that he would be forced to use IOUs to pay the state's bills beginning on July 2.

Kendra Todd - The Lawsuit

Kendra Todd, Uber Real Estate Pumper
(see also, Part 1, Kendra Todd Meets God)

If guilty, perhaps behind bars she will convert to Islam.

* Hat tip Johnnie

2009-06-21: Kendra Todd accused of fraud in lawsuit over homesale
...
But homebuyer Diane Harris probably wished Todd had a different show - perhaps one entitled, "My Closing Costs Are Worth What?"

Harris said Todd used her Apprentice success "to lull unsuspecting victims into her scheme to defraud," according to a Palm Beach County Circuit Court lawsuit filed against Todd by Harris earlier this month.

More specifically, Harris claims Todd defrauded her by inducing her to buy a Texas home in a deal stuffed with financial extras for Todd, "including overcharges and illegal charges, none of which were disclosed." As a result of the added closing costs, plus a high interest rate mortgage Harris couldn't afford, the property is in foreclosure and Harris' credit is ruined, the lawsuit claims.

Harris is suing Todd, mortgage broker Michelle Caldwell, and Todd's company, Kendra Todd Group, a dissolved Florida corporation formerly based in Hypoluxo. The suit, which includes allegations of fraud and breach of fiduciary duty, seeks unspecified money damages.
...
In her lawsuit, Harris claims Todd called the Obra purchase "a fantastic investment opportunity" and that only a few lots still were available for sale. Swayed, Harris said she gave Todd a $7,500 deposit for the purchase of a $88,820 home, the lawsuit says.

Things went south soon after that. Harris's suit said she was told the home would be equipped with appliances. But when Harris went to see the home, she learned the appliances weren't included - but could be purchased through the mortgage loan. So another $1,000 was added to the mortgage, the lawsuit says. (Before it went bust, Obra gained a reputation for luring home buyers in with low-cost home prices and the promise of free appliances.)

In addition to the appliance snafu, other nasty surprises awaited Harris, including an extra $2,000 in deposits owed, the suit claims.

Harris claims she later learned Todd received "kickbacks" from Obra for bringing buyers to the homebuilder, the lawsuit alleges. But Harris' suit said Todd wasn't licensed as a broker in Texas, and therefore couldn't receive kickbacks - or brokerage fees, as Todd described them in closing documents, the lawsuit says.

Harris's suit said she also paid mortgage broker fees to Caldwell, even though she wasn't a licensed mortgage broker in Texas. Caldwell could not be reached for comment, and the company she worked for, Benchmark Mortgage Corp., is listed as a dissolved Florida corporation, according to state records.

Todd, who still owns a Boynton Beach home appraised at $219,276, also could not be reached for comment by presstime. Her publicist said she was in Seattle.
----
34 Baytree Cir, Boynton Beach, FL
3 beds, 2.0 baths, 1,577 sq ft
Zestimate®: $180,000

Sale History
04/23/2004: $207,000

Property Appraisal

Barack Hussein Obama

Barack Hussein Obama, President, USA
As if the housing debacle couldn't get any worse, along comes the Commander in Chief Thief to bring "financial rape" to the American Public (The Dumbest Thing I've Seen Yet, Denninger).

2009-06-19: Obama’s Mortgage Program
June 19 (Bloomberg) -- President Barack Obama’s program to help more homeowners refinance may be expanded to include borrowers who owe more than 105 percent of their homes’ values, Federal Housing Finance Agency Director James Lockhart said.

The Obama administration is considering allowing Fannie Mae and Freddie Mac to refinance loans with current loan-to-value ratios of 125 percent or higher, Lockhart said at a National Association of Real Estate Editors Association conference in Washington yesterday.

Roxie Chilcott, Part 2

Roxie Chilcott, Mortgage Broker??
(Part 1)

Well, well, well, what do we have here? I was perusing some old HBHS® posts and after seeing Roxie I thought I would do a little internet search to see if there was any new, publicly-available information on our mortgage broker sweetheart. And what do I find...

Link: Foreclosure Listing

And, San Diego Source: PUBLIC NOTICES (then select "Trustee's Sales")
Notice is hereby given that RECONTRUST COMPANY, N.A., as duly appointed trustee pursuant to the Deed of Trust executed by ROXIE ANN CHILCOTT, AND KEVIN RICHARD KELLY, WIFE AND HUSBAND AS JOINT TENANTS, dated 11/10/2006 and recorded 11/17/06, as Instrument No. 2006-0820873, in Book, Page 11705), of Official Records in the office of the County Recorder of San Diego County, State of California, will sell on 01/22/2008 at 10:00AM, AT THE SOUTH ENTRANCE TO THE COUNTY COURTHOUSE, 220 WEST BROADWAY, SAN DIEGO, CA at public auction, to the highest bidder for cash or check as described below, payable in full at time of sale, all right, title, and interest conveyed to and now held by it under said Deed of Trust, in the property situated in said County and State and as more fully described in the above referenced Deed of Trust. The street address and other common designation, if any, of the real property described above is purported to be: 4046 CAMINITO ESPEJO, SAN DIEGO, CA, 921071521.

Reviewing the house details, it was purchased in '95 for $160K and it sold for $415K after the foreclosure. But the loan amount shown in the foreclosure listing is $468K. Livin' high on the HELOC? Out of curiosity, would this loan have legal recourse?

What is even more fascinating about this foreclosure is that it occurred near the same period of time that Roxie was serving as Pres. CA Assoc of Mortgage Brokers (San Diego Chapter) and was being quoted in the San Diego Union-Tribune (Dec. 07).

4046 Caminito Espejo, San Diego CA 92107
3 beds, 2.5 baths, 1,434 sq ft
Recently Sold: $415,000

Sale History:
06/13/2008: $415,000
02/28/1995: $160,000

Kendra Todd Meets God

Ever notice that when people reach bottom and they can't pimp their BS anymore, they turn to god. Go check out some of Kendra's more memorable past remarks, HERE.

Kendra Todd: "Money is God" (see below)
WTF!!!

Kendra Todd: "the Lord will guide us through this financial crisis"

Wait a second, didn't she help guide people INTO the crisis??

700-Club Video

Kendra Todd: Turn Passion Into Prosperity
“I’m a real estate investor, but that’s just one facet of one part of a bigger picture – teaching people how to develop a healthy attitude and mindset towards money,” she said.

Her best selling book, Risk & Grow Rich targets the challenges and importance of taking risks to create wealth, and directly confronts how our relationship to risk affects our lives.

Her team's main mission is to match buyers with properties that fit their goals, and to help people grow one step closer to financial freedom. And, although Kendra has an in-depth background in real estate, her main goal is equipping people with the knowledge that success and wealth comes from God.

“I’m a strong Christian, and I’m getting ready to launch a Christian biblical based approach to making and saving money, tithing and giving,” she said. “I am getting ready to do what I am passionate about. I want to empower people to create a real positive relationship with and perspective on money, and realize it’s all God.”

Kendra also specializes in financial literacy and believes that it’s important to learn how to save and not be indebted to anyone; learning the biblical foundation on how to approach money and setting yourself up for retirement is key, especially during this current economic crisis. (Hey, what happened to tapping sweet home equity? See: My House is Worth What? )

“It isn’t about you. It’s all God,” she said. “That’s something that I really put out there as one of the fundamental approaches to developing a successful mindset. Turn off the television; the Lord will guide us through this financial crisis. Don’t get overly excited about what the news is saying. Don’t let that dictate how you feel about your current situation.”

Santa Clara Fishing

Is it really a good time to buy?
Is SillyCon Valley really immune?
Answers: No and No

Fasten your seatbelts, SillyCon Valley, the day of reckoning is appoaching.

Here's a random example of the insane bubble.
$630K at the peak.
He $HOOT$, he $CORE$!!!
(but they better convert some of that fiat profit to tangible assets; one way or another, it all has to be given back)

3173 Cabrillo Ave (or Movoto)
Santa Clara CA 95051
3 beds, 2.0 baths, 1,078 sq ft

Sale History
06/25/2008: $500,605 *
05/19/2006: $630,000 (Buy now or be priced out forever! Really?)
06/29/1995: $210,000

For Sale: $430,000

Got Gold?

Is this going to be a growing trend???

Things are getting very, very interesting.

And did you see silver bust through $16?

2009-06-01: Northwestern Mutual Makes First Gold Buy in 152 Years
June 1 (Bloomberg) -- Northwestern Mutual Life Insurance Co., the third-largest U.S. life insurer by 2008 sales, has bought gold for the first time the company’s 152-year history to hedge against further asset declines.

“Gold just seems to make sense; it’s a store of value,” Chief Executive Officer Edward Zore said in an interview following his comments at a conference hosted by Standard & Poor’s in Brooklyn. “In the Depression, gold did very, very well.”

Northwestern Mutual has accumulated about $400 million in gold, and Zore said the price could double or even rise fivefold if the economy continues to weaken. Gold gained 10 percent last month, the most since November. The commodity has more than tripled since 2000, rising for eight straight years. Gold futures for August delivery slipped $4.80 to $975.50 at 4:03 p.m. in New York.

“The downside risk is limited, but the upside is large,” Zore said. “We have stocks in our portfolio that lost 95 percent.” Gold “is not going down to $90.”

Alt-A Bomb

I haven't done this in a while, so lets do some detective work and poke at house debtors.

Here was the story:
2009-05-30: Alt-A Loans, Second wave of foreclosures ahead
Refinancing three years ago into a pay-option loan allowed Kristi and Marvin Laron to avert a jump in the monthly cost on the original loan the couple used to purchase their Cloverdale home. The loan’s minimum payment was $400 lower than their previous mortgage payment.

“Our whole goal was to pay less,” Kristi Laron said. “We figured we were going to refinance again. Who knew what was going to happen.”

Now the Larons are stuck with the loan and face a $1,000 hike in their monthly mortgage payment, boosting it to about $3,200. The couple can’t refinance because they owe more than the house is worth. Their lender has denied requests to change the loan and avert the payment jump, primarily because the couple has not fallen behind on payments and doesn’t have a financial hardship.

“We’re trying to avoid foreclosing on our house. We’re trying to do the right thing and nobody wants to help,” Kristi Laron said. “We both have jobs and we can’t really complain except for wondering what the future holds.”

Here is the house:
433 Reisling, Cloverdale, CA
Z-Estimate: $340,000
Sold: 1/20/2005
Sale Price: $400,000
2008 Property Tax: $5,361

There is a house for sale in the neighborhood for $300K. As the bomb starts going off, how many houses in this neighborhood will succumb to foreclosure? And check out the property taxes; the price of "ownership".

Was their long-term plan to continue refinancing to keep their house ponzi going?

Final Question: Who will help the Larons?
(click HERE for answer)

Sonoma Canary

Below are the Notices of Default and Trustees Deeds for the county of Sonoma, as taken from the Sonoma County Assessor. I thought I would regularly post these as indicators of the real estate situation and "recovery" in California.

Note the drop in NODs and Trustees Deeds as the new California law (SB 1137) went into effect. It effectively delayed the foreclosure process, offering no real benefit or solution for house debtors. The numbers below appear to support its lack of effectiveness.

May '09: Notice how NODs are back to the high levels, yet Trustees Deeds are not back up to the previous levels (200-350). Give it time, however; this is still quite broken and disturbing. Do you see recovery in these number? BTW, Calculated Risk just posted an article on the Alt-A bomb exploding in Sonoma.

NODs:

2008 . . 2009

Jan 451 . 394

Feb 513 . 468

Mar 498 . 553

Apr 509 . 497

May 505 . 491 Signs of a bottom?

Jun 492 . 562

Jul 460 . 202 through July 13

Aug 482

Sep 191 <--- CA Law SB 1137 takes effect

Oct 178

Nov 241

Dec 500 <--- CA Law SB 1137 FAILS

Trustees Deeds:

2008 . . 2009

Jan 164 . 166

Feb 238 . 151

Mar 221 . 121

Apr 236 . 123

May 280 . 149

Jun 324 . 271

Jul 341 . 089 through July 13

Aug 372

Sep 303

Oct 195

Nov 184

Dec 229

Pink-Slip Capitals

2009-05-19: America's Pink-Slip Capitals

#4: Los Angeles, Calif

Mass Layoffs: 100
Workers Affected: 10,594
A state budget crisis is hurting government budgets. In April, the Los Angeles Unified School District voted to lay off 5,000 teachers, school administrators, counselors and other employees.

#6: San Francisco, Calif
Mass Layoffs: 50
Workers Affected: 7736
The City by the Bay is being hit by market turmoil as financial heavyweights headquartered there, like Wells Fargo, Barclays Global Investors, Charles Schwab and Visa thin their ranks to survive hard times.

#10: Riverside, Calif
Mass Layoffs: 19
Workers Affected: 4,107
Collapsing home prices have caused mayhem in the inland empire economy leading to sweeping reductions in payrolls. State budget cuts have hit construction projects and government workers, too.

Silicon Valley: Cracks in the Foundation

Silicon Valley... it's different here.

No, not really, but that is the kind of ridiculous thinking that permeates the mentality of people living here.

Silicon Valley, AKA 'Self-Entitlement Valley', 'Silly Valley', etc...

I know someone in Santa Clara that paid $850K for a house in '05--one of those new, packed-in, little communities. They owe $750K and the Z-est is $600K; maybe it would sell for $550K today. I then searched 18 houses immediately surrounding this one; all purchased in '05 for $750K-850K. Unless they put massive dollars down, every house debtor is seriously underwater and ALL should walk away. But this is Silicon Silly Valley, it's different here. Wrong. At bottom, these boxes should be priced around $350K. Things are just starting to get interesting, but most of the debtors are in serious denial.

After the dot-com garbage and now the exploding real estate debacle, where will the next phony injection of wealth come from for Silicon Valley?

2009-05-24: Recession suddenly humbles high-tech sector
Five miles away, former indoor plant specialist Michael A. Jones is having what he calls "a humbling experience" at a nonprofit food pantry, choosing dented cans of corn and tuna, a crunched box of Rice Krispies and some soon-to-expire milk to supplement his food stamps.

Jones used to gross $12,000 a month as an indoor horticulturist for high tech companies, restaurants and car dealerships (SAY WHAT?? $12K/month for a glorified gardener?!), although not Silicon Valley Auto Group. Then "everyone cut back all at once and we had to shut down," he said. "It happened fast."

The Associated Press Economic Stress Index, a month-by-month analysis of foreclosure, bankruptcy and unemployment rates in more than 3,000 U.S. counties, shows that last year, as the national economy tanked, high tech economic centers from California's Silicon Valley to North Carolina's Research Triangle were apparently "recession-proof" with increasing jobs and stable housing prices.

Last fall, everything changed. When previously invested funds petered out, there was no new capital. Bankruptcies, foreclosures and unemployment in high tech regions spiked, and are now at some of the highest levels in the country.

For example:
-- Santa Clara County, home to Silicon Valley, saw bankruptcies soar 59 percent in the past 12 months, and projections are that they're still climbing;

"We had hoped we might stay insulated from the global economic crisis, and for a long time we were," said Silicon Valley Network president Russell Hancock. "But then it caught up with us and now everyone is laying off."
Everyone?
"There isn't anybody who isn't laying off," he said, then draws a long breath before reciting this list: "Microsoft, Intel, Hewlett Packard, Sun, Yahoo, Apple, Google." He pauses a moment to consider that. "Google. When Google is laying off you know something is going very wrong." (What's wrong is Google, itself.)

"Folks believe that because we're in the Silicon Valley with million-dollar homes and billion-dollar businesses, hunger and homelessness don't exist. But in fact it's getting much worse, and it's just really frightening," he said.

Timothy Geithner

Timothy Geithner
And the taxpayer continues to pick up the tab for the mistakes, recklessness, and stupidity of others.

2009-05-20: Geithner Says Toxic-Asset Plan to Start in Six Weeks
May 20 (Bloomberg) -- Treasury Secretary Timothy Geithner said policy makers plan by early July to begin helping banks dispose of illiquid assets, in the U.S. government’s next step to end the worst credit crisis in decades.

“Working with the Federal Reserve and the FDIC, we expect these programs to begin operating over the next six weeks,” Geithner said in testimony to the Senate Banking Committee today in Washington.

The Treasury’s Public-Private Investment Program will use $75 billion to $100 billion of government funds to finance sales of as much as $1 trillion in distressed mortgage-backed securities and other assets. The effort has two components, which the Treasury will manage in conjunction with the Fed and the Federal Deposit Insurance Corp.

UCLA Anderson Forecast

Why does this group continue to be published? But if it's predicitions you want, here are 10 that are probably much more accurate than Anderson Forecast
America By 2012: 10 Dire Predictions

And follow the link for Mark Shniepp. Is this the kind of "expert" you want to follow?

2009-05-15: Home price fall nears bottom
Although 2009 will be a “throwaway year” for San Diego County, with double-digit unemployment, growing office vacancies and declining retail sales, local housing prices will hit bottom this fall, heralding an eventual recovery, UCLA's Anderson Forecast predicted in a report to be released today.

The Anderson Forecast, one of the state's most followed teams of economic analysts, predicted that housing prices will start rising steadily by the second quarter of the year, starting with a rebound in the price of existing single-family homes.

“When it is generally perceived that selling values have reached a bottom, sideline buyers will enter the market and conventional home sales will dominate the real estate recovery,” UCLA economist Mark Schniepp said. “Reported selling values for homes will reverse, slowly at first, and then rise more convincingly.”

Oh, yeah, Anderson Forecast?

2008-03-11: Experts' forecast sees no recession
UCLA's Anderson Forecast, which previously has been ahead of the curve in forecasting the downturn of the California housing market and the resulting decline in the economy, predicted yesterday that the state and nation would not fall into a recession.

“The data don't yet add up to a recession, and there is nothing to challenge the basic story of sluggishness that we have had for two years. Don't worry, be happy,” said Edward Leamer, director of the forecast, the state's best-known economic report.

Tell us more, WHORES!

2006-05-04: County home prices to flatten
With home sales sharply declining and values hitting a plateau, economists from the UCLA Anderson Forecast predicted yesterday that residential real estate prices in San Diego County will remain flat through 2011.

Ratcliff said no crash in prices is likely since the economy is so healthy. Generally, home prices fall only when large numbers of workers lose their jobs. [LIKE RIGHT NOW?]

“Home prices will plateau but not depreciate,” Ratcliff said. “Home prices only fall during recessions.”

Trampled Green Shoots

I like lists of things. Here is one from Jim Willie...

2009-05-15: Trampled Green Shoots
What follows is a laundry list that puts the USEconomy halfway between the Intensive Care Ward and the National Morgue:

• Endless War spending could subsidize every household in America with $1000 per year
• Income is trending down in the United States, England, and Japan
• US banks loan loss reserves are at a 20-year low while profound losses continue
• Of the nearly 9000 US banks, 1575 of them posted a Q1 loss
• Bernanke claims $2 trillion is needed by the big US banks, but they pass the Stress Test
• Municipal bonds and state finances are disasters, as they each appeal for USGovt aid
• A shocking 20% of US homeowners have loan balances greater than their home values
• Half of modified loans result in foreclosure within several months
• Jobs report for April revealed jobless level at 8.9% (massaged) and 15.8% (actual)
• Jobs Report for April included 66k worse revised job losses for March and February
• Continuing jobless claims at 6.56 million, grew 220k just last week
• CALPERS pension fund is insolvent, USGovt pension PBGC guarantee fund in deep deficit
• FDIC requested $500 billion in additional funds to cover bank failures (giant failure coming)
• Car sales still down 40% annually, with steep Japanese car sales declines also
• Detroit carmakers are closing down plants, with huge ripples through entire supply chain
• GM & Chrysler restructures are extremely likely to result in Chapter 7 liquidation in time
• GM burned $1.3B in Q1, burns $113 million per day, unable to transition to green cars
• Business investment down 38% in Q1, a RELIABLE LEADING INDICATOR
• Durable goods up 9% in Q1, but only after Q4 was pushed down from bank shock
• Inventory reduction not key, but rather inventory/sales ratio, since sales way down
• Economic contraction despite lower energy costs from crude oil, natural gas, gasoline
• Housing was false foundation since 2002, now in stubborn decline, the Giant Albatross
• Distress sales make up 40% of all housing sales, led by underwater sales and foreclosures
• Cramdown Law rejection means open season on foreclosures, more huge bank losses
• Banks admit that home loan are not modified after all, a revolving door to foreclosure
• Option ARMs, Jumbos, and Commercial mortgage defaults are ramping up fast
• Commercial mortgage bonds have $70-100 billion that cannot be refinanced, sure to default
• Staggering decline in consumer credit, -80% in Q3, minus $31.7B in Q4/Q1

Kern County: New 'Highest Ever'

Lets continue the Kern County NOD record tracking for Bakersfield Bubble.

(Old Highest Ever)

2009: Credit Cards and California

From Welcome to 2009, here is more supporting information for the downtown.

• * Credit Card Debt and Credit Contraction
• * Reduced State/Government Tax Revenue
  
  
  2009-05-10: Credit card losses
  Mr. Ward lost his job at a retail warehouse in April and so far has managed to make minimum payments on his credit card debt, which he estimates at $15,000 to $20,000. Asked if he thinks he will be able to pay off his balance, he said, “Not unless I win the lottery.”
  
  In the meantime, he said, “I’m just doing what I can.”
  
  Even if Mr. Ward can pay off his debts, experts predict that tens of thousands of Americans will not be able to, leaving a gaping hole at ailing banks still trying to recover from the housing bust.
  The bank stress test, released last Thursday, found that the nation’s 19 biggest banks could expect nearly $82.4 billion in credit card losses by the end of 2010 under what federal regulators called a “worst-case” economic situation.
  
  But if unemployment breaches 10 percent, as many economists predict, the rate of uncollectible balances at some banks could far exceed that level. At American Express, Citigroup, and J.P. Morgan Chase, one-fifth of the credit card balances are expected to go bad over the next 20 months, according to stress test results. At Bank of America and Wells Fargo, about a quarter of card loans are expected to sour.
  
  (hat tip to Exurban Nation)
  2009-May: CA State Revenue in April 2009
  * The State’s revenues continued to deteriorate in April. Total General Fund revenues were down $1.89 billion (-16%) from the latest estimates found in the 2009-10 Budget Act.
  * Personal income taxes were $1.06 billion below the estimate (-12.6%), corporate taxes were below the estimate by $831 million (-35.6%) and sales taxes lagged the estimate by $108 million (-19.9%).
  * Compared to April 2008, General Fund revenue in April 2009 was down $6.3 billion (-39%). The total for the three largest taxes was below 2008 levels by $6.3 billion (-40.3%). Sales taxes were $452 million lower (-50.9%) than last April, and personal income taxes were down $5.7 billion (-43.6%). Corporate taxes were $142 million below (-8.6%) April of 2008.
  * Sales tax collections year to date are short $327 million (-1.8%) from the 2009-10 Budget Act. Income taxes were $653 million lower (-1.7%) than expected, and corporate taxes were $788 million lower than expected (-9.5%). The State’s other revenue streams were $299 million below (-6.7%) the estimates.

ACORN

ACORN, housing.ACORN.org, ACORN Housing Services
And as the Housing Bubble enters the later stages of its destruction, a group has to insert its stupidity in hopes of saving house debtors. Fools, morons, monkeys, and jackasses... welcome, ACORN.
(hat tip to Sacramento Land(ing) )

2009-05-01: Protesters disrupt foreclosure auctions in Sacramento
Protesters disrupted several foreclosure auctions Tuesday on the Sacramento County Courthouse steps, winning a temporary cancellation of one and sending an unidentified auctioneer to the hospital with chest pains.

An ACORN official said the activist group simply wants more time for struggling borrowers it claims were often targeted for dangerous loans.

"Many of the sales that are happening now are around houses that could be saved by the (loan modification and refinance) plans starting to be implemented," said Amy Schur, California director of ACORN.