In Stockton, which had one of the highest foreclosure rates in the nation, the median home price of $100,500 is down from $397,000 at the height of the boom — a stunning 74% drop.
latimes.com
Northeast of Silicon Valley, recession's effects are magnified
East of San Francisco, jobless rates go up to 20% and home prices are down as much as 75%.
By Alana Semuels, Los Angeles Times
August 9, 2010
Reporting from Tracy, Calif.
Sixty miles northeast of the sleek corporate campuses of Google Inc. and Intel Corp., housing tracts sit vacant. Factories are closed and job centers are packed with people looking for work.
Think Southern California's Inland Empire is suffering? By some measures, the inland region east of San Francisco has it just as bad.
Like Riverside and San Bernardino counties, the inland area that includes San Joaquin, Alameda and Contra Costa counties became bedroom communities for workers priced out of real estate markets closer to the coast. And just like the Inland Empire, the area was among the hardest hit by the economic downturn as buyers lost homes to foreclosure and prices plummeted.
But other factors have compounded the northern inland region's misery.
The financial crisis erased thousands of the area's banking and financial services jobs. The housing slowdown crippled dozens of manufacturers that made building supplies there. And the closure in April of California's only auto plant, in Fremont, snowballed into the shutdown of dozens of inland suppliers and the disappearance of tens of thousands of jobs.
Though some economists have predicted the technology-rich Bay Area would lead the state out of the downturn, Jeff Michael, an economist with the University of the Pacific at Stockton, says its inland areas will be among the last to recover.
"That region has been really hard hit," Michael said. "It will be very slow to emerge from the recession."
To be sure, parts of Contra Costa and Alameda counties are tied to the wealth of the Bay Area and will be helped by renewed growth in the tech sector. In San Ramon, home to Chevron Corp., the unemployment rate is just 4.7%, and in Fremont, which has an unemployment rate of 8.4%, a solar company just announced a $45-million investment. But farther inland, their eastern regions are still struggling, as is most of ailing San Joaquin County.
Housing is perhaps the biggest millstone. During the real estate boom, families that couldn't afford real estate in San Francisco headed inland, buying homes in towns such as Tracy, Manteca and Brentwood. Dwellings there could cost $500,000 less than comparable properties in the Bay Area, said Michael Locke, president and chief executive of the San Joaquin Partnership, a private economic development company. Builders rushed to put up homes in vast developments, and employment in financial services in the three counties grew by a third in just a few years.
Now, building has all but stopped. Home prices in San Joaquin County have fallen 63% since the peak median price of $451,500 in November 2005, according to MDA DataQuick. Prices in Contra Costa County are down 53% from their peak of $600,000 in April 2007. One in every 135 houses in Contra Costa County received a foreclosure filing in June 2010. In San Joaquin County, that figure is 1 in 104 — nearly double the California average.
Signs of a slowdown are everywhere. At Bethel Island, a Contra Costa County summer vacation area normally busy with tourists and fishermen, boats sit rotting in the Sacramento River. Nearby, a planned residential waterfront development has stalled. The builder completed boat docks before pulling out; an eerie remnant of the luxury once planned there. In Livermore, an Alameda County town, whole shopping developments are empty and foreclosure notices dot homes.
In Stockton, which had one of the highest foreclosure rates in the nation, the median home price of $100,500 is down from $397,000 at the height of the boom — a stunning 74% drop.
That's forced people such as Troy White out of work. The onetime real estate agent has been looking for a job since 2007, the year he lost his home to foreclosure. His wife, a bus driver, commutes an hour and a half to Oakland to provide the only income for their family of four.
"People say this is the most miserable place in the world," said White, standing in the hot sun outside a job center in downtown Stockton. "It's really bad out here. There ain't no jobs."
Weston Ranch, the Stockton community where White lost his home, was one of the epicenters of the California housing crash. Median home prices there dropped to $110,000 from $446,000 in a span of three years. Now foreclosures plague nearly every block. In April 2008, there were 1,003 notices of default served in the city, up two-thirds from a year earlier, according to ForeclosureRadar.com.
As in Southern California's Inland Empire, investors have taken over some of these properties, changing the texture of the neighborhood.
Standing on the front lawn of his Weston Ranch house, where rosebushes climb up trellises, resident Ruben Modesto showed a visitor the homes that had been foreclosed on in the last few years.
"One, two, three, four, five, the one on the corner makes six, seven, eight nine, 10," he said, pointing up and down the block. Across the street, a gaggle of children sat on a shopping cart. Modesto said renters, including low-income families with federal housing assistance, have moved into the neighborhood.
He's not sure whether he and his wife will be able to stay in their home. She recently lost her job, and their financial advisors have told them to walk away. They paid $450,000 for the house. It's now worth about $120,000.
But buyers are scarce. Homes much closer to employment centers such as San Francisco and San Jose have fallen to the prices Stockton enjoyed a few years ago.
"It's not a bargain if you don't have a job," said Stockton real estate broker Rudy Willey.
The unemployment rate in Stockton, the county seat of San Joaquin County, is 19.8%. It's 29% in the nearby hamlet of Garden Acres, higher than any city of its size in Southern California's Inland Empire. Closer to San Francisco, in the Contra Costa County city of Pittsburg, the unemployment rate is 18%. Some of the jobs have been lost because of closures in the manufacturing and financial services industries, traditionally strong in this area. And as the region's population cuts back on spending, stores and restaurants are also suffering.
But perhaps the biggest blow was the auto-plant shutdown. New United Motor Manufacturing Inc. — known as NUMMI — was a joint venture of General Motors Co. and Toyota Motor Corp. that employed about 4,700. By some estimates, its closure could cost the region as many as 40,000 jobs. Many inland suppliers have announced they are closing or laying off most of their workers, including Johnson Controls in Livermore, Pacific Coast Industries in Tracy and Kyoho Manufacturing California in Stockton.
"The closure of NUMMI has reduced employment in a critical sector, not just in this county, but throughout Northern California," said Bruce Kern, executive director of the East Bay Economic Development Assn. "This has created a double whammy — a reduction in the value of real estate and the loss of a critical sector providing pay."
Larry Graves lost his job after both GM and Toyota pulled out of the Fremont factory they had operated since the mid-1980s. One day last month, the 52-year-old was waiting to be interviewed at a job fair at a WorkNet center in Tracy.
"It's a little scary," he said, looking at the dozens of other people scattered around the room, each waiting nervously for a chance to be interviewed for a position as a forklift operator, administrative assistant or material handler. "There's so many people out there."
Sitting next to him, Jane King took deep breaths to stay calm. She lost her job at a cookie company in Pleasanton in November 2008 and still hasn't found work. Her husband, a machinist, is also unemployed. They moved to Manteca, just north of Tracy, to buy a home in 2000, only to watch it plummet in value.
They now owe more than it's worth. King's unemployment benefits ran out in July, and the couple and their 3-year-old daughter have no health insurance.
"I think there are a lot of people in the same boat," she said, clutching the job application.
With sales and property taxes plummeting, cash-strapped cities are hustling to attract businesses.
Like many areas, San Joaquin County has an enterprise zone. Businesses that locate there are eligible for tax breaks. Last year the county expanded its zone to 656 square miles.
Stockton attracted a power plant and a prison hospital, businesses other communities might not welcome. Gus Duran, the city's interim economic development director, said he's trying to woo other businesses by slashing permit and development fees 50%.
And Tracy's City Council has voted to develop an incentive plan to attract retailers to the half-empty West Valley Mall, where a Mervyn's closure prompted other retailers to flee. On a recent afternoon, in the darkened side of the mall that once held the Mervyn's, two teenagers groped each other on a bench near the empty stores.
Economists say the employment picture won't likely get much better until things improve in the East Bay, which supported many inland jobs. The Port of Oakland has shed jobs as cargo traffic fell; import volumes tumbled 14% between the first quarter of 2007 and the same period in 2010, according to the National Retail Federation. The region was also hit by the bankruptcy of Mervyn's, headquartered in Hayward, and the buyout of Longs Drug, based in Walnut Creek.
"Stores don't last here," said Edna Jones, a teacher sitting outside a closed Mervyn's in Newark. "You think something's open, but it's gone."
A few blocks away, Mullesa Self pushed her baby across a parking lot outside a boarded-up Dollar Tree at Mowry Crossing, a recently stalled development. She said she's been living in a nearby Motel 6 as she looks for work as a cashier. She passes the blighted development every day.
"Lately, I've been noticing things going downhill," she said. "Big-time."
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DEPARTMENT OF CORPORATIONS
The San Diego Union
By Craig D. Rose May 3, 2003
Wells Fargo mortgage license is revoked
State takes action over interest dispute
Citing a pattern of overcharging borrowers, state regulators yesterday revoked the mortgage lending license of Wells Fargo, but the bank will continue to make and service loans under federal jurisdiction.
The California Department of Corporations said Wells Fargo, the state's largest mortgage lender, has been charging consumers interest for days disallowed by state regulation.
The dispute is over the period after a lender releases funds for a loan and before consumers can make use of that money, which doesn't happen until the transaction is recorded by county authorities.
California allows mortgage lenders to bill borrowers for one day of interest during this period. But often there's a lag of several days, brokers say, particularly if the loan is funded late in the work week and the loan is not recorded until the following Monday by county officials.
The daily cost of a $300,000 mortgage at 5 percent interest is about $40.
"Wells Fargo charged consumers interest on their mortgages more than one day before being recorded, an admitted violation of California law," said Demetrios Boutris, state commissioner of corporations. "If Wells Fargo is not going to abide by California's laws, it has no right to California's licenses."
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WHO WANTS TO BET THAT WHEN BANKSTER BOY DODD GETS HIS BANKSTER ASS KICKED OUT, HE GOES AND WORKS AS A LOBBYIST FOR THE BANKSTER FUCKERS?
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WHAT DID THE BANKSTERS KNOW ABOUT OUR ACTOR OBAMA THAT WE DIDN’T KNOW?
Records show that four out of Obama's top five contributors are employees of financial industry giants - Goldman Sachs ($571,330), UBS AG ($364,806), JPMorgan Chase ($362,207) and Citigroup ($358,054).
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OBAMA’S CON JOB ON REGULATION WILL NOT IMPACT HIS LARGEST BANKSTER DONORS! WHO’D OF THOUGHT???
“Obama's rhetoric covered the whole financial industry, but the key changes will affect only a few high-profile players, including JPMorgan Chase & Co., while sparing investment banks like Goldman Sachs Group Inc.”
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Lou Dobbs Tonight
Thursday, July 9, 2009
And Harvard economics professor JEFFREY MIRON will weigh in on the state of the U.S. economy—and why the only plausible argument for bailing out banks crumbles on close examination.
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"There is a populist and conservative revolt against Wall Street and financial elites, Congress and government," Democratic pollster Stanley Greenberg warned in an analysis this week. "Democrats and President Obama are seen as more interested in bailing out Wall Street than helping Main Street."
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Lou Dobbs Tonight
Monday, November 12, 2007
Mortgage giants Wells Fargo and Countrywide Financial are accused of slapping dubious fees on homeowners struggling to save their homes. With fewer new mortgages being written, these
companies appear to be leaning on these lucrative fees to stay profitable—with devastating consequences for homeowners. We’ll have that report.
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After several weeks of strong showings in the media, President Barack Obama appears to have committed political suicide in an interview with Bloomberg focusing on bank bonuses. Just as bad, Obama's statements praising bailout barons and downplaying their bloated bonuses amount to outright economic insanity. Obama says he doesn't have a problem with bonuses at Goldman Sachs and JPMorgan. He's going to have a big problem at the polls in November. – Zach
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Bernanke opposes move to strip Fed of oversight
Associated Press
Friday, January 15, 2010
(01-15) 04:00 PST Washington - -- Federal Reserve Chairman Ben Bernanke waged a fresh battle against Senate efforts to strip the Fed of banking supervision.
Bernanke, in a paper to Congress released Thursday, argued that stripping the Fed of such power would deprive the central bank of information that factors into the setting of interest rates to influence overall economic activity.
"Elimination of the Federal Reserve's role in supervision would severely undermine the Federal Reserve's ability to obtain in a timely way and to evaluate the information it needs to conduct its central banking functions effectively," according to the paper.
DODD BUSTING HIS CORRUPT ASS BEFORE HE LEAVES OFFICE FOR HIS BANKSTER PAYMASTERS!
Senate Banking Committee Chairman Chris Dodd, D-Conn., wants to rein in the Fed's power and remove it from overseeing banks.
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JUDICIAL WATCH.org … GET ON THEIR FREE EMAILS
The “Ten Most Wanted Corrupt Politicians for 2009” list has been announced by Judicial Watch, the public interest group that investigates and prosecutes government corruption, The list is compiled at the end of each year. The list, in alphabetical order, includes:
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Senator Christopher Dodd (D-CT): This marks two years in a row for Senator Dodd, who made the 2008 "Ten Most Corrupt" list for his corrupt relationship with Fannie Mae and Freddie Mac and for accepting preferential treatment and loan terms from Countrywide Financial, a scandal which still dogs him. In 2009, the scandals kept coming for the Connecticut Democrat. In 2009, Judicial Watch filed a Senate ethics complaint against Dodd for undervaluing on his Senate Financial Disclosure forms a property he owns in Ireland.
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Senator John Ensign (R-NV): A number of scandals popped up in 2009 involving public officials who conducted illicit affairs, and then attempted to cover them up with hush payments and favors, an obvious abuse of power. The year's worst offender might just be Nevada Republican Senator John Ensign.
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Rep. Barney Frank (D-MA): Judicial Watch is investigating a $12 million TARP cash injection provided to the Boston-based OneUnited Bank at the urging of Massachusetts Rep. Barney Frank.
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Secretary of Treasury Timothy Geithner: In 2009, Obama Treasury Secretary Timothy Geithner admitted that he failed to pay $34,000 in Social Security and Medicare taxes from 2001-2004 on his lucrative salary at the International Monetary Fund (IMF), an organization with 185 member countries that oversees the global financial system.
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Attorney General Eric Holder: Tim Geithner can be sure he won't be hounded about his tax-dodging by his colleague Eric Holder, US Attorney General. Judicial Watch strongly opposed Holder because of his terrible ethics record, which includes: obstructing an FBI investigation of the theft of nuclear secrets from Los Alamos Nuclear Laboratory; rejecting multiple requests for an independent counsel to investigate alleged fundraising abuses by then-Vice President Al Gore in the Clinton White House; undermining the criminal investigation of President Clinton by Kenneth Starr in the midst of the Lewinsky investigation; and planning the violent raid to seize then-six-year-old Elian Gonzalez at gunpoint in order to return him to Castro's Cuba.
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Rep. Jesse Jackson, Jr. (D-IL)/ Senator Roland Burris (D-IL): One of the most serious scandals of 2009 involved a scheme by former Illinois Governor Rod Blagojevich to sell President Obama's then-vacant Senate seat to the highest bidder. Two men caught smack dab in the middle of the scandal: Senator Roland Burris, who ultimately got the job, and Rep. Jesse Jackson, Jr.
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President Barack Obama: During his presidential campaign, President Obama promised to run an ethical and transparent administration. However, in his first year in office, the President has delivered corruption and secrecy, bringing Chicago-style political corruption to the White House.
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Rep. Nancy Pelosi (D-CA): At the heart of the corruption problem in Washington is a sense of entitlement. Politicians believe laws and rules (even the U.S. Constitution) apply to the rest of us but not to them. Case in point: House Speaker Nancy Pelosi and her excessive and boorish demands for military travel.
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Rep. John Murtha (D-PA) and the rest of the PMA Seven: Rep. John Murtha made headlines in 2009 for all the wrong reasons. The Pennsylvania congressman is under federal investigation for his corrupt relationship with the now-defunct defense lobbyist PMA Group. PMA, founded by a former Murtha associate, has been the congressman's largest campaign contributor.
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Rep. Charles Rangel (D-NY): Rangel, the man in charge of writing tax policy for the entire country, has yet to adequately explain how he could possibly "forget" to pay taxes on $75,000 in rental income he earned from his off-shore rental property. He also faces allegations that he improperly used his influence to maintain ownership of highly coveted rent-controlled apartments in Harlem, and misused his congressional office to fund raise for his private Rangel Center by preserving a tax loophole for an oil drilling company in exchange for funding.
There are further explanations about corruption why each politician was chosen at Judicial Watch.
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