Delora's Daughter

E-MAIL POST

My colleague Kelly Bennett is allowing me to drop in to Survival for a moment to direct you to some interesting bits of information.

First of all, Kelly mentioned in her story today that Delora Snow, the flight attendant she profiled for People at Work, has a daughter who recently competed in the Olympic Games in Beijing.

By utter coincidence, I had photographed her daughter several months earlier for this column by Tom Shanahan. And the coincidences went on and on. The family is from Escondido, where I grew up, and Tiffany was, at the time we shot this story, playing field hockey in New Zealand, where I was born.

On a somewhat related note, I wanted to direct you to the video I put together about Snow's job as a flight attendant. If you haven't already had the chance to check it out, you can see it below. If you have any feedback, fell free to e-mail me at sam.hodgson@voiceofsandiego.org. Of course, you can check out all the stories from the People at Work series, as well as all the video and slideshows, on our new People at Work archive page.

-- SAM HODGSON

Monday, October 6 -- 3:26 pm

Aguirre May Put City's Suit on Hold

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City Attorney Mike Aguirre called the settlement struck between 11 states' attorneys general and Countrywide Financial Corp. "a bit of good news for the San Diegans who were victimized" by predatory lending practices of the lender, now owned by Bank of America, in a press conference this morning.

The settlement achieves much of the relief that Aguirre sought in the suit he filed in July, though the city has not directly settled its suit.

He said this morning he anticipates putting the city's suit on hold as long as a couple of provisions are met that he said are not yet represented in the settlement. He wants to ensure Countrywide doesn't "push through" a slew of foreclosures between now and Dec. 1, the day the settlement officially takes effect.

He also wants to demand that Countrywide exhibit some guarantee, like additional staffing, that the loan workouts afforded in the settlement are accessible for homeowners whose loans fit the criteria for the relief. (Previous promises made by Countrywide and other lenders to pursue loan workouts have proven frustrating for consumers seeking relief who wind up bogged down in answering machines and automated phone systems, only to see their house foreclosed on in the meantime.)

Jumana Bauwens, spokeswoman for Countrywide, knew no specific information about the progress of the city of San Diego's suit.

"Obviously, this (settlement) helps the residents of San Diego as well as residents for the rest of the state," she said.

Bauwens said Aguirre's provisions are already met. She said the lender will not advance the foreclosure process, even before Dec. 1, for loans it believes fit the criteria for relief from the settlement. And she said that when Bank of America assumed ownership of Countrywide, the bank promised a minimum of 3,900 staff members for "home retention efforts." Currently, there are 5,000 people on that team, Bauwens said, compared to 1,000 two years ago.

Aguirre said he will announce by Friday a list of other subprime lenders he will be targeting with similar legal action, in line with his efforts to create a "foreclosure sanctuary" in San Diego.

He said the sanctuary isn't yet achieved, but that the Bank of America settlement sets a precedent for future relief for homeowners facing foreclosure because of loans they should never have been given in the first place.

"It's enough to get us started," he said. "It will be very difficult for other subprime lenders to not follow suit."

Those lenders have not yet been contacted, he said. "There has been no formal discussion, other than we've announced that we're on our way," he said.

Aguirre said the city will continue its lawsuit against the individuals named in the suit, including Angelo Mozilo, the company's former CEO.

-- KELLY BENNETT

Monday, October 6 -- 12:18 pm

BofA Settles Deceptive Lending Suit

E-MAIL POST

Bank of America has agreed to modify thousands of mortgages in 11 states as part of a settlement worth more than $8.4 billion in a suit challenging the practices of Countrywide Financial Corp., which the giant bank acquired in July. California Attorney General Jerry Brown and officials from 11 states have sued Countrywide over deceptive lending practices they say placed borrowers in such risky loans they had little chance of avoiding foreclosure.

The workout plan, announced today, is likely the largest one of its kind and is expected to relieve borrowers holding $3.5 billion of mortgage debt in California, the state with the largest share in the settlement agreement, Brown said.

City Attorney Mike Aguirre in July added the city of San Diego to the list of governments suing the mortgage company. While this settlement doesn't include the city's suit, Aguirre is confident he will soon have a settlement, Legal Newsline reported.

Aguirre filed his suit in July, asking the court to stop foreclosure proceedings on loans in the city of San Diego that have a specific set of characteristics; including those with a 100 percent loan-to-value ratio, a teaser rate that is at least 3 percent less than the rate it would eventually reset to, and a payment that would push the borrower's debt-to-income ratio over 50 percent. At a hearing at Harvard University last month, Aguirre was a proponent for loan modification as part of any settlement, not just financial awards to borrowers who'd been foreclosed upon.

He talked to Legal Newsline last night after word of the settlement leaked to several outlets:

Aguirre's lawsuit, filed on behalf of San Diego, a California city beset by foreclosures, has not yet directly settled with Bank of America.

"We will be," Aguirre said. ...

Aguirre said the settlement is the strongest possible validation for the effort that began as a grassroots movement in California, based on a lawsuit settlement in Massachusetts that focused on reworking predatory loans into more conventional loans that homeowners can afford.

"There is this growing consensus this is the best way to help everybody concerned," Aguirre said. "The moratorium has taken on the idea of pausing foreclosures to focus on the workouts."

The settlement focuses on risky loans, including those adjustable-rate mortgages with interest rates that reset dramatically after a several-year intro period with a teaser low rate. Countrywide will lower principal balances for some homeowners under the plan, and lower interest rates for others to as low as 2.5 percent, depending on what the borrower can afford. The loan must be for at least 75 percent of the home's value, and the first payment must have been due between Jan. 1, 2004 and Dec. 31, 2007.

More context on the settlement, from The New York Times:

Countrywide has made pledges before to modify large swaths of loans. Late last year, it vowed to help about 82,000 borrowers who were facing higher payments through 2008. But the new program will be mandatory and will be monitored by state officials.

Check back for more on this later today.

-- KELLY BENNETT

Monday, October 6 -- 7:42 am

How Much for 'General Malcontent?'

E-MAIL POST

I just came across the donation page on the website of the Grantville Action Group, the group fighting redevelopment in Grantville. The group's raising money for its legal challenge to the settlement. I found a couple of these donor categories funny, though some appear to need a run through the spell-check:

$1,000 and above - Neighborhood Patriot
$500 - Eminant Domain Warrior
$250 - Civic Activist
$100 - Community Rabble Rouser
$50 - General Malcontent
$20 - Too many Casues to Fight at Once
$10 - Improving Downtown Improves Grantville How?
$5 - Why did they put the trolly stop all the way over there?
$1 - Just Don't Like Madaffer

Lots has been happening on this Grantville situation, starting with the settlement struck this summer to allow redevelopment to go forward. It's a complicated series of financial transfers that will send Grantville redevelopment revenue downtown for trolley improvements and downtown money to the county for developing land at the Embarcadero.

This week, the Attorney General Jerry Brown's office responded to Sen. Chris Kehoe's letter requesting an investigation into the settlement. The AG concluded that the settlement wasn't illegal and that its maneuvers seemed technically permissible. Kehoe said she'd introduce a bill to halt any future maneuvers like the ones that gave us this Grantville settlement.

-- KELLY BENNETT

Friday, October 3 -- 4:12 pm

What Will the County Do?

E-MAIL POST

In my story today, I mentioned that the federal government granted $17 million to the region for help with neighborhood stabilization. San Diego's piece of that is $9.4 million, Chula Vista gets $2.8 million and the county's piece is $5.1 million. Officials from both cities told me they're studying their options, but I've had a couple of people ask me: What will the county do with its part of the money?

The short answer: They don't know yet either.

I chatted a few minutes ago with David Estrella, assistant director in the county's Housing and Community Development department. He said the county is studying what they can do with the money and will present it to the Board of Supervisors in the next couple of months.

As soon as I know more, I'll let you know.

-- KELLY BENNETT

Wednesday, October 1 -- 3:58 pm

Video: The FHA Wrinkle

E-MAIL POST

Here's a great example of what we were talking about in this story on FHA and VA financing, government-insured loan programs popular among first-time and veteran buyers because of their tiny down payment requirements. But people using those loans are having a tough time using them to buy houses that have been repossessed.

From my story:

... the hope that buyers using these loan options will dramatically help reduce the stock of houses on the market might be ill-placed. Buyers looking for a deal on a foreclosure using one of these loans are encountering a tougher situation than they expected: banks turning down offer after offer.

If banks have another offer from a buyer holding cash or even a typical loan, they are reluctant to approve offers from buyers using FHA or VA financing because the programs require sometimes significant fixes be done to the property before the sale closes, like installing new appliances in a thrashed kitchen or resurfacing a holey floor.

Here's the kind of house that's a good example of the issue. Realtor Jim Klinge sells homes that have been repossessed by Countrywide, and puts together video tours of his listings. Near the end of this one, about a listing in Oceanside near the "back gate" of Camp Pendleton, he points out an unfinished addition to the house. That could cause a wrinkle if an offer comes in with FHA financing, Klinge says. Check it out:

-- KELLY BENNETT

Wednesday, October 1 -- 3:52 pm

Kehoe: 'This Loophole Needs to Be Closed'

E-MAIL POST

Sen. Chris Kehoe said she will introduce a bill to stop the kind of redevelopment funding transfers that brought you such bizarre settlements as the one struck to enable Grantville to go forward with redevelopment.

Kehoe asked the attorney general earlier this month to investigate the settlement, a complicated series of financial transfers that will send Grantville redevelopment revenue downtown for trolley improvements, and downtown money to the county for developing land at the Embarcadero. Attorney General Jerry Brown's office responded with a letter concluding the settlement wasn't illegal, even if the arrangement might not carry out the spirit of the law restricting certain redevelopment funding transfers.

From a press release:

"The state's redevelopment laws don’t allow residents to go to court to challenge a redevelopment agency's decision," said Kehoe. "This loophole needs to be closed."

Kehoe plans to introduce a bill in January that would "close state loopholes that allow cities to move funds from blighted areas to projects in more developed locations," according to a press release.

 

"I'm frustrated by the cat-and-mouse game that redevelopment agencies continue to play with residents and property owners," said Kehoe. "... It looks like we have more work to do to ensure better use of tax dollars, because redevelopment is a great tool when it's used right."

-- KELLY BENNETT

Tuesday, September 30 -- 3:46 pm

AG: Grantville Settlement Isn't Illegal

E-MAIL POST

Attorney General Jerry Brown's Office, which reviewed the Grantville settlement after Sen. Chris Kehoe asked for an investigation, has concluded the settlement is not illegal, according to a letter sent yesterday to Kehoe.

The settlement was struck this summer to end the county's legal challenge to the city of San Diego's declaration of blight in Grantville, and the subsequent creation of a redevelopment area in the neighborhood. The settlement sends $31.36 million in Grantville redevelopment dollars to the city for improvements along the C Street trolley line in downtown. In turn, $31.36 million from the downtown redevelopment area goes to improvements to county-owned land as part of plans to renovate the North Embarcadero.

Kehoe asked for an investigation into the validity of a settlement like this that would send redevelopment money from one community (Grantville) to another one (downtown) more than 15 miles away.

The attorney general's review concluded there are two issues raised by the settlement. The plan to spend money from one redevelopment area in another one raises a "legitimate question." But no matter what the answer is, the letter states, the law bars any judicial challenge to that kind of expenditure.

The second issue is the agreement between the city, county and Redevelopment Agency to send the money from Grantville to downtown, and then to send money from downtown to the county-owned land at the Embarcadero. That agreement "might be construed as an effort to bypass legal restrictions on the use of redevelopment funds to settle litigation."

From the letter:

While there is a question about whether this agreement is consistent with the Legislature's intent in adopting these restrictions, we cannot conclude it is illegal.

The letter lays out those restrictions, which I found really interesting. You might, too, even if you're not as redevelopment nerdy as some of us are. Here's how I understand it:

The legal quagmire we've seen in Grantville used to happen all of the time. Agencies that stood to lose out on tax revenue when redevelopment areas were created (like school districts, counties and the state) used to watch blight designations really carefully. (Creating redevelopment areas allows municipalities -- in this case the city -- to get a larger share of the tax revenue from a specific area and then use the money to fund beautification projects or subsidize private development in that area, provided they prove the neighborhood is blighted.)

When those agencies felt that neighborhoods weren't really blighted, they'd sue and settle the lawsuit to recoup some of their lost cash.

But the state wasn't usually party to those settlements, so state lawmakers came up with a formula in 1993 to regulate how those settlements could work and how the money could "pass through" from a redevelopment agency to another taxing entity, like the school district or the county. That ban applies to plans adopted after Jan. 1, 1994.

Grantville's redevelopment area was approved in 2005 and is thus regulated by that prohibition -- the city can't use Grantville funds to compensate the county or to pay for county facilities.

But here's how they made it work in Grantville. The Redevelopment Agency sends $31 million from Grantville to the downtown redevelopment area for trolley improvements. From the letter:

This ensures that Grantville funds will not go directly to the County in contravention of [the law].

But since the redevelopment plan for the downtown area was adopted in 1992, it's exempt from those 1994 restrictions. Because CCDC's funds are technically unrestricted by that law, the $31 million can be spent from CCDC to pay for the county facilities, the park and the parking lot.

Although it might be questioned whether this arrangement carries out the Legislatures' intent in adopting the anti-pass through provision in 1993, it appears to be technically permissible.

Whoa. The attorney general concludes that part of the settlement arguably undercuts the spirit, if not the letter, of the restrictions in the redevelopment law to keep stuff like this from happening. You can read the whole letter here.

Mike Aguirre last week echoed Kehoe's skepticism of the settlement, calling the agreement "an abuse of the law." And a group of landowners, leaseholders and business owners in Grantville sued the city, the county, the Redevelopment Agency and a private landowner on Friday over the settlement's validity.

-- KELLY BENNETT

Tuesday, September 30 -- 3:46 pm

Case-Shiller: 'No Evidence of a Bottom'

E-MAIL POST

At the end of July, home prices in San Diego County had fallen 31 percent since the November 2005 peak, according to the most recent Standard & Poor's/Case-Shiller index released this morning. The aggregate index experienced a 25 percent drop from the previous July.

The declines show up strongest among houses priced below $354,157. In that category, the lowest of the index's three tiers, prices have fallen 34 percent year-over-year and 41 percent from that tier's peak in June 2006.

The middle tier -- homes priced between $354,157 and $518,796 -- saw a 24 percent drop from July 2007 and a 32 percent drop from the peak in November 2005.

And the highest tier, homes priced higher than $518,796, slumped 17 percent year-over-year and 21 percent from that tier's peak in June 2006.

San Diego's 25 percent drop from July 2007 to July 2008 came fifth among the 20 metro areas counted in the Case-Shiller index. Ahead of San Diego were Las Vegas, Phoenix, Miami and Los Angeles, with annual declines between 26 percent and 30 percent each.

David Blitzer, chairman of the Standard & Poor's Index Committee, said the rate of decline is slowing some across the metro areas, but that there is "no evidence of a bottom."

More from his statement:

The Sunbelt continues to be the story, with the seven cities that basically represent that area reporting annual declines roughly between 20 and 30%. While some cities did show some marginal improvement over last month’s data, there is still very little evidence of any particular region experiencing an absolute turnaround.

We'll have more on these numbers for you later today.

-- KELLY BENNETT

Tuesday, September 30 -- 11:42 am

What to Do With $9.4 Million in Federal Foreclosure Aid

E-MAIL POST

Mayor Jerry Sanders announced today the city of San Diego's piece of a $4 billion federal grant package for combating blight in neighborhoods impacted by foreclosure.

The city will receive $9.4 million as part of the Housing and Economic Recovery Act of 2008, passed in July.

"As we are all painfully aware, the San Diego region, like the rest of California and much of the nation, has been hit hard by the mortgage crisis," Sanders said this morning at a press conference outside of a foreclosed home in Encanto.

The money can be used to:

Fix up or repair homes that have been repossessed and abandoned.

Expand code enforcement.

Demolish or remove abandoned properties.

Buy or rehab homes to sell, rent or redevelop.

Sanders made it clear he doesn't think government needs to be in the business of buying houses. He said he thinks the money can go further by boosting financing programs like the ones the Housing Commission offers, including assistance with down-payments and rehabilitation.

I asked Sanders how this money fits with the land bank plan that is planned to be a partnership with government, private and philanthropic funds to purchase blighted homes and rehab them in some of the region's worst-hit communities. That plan has been gaining traction at the City-County Reinvestment Task Force, the region's committee tasked with incentivizing investment in depressed neighborhoods. Proponents of the land bank have been anticipating these federal funds as a potential boost to their efforts.

"That's just one of the ideas out there," Sanders said of the house-purchase part of the land bank plan. "Nine million dollars in the city of San Diego isn't going to land bank much. We're going to be looking at the full impact of this before we start buying houses."

Under the grant program, Chula Vista received $2.8 million and the county received $5.1 million. The agencies will file applications to the federal Housing and Urban Development Department by Dec. 1. San Diego officials hope to be using the money by early spring 2009.

-- KELLY BENNETT

Monday, September 29 -- 6:36 pm

Grantville Settlement Challenged in Court

E-MAIL POST

The Grantville Action Group filed suit in Superior Court today against the city of San Diego and its Redevelopment Agency, the county of San Diego and a family of landowners in the neighborhood over the settlement struck in July to pave the way for a new city redevelopment area.

In the complicated settlement plan, funds would be shifted between Grantville, downtown, the city, and the county, to settle a lawsuit brought by the county in 2005 challenging the city's creation of the redevelopment area. The redevelopment area would siphon funds away from the county and use them to redevelop the specific Grantville neighborhood.

Brian Peterson, president of the nonprofit group of landowners, leaseholders and business owners in Grantville, released a statement announcing the lawsuit:

Clearly, this is a shell game to get Grantville tax increment to payoff the County and end the lawsuit. There is no way either of the downtown improvements are Grantville improvements. This scheme is clearly not legal. Furthermore, we resent that our properties in Grantville will now be threatened with eminent domain to fund downtown improvements. If Grantville really is blighted, all the tax increment should stay here.

The City Council and the Redevelopment Agency ratified the settlement in July, concurring that the money could be sent from Grantville to downtown, and from downtown to the county land at the Embarcadero. Donna Frye was the lone dissenter in those votes.

The county Board of Supervisors adopted those same findings Tuesday with a 3-1 vote, with Pam Slater-Price absent and Dianne Jacob opposing.

The lawsuit those findings are:

arbitrary, capricious, and not supported by any reasonable or substantial evidence, and the findings cannot be made ...

Additionally, the settlement granted an exemption from eminent domain to a Grantville landowner, Phil Teyssier, who had joined the county's 2005 lawsuit against the city. The GAG lawsuit today also names Teyssier, his company and trusts, as defendants because the group believes that the exemption for Teyssier is illegal.

"We believe it's outside the [law] to offer one property, to grant an exemption from eminent domain," Peterson said. "There's no way that they can show that one is more blighted than another."

-- KELLY BENNETT

Friday, September 26 -- 11:58 am

Aguirre Wants Foreclosure Suit to Stay Local

E-MAIL POST

At a hearing at Harvard University today, City Attorney Mike Aguirre argued that his case against Countrywide Financial Corp. should be heard in San Diego. He called Countrywide's request a delay tactic to prolong the legal process and keep foreclosing on homes.

Aguirre joined lawyers representing California Attorney General Jerry Brown and the Illinois attorney general to push back against a request from the mortgage giant that all of the lawsuits filed against it be consolidated into one big federal case. The attorneys argued that their individual cases, filed against Countrywide, now owned by Bank of America, for its alleged predatory lending activity, should be heard in their local jurisdictions.

Aguirre expected an answer within a week.

Aguirre's suit was filed in July. My colleague David Washburn summed up the legal action like this:

Aguirre's suit, filed last month, asks the court to stop foreclosure proceedings on loans that have a specific set of characteristics; including those with a 100 percent loan-to-value ratio, a teaser rate that is at least 3 percent less than the rate it would eventually reset to, and a payment that would push the borrower's debt-to-income ratio over 50 percent.

The other suits seek damages on behalf of borrowers who were foreclosed on by Countrywide.

I talked to Aguirre this morning about the hearing and he said it was "very positive." He said to illustrate his reasoning for wanting the case heard in San Diego, he asked the courtroom some rhetorical questions using context that only a local judge would understand: "How would you handle foreclosures in Skyline? How would you handle a foreclosure in Encanto?"

"That's what they took off on," he told me.

Contrasting his case from the ones filed by the attorneys general in other states, Aguirre said he's fighting for the foreclosure proceedings to be stopped, not for damages or penalties.

"We don't want damages, we want people in their homes," he said.

From a LegalNewsline account of the hearing:

"We are suffering dearly in San Diego," Aguirre said. "We are trying to stop all those foreclosures so we don't destroy those neighborhoods. Many of those homeowners, even though they are current, are having trouble selling or refinancing because of all the vacant properties around them."

Aguirre said he was encouraged in speaking with the other legal teams assembled, including the lawyers representing the California Attorney General's office.

"They did a good job," Aguirre said of Brown's legal team.

Aguirre and Brown have sparred publicly in recent weeks over Brown's lack of support for a foreclosure moratorium, something Aguirre has been an outspoken proponent of. ...

Brown has said in recent weeks that Aguirre was simply "grandstanding" while his office did the serious work of negotiating a settlement with Bank of America.

-- KELLY BENNETT

Thursday, September 25 -- 6:54 pm

The Last Limericks

E-MAIL POST

Here's the best of the last few limericks that have rolled in since I launched our challenge Tuesday. I challenged you to turn this story about Nantucket, a development in Leucadia, into a limerick. A few of you responded with these ones and these ones.

Here's one from reader MLS:

There once was a man built Nantucket
He lost all his money and said, "Chuck it"
White wrapped big eyesores
Old rotten two-by-fours
Will he finish with bail-out tax ducats?

Here's SD's take:

Nantucket was a development in Leucadia
With property values that sank like the RMS Lusitania
The developer tried and tried to stall
But ended up with houses missing a wall
And now they won't even return your call.

DF added:

Barratt, the builder from Carlsbad
Knew breathtaking views were no fad
So they took a big flier
But lost all their buyers
Now they're busted and terribly mad

-- KELLY BENNETT

Thursday, September 25 -- 10:47 am

State Economy: 'Doldrums' for 18 to 24 Months

E-MAIL POST

Plunging prices, soaring foreclosures, mortgage and finance issues and slowing imports in the state are "taking their toll," conclude the economists at the UCLA Anderson Forecast in their newest report released today.

The forecast lists late 2009 as a starting point for a recovery in construction and finance. But because the impact to state and local budgets lag those industries, this "new drag on the state economy (will) arrive after the drag of the housing market is played out," wrote economist Jerry Nickelsburg.

Nickelsburg continues:

Consequently, we can expect doldrums to be the operative word describing the California economy over the next 18 to 24 months. The risk in the forecast comes from the finance sector. If the housing market continues to decline due to a lack of funding for new mortgages, then weakness in housing extends into the period of weakness in consumer durables and state and local government.

The economists stop short of predicting a recession for the nation or the state. Edward Leamer, director of the Anderson Forecast, summed up the state of the national economy with this:

The low rates of interest, the innovations in the financial markets and the tax cuts have turned us into a consumption-loving debt-ridden foreign depending society.

The slaps in the face each time we fill up our SUVs are carrying the rude message: things have to change. You cannot maintain that profligate life style. The structural adjustment that lies ahead seem certain to come with unbalanced sluggish growth and weak labor markets for a considerable period of time. Misery, but no recession.

The tightening in finance bodes poorly for not just individual borrowers but for businesses, as well. Without financing for projects, some companies have undergone massive layoffs, adding to the state's dismal economic picture and shooting the unemployment rate past 7 percent.

As an example of that trend, the LA Times story on the forecast's release references the layoffs at Barratt American, the Carlsbad-based homebuilder whose trouble we wrote about yesterday.

-- KELLY BENNETT

Wednesday, September 24 -- 1:27 pm

Five More Lines

E-MAIL POST

Got another creative limerick about the Nantucket development. Here's Kevin in San Diego:

Said developer Barratt,
Eyeing each unfinished garret,
"Debris of Nantucket,
Just too broke to truck it.
Suckers, you just have to bear it!"

Our real estate poet added some disclaimers:

(OK, there are extra syllables in lines 2 and 5. Best I can manage from work.)

Send your five-line poems to me at kelly.bennett@voiceofsandiego.org.

-- KELLY BENNETT

Tuesday, September 23 -- 6:35 pm

Limerick Challenge: And They're Off

E-MAIL POST

I can't wait to share these first couple of limericks that have come in as entries in our challenge today to pen a five-line rhyme about the Nantucket development in Leucadia.

My British colleague Will Carless apparently invoked the muse of his countryman, Edward Lear, the man credited with popularizing the limerick, for this creation:

If you wanna buy a home in Nantucket,
say goodbye to your equity -- it will suck it.
You'd be better to buy gold,
Than, to property be sold,
Even better, bury cash in a bucket.

Reader Seagull sent in a verse entitled "Bankruptcy"

There once was a financed subdivision named Nantucket,
where the developer’s money down was just a drop in the bucket
But the market slumped and the bank killed the lending plan.
Damn, the neighboring house looks like an unfinished convertible sedan.
Now all the little guy’s loans are resetting and they are about to say... (I'll let your imagine do the rest)

Send your limericks to me at kelly.bennett@voiceofsandiego.org. I'll post some more later.

-- KELLY BENNETT

Tuesday, September 23 -- 12:08 pm

Limerick Challenge

E-MAIL POST

OK, major nerd alert. Since I started working on this story today about a subdivision called Nantucket, we've been thinking this story is ripe for some limerick-making.

Here's the challenge: I want you to hit us with your best shot at writing a limerick about Nantucket, the Barratt American development in Leucadia where owners of multi-million dollar homes live next to papered-up houses, weeds and foundation slabs without houses on them.

The internet tells me that this Nantucket limerick first showed up in 1924. As you can imagine, there are a couple of bawdy versions of Nantucket limericks out there that are definitely not safe for work, so recreate my Google search at your own risk:

There once was a man from Nantucket
Who kept all his cash in a bucket.
But his daughter, named Nan,
Ran away with a man
And as for the bucket, Nantucket.

Send your five-line poems to me at kelly.bennett@voiceofsandiego.org. I'll post the best ones in Survival.

-- KELLY BENNETT

Tuesday, September 23 -- 10:57 am

Grantville 'An Abuse' of the Law

E-MAIL POST

City Attorney Mike Aguirre added his voice today to state Sen. Chris Kehoe's push for an investigation into the Grantville redevelopment settlement between the city and the county of San Diego.

Kehoe asked Attorney General Jerry Brown earlier this month to investigate the settlement. She questioned the legitimacy of the complicated settlement, under which funds generated in the Grantville redevelopment area would be sent to downtown for trolley upgrades, and downtown money would be spent to enhance county land at the Embarcadero.

Kehoe was justified in that request, Aguirre argued today. He issued a memo to City Council members, reviving his suggestion that the City Council open the doors for a legal challenge to the Grantville settlement. The council voted that down on Sept. 2. Aguirre attached Kehoe's letter.

In his memo, Aguirre pointed to the section of the state government code that regulates redevelopment:

Senator Kehoe's concerns are justified. While Health & Safety Code section 33445 does allow for the transfer of funds outside a project area where the use of the funds is "of benefit" to the project area, section 33445 does not allow for the type of fund shifting that occurred in this instance. The Grantville Settlement is an abuse of section 33445 because it stretches the law well beyond what the California Legislature intended. Specifically, the intent of the section is to ensure expenditures benefit a project area, not merely facilitate settlement regardless of benefit to the project area.

You can read my story on the $31.6 million settlement here, and a previous story about the fight for redevelopment in Grantville here.

-- KELLY BENNETT

Date: 9/22/08

Land Bank Plan Moves Forward

E-MAIL POST

A new plan to assemble taxpayer, private and philanthropic dollars to purchase foreclosed houses took another step yesterday. The regional committee tasked with encouraging housing and economic improvement in low- and moderate-income neighborhoods unanimously approved a business plan that offered some of the first specific details about the concept, called a land bank.

The predominance of foreclosed properties has government officials concerned some neighborhoods will slip into blight, left to become vacant magnets for vandalism and fall into disrepair before they can be repurchased by homeowners from the banks.

Under the plan, the land bank would acquire bank-owned properties from banks in bulk at a discounted price. Priorities include parts of San Diego, Chula Vista, Oceanside, Escondido, El Cajon and some unincorporated areas.

Barry Schultz presented the plan for the land bank to yesterday's meeting of the City-County Reinvestment Task Force. Schultz said the task force prefers single-family detached homes or two-to-four unit complexes in neighborhoods hardest hit by foreclosure. The land bank would seek to purchase those properties in bulk, directly from the bank, paying 50 percent of the ultimate resale price.

So the land bank would try to purchase a house for $100,000 to $150,000 from the bank, rehab it, and sell it for $200,000 to $300,000.

Here's the plan for selling those preferred properties:

Rehabilitate property, according to established standards.

Coordinate with community-based agencies to develop pipeline of qualified buyers.

Price at market, at price affordable to 80 percent to 120 percent AMI buyers ($210,000 to $290,000). Create package of potential seller concessions to include down-payment assistance and/or seller-paid closing costs.

Use selected/qualified "area leaders" as listing agents/transaction coordinators. Area leaders act as independent agents, but coordinate closely with Land Bank to prepare and market properties.

Link to homebuyer support programs. Encourage buyers to promote ownership opportunities to others.

Schultz presented a matrix to show the acquisition of other types of properties. That matrix is here.

Members of the task force asked a bunch of questions about the financial elements of the plan before deciding unanimously to forward the plan to the City Council for discussion. Schultz, CEO of the San Diego Capital Collaborative, said he will have additional information soon about the financial feasibility of the plan. That will help potential investors understand the returns they can expect if they participate in the plan. We'll keep you posted.

-- KELLY BENNETT

Date: 9/19/08

Foreclosures Amount for More Sales

E-MAIL POST

About 43 percent of home sales in August in San Diego County had been foreclosed in the previous year, MDA DataQuick reported today.

That means about 1,360 of the region's 3,148 homes sold fit the foreclosure category. That number doesn't count the homes that were sold as short sales, meaning they sold for less than was owed on the mortgage. It compares to a 14.7 percent share of sales for which foreclosures counted in August 2007.

The sales total was higher last month than it was in August 2007, marking a second consecutive month of year-over-year sales gains. In a recent story, I included a perspective on that sales bump from economist Chris Thornberg:

"When you see sales begin to increase, that's often an indicator of a market turning," said Chris Thornberg, founding partner at Beacon Economics and former economics professor at the University of California, Los Angeles. "But this is a bit of a false dawn."

It's a false dawn, Thornberg said, because so many of the sales are foreclosures.

The overall median price for all types of housing reached $350,000 in August, a 32 percent decline from the peak of $517,500 in November 2005 and a 26 percent decline from the median price in August 2007.

-- KELLY BENNETT

Wednesday, September 17 -- 6:06 pm