What is a Loan Modification Program and Who Is at Risk? This is the “question of the day” as many homeowners are faced with some very difficult decisions. As a result of a number of financial issues, including sub-prime loans some two to three years ago, some homeowners are now dealing with increased adjustable rate mortgage payments, or a loss of a job by one of the wage-earners, or a change in their personal circumstances that is causing an unexpected move out of their home. What was thought to be a “good deal” a short time ago is now turning into a “nightmare” for some, and they are earnestly seeking ways to resolve their immediate situation. One option is a loan modification program that has been on the national news just this week. What is a Loan Modification Program (LMP)? This is a program that is designed to change the mortgage payment and terms agreement that the homeowner entered into when they took out the loan. How can you change a note, a contract, and an agreement that was agreed upon and signed by all parties, one may ask? Legally, the only way is to change the terms with all parties agreeing, and that is exactly what happens with a LMP. What is the process? It starts with understanding how the original loan was made. In many cases in this area, a homeowner would go to a local lender, such as a bank, a mortgage broker, or a mortgage representative and get a loan. This loan application and approval was handled by the mortgage maker (bank, mortgage company, etc) and after the close of escrow, this loan was “sold” by this lender to a larger “investor”, such as Fannie Mae, Freddie Mac, or one of the many Wall Street money firms, such as Lehman Brothers. This parent group, if you will, then invested the money and all were happy. This process was fine as long as the value of the security (the home) would continue to keep or grow in value. What happened though, starting about four years ago, was that the housing industry on a nationwide scale, thanks to the unprecedented availability of money, starting building homes at an alarming rate, especially in the larger metro areas and suburbs around those areas. The result was a huge increase in the inventory of available homes, and then supply and demand set in. The supply grew faster than the demand, and prices started leveling and in some cases dropping and the result was the value of the home security was reduced. The investor got worried, and decided to sell the security, and this went on for awhile until the basic security dropped even lower in value, making the security harder to sell. Before long the investor had a bad investment. Our economy is based on moving dollars from one arena to another, and this process, in the housing industry, just stopped. Compounding all of this was the adjustable rate mortgage, whereby mortgage payments start increasing after the first year of the loan. As the housing industry slowed down, so did all of the associated industries, such as lumber, flooring materials, plumbing, etc. With a slowdown, comes a loss of jobs, and the resulting income. Many two income earner families saw their incomes drop, but at the same time their mortgage payments were going up. Not a good situation. The immediate effect was that homeowners said, “we cannot afford this home, so let’s sell”. Due to the inventory and dropping prices, the homeowner is eventually faced with not making the payment and walks away from the home and all of the obligations that go with the home. The investor is left with an empty home that is losing value daily with no income at all coming from that investment. Not good. The rest is history, as it becomes a downward spin for all involved. Instead of addressing this situation some two years ago, many lenders, driven by greed and not fully appreciating the magnitude of what was actually happening, refused to negotiate with the homeowner in an effort to “save the deal”. The result was the highest percentage of mortgage foreclosures in our history, and it is still going on. And, here comes the federal government to the rescue, just way too late. The problem is now of huge proportions, for national housing investments have continued to plummet and many of the investor’s securities are almost worthless. After trying to bail out Wall Street, the government decided to try and help the homeowner, and brings up Loan Modification Programs. Again, too late to help such a huge problem, but at least an attempt. The problem is, how does the government decide who to help and how much help to provide, and this is where the federal program will bog down. A few years ago, some foresighted financial folks saw what was happening and decided to address the issue head on, and we saw an increase in the number of debt resolution companies, initially directed toward credit card debt. Some decided, as the housing market declined, to address the mortgage loan issue, and that is where we are today. This Thursday night, November 20, 2008, at 7 PM, at the Redding Main Library, we will be conducting a Mortgage Loan Modification Seminar for all that are at risk or are thinking that they might be at risk in the near future. This is an information dissemination seminar and the various options will be explained by the Largent Team at Keller Williams Realty who will be joined by a national debt resolution firm that has a 97% success rate with loan modification programs. The process outlined above will be explained in more detail, questions will be answered, and hopefully options will be offered that can help homeowners as they deal with the possibility of “losing their homes”. Reservations can be made for the free seminar by calling 530-248-5601.

You Vote….Your Call…..the Real Issues

In a few days, you vote. The national situation is well known, but what about issues here in Redding? The real issues, not just the campaign “tell you what you want to hear” stuff from the candidates. The real question for me is “which candidate has the ability and determination to make a hard decision on issues and stand by it?” We have some major things going on right now, and we have to make decisions now. #1. Cut expenses or increase revenue, and #2. Get jobs. Simple. Sure, we hear that we need this and that but in reality, we need to face our current local economic situation head on. Redding could be in trouble if we don’t.

First, we have a current situation where we are losing businesses and jobs, thus income to the city is going to be decreasing. In the past few months, a number of companies have closed, the most recently Mervin’s, with a loss of several good jobs. Before that it was Maui Wowi , along with 2 local Starbucks, and a number of other small businesses, each with a loss of vital jobs and loss of income to the City. Still, the City is spending money as if it was “business as usual”. Is this a wise thing to do? And with this spending the City may require a needed additional source of income. If it isn’t from sales tax, where will it come from? Will it be by increasing taxes? Shouldn’t the City be thinking about cutting expenses, one way or the other, rather than looking for taxes to “bail them out? This is not the time to add expenses to the typical household in Redding. This is an issue. An alternative for the City would be to raise development impact fees. No way. The WalMart expansion called for huge development and impact fees of over $1,000,000 before construction. How many businesses that are considering coming to Redding can afford this amount in fees before they break ground? Fiscal conservativeness for the City for 2009 is an issue that will have to be addressed by the Council.

Secondly, and maybe this is priority #1, Get jobs. We have a City Economic Development Office and we are losing employers. What’s the story should be the issue. Is anything happening? Isn’t it time to quit talking and act? Let’s have some Council leadership to convene a multi-jurisdictional “committee”, if you will, made up of the brightest and most creative minds in our area. In fact, make it open to volunteers, not “appointed or anointed ones”. Throw it out on the table asking “what kind of business can we bring to the north state?” Naturally have the pros there, for they have the contacts, but in our community we have some very bright folks that are well educated, have been around and lived in other areas, and participated in growth and development issues in various locations. Solicit their ideas and follow the Disneyland model of “no bad ideas when you are creating”. What do we have to lose? From high tech to recreation and tourism, from transportation to basic manufacturing, from our natural resources to our natural labor force, we should be open to it all. Are we going after it, or are we just doing “more of the same, over and over?’. This is the issue, and we need strong leadership that will say “Time to act and I will now”.

Our national mess is the result of “failure to act” on the part of legislators, in my opinion. In Redding, let’s not let this happen, and by holding our elected officials accountable, by constantly supporting them by constructive criticism and positive suggestions, and by letting them know regularly that we want action not just words, we can change things for the better in Redding. After all, with good jobs, low taxes, and controlled expenses, Redding will be what we all want…the best place in the world to live, work, and play. Your call and your vote.

Why do you want to be on City Council?

This question should be asked of each candidate in the upcoming city election. It is a good question, for this job might be considered a thankless job. Yet, a large group of candidates are going to spend quite a bit of money advertising in one way or another that they want to serve you on the Redding City Council.

So what is so good about serving on the Council? Well, let’s take a look at what makes up their jobs. First, they have to attend meetings to prepare for the Council meeting, which will meet every other week. These Council meetings usually start at 7PM, unless called earlier, and will last 3 to 4 hours, or longer. For each of these meetings, Councilpersons, if they are doing their job, must prepare for the subject matter at hand. This might involve meeting with community members, interest groups, or members of the city staff, as well as reading the documentation. This must be done if they are going to be knowledgeable on the various matters that will come before Council. Many of the matters and issues must be studied and understood, rather than just being rubber-stamped. Bottom line: lots of meetings, study, and thinking of what’s best for Redding.

Then Councilpersons have to become knowledgeable about how the City runs. In Redding, we have the City Manager form of government, and the role of the Mayor is to run the Council meetings and to represent the City and Council in public events and activities. The Mayor actually serves at the pleasure of the other Council members, for a 1 year term. All of the Council members, though, should develop a good understanding of how the various departments function, for matters will come before them that range the entire community, from pet care to paving the streets to planning a budget for personnel gains or losses. As Redding is operated, the Council depends to a large degree on the preparation that is done at the staff level, but this does not take the place of preparation on the part of each Councilperson. In fact, in Redding, there has been a great deal of concern about how much the Council just takes the staff reports as they are presented and doesn’t really do their own individual homework before the staff presentation. This issue, by the way, should definitely be asked of each candidate. Specifically, will you accept staff reports without questioning these reports, and if you question them, will you have done enough work to know what you, and they, are talking about? Will you just “rubber-stamp” reports?

Well, there is more than above, but this gives a brief idea of the Council job, and of course leads to the next question, who is qualified to serve on the Council if they are, in fact, going to do the job as above. This question needs to be asked of each candidate, for some are obviously more qualified than others and more knowledgeable than others about City matters. Some of the candidates have actually attended Council meetings, and some haven’t. You, the voters must ask these questions, for this will help to determine the qualifications. Already we are seeing signs stating integrity, experience, qualified, etc., realizing that the candidates can only put favorable characteristics on their ads. I mean, who would advertise negatives, like I’m dishonest, can’t be trusted, a scoundrel, but vote for me anyway. The only way we can get to know the real candidate and their attitudes and viewpoints, and prejudices too, is to ask the hard questions, and then wait for the answers. And, voters should be able to “hold their feet to the fire”. We deserve a high caliber of elected officials, and we need to do a better job vetting them out. Are you in favor of increasing development fees, and why? or, do you think we need a new Police station, and why? and have you figured out how the City can pay for this? If you get the deer in the headlights look, maybe that candidate doesn’t know what’s going on. And if the candidate tries to spin the answer, then don’t let them get away with it, and ask it again, maybe this time with a different inflection, like “do you really think the City can afford Turtle Bay?”. Ooh, not a good subject, but guess what, you will probably get an answer, which is what we need to know before the election.

Well folks, we have a few weeks left, and the campaign is just heating up, so here’s your chance to help influence the future of Redding. Here’s your chance to (1) elect a candidate that is going to represent you and (2) to exercise a valuable right, the right to vote, so be prepared. The future of Redding is largely influenced by the attitudes and actions of the City Council. No easy task, so let’s not treat it as if it is just another election. You can make a difference.

Ron Largent

September 17, 2008

A wind-whipped wildfire charred 130 acres in the heart of Redding today, burning within 20 yards of the Sundial Bridge and causing evacuations along Hilltop Drive.

Between 3,000 and 4,000 customers lost power this afternoon while Redding Electric Utility crews worked to reroute electricity from the Sulphur Creek Substation, at the bottom of Market Street near the fire, an REU spokesman said. By this evening most had power restored.

Swirling north winds - with gusts up to 30 mph clocked at the Redding Municipal Airport at the time of the fire - fanned the flames from where they started at about 11 a.m. on Sulphur Creek Hill across the four lanes and a median on North Market Street.

From there the fire spread up toward homes, apartments and condominiums on Hilltop Drive and into the Turtle Bay Exploration Park's McConnell Arboretum and Botanical Gardens, and prompted the evacuation of Turtle Bay Elementary School where classes were in session.

The encroaching fire also caused the evacuation of residences along the Hilltop Drive's west side as it winds above the Sacramento River. Crowds gathered at vistas along Hilltop to watch the fire's fast spread below as it pushed toward the Sacramento River and the Sundial Bridge.

Fire crews had the fire contained by 4 p.m., five hours after it started. More than 300 firefighters and 45 fire engines, as well as air tankers and helicopters in the air and bulldozers on the ground, fought the fire.

Cause of the fire is under investigation,apparently.

Fire damaged about 20 percent of the botanical garden's plants. Fire burned on both sides of the garden's fences and close to the Sundial Bridge.

On the riverbank it was about 20, 25 yards from the bridge, as near as I could see.

If you want to see my videos of the fire from across the Sacramento River, go to  www.youtube  then  ronlargent   and you will see them.

Best wishes,

Ron Largent   Keller Williams Realty of Redding, CA

www.ronlargent.com

Is Stillwater Park Our Future? Should it be? What about Recreation and Tourism?

We recently read that Turtle Bay “delivers $9.6 million” to the County last year. Not bad for a Park that receives $350,000 from the City each year to attract visitors from near and far. So, how do the “experts” come up with $9.6 mil? A complicated formula, no doubt, but seems to be based on the theory that the income that Turtle Bay generates is equivalent to 233 full time jobs in the area. These jobs would then provide income that would in turn be spent on living expenses here in Redding, which would in turn generate sales tax, property taxes, and a lot of other jobs that would create income, and on and on.

OK, I’ll buy that, to a degree. However, what does this “income” really tell us? It tells me that “tourism pays”. So, why aren’t our City leaders looking at ways to increase tourism/recreation dollars? In fact, maybe the tourism/recreation “industry” would be a good fit for Shasta County? Maybe even as logical to pursue as big industry coming to Stillwater Business Park. 

Since my theory of “tourism/recreation” as our major industry will be discussed, down-played, and dismissed by smarter folks, I broadened my thinking to include all of the other sources of recreation/tourism dollars that flow into the City. There is the hotel-motel tax that is paid for every room occupied. Taxes are paid by Win-River and the 3 movie complexes. From Water World to Shasta Caverns, folks pay for this recreation and part of what they pay flows in as tax income to the city. How about the gas tax that is paid to the City, a good portion of that coming from out of town “tourists”. And so it goes. We are talking some “big bucks”, and yet, what are we doing to increase this “industry” if you will?

Stillwater broke ground a few weeks ago, and there was an excitement in the air that we would start seeing new businesses announce they were coming to Redding. We are all hopeful that they will, but will they? Over the past few years, a number of the new businesses, some in manufacturing and hi-tech have come, and gone. My thought is that it could be that we are not looking at the “right business or industry for our area”. Maybe we might consider going after industry that is related to what we seem to be doing pretty well, the recreation and tourism “industry”. Think about it: boats used on our lakes and rivers are built in Oregon, and the equipment used in fishing and water sports is a big business and made someplace, but not Redding. Ski equipment for both water and snow sports are manufactured in various parts of the country, but not in Redding. Bikes for many uses are sold in a number of local stores and come from all over the world, but not from Shasta County. RV’s are sold and repaired here, but are built in Montana or Mississippi. Even swimwear and snow attire could be made here, and the list of recreation/tourism related products goes on. It might be very interesting to be able to go visit the plant where your boat was being built, or see how snowboards or skateboards are made. And, of course, when one company finds that we have a great work force, a reasonable cost of living, and an exceptional quality of life, the word will spread.

Wishful thinking or naivety? Maybe. But the fact that we have all of the uses for these various products within a short distance does make a lot of sense to a manufacturer if only from the shipping and transportation aspect. Certainly makes sense to me to seriously look into this potential industry, especially when we don’t have many others lined up at the gate to get into Stillwater Park. But, just my view. 

Thanks,
Ron Largent    Keller Williams Realty in Redding, CA
www.ronlargent.com

The State of the State, of sorts!

Last week about 80 of us gathered to hear one of the most enlightening speakers in California, Dan Walters. Dan has been a journalist for more than 40 years, spending all but a few of those years working for California newspapers. At one point in his career, at age 22, he was the nation's youngest daily newspaper editor.

Dan joined The Sacramento Union's Capitol bureau in 1975, just as Jerry Brown began his governorship, and later became the Union's Capitol bureau chief. In 1981, Mr. Walters began writing the state's only daily newspaper column devoted to California political, economic and social events and in 1984, he and the column moved to The Sacramento Bee. He has written more than 6,000 columns about California and its politics and his column now appears in more than 50 California newspapers. He has written about California and its politics for a number of other publications, including The Wall Street Journal and the Christian Science Monitor. In 1986, his book, "The New California: Facing the 21st Century," was published in its first edition. He is the founding editor of the "California Political Almanac," the co-author of a book on lobbying entitled "The Third House: Lobbyists, Money and Power in Sacramento," and is a frequent guest on national television news shows.

He came to Redding to give our group, Shasta Voices, his views on where California has been over the past 40 years, and where we are now headed economically, socially, and culturally. A most interesting time, as he gave us a “walk through time” from the 1960’s through today. In case we have forgotten what California, and Redding, was like “back then”, here are some of his points.

Traditionally, California was primarily an agricultural and manufacturing state.  Santa Clara County was a leading producer of various crops, located right in the middle of what is now Silicon Valley. Fishing played a big part in the state economy from Eureka to Santa Barbara and Ventura County. Logging was a big part of the north state and the Sierra’s, including Redding. Large auto manufacturing areas, like Ford in Fremont and GM in Southern California employed thousands, and the Oakland Shipyard was one of the largest in the nation. Fontana had the largest steel plant on the west coast, and airplanes were built from San Diego to the Bay area. After Korea and Vietnam, the nature of the California economy started to change. Oil fields closed, tire plants in the Central Valley relocated out of state, and chemical plants shut their doors due to environmental concerns. California had some tough years in the late ‘70’s and early ‘80’s.

To fill this economic void, and address the changing nature of the state, cities and counties, and the State, reacted by encouraging a “new economy’, and companies like Hewlett Packard, Intel, and Apple Computer emerged, joined by a whole new kind of “industry” called Healthcare. Almost overnight, where there were factories and orchards, we saw housing developments, with all of the trades and services involved with this industry, along with a new group of employees called immigrants. They came from all over to the land of opportunities, bringing with them their culture and traditions, and California started absorbing these folks at a record pace. Jobs were created and the economy was rapidly changing. Overnight, biotech and hi-tech companies sprang up, like Gentech in Vacaville and Google and Yahoo in Mountain View. What had been referred to as “Kansas on the West Coast” was quickly becoming the largest “melting pot in the world”, with population groups like Russians moving to Sacramento and Vietnamese to Orange County. This changing culture caused California to change its education strategy, for languages almost unheard of 10 years before were now being taught in the schools. Change would be, and is,  the future of California. like it or not.

Today, California needs to create 250,000 jobs a year, just to keep pace with the growth. Every aspect of our lives, from water to transportation, to land use to healthcare is now an “issue” for the State. How the State deals with change, such as the graying of the baby boomers”, will affect each of us. Every service we receive, from good highways to good healthcare will be a ballot item, and each of us  must realize that now, as in the 1800’s, California is still the “destination of choice” for many. The Gold Rush is still with us. Are we ready, is the question. Stay tuned.

Ron Largent

July 20, 2008