Which Way LA?*

The one-way plan for Pico and Olympic Boulevards sounds like such a great idea that I'm already redrawing my daily driving plans.

Once the traffic engineers make their case to the public, I expect all of Los Angeles will wholeheartedly agree. If LA is unified in its fight against anything, it's together in the battle against traffic congestion. Who would dare oppose something so simple as turning two boulevards into one-way channels in and out of the downtown area?

...

Read the full post at LA Observed.

*With appologies to Warren Olney...

Foreclosures Up, Sales Down

Housing is all over the Los Angeles Times today.

There's a story about the troubles at New Century Financial Corp., " the nation's largest independent provider of high-risk home loans" (see previous post). Watch for an increase in the number of people predicting a foreclosure crisis:

... Many homeowners with high-risk loans whose rates will adjust upward in the next year or two won't be able to refinance into loans with better terms. That could put some into foreclosure.

"If foreclosures continue to mount — and they are already climbing rapidly — we could see a scenario similar to California in the early 1990s, where banks' sales of foreclosed properties pushed home prices down even further," said Zach Gast, an analyst at the Center for Financial Research and Analysis, an investment research firm.

A comparison to the market woes of the 1990s? (Don't forget LA's lack of affordability).

Another story details how Los Angeles County's sales volume is sinking. There were fewer transactions in February than in any February since 1997:

In February, the median price of all homes sold in L.A. County rose 7.8% to $528,000, according to La Jolla-based research firm DataQuick Information Systems. It was the biggest year-over-year percentage gain since July.

At the same time, home sales fell 11% to 6,300, the fewest transactions for a February since 1997, DataQuick said. The rate of decline picked up from January, when sales fell 6.9% from a year ago, but was an improvement over mid-2006, when sales were falling at a 25% year over year pace.

L.A. County's median price -- the point at which half of all homes sold for more, half for less -- had been virtually flat since June, when the median was $520,000.

And finally, an upside: condos are still selling downtown.

— TJ Sullivan in LA

California's Housing Market Feeling Pain

Bloomberg reports that New Century Financial Corp., based in Irvine, may be on the verge of bankruptcy because too many of its borrowers can't afford the homes they bought:

New Century may be insolvent because too many of its own customers -- most of whom have poor credit histories or heavy debt burdens -- aren't repaying their loans. Bad U.S. subprime mortgages are at a seven-year high, forcing more than two dozen lenders to close or sell operations. Their woes may contribute to more than 1.5 million Americans losing their homes and 100,000 people losing their jobs, according to real estate executives, economists, analysts and a Federal Reserve governor.

New Century said in a federal filing it doesn't have funds to repay lenders including Morgan Stanley, Citigroup Inc. and Goldman Sachs Group Inc. The creditors want New Century to repurchase all outstanding mortgage loans they financed.

UPDATE: SEC Investigation at New Century.


'The Harsh Side'

A story headlined "The harsh side of the housing boom" in Sunday's The Mercury News told the story of families claiming to have been bamboozled by some lenders:

Luis Mapula was living in a converted garage with his wife and two daughters and earning $54,000 a year as a fence company construction worker. Then, almost like magic, he became the owner of a $543,000 home with no down payment.

Situated on a quiet cul-de-sac off Quimby Road in East San Jose, the two-bedroom home was to have been his family's piece of the American dream. Instead, it became a financial trap that consumed most of Mapula's income. He got out only after his real estate broker took back the home and paid off the loan as part of a legal settlement.
Renters once again, the family has no plans to buy another home.

"Better a garage than live without enough to eat," Mapula's wife, Cristina Plata, said through a translator.

The couple are among a growing number of Latinos in Santa Clara County who say they've been victimized by a dark side of the housing boom in which people who speak limited or no English bought homes they couldn't afford based on exaggerated statements of income they say they knew nothing about. The deals generate commissions and fees for a chain of intermediaries, but can leave home buyers in foreclosure with ruined credit.

In most of the cases examined by the Mercury News, buyers complain that their loan disclosures weren't translated into Spanish, as required by law, and that they didn't understand the terms of their loans. Their stories reflect a national problem that is particularly acute in California...

Find the entire story at The Mercury News.

— TJ Sullivan in LA